PSP Swiss Property Raises Guidance for Adjusted Earnings in 2023

PSP Swiss Property, a leading Swiss real-estate company, has increased its guidance for adjusted earnings in 2023. However, the company reported a decline in net profit for the second quarter, primarily due to a devaluation in its real-estate portfolio.

Improved Earnings Expectations

On Friday, PSP announced that it now anticipates earnings before interest, taxes, depreciation, and amortization (excluding gains or losses on property investments) to reach 295 million Swiss francs ($335.8 million) this year. This forecast is higher than the previous guidance of CHF290 million.

While temporary rent losses are expected due to ongoing major renovation projects, PSP is confident that overall rental income will still surpass that of 2022. This is attributed to inflation adjustments in rental contracts, project completions, and past acquisitions.

Second Quarter Performance

PSP reported a net profit of CHF19.9 million for the second quarter, compared to CHF149.2 million during the same period last year. The company incurred a CHF90.7 million loss stemming from changes in the fair value of its real-estate investments.

However, rental income for the quarter saw an increase to CHF82.2 million, rising from CHF78.7 million. Adjusted Ebitda also showed improvement, reaching CHF80.6 million compared to CHF68.1 million in the prior year.

Net Asset Value and Conclusion

As of June, PSP's net asset value per share stood at CHF111.19, slightly lower than the CHF113.33 recorded at the end of December.

In summary, PSP Swiss Property remains optimistic about its future earnings despite the challenges faced in the second quarter. The company's focus on significant renovation projects coupled with inflation adjustments in rental contracts positions it well for continued growth.