Log CP (LOGG3) profits 90% more in the 1st quarter, at R$55.3 million, and sees a market with strong demand

SÃO PAULO (Reuters) – Log CP (LOGG3), which develops, leases and manages logistics warehouses, almost doubled its net profit in the first quarter compared to the same period last year, citing high levels of pre-leasing and a stabilization at the low level of vacancy.

The company had a net profit of 55.3 million reais in the first three months of this year, an increase of 90.1% compared to the same stage in 2023, while earnings before interest, taxes, depreciation and amortization (Ebitda) for the period rose 36.4%, to 74 million, the company reported this Wednesday.

“The logistics property rental market is in high demand,” Log’s executive president, Sérgio Fischer, told Reuters. Log’s pre-lease level was 100% at the end of March, according to the CEO, while the vacancy level (areas free for lease) showed stability in the period, at 0.91%.

“The two variables (high level of pre-lease and stable low vacancy) help… The class A logistics condominium sector in Brazil today runs with a vacancy rate of 10%. Log has, in the last 5 years, reported vacancies very close to zero.”

The company expects to increase its annual rental revenue by 20% to 25% this year and beyond through 2028, Fischer said.

Log has the goal of delivering 500 thousand square meters of gross leasable area (GLA) in 2024, and around 2 million square meters in the next four years. For 2024, the pre-lease of these assets is already close to 50%, according to the executive.

“As we deliver, getting closer to the end of each project, this number tends to increase, which is what happened in the first quarter, with the delivery of 100% pre-lease,” he stated.

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Among the factors for the good moment in the sector, Fischer highlights a declining basic interest rate and an increase in consumer income, stimulating consumption and consequently the demand for logistics warehouses in the country.

Over the past twelve months, Log said it has generated more than 1.7 billion reais from its “asset recycling” strategy, in which the company generally sells existing assets to free up capital or reinvest it in new projects. According to Log, these sales were made with “relevant” margins.

This month, the company concluded the sale of two warehouses, one in Minas Gerais and the other in Bahia, totaling 509.7 million reais and a gross margin of 40.9%.

“These results demonstrate that, in 2024, Log continues to present attractiveness, liquidity and strong demand for its assets,” said the company in a statement.