Eiendomsspar (EISP) Q3 2024 earnings summary

Executive summary

• Rental income for January–September 2024 was NOK 839.3 million, up from NOK 790.9 million year-over-year, driven by CPI adjustments and higher hotel turnover rents.

• Pre-tax profit fell to NOK 435.8 million from NOK 850.4 million, mainly due to lower sales gains and changes in market-based share write-downs.

• Cash flow before tax per share was NOK 24.17, slightly down from NOK 24.61 in the same period last year.

• Liquidity reserve at the end of Q3 2024 was NOK 2,081 million, down from NOK 2,375 million at year-end 2023, mainly due to share acquisitions.

Financial highlights

• Gross operating profit reached NOK 768.0 million, up from NOK 734.2 million year-over-year.

• Net cash flow before tax (including joint ventures and associates) was NOK 803.5 million, down from NOK 822.1 million.

• Average interest rate on debt was 4.4% at Q3 2024, with 64% of loans at fixed rates and an average maturity of 4.7 years.

• Equity per share was NOK 282, and the share price increased 14% since year-end, adjusted for dividends.

Outlook and guidance

• Norges Bank is expected to start rate cuts in Q1 2025, with several more anticipated through 2026, though uncertainty remains about the pace and level.

• Office completions in Oslo are expected to drop 28% in 2024, with a rebound in 2025 potentially putting downward pressure on rents.

• Moderate housing price growth is expected, supported by gradual rate cuts and low new housing starts.

• The company is financially solid and well-positioned to handle weaker market conditions and capitalize on opportunities.