Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CTP NV (XPRA:CTP, Financial) reported a strong operational and financial performance for the first nine months of 2024, with expectations for a robust Q4.
- The company signed over 1.5 million square meters of leases in 2024, marking a 5% increase compared to 2023.
- CTP NV (XPRA:CTP) remains the market leader in several Central and Eastern European (CEE) countries, including the Czech Republic, Slovakia, Hungary, and Romania.
- The company has a strong tenant base, with two-thirds of new lease agreements signed with existing tenants, reducing business risk.
- CTP NV (XPRA:CTP) has a robust balance sheet with a cash position of EUR1.3 billion and a liquidity position of EUR1.8 billion, ensuring financial stability.
Negative Points
- The company's exposure to the automotive industry has decreased, with leases related to automotive down to 16% from 20% over the past 12 months.
- There is a slight timing issue with development completions, with some projects potentially being delayed from Q4 2024 to early 2025.
- The company faces competitive challenges in acquiring land at favorable prices, particularly in extending existing business parks.
- CTP NV (XPRA:CTP) has not provided specific guidance for 2025, which may cause uncertainty among investors.
- The company's average cost of debt is expected to increase as new funding is acquired at higher interest rates.
Q & A Highlights
Q: Can you provide more details on the allocation of the recent capital increase and the opportunities you're seeing?
A: Richard Wilkinson, Deputy CEO and CFO, explained that the capital raised has been partially invested in Germany and Romania. They see interesting opportunities across their network, not limited to one region, and expect to fully allocate the proceeds within the next 12 months. The development completion is on track, with a clear view of delivering within the 1.2 to 1.3 million square meter range this year.
Q: Are there any plans to expand outside your current geography, such as into Mexico?
A: Remon Vos, CEO, stated that while the focus remains on the current 10 countries, they are open to exploring new markets if opportunities arise, driven by tenant demand. Although there is interest in Mexico, no concrete plans are in place yet, but they are always open to exploring new opportunities.
Q: Could you comment on the competitive environment for land acquisition and your strategy?
A: Remon Vos highlighted that they prioritize extending existing business parks to leverage existing infrastructure. The land acquisition is competitive, but having cash on hand helps in negotiating better deals. They see opportunities in markets like Germany for both large projects and smaller units.
Q: What are your thoughts on the lower retention rates and subleasing trends?
A: Richard Wilkinson noted that the lower retention rate is not a trend but a statistical variation. They maintain a high retention rate around 90% and do not see a significant decrease in space utilization by tenants. Subleasing is not a major concern for them currently.
Q: Can you provide guidance on capital deployment and the transaction market outlook?
A: Richard Wilkinson mentioned that they have significant firepower for investments over the next 6 to 12 months. They are disciplined in capital allocation and see attractive opportunities across multiple markets. The speed of capital deployment aligns with their expectations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
