Good afternoon, this is the course cooperator. Welcome to IGD's Conference Call presenting Q1 2025 results. Let me remind you that all participants are in listen-only mode. After the presentation, a Q&A session will be held. To be assisted by an operator during the conference call, please press star and zero on your phone handset. I will now turn the conference over to Mr. Roberto Zoia, CEO of IGD.
Good afternoon to all of you. Thank you so much for joining us today. Let's start with the presentation first. It was published just after the board meeting. Let me start with a few highlights and a few figures to crunch. As you can see on page two, the quarter from the operating viewpoint was a good quarter.
You have to bear in mind there was a calendar effect, which was unfavorable versus last year because last year was a leap year. This year we had one less day. Last year, Easter was in March, and this year it was in April. Despite that, despite the calendar effect, we see that footfall is still there for the time. Tenants are basically flat, and those at hypermarkets are down 1.7%. You have to, again, bear in mind that there was no Easter shopping included. I can say that they are definitely satisfactory. They are satisfactory, and also core KPIs are also satisfactory. You find them on page three. On a like-for-like basis, we have net rental income that is up 2.4% versus the previous quarter, the same quarter in 2024.
On a like-for-like basis, core business EBITDA is up 2.1%. Generally, definitely our core business is very sound and is giving positive signs. FFO, let me remind you that we gave you a guidance when we presented full year 2024 results. We gave you a EUR 38 million guidance, but thanks to this first quarter, we stood at EUR 10.2 million. You compare it to a EUR 10.3 million that we recorded last year in 2024, but we have the full fruit-juice portfolio, hypermarkets, and shopping malls. As we move on, they had a strong impact. Despite that, our net financial position has a positive impact, and our FFO is landing at EUR 10.2 million. I confirm the guidance, the EUR 38 million guidance we gave you before. We will see the interim report, the six-monthly report. We will see if it is possible to even improve our guidance.
We are very confident and satisfied from a financial perspective. That was indeed a point of attention ever since I was appointed slightly more than a year ago. We are on page four of the presentation. You see, of course, loan-to-value is further down. It is 44.2%, down 20 basis points versus the full year where we were at 44.4%. The weighted average interest rate or cost of debt went from 6.04% to 5.6%. We were at 5.7% when we had the financial statement report. It is a long pathway we are following, but we are constantly reducing our cost of debt, and that is reflected in our results. We move on to page five. Let me remind you that finally we are back to paying out dividends, and the actual payment of EUR 0.10 per share will happen on May the 14th.
From an operating perspective, from a business perspective, if you move on to page six, you'll be able to see the pathway we've been following so far, the pathway we have announced last year. Quarter after quarter, we are moving along that pathway. We started with Q1 2024 with a 3.5% downside for Italy. Every quarter, you see a steady growth of renewals with the same tenants or with new tenants, with new or remarketed assets. It's slightly, well, it's weaker. This is up 0.7% versus 4.10% in last quarter of 2024, but it still is a positive sign that makes us think for the best. Occupancy. We gave us a goal for 2027 to reach 98% of occupancy in Italy. When we first disclosed our business plan, we were below 95%, and now we are very close to 96%.
In less than a year, we've already recovered 1% on the 3 percentage points we had given ourselves as a target, as a goal for 2027. As you can see, quarter after quarter, our occupancy levels are improving with a favorable impact on our core business. We are working hard to extend our debt maturities, and we confirm our 2% of our wall before shopping malls. We are extending the new contracts, but as we move along the pathway, as we get to shorter maturities for the older contracts, and retaining 2% at this time, it's definitely a positive sign. If we move to page seven, you can see some major openings we had in the quarter. Let's focus on two very informative shopping centers in Emilia-Romagna, Ravenna and Forlì. Very important tenant openings. The first store of Courier is a French footwear chain.
We keep on working because it's very important for us, because it's a very important center of attraction for our shopping centers, that's AV Sport, at least La Favorita shopping center. We've completed a project, a restyling project that was started soon after the end of the pandemic. La Favorita is a shopping center we acquired in 2018. We've refurbished it. We have photovoltaic plants installed. Now it has full occupancy. We have introduced IKEA in the first plan and order point. They are practically assisting customers on their online purchases, and it really generates a lot of traffic. The same applies to Romania. We still keep the level of assets very high with very, very high premium brands. On page eight, we have the hypermarkets, the Le Porte di Napoli shopping center.
