ADLER Group S.A.
Adler Group’s rental business continued to develop positively in 2024 while the recapitalisation is expected to be completed in September 2024

Adler Group’s rental business continued to develop positively in 2024 while the recapitalisation is expected to be completed in September 2024

• Net rental income of €103m in the first half of 2024, 4% lower compared to the previous year due to portfolio disposals in 2023
• Like-for-like rental growth of 4.6%, vacancy rate at 1.8%, average residential rent at €7.65/sqm/month
• FY 2024 net rental income guidance confirmed
• Decelerated value decline of 2.1% in H1 2024 signals a potential stabilisation in valuations of the yielding assets
• Comprehensive recapitalisation fully on track with expected completion in September 2024
• Successful prolongation of all Adler Group 2024 maturing bank loans in the total amount of €262m

Luxembourg, 29 August 2024 – Adler Group S.A. (“Adler Group”) announces its results for the six-month period ending June 2024 with a solid operational performance. Net rental income decreased only slightly by 4% from €108m in the previous year to €103m due to portfolio sales that have since then been completed, e.g. the Wasserstadt transaction in 2023. The decrease in size was partly compensated by like-for-like rental growth of 4.6% resulting in an average residential rent of €7.65/sqm/month for the core portfolio as per June 2024. The operational vacancy rate stood at 1.8% as per end of Q2 2024. Adler Group confirms its guidance for the net rental income to range between €200m and €210m in the full year 2024.

As per 30 June 2024, Adler Group’s residential core portfolio (not comprising units owned by the subsidiary BCP) includes 25,005 units, with the majority of 17,723 units located in Berlin. As in previous years, Adler Group’s real estate portfolio was externally revalued at the end of the second quarter of 2024. Compared to prior periods, the value of the yielding assets fell only moderately by 2.1%. With that, the gross asset value (GAV) of the yielding portfolio came down to €4.1bn as per June 2024 (vs. €4.2bn as per December 2023).

“The decelerated value decline of (2.1%) in H1 2024 signals a potential stabilisation in valuations. As we see that the devaluation cycle is coming to an end, we do not expect further significant value adjustments for our yielding asset portfolio in the second half of the year” comments Thierry Beaudemoulin, CEO of Adler Group.

In Q2 2024, Adler Group signed disposals of condominium units in Berlin for a total sales price of c. €4m. The disposal of the development project Leipzig FourLiving VauVau to the city of Leipzig was completed in Q2 with net proceeds of €26m received.

The income from operating activities amounted to minus €319m in the first six months of the current financial year (previous-year period: minus €923m) and was largely affected by the negative portfolio revaluation result in the second quarter. In addition to that, the net result of minus €507m (previous-year period: minus €1,040m) was also impacted by the increased interest expenses. The weighted average cost of debt stood at 6.4% as per June 2024. At the end of Q2 2024, Adler Group had cash and cash equivalents of €334m, a slight reduction of €19m compared to the Q1 2024 balance sheet.

The negative net earnings situation is also reflected in the financial key figures FFO and EPRA NTA. FFO I was negative at minus €54m (previous year: plus €8m) due to the increasing interest burden. The EPRA NTA amounted to €18m, or €0.12 per share, as of 30 June 2024, compared to €529m or €3.49 per share as of 31 December 2023.

Following the binding agreement with a group of bondholders signed in May 2024, Adler Group has made further important steps towards completion of the comprehensive recapitalisation. Stefan Brendgen, Chairman of the Board of Directors of Adler Group, comments as follows: “We are grateful for the support that we have received from both our bondholders and the shareholders and expect to complete the recapitalisation in September 2024. This agreement provides Adler Group with financial stability allowing it to execute its strategy in the interest of all of its stakeholders.”

Beside the progress made on the recapitalisation, Adler Group has successfully prolonged all its 2024 maturing bank loans in the total amount of €262m. In addition to that, the company is in constructive discussions with its lending banks regarding the prolongations of the 2025 maturing bank loans.

Following the completion of the comprehensive recapitalisation in September 2024, Adler Group expects to publish its audited annual reports for 2022 and 2023 by the end of September.

Webcast

A webcast for analysts and investors will be held today, Thursday, 29 August 2024, at 10:00am CEST / 09:00am BST.

The webcast is available at the following link:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=lOOnq8tK

Contact

Investor Relations:
T +352 203 342 10
investorrelations@adler-group.com