EastGroup Properties Inc (EGP, Financial) released its Q3 2023 earnings report on October 24, 2023, showcasing robust financial performance and operational resilience. The company's strategic investments and strong market presence have contributed to its impressive results, despite the ongoing economic uncertainties.
Financial Highlights
EGP reported a net income attributable to common stockholders of $1.07 per diluted share for Q3 2023, a significant increase from $0.87 per diluted share in Q3 2022. The company's FFO per share for Q3 2023 was $2.00, marking a 13% increase from $1.77 per share in Q3 2022. The FFO excluding gain on involuntary conversion and business interruption claims was $1.95 per share, up 10.2% from the same quarter last year.
Operational Performance
EGP's operating portfolio was 98.5% leased and 97.7% occupied as of September 30, 2023. The average occupancy of the operating portfolio was 97.7% for Q3 2023, compared to 98.3% for Q3 2022. The company also reported a 6.0% increase in the same property net operating income on a straight-line basis for Q3 2023 compared to the same period in 2022.
Strategic Investments and Dividends
During Q3 2023, EGP acquired an operating property containing 254,000 square feet for approximately $53 million and 93.4 acres of development land for approximately $27 million. The company also started construction of three development projects with projected total costs of approximately $132 million. Furthermore, EGP declared its 175th consecutive quarterly cash dividend of $1.27 per share, projecting a 7.2% increase in total dividends per share for 2023 compared to 2022.
CEO's Commentary
Commenting on EastGroup’s performance, Marshall Loeb, CEO, stated, “Our team’s strong performance continues as evidenced by third quarter FFO per share rising 13%. The day-to-day industrial market remains resilient, producing a number of strong metrics such as our percent leased, quarterly releasing spreads and same store net operating income growth. We’re pleased with our operational results, especially given continued global economic unease and capital markets dislocation. This uncertainty is creating several outcomes such as greater leasing deliberations among our customers along with four consecutive quarters of materially declining market construction starts. We remain judicious with capital allocation and incremental risk, particularly in this continuing uncertain economic climate, which is one of the primary reasons we continually work to strengthen our balance sheet. Longer term, I remain bullish on the continuing external secular trends which benefit our shallow bay, last mile Sunbelt market portfolio.”
EGP's strong Q3 2023 results reflect its operational resilience and strategic investments in a challenging economic environment. The company's focus on strengthening its balance sheet and capital allocation strategy continues to drive its financial performance and shareholder value.
