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CTP NV reported its Q1 2025 earnings with a notable increase in gross rental income, reflecting a robust performance in its core markets. The company’s adjusted EPRA earnings per share rose to €0.21, marking a 6.9% increase from the previous year. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics, trading at an attractive P/E ratio of 6.91. Despite positive financial results, the stock experienced a slight decline of 0.98% in pre-market trading, closing at €16.36.
Key Takeaways
- Gross rental income increased by 15.9% year-over-year.
- Net rental income showed a 16.8% rise from the previous year.
- The company maintains a high tenant retention rate of 90%.
- CTP NV is expanding its footprint in Central Europe, particularly in Poland and Germany.
- The stock price showed a minor decline despite strong earnings growth.
Company Performance
CTP NV demonstrated a strong performance in Q1 2025, driven by increased rental income and strategic expansion in Central Europe. The company’s focus on deglobalization and nearshoring trends has positioned it well in the current market environment. InvestingPro data reveals impressive revenue growth of 28% over the last twelve months, with a healthy gross profit margin of 78.3%. With a diverse tenant base across industries, CTP NV continues to capitalize on the demand for industrial spaces, particularly from sectors such as automotive, e-commerce, and technology.
Financial Highlights
- Gross rental income: €182.5 million, up 15.9% YoY
- Net rental income: Increased by 16.8% YoY
- Adjusted EPRA earnings per share: €0.21, a 6.9% increase YoY
- Total cross assets value: €16.3 billion, up 2.3% from Q4 2024 and 16.7% YoY
Outlook & Guidance
CTP NV provided guidance for continued growth, with an EPS target of €0.86-€0.88 for 2025, reflecting an 8-10% growth. The company plans to develop between 1.2 and 1.7 million square meters throughout the year, aiming for double-digit EPS growth from 2026 onwards. Analysts tracked by InvestingPro maintain a strong buy consensus, with price targets suggesting up to 18% upside potential. The company’s attractive 3.61% dividend yield and four consecutive years of dividend growth further support its investment case. Expansion efforts will focus on Germany and Central Europe, leveraging strong market demand.
Executive Commentary
CEO of CTP NV emphasized the company’s dynamic approach, stating, "We are an entrepreneurial property company, very dynamic, and ready to make quick decisions." The finance executive highlighted the importance of tenant satisfaction, noting, "Tenants are happy and that’s very important." These comments underscore CTP NV’s commitment to adaptability and customer service in its growth strategy.
Risks and Challenges
- Supply chain disruptions could impact construction timelines and costs.
- Market saturation in certain regions may limit growth opportunities.
- Macroeconomic pressures, including inflation and interest rate fluctuations, could affect profitability.
- Geopolitical tensions in Europe might influence investment and expansion plans.
CTP NV’s performance in Q1 2025 reflects its strategic focus on growth and expansion in key markets. While the stock price experienced a slight dip, the company’s robust financial metrics, including an InvestingPro Financial Health Score of "GREAT" and a strong current ratio of 1.14, along with forward-looking guidance suggest a positive outlook for the future. For deeper insights into CTP NV’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro.
Full transcript - CTP NV (CTPNV) Q1 2025:
CEO/Senior Executive, CTP: Good morning from Prague here at CDP’s headquarter, and thank you for joining and for dialing in with some good news. So far, q one has been a bit bumpy and a bit interesting, I would say, for for CDP, for our clients. The markets have seen a lot of change and opportunity, which we like at CDP. We are an entrepreneurial property company, very dynamic, and ready to make quick decisions with money in hand so that the market where we are currently definitely is an interesting market and circumstances which we will do our very best to benefit from. It’s about, I think, deglobalization, it’s about nearshoring, it’s about bringing production to the markets where your clients are.
With 450,000,000 consumers in Europe, we see a lot of companies coming to Europe to set up business, to grow their business. That’s what we have been doing for the past more than two decades still to to help companies set up business and grow their business in Central Europe for the European market. Nowadays, we see Asian companies coming in. I’ve just returned back from another trip to Asia to visit our clients who are bringing more business to Europe for European market as as explained. Multiple reasons.
Decarbonization, tariffs is an issue, geopolitical circumstances. So there are lots of reasons why to bring production or e commerce activities to Europe for European markets going forward. Different industries, automotive still very interesting. E commerce, obviously technology, the electronics sector, AI driven maybe push, but also data center. And not necessarily us building data centers, but many of our clients somehow involved in the data center industry, especially Taiwanese when I refer to the Asian clients.
So a lot of change going on and definitely interesting for us to be part of. With regards to business, so far, q one has been good. Back to the Asian is around 20% of our new business. We still do a lot of business with existing clients, as you know. That is still the largest driver at CTP, so business we do for existing clients who came over, who started to work with CTP and then continue to grow.
