Fibra Mty S A P I (FMTY 14) Q3 2024 earnings summary

Executive summary

• AFFO for 2024 is expected to exceed guidance, driven by strong organic and inorganic growth, disciplined capital management, and robust industrial sector fundamentals.

• Portfolio expanded to 112 properties with 1,766,418 m² GLA and 96% occupancy, with industrial assets as the main growth driver.

• Share buybacks intensified, with 1% of CBFIs repurchased and further repurchases planned using AFFO surplus, enhancing per-share returns.

• Strategic focus on industrial assets, divesting underperforming office properties near book value, and reinvesting in high-yield opportunities.

• Major acquisitions include the "Aerotech" portfolio and a binding agreement for the "Batach" portfolio, pending regulatory approval.

Financial highlights

• Same-property NOI increased nearly 15% year-over-year for Q3 2024, with total NOI for Q3 exceeding MXN 650 million and a 90%+ NOI margin.

• AFFO and FFO surged over 55% YoY, with AFFO yield close to 11% and per share well above 2024 guidance.

• Portfolio value rose 4% in USD terms sequentially, and 10% including FX effects; investment properties increased to Ps. 34.1B in 3Q24.

• Weighted average interest rate on debt reduced to 4.9%, with gross LTV at 25% and net debt/EBITDA at 1.4x.

• NOI and EBITDA margins at 90.4% and 83.5%, both above targets.

Outlook and guidance

• AFFO per CBFI for 2024 is projected to surpass initial guidance, with increases over 150 bps above three-year accumulated inflation in Mexico and the US, adjusted for FX.

• Pipeline includes $700 million in industrial investments, with over 61% committed, targeting 8% cap rates and continued expansion.

• Ongoing negotiations for additional expansions and acquisitions, with high confidence in closing further deals by Q1 2025.

• Challenges include lease maturities (12.6% of revenues in 2024), competitive industrial cap rates, and office segment performance.