Mobimo Holding AG (MOBN) Earnings Call Transcript & Summary

Good day, and welcome to the Business Update on COVID-19 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Daniel Ducrey. Please go ahead, sir.

Thank you. Dear investors, dear analysts and journalists, thank you for participating at this conference call for the business update as it has been published this morning. It is very important for us to provide you with information on our business activities after these extraordinary weeks, especially since the half year results are still a moment away, will be 31st of July. My presentation will take less than 10 minutes, after which, we will have time for your questions. I'm sure you have read our communicate this morning and know that Mobimo has basically come through this crisis reasonably well. Our portfolio is highly diversified and includes a significant portion of residential properties. Residential properties account for 47% of the value of the investment portfolio and contribute almost 39% of our rental income. We do not expect the coronavirus crisis to have any impact on this important part of our portfolio. Fortunately, the residential market continues to be dynamic. During the lockdown, we completed all planned apartment handovers and continued to find new tenants. The Aeschbachquartier, for example, is now fully let, and we have more than 90% of the apartments rented out in the Mattenhof. As you all know, the gastronomy and retail sectors were particularly hard hit by the lockdown. This type of use accounts for 21.2% of the rental income in Mobimo's portfolio, out of which, 10% are hotel and catering and 11.2% from retail. In the retail sector, I would like to highlight that the difference between -- or the portion of the nonfood sector accounts for around 80% of the overall rental income in retail. The proportion of turnover rental income is incidentally negligible at Mobimo. It's less than 1%. Our office and commercial tenants were less affected, and this also applies to the Quartier du Flon, which has a considerable portion of office use at around 35%. A question that has attracted considerable interest in the recent weeks, and this not only in the media, was whether and how landlords are accommodating their tenants affected by the lockdown. For Mobimo, I can say, of course, we made concessions. It is in our own best interest to support our tenants and to help them in this extraordinary and difficult time. The support measures adopted, particularly for the small businesses and catering and gastronomic establishments affected by the official lockdown, they are substantial. Mobimo is implementing measures in 3 categories: First, for business tenants with net rent below CHF 5,000 and reopening at 27th of April, Mobimo will waive the rent for the month of April and May in full. Second, the restaurants and catering establishments in 1 of our 3 big districts will also be relieved of 2 months of rent, and the same similar restaurants or cafés in other properties will be -- with a rent below CHF 5,000 will also be granted a 2-month reduction. In addition to these measures, which already helps a large number of our tenants, many constructive discussions with our tenants are concluded or on the way to be so. They will lead to individual agreements. Not only do we consider a sensible and fair to differentiate according to the situation, the financial strength and the future prospects of this business, we also have an obligation to our shareholders to act this way. The corona-related loss of rental income is expected to be in the upper single digit of the million. This amount includes the already finalized agreements with the tenant and also, and to a larger extent, future agreements, which are in the course of ongoing negotiations. With regard to vacancies, we expect an increase to more or less 5.5% even without the coronavirus crisis. The Mattenhof would have been the main trigger of this increase. Due to corona, the marketing of commercial spaces there has slowed down, so that the vacancy rate is higher than the forecast, and we cannot exclude or rule out further corona side effect by the end of the year as the general economic environment will be decisive and remain uncertain. As I mentioned at the outset, Mobimo has come through this crisis in good shape, and our business operations have continued to run largely normally. As things stand today, we are not expecting significant delays in our development and construction projects, and we are also able to start the construction work in our newest condominium project called [ Grace ] in Meggen, on schedule and with a good level of advanced sales. Thank you for your interest. And I'm now available for your questions, if you may have.

[Operator Instructions] And we now have one question in the queue.

This is John Vuong from Kempen. I've got a question regarding your guidance of the impact. Could you give a little bit more color regarding the high single digit? Is that mostly related to future agreements? Does that mean re-lapping? So how should I read into this?

Yes. John, thank you for the question. No. I mean I say that part of it is what has already been concluded, and part of it, which is the bigger part, is what we expected to finalize. Part of the agreements are in discussion. We verbally agreed are not signed. That's one share of it. And the second one is that in the second part of the year, we will certainly face some less turnover of some of the restaurants, of the hotels or some other places where we have to expect some impact from there also.

Okay. So this does not include any potential lettings on, for example, the Mattenhof?

No potential for? Sorry, I didn't get your question.

For Mattenhof? So for any developments.

It doesn't include -- it includes, sorry, the fact that Mattenhof, the rent, the letting of our commercials basis will be more difficult and will be slowed down by -- until the end of the year. This is included in it.