Prisma Properties (PRISMA) Q2 2024 earnings summary

Executive summary

• Achieved public listing on Nasdaq Stockholm in June 2024, raising SEK 1,185 million after costs and enabling further growth and acquisitions in the Nordics.

• Rental income increased 18% year-over-year to SEK 99 million in Q2 2024, with net operating income up 15% to SEK 86 million.

• Property portfolio expanded to 123 properties valued at SEK 6.5 billion, with a 99% occupancy rate and a weighted average lease term of 9.1 years.

• Net profit for Q2 2024 was SEK -39 million, mainly due to higher financial costs and negative unrealized property value changes.

• Strategic acquisitions and new long-term leases with major discount and grocery retailers support growth.

Financial highlights

• Q2 2024 rental income: SEK 99 million (up from SEK 84 million in Q2 2023); net operating income: SEK 86 million (up from SEK 75–78 million); surplus ratio: 87–90%.

• Adjusted profit from property management was SEK 37 million, in line with expectations and up from SEK 32 million in Q2 2023.

• Net loan-to-value (LTV) stands at 27%; equity/assets ratio: 56%; interest coverage ratio: 2.1x; average interest rate: 5.26%.

• Unrealized value change of SEK -63 million for H1 2024, including a SEK 50 million write-down in Uppsala.

• Net profit for Q2 2024 was SEK -39 million, compared to SEK -1 million in Q2 2023, impacted by unrealized property value changes.

Outlook and guidance

• Focus on continued growth through acquisitions and project development, leveraging IPO proceeds.

• Project pipeline increased to SEK 3.5 billion, up from SEK 1.9 billion in Q1, with higher yield on cost expected for new projects.

• High occupancy (99%) and long lease terms (9.1 years) provide stability for future earnings.

• Building costs have stabilized and decreased by about 10% in recent tenders.

• Dividend policy prioritizes reinvestment for growth; low or no dividends expected in coming years.