Cromwell Property Group (CMW) H2 2024 earnings summary

Executive summary

• Completed $1.6 billion in non-core asset sales since 2022, including the European platform and Polish Retail Fund, simplifying operations and reducing gearing.

• Statutory loss of $531.6 million for FY24, mainly due to asset revaluations and exit costs from major sales.

• Underlying operating profit was $136.7 million, down 13.8% year-over-year, reflecting the impact of asset sales and higher debt costs.

• Transitioning to a capital-light, Australian-focused funds manager model, with a focus on local growth and platform acquisitions.

• High occupancy and stable income in the Australian portfolio, with significant government tenancy underpinning income quality.

Financial highlights

• Statutory loss: $531.6 million (loss of 20.3 cps), compared to $443.8 million loss in FY23, driven by valuation changes and impairments.

• Underlying operating profit: $136.7 million (5.22 cps), down from $158.6 million (6.06 cps) in FY23.

• AFFO: $98.7 million (3.77 cps); distributions: 3.08 cps (81.8% payout ratio).

• NTA per unit: $0.61, down from $0.84 at FY23, mainly due to asset revaluations and impairments.

• Assets under management: $11 billion as of 30 June 2024.

Outlook and guidance

• Completion of the European platform sale anticipated in Q1 FY25, with further business separation and gearing to fall to 20%-28%.

• Distributions to continue quarterly, with 0.75 cps expected for September 2024 quarter; guidance will be assessed annually due to ongoing capital redeployment and market conditions.

• Focus on redeploying capital locally as an Australian capital-light fund manager, pursuing growth through platform acquisitions and new product launches.