Terawulf Inc
NASDAQ:WULF
Terawulf Inc
Terawulf Inc., a company that has been making waves in the energy and cryptocurrency sectors, operates with a vision that combines innovative technology and clean energy solutions. Founded by a team of seasoned professionals in the energy industry, Terawulf is primarily focused on the environmentally conscious mining of Bitcoin. At its core, the company aims to bridge the gap between cryptocurrency mining and sustainable energy use by utilizing zero-carbon resources such as hydroelectric, solar, and nuclear power. By strategically positioning its operations near these energy sources, Terawulf significantly reduces its carbon footprint while maintaining a cost-effective mining process. This approach allows the company not only to produce ethical cryptocurrencies but also to potentially gain a competitive edge in an industry often scrutinized for its environmental impact.
Revenue generation for Terawulf stems from its successful Bitcoin mining operations. The company earns by effectively leveraging its energy-efficient infrastructure to mine cryptocurrencies at a lower cost compared to traditional operations. Beyond mining, Terawulf is involved in other aspects of the cryptocurrency and energy supply chain, further solidifying its business model. This vertical integration allows Terawulf to capture value at multiple stages, from energy generation to cryptocurrency transacting, thus creating a robust and diversified revenue stream. By aligning itself with sustainable practices and exploring further innovations in energy and technology, Terawulf positions itself as a forward-thinking leader in the convergence of green energy and digital currencies.
Earnings Calls
In its fourth quarter of 2024, Fibra Danhos showcased robust performance, with double-digit growth in revenue, NOI, and EBITDA driven by improved occupancy and new tenant agreements. AFFO reached MXN 1.2 billion, resulting in a distribution of MXN 0.45 per CBFI, maintaining a 60% payout ratio. Their leverage stands at a solid 12.4%, supporting future expansion, particularly in industrial developments like Cuautitlán I. A notable new retail project in Oaxaca is expected to span 60,000 square meters, with a three to three-and-a-half-year timeline for development. Management projects stable dividends for investors while strategically investing in growth.
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Good day, everyone, and welcome to today's Fibra Danhos' Fourth Quarter 2024 Conference Call.
[Operator Instructions]
Please note, this call is being recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Rodrigo Martinez. Please go ahead, sir.
Thank you very much. Hello, everyone. I am Rodrigo Martinez, and I run Investor Relations for the company. At this time, I'd like to welcome everyone to Fibra Danhos 2024 Fourth Quarter Conference Call. We issued our quarterly report yesterday. If you did not receive a copy, please do not hesitate in contacting us. Please be aware that they are also available on our website and in Mexico Stock Exchange website.
Before we begin today, I would like to remind you that forward-looking statements made during today's call do not account for future economic circumstances, industry conditions and company performance or financial results. These statements are subject to a number of risks and uncertainties. All figures included herein were prepared in accordance to IFRS standards and are stated in nominal Mexican pesos, unless otherwise noted.
Joining us today from Fibra Danhos in Mexico City is Mr. Salvador Daniel, CEO of Fibra Danhos; Mr. Jorge Serrano, CFO of Fibra Danhos and Mr. Elias Mizrahi.
Now I will turn the call to Jorge Serrano for opening remarks and financial and operating indicators. Jorge, please go ahead.
Thanks, Rodrigo. Thanks, everybody. Good morning. Thank you for joining us to our fourth quarter '24 conference call. Fourth quarter results reflect improved occupancy levels with high affluence, fixed rent growth triggered by new tenants, high average and [ positive ]. Industrial Development Cuautitlán 1 base has started to deliver and new industrial properties will start contributing later on this year. Once again, revenues, NOI and EBITDA posted double-digit growth during the quarter and for the year ended in 2024.
Costs and expenses, on the other hand, are controlled and consequently, our margins have improved. AFFO reached MXN 1.2 billion that accounted for MXN 0.75 per CBFI with economic rights. Distribution per CBFI determined at MXN 0.45 per CBFI. This represents a payout ratio of 60%. Retained cash flow complemented with short-term revolving credit facilities has been used to finance our development portfolio.
Leverage of 12.4% reflects a strong balance sheet while maintaining fire power to deliver on our CapEx program. Industrial developments represents an important growth path for Danhos. Cuautitlán I in Palomas confirm our existing pipeline. Both new opportunities are being analyzed on good locations within the metropolitan area. We are also working on a new retail development in the state of Oaxaca, which appears to be an excellent prospect market for our commercial partners. Danhos is committed to maintain a high-quality real estate portfolio while pursuing growth with profitability.
With this, I finish my opening remarks. Thanks, and let's move on to the Q&A session.
[Operator Instructions]
And our first question will come from Rodolfo Ramos with Bradesco BBI.
Congratulations on the results as well. My question is a little bit more strategic. Industrial has been the flavor of the last 10 years or so. And on a stand-alone basis, it makes a lot of sense on a long-term basis, but just wanted to see your thinking as Danhos being the right vehicle to do it, the market is clearly paying more for specialized vehicles. So my question is, if you'd be later down the line open to monetize some of these assets and perhaps capturing that spread at which you may be developing some of these properties.
I mean we believe right now that Danhos is a correct vehicle for us to grow in that space. At least until we have the sites that we need to be independently but although in our mind today, we see Danhos as a correct vehicle to do so and to grow in a quick way.
