LOG Commercial Properties e Participações (LOGG3) Q3 2024 earnings summary

Executive summary

• Achieved record asset sales of R$1.5 billion in Q3 2024/YTD, involving five transactions across eight projects in six states, with 61% received upfront and gross margin of 38%, highlighting portfolio attractiveness and margins at or above NAV.

• Delivered 254,000 sqm of GLA YTD, with 134,000 sqm in Q3, maintaining a strong delivery pace and a historic low stabilized vacancy rate of 0.44%, well below the industry average of 9%.

• Strong demand across all regions, with gross absorption of 219,000 sqm in Q3 and 497,000 sqm accumulated in 2024.

• Share buybacks and cancellation of 14.3 million shares (14% of capital stock) at a >40% discount to NAV per share, enhancing shareholder value.

• Interim financial statements reviewed with no material modifications required, confirming compliance with Brazilian and international standards for the period ended September 30, 2024.

Financial highlights

• Net rental revenue in Q3 2024 was R$56.6 million, up 17.6% year-over-year, with consolidated net revenue for the nine months at R$163.8 million.

• EBITDA in Q3 2024 reached R$136.2 million (+77% YoY); 9M24 EBITDA was R$351.0 million (+74.1%).

• Net income in Q3 2024 was R$97.1 million, a 99.8% increase YoY; 9M24 net income was R$244.3 million (+100.8%).

• SG&A expenses reduced by 4% year-over-year.

• Asset management revenue grew 78% YoY in Q3 2024, with gross margin improvement to 69.7%.

Outlook and guidance

• Rental revenue CAGR projected between 20% and 25% through 2028, driven by expansion and asset recycling.

• Pre-lease levels expected to remain high, with at least 70% pre-leased for new deliveries and strong pipeline for 2025.

• Plans to recycle 200,000–250,000 sqm of GLA annually to finance growth.

• Targeting delivery of 2.5 million sqm of GLA between 2024 and 2028, with expected gross profit from new developments of R$1.8–2.0 billion.

• Optimism for continued strong demand, robust project delivery, and high yields into 2025.