HALF-YEAR 2024: ARGAN ACHIEVED A DOUBLE WIN BY COMBINING GROWTH
& DEBT REDUCTION
Half-year results – Neuilly sur Seine,
Wednesday, July 24, 2024 – 5.45 pm
Half-year 2024:
ARGAN achieved a double
win by combining
GROWTH & DEBT REDUCTION
- Sustained growth in main
financial indicators
- Rental income: +8% at €98
million
- Recurring net income – group
share: +7% at €67 million
- Consolidated net income –
group share: €91 million
- Strong debt
reduction
- EPRA LTV at 46%: down 4
points vs. end of 2023
- Full success of a capital
increase in an amount of €150 million
- Cost of debt maintained at
2.3%
- A continuously strengthened
Prime portfolio
- €180 million investments in
2024
- Portfolio valuation
(excluding duties): €3.8 billion, with 100% occupancy
- Stable NAV EPRA NTA:
€79
- Annual targets for 2024
confirmed
- Rental income: €197 million
(+7% vs. 2023)
- Recurring net income – group
share: €135 million1
(+7% vs. 2023)
- Dividend per share:
€3.302 (+5% vs.
2023)
Ronan Le Lan, Chairman of ARGAN’s Executive
Board:
« On a backdrop that remains
uncertain and that can still weigh on future trends in
rates, Argan delivered a solid
financial performance in the first six
months of the year. More particularly, we recorded a strong growth
in our rental income (+8%) and recurring net income (+7%),
as well as a significant and proactive reduction in our
debt with an EPRA LTV down 4 points over 6 months to
46%.
In 2024, we have decided to further
accelerate our debt reduction and growth paths
with a capital increase in April, that successfully led to raising
€150 million. We are thus now aiming for
an average annual increase in our rental income of
+7% over the 2024-2026
period (vs. +5% previously) and EPRA LTV
of 44% by the end of 2024 (vs. 48% previously), and
around 38% by the end of 2026.
Building on a strong balance
sheet, Argan is now, more than ever, on track to
fully benefit from the favourable trends linked to the development
of the logistics real estate in France. »
2024 targets
confirmed:
|
Indicators |
Updated 2024 targets |
Initial 2024 targets |
Full year 2023 |
Trends
vs. 2023 |
|
Rental income |
€197m |
€197m |
€184m |
+7% |
|
Recurring net income – Group share |
€135m* |
€133m |
€126m |
+7% |
|
Dividend per share |
€3.303 |
€3.301 |
€3.15 |
+5% |
* The 2024 target for the recurring net income
was raised as part of the capital increase that took place on April
23, 2024. For more information, please refer to press releases
dated April 23 and April 24, 2024.
Financial performance as at June 30,
2024
Financial key figures as at June 30,
2024:
|
Consolidated income statement |
June 30, 2024 |
June 30, 2023 |
Trends |
|
Rental income |
€98.1 million |
€90.9 million |
+8% |
|
Net income – Group share |
€90.9 million |
-€267.0 million |
n.a |
|
Net income per share – Groupe
share |
€3.84 |
-€11.6 |
n.a |
|
Net recurring income – Group share |
€67.0 million |
€62.8 million |
+7% |
|
Recurring net income per share – Group
share |
€2.82 |
€2.7 |
+3% |
|
|
|
|
|
|
Valuation indicators |
June 30, 2024 |
Dec. 31, 2023 |
Variation |
|
Portfolio valuation excluding duties |
€3.76 billion |
3.68 billion |
+ 2% |
|
NAV EPRA NTA per share |
€78.95 |
€79.1 |
0 % |
|
NAV EPRA NRV per share |
€89.73 |
€90.6 |
- 1 % |
|
NAV EPRA NDV per share |
€82.83 |
€83.6 |
-1 % |
| |
|
|
|
|
|
|
|
|
Debt indicators |
June 30, 2024 |
Dec. 31, 2023 |
Variation |
|
LTV EPRA |
45.9% |
49.7% |
-380 bps |
|
LTV EPRA (incl. duties) |
43.4% |
47.1% |
-370 bps |
|
Cost of debt |
2.3% |
2.3% |
0 bps |
|
Net debt / EBITDA6 |
9.5x |
11.0x |
-1.5 pts |
2024 Half-year consolidated accounts were
agreed by ARGAN’s Executive
Board on July 18, 2024, and approved by the Supervisory Board on
July 23, 2024. The procedures related to the limited review of our
statutory auditors on these consolidated financial statements have
been finalized, and their limited review report was
issued.
