Charter Hall Long WALE REIT (CLW) H1 2025 earnings summary

Executive summary

• Portfolio valued at AUD 5.5 billion, diversified by tenant, industry, geography, and property type, with a WALE of 9.7 years and 99.8% occupancy as of 31 December 2024, leased primarily to blue-chip tenants.

• Operating earnings were AUD 89.8 million (12.5 cents per security) for 1H FY25, with distributions also at 12.5 cents per security; statutory profit rebounded to AUD 51.3 million from a prior loss.

• Completed AUD 300 million in asset sales and a AUD 50 million security buyback, strengthening the balance sheet and maintaining gearing at 31.8%.

• Moody's Baa1 investment-grade credit rating reaffirmed with a stable outlook.

• Principal activity remained property investment, with no significant changes in business nature.

Financial highlights

• Like-for-like net property income grew 3.5% year-over-year, benefiting from 54% of income being CPI-linked.

• Operating earnings and distributions per security for the half-year were AUD 0.125, in line with full-year guidance of AUD 0.25 per security.

• Net tangible assets (NTA) per security at AUD 4.62, stable since June 2024, with a slight decrease from $4.66 due to property revaluation and interest rate swaps.

• Operating expenses reduced by 17.5% and finance costs by 15.6% due to divestments.

• Statutory earnings rebounded to $51.3m from a loss of $258.4m in 1H FY24, driven by lower negative fair value movements.

Outlook and guidance

• FY25 operating earnings and distribution guidance reaffirmed at AUD 0.25 per security, representing a 6.4% yield based on recent closing price.

• No further buyback planned; focus on earnings growth through acquisitions, recycling, and benefiting from potential interest rate reductions.

• The REIT benefits from inflation-linked revenue streams and interest rate hedging.

• Uncertainty from geopolitical events, inflation, and interest rates may impact future performance, but no material changes to operations are anticipated.