Akelius Residential Property (AKEL) Q2 2022 earnings summary

Executive summary

• Portfolio fair value was €6,829 million at June 30, 2022, with 19,061 apartments across 9 cities and a 96% residential share.

• Real vacancy was 2.0%; portfolio allocation was 43% United States, 36% Canada and 21% Europe.

• Jan–Jun rental income rose 40.4% YoY to €140 million; like-for-like growth was 10.5%.

• Continuing-operations loss was €77 million versus €67 million in H1 2021; property fair value increased €15 million, or 0.2%.

• Operating growth coincided with lower debt and portfolio changes following German and Scandinavian property disposals.

Financial highlights

• Jan–Jun net operating income was €68 million, up 47.3% YoY; EBITDA was €55 million, up 41.3%.

• Like-for-like rental income grew 10.5% and like-for-like NOI grew 18.0% in Jan–Jun; NOI margin was 48.4%, versus 46.1% in H1 2021.

• Q2 rental income was €74 million and NOI €36 million, versus €51 million and €24 million, respectively, in Q2 2021.

• Loss before tax was €90 million versus €65 million; continuing-operations loss was €77 million versus €67 million.

• H1 total comprehensive income was €239 million, including €316 million of other comprehensive income.

Outlook and guidance

• Vacancy was expected to continue decreasing, with strong like-for-like NOI development anticipated across markets.

• Inflation-linked rent indexation was expected to support rent growth over the coming year.

• Higher rental growth was expected to support property values over time, despite potential short-term negative valuation effects from higher interest rates.

• Lower interest costs were expected in the short to medium term as debt levels declined; no additional debt raise was considered necessary.