VGP (VGP) H1 2024 earnings summary

Executive summary

• Pre-tax profit reached EUR 154.6 million, up 218% year-over-year, with net profit at EUR 141.5 million, a 308% increase versus H1 2023, driven by rental and renewable energy income, management fees, and valuation gains.

• Signed and renewed lease agreements totaled EUR 45.6 million, with record EUR 28.8 million in new leases, boosting annualized rental income to EUR 384.7 million (+17.3% y.o.y.).

• Portfolio occupancy remains above 98.9%, with a weighted average lease term of 7.8 years.

• 835,000 sq m under construction, with over 70% pre-let, and a land bank of 8.5 million sq m supporting future growth.

• Strong cash position with EUR 625 million available, EUR 400 million undrawn credit facilities, and net cash recycling of EUR 662.1 million from JV transactions and disposals.

Financial highlights

• Net rental and renewable energy income grew 20.2% year-over-year, reaching EUR 91.6 million on a look-through basis.

• Gross renewables income rose 31% to EUR 3.8 million, driven by a 115% YoY increase in photovoltaic capacity to 143.3 MWp.

• EBITDA increased by 60% to EUR 182 million, with all business segments contributing.

• Gearing ratio reduced from 40.3% to 32.7%; proportional LTV dropped from 53% to 48.6%.

• Investment properties (own portfolio) grew to EUR 1,739 million; total capex for H1 2024 was EUR 223.3 million.

Outlook and guidance

• Confident in exceeding EUR 400 million of contracted annualized rental income by year-end, with a robust pipeline and over 70% pre-let ratio.

• Planned deliveries for 2024 are 600,000–700,000 sq m, with a normalized annual run rate of 400,000–600,000 sq m.

• Land bank of 8.5 million sq m supports future growth, with over 3.7 million sq m of development potential.

• Continued focus on technical competence and complex, long-term projects, with robust demand expected to persist.

• Increased investor activity in industrial real estate anticipated to stabilize property valuations.