Charter Hall Social Infrastructure (CQE) H1 2025 earnings summary

Executive summary

• Operating earnings for 1H FY25 were $28.5 million (7.6 cents per unit), with statutory profit rebounding to $31.0 million from a prior loss, and distributions of 7.5 cents per unit, all in line with guidance.

• NTA per unit remained stable at $3.82, with portfolio value at $2.1 billion, 347 properties, 100% occupancy, and an 11.9-year WALE.

• Major portfolio actions included a $47 million life sciences acquisition and $84 million in childcare divestments at an 8.6% premium to book value.

• Achieved a 16.4% average rent uplift on 15 childcare market reviews.

• The REIT’s principal activity remains property investment in social infrastructure assets in Australia.

Financial highlights

• Like-for-like net property income grew 3.2% year-over-year, partially offset by net divestments.

• Net property income was $53.5 million, with total revenue of $59.8 million and net assets per unit at $3.82.

• 59% of the portfolio was independently revalued, resulting in a net valuation increment of $6.4 million.

• Statutory earnings for 1H FY25 were $31.0 million, up from $(10.9) million in 1H FY24, driven by positive fair value movements.

• Finance costs increased due to higher average debt costs, though partially offset by lower drawn debt.

Outlook and guidance

• FY25 distribution guidance increased to 15.2 cents per unit, up from 15.0 cents, driven by positive yield spread and market review outcomes.

• Announced an on-market unit buy-back of up to $25 million, representing 2.5% of market cap.

• Social infrastructure remains a growth sector, supported by demographic trends and government funding.

• Ongoing quarterly distributions expected.

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