Perfect. And just a follow-up, if I may. You mentioned that you're looking for additional opportunities. Just wondering if you're looking to venture outside of Mexico's metropolitan area on the industrial front.
We've looked at basically the whole country. We, as you know, took a very straight look to each project, and we will basically cherrypicking. So if we find out anywhere a good opportunity, we will take advantage of it.
And our next question will come from Pablo Monsivais with Barclays.
I would like to have more detail on the expirations that you have on the office portfolio this year and next year. Which are specific properties are these expirations happening?
We basically have two properties. One is in the Toreo side and the other one is in [indiscernible].
And if I may, how do you feel about the lease spreads on these renewals, if that is the case?
We haven't basically think about that. We're basically trying to keep our clients, and we want to do so.
We'll move next to Alan Macias with Bank of America.
Just a quick question on timing of the Oaxaca project. Is that -- do you have a timeline yet for that and perhaps the size of investment.
We already talked to the government, and we expect these projects to flow pretty quickly. We have to work very strong on the executive project. And so we might give you a some point to start this project actually this year. It depends a little bit on how we can advance on the executive project.
And then size, GLA or investment?
It's an important size for Oaxaca, we believe it's going to be around 60,000 square meters of GLA. For Oaxaca, it's a pretty big project, but we believe the market will absorb it pretty quickly. We've been trying to achieve something in Oaxaca for many, many years. This is finally part of what we've tried to achieve in basically 5 years of negotiations, we just did that.
We'll move now to Felipe Barragan with BTG Pactual.
Congrats on the results. I'm curious on the LTV. So you guys drew a little bit more debt this quarter. Just curious on what we can expect moving forward on debt to sort of continue developing both the Oaxaca project and more industrial -- on development side is my first question. And my second question, is it fair to assume that these MXN 0.45 of distributions will remain for the rest of the year?
I'm going to leave the debt answer to Jorge, which I believe he's going to be more capable to answer you. But in terms of the MXN 0.45 dividend yield, we expect to leave it this year as it is. We prefer to leave some cash flow for our new developments inside the Fibra. So Elias, do you want to take the next question.
Yes. And basically, regarding debt, it's in line with the distribution policy. So as we've continued with our growth pipeline, having retaining some cash has lowered the debt demand for new projects. But obviously, with the new industrial project being announced Danhos Palomas plus Oaxaca, we're going to use some debt gradually. Remember that these investments are not -- or they don't come in the 1-year span. They're done in multiple years. So in the industrial front, when we invest, we get a payback, it's a much shorter payback period. For Oaxaca, it's usually -- it's going to be probably a 3.5 investment horizon. So I think that we're going to try to keep our LTV on stable levels and very solid levels. Jorge, you want to complement?
No, just to complement Elias, remember that we have established committed credit lines that are available for specifically this growth, this CapEx program. And we also have in place a bond program that could complement this. So we have firepower to meet this CapEx demand.
Great. And a quick follow-up, if I may. What sort of internal limit of LTV do you guys have, I don't know, something around 25%. I'm guessing, I don't know.
Actually, it's a bit lower than that internally, but it depends a lot on the opportunities and what we see in the value creation of the Fibra. So we take this project by project, but we will never go above 25% for sure.
[Operator Instructions]
Our next question will come from Mario Simplicio with Morgan Stanley.
I have a quick question on variable rent. It decreased close to 20% this year. And I would want to know if you guys could provide more color on your expectation for growth into 2025? And also, what could be the main drivers for growth next year.
This is Elias. So the holiday season was strong in general. I think the consumer during 2024 remains strong. And that's a trend that we saw last year. And specifically, variable rent was very strong in our portfolio, mainly driven by the Aquarium in Parque Tepeyac, which has been a huge success. It's been driving an incredible amount of visitors to the shopping mall. And just in general, Parque Tepeyac as to highlight, but Parque Tepeyac has stabilized much quicker than expected, and it's one of our main contributors to our portfolio now. So we're very happy with its progress.
And our next question will come from Francisco Chávez with BBVA Market Strategy.
Firstly to follow up on Felipe's question regarding dividend. Is it fair to assume that the dividend will remain more or less the same in the next year, considering that we will be developing the Oaxaca project.
We're going to -- Francisco, we can barely hear your question, but if we understand it correctly, we're going to keep the MXN 0.45 dividend yield this year. And we need cash for our projects for us to control our leverage. So we expect at least this year to be at MXN 0.45 per [ meter ].
Our next question comes from Igor Machado with Goldman Sachs.
Could you please provide more details on the agreement to develop the shopping center timeline CapEx, GLA and your view on the retail demand for the country?
This is Elias. So basically, we just announced that we're starting to work on that project. We haven't disclosed the CapEx requirements as we're still working the executive project and basically that's going to determine the investment. Timeline, as I mentioned, is going to be around 3 to 3.5 years, but that can also change. So we expect to give you more details on the following calls.
[Operator Instructions]
And it appears there are no further questions at this time. Mr. Martinez, I'll turn the conference back to you.
Thank you very much. Thank you, everyone, for joining us today. Please do not hesitate to contact us in case you have any further questions. We are always available and see you on the next conference call. Thank you very much.
Thank you. This does conclude today's Fibra Danhos' Fourth Quarter 2024 Conference Call. Thank you for your participation. You may now disconnect.