DEMIRE Deutsche Mittelstand Real Estate (DMRE) Q3 2024 earnings summary

Executive summary

• Rental income and FFO I declined year-over-year due to portfolio reductions, asset disposals, and deconsolidation, but letting performance more than doubled to over 60,000 sqm despite a challenging market.

• Annualized contractual rent as of September 2024 is €57.6 million, down from year-end 2023 due to asset disposals and deconsolidation.

• Guidance for FY 2024 confirmed, with lower rental income (€64–66 million) and FFO I expected, and further asset disposals planned.

• Bond restructuring is nearing completion, reducing refinancing risk and extending main financing to end of 2027.

• Organizational and personnel changes have been implemented to support strategic goals.

Financial highlights

• Rental income for the first nine months of 2024 was €50.6 million, down 15.4% year-over-year due to portfolio reduction and deconsolidation.

• FFO I reached €23.0 million, a 17.5% decrease compared to the prior year.

• EBIT improved to €-13.8 million from €-64.6 million in the prior year, mainly due to lower property devaluations.

• Net LTV decreased to 52.3% from 57.7% at year-end 2023, with further reduction expected post-bond restructuring.

• Cash and cash equivalents increased to €164.5 million, up 37.1% from FY 2023.

Outlook and guidance

• Rental income for 2024 is expected between €64 million and €66 million, with FFO I significantly lower than 2023.

• Net LTV anticipated to fall below 50% after bond restructuring.

• Additional asset disposals are planned, targeting a total volume of €50 million by end of 2025.

• Company expects to comply with all bond covenants after the 2019/24 bond extension.

• Average cost of debt expected to rise to approximately 3.5% following bond amendments.