Delta Property Fund (DLT) H2 2024 earnings summary

Executive summary

• Turnaround strategy is gaining momentum despite economic headwinds, high interest rates, and political developments.

• Portfolio consists of 89 properties, reducing to 86 post year-end due to strategic disposals, with a focus on the office sector and sovereign tenants.

• Emphasis on lease renewals, property disposals, and debt reduction, supported by stakeholder engagement and cost management.

• Service quality and property investment maintained despite tight budgets; facilities management and capex prioritized for tenantability.

• Portfolio optimization and stakeholder engagement have improved lease expiry profiles and reduced vacancies.

Financial highlights

• Profit from operations rose to R399.2 million, a turnaround from a R226.1 million loss in the prior year.

• Loss for the period reduced by 89.6% to R77.6 million from R749.7 million.

• Portfolio fair value loss decreased to R180.1 million from R833.6 million.

• SA REIT FFO per share increased 68.5% to 18.7c.

• Overall debt reduced by 48.1% to R183.1 million.

Outlook and guidance

• Continued focus on asset disposals, cost containment, and lease renewals to meet covenant levels and return to distributions.

• Targeting ZAR 2.3 billion in disposals, with at least 50% unlocking significant interest savings and potential for resuming distributions.

• Targeting a post-disposal LTV of 45.0%, debt of R2.0bn, and ICR of 2.0.

• Exploring asset repurposing, including office-to-residential conversions.

• Plans to evolve into a smaller, more sustainable REIT over the medium term.