We had a time of vacancy because one of the tenants had left, and instead now we got Sole 365. We are starting to see the first results in March and April at Le Porte di Napoli footfall, much higher than the ones we had in 2019 and onward. We have a full restyling project at the Catania hypermarket in Catania. We have the master franchisee Coop Alleanza. They have fully refurbished it, and it opened again on March 6th, but the turnover levels are very, very interesting so far. Let's move on to page 10, where we have some figures, the crunch. If we start from net rental income from freehold, we were at EUR 28.8 million. To give you a like-for-like bridge to see the growth IGD has witnessed in the shopping center, we removed the EUR 4.2 million. That's the change in income scope.
That was net income from the leasehold portfolio that was disposed of. Point one is the asset, the Romanian asset we sold on February 14. Again, to offer a like-for-like basis, we have a like-for-like delta of 0.6 in the net rental income. That takes us to EUR 25.1. That is to say the 2.4% I mentioned in the highlights at the beginning of the presentation. We have more or less the same effect in the following slide, page 11. We see it with core business EBITDA following the same flow of our net rental income. Here too, we give you like-for-like figures. We see that from EUR 24.3 EBITDA with net rental income going up and net income from the service business unit, we get, we found that EUR 24.8 with a 2.1% growth on a like-for-like basis.
For all of you who are listening to us and following us now, the most important thing is page 12. That is where we see that the recurring financial management and financial position with the refinancing transaction, early repayment of our bonds, and a policy of further cost of production policy will land at EUR 12.1 million against EUR 15.8 million we had in Q4. The overall financial management is also declining. That was affected by a cost we had there for early repayment of the early redemption of our bonds. We have had to make sacrifices on our P&L, but indeed we generated the foundation for our company to grow by reducing cost of debt. The FFO result takes two things into account: the growth of our like-for-like core business and the capping of financial costs that lead to an increase in Net profit.
If you move to page 13, you'll be able to see clearly how much ground we recovered despite selling the EUR 250 million worth of portfolio with a net cashing of EUR 160 million. The full transaction, the full deal was very important because, as you remember, we were at 48% to 49%. Now we stand at 44.2%, having already cut it over the last three months. We need net income, the Net income we disposed of, but we have some benefit from financial management for the financial position. We started from 10.3. We are now at 10.2. We can further improve both core business and further reducing our cost of debt. The effect of the disposal can be seen on three main indicators: lowering of our LTV, the second, the reduction of our NFP, and then everything supported by a growth in our, of course, financial management or financial position.
On page 14, you can clearly see higher costs, ancillary costs stemming from the early repayment of our bond. It was EUR 310 million, if you remember, November 2023. We kept it going the time of having enough resources or enough money to repay it. Of course, we have ancillary costs for this early repayment. The net profit, the net result, is a positive sign before it, and it's EUR 1.6 million as the net income. Page 15 is my net financial position. We'd already lightened it in 2024 with the disposals we completed. Our net financial position was EUR 806 million at the end of 2024. Now, with the Romania disposal and some other transactions, we've actually landed at EUR 797 million. On a like-for-like basis, excluding the Cluj disposal, to land at 44.2% loan-to-value, an average cost of debt, which is down from 6.04.
We're now at 5.60, 5.60. ICR is also increasing, going from 1.8 times a year in 2024 to 2 times at the end of March 2025. Moving on to page 16, where you can see the growth maturity profile and how it changed over time. Let me remind you that exactly a year ago, we had a cliff, a cliff that was EUR 570 million cliff, considering the food transaction already embedded. Now we have maturities that have been really extended. When we talk about 2029, we talk about December 2029 and December 2031. The average maturity at the end of 2024 was 2.6 years. Now the average maturity is 5.1 years. We had ratings confirmed by both Fitch and S&P, but we're not standing still, meaning today our goal is to keep monitoring the debt capital market. Over the last few weeks, markets are highly volatile.
Debt capital deals or transactions that have issuances, this is not the most favorable time for issuances. If it were to calm down a bit and if there were interest to save on our cost of debt, if there was an opportunity to really save on our cost of debt, our goal is to issue, free up assets that now use as collateral with the banking system. We are being very, very careful and active in monitoring records to try and see a good pricing for a possible issuance. We can have this kind of approach, wait and see still approach until we get the right window, the ideal window, because we do not have short-term maturities coming up. That really enables us to safely look ahead and wait and see what happens.