Strong growth in main financial
indicators
ARGAN recorded
strong increases in its main financial indicators in the
first six months of 2024. Rental income and Group
share recurring net income grew at a sustained and
similar pace, recording respectively +8%
and +7%. These results are a demonstration
of our Group’s ability to turn its very
good business momentum into created value and
lasting cash flows.
Sustained growth in rental income:
+8%
Rental income grew +8% in the first half
of 2024, to €98 million. This
sustained increase mainly came from the rents’ indexation (+4.6%)
that took place on January 1, 2024, complemented by the full-year
impact of 2023 deliveries and 2024 deliveries.
Building on a high-quality PRIME
portfolio, in demanded locations, the occupancy rate remained at
100% for the 6th
consecutive quarter in a rental market with a vacancy rate
that is still low (vacancy at 4.3% in France at the end of
June 2024 according to CBRE). Our EPRA vacancy rate was thus 0% at
the end of June 2024.
Increase in the Group share
recurring net income: +7%, in line with rental
income
Group share recurring net income was up
+7%, at €67 million at the end of June 2024, representing
a margin on rental income that was
maintained at a high level of 68%. This testifies to the
soundness of Argan’s hedging policy, thus
limiting the impact on Group’s cost of debt coming from rates
increases that took place when comparing the first half of 2023 to
the first half of 2024.
Thanks to a fair value variation of our
portfolio that is once again turning positive, for +€17.0 million
over 6 months, the consolidated
Group share net income was €90.9 million at the
end of June 2024.
Back to an increasing portfolio
value
A premium portfolio appraised (excl.
duties) at €3.76 billion
The portfolio delivered
(excluding properties under development) represented
3,615,000 sq.m as
at June 30, 2024. Excluding duties, the valuation was €3.76
billion (€3.98 billion including duties), i.e., an
increase of +2% from December 31, 2023.
The capitalisation rate excluding
duties was thus 5.30%, a slight increase
from 5.10 %, which was the rate excluding duties recorded on
December 31, 2023. Including duties, the
capitalisation rate (EPRA Net Initial Yield) was
5.00%, reflecting the PREMIUM quality of our
assets.
The average residual lease term
was 5.5 years as at June 30, 2024 and the
weighted average age was 11.5 years.
A record development pipeline for 2024: €180
million7
In total, ARGAN has thus commitments for
close to €180 million in developments representing 170,000 sq.m in
2024, generating an average yield approaching 7%. The high
profitability of projects to be delivered in 2024 reflects
ARGAN’s ability to pursue its profitable growth
momentum, driven by a portfolio of Aut0nom®
-labelled warehouses on strategic
locations, as part of an approach of pre-let
projects and long-term partnerships with reliable
and blue-chip clients.
Stable NAV EPRA of continuation (NTA): €79 per
share
The NRV (reconstitution NAV) was €89.7 per share
as at June 30, 2024 (-1% over 6 months).
The NTA (continuation NAV) was €78.9 per share as at June
30, 2024 (almost stable over 6 months).
The NDV (liquidation NAV) was €82.8 per share as at June 30, 2024
(-1% over 6 months).
More particularly, the trend in the NTA
(continuation NAV) over the half-year
represents, in value, a limited decrease of -€0.2
compared with December 31, 2023. This came from the net result per
share (+€2.7), the change in the value of the assets (+€0.7), the
dilutive impact of the new shares created as part of the capital
increase that took place in H1 2024 (-€0.5), the payment of the
dividend in cash (-€2.1) and in shares (-€1.0).
