Lumo (LUMO) Q2 2024 earnings summary

Executive summary

• Total revenue and net rental income increased year-over-year, but FFO and profit before taxes declined due to higher financial and maintenance expenses, market oversupply, and the absence of last year's bond repurchase gain.

• Financial occupancy rate decreased amid continued market oversupply and intense competition, while tenant turnover increased.

• The saving program is progressing as planned, with all measures implemented and significant cost savings achieved.

• Balance sheet and liquidity remain strong, with all 2024 and 2025 loan maturities covered and no dividend paid for 2023 to strengthen the financial position.

• Investments were exceptionally low, with no new modernization projects started and the last development project completed in June.

Financial highlights

• Total revenue for H1 2024: €225.6 million, up 3.9% year-over-year; net rental income: €142.7 million, up 3.0% year-over-year.

• FFO: €68.2 million, down 15.3% year-over-year, impacted by increased financial costs.

• Profit before taxes: €-65.0 million (vs. €95.7 million prior year), mainly due to €-138.8 million fair value change in investment properties.

• Fair value of investment properties: €7.9 billion, down 4.2% year-over-year, affected by a 0.1 percentage point yield requirement increase.

• Gross investments sharply reduced to €19.3 million.

Outlook and guidance

• 2024 revenue growth expected at 2–4% (previously 4–7%); FFO guidance lowered to €142–152 million, excluding non-recurring costs.

• Guidance reflects management's view on revenue, expenses, occupancy, and rent trends; excludes impact of potential acquisitions or disposals.

• Occupancy expected to improve moderately in H2 but remain below last year's level.