Eastnine (EAST) Q2 2024 earnings summary

Executive summary

• Profit from property management rose 21% year-over-year to EUR 10.5m for Jan–Jun 2024, with Q2 growth at 26% and per-share profit at EUR 0.12 after a 4:1 share split.

• Acquisition of Nowy Rynek E in Poznań, Poland, for EUR 79.3m, expanded the portfolio to 15 assets and 212,600 sq.m, enhancing market position.

• Portfolio occupancy improved to 93.6%, with net letting of EUR 263k and surplus ratio at 93%.

• Share split completed, improving stock liquidity by nearly 30% and increasing total shares to 89,481,044.

• Unrealised value changes were negative, mainly due to higher yield requirements, impacting comprehensive income.

Financial highlights

• Rental income increased 1% year-over-year to EUR 18.4m, with Q2 rental income up 3% to EUR 9.3m; net operating income up 1% to EUR 17.0m.

• Interest expenses rose due to refinancing and new acquisition financing.

• Net profit for the period was EUR 5.3m, compared to a loss of EUR -46.6m in the same period last year.

• Cash position decreased to EUR 71.6m after the acquisition, with total assets at EUR 755.6m.

• LTV and net debt/EBITDA increased, partly due to VAT effect and new acquisition.

Outlook and guidance

• Profit from property management expected to continue increasing, driven by recent acquisition and higher rental income.

• Focus remains on further acquisitions, particularly in Poland and Warsaw, leveraging strong acquisition capacity.

• VAT related to the Nowy Rynek E acquisition temporarily reduced cash, with repayment expected in autumn.

• Plan to maintain group LTV around 50% for future acquisitions.

• ECB’s recent rate cut is seen as positive, with hopes for further reductions, though uncertainty remains.