Azrieli Group (AZRG) Q2 2022 earnings summary

Executive summary

• Q2 NOI was NIS 473m, up 16% YoY; annualized NOI run rate based on Q2 was NIS 1.9bn, excluding Mall Hayam and signed Data Centers contracts not yet generating income.

• Net profit attributable to shareholders rose to NIS 803m from NIS 383m YoY; comprehensive income reached NIS 843m versus NIS 445m.

Financial highlights

• Same Property NOI increased 11% YoY in Q2.

• FFO excluding senior housing was NIS 309m versus NIS 308m YoY; total FFO was NIS 331m versus NIS 371m.

• Investment property appreciation totaled ~NIS 601m, mainly reflecting CPI increases; higher interest expense, also linked to CPI, partly offset profit growth.

Outlook and guidance

• Data Centers contribution is expected to emerge as projects under development are completed; London expansion adds to the development pipeline.

• Development efforts continue in hospitality and long-term rental housing, alongside exploration of opportunities across operating segments.

• Annual NOI run rate based on Q2 was NIS 1.9bn, excluding Mall Hayam and Data Centers contracts not yet producing income.