Entra Asa · OSL:ENTRA
Entra Asa — Q2 2024 Earnings Presentation
26 slides from Entra Asa's earnings presentation, Jul 22, 2024
Slide 1: Q2 2024
MJ entra No N oO N N O Oslo, 12 July 2024
Slide 2: Highlights
Highlights Key figures Key events in the second quarter • Rental income of 853 million, NIPM of 348 million, affected by divestments • Net value changes of 2 million and profit before tax of 344 million • Positive net letting of 12 million • Closed sale of the Trondheim portfolio and sold Hotel Savo
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 176 million (60 700 sqm) • Terminated contracts of 59 million • Net letting of 12 million • Occupancy 94.8 % • WAULT at 6.3 years (6.6 years incl. project portfolio) • 52 % of rental income from public sector tenants in the management portfolio Large
Slide 6: Sale of Hotel Savoy (Universitetsgata 11)
Sale of Hotel Savoy (Universitetsgata 11) • Total transaction value of 225 million • 28 per cent above Q1 book values • Acquired by Entra in 2021 for 185 million • Proceeds used to strengthen Entra's balance sheet • Closed on 28 June (debt repayment in July) 6
Slide 7: Finalised redevelopment project Schweigaards gate 15 in Oslo
Finalised redevelopment project Schweigaards gate 15 in Oslo Large redevelopment, next to Oslo Central Station 22 900 sqm 93 % let (31 % at project start) Total project cost: NOK 1 416 million BREEAM-NOR Very Good Yield on cost: 5.3 % (4.7 % at project start)
Slide 8: Started refurbishment project in Brynsengfaret 6 in Oslo
Started refurbishment project in Brynsengfaret 6 in Oslo Large refurbishment at the most central public transport node in the eastern part of Oslo 35 400 sqm 76 % pre-let Total project cost: NOK 1 327 million Expected completion: Q1/Q4 25 BREEAM In-use Excellent Yield on cost: 5.8 %
Slide 9: Started refurbishment project in Nonnesetergaten 4 in Bergen
Started refurbishment project in Nonnesetergaten 4 in Bergen Large refurbishment, close to Bergen Central Station 17 300 sqm 55 % pre-let Total project cost: NOK 1 004 million Expected completion: Q3 25 / Q3 26 BREEAM In-use Very Good Yield on cost: 5.7 %
Slide 10: Started refurbishment project in Malmskriverveien 2 and 4 in Sandvika
Started refurbishment project in Malmskriverveien 2 and 4 in Sandvika Refurbishment, close to Sandvika train station 3 400 sqm Fully let, District Court of Asker and Bærum Total project cost: NOK 201 million Expected completion Q3 25 Yield on cost: 5.3 %
Slide 11: 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 12: Market development
Market rental growth and vacancy in Oslo Market development Norwegian economy expected to pick up • Lower interest rates and solid wage growth expected to fuel private consumption and housing investments, combined with increased public spending • Increased projections for GDP and employment growth •
Slide 13: Market development: transaction and yields
Prime yield Oslo Market development Transaction and yields • Interest rates and inflation believed to have topped out • Prime yields expected to decrease slightly from 2025 • Financing markets opening up, tightening credit margins • Transaction volumes expected to pick up through 2024 Total transact
Slide 14: Financial update
| ( Financial update J
Slide 15: Strong operating results in line with expectations
Strong operating results in line with expectations NOK million Rental income Net income from property management Profit/loss before tax 15
Slide 16: Key financials per share
Key financials per share NOK per share Cash Earnings1 EPRA NRV CAGR 6 % CAGR 7 %3 2 1 Rolling four quarters 3 CAGR 9 % when including dividends in the period 2 Annualized Cash Earnings for Q2 isolated: 7.6 16
Slide 17: Profit and loss statement impacted by divestments
Profit and loss statement impacted by divestments • Revenues and operations in line with expectations • Rental income impacted by high CPI, market rental growth and finalised projects, offset by divestments • Other revenues and other costs grossed with impact from forward sold development project in
Slide 18: Rental income development impacted by divestments
Rental income development impacted by divestments 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 that will expire, and where
Slide 19: Property value development
Property value development Property value development in Q2-24 NOK million • Negative property value change of 0.7% • Decreased inflation expectations and increased discount rates on certain assets • Portfolio net yield currently at 4.99 % • 5.72 % if fully let at market rent • Average property yiel
Slide 20: Financing position and activities in the quarter
Financing position and activities in the quarter Financing mix EPRA LTV 1 and ICR 2 Q2 status • Net repayment of debt of 6.2 billion 53.9 • Issued commercial papers of 1.6 billion • Net nominal interest-bearing debt of 31.9 billion • Effective leverage reduced with 4.0 percentage points to 50.4 per
Slide 21: Projected interest rate development
Projected interest rate development ’ -in interest rate, including credit margins • Assumptions in graph: 4.73 % • 3M/1M NIBOR forward curve • Existing hedges included 3.96 % • As-is debt levels • ’ • Effective interest rates 15 bps higher than nominal due to issuance of bonds below par value • 71 %
Slide 22: Increased and large liquidity buffer
Increased and large liquidity buffer NOK million 2024 2025 2026 2027 2028 • 12.9 billion available liquidity as of 30.06 • 12.5 billion unutilised credit facilities • 0.4 billion cash • Liquidity buffer planned to be reduced • 3.8 years average time to maturity of debt • Debt markets are open with i
Slide 23: Closing remarks
| ( Closing remarks J
Slide 24: Closing remarks and outlook
Closing remarks and outlook • Positive outlook for Norwegian economy • GDP and employment growth expected to pick up • Interest rates believed to have topped out, expectations of first cut in Q1 25 • Letting market remain solid with increasing market rents and low vacancy • Supported by employment g
Slide 25: Q&A
Q&A 25
Slide 26: 3rd quarter results 17 October 2024
Next event 3rd quarter results 17 October 2024 For more information see, www.entra.no/investor-relations