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 reflecting strong operational execution.

• Delivered over 64,000 sqm GLA in three projects with a 79% pre-lease rate and yield on cost near 13%.

• Maintained stabilized vacancy rate below 2% for the sixth consecutive quarter, with sector concentration below 17% and a diversified customer base.

• Asset recycling strategy resulted in BRL 764 million in sales this quarter, with gross margins of 41%-47% and total sales of BRL 2.4 billion over 24 months.

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

Financial highlights

• Net revenue for the quarter was BRL 53.4 million, down year-over-year due to asset sales; excluding sales, gross revenue would have grown 31%.

• EBITDA reached BRL 141 million, doubling year-over-year; net income was BRL 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.

• Net debt (adjusted for receivables) was BRL 531 million, down 24% year-over-year; adjusted 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.

• Anticipates annual revenue growth of 20-25% during the 2024-2028 cycle, with plans to deliver 2.5 million sqm GLA and recycle about 200,000 sqm per year.

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

• Capex for 2024 expected between BRL 800 million and BRL 900 million.