Warehouses De Pauw (WDP) Q3 2024 earnings summary

Executive summary

• Earnings per share are on track for €1.47 in 2024, up 5% year-over-year, with underlying EPRA EPS up 8% to €1.09 for 9M 2024, excluding a one-off in 2023.

• €600 million in new investments at a 7% yield were added in 2023/9M 2024, mainly in Western Europe, supporting continued profitable growth.

• Occupancy rate remains high at 98% (97.8% as of 30 September 2024), with tenant retention expected to dip from 90% to 80% in 2025.

• Balance sheet is strong and liquid, with loan-to-value at 36.6% and net debt/EBITDA (adj.) at 6.9x.

• Market conditions are less buoyant short-term, but structural demand for logistics space remains healthy.

Financial highlights

• Net rental income rose 14.3% year-over-year to €284.7m; property result up 13% to €300.3m.

• EPRA Earnings increased 11.5% to €242.7m; operating margin at 90%.

• Net result (IFRS) group share reached €306.3m, a turnaround from €48.7m in 9M 2023.

• Portfolio fair value at €7.4bn, with a gross initial yield of 6.2% and EPRA net initial yield of 5.4%.

• EPRA NTA per share at €20.5 (+1.9% ytd); share price at €23.9 (16.6% premium to EPRA NTA).

Outlook and guidance

• 2024 EPRA EPS guidance at €1.47 (+5% y/y); DPS expected at €1.18 (+5% y/y), payout ratio 80%.

• #BLEND2027 plan targets €1.70 EPRA EPS and €1.36 DPS by 2027, with €1.5bn in investments and 6% CAGR.

• Guidance assumes 98% occupancy, organic rental growth (~3%), and loan-to-value below 40%.

• Final year of Dutch REIT status in 2024; abolishment to impact EPRA EPS by -€0.05/share from 2025.

• No material sensitivity to potential declines in market rents for 2027 targets.