Release Date: November 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dipula Income Fund Ltd (JSE:DIB, Financial) reported a 5% increase in the value of its assets, indicating strong asset management and growth.
- The company has maintained a high tenant retention rate of 87%, showcasing effective tenant relationship management.
- Dipula Income Fund Ltd (JSE:DIB) has successfully increased its net asset value by 5%, reflecting strong financial health.
- The retail portfolio has shown resilience with a 4% increase in turnover, demonstrating robust performance in challenging market conditions.
- The company has a strong focus on sustainability, with significant investments in solar energy projects, aiming to reduce dependence on local municipalities.
Negative Points
- Dipula Income Fund Ltd (JSE:DIB) experienced a decline in distributable earnings by 3.5%, impacted by government reversions and lack of acquisitions.
- The office portfolio faced challenges with negative reversions affecting margins, highlighting sector-specific difficulties.
- There was a significant increase in property expenses by 15%, driven by higher municipal expenses and tenant incentives.
- The residential sector saw higher vacancies, particularly at Palm Springs, affecting overall margins.
- Interest rate increases have led to higher finance costs, impacting the company's cost structure.
Q & A Highlights
Q: Do you have any update on the Midrand property?
A: We are in constant discussion with the insurers, and everything looks good so far. We are estimating replacement costs and starting the works on reinstating the property. We don't have a final number yet, but we are going through the same process as during the riots, focusing on replacement methods and costs.
Q: With 71% of your debt hedged, to what extent will you benefit from potential further interest rate cuts?
A: We have about 900 million coming up in 2025, and there is a mismatch between our debt and hedges. Our debt is over four years, and hedges are two years, so we will definitely benefit from lower interest rates.
Q: What is the average rate for the hedges as they roll off in FY25 and FY26?
A: The weighted average for our swap rates as of August 2024 was 6.95%. We don't have the exact number for the ones rolling off, but we can provide that information.
Q: In light of the Boxer listing and its expansion plans, are you getting inquiries for space?
A: We have a good relationship with Boxer and talk to them weekly. While we aren't getting additional inquiries due to their listing, they have always been looking for more space. We are making plans to accommodate them where it makes strategic sense.
Q: How are you accounting for solar CapEx on your books?
A: We capitalize it into the properties at this stage. Most of the CapEx happened post-year-end, so the income will start flowing from November.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
