Charter Hall Social Infrastructure (CQE) H2 2024 earnings summary

Executive summary

• Operating earnings and distributions of AUD 0.16 per unit, in line with FY 2024 guidance, with portfolio occupancy at 99.8% and WALE of 12.4 years.

• Divested 12 childcare properties for AUD 40 million at a 4.1% premium and acquired two new centers for AUD 10.8 million, with further transactions due in FY25.

• Net property income rose 5.8% year-over-year, driven by rental growth and portfolio activity.

• ESG achievements include Net Zero carbon emissions for operational assets and expanded solar rollout.

• Portfolio focused on government-backed and sector-leading tenants, with 355 properties in essential community services.

Financial highlights

• Net property income: AUD 106.3 million (up 5.8% year-over-year); operating earnings: AUD 59.5 million (up 0.5%).

• EPU: 16.0 cpu (down 0.6%); DPU: 16.0 cpu (down 7.0%).

• NTA per unit: AUD 3.82 (down 5.4%) due to a net property revaluation decrement of AUD 65.8 million.

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

• Gearing at 33%, within the 30%-40% target range.

Outlook and guidance

• FY 2025 distribution guidance set at AUD 0.15 per unit, reflecting hedge restructure and lower cost of debt.

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

• Positive industry and demographic fundamentals expected to support future growth.

• Ongoing focus on active portfolio management and capital growth in social infrastructure.