EastGroup Properties (EGP) Q2 2024 earnings summary

Executive summary

• Net income attributable to common stockholders rose 29% year-over-year to $55.3M for Q2 2024, with diluted EPS up to $1.14, driven by higher property net operating income and lower interest expense.

• FFO per diluted share grew 9.4% to $2.09 for Q2 2024 and 8.5% to $2.05 per share excluding one-time items, with strong leasing and development activity.

• Portfolio was 97.4% leased and 97.1% occupied as of June 30, 2024, with average quarterly occupancy at 97.0%.

• Rental rates on new and renewal leases increased an average of 59.7% on a straight-line basis in Q2 2024.

• Maintained a diversified rent roll, with top 10 tenants representing only 7.8% of rents.

Financial highlights

• Q2 2024 FFO per share was $2.09, up from $1.91 in Q2 2023; same property NOI rose 5.3% for the quarter.

• Total revenues for Q2 2024 were $159.1M, up from $139.9M in Q2 2023.

• PNOI increased 12.3% to $113.8M for Q2 2024; interest expense declined by $2.7M year-over-year.

• Dividend FFO payout ratio at 57% for Q2 2024, continuing a trend of sub-70% payout since 2010.

• Compound annual total return for the five-year period ended June 30, 2024, was 10.8%.

Outlook and guidance

• 2024 FFO per share guidance raised to $8.28–$8.38, with Q3 guidance at $2.06–$2.12 per share.

• Same property NOI growth projected at 5.6% to 6.6% for 2024; average occupancy expected between 96.6% and 97.6%.

• Development starts for 2024 projected at 1.9 million sq ft with $260 million investment.

• Management expects current cash flow, credit facilities, and access to equity and debt markets to be sufficient for ongoing operations, development, and acquisitions.

• Expect continued use of equity for capital needs into early 2025, with flexibility to add debt if rates become attractive.