HBR Realty Empreendimentos Imobiliários (HBRE3) Q4 2024 earnings summary

Executive summary

• Net revenue reached BRL 41 million in Q4 2024, up 11.4% year-on-year, with annual net revenue surpassing BRL 150 million, driven by asset maturation and reduced tenant discounts.

• Portfolio expanded to 48 operational assets (240,674 sqm GLA), with new openings including the W Hotel São Paulo and ComVem W.

• Hotel revenue increased 25% versus Q4 2023, and +Box rental revenue rose 41.2% with high occupancy.

• Asset fair value appreciated by over BRL 110 million year-on-year, with investment properties totaling BRL 3.6 billion.

• Board of directors restructured to support the next growth cycle.

Financial highlights

• IFRS net revenue for Q4 2024 was BRL 43.98 million (+12.7% YoY); annual IFRS net revenue reached BRL 162.98 million (+6.3%).

• NOI for Q4 was BRL 34.5 million (+11.1% YoY); annual NOI was BRL 130 million (+4.6%).

• Adjusted EBITDA for 2024 was BRL 84.5 million (+6.2% YoY), with a margin of 51.9%.

• Net income for 2024 was BRL 47.7 million, down from BRL 131.8 million in 2023, mainly due to lower fair value gains.

• Financial expenses rose 33.9% to BRL 129.6 million in 2024, reflecting increased debt and higher interest costs.

Outlook and guidance

• Multiple projects in São Paulo and other regions are scheduled for delivery from 2025 to 2029, with a total GLA pipeline of 278,301 sqm.

• CapEx for new projects is estimated at BRL 1.0 billion, with BRL 824 million yet to be incurred.

• Asset recycling and sales expected to progress, with Bradesco BBI engaged as strategic advisor.

• Positive outlook for Patteo Urupema to reach break-even in 2025.