DREAM Unlimited (DRM) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw a major turnaround, with net income of $64.2M–$59.5M, reversing prior losses, driven by strong land sales in Western Canada and carried interest from the Dream U.S. Industrial Fund.

• Standalone FFO per share rose to $0.55 in Q2 2024 from $0.12 in Q2 2023, reflecting higher net operating income and improved yields.

• Assets under management reached $25B as of June 30, 2024, up from $24B at year-end 2023 and up 44% over 18 months.

• Residential rental portfolio maintained high occupancy, with new developments in lease-up and construction started on Dream LeBreton in Ottawa.

• Diversified business model and focus on recurring income and Western Canada expected to generate near- and long-term benefits.

Financial highlights

• Q2 2024 revenue was $178.3M, up from $74.4M in Q2 2023; net margin was $61.0M (34.2%), up from $14.5M (19.5%).

• Standalone FFO for Q2 2024 was $23.3M, up from $5.2M in Q2 2023; consolidated FFO was $45.5M, up from $3.6M.

• Available liquidity at quarter-end was $280.8M–$281M.

• Book value per share stood at $29.58; current share price at $22.58 as of August 12, 2024.

• Dividends paid in Q2 2024 totaled $6.3M, up from $5.4M in Q2 2023.

Outlook and guidance

• $133.5M–$134M in land commitments for sale in the second half of 2024 and $51.7M in 2025, positioning for one of the best years in Western Canada in nearly a decade.

• Expect to add nearly 1,700–2,286 residential rental units to the portfolio through 2026, with 437 units commencing occupancy in 2024.

• Asset management is expected to grow through new investment opportunities and increased institutional interest.

• Progressing on Toronto developments, with meaningful updates expected in the next three to six months.

• Identified as a Frequent Builder under CMHC’s new program, supporting future affordable rental development.