Argosy Property Ltd (NZSE:ARG) (Q2 2026) Earnings Call Highlights: Strong Profit Growth Amid ...

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• Gross Property Income:$69.4 million, up 4.1% from $66.6 million last year.

• Net Property Income:$61.2 million, up 4.9% from the prior period.

• Net Profit After Tax:$61.1 million, compared to $33 million in the prior period.

• Gross Distributable Income:$36.8 million, up 16.4% from $31.6 million last year.

• Net Distributable Income Per Share:$0.0358, up 10% from $0.0325 last year.

• Funds From Operations (FFO):$29.6 million, up 10.4% from $26.8 million last year.

• FFO Per Share:$0.0345, compared to $0.0317 last year.

• Investment Properties:Increased by $70 million compared to March '25.

• Debt to Total Assets Ratio:35.9% at September 30, compared to 35.7% in March.

• Weighted Average Cost of Debt:Reduced to 4.8% from 5.1% in March.

• Interest Cover Ratio:Improved to 2.6 times, above the bank covenant of 2 times.

• Dividend:Second quarter dividend of $0.016625 per share announced.

• Warning! GuruFocus has detected 14 Warning Signs with NZSE:ARG.

• Is NZSE:ARG fairly valued? Test your thesis with our free DCF calculator.

Release Date: November 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Argosy Property Ltd ( NZSE:ARG ) reported a revaluation gain of $31.3 million, driven by a nine-year lease extension with MBIE at the Stout Street development.

• Net property income increased by 4.9% to $61.2 million, with strong rent reviews contributing to this growth.

• The company achieved a net profit after tax of $61.1 million, nearly doubling from $33 million in the prior period.

• Interest expenses decreased due to lower rates and higher capitalized interest, improving the interest cover ratio to 2.6 times.

• Leasing inquiries have significantly increased, particularly in the industrial sector, with strong demand for green-rated spaces.

Negative Points

• Vacancy rates remain higher than desired, with office occupancy down to 83% from 88% on a square meter basis.

• The economy in Auckland and Wellington remains relatively weak, posing a risk of tenant failures.

• Some properties received offers below book value, leading to a decision to pull them from active marketing.

• The company faces challenges with seismic upgrades, with an estimated $18 million needed for one building.

• The large-format retail sector shows virtually no demand for sustainably rated space, limiting growth opportunities in this area.

Q & A Highlights

Q: With your NPI coming in at $61.2 million, up 5% on the PCP, what contributed to this strong growth despite no acquisition activity and the loss of rental from Forge Way? A: Dave Fraser, CFO: There were two main contributors. First, a significant rental uplift from a rent review with one of our tenants. Second, we received a surrender payment from an industrial tenant, which impacted the NPI line by $1.1 million. Fortunately, we were able to re-lease the property within a month, which was a bonus.