Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Patrizia AG (WBO:P1Z, Financial) reported a significant increase in equity raised, with a 170% rise compared to the previous year, indicating positive investor sentiment.
- The company achieved over EUR1.3 billion in signed transactions, with a balanced distribution between real estate and infrastructure.
- There is an increased demand for infrastructure investments, particularly in the energy transition sector, which Patrizia AG is well-positioned to capitalize on.
- Patrizia AG's diversified asset base has shown resilience, with only a 5% decline in AUM from the market peak, which is favorable given the current market conditions.
- The company has implemented cost-cutting measures, resulting in a 3% reduction in operating expenses year-on-year, demonstrating effective cost management.
Negative Points
- Patrizia AG is operating in a subdued market environment with ongoing economic and geopolitical uncertainties, which could dampen recovery efforts.
- The office sector remains a challenged asset class due to structural changes in work demands, impacting Patrizia AG's portfolio.
- Overall revenues are down 13% year-on-year, primarily driven by a decrease in management and performance fees.
- EBITDA has significantly reduced by 73% to EUR13 million, affected by negative consolidation effects and one-off costs.
- Available liquidity has decreased to EUR120 million, down from EUR130 million in the previous quarter, due to strategic investments and asset warehousing.
Q & A Highlights
Q: What is the probability of the expected deconsolidation of the equity investment in the fourth quarter, and what is the share of the EUR13 million you could recover?
A: Martin Praum, CFO, stated that there is a very high probability of the deconsolidation happening due to good fundraising momentum. The net effect on Patrizia after nine months was around EUR9 million, and they expect a reversal effect of approximately EUR8 million in the fourth quarter.
Q: Are there any expected extraordinary positive effects in the fourth quarter?
A: Martin Praum, CFO, mentioned that there could be meaningful one-off effects, likely non-cash, depending on certain target achievements. However, they cannot comment further until they have better indications of how the rest of the year progresses.
Q: How is the transaction pipeline for the fourth quarter, and do you expect to be more geared towards acquisitions rather than disposals?
A: Martin Praum, CFO, confirmed that the pipeline is building up with more acquisitions planned than disposals. The focus is on living, value-add commercial, and infrastructure, with some potential office acquisitions if they fit a value-add strategy.
Q: Can you provide an update on the Dawonia fund and the deferred performance fee claims?
A: Martin Praum, CFO, stated that discussions with investors are ongoing, and the complexity lies in needing a 100% vote from all investors for prolongation. The asset quality and future outlook for Dawonia remain positive.
Q: Given the current business environment, do you foresee significant one-offs in 2025, and how do you view the business conditions for next year?
A: Martin Praum, CFO, indicated that the outlook for 2025 depends on business volume, development, and cost-cutting measures. They expect a flattish development compared to 2024, with a focus on operational growth and cost containment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
