Public Property Invest (PUBLI) Q3 2024 earnings summary

Executive summary

• Rental income increased by 19% year-over-year to NOK 173 million in Q3 2024, with net operating income at NOK 157 million and net income from property management at NOK 81 million.

• Net profit for Q3 was NOK 17 million, marking the first positive quarterly profit in over two years and a turnaround from a NOK 305 million loss in Q3 2023.

• High occupancy rate of 97% maintained, with 92% of rental income from public sector tenants and WAULT of 4.6 years.

• André Gaden appointed as CEO, with Ilija Batljan transitioning to Chief Investment Officer.

• Acquisition of Jærveien 33 in Sandnes for NOK 139 million, fully let to Sandnes Municipality, and completion of first post-listing property acquisition.

Financial highlights

• Rental income for Q3 2024: NOK 173 million (up from NOK 145 million in Q3 2023); net operating income: NOK 157 million (up from NOK 129 million); net income from property management: NOK 81 million (up from NOK 56 million).

• Net profit for Q3: NOK 17 million (Q3 2023: loss of NOK 285 million); YTD: loss of NOK 207 million due to value changes and IPO costs.

• EPRA NRV per share increased to NOK 26.2 at the end of Q3.

• NOI margin stood at 91% for the quarter; 89.9% for the first nine months.

• Partial repayment of two bonds totaling NOK 664 million reduced interest-bearing debt to NOK 4.9 billion.

Outlook and guidance

• Normalized annual run rate expected at NOK 696 million rental income and NOK 573 million EBITDA.

• Focus on maximizing organic growth, value-accretive transactions, and reducing financing costs, with a strong pipeline of deals.

• Targeting investment grade rating to further lower financing costs.

• Board to announce a dividend proposal for quarterly payments in the year-end report.

• Market fundamentals suggest the direct property market is near the bottom of the cycle, with opportunities for consolidation.