Heimar (HEIMAR) Q3 2024 earnings summary

Executive summary

• Rental income grew 7.8% year-over-year in the first nine months of 2024, outpacing inflation by 1.1%.

• EBITDA reached ISK 7.4 billion, up 7.5% year-over-year, with a 72% EBITDA margin on rental income.

• Profit after tax was ISK 5.6 billion, and occupancy rates remained high at 97%.

• Strategic focus on core areas, with 71% of rental income from these locations and continued divestment of non-core assets.

• Share buyback programs and asset sales above book value support capital allocation strategy.

Financial highlights

• Consolidated operating revenue for the first nine months of 2024 was ISK 10,922 million, up from ISK 10,145 million year-over-year.

• Total assets at period end were ISK 204 billion, with investment properties at ISK 190 billion.

• Equity ratio stood at 31%, and leverage ratio at 63.5%.

• Net finance costs decreased by 11.4% year-over-year.

• Return on equity was 13%, and return on investment properties was 5.4%.

Outlook and guidance

• Declining interest rates are expected to positively impact property valuations and reduce interest payments.

• 94% of rental income is indexed, mitigating risk from inflation.

• Limited refinancing needs in the coming years, with no refinancing required in 2024.

• Continued focus on sustainable property management and increasing the proportion of green-certified buildings.

• Demand for rental properties remains stable; property taxes rose 2% year-over-year.