Adler Group (ADJ) Q2 2024 earnings summary

Executive summary

• Comprehensive recapitalisation plan advanced, including a €2.3bn debt-to-equity conversion, extension of debt maturities, and new voting structure, with over 90% bondholder and AGM support; completion expected by September 2024.

• Strong operational performance in H1 2024, with 4.6% like-for-like rental growth and low 1.8% vacancy.

• Net rental income for H1 2024 was €103.4m, down from €107.7m year-over-year, mainly due to asset disposals.

• Net loss for H1 2024 was €-507.4m, mainly from negative revaluations and high finance costs.

• Disposals and development project sales, including Leipzig FourLiving, generated €26m net proceeds and supported a €334m cash position as of June 2024.

Financial highlights

• Adjusted rental EBITDA reached €60m and adjusted total EBITDA €42m in H1 2024.

• FFO 1 from rental activity was negative at €-54m, impacted by higher interest expenses.

• Weighted average cost of debt was 6.4% with a weighted average maturity of 2.3 years.

• Cash position at end of June 2024 was €334m, excluding BCP cash.

• Net asset value per share fell to €0.12 NTA and €1.04 NRV.

Outlook and guidance

• Net rental income guidance for 2024 confirmed at €200–210m.

• Management expects stabilization in asset valuations and continued positive rental business development in H2 2024.

• Audit of 2022 and 2023 financial statements on track for publication by end of September 2024.

• No FFO 1 guidance provided due to focus on liquidity and deleveraging.