Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenue and net rental income increased by 3.1% from the corresponding period.
- The financial occupancy rate improved during Q3 compared to Q2, indicating positive momentum.
- The company's saving program is proceeding according to plan, with cost items and investments in line.
- Kojamo Oyj's balance sheet remains strong, and the liquidity situation is good.
- The company has a strong cash position of roughly EUR 350 million, providing flexibility for future financing needs.
Negative Points
- Financial occupancy rate decreased from the corresponding period, indicating challenges in maintaining occupancy.
- Increased finance and maintenance expenses negatively impacted Turm FFO.
- The average cost of financing remains higher compared to the previous year.
- The rental market is still experiencing oversupply, affecting occupancy rates.
- The transaction market remains muted with low volumes, impacting potential disposals.
Q & A Highlights
Q: Can you provide an update on the market vacancy and the impact of your recent pricing strategies?
A: The market vacancy is improving, although there is still oversupply. Our occupancy moved in the right direction during Q3, and we've made a significant number of new lease agreements. We've implemented price reductions and rent-free periods to support renting. (Erik Hjelt, Deputy CEO & CFO)
Q: With ongoing construction, do you expect rental tensions to ease by 2026?
A: Construction companies have many unsold apartments, mostly intended for sale. Social housing developments will decrease next year, and the non-subsidized rental market is low. We expect equilibrium in the market after summer next year, with vacancy levels similar to pre-COVID-19. (Erik Hjelt, Deputy CEO & CFO)
Q: Are there any plans for property disposals as part of your savings program?
A: We are considering moderate property disposals. Some smaller transactions are nearly finalized, and discussions are ongoing. We are not in a position where we must sell, but it's part of our strategy. (Erik Hjelt, Deputy CEO & CFO)
Q: What are your plans for refinancing the 2026 maturities?
A: Our preference is to return to the bond market. The market conditions have improved, with swaps decreasing and spreads tightening. We aim for Q1 next year as a potential timing for this move. (Erik Hjelt, Deputy CEO & CFO)
Q: Can you comment on the current transaction market and foreign investor interest?
A: The transaction market remains muted with low volumes. International investors are scanning the market, but discussions have not led to significant transactions. During Q3, there were three smaller portfolio transactions involving international players. (Erik Hjelt, Deputy CEO & CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
