LOG Commercial Properties e Participações (LOGG3) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly production of up to 115,000 sqm GLA, supporting annualized production of 500,000 sqm GLA and strong operational momentum.

• Net profit reached R$91.9 million in Q2 2024, more than doubling year-over-year, driven by asset development, operational efficiency, and fair value gains.

• Delivered over 63,400 sqm GLA in Q2 2024 with a 79% pre-leasing rate and yield on cost near 13%.

• Asset sales in 2024 totaled up to R$764.1 million with gross margins of 41%-47%, supporting asset recycling strategy.

• Cancelled 9.5 million shares (9.3% of capital stock) and announced new buyback programs, reflecting confidence in share appreciation potential.

Financial highlights

• Net revenue for Q2 2024 was R$53.4 million, down year-over-year due to asset sales; excluding sales, gross revenue would have grown 31%.

• EBITDA reached R$141 million, doubling year-over-year, with a margin of 263.8%; net income was R$92 million, up 109% from the prior year.

• Operating expenses improved by up to 39.3% year-over-year, driven by lower tax impacts from asset sales and G&A efficiency.

• Adjusted net debt reduced by 24.2% YoY to R$531.2 million; leverage improved to 1.49x.

• Net LTV (adjusted) decreased to 11.9%; effective cost of debt reduced to CDI + 1.7%.

Outlook and guidance

• Expects robust revenue and FFO growth from Q3 onward, driven by additional GLA and strong market demand.

• Projects annualized lease revenue growth of 20–25% CAGR through 2028, with expected 2.3x–2.7x increase in annualized revenue.

• LOG 2 Million Plan deliveries to begin in 2025 and conclude in 2028, targeting 70% net portfolio growth.

• Plans to deliver 2.5 million sqm of GLA between 2024 and 2028, recycling about 200,000 sqm of GLA per year to finance expansion.

• Capex for 2024 expected between R$800 million and R$900 million.