A sound balance sheet: Significant decrease in debt
ratios
A cost of debt that remains under
control
Gross financial debt was
€1.8 billion as at June 30, 2024.
Including available cash and cash equivalent at the end of June
2024 for €63 million, net debt was also
close to €1.8 billion.
On a backdrop of interest rates that were still at a high
level in the first half of 2024, the average cost of debt as at
June 30, 2024 was stable at 2.3 %, for a
maturity of 5.5 years. Our Group is now expecting a cost of debt
stabilising at 2.3% for 2024 based on a 3-month Euribor forecast of
close to 4% on the full-year.
The cost of debt over the half-year thus remained contained with
the following breakdown:
-
58 % fixed-rate debt;
-
39 % of hedged variable debt;
- Only 3% variable rate debt
that is not hedged.
Significant decrease in debt
ratios
Our net debt level as at June 30, 2024, led to a
net EPRA LTV (net financial
debt/appraised value excluding duties) that recorded a
significant 4-point decrease at 45.9%, well below
our bond’s covenant (65%), and the net debt /
EBITDA8 ratio
decreased to 9.5x from 11.0x at the end of December
2023.
Successful capital increase in an amount of €150
million
On top of reflecting a
maintained solid portfolio valuation at a Prime level for
Argan, the decrease in net
EPRA LTV ratio in the first half also testifies to the
positive impact of the capital
increase9 made in
April in an amount of €150 million through an ABB process
(at a price per share of €74).
With this capital increase, and
building on a strategy that aims at not subscribing any
additional debt until 2026, Argan has set the following
main targets:
- A strong
decrease in its net EPRA LTV ratio from 50% at the
end of 2023 to around 44% at the end of
2024; and
- Bringing down
its net debt/EBITDA ratio to around
9.5x at the end of 2024, from 11x at the
end
of 2023.
Argan also plans to leverage this equity
increase to continue its development, targeting a
CAGR of its rental income of +7% over the 2024-2026
period, and to increase the liquidity of its share
on the stock market, with the free float having
increased from 44% to 48% of the company's capital.
€78 million in targeted assets sales for
2024
Additionally, and in support of its debt
reduction policy, Argan is deploying an
assets sales program in an amount of about €180 million for
the 2024-2026 period and plans to achieve around
€78 million in 2024, with:
- €18
million already finalized with the disposal – in
the second quarter – of a logistics
platform in
Caen (14) of 18,000 sq.m;
and
- The remaining amount of
about €60 million planned over the second half of
2024.
*********************
2024 financial calendar (Publication of the
press release after closing of the stock exchange)
- October 1: Net sales of 3rd quarter 2024
2025 financial calendar (Publication of the
press release after closing of the stock exchange)
- January 3: Net sales of 4th quarter 2024
- January 16: Annual results 2024
- March 20: General Assembly 2025
About ARGAN
ARGAN is the only French real
estate company specializing in the DEVELOPMENT & RENTAL OF
PREMIUM WAREHOUSES listed on EURONEXT and is the leading player of
its market. Building on a unique client-tenant-centric approach,
ARGAN builds pre-let PREMIUM warehouses for blue-chip clients and
supports them throughout all project phases from the development
milestones to the rental management.
Profitability, tight control over our debt and sustainability are
at the heart of ARGAN’s DNA. Its strongly
proactive ESG policy has very concrete results with our Aut0nom®
concept, the “in-use” Net Zero warehouse.
As at June 30, 2024, our portfolio represented 3.6 million sq.m,
across about a hundred warehouses, exclusively located in the
continental part of France, and this portfolio was valued €3.8
billion for a yearly rental income of about €200
million.
