Covivio Hotels (COVH) H1 2024 earnings summary

Executive summary

• H1 2024 marked by strategic transformation, robust operating activity, and reinforced balance sheet, with sustained growth and recurring net income up 6.6% year-over-year to €119.5 million.

• European hotel market showed strong performance, with RevPAR up 4% on average, led by Southern Europe (Spain +15%, Italy +8%).

• Major memorandum of understanding signed with AccorInvest for a hotel asset swap, consolidating 24 hotel operating companies and transferring 10 hotels, expected to close in Q4 2024.

• Focus on financial discipline, earnings growth, and portfolio rebalancing.

• €77 million in new disposal commitments signed at an 11% premium to end-2023 values, reflecting robust investor appetite.

Financial highlights

• Adjusted EPRA Earnings up 3% year-over-year to €231m; recurring net result rose 3% to €230.8m; net rental income up 1%.

• H1 2024 Group Share revenue: €155.4 million, up 2.2% year-over-year; like-for-like hotel revenue up 5.2%.

• EPRA NTA: €3,505 million (€23.7/share), down 1.3% from end-2023; EPRA NDV: €3,472 million (€23.4/share), down 1.1%.

• Portfolio value (Group Share): €5,866 million, up 0.4% like-for-like; average yield 6.0%.

• H1 2024 revenues grew 6.5% like-for-like, driven by strong rental growth across segments.

Outlook and guidance

• 2024 net recurring result guidance raised by 5% to €460m.

• Plans to leverage portfolio consolidation and market growth, especially through the AccorInvest transaction.

• Strategic priorities include further hotel reinforcement and extracting growth potential.

• Ready for market rebound, with positive sector outlooks in hotels and residential.

• Anticipates continued strong hotel market momentum, particularly in Southern Europe.