Warehouses De Pauw 1H24 Results, Solid performance in a turbulent stock market

EPRA EPS 1H24 came slightly above our expectation at EUR 0.71 vs. 0.70 exp. WDP repeated the FY24 EPRA EPS guidance of 1.47, slightly above our 1.46 expectation. The 5% expected yoy growth is impressive as its average share count increased by 8%. The NIY stabilised and indicates an end to the yield expansion trend. The “Blend27” strategy was repeated with a guidance of 1.70 EPRA EPS by FY27. It will spend up to 1.5bn Capex and already identified 0.5bn. New developments (0.1bn) over 1H24 are 77% pre-let and GIY of 7.4%. Another remarkable metric is the decline in Cost of Debt from 1.9% to 1.7%. WDP “over-hedged” its debt in anticipation of its investment program. The only dissonant in the report is the solar income that declined 12.5%. WDP has been an early mover in the Energy as a Business space, but energy prices have collapsed and more investments in grid balancing are needed. We still believe in the need and potential of these investments, but reduce our target price to 32.0 from 34.0 to reflect the longer horizon.