Big Shopping Centers (BIG) Q1 2024 earnings summary

Executive summary

• Effective NOI excluding AfI rose to ₪198m from ₪180m YoY; including AfI, NOI reached ₪383m versus ₪348m.

• FFO including AfI increased to ₪208m from ₪191m; like-for-like NOI grew 4.3%–10.5% across the four reported portfolios.

• EPRA NAV was ₪12.965bn, or ₪531 per share, versus a ₪371.4 share price, a 43% discount.

Financial highlights

• Rental, management and other income rose 16% to ₪516.5m from ₪446.1m; operating profit increased to ₪350.0m from ₪281.4m.

• Net income was ₪150.9m versus ₪147.2m; net income attributable to shareholders was ₪134.7m versus ₪129.8m, and basic EPS was ₪5.51 versus ₪5.42.

• BIG Israel like-for-like NOI rose to ₪125.1m from ₪115.3m (+8.5%); BIG Europe rose to €39.9m from €36.1m (+10.5%).

• AfI Israel like-for-like NOI increased to ₪40.9m from ₪39.2m (+4.3%); AfI Europe rose to €12.5m from €11.8m (+5.9%).

• Net finance expense increased 31% to ₪153m, mainly due to foreign-exchange losses on investee loans and higher interest rates; lower inflation-linked costs partly offset the increase.

Outlook and guidance

• Effective-group year-end NOI forecasts: ₪1,909m for 2024, ₪2,064m for 2025, ₪2,104m for 2026 and ₪2,274m from 2027 onward; Midtown purchase-option exercise would reduce NOI by ₪22m.

• Effective-group FFO forecasts: ₪1,008m for 2024, ₪1,113m for 2025, ₪1,134m for 2026 and ₪1,233m from 2027 onward; Midtown purchase-option exercise would reduce FFO by ₪11m.

• Management expects positive operating cash flow and considers available credit, unencumbered assets and refinancing capacity sufficient for current obligations.

• Development schedules are predominantly for 2024, with selected projects in 2027 and 2028; timing assumes no significant deterioration in security conditions.

• Added employment and public-building rights were approved at BIG Glilot; the added tower is on hold amid office-market and security uncertainty.