Pandox (PNDX) Q1 2017 earnings summary

Executive summary

• Q1 cash earnings rose 23%; solid hotel demand, acquisitions and improving Brussels performance supported growth, with a positive Easter calendar effect.

• Like-for-like NOI increased 8% in property management and 14% in operating activities; Easter contributed an estimated 3–4 percentage points to property-management growth.

Financial highlights

• Rental income was SEK 474m, up 23%; property-management NOI was SEK 396m, up 24%.

• Operating-activities NOI was SEK 82m, up 52%; like-for-like revenue increased 4% and NOI increased 14%.

• Cash earnings were SEK 290m, up 23%; financial net was negative SEK 130m, reflecting a larger loan portfolio, longer average fixed-interest period and facility fees.

• Total NOI increased SEK 104m, or 28%, with acquisitions, underlying demand and Easter supporting growth; divestments and renovations were offsets.

Outlook and guidance

• Market conditions were described as stronger than previously communicated; quality assets were expected to capture a fair share of market growth in rents and operated-hotel revenue.

• SEK 900m of portfolio investments were planned over the next three years, supporting growth alongside market expansion.

• Current-tax total for FY17 was expected to follow the stated run rate, driven by Brussels profitability and German operations with a 10–13% tax burden.

• Montreal room renovations were to pause in Q2 and resume late in 2017 and early 2018; Berlin renovations typically concentrate in Q1.