Shares in Vonovia saw an increase after the company released its nine-month results, highlighting continued deleveraging efforts through asset sales.
At 0900 GMT on Friday, Vonovia shares were up 3.8% at EUR23.61.
Decline in Adjusted Earnings
During the first nine months of the year, the German real estate company reported a decline in adjusted earnings before interest, taxes, depreciation, and amortization. The figures dropped to 2.01 billion euros ($2.13 billion) from EUR2.11 billion in the same period last year.
Revenue and Operational Profitability
Total segment revenue also fell to EUR4.23 billion from EUR4.61 billion. Meanwhile, group funds from operations, a crucial measure of operational profitability, decreased to EUR1.45 billion from EUR1.58 billion.
However, Citi analysts Aaron Guy and Aakanksha Anand noted that apartment sales reached EUR1.7 billion, surpassing estimates and indicating progress in reducing leverage and covering debt maturities.
Loan-to-Value Ratio and Rental Growth
Citi reported that the proforma loan-to-value ratio stood at 45%, which means all unsecured debt maturities are covered until the end of Q1 2025.
In terms of organic rental growth, there was a 3.8% increase compared to the same period last year (which had a growth rate of 3.3%). The analysts anticipate this growth trend to continue into the next year.
Citi stated, “If interest rates moderate or even decline due to a recession, Vonovia is expected to outperform towards our price target.”