Azrieli Group (AZRG) Q2 2023 earnings summary

Executive summary

• Q2 NOI rose 18% YoY to NIS 559 million; same-property NOI increased ~8%.

• FFO excluding senior housing grew 11% YoY to NIS 342 million; total FFO rose 8% to NIS 357 million.

• A planned sale of minority holdings in Compass is expected to generate gross proceeds of ~NIS 3.2 billion, subject to closing.

Financial highlights

• Q2 NOI was NIS 559 million versus ~NIS 473 million YoY; growth reflected Mall Hayam’s acquisition and rent increases in malls, offices and data centers.

• Net profit attributable to shareholders was ~NIS 419 million and comprehensive income was ~NIS 512 million; Q2 2022 included significantly higher revaluation profits.

Outlook and guidance

• Data centers remain a growth engine, with plans to expand the activity through Green Mountain.

• Sale of Compass holdings, if completed, is expected to yield ~NIS 2 billion cash-flow profit before tax and transaction expenses.

• Management expects property location, quality and differentiation to support high occupancy despite economic uncertainty.