Kennedy-Wilson (KW) Q2 2024 earnings summary

Executive summary

• Reported a GAAP net loss to common shareholders of $59.1 million ($0.43/share) in Q2 2024, compared to net income of $39.0 million in Q2 2023, primarily due to lower gains on real estate sales and fair value losses.

• Adjusted EBITDA for Q2 2024 was $79.3 million, down from $195.1 million in Q2 2023; YTD Adjusted EBITDA was $282.5 million, nearly flat year-over-year.

• Investment management fees grew 37% in Q2 2024 and 57% YTD, driven by debt platform expansion and higher AUM; fee-bearing capital reached a record $8.7 billion.

• Deployed $2 billion of new capital YTD, including $1.7 billion in credit platform construction loans and $300 million in multifamily and industrial acquisitions.

• Five multifamily communities stabilized in Q2, adding $16 million to estimated annual NOI; lease-up and development portfolio expected to add $75 million in incremental NOI at stabilization by year-end 2026.

Financial highlights

• Q2 2024 total revenue was $132.0 million, down from $146.5 million in Q2 2023, mainly due to asset sales and deconsolidations.

• Adjusted Net Loss for Q2 2024 was $16.8 million, compared to Adjusted Net Income of $86.0 million in Q2 2023.

• Estimated annual NOI from stabilized real estate portfolio is $485 million as of June 30, 2024.

• Cash and lines of credit total $695 million, with 98% of debt fixed or hedged and an effective interest rate of 4.6%.

• Share repurchases totaled 1.7 million shares YTD at an average price of $8.70, with $110 million remaining on the $500 million authorization.

Outlook and guidance

• Management is optimistic about the disposition program, ability to raise third-party capital, and portfolio valuations due to declining interest rates.

• Lease-up and development portfolio expected to contribute an additional $75 million in NOI at stabilization by year-end 2026.

• Focus remains on growing investment management, credit platform, and logistics, with continued capital raising efforts in Asia, Canada, and Europe.

• Disposition program to further shift portfolio toward U.S. multifamily and simplify geographic focus to U.S., U.K., and Ireland.

• 14% growth in stabilized affordable housing units projected by year-end 2025.