MERLIN Properties SOCIMI (MRL) H1 2024 earnings summary

Executive summary

• Strong operating performance in H1/6M 2024, with like-for-like rental growth of 2.8%, high occupancy across all asset divisions, and positive release spreads, especially in logistics and shopping centers.

• S&P upgraded credit rating to BBB+ due to lower leverage and improved cash flow.

• Data center business is a key growth driver, with 13.3% valuation uplift, robust client interest, and major expansion underway.

• Over €90m in non-core asset disposals at a premium to GAV, supporting capital recycling.

• Net earnings reached €132.8m, reversing a €47.5m loss in 6M23, driven by strong operating performance and positive fair value adjustments.

Financial highlights

• H1/6M24 gross rents reached €248.2m, up 4.4% year-over-year; net rents up 3.7% to €208.6m.

• EBITDA rose 3.7% to €188.4m; FFO €147.8m (+0.3%), AFFO €142.5m (+1.2%), FFO per share €0.31.

• EPRA NTA per share at €15.11, down 1.6% YoY; TSR for H1/6M24 at 1.8%.

• IFRS net profit reached €132.8m.

• GAV remained flat at €11,375m, with value created in developments offsetting operating portfolio losses.

Outlook and guidance

• FFO guidance for 2024 confirmed at €0.59 per share; dividend recommendation of €0.44 per share for FY24, with interim payment expected in Q4.

• No major debt maturities until November 2026 after proactive refinancing; liquidity stands at €1.6bn.

• Occupancy expected to improve further by year-end, with continued positive rental growth and robust leasing activity.

• Data centers pipeline advancing, with significant capex planned for expansion and new licenses secured.