CPI Property Group (O5G) Q3 2024 earnings summary

Executive summary

• Solid Q3 operational results with progress on capital structure and liquidity; macroeconomic headwinds in Germany and other markets noted, but low interest rates and limited new construction support demand for CEE real estate.

• Over €1.2 billion of gross disposals closed YTD, with €440 million signed and €400 million in due diligence; total disposal pipeline exceeds €3 billion.

• Net rental income up 2.9% to €627 million, driven by 3.6% like-for-like rental growth; net business income at €671 million.

• Consolidated adjusted EBITDA at €594 million; FFO1 at €311 million; net profit for the period €17 million, down 66.5% year-over-year.

• Occupancy stable at 91% with WAULT of 3.4 years; retail segment occupancy at 97%.

Financial highlights

• Total revenues for Q1–Q3 2024 were €1,210 million, down 6.6% year-over-year.

• Gross rental income increased 0.9% to €699 million; net rental income up 2.9% to €627 million.

• Net hotel income fell 35.9% to €37 million due to deconsolidation of certain hotels.

• Net business income slightly decreased by 0.5% to €671 million.

• Net valuation loss of €167.8 million, mainly from S IMMO, IMMOFINANZ, Prague offices, and an Italian project.

• Net loss on disposals primarily from sale of Crans Montana resort (€10 million) and an Italian project (€8 million).

• Total assets at €21.7 billion, down 1.1% from year-end 2023; property portfolio at €18.6 billion.

• Net debt reduced by €848 million to €9.4 billion; net LTV at 50.4%.

Outlook and guidance

• Targeting over €1 billion in disposals for 2025 and at least €500 million annually thereafter; aim to reduce Net LTV toward 40% and regain investment grade ratings.

• Distribution for 2024 expected to be meaningfully less than the stated policy of 65% of FFO.