Maybe also because we offer small, medium sized properties to help them get started, and then when they need more, we can offer them a larger building, sometimes within the same park, we can do an extension, or also we see that we do for existing clients property solutions in different parts of the portfolio, which are currently in 10 markets. And looking at other markets to to open up as well. We did sign 416,000 square meter of leases during q one of twenty five, and 04/2016 is almost 25% up compared to last year, and so we’ve done more leases, we signed more leases, and I think more importantly also we continue to collect more euros per square meter per month, so we we continue to be can see rental growth around 3% more than we got for the same square meter a year ago. Beforeward, I mentioned nearshoring one of the drivers. We’ll also see large fashion retailers who continue to grow footprint.
I mentioned fashion retailers the other day, but it’s also pet food. Europeans, they love pets. They have rabbits and donkeys, and pet food is just a great industry to be part of. We do that as well. And also pharmaceutical, we have seen many of our clients grow their business.
That’s all, of course, also to do with consumer spending, is just growing in Central European countries because people make more money. So that’s what we do as well. Defense industry, we see consumer electronics, we see, yes, it’s very diverse actually. We have so many different clients, multinationals or SMEs in different businesses. So, not overexposed to one industry or one specific client, but rather diversify.
Tenants are happy and that’s very important. We are almost 1,000 people here at CTP and I always say keep your clients happy, make sure that they can do their business, and if they do their business, if they’re successful, they will come to you for more space, or maybe they will talk to you with their suppliers, with their friends, and then through them you can get more business, and that is number one. So talk to your clients and make sure clients are happy, buildings are in an excellent condition, and that’s the target. Detention rates, 90%, nine zero. So the park model continues to be successful, growing with existing tenants, offering new tenants attractive locations.
We’ve obviously the the concept and the model of having these city park projects with CTP people on-site in the parks, look after the buildings, look after tenants, close to where the action is, stay connected to the core business, especially nowadays when we see CDP growing. It’s very important to, you know, stay and stick to the core business and and create micro teams so they can actually focus on on the business going forward. Yeah. Maybe break it down, operator. You know, the the our business is responsible for the income producing part.
Stable occupancy, 93, around 93%. Walled, six and a half years, And together is a 13,400,000 square meter of lettable area, and that is good for €750,000,000 of rental income with more than 1,500 different clients and tenants from all kind of different industry in those buildings. That’s for the operator. Jump to the developer, in house construction company. I’m very passionate about building new buildings, and we continue to do prepare a lot of projects and do a lot of innovations, making buildings better, new buildings, but also the existing buildings, continue to invest, make sure that these are in excellent condition.
We see lots of opportunities to to do better to yeah. Also, to create parks with more amenities and services, and, of course, utilities on-site. At 10% yield and cost, as we’ve been doing, big thank you to the team of in house design, procurement, all of the the people involved in the construction management to build good quality properties to last, generic design. Q one in terms of deliveries has been quite small, low below a hundred thousand square meter, but we still have a 1,900,000 square meter under construction for most of that I think we can complete this year. Almost 80%, eight zero % of the 1,900,000 square meter under construction is within existing business parks.
So and when we started with a park, we bought land, we do a nice master plan, we start to build infrastructure, and one after the other building is being built, and then we have more land to go with zoning, with permits, with infrastructure and utilities to build on those land plots for the same company or for other companies and to to continue build larger business parks. And that’s 80% of all what we have under construction. Benefit is that we know the location, know the authorities, we have infrastructure, so limited risk, we can start a development and then see how we can lease it up and then complete the building on time. When this 1,900,000 square meter is completed, we think it will produce another hundred and €48,000,000 of rental income. We think we do that north of 10% yield on cost.
And, yeah, we think that by end of this year, q ’1 into next year, most of that will be leased and will become part of the portfolio and then will be transferred to the operator. Poland, good demand, largest country, can be very competitive. We got hold of a few very nice sites there where we can do nice projects for good clients. Yeah. So overall quite satisfied with what we see in Poland, the engine of Central Europe.
If Central Europe is the engine of Europe, then within Central Europe, Poland, definitely a large opportunity. We are moving on in Germany. As you remember, we bought some land sites. So two things in Germany. One is the Deutsche industry.
That’s the portfolio of properties we bought, 100 buildings. We are working on the clients, make sure buildings are in a good condition. We need to invest here and there. In return, we get rental growth. At the same time, the future of CTP Germany is much more to develop, and we have been very lucky, I think, that we have got hold of couple of land sites, Dusseldorf, Mulheim, also Stuttgart, Rastad, etcetera, Kreisfeldt, where we are currently either under construction or preparing for construction next year.
And we are quite advanced at the same time doing the leasing. So it’s a mix of SMEs or small business units. Let’s say 450, five hundred, maybe 1,000 square meters, 808 square meters, well below 1,000. We have a loading dock in a good location in city center, close to the city center. In most locations, Rastad, Krefeld, those locations I refer to.
But then also you have larger sites, Mulheim, Dusseldorf. Mulheim will start construction next year. I think Dusseldorf’s gonna take a bit longer, but we have the full support of the city of Dusseldorf as well. So, yeah, a lot of opportunity. I continue to visit Germany every week.
The management team is has grown a lot and in terms of responsibility, in terms of where we wanna go with CDP Germany for the for the coming years, and we have a nice business plan for twenty twenty thirty. So that looks good. So overall, quite positive and and maybe a bit better than, yeah, you would expect. Seems to be good, a good demand and in Europe for Europe, and then definitely CDP with our activities in Central Europe with the strong client base we have with all of the local knowledge. I think we are in a in a good position, so thank you very much for your attention.
