Eurocommercial Properties (ECMPA) H2 2023 earnings summary

Executive summary

• FY 2023 retail sales rose 5.8% and footfall 3.4%; like-for-like rental growth reached 9.7%.

• Direct investment result rose to €123.1m, or €2.32 per share, from €119.5m, or €2.28 per share; proposed dividend increased 6.25% to €1.70 per share.

• Portfolio values fell 2.2% as higher yields and discount rates outweighed higher net operating income; EPRA net initial yield increased to 5.8%.

Financial highlights

• IFRS revenue was €256.9m; rental income was €215.3m and net property income was €177.6m.

• Proportional gross rental income rose 8.4% to €227.1m and proportional net property income rose 7.8% to €188.8m.

• EPRA earnings increased to €119.8m, or €2.26 per share, from €114.7m, or €2.17 per share.

• IFRS result attributable to owners was a €26.9m loss, or €0.51 per share; indirect investment result was negative €150.0m, mainly reflecting property and derivative revaluations.

• Net interest expenses increased to €47.0m from €38.8m; 80% hedging limited the increase.

Outlook and guidance

• FY 2024 direct investment result guidance is €2.30–€2.40 per share, conditional on no major deterioration in the macro environment.

• Estimated portfolio rental indexation for 2024 is 3.3%, based on published 2023 indices.

• Country outlooks anticipate continued tenant demand and stable or improving retail activity; French leasing momentum may benefit from limited new retail supply.