Goodman Group FY24 Earnings Call Highlights

Goodman Group (ASX: GMG) shares opened lower on Thursday after its FY25 guidance and dividend fell short of analyst expectations.

FY24 Key Numbers

• Operating profit up 15% to $2.0bn vs $2.21bn consensus

• Operating EPS up 14% to 107.5 cents per share, in-line with market expectations

• Statutory loss of $98.9m

• Loss reflects revaluation movements of -$1.5bn for the Group

• Total dividend for FY24 of 30 cents per share

• FY25 forecast operating EPS of 117.2 cents, up 9% on FY24 but below Macquarie expectations of 120 cents

• FY25 forecast dividend of 30 cents per share, below Macquarie expectations of 34 cents

Earnings Call Highlights

Data centre development: "The group is evolving in response to the significant data center opportunity before us. We have expanded our global Power Bank to 5 gigawatts and augmented our existing team of around 1,000 people with more data center talent." – CEO Gregory Goodman

Data centre trends: "Over the next five years, global demand for data centers is expected to more than double what it is now. The data center industry is grappling with growing barriers to entry, compounded by land scarcity, complex planning, regulatory hurdles, and the challenges of securing power." – CEO Gregory Goodman

Asset valuations: "There were $1.3 billion of unrealized valuation adjustments in the year, which represents the group's share of the $5.1 billion across the entire portfolio. The valuation declines equated to a movement in value of around 6%." – CFO Nick Vrondas

Industrial vs. Data business: "Demand from logistics users for quality buildings in strong locations remains sufficient for our current activity levels. However, the diversion to data centers as the better use of our sites is occupying a greater portion of our opportunity set. This is limiting the amount of industrial development we're undertaking." – CEO Gregory Goodman

Analyst Q&A Highlights

The below topics have all been answered by CEO Gregory Goodman and CFO Nick Vrondas

Data centre project constraints: "Firstly, you've got to own the land otherwise you've got no shot at it. Secondly, you need to then be putting significant amount of money into infrastructure, including power infrastructure ... So all those things mean it's not for everybody."

Project yields: "Genuinely on the industrial, we will not kick off an industrial project anywhere in the world apart from Japan unless it's got a seven handle in front of it anyway."

This article was generated with the support of AI and reviewed by an editor.