Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TAG Immobilien AG (TAGOF, Financial) reported a strong increase in net income from its operations in Poland, exceeding expectations.
- The company achieved a significant reduction in the vacancy rate of its German portfolio, now below 4% for the first time.
- TAG Immobilien AG (TAGOF) successfully issued a EUR500 million corporate bond, enhancing its liquidity position to EUR670 million.
- The company reinstated its dividend, proposing a payout of EUR0.40 per share, based on a 40% payout ratio of FFO1.
- TAG Immobilien AG (TAGOF) expects a 25% increase in rental EBITDA from its Polish portfolio by 2028, indicating strong future growth potential.
Negative Points
- The company experienced a slight loss of EUR1.8 million from the sale of 915 units in Germany, selling them around book value.
- Higher maintenance costs in the German portfolio impacted the ABR from the rental business, reducing it by EUR0.3 million.
- TAG Immobilien AG (TAGOF) anticipates stable FFO1 for 2025, indicating limited immediate growth in this metric.
- The company faces cost inflation pressures, particularly in property management costs.
- TAG Immobilien AG (TAGOF) reported a slight negative rent growth in its Polish portfolio in Łódź, though not seen as a long-term trend.
Q & A Highlights
Q: Can you explain the rationale behind the 40% payout ratio and how it was decided?
A: The 40% payout ratio of FFO1 means not paying out the full cash available from the rental business. This allows us to retain some cash in the company, which, combined with surplus from the sales business, provides enough equity to grow the Polish rental portfolio. The aim is to balance paying a reasonable dividend with maintaining a solid equity position for future growth. - Martin Thiel, CFO
Q: Will the retained cash be focused solely on Poland, or are there opportunities in Germany as well?
A: While the primary focus is on growing the Polish rental portfolio, we are open to opportunistic acquisitions in Germany, though not on a large scale. Any potential acquisitions would be smaller and in locations we know well. - Martin Thiel, CFO
Q: How do you see the trend of sales prices in the build-to-sell business, and does the 2025 target include any one-off impacts?
A: The sales target for 2025 does not assume any new subsidy programs. We remain optimistic about Poland, having seen strong price increases despite a challenging environment. We expect prices to stabilize rather than decrease, and our focus is on maintaining strong pricing rather than just volume. - Martin Thiel, CFO
Q: Regarding the FFO Bridge, is the reduced rent from disposals in Germany a phasing effect, or do you assume additional disposals?
A: The reduced rent is from disposals that occurred in 2023, with no additional disposals planned for 2025. We do not have any major disposal plans for the German portfolio. - Martin Thiel, CFO
Q: Could you provide more details on the potential valuation results for 2024?
A: The expectation of a broadly unchanged portfolio value refers to the second half of 2024. In the first half, we had a devaluation of over 2.5%, but we expect the second half to be around zero. - Martin Thiel, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
