ESR Group (1821) H1 2024 earnings summary

Executive summary

• APAC's largest real asset manager with US$154 billion AUM (+6.1% y-o-y) and US$80 billion fee-related AUM (+2.7% y-o-y), following full LOGOS integration and strategic focus on data centres, infrastructure, and renewables.

• Reported a net loss of US$209 million for 1H2024, reversing from a net profit of US$314 million in 1H2023, mainly due to non-cash asset revaluations and absence of promote fees.

• Revenue declined 31.4% year-over-year to US$312 million, with fund management segment contributing over 80% of total revenue.

• Ongoing balance sheet optimisation, non-core divestments, and cost synergies targeted to drive growth and efficiency.

• Strategic focus on data centres and new economy assets, with robust capital raising and development pipeline.

Financial highlights

• Revenue for 1H2024 was US$312 million (-31.4% y-o-y); fee income (ex-promote) was US$254 million (-5% y-o-y); core asset recurring fee income grew 7% year-over-year.

• PATMI was a loss of US$219 million (vs. profit of US$289 million in 1H2023); Adjusted PATMI at a loss of US$58 million, mainly due to non-cash losses and absence of promote income.

• EBITDA swung to a loss of US$22 million from a profit of US$537 million; Adjusted EBITDA dropped 76% to US$132 million.

• Gearing at 32.3% as of June 2024, expected to drop to 20–30% post-divestments; weighted average interest cost reduced to 4.9% from 5.6% y-o-y.

• Cash and bank balances at US$1.06 billion as of June 2024.

Outlook and guidance

• Management expects recovery in fundraising, EBITDA, and earnings over the next 12–18 months as interest rates are expected to decline.

• Targeting US$1.5–2.0 billion additional balance sheet sell-downs in next 12–18 months; focus on reducing gearing to 20–30% range.

• Expects increased activity in core and core plus mandates and deployment of US$23 billion uncalled capital as rates fall.

• Projected borrowing costs for H2 2024: 4.5–4.8%; below 4.5% in 2025.

• Data centres and infrastructure platforms expected to drive AUM and earnings growth, leveraging AI demand.