Diös Fastigheter (DIOS) Q2 2024 earnings summary

Executive summary

• Revenue increased by 2% to SEK 634 million in Q2 2024, with operating surplus up 3% to SEK 446 million and property management income up 9% to SEK 240 million; economic occupancy rate was 91%, slightly down due to divestments.

• Like-for-like rental growth reached 6.3%, driven by CPI indexation and positive net letting in 20 of the last 22 quarters.

• Asset disposals, totaling SEK 1.4 billion year-to-date and SEK 507 million in Q2, focused on non-core assets to strengthen the balance sheet.

• The Swedish real estate market is improving, with increased investor interest, declining inflation, and expectations of further rate cuts; green industry transition in Northern Sweden is driving long-term investment and demand.

• CEO transition announced: David Carlsson to succeed Knut Rost as CEO from January 2025.

Financial highlights

• Total income for Q2 2024 was SEK 634 million, up from SEK 620 million in Q2 2023; operating surplus increased to SEK 446 million from SEK 433 million.

• Like-for-like rental growth reached 6.3%, driven by CPI indexation and rent reversions.

• Profit after tax for Q2 2024 was SEK 118 million, up from SEK 82 million in Q2 2023; earnings per share improved to SEK 0.83 from SEK 0.58.

• Unrealized value changes were positive by SEK 10 million; realized value changes were -SEK 34 million; derivative value changes were SEK -101 million.

• Surplus ratio remained stable at 71%; equity ratio at 36.6%; loan-to-value ratio at 53.4%.

Outlook and guidance

• Management expects continued rental growth, improved occupancy, and higher rent levels, especially in cities benefiting from the green transition.

• Targeting loan-to-value below 50% and committed to keeping interest coverage ratio ≥2.0; refinancing risk is low for the remainder of 2024.

• Plans to announce major projects, focusing more on refurbishments than new builds, and aims to certify at least 55% of properties as green by 2026.