Charter Hall Social Infrastructure (CQE) H2 2024 earnings summary

Executive summary

• Operating earnings of AUD 59.5 million or 16.0 cents per unit, with distributions matching at 16.0 cpu, in line with FY 2024 guidance.

• Statutory earnings were negative at ($19.6) million for FY24.

• Portfolio occupancy at 99.8% and WALE of 12.4 years, with 355 properties focused on essential community services and sector-leading tenants.

• Divested 12 childcare properties for AUD 40 million at a 4.1% premium to carrying value and acquired two new childcare centers for AUD 10.8 million.

• ESG achievements include Net Zero carbon emissions for operational assets and strong tenant engagement.

Financial highlights

• Net property income increased by 5.8% year-over-year to AUD 106.3 million, driven by 3.4% like-for-like growth and portfolio activity.

• Operating earnings reached AUD 59.5 million, up 0.5% from the prior year.

• NTA per unit decreased 5.4% to AUD 3.82, mainly due to a net property valuation decrement of AUD 65.8 million.

• Finance costs rose 16.8% as weighted average cost of debt increased from 4.1% to 5.1%.

• Balance sheet gearing at 33%, within the 30%-40% target range.

Outlook and guidance

• FY 2025 distribution guidance set at 15.0 cents per unit, reflecting hedge restructure and lower cost of debt.

• Distribution reinvestment plan temporarily suspended due to persistent trading at a discount to NTA.

• Ongoing focus on active portfolio management, capital growth in social infrastructure, and growth opportunities supported by demographic trends and government backing.