Fonciere Inea (INEA) H1 2024 earnings summary

Executive summary

• Operational resilience and growth continued in H1 2024, with EBITDA up 20% and recurring net income per share up 6% year-over-year, despite inflation, rising interest rates, and a subdued investment market.

• Gross rental income rose 17% to €38.1m, driven by like-for-like growth and new project deliveries.

• No new investments or asset disposals occurred, but three new buildings were delivered, and a sale promise was signed for a Marseille office asset.

• The property portfolio showed limited value adjustment (-1.1% to -1.3%) over six months, confirming resilience.

• The company created two subsidiaries, SERENEA and SERENYFLEX, to expand renewable energy production on its real estate portfolio.

Financial highlights

• Gross rental income: €38.1m (+17% year-over-year); EBITDA: €23.4m (+20%).

• Net recurring income grew 6% to €13.4m; recurring EPS up 6% to €1.24.

• Net result was a loss of €5.8m, mainly due to a €18.3m negative fair value adjustment on properties.

• EPRA NDV per share fell 5.4% to €52.5 over six months; share price dropped 25% to €28.40.

• Dividend of €2.70 per share paid, yielding 7.1% on 2023 year-end price.

Outlook and guidance

• Fundamentals remain strong, supporting continued operational performance and portfolio resilience.

• Seven projects under construction, with three new assets to be delivered in H2 2024, expected to drive rental income growth.

• Ongoing construction pipeline to support future growth, with phased deliveries through end-2025.

• Strategic shift to include opportunistic asset rotation to address market discount to asset values.

• Potential positive impact from anticipated central bank rate cuts.