Merlin reported a net profit of 12.5 million euros for the period, marking a 98% drop from the 567.1 million euros earned in the same period a year earlier, according to the latest release issued on Thursday.
The decline is attributed to higher interest rates affecting asset valuations, including real estate holdings, and the impact of selling Tree, the BBVA office portfolio that SOCIMI exited last year.
On the asset side, the gross value stood at €11,367 million, as shown in the most recent income statement, versus €11,599 million that the portfolio was valued at at the end of September 2023.
This created a deduction of about €200 million from the accounts, contrasting with a positive €122 million revaluation effect recorded a year earlier. In any case, this is an accounting change with no cash outlay.
The sale of BBVA offices also influenced operating profit, which fell 3.6% to €216 million in the period. Excluding the Tree sale, this metric would have risen by 12%.
The operating profit corresponds to €0.46 per share, aligning with the €0.60 per share that the company expects to report for the full year.
Overall, revenue increased by 7.2% to €365 million, while gross operating profit (EBITDA) rose by 10% to €274 million.
99% occupancy in logistics
Leasing income from office properties rose by 6.8% under comparable conditions, with an occupancy rate of 91.9%. In the logistics segment, rents advanced by 5% and the occupancy rate neared full capacity at 99%.
Shopping malls saw tenant sales advance by 2.4%, and foot traffic exceeded pre-pandemic levels by 15.1%. Data centers in Madrid-Getafe, Barcelona-PLZF, and Bilbao-Arasur are already operational and handed over to tenants.
In terms of disposals, under its policy of rotating non-strategic assets, Merlin completed sales totaling €31.6 million, including two shopping centers and an industrial warehouse.
From a financial standpoint, the loan-to-value ratio on the asset base remained pressurized by valuation movements, rising to 34% from 32.7% in December 2022. By 15 November, Merlin carried €170 million of seven-year bilateral debt, with debt exchanges using a medium swap carrying a cost of +125 basis points.
Dividend
Finally, the SOCIMI board approved an interim dividend of €0.20 per share for the 2023 fiscal year at its meeting on Thursday. The payment date is set for December 12, matching the prior year’s distribution.
The record date for shareholders entitled to receive the dividend will be November 27. Settlement will occur through the securities clearing system, with Iberclear acting as the payment agent, following the standard procedures of the market.