Eik fasteignafélag (EIK) Q2 2024 earnings summary

Executive summary

• Rental income for 1H 2024 was ISK 4,809 million, with total operating income at ISK 5,527 million, slightly below management expectations due to weaker performance at Hotel 1919 and higher impairment of receivables.

• Net profit for the period was ISK 2,798 million, with earnings per share at ISK 0.82.

• Asset value increased to ISK 147,753 million, with investment properties valued at ISK 138,297 million at the end of June 2024.

• The company completed significant refinancing, shifting to indexed loans and issuing new bonds, with over 92% of loans now indexed.

Financial highlights

• Operating profit before fair value changes and depreciation was ISK 3,519 million, down from ISK 3,827 million year-over-year.

• Net operating income (NOI) margin was 69.9%, compared to 78.4% in 1H 2023, with the prior year including one-off positive items.

• Cash flow from operations was ISK 1,762 million, down from ISK 2,147 million in the same period last year.

• Fair value changes in investment properties contributed ISK 4,084 million positively.

• Dividend of ISK 2,540 million was paid to shareholders in April 2024.

Outlook and guidance

• EBITDA for 2024 is expected in the range of ISK 7,280–7,580 million, at the lower end of the original guidance, mainly due to lower expected results from Hotel 1919.

• Cash flow from operations, the basis for dividends, is projected to exceed last year.