In This Article:
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FFO Growth: Increased organically by close to 7%.
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Overall Occupancy: Currently at 95.6%, with improvements across all classes.
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Dividend: Proposed distribution of EUR 0.18 per share, payable on December 10.
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Debt Rating: Upgraded by Moody's to BAA1 and by S&P to BBB+.
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Large Leases Signed: Secured more than EUR 500 million in backlog rents.
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Like-for-Like Rent Growth: Offices 2.5%, Logistics 3.2%, Shopping Centers 2.3%.
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Release Spread: Offices 1.7%, Logistics 4.6%, Shopping Centers 5.5%.
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FFO Guidance: Minimum of EUR 0.54 with the new share count.
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Dividend Guidance: Around EUR 0.40 with the new share count.
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Disposals: Expected to be around EUR 30 million.
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Relief Aid: EUR 1 million provided for flood victims in Spain.
Release Date: November 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Merlin Properties SOCIMI SA (MRPRF) reported an organic FFO increase of close to 7%, indicating strong financial performance.
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The overall occupancy rate improved to 95.6%, with growth across all asset classes.
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The company secured large leases, including a 15-megawatt lease in Barcelona, expected to boost income by EUR 23 million next year.
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Merlin Properties announced a dividend of EUR 0.18 per share, payable on December 10, reflecting confidence in its financial health.
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Moody's upgraded the company's debt rating to BAA1, following an upgrade by S&P to BBB+, highlighting improved creditworthiness.
Negative Points
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The potential elimination of the SOCIMI regime has created uncertainty, impacting the company's stock price negatively.
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The proposed tax changes could impact FFO by approximately 8.5%, necessitating strategic adjustments.
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The company faces challenges in sheltering income from double taxation, particularly from Portuguese sources.
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The recent capital increase led to a dilution effect, worsening FFO and NPA metrics by 11% and 7%, respectively.
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Flooding in Spain caused minor operational disruptions, although no significant asset damage was reported.
Q & A Highlights
Q: Could you provide more color on how you reach the 8.5% impact to FFO? And how do the new data center contracts compare to initial expectations? A: The 8.5% impact on FFO was calculated through a complex simulation involving consolidation and subsidiaries versus the mother company. This includes accounting and tax depreciation, financial expenses, and tax loss carryforwards from the Metrovacesa merger. Regarding data centers, the lease in Barcelona exceeded initial rent expectations, and future leases are expected to continue this trend. However, specific conditions cannot be disclosed. - Ismael Clemente Orrego, CEO