Fibra UNO (FUNO 11) Q2 2024 earnings summary

Executive summary

• Achieved strong operational recovery, reaching pre-pandemic occupancy levels across all segments, with overall portfolio occupancy above 98% and robust rent growth, especially in industrial assets.

• Focus on total return through dividend distributions and capital appreciation, leveraging active management, asset acquisitions/sales, and development projects.

• Portfolio is highly diversified by geography, tenant type, and industry, with over 2,900 tenants and 613 operations.

• Maintains a counter-cyclical business model with stable occupancy and cash flows across cycles.

• Distributions totaling $4,210 million pesos were paid to CBFI holders in the first half of 2024.

Financial highlights

• Revenue grew 1.4% quarter-over-quarter and 7.4% year-over-year, excluding tenant support related to hurricane impacts.

• Net operating income (NOI) was nearly MXN 5.2 billion, down 1.3% sequentially, with NOI margin at 83.6% over rental revenues.

• Total assets increased to $349,703.6 million pesos as of June 30, 2024.

• Net consolidated income for the six months ended June 30, 2024, was $6,998.3 million pesos, down from $12,352.9 million in the same period of 2023.

• Distributed over 83 billion pesos in dividends over 13 years, nearly matching current market cap.

Outlook and guidance

• Expect continued high occupancy and strong leasing spreads, especially in industrial and retail segments.

• Priority is the carve-out of the industrial portfolio into a pure-play vehicle, with options including IPO as a FIBRA or non-FIBRA, or other strategic alternatives.

• Nearshoring and supply chain trends seen as long-term tailwinds, with minimal impact from Tesla's project delay.

• The IMF projects Mexico's GDP growth at 1.9% for 2024, with upgrades due to strong domestic demand and trading partner growth.