If a window comes up, we'll be able to seize it in a very, very short time frame to be able to rebalance our net financial position between banking debt and market debt. The real estate market, and on page 17 now, the real estate market over the quarter. We'd already talked about 2024 full year, which was indeed a record year, both for Italy, for the overall real estate, almost EUR 10 billion worth of exchange volumes and traded volumes, with the retail, from our point of view, we see sectors that are going back to real estate retail. That was reconfirmed in the first Q of 2025. The total traded assets were EUR 2.5 billion real estate, of which EUR 505 million were retail. That is up 619% versus Q4 2024, Q1, sorry, Q1 2024. The same applies.
I'd like to tell you something about the interest we've had on our disposal plan in Romania. It's a very, very small market, indeed, a very local market. You can see that already in 2024, retail had EUR 240 million traded versus a total of EUR 733 million. In Q1 2025, almost EUR 200 million worth of real estate investments, more than half of that was focusing on retail, was focused on retail, small-sized retail with a local profile that is exactly in line with the strategy we gave ourselves for 2025. Let me remind you, because I think it's important for all of us to remember that we have a disposal plan. You can see it on page 18.
We have a disposal plan of about EUR 100 million over three years, 2025 to 2027, with all sold EUR 8.3 million of the Cluj in Romania, which was in line with our book value. Right now, we have a lot underway, many negotiations underway. We are confident that by year-end, we will have disposed of assets for approximately EUR 12 million, to actually reach the EUR 20 million target we have given ourselves for fiscal year 2025. We keep working hard also on authorizations to then be able to sell the disposal of the three areas we have in Livorno. What is helping us in this transaction is the fact that now we only have four flats to sell out of 125. The residential part went really well.
With the opening of Primark in November 2023, also the commercial part, the sales part, is witnessing increasing footfalls and excellent performance. Seeing the success of the first projects we have completed, also those areas are really appealing. Bureaucracy is not helping us. Red tape is not helping us so far. We streamlined the deals, but we are working to actually focus on certain non-core assets that we aim to dispose of. Page 19, we go back to Romania, where we are actually seeing that our strategy, the disposal strategy we put in place, is a good one. We do sell assets on an asset-by-asset basis. Also, with individual contracts for assets that are worth a few million only, but there is a very sound market for these assets. It is private family offices who are showing interest at a decent satisfactory rate. The negotiations are very long.
They are very complex. We are very close to closing a few more deals on, again, individual assets. Page 20, as you can see, the Porta a Mare di Livorno deal and project, it's one of the first examples, major example of really rejuvenating, urban rejuvenation, if you wish, that we've witnessed in our country. The tourist port is, the works have started, and the different piers around the area, they have work in progress, so to say. They have building sites. We are also going ahead with the disposal plan according to our agenda. We have a very strong agenda of meetings. We are going to take part in a lot of events as well. Just to give you an idea of how we are approaching the business, how we are working with figures as well so that our organization can grow further.
It is a long march. It is a long pathway we are working on. We confirm our efforts quarter after quarter with a lot of patience. In the presentation, you will find a lot of attachments and annexes. I would rather leave room for your questions so that each and every one of you can ask for whatever you think is most interesting to hear. Thank you very much for your attention. This is the course cooperator. We are now starting the Q&A session.
If you want to ask a question, press star and one on your phone handset. To be removed from the Q&A queue, press star and two on your phone handset. Use your handsets to ask your questions. If you want to ask a question, press star and one now. First question comes from the line of Andrea Trotto Deschini with Banca Akros.
Good afternoon to all of you. Thank you very much for your presentation. Could we have a bit more color on trends for the different types of merchandising for Italy, personal care, electronics? How are they doing? A follow-up question on the SIIQ Alliance you have created. Is there any member who could contribute part of their assets into the control company, who could partly contribute their assets in the subsidiary?
Let me start by saying that the results by product mix or product type, 2025 over 2024, so we have three months, they account for 10% in IGD's portfolios, health and personal care. They witnessed an 8.7% growth on a like-for-like basis. Electronics, if I remember correctly, they went through a crisis in 2023, especially due to what happened in 2022, where they had a very strong growth. Now it is flat.
