Plaza Retail REIT (PLZ.UN) Q2 2024 earnings summary

Executive summary

• Q2 2024 core EPS was $1.23, year-to-date EPS at $2.37, with 2024 guidance reaffirmed at $4.75-$5.05.

• Load growth trends are accelerating, with a 35% higher 10-year forecast, driving grid investment.

• Achieved record lease renewal spreads and same-asset NOI growth, with strong demand for essential and value retail properties.

• Portfolio includes 225 properties totaling 8.9 million square feet, mainly open-air centers with national tenants.

• Sustainability remains central, with 52% carbon-free power delivered in 2023 and a leading energy storage portfolio.

Financial highlights

• Q2 2024 core EPS grew by $0.22 year-over-year, driven by higher CPUC revenue and favorable regulatory decisions.

• Q2 2024 revenues rose 7.8% year-over-year to $30.7 million; six-month revenues up 6.0% to $60.2 million.

• Q2 NOI increased 4.2% to $18.4 million; six-month NOI up 5.8% to $36.4 million.

• Q2 profit dropped to $2.4 million from $13.0 million year-over-year, mainly due to a $7.3 million decrease in fair value of investment properties.

• SCE maintains the lowest system average rate among major California IOUs, currently at $0.267 per kWh, down 2% from the start of the year.

Outlook and guidance

• 2024 Core EPS guidance reaffirmed at $4.75-$5.05, with confidence in achieving the range.

• Management expects continued strong retailer demand and ongoing progress in development programs.

• Projected system average rate growth of 2.6% through 2028 incorporates GRC increases and full recovery of legacy wildfire costs.

• Equity needs for 2025-2028 are only $400 million, among the lowest in the industry.

• Forward-looking statements caution about risks from economic, retail, and capital market conditions, including interest rates and inflation.