DEMIRE Deutsche Mittelstand Real Estate (DMRE) Q1 2024 earnings summary

Executive summary

• Achieved successful bond restructuring, with maturity extension to 2027 and strong shareholder support, enhancing financial stability.

• Rental income and FFO I declined year-over-year due to asset/property disposals, with 2024 guidance reflecting a smaller portfolio.

• Portfolio size reduced after disposals in Leipzig (LogPark) and Ulm, impacting annualised contractual rents and rental income.

• EPRA vacancy increased to 15.5% as of June 2024, with WALT at 4.3–4.4 years; indexation adjustments continue to benefit most properties.

• Focus remains on opportunistic disposals of non-strategic and mature assets.

Financial highlights

• FY 2023 rental income at €78.5m (down 3%); H1 2024 at €35.5m (down 13%); Q1 2024 at €18.6m (down 10.3%), mainly due to asset sales.

• FFO I after taxes and before minorities for FY 2023 at €36.7m (-12%); H1 2024 at €15.5m (-19.7%); Q1 2024 at €7.9m (-14.3%).

• FY 2023 EBIT at -€187.9m, impacted by negative fair value adjustments; H1 2024 EBIT at -€14.1m; Q1 2024 EBIT at €4.8m due to fewer impairments.

• Cash and cash equivalents increased to €180.6m as of March 2024, up from €119.9m at year-end 2023.

• Net asset value per share (basic) was €3.23 as of March 2024, nearly unchanged from year-end 2023.

Outlook and guidance

• FY 2024 rental income expected between €64m and €66m, reflecting reduced portfolio size.

• FFO I (after taxes, before minorities) for FY 2024 expected to be significantly lower than FY 2023.

• The company expects to remain in line with its plans for the year, despite a challenging market environment.