MERLIN Properties SOCIMI (MRL) H1 2024 earnings summary

Executive summary

• Strong operating performance in H1/6M 2024, with like-for-like rental growth up to 2.8%, high occupancy across all asset divisions, and positive release spreads, especially in logistics and shopping centers.

• S&P upgraded credit rating to BBB+ due to lower leverage and improved cash flow.

• Over €90m in non-core disposals at a premium to GAV, with significant progress in logistics and digital infrastructure development.

• Data center segment delivered a 13.3% valuation uplift, with 90% of Phase I capacity booked and major expansion underway.

• Net earnings were €132.8m, a turnaround from a €47.5m loss in 6M23, driven by strong operating performance and positive fair value adjustments.

Financial highlights

• H1/6M24 gross rents rose 4.4% year-over-year to €248.2m; net rents up 3.7% to €208.6m.

• EBITDA increased 3.7% to €188.4m; FFO up 0.3% to €147.8m; AFFO up 1.2% to €142.5m.

• EPRA NTA per share at €15.11, down 1.6% YoY; shareholder return for 6M24 was 1.8%.

• EPS improved to €0.28 from a loss of €0.10 in 6M23; FFO per share stable at €0.31.

• Incentives reduced to 5.5% of gross rents from 6.5% last year.

Outlook and guidance

• FFO guidance for 2024 confirmed at €0.59 per share; dividend recommendation of €0.44 per share for FY24, with interim payment expected before year-end.

• No major debt maturities until November 2026 after proactive refinancing.

• Occupancy expected to improve further by year-end, with continued positive rental growth and robust leasing activity.

• Data centers pipeline advancing, with significant capex planned for expansion and new licenses secured.