Entra (ENTRA) Q2 2024 earnings summary

Executive summary

• Rental income was stable at NOK 853 million in Q2 2024, with like-for-like growth offset by divestments and lower occupancy.

• Net income from property management reached NOK 348 million, up 7% from Q1 but down 1% year-over-year due to higher interest costs.

• Profit before tax was NOK 344 million, rebounding from a NOK -1,739 million loss in Q2 2023, driven by asset sales and positive value changes.

• Major divestments included the Trondheim portfolio and Hotel Savoy, reducing debt by NOK 6.2 billion and improving leverage by four percentage points.

• Key events included the start of three major refurbishment projects and a positive net letting of NOK 12 million, with new and renewed leases totaling NOK 176 million and an occupancy rate of 94.8%.

Financial highlights

• Rental income for H1 2024 was NOK 1,730 million, nearly flat year-over-year, with Q2 at NOK 853 million.

• Net income from property management for H1 2024 was NOK 673 million, down from NOK 741 million in H1 2023.

• Net value changes totaled NOK 2 million in Q2 2024, with a NOK 397 million gain on the Trondheim portfolio sale.

• Profit after tax was NOK 345 million in Q2 2024.

• Cash earnings per share for Q2 standalone was 7.6; NRV per share at NOK 158.

Outlook and guidance

• Rental income is expected to decrease by 9% in Q3 due to divestments.

• Norwegian economy outlook is positive, with expected GDP and employment growth, and interest rates believed to have peaked.

• Market rents are projected to grow over 3% annually for the next three years, with prime yields expected to decline slightly from 2025.

• Moody’s affirmed Baa3 rating with stable outlook in June.

• Office demand in Oslo is robust, with limited new supply and continued rental growth expected.