I will be available for any any questions if you have later on. Will now hand over to Martin. Thank you.
Martin, CFO, CTP: Moving on to the financial highlights. The like for like rental growth came to 4.2% in q one twenty five, driven by indexation and strong rent reversion. Occupancy remained stable at 93%. And our gross rental income increased by 15.9% year on year to €182,500,000. Net rental income went up by 16.8% year on year as we reduced the service charge leakage further.
Consequently, the NOI to GRI ratio came to 98.3%. Analyzed rental income increased to €748,000,000 illustrating strong cash flow generation of our portfolio. And we confirm our target to reach an annualized rental income of €1,000,000,000 by ’27. The company specific adjusted EPRA earnings per share increased 6.9% year on year to €21 cents, on track to reach our guidance for ’25. As highlighted with the ’24 results, we did a material amount of refinancing in ’24.
So we de priced the vast majority of our debt stack. This results in a slight headwind for the ’25 EPS, but we expect to return to double digit EPS growth from ’26 onwards. Now looking at the valuation results. For the Q1 and Q3 results, owning the investment properties under development are revalued. In Q1 twenty five, the devaluation amounts to €156,200,000 driven by the construction and leasing progress on our developments.
Our total cross assets value now stands at €16,300,000,000, up 2.3% in q one twenty five and sixteen point seven percent year on year. CTP’s reversionary yield stands at conservative 7.1%. We saw the first yield compression in the second half of last year, and we expect both further yield compression in ’25 as well as positive EFE growth for the CEE region. In most CEE markets, inflation adjusted real rents remained lower than fifteen years ago, illustrating the affordability of the region for our tenants as well as the midterm rental growth potential. This is also illustrated by the new leases that we signed in q one twenty five, which were 3% higher than the new leases signed in q one twenty four.
We also saw transaction markets reopening across Europe as there is more clarity around funding cost. And especially on the private equity side, its funds coming to their maturity, we expect to see more churn. This will further support our valuations, but as well offer opportunities for us. Our apparent net tangible assets per share increased from €18.08 at year end ’20 ’4 to €18.58 at quarter end, representing an increase of 2.8%. Year on year, the increase was 12.6%.
With this NTA growth and our dividend, we delivered a total accounting return of 16% in the last twelve months to our shareholders. And now I hand over to Richard.
Richard, Finance Executive, CTP: In Q1 twenty twenty five, we raised €1,200,000,000 of debt to further improve our liquidity position. We issued €1,000,000,000 of bonds directly after our full year 2024 results, seizing the market opportunity ahead of the tariff announcements and the subsequent market turmoil. In addition, we closed our inaugural Samurai loan of 30,000,000,000 yen, the equivalent of €185,000,000. Diversifying the sources of our funding is one of our main priorities. We transformed CTP from a purely euro senior secured financing structure in 2020 to now having a largely unsecured financing structure and we did this through bonds, private placements, unsecured syndicated bank loans consistent with our stable investment grade rating.
Adding the Japanese yen market to our funding mix further improves our position as the Japanese yen market, which is the world’s third largest lending market after US dollars and euros, is competitive at different times than the euro market. We continue to actively manage the loan portfolio in Q1 twenty twenty five and negotiated margin reductions on a further €159,000,000 of secured bank loans. In total, we have renegotiated or repaid over €1,100,000,000 of our most expensive bank loans in recent months. Our cash position stands at €1,800,000,000 When including our RCF, our liquidity position amounts to €3,100,000,000, more than sufficient to meet our cash needs for the next twelve months. The average maturity of our debt stands at five point one years, with only €547,000,000 of debt maturities in twenty twenty five.
At the end of
: the
Richard, Finance Executive, CTP: quarter, CTP’s average cost of debt came to 2.9%, slightly down compared to year end 2024 as the renegotiated secured loans with lower margins reduced our funding costs from Q1. Our marginal cost of funding is currently around 4% for five year money. Thanks to our strong cash generating portfolio, we have a healthy interest coverage ratio of 2.5 times, while our normalized net debt to EBITDA remained stable at 9.1 times. As shown during our last Capital Markets Day, thanks to our market leading development yield on cost of over 10%, each euro we invest in our pipeline increases our ICR and decreases our net debt to EBITDA. Our loan to value stands at 45.3%, stable from year end 2024.
We are confident in the outlook for CTP. Our leasing remains strong. We see near shoring speeding up in many industries with production in Europe for Europe continuing to drive demand. Our pipeline is highly profitable and our growth is tenant led. Thanks to our industry leading yield on cost of over 10%, we’re able to deliver sustainable and profitable organic growth while maintaining our strong financial position.
We confirm our EPS guidance of $86 to $0.88 for 2025, representing an 8% to 10% growth compared to 2024, and we expect to deliver 1,200,000 to 1,700,000 square meters of developments this year, in line with our long term growth targets. Thank you for your attention. We now welcome your questions.
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