Invincible Investment (8963) Q2 2024 earnings summary

Executive summary

• Jan–Jun 2024 revenue rose 12.3% from the preceding fiscal period to JPY 21,136m; net income increased 16.9% to JPY 12,901m and DPU was JPY 1,917.

• Portfolio NOI rose 35.2% YoY to JPY 19,634m, driven mainly by hotels; appraisal value for 133 properties reached JPY 657,902m.

• July acquisitions of 12 hotels for JPY 104,420m expanded the hotel portfolio to 104 hotels and JPY 612.3bn in assets.

Financial highlights

• Operating income was JPY 14,635m, up 16.3% from the preceding period; NOI was JPY 19,634m, up 14.1%, on the same period-comparison basis.

• Operating revenue increased JPY 2,316m, or 12.3%, from the preceding period; real estate rental income was JPY 16,696m and management contract revenue was JPY 2,123m.

• Cash from operations was JPY 20,326m; investing and financing cash outflows were JPY 2,754m and JPY 9,902m, respectively; period-end cash was JPY 42,561m.

• At June 30, 2024, total assets were JPY 569,017m, net assets JPY 292,767m and interest-bearing debt JPY 271,154m.

Outlook and guidance

• Dec 2024 forecast: revenue JPY 23,720m, net income JPY 13,718m and DPU JPY 1,797; each forecast DPU increased JPY 8 from the July 18 offering forecast.

• Jun 2025 forecast: revenue JPY 24,247m, net income JPY 14,467m and DPU JPY 1,895; DPU is 1.8% above normalized Jun 2024 DPU of JPY 1,861.

• Forecasts assume 145 properties plus one TMK preferred equity interest, 7,646,453 units and JPY 321,497m of interest-bearing liabilities through Jun 2025.

• Domestic hotel demand assumptions remain conservative, with inbound growth expected and a temporary Osaka demand boost from Expo 2025.