Covivio (COV) H1 2024 earnings summary

Executive summary

• H1 2024 marked by strategic transformation, with increased hotel exposure to 20% of the portfolio, a new AccorInvest partnership, and a Berlin residential JV, alongside reinforced balance sheet and portfolio rebalancing.

• €311 million in new disposal agreements signed, reducing LTV to 40.3% and supporting BBB+ rating with stable outlook.

• Recurring net result grew 3.3% year-over-year to €231 million, with guidance raised to €460 million for 2024.

• Premium office offer success drove occupancy to 95.1%, with strong progress in portfolio rebalancing and asset management.

• Net income Group share improved sharply to -€8.4 million from -€689.7 million in H1 2023, reflecting stabilizing property values.

Financial highlights

• Group share revenues rose 1.8% to €326.8 million, with like-for-like growth of 6.5% driven by offices (+8.8%), hotels (+5.2%), and German residential (+3.9%).

• Adjusted EPRA Earnings up 3.3% to €230.8 million; EPS at €2.24, down due to higher share count from scrip dividend.

• Portfolio value increased 2% to €15.4 billion, with EPRA NTA at €8.7 billion (€77.7/share, -7.5% per share year-over-year).

• Net rental income up 1% to €284.9 million; hotel EBITDA up 9% to €23.9 million.

• Occupancy rate increased to 97.1% (+1.3pt year-over-year).

Outlook and guidance

• 2024 recurring net result guidance raised to €460 million (up 5% vs. initial), reflecting strong office and hotel performance.

• Full cash dividend targeted for 2024, with payout ratio above 80%.

• Medium-term focus on further hotel portfolio growth and value extraction in Paris, Milan, and Berlin.

• Management expects continued stabilization in property values, with resilience in hotels and German residential.

• Ongoing focus on portfolio rotation, centrality, and sustainability, with €584 million capex planned for the committed development pipeline.