Release Date: May 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adler Group SA (XTER:ADJ, Financial) successfully completed the BCP transaction, generating EUR219 million in cash proceeds.
- The company has launched a comprehensive cost-cutting program expected to save approximately EUR30 million in 2025.
- Adler Group SA's cash position increased to EUR293 million following recent transactions and debt repayments.
- The company reported a low operational vacancy rate of 1.5%, indicating strong demand for its rental properties.
- Adler Group SA confirmed its full-year guidance for net rental income between EUR127 million and EUR135 million.
Negative Points
- Net rental income decreased in Q1 2025 due to disposals, resulting in around EUR15 million of lower rental income.
- The adjusted EBITDA was negative as the development segment did not contribute material earnings in the quarter.
- The company's like-for-like rental growth was only 1.9%, significantly lower than the previous year's unusually high growth.
- Adler Group SA's LTV ratio is expected to marginally increase quarter by quarter due to interest expenses.
- The company faces challenges in disposing of development projects in the current market, although progress is being made.
Q & A Highlights
Q: Is there any plan to collapse the Adler real estate structure given the reduced asset value, and are there any costs associated with that?
A: Thorsten Arsan, CFO, stated that while the structure has been simplified significantly after recent disposals, there is no current plan to fully collapse the Adler real estate subgroup. The aim is to continue simplifying the structure, but there are still approximately EUR500 million in Berlin portfolio value within the subgroup.
Q: Regarding the Adler first lien repayment of EUR265 million, how much was repaid before versus after the refinancing?
A: Thorsten Arsan, CFO, mentioned that the repayment was partially done before and after the refinancing, using proceeds from disposals. He offered to provide specific numbers bilaterally as he did not have the exact figures at hand during the call.
Q: Looking towards the end of 2026, what is the ideal future capital structure for Adler Group, considering the expensive debt stack and growing LTV?
A: Karl Reinitzhuber, CEO, explained that with no maturities until the end of 2028, the structure will remain largely unchanged. The company is keeping options open regarding asset disposals and will closely monitor market opportunities.
Q: Can you provide any timing expectations for the completion of development project sales and how proceeds will be used?
A: Karl Reinitzhuber, CEO, stated that while specific sales processes are not disclosed, several assets are in different stages of sales, with some expected to close in the coming months. Proceeds will be used to repay debt quickly, with the disposal holdback basket nearly full.
Q: Will development proceeds be used to pay down the first lien, and how will this affect the LTV?
A: Karl Reinitzhuber, CEO, confirmed that the objective is to repay debt as quickly as possible with incoming funds from asset disposals, which will help reduce the LTV over time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
