Catella (CAT) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw continued market uncertainty, with transaction activity slightly up from Q1 but still at low levels; pricing in European real estate appears to be stabilizing, and a broader recovery is expected in early 2025.

• Net revenue for Q2 2024 was SEK 334M, down from SEK 442M year-over-year, with EBIT at SEK 35M versus SEK 88M last year; earnings per share declined to SEK -0.37 from SEK 0.95.

• Cost efficiency, digitalization, and new investment strategies have been prioritized, resulting in a lower cost base and improved operational resilience.

• The merger of two fund platforms aims to create a more efficient EUR 10 billion platform, enhancing capital raising and investor relations.

• Asset Management delivered AUM growth, reaching SEK 153 Bn, up SEK 1 Bn from Q1 2024.

Financial highlights

• Net revenue decreased by SEK 108 million (24%) year-over-year, mainly due to lower transaction volumes and absence of performance-related fees.

• EBIT was SEK 35 million, down from SEK 88 million in Q2 2023, with cost reductions of SEK 55 million partially offsetting revenue decline.

• Net loss of SEK 33 million, or SEK 9 million adjusted for FX, driven by negative FX effects and higher debt costs.

• Cash position at quarter-end was SEK 950 million, up from SEK 800 million at year-end; equity ratio stood at 35%.

• AUM increased by SEK 3.3 Bn year-over-year, with inflows of SEK 27.3 Bn and outflows of SEK 12.5 Bn.

Outlook and guidance

• Transaction market recovery is expected to begin in early 2025, with some improvement anticipated in H2 2024.

• Investor interest in property assets is gradually increasing, but market recovery timing remains uncertain.

• Focus remains on cost control, efficiency, and expanding fixed margins to position for profitable growth as the market recovers.

• Active capital raising for new strategies continues, though fund-raising cycles are longer in the current environment.