Entra Asa · OSL:ENTRA
Entra Asa — Q1 2024 Earnings Presentation
22 slides from Entra Asa's earnings presentation, Apr 23, 2024
Slide 1: Q1 2024
MJ entra Q1 2024 Oslo, 23 April 2024
Slide 2: Highlights
Highlights Key figures Key events • Rental income growth of 1 %, affected by divestments • Higher interest costs and negative portfolio value changes affecting results • Solid letting market, positive net letting of 28 million • Signed agreement for sale of Trondheim portfolio with closing 31 May 2
Slide 3: Agenda
Agenda Operations and market Financial update Closing remarks Q&A
Slide 4: Operations and market
Sf Operations and market J 0 | | _ Mentra
Slide 5: Letting and occupancy
Letting and occupancy • New and renewed leases of 162 million (52 200 sqm) • Terminated contracts of 115 million • Net letting of 28 million • Occupancy 95.3 % • WAULT at 6.2 years (6.4 years incl. project portfolio) • 57 % of rental income from public sector tenants in the management portfolio Larg
Slide 6: Q1-24: Signed agreement for sale of Trondheim portfolio
Q1-24: Signed agreement for sale of Trondheim portfolio • 13 office properties in Trondheim, totalling around 187,500 sqm • Total value of 6.45 billion, 1 % below Q4 book values • Agreement also includes forward sale of development project in Holtermanns veg 1-13 (phase 3), expected closing in 2026
Slide 7: Ongoing development portfolio
Ongoing development portfolio 1 Total project cost (including book value at date of investment decision/cost of land), excluding capitalized interest cost 2 Estimated net rent (fully let) at completion/total project cost (including initial value) 3 Weighted average occupancy of the project portfolio
Slide 8: Market development
Market rental growth and vacancy in Oslo Market development Rent and Vacancy • Soft landing expected for Norwegian economy • Expected GDP growth* of 1.1 % in 2024 (0.5 % in 2023) • Stable employment, low unemployment • Key policy rate expected to have reached a top at current 4.50 % • Inflation on a
Slide 9: Market development
Prime yield Oslo Market development Transaction and yields • Interest rates and inflation believed to have topped out • Prime yields expected to have peaked • Financing markets opening up, tightening credit margins • Transaction volumes expected to pick up through 2024 Total transaction volume (NOK
Slide 10: Financial update
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Slide 11: Strong operating results in line with expectations; results impacted by higher financing costs and negative value changes
Strong operating results in line with expectations; results impacted by higher financing costs and negative value changes NOK million Rental income Net income from property management Profit/loss before tax 11
Slide 12: Key financials per share
Key financials per share NOK per share Cash Earnings1 EPRA NRV CAGR 6 % CAGR 7 %2 1 Annualised, rolling four quarters 2 CAGR 10 % when including dividends in the period 12
Slide 13: Profit and loss statement impacted by divestments, negative value changes and higher financing costs
Profit and loss statement impacted by divestments, negative value changes and higher financing costs • 1 % income growth • Underlying growth of 6.5 % excluding transactions and 16 mill one-off effect in Q1-23 • 4.8 % CPI rolled into lease contracts from January 2024 • Other revenues and other costs
Slide 14: Rental income development impacted by divestment of the Trondheim portfolio
Rental income development impacted by divestment of the Trondheim portfolio NOK million Based on reported events. Does not constitute a forecast; aims to demonstrate the rental income development based on all reported events; does not reflect letting targets on either vacant areas or on contracts th
Slide 15: Property value development
Property value development Property value development in Q1-24 NOK million • 2.5 % write-down in property values in Q1 • Portfolio net yield currently at 5.1 % • 5.7 % if fully let at market rent • Average property yields adjusted up by 124 bps since peak valuation in Q1-22; 150 bps taking into effe
Slide 16: Financing position and activities in the quarter
Financing position and activities in the quarter Financing mix EPRA LTV 1 and ICR 2 Q1 status 57.8 • Net repayment of debt of 1 billion • Issued commercial papers of 0.5 billion • Additional commercial papers in April of 0.5 billion • Total unutilised credit facilities and cash of 6.5 billion as of
Slide 17: Projected interest rate development
Projected interest rate development ’ -in interest rate, including credit margins • Assumptions in graph: 4.73 % • 3M/1M NIBOR forward curve 4.27 % • Existing hedges included • Expected debt levels assuming repayment of debt following Trondheim transaction • ’ • Effective interest rates 15 bps highe
Slide 18: Large liquidity buffer and manageable bond maturities next 5+ years
Large liquidity buffer and manageable bond maturities next 5+ years NOK million 2024 2025 2026 2027 2028 • 6.8 billion in available liquidity as of 31.03 • 6.5 billion of unutilised credit facilities • 0.2 billion in cash • Expecting ~7 billion in additional proceeds during 2024 from signed transact
Slide 19: Closing remarks
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Slide 20: Closing remarks and outlook
Closing remarks and outlook • Solid letting market • Favorable supply side with low vacancies and very limited new supply • Breakeven rents for newbuilds significantly above current market rents • Record high renegotiation levels • Interest rates and inflation believed to have topped out • Prime yie
Slide 21: Q&A
Q&A 21
Slide 22: Next event: 2nd quarter results 12 July 2024
Next event 2nd quarter results 12 July 2024 For more information see, www.entra.no/investor-relations