Half Year 2024 Waypoint REIT Ltd Earnings Call Transcript
Key Points
- Waypoint REIT Ltd (ASX:WPR) delivered distributable EPS of $0.0828 for the six months to June 30, in line with the first six months of last year.
- The value of Waypoint's investment portfolio increased by 1.4% during the period, leading to a 2.1% increase in NTA per security to $2.79.
- Gearing decreased slightly from 32.8% in December to 32.6%, remaining at the lower end of the target range.
- Waypoint REIT Ltd (ASX:WPR) refinanced $600 million of debt and implemented additional hedging, extending the weighted average debt maturity to 4.5 years.
- Distributable earnings for the half were $55.6 million, positioning the company well to deliver its full-year guidance.
- Higher net interest expense is expected to impact second-half results, leading to lower performance compared to the first half.
- Progress on discussions with VEA regarding funding OTR conversions has been slower than anticipated.
- The cost of debt is expected to continue increasing over the coming financial periods due to higher rates on hedge debt and new swaps.
- Non-core asset sales progress was limited in the first half, with only one small asset sold at a 3.6% discount to the December book value.
- The major capital works provision in the master lease is not being triggered by the current rebranding and refurbishment works, limiting potential uplift in market rent.
Good morning, everyone. Thank you for joining us on the call today. I'll start on page 7 of the presentation where you'll see that Waypoint delivered distributable EPS of $0.0828 for the six months to June 30. This result was in line with the first six months of last year with higher net interest expense being offset by rental growth and lower operating costs.
We note that the result is above our guidance range for the full year on an annualized basis. However, we do expect second-half results to be lower, primarily due to higher interest exceeds.
The value of Waypoint's investment portfolio increased by 1.4% during the period, with contracted rental escalations for the majority of the portfolio, offsetting a six basis point increase in weighted average cap rate to 5.74%. The 1.4% increase in the value of Waypoint's investment portfolio underpinned a $0.06 or 2.1% increase in NTA per security to $2.79 and also resulted in a slight decrease in gearing from 32.8% in December to 32.6%, which remains at
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