ARGAN is a listed real estate investment company
(French SIIC), on Compartment A of Euronext Paris (ISIN
FR0010481960 - ARG) and is included in the Euronext SBF 120, CAC
All-Share, EPRA Europe and IEIF SIIC France indices.
www.argan.fr
Francis Albertinelli – CFO
Aymar de Germay – General Secretary
Samy Bensaid – Head of Investor Relations
Phone: +33 1 47 47 47 40
E-mail: contact@argan.fr
www.argan.fr |
Marlène Brisset – Media relations
Phone: +33 6 59 42 29 35
E-mail: argan@citigatedewerogerson.com
|
|
|
Appendices
Consolidated net income (IFRS)
|
In € millions |
June 30, 2023
(6 months) |
December 31, 2023
(12 months) |
June 30, 2024
(6 months) |
|
Rental income |
90.9 |
183.6 |
98.1 |
|
Rebilling of rental charges and taxes |
28.3 |
33.9 |
29.9 |
|
Rental charges and taxes |
-29.0 |
-35.0 |
-30.1 |
|
Other property income |
1.6 |
3.2 |
1.8 |
|
Other property expenses |
-0.1 |
-0.2 |
-0.2 |
|
Net property income |
91.7 |
185.5 |
99.4 |
|
EBITDA (Current Operating Income) |
85.3 |
172.1 |
92.6 |
|
Of which IFRS 16 impact |
1.5 |
3.0 |
1.6 |
|
Change in fair value of the portfolio |
-331.4 |
-370.8 |
18.2 |
|
Change in fair value IFRS 16 |
-1.2 |
-2.4 |
-1.2 |
|
Other operational expenses |
- |
- |
- |
|
Income from disposals |
-0.2 |
-0.2 |
- |
|
EBITDA, after value adjustments (FV) |
-247.5 |
-201.2 |
109.7 |
Income from cash and equivalents
Interest on loans and overdrafts
Interest on IFRS 16 lease liabilities
Borrowing costs
Change in fair value of the derivative instruments
|
1.4 |
1.6
-41.4
-1.9
-3.7
-0.2
|
0.4 |
|
-20.2 |
-23.3 |
|
-0.9 |
-0.9 |
|
-1.9 |
-1.6 |
|
-0.2 |
-0.1 |
|
Early repayment penalties |
- |
- |
- |
|
Income before tax and other financial income and
expenses |
-269.3 |
-246.8 |
84.3 |
|
Other financial income and expenses |
-0.2 |
-19.7 |
6.8 |
|
Tax |
- |
- |
- |
|
Share of profit of equity-accounted companies |
- |
- |
0.1 |
Consolidated net income
Consolidated net income – group share
|
-269.5 |
-266.4
-263.5
|
91.1 |
|
-267.0 |
90.9 |
|
Consolidated net income per share (€) |
-11.6 |
-11.4 |
3.8 |
Net recurring income
|
In € millions |
June 30, 2023
(6 months) |
December 31, 2023
(12 months) |
June 30, 2024
(6 months) |
|
Consolidated net income |
-269.5 |
-266.4 |
91.1 |
|
Change in fair value of hedging instruments |
0.2 |
0.2 |
0.1 |
|
Change in fair value of the portfolio |
331.4 |
370.8 |
-18.2 |
|
Income from disposals |
0.2 |
0.2 |
- |
|
Other financial expenses |
0.2 |
19.7 |
-6.8 |
|
Tax |
- |
- |
- |
|
Share of profit of equity-accounted companies |
- |
- |
-0.1 |
|
Early repayment penalties |
- |
- |
- |
|
Allocation of free shares |
- |
0.6 |
0.5 |
|
Other operating expenses non-recurring |
- |
- |
- |
|
Impact of IFRS 16 |
0.6 |
1.3 |
0.5 |
|
Net recurring income |
63.1 |
126.2 |
67.1 |
|
Minority interests |
0.3 |
0.6 |
0.1 |
|
Net recurring income – Group share (EPRA) |
62.8 |
125.6 |
67.0 |
|
Recurring net income per share (€) |
2.7 |
5.5 |
2.8 |
Simplified consolidated balance sheet
|
In € millions |
June 30, 2023 |
December 31, 2023 |
June 30, 2024 |
|
Non-current assets |
3,909.1 |
3,935.5 |
4,023.3 |
|
Current assets |
270.6 |
118.1 |
145.9 |
|
Assets held for sale |
- |
17.5 |
