ARGO Properties (ARGO) Q3 2023 earnings summary

Executive summary

• Q3 like-for-like rent growth reached 9.9%; rental revenue rose 27% YoY to €5.510m.

• A €10.1m Q3 fair-value loss contributed to a €6.970m net loss, partly offset by 63% growth in operating profit before fair-value changes.

• EPRA NRV was €435.5m, or €24.06 per share; strategy focuses on German residential rentals, rent growth, refinancing and future apartment privatization.

Financial highlights

• Q3 rental revenue was €5.510m vs. €4.337m YoY; gross profit was €4.670m vs. €3.485m.

• Q3 operating profit before fair-value changes was €3.345m vs. €2.049m; reported operating loss was €8.291m vs. €6.200m profit.

• Q3 net loss was €6.970m, or €0.38 per share, vs. net income of €5.307m, or €0.29 per share, a year earlier.

• 9M rental revenue was €16.600m vs. €11.963m; 9M net income was €30.839m vs. a €6.970m net loss in 9M 2022.

Outlook and guidance

• Organic rental growth is expected to remain high; new-lease rent reached €11.54/m², up 7.1% YoY, with 47% potential uplift over in-place rent.

• Privatization planning and permitting are underway; project starts are expected within 12 months, while condo sales are expected in 1–2 years as eligible buildings reach scale.

• A dedicated team is advancing privatization; the plan targets annual sales of ~10% and reinvestment of proceeds in new assets.

• Athena conversion and Diana development timing and returns remain subject to permits, financing, market conditions and demand.