Adler Group (ADJ) Q3 2024 earnings summary

Executive summary

• Disposed of 62.8% stake in Brack Capital Properties (BCP) to LEG Immobilien SE, generating €219–290 million net cash, supporting liquidity and funding through 2025, with full exit by January 2026.

• Completed comprehensive recapitalisation in September 2024, converting €2.3 billion of debt into equity, reducing nominal debt from €6.5 billion to €4.7 billion, and strengthening equity to €2.2 billion.

• LTV reduced to 62.6% from 97.6%–105.7% post-recapitalisation, with improved liquidity and extended debt maturities.

• Focus shifting to Berlin yielding assets, with ongoing disposals in NRW and development projects; Berlin portfolio stable at ~25,000 units and €3.5 billion GAV.

• Board expanded to six members, including new CFO and business specialist appointments in November 2024.

Financial highlights

• Net rental income for the first nine months of 2024 was €155–155.1 million, down from €160 million year-over-year due to disposals.

• Adjusted rental EBITDA at €85.8–86 million; adjusted total EBITDA at €53 million for the same period.

• FFO1 from rental activities was negative at -€88 million, impacted by higher interest expenses post-recapitalisation.

• Net profit for 9M 2024 was €1,450.6–1,451 million, mainly due to €2,088 million gain from derecognition of financial instruments.

• Cash position at €363 million at Q3 end, up €29 million from Q2.

Outlook and guidance

• Net rental income guidance for 2024 confirmed at €200–210 million.

• Stable valuation of yielding assets expected for H2 2024; development assets may see further value decreases.

• Management expects continued rental growth and low vacancy to support operational performance.

• Confident in closing further disposals and extending bank loan maturities in coming months.

• No FFO1 guidance provided due to focus on liquidity and deleveraging.