Q3 2024 Deutsche Konsum REIT-AG Earnings Call Transcript
Key Points
- Deutsche Konsum REIT-AG (XTER:DKG) maintained stable operational business over the first nine months of 2024.
- Net rental income slightly increased due to the absence of non-periodic items from the prior period.
- The company successfully closed the sale of 14 properties, using the proceeds to repay EUR77 million in debt.
- The refinancing of maturing bonds totaling EUR145.9 million was completed, with new debt instruments issued.
- 86% of rents are CPI-linked, providing a hedge against inflation and supporting rental income.
- FFO decreased by 11% year-on-year, primarily due to higher debt costs.
- The vacancy rate increased to 14.3%, partly because the sold 14-asset portfolio was predominantly fully let.
- The average weighted debt cost increased to 4.28%, reflecting higher financing costs.
- The company's LTV remains high at 61.4%, although slightly reduced from the beginning of the financial year.
- Interest rates on new bonds are expected to rise to low double digits, increasing future interest expenses.
Good morning, everybody. My name is Kyrill Turchaninov, and together with my colleague, Alexander Kroth, who is the CIO of Deutsche Konsum REIT, we will be presenting the financial results of the first nine months of 2024 financial year of Deutsche Konsum REIT.
We will start with an overview on page 4, which shows us the highlights of the nine months ending on 30/6/24. There are some events, which happened after the end of these nine months, which happened in July, and we will touch upon those as well because they are important to understand what happened in the business and how things have developed.
We had stable operational business in the nine months, and there are some effects, which we have on FFO coming from the higher financing costs. Rental income remained almost flat versus the prior year. There were almost no changes in those periods to the portfolio composition in terms of assets.
Net rental income slightly increased, which was mainly driven to the non-periodic items in the prior period. And in
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