Results at 30 September 2024
- Net rental income: €85.2 million (+3.7% vs 9M2023R[1]; +4.4% like-for-like)
- Upside on 3Q 2024 renewals: Italy +8%; Romania +0.6%
- Malls Italy: tenant sales -0.2%; footfalls +0.7% (vs 9M2023)
- Funds From Operations (FFO): €3 million (-31.0% vs 9M2023R1)
- Loan-to-Value: 44.8%
- 2024 FFO guidance confirmed
- 21 November 2024: Presentation of the 2025-2027 Business Plan in Milan
Bologna, 7 November 2024. Today, in a meeting chaired by Antonio Rizzi, the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. (“IGD” or the “Company”) examined and approved the results at 30 September 2024.
Message from the Chief Executive Officer and General Manager, Roberto Zoia
“The performance in the third quarter of this year shows a positive trend and a strengthening of the core business, with encouraging signals for the future. We recorded an upside of 8% on renewals and re-lettings in the quarter, as well as an extension of the lease terms, which provides us with good visibility for the coming years. Quarter after quarter, I believe that the results of the work we are doing are clearly visible. The next step on this new path will be the rollout of the strategic lines of the new business plan that we will present in a few weeks. We are continuing to pay great attention to the financial part in order to extend maturities and reduce the average cost of debt, another priority we had already given ourselves in recent months”.
OPERATING PERFORMANCE
Italy
In the first nine months of 2024, footfalls in malls were +0.7% higher than in the same period of the prior year, while tenant sales were largely stable (-0.2%); after a positive first quarter, a negative performance was recorded in the spring and summer months, but an excellent trend was recorded in September with footfalls rising +4% and tenant sales up +6.4% compared to the same month in 2023.
Looking at sales by product category, Electronics and Home Care recorded the biggest drops at -6.8% and -6.0%, respectively, compared to the same period of last year, while Personal Care and Wellbeing recorded the strongest growth (+9.4% vs 2023); a positive trend was also recorded in Clothing, Restaurants and Services.
The third quarter of the year was characterized by lively commercial activity with various openings: the most important include the opening of Primark and Sinsay at Porta a Mare Waterfront in Livorno and the new Notorious cinema at Centro Nuova Darsena in Ferrara.
Since the beginning of the year 139 leases (81 renewals and 58 turnover) have been signed with an average upside of +2.4%; the figure was particularly positive in the third quarter when the increase in rents reached +8%.
The intense marketing activities carried out in the year brought mall occupancy to 94.48% at 30 September, consistent with the growth path begun at the start of the year (+10bps vs. 30 June and +32bps vs. 31 March 2024). The average occupancy rate of malls + hypermarkets was also 10 bps higher than in June 2024, coming in at 95.06%.
The collection rate for the first nine months of 2024 was about 95.2%.
Romania
Occupancy at the Winmarkt shopping malls was once again high, landing at 95.2% in September 2024, but was slightly lower than the 95.5% recorded in first half 2024.
in the first 9 months of the year, 246 leases were signed between renewals (172) and turnover (74), with an upside on renewals of around +4.3% (calculated on rents net expenses).
The collection rate came to approximately 97% in the first 9 months of 2024.
ECONOMIC – FINANCIAL RESULTS
In the first nine months of 2024, gross rental income stood at €100.7 million, a decrease of -4.4% compared to the same period of the prior year: for a more consistent comparison, following the sale of the asset portfolio finalized in April 2024, the 2023 rental income was restated in order to reflect the change in the scope of consolidation (for €7.8 million).
The increase over the 2023 restated amount is therefore +3.2%, attributable to:
- for approx. +€1.9 million, higher like-for-like revenues in Italy; both malls (+2.3%) and hypermarkets (+1.9%) showed growth
- for approx. +1.2 million, to revenues – not like-for-like Italy – driven, above all, by the opening of Porta a Mare Waterfront in September 2023 and the remodeling done at the Katanè (CT) and Lungosavio (FC) centers.
The contribution of Romania’s like-for-like revenues unchanged.
Net rental income was €85.2 million, down -3.6% compared to the same period of last year; +3.7% against the restated figures, while on a like-for-like basis, a +4.4% increase was recorded.
Core business Ebitda amounted to €77.7 million, (-4.1% compared to the first nine months of 2023; +3.9% against the restated figure) with the EBITDA margin down slightly at 72.8% (-10bps). The freehold EBITDA margin (relating to freehold properties) was also down slightly by -40 bps and came in at 74.6%.
Total financial charges amounted to €-52.1 million (+67.8%); net of the accounting impact of IFRS 16 and nonrecurring expenses, financial charges landed at €-43.9 million or +50.3% higher than at 30 September 2023 due to the higher average cost of most recent loans.
Funds from Operations (FFO) reached €26.3 million, -40.7% lower than at 30 September 2023 due solely to higher financial charges. The change from the restated figure was -31.0%.
The Group closed the first nine months of the year with a net loss of €-32.0 million, -17.7% lower than the loss reported in September 2023 (€ -39.0 million).
ASSET MANAGEMENT ACTIVITIES
In the first nine months of 2024 investments amounted to around €13.5 million and were mostly allocated to capex in Italy (€12.6 million), mainly concentrated in fit-out activities for the Primark store that opened in September at Porta a Mare Waterfront. Internal restyling work at the Centro Leonardo in Imola also continued.
As part of Porta a Mare Project in Livorno, 31 apartments within Officine Storiche residential area have been sold, adding to the 73 units already sold at the Mazzini area and the other 4 sales expected to close in the coming months, therefore, only 7 units out of 115 total remain to be sold.
FINANCIAL STUCTURE
Looking at the Group’s financial structure, the Loan- to-Value came to 44.8% at 30 September 2024, slightly better than the 44.9% recorded at 30 June.
The average cost of debt was 6.03%, in line with the 6.05% reported at 30 June 2024; this indicator was impacted by the high cost of the most recent loans; the interest cover ratio or ICR, was 1.7x, while the interest cover ratio for covenants was 1.9X.
During the third quarter of 2024, the Company also continued consultation with banks and investors to refinance upcoming maturities in advance, so as to have a more diluted repayment dynamic over time, with fewer concentrations and more consistent with expected cash flows.
OUTLOOK 2024
In view of the operating and financial results achieved in the first nine months of 2024, and assuming no significant negative changes in global macroeconomic scenario, the Company confirms the FFO guidance disclosed to the market on 27 February 2024 (2024 Funds from Operations expected to be approx. €34 million).[2]
BUSINESS PLAN 2025-2027
The 2025-2027 Business Plan will be disclosed to the market and presented to the financial community on November 21st, 2024, in Milan. More details regarding the presentation on November 21st will be available on the company’s website in the coming weeks at the following link: https://www.gruppoigd.it/en/investor-relations/financial-calendar/ .
