Japan Real Estate Investment (8952) Q2 2024 earnings summary

Executive summary

• September 2023 DPU was JPY 12,000, up JPY 333 from March and JPY 500 above forecast; distributions increased for 19 consecutive periods.

• H1 revenue rose 3.4% to JPY 38,627 million and profit rose 5.7% to JPY 17,075 million versus the prior period.

• The 77-property portfolio had 95.0% occupancy at period-end, down 0.5 percentage points; occupancy was 96.5% excluding Harumi Front.

Financial highlights

• Operating profit was JPY 18,048 million, ordinary profit JPY 17,086 million, and profit per unit JPY 12,013 versus JPY 11,667 in the prior period.

• Results exceeded forecast by JPY 658 million for operating profit, JPY 706 million for ordinary profit, and JPY 705 million for profit; DPU beat forecast by JPY 500.

• Property-related revenue was JPY 34,497 million, property-related profit JPY 16,050 million, and NOI JPY 22,313 million.

• Harumi Front sale gains were JPY 4,131 million; property-related profit excluding sale gains was JPY 16,049 million.

Outlook and guidance

• March 2024 forecast: revenue JPY 41,300 million, operating profit JPY 19,530 million, ordinary profit JPY 18,500 million, profit JPY 17,850 million, and DPU JPY 11,700.

• September 2024 forecast: revenue JPY 34,980 million, operating profit JPY 14,280 million, ordinary profit JPY 13,180 million, profit JPY 14,170 million, and DPU JPY 11,300.

• March 2024 forecast includes a JPY 6,470 million Harumi Front gain; September 2024 distributions are expected to use JPY 2,910 million of retained earnings.

• Occupancy is forecast to reach 96.5% by March 2024; leasing plans balance occupancy improvement with profitability.