DEMIRE Deutsche Mittelstand Real Estate (DMRE) Q2 2024 earnings summary

Executive summary

• Bond restructuring secured with maturity extended to end of 2027, providing financial stability and over 90% bondholder consent.

• Rental income and FFO I declined due to asset disposals and market headwinds; FY 2023 rental income €78.5m (down 3%), H1 2024 €35.5m (down 13.1%).

• Portfolio size reduced through disposals, notably LogPark Leipzig and Ulm, impacting rental income and vacancy rates.

• Limes portfolio insolvency led to deconsolidation and significant write-downs.

• Letting performance improved by 37.4% year-over-year to 25,000 m²; sustainability efforts reduced emissions by 39%.

Financial highlights

• FY 2023 rental income €78.5m (down 3% y-o-y); H1 2024 €35.5m (down 13% y-o-y); FFO I after taxes €36.7m (FY 2023), €15.5m (H1 2024, down 19.7%).

• FY 2023 EBIT at -€187.9m; H1 2024 EBIT at -€14.1m; H1 2024 net loss €-27.6m.

• Cash and cash equivalents: €167.1m (June 2024); total assets: €1,263.0m (June 2024).

• Net-LTV at 55.6% as of June 2024, expected to fall to ~50% post-restructuring; average cost of debt at 1.78%, expected to rise to ~3.5%.

• NAV per share (basic): €3.02 (June 2024); EPRA NAV per share (diluted): €3.01.

Outlook and guidance

• FY 2024 rental income expected between €64m–€66m, with FFO I significantly lower than FY 2023 due to reduced portfolio and bond refinancing.

• Further focus on opportunistic disposals of non-strategic and mature assets.