That's an excellent result, by the way, just like clothing is flat. Restaurants and catering are withstanding their ground, and services are also standing their ground. First quarter of 2025, from a product category viewpoint, is very similar to 2024 full year. If you drill down into a greater level of detail, we will see that when we talk about clusters, personal care, for instance, you have perfumes, eyewear that are doing really well. Jewels are doing well. Jewelry stores alone are up 5.1%, and we're only talking about the first quarter. We've had excellent results in Q4 2024. Amongst us, we said maybe it was Christmas presents, blah, blah, blah. That was not the case because even in Q1, they are doing really well. March was very good for sports, for on large surfaces.
Everything is very much in line with what had already happened in 2024. Going to Alliance, right now there's a lot of interest, meaning that many portfolios that are around are seeing this opportunity. I'll give you more details about it. I'll elaborate a bit on it. They made a move and showed their interest. It's an easy opportunity. They can contribute. If you contribute your portfolio into Alliance, you can benefit from the SIIQ regime. That means almost no taxes. To really, as a guarantee from the parent company, there are mandatory dividends, just like we have on the SIIQ company. You have a portfolio, and whatever that portfolio is generating, you get back as a dividend, practically. Of course, we are selecting.
We are picking because the SIM, so a third party can contribute up to 49% and a maximum contribution to the SIIQ up to 51%. We want consistent portfolios. It's not a dust bin; it's an opportunity of growth. On a like-for-like basis, portfolio-wise, we look at returns, the NOI for our portfolio and third-party portfolio. We make an assessment with one single appraiser or assessor or auditor. You define NAV, and then you make the split. To be partner of a SIIQ, control has to be in the hands of the SIIQ. There should be no special shareholders' agreements or special governance agreements. It must be clear that if you contribute to your portfolio, you become a minority. The control has to stay within the hands of the SIIQ because otherwise you lose the benefit of the SIIQ regime. That's an opportunity, SIIQ.
Without cashing out anything, we would have a growing portfolio. It's a replicable exercise, meaning that today it's Alliance SIIQ. Tomorrow it could be Alliance 2 or Alliance 3. It's a matter of having portfolios that are consistent with one another, that are performing, and that have a level of occupancy, and natural income that is similar to the portfolio we're contributing to the Alliance. In the future, going forward, once we do a business plan, three to five years, either the SIIQ becomes full ownership of IGD, or it may become the ownership of a third party, starting from the top as an umbrella. The pricing level we now have with stock price, it's very hard to think of the merger of NAV and having a 64% discount applied as you would have now on the stock.
We have a company like ours who is well capable of managing its own assets, a system that is one of a kind. The certainty that to protect minorities, the SIIQ company has to pay out dividends. It is mandatory for it to pay dividends. We have a lot of potential partners that have shown interest in this kind of transaction. Now it is a matter of finding the right focus on the portfolio we like and on the portfolio that can be easily comparable with ours from all perspectives. From that perspective, even the level of debt has to be such that would lead to a further reduction of IGD's LTV. On the one hand, we have the larger IGD with the lower gearing, but retaining the same yields.
It would be a first way to move on with this transition to grow further because this is not the first time that I say this. I said that at the very beginning. IGD's mission is to grow. We think this is an excellent opportunity for growth. Perfect.
Thank you so much.
Next question comes from Arianna Terazzi with Intesa Sanpaolo.
Good afternoon to all of you. Thank you, Roberto, for the presentation. I would like to ask for comment on valuation and your expectations accordingly, given the transaction figures you shared with us. That is my question.
Thank you, Arianna. I do not have data yet. It is a bit early still. The feeling I have is that volumes, as they were important and meaningful, are a good way to, well, focusing on volumes are a way to get valuations that are or assessments that were different, that are different from the ones we had in the previous years. From a macroeconomic viewpoint, rates are going down, and that should lead to a decline in capitalization rates as well. We have a like-for-like growth, and having upside in our renewals also makes those who have to appraise the assets to have more comfort and confidence in doing so. We do not have any special events right now. Last year already, our core portfolio, IGD's core portfolio, was in line. We had written down, we had a one-off impairment of the food fund stake.
This year, it was just once, and then we'll go back to it at the end of the business plan. We will have the last one. I don't think they'll have no specific impairment. I don't expect any specific write-ups. It's true that volumes are sizable, but we don't have yet transactions that could support a reduction of the net exit yield. My impression is that valuations will be in line with last year. In a portfolio that we had for our portfolio is much better, but it's still too early. We've just closed the first quarter by, around 2025 May. We'll start to ask, we'll send independent experts, all data, to have a full valuation at the end of June.
