VGP's Impressive Half Year Results for 2024
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VGP’s Half Year Results 2024
Regulated information - Inside information
VGP NV (‘VGP’ or ‘the Group’), a renowned European provider of high-quality logistics and semi-industrial real estate, today announces the impressive results for the half-year ended 30 June 2024:
Financial Performance Highlights
The Group reported a pre-tax profit of € 154.6 million, an increase of 218% compared to the first half of the previous year. This remarkable growth is attributed to various income streams:
- € 33 million derived from net rental and renewable energy income.
- € 15.7 million from joint venture management fee income.
- € 99.1 million in net valuation gains on the portfolio.
Leasing and Rental Income
During the first half of 2024, VGP recorded signed and renewed lease agreements valued at € 45.6 million, contributing to a total committed annualized rental income of € 384.7 million, reflecting a 9.7% increase year-to-date.
New Lease Agreements
A record-setting amount of € 28.8 million in new lease agreements was contracted, marking a significant increase of 47% from the same period last year.
Net Rental and Renewable Energy Income
On a look-through basis, the net rental and renewable energy income experienced an increase of 21% year-on-year, amounting to € 91.6 million.
Development Projects Overview
As of 30 June 2024, VGP has 835,000 sqm currently under construction across 34 ongoing projects, which represent a potential additional annual rent of € 56.8 million once these projects are fully completed and let.
Project Statistics
A substantial 326,000 sqm of projects were initiated during the first half of 2024, projected to yield € 21.6 million in rental income upon completion. The pre-let ratio stands at an impressive 70.1%, with assets that have been under construction for over six months achieving a pre-let status of 74.2%.
Completed Projects
During this period, VGP successfully delivered 8 projects totaling 264,000 sqm, all of which are fully let, generating a total rental income of € 17.2 million. The total completed assets now encompass 5,632,000 sqm, consisting of 229 buildings, with a near-total occupancy rate of 99% and an average asset age of only 4.0 years.
Landbank and Future Growth
The current landbank has expanded to 8.5 million sqm, providing a substantial development potential of 3.7 million sqm. This growth reflects the acquisition of 375,000 sqm of new development land, along with the strategic divestment of VGP’s interest in the Development Joint Venture LPM during the reporting period.
Renewable Energy Performance
VGP reported a strong growth trajectory in their renewable energy sector, with gross income increasing 31% year-over-year, bringing in € 3.8 million despite the overall dip in energy prices. The company has achieved a 115% year-on-year increase in photovoltaic (PV) capacity, now totaling 143.3 MWp, up from 66.6 MWp in the previous year. VGP has plans for 29.7 MWp of PV projects currently under development, with an additional 92.6 MWp in the planning stage.
Battery Project Initiatives
A significant 6.8MWh battery project is in development to enhance self-consumption and address grid capacity concerns. Additional battery projects are anticipated as part of VGP's commitment to renewable energy.
Financial Stability
VGP maintains a robust financial posture with a total cash reserve of € 625 million alongside € 400 million in undrawn credit facilities. Recently, the company drew € 135 million from the € 150 million credit facility issued by the European Investment Bank, available since February.
Cash Recycling and Debt Management
The company realized a net cash recycling amounting to € 662.1 million due to successful closings with the Deka and Areim Joint Ventures, as well as the divestiture of the Development Joint Venture LPM Moerdijk. An additional € 68 million in gross proceeds was generated from a third closing with Deka.
Cost of Debt Reduction
After the balance sheet date, VGP made a significant move by repaying a € 75 million bond that was due, effectively reducing the cost of debt from 2.25% per first half 2024 to 2.21% post-repayment.
Frequently Asked Questions
What were VGP's key financial highlights for the first half of 2024?
VGP reported a pre-tax profit of € 154.6 million, with a significant increase in net rental and renewable energy income.
How much new lease agreements has VGP signed in H1 2024?
The company contracted new lease agreements worth € 28.8 million, a 47% increase from the previous year.
What is the status of VGP's development projects?
VGP has 835,000 sqm under construction across 34 projects, with a strong pre-let ratio of 70.1%.
How has VGP addressed renewable energy initiatives?
VGP has increased their PV capacity by 115% year-over-year and plans for various new energy projects.
What steps has VGP taken regarding its financial stability?
VGP maintains a strong balance sheet with € 625 million in cash and has effectively managed its debt obligations.
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