- |
|
Total Assets |
4,179.7 |
4,071.1 |
4,169.2 |
|
Shareholders’ equity |
1,888.0 |
1,887.8 |
2,075.1 |
|
Minorities |
35.1 |
34.6 |
34.8 |
|
Non-current liabilities |
1,873.0 |
1,864.5 |
1,833.4 |
|
Current liabilities |
383.6 |
276.2 |
225.9 |
|
Liabilities classified as held for sale |
- |
8.0 |
- |
|
Total Liabilities |
4,179.7 |
4,071.1 |
4,169.2 |
NAV EPRA
|
|
December 31, 2023 |
June 30, 2024 |
|
|
NRV |
NTA |
NDV |
NRV |
NTA |
NDV |
Shareholders’ equity (in €m)
Shareholders’ equity (in €/share) |
1,887.8
81.8 |
1,887.8
81.8 |
1,887.8
81.8 |
2,075.1
81.7 |
2,075.1
81.7 |
2,075.1
81.7 |
|
|
|
|
|
|
|
|
|
+ Fair value of financial instruments (in €m) |
-5.5 |
-5.5 |
- |
-14.0 |
-14.0 |
- |
|
- Goodwill in the balance sheet (in €m) |
- |
-55.6 |
-55.6 |
- |
-55.6 |
-55.6 |
|
+ Fair value of fixed-rate debt (in €m) |
- |
- |
98.2 |
- |
- |
85.1 |
|
+ Transfer taxes (in €m) |
208.4 |
- |
- |
217.3 |
- |
- |
| |
|
|
|
|
|
|
= NAV (in €m)
= NAV (in €/share) |
2,090.7
90.6 |
1,826.6
79.1 |
1,930.4
83.6 |
2,278.4
89.7 |
2,005.4
78.9 |
2,104.5
82.8 |
Disclaimer
Some elements or statements included in this
press release may contain forward looking data or prospective
estimates regarding potential future events, trends, roadmaps or
targets. Although ARGAN considers these forward-looking statements
rely on reasonable assumptions at the time this document is
released, forward looking projections and announced trends are by
nature subject to risks, identified or not as of today. These can
lead to significant discrepancies between actual results and those
indicated or implied in elements or statements contained in this
press release.
For more detailed information regarding risks, readers can refer to
the latest version of the Universal Registration Document of ARGAN,
filed with the Autorité des marchés financiers (AMF) and available
in a digital format on the AMF website (www.amf-france.org) as well
as ARGAN’s (www.argan.fr).
ARGAN makes no undertaking in any form to publish updates or revise
its forward-looking statements, nor to communicate new pieces of
information, new future events or any other circumstances that may
question these statements.
1 Confirmed target for the recurring net income previously
raised on the occasion of the capital increase finalized on April
23, 2024. For more information, please consult press releases dated
April 23 and 24, 2024.
2 Subject to approval during the Shareholders Annual Meeting of
March 20, 2025.
3 Subject to approval during the Shareholders
Annual Meeting of March 20, 2025.
4 Calculated on the weighted average number of shares of
23,919,304.
5 Calculated on the number of shares at the end of June 2024 of
25,402,673.
6 Net debt on a proforma EBITDA (half-year EBITDA on a yearly
basis).
7 For more information regarding development projects and
deliveries of 2024, please consult the press release date July 1,
2024.
8 Net debt on a proforma EBITDA (half-year EBITDA on a yearly
basis).
9 For more information on mentioned capital increase, please refer
to press releases dated April 23 and 24, 2024.
- 20240724 - ARGAN_Half-Year_Results 2024
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