Next question comes from the line of Simonetta Chiriotti with Mediobanca. Go ahead,
madam. Good afternoon. I have a question on SFO. Roberto, you said that there's room for improvement on the level you raised in Q1. What are the drivers for this improvement that you mentioned? Is it coming from a further reduction of your financial charges, or what are the drivers? I was also wondering about your exposure to interest rates. How much of your debt is floating rate and how much is fixed rate? About rent, like-for-like on a like-for-like basis is up 2.4%. Is it quarter on quarter or year on year? Could we have a breakdown between how Italy is performing and how Romania is performing and the level of indexation, the indexation rate?
Let me follow the order of your questions you asked. FFO has two levers, two drivers for improvement. To grow further, as we did. You mentioned that 2.4% is quarter on quarter. You have a 2.4% growth quarter on quarter. If you apply it to all quarters, it becomes an essential driver. Here we can really work hard on it, and I'm confident we'll be able to improve our performance. Upside growth for Tamara Livorno, for instance, we have. We are getting close to being fully up and running, so we're going to, according to plan, growth is according to plan. Of course, declining rates will also help. Today we are engaging in a very, very careful hedging policy. Every day there's a window to hedge, and so far it's 50/50 between hedged, so fixed rate, and 50% is floating rate. Staying with 50% all floating is a bit risky. Over these few days, last few days, we've taken, we've seen that there are declines.
The rates are going up 10 points or going up or down 10 points. These points. Core business, on the one hand, is a driver, but we still have more drivers to cut our cost of debt today. 5.6. If we manage to lock with the lower level yields, I think in June we will be able to further reduce it. The average level of hedging with fixed rate should be 65. We should reach 65-70 fixed rate. That would be a limit fixed rate debt because we still have a few things to dispose of, few assets to dispose of. We are still looking at bonds, but having a 70-70 fixed rate and 30 that could benefit from declining rates is more or less the balance we would be looking for or looking at.
On a like-for-like basis, the growth, if it goes on at a pace of 2.4%, revenues going up on a like-for-like basis in the first three months. As of the next quarter, April to June, we will not have the foot effect to factor in. It will be a real like-for-like basis. Increasing our core business, our occupancy level, every 10 basis points of occupancy, it does not seem much, but it is less expenses and more rents. A further decline or the fact that we could benefit from a further decline in rates. EUR 10.2 million, which means that we have fully minimized EUR 4.2 million of net rental income, which was the food portfolio we disposed of. We are at EUR 10.2 million against EUR 10.3 million last year. Indeed, there is room for improvement, but today, even during the board meeting, the board asked the same question.
I told them, "Today we confirm our guidance of EUR 38 million, but you understand that for what we are doing now, lowering costs and all the actions we're undertaking, we can do better, we think." On page 10, if we look at Romania, Romania is flat, meaning that we are keeping it where it is. We're keeping it flat. We have to retain a good revenue level because it has to be a good asset, a good project to sell. In Italy, net rental income is growing. It's growing in Italy, so it's in our Italian portfolio.
Let me remind you that if you want to ask a question, you may press star and one on your phone handset. For further questions, please press star and one on your phone handset. Next question is a follow-up from Simonetta Eriotti with Mediobanca.
I would like to know if you could have data from the impact of indexation.
Sorry, I apologize. It's 0.7, 0.7 because inflation has to be calculated over the course of the entire year and in the reference month. When you have, when we have a table with the different levels, the impact of the inflation is zero in the first year, and then, of course, you move on. What we did with this 2.7 Italy, 2% we said is a real growth of rents, and 0.7 is the inflation indexation effect. On some contracts, rentals and services for hypermarkets, inflation is calculated as 75% of the index, while for the other contracts, it's 100%. Out of 2.7, 2% is really a rent increase, and 0.7 is the actual impact of inflation. That adds to 2.7%.
For further questions, please ask a star and one on your phone handset. Mr. Zoia, there are no more questions in the queue for the time being.
Very well. I would like to thank you very much for joining us today, and we'll talk to you soon at the six-monthly for a dreamlike six-monthly report. Thank you very much. See you the next time.
Thank you. This is the CORSPOL operator of the conference call is coming to an end. You may disconnect your phones. Thank you very much.