Deutsche Konsum REIT (DKG) H2 2024 earnings summary

Executive summary

• Rental income declined 2.9% year-over-year to EUR 77.4 million, mainly due to property sales and tenant insolvency, while FFO fell 15.6% to EUR 28.0 million, or EUR 0.80 per share, impacted by higher financing costs.

• Debt burden reduced by EUR 88.6 million (14% year-over-year) through asset sales and refinancing, improving LTV to 57.2%.

• Portfolio consists of 167 properties with a fair value of EUR 886.2 million and annualized rent of EUR 69.7 million; 66% of rent from non-cyclical tenants and 85% CPI-linked.

• Vacancy rate increased to 14% due to asset sales and major tenant bankruptcy; revitalization and lease-up efforts are underway.

• Management focus for 2024/2025 is on optimizing financial structure, refinancing expiring liabilities, and advancing long-term strategy.

Financial highlights

• Net rental income slightly decreased to EUR 48.0 million; EBIT improved to EUR 37.1 million from a prior loss, and net income turned positive at EUR 2.0 million.

• FFO per share (undiluted) at EUR 0.80; aFFO per share up 40.1% year-over-year to EUR 0.44 due to lower capex.

• EPRA NTA per share at EUR 7.55; NAV per share increased to EUR 10.23.

• Portfolio devaluation of 1.7%, mainly from a single asset with high vacancy.

• Headline earnings per share (HEPS) undiluted at EUR 1.01, up from -EUR 1.92.

Outlook and guidance

• FFO guidance for FY 2023/2024 confirmed at EUR 28.0 million, within the EUR 27–29 million range.

• Rental income for 2024/2025 expected to decline to EUR 66–71 million due to selective property sales.

• Plans to refinance and repay EUR 85.9 million in bonds maturing September 2025; further asset sales and lease-up of vacant space targeted.

• CapEx for lease-up of vacant space expected to total about EUR 2 million over two years.

• Operational focus on vacancy reduction, efficient portfolio management, and cost optimization.