ESR(HK:01821)2024-03-21 09:04Financial Performance - ESR Group Limited reported a revenue of $871.3 million for the fiscal year 2023, representing a 6.1% increase from $821.2 million in 2022[2]. - The company's EBITDA for 2023 was $724.6 million, down 32.2% from $1.1 billion in 2022, while adjusted EBITDA decreased by 23.1% to $885.3 million[2]. - The annual profit for 2023 was $268.1 million, a significant decline of 57.5% compared to $631.1 million in 2022[2]. - The group's revenue increased by 6.1% from $821.2 million in FY2022 to $871.3 million in FY2023, primarily driven by an increase in management fees[18]. - Management fees rose from $713.3 million in FY2022 to $736.7 million in FY2023, reflecting an increase in the asset management scale[18]. - EBITDA decreased by 32.2% from $1.0685 billion in FY2022 to $724.6 million in FY2023, mainly due to a decline in fair value gains and the absence of one-time sale gains from FY2022[19]. - PATMI fell by 59.8% from $574.1 million in FY2022 to $230.8 million in FY2023, impacted by increased interest expenses and lower fair value gains[19]. - The company reported a pre-tax profit of $394,238 thousand for 2023, down 51.7% from $815,125 thousand in 2022[32]. - Basic earnings per share for 2023 is $0.05, a decrease of 61.5% from $0.13 in 2022[32]. Assets and Liabilities - The total assets under management increased by 7.3% year-on-year to $156 billion, with management fee-related assets growing by 6.3% to $81 billion[6]. - The debt-to-asset ratio increased to 30.7% in 2023 from 22.8% in 2022, reflecting a 7.9 percentage point rise[2]. - The asset-to-liability ratio was reported at 30.7% as of December 31, 2023, with expectations to reduce it to a target range of 20% to 30% in the medium term[13]. - Total liabilities increased to $6 billion as of December 31, 2023, from $5.5 billion in the previous year, with net debt rising to $5 billion[23]. - Total equity decreased to $8.7 billion as of December 31, 2023, from $9.1 billion, impacted by a net unrealized loss of $86.3 million on financial assets[24]. - The company reported a total of $5,979,553,000 in bank loans and other borrowings as of December 31, 2023, compared to $5,496,630,000 in 2022, an increase of 8.8%[61]. Capital Management - The company raised $7.5 billion in capital during the fiscal year, including the establishment of its largest RMB income fund in China[8]. - The company has a significant amount of capital available for investment, totaling $23.9 billion, with over $13.5 billion focused on new economy sectors[8]. - The group has $23.9 billion in capital awaiting deployment, with over $13 billion allocated to new economy sectors, and management is cautiously optimistic about deploying this capital in the second half of 2024[16]. - The company plans to refinance part of its existing debt with long-term fixed-rate debt to achieve a more balanced debt composition[17]. Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.125 per share, equivalent to approximately USD 0.016 per share, representing a yield of 2.9%[7]. - The company reported a total of $69,886,000 in dividends paid to shareholders in 2023, an increase from $70,777,000 in 2022, representing a growth of 96.9%[38]. - The company proposed a final dividend of HK$0.125 per share for the year ended December 31, 2023, totaling approximately HK$527 million, a decrease from HK$550 million in 2022[64]. Operational Highlights - The overall occupancy rate for new economy assets remained above 91%, with a weighted average lease expiry (WALE) of 4.6 years[11]. - The rental growth rate for new economy assets reached approximately 8.2%, with Australia and Korea experiencing the highest growth at around 19.5%[11]. - Approximately 90% of the ongoing development projects are expected to be completed between FY2024 and FY2027, significantly expanding future management fee income sources[12]. - The group has installed 110 MW of rooftop solar power capacity and over 850 electric vehicle charging stations in its property portfolio by the end of 2023[14]. Strategic Initiatives - ESR Group plans to complete asset sales valued at over $500 million and aims for additional transactions worth $1.5 to $2 billion in the next 12 months[9]. - The group identified the sale of non-core assets worth up to $750 million, with the sale of the ARA private equity fund business being a significant milestone[10]. - The integration of LOGOS is expected to create further synergies in the Asia-Pacific new economy platform, projected to yield additional benefits in FY2024 and FY2025[10]. Market and Economic Conditions - The company anticipates continued high occupancy rates and rental growth in key markets such as Australia, Japan, and South Korea, despite a slowdown in leasing activity[16]. - Financing costs increased by 40.7% from $222.4 million in FY2022 to $312.9 million in FY2023, attributed to additional borrowings for project transitions[19].