Half Year 2024 Warehouses de Pauw NV Earnings Call Transcript
Key Points
- Warehouses De Pauw SA (WDPSF) achieved EUR500 million in new investments with an average yield of 7%, marking a significant milestone in the company's history.
- The company maintains a strong balance sheet with a loan-to-value and net debt to EBITDA ratio of 6.8x, supporting its growth strategy.
- WDPSF's investment pipeline is well-diversified across regions, with over 70% in Western Europe, enhancing its geographical footprint.
- The company has successfully indexed leases by more than 3% and achieved a positive rent reversion of 15% on 200,000 square meters, indicating strong rental growth potential.
- WDPSF is advancing its energy projects, aiming for 350 million megawatt peak of solar panels, and is developing a significant battery park in Genk, showcasing its commitment to sustainable energy solutions.
- The company faces challenges with a slight decline in occupancy rates, now below 98%, which is the lowest since the first half of 2019.
- There are concerns about sluggish occupier demand, particularly in consumer-driven sectors like fashion and FMCG, which could impact future growth.
- WDPSF experienced a 12.5% decline in solar income, attributed to both weather conditions and pricing mix, affecting its renewable energy revenue.
- The development pipeline has a pre-letting rate of 77%, with some projects, like the one in Kerkrade, having lower pre-letting rates, posing potential risks.
- The cost of debt is expected to rise to around 2% by the end of 2024, which could impact the company's financial flexibility.
Good morning, everybody. Welcome to the conference call of WDP. Welcome to Wolverton. I think we can say that probably the weather was not the best in this first half year and the sun did not shine enough. But we at WDP, we blended a perfect first half year with EUR500 million of new investments at the yield on average of 7%, which is unique in our history.
And we could do that thanks to a perfect balance sheet now with a loan-to-value and net debt to EBITDA of 6.8x. Based on our existing portfolio of more than EUR7 billion and all our clients. And besides the growth, we could also realize the results we had foreseen. And so we are on our way to a EUR1.47 which is 5% more than last yea, based on a stable occupancy rate.
But I think we can say that the EUR500 million is the most important element of this first half year. And let's look a little bit deeper into this EUR500 million. First of all, it is profitable on average 7% yield on the total investment pipeline, 7% on acquisitions, 7.4% on our
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