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Alexander & Baldwin, Inc. (ALEX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was solid with net income of $21.4M ($0.29 diluted EPS), CRE operating profit of $23.4M, and Same-Store NOI growth of 4.2%, while leased occupancy rose to 95.4% .
  • Guidance raised: FY2025 FFO per diluted share increased to $1.17–$1.23 (from $1.13–$1.20); net income guidance also raised to $0.68–$0.74 (from $0.64–$0.71). CRE & Corporate FFO and Same-Store NOI growth were maintained .
  • Versus consensus, the quarter delivered beats: revenue and EBITDA outperformed; diluted EPS of $0.29 was above the $0.155 EPS consensus (S&P Global) — management cited stronger occupancy, leasing spreads, and land operations contributions . Values marked with * are from S&P Global.
  • Catalysts: execution of a 75-year ground lease at Maui Business Park (adds ~$0.01 FFO/share in 2025), improving occupancy including backfill at Kaka‘ako Commerce Center, and raised full-year FFO guidance .

What Went Well and What Went Wrong

  • What Went Well

    • Same-Store NOI growth of 4.2%; blended comparable leasing spreads of 10.2% (retail 11.1%, industrial 9.5%); total leased occupancy improved 80 bps q/q to 95.4% .
    • Strategic 75-year ground lease at Maui Business Park, converting non-income land into recurring income (~$0.01 FFO/share in 2025) .
    • Management quote: “Our portfolio performed well... achieving CRE Same-Store NOI growth of 4.2%... converting five acres of non-income producing land into an income producing ground lease...” .

  • What Went Wrong

    • Land Operations revenue declined y/y (to $2.7M from $12.3M), and total operating revenue fell y/y to $53.7M (from $61.2M) as land sale activity normalized .
    • Kaka‘ako Commerce Center backfill carries contingencies; if unresolved, occupancy would reverse out — management is confident but flagged the risk .
    • Macro/tariff uncertainty: steel costs up ~8%; actions include pre-purchasing and storing materials to mitigate inflation/logistics impacts .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Total Operating Revenue ($USD Millions)$61.2 $62.5 $53.7
Diluted EPS ($USD)$0.28 $0.17 $0.29
FFO per Diluted Share ($USD)$0.40 $0.30 $0.36
CRE Same-Store NOI Growth (%)4.1% 2.4% 4.2%

Segment breakdown (Q1):

SegmentQ1 2024Q1 2025
CRE Operating Revenue ($USD Millions)$48.9 $51.0
CRE Operating Profit ($USD Millions)$22.0 $23.4
Land Ops Operating Revenue ($USD Millions)$12.3 $2.7
Land Ops Operating Profit ($USD Millions)$7.9 $4.9

KPIs and portfolio metrics:

KPIMar 31, 2024Dec 31, 2024Mar 31, 2025
Total Leased Occupancy (%)94.0% 94.6% 95.4%
Retail Leased Occupancy (%)93.2% 95.2% 95.2%
Industrial Leased Occupancy (%)96.8% 95.2% 97.3%
Blended Comparable Leasing Spread (%)7.8% 14.0% 10.2%

Consensus vs actual (Q1 2025):

MetricConsensusActual
Revenue ($USD Millions)$50.8*$53.7
Diluted EPS ($USD)$0.155*$0.29
Adjusted EBITDA ($USD Millions)$26.7*$32.2
# of Estimates (Revenue / EPS)3 / 2*—

Values marked with * are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income per Diluted ShareFY 2025$0.64–$0.71 $0.68–$0.74 Raised
FFO per Diluted ShareFY 2025$1.13–$1.20 $1.17–$1.23 Raised
FFO per Share (CRE & Corporate)FY 2025$1.11–$1.16 $1.11–$1.16 Maintained
CRE Same-Store NOI Growth (%)FY 20252.4%–3.2% 2.4%–3.2% Maintained
Dividend per ShareQ2 2025$0.225 (Q1 2025) $0.225 (declared Q2) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q4 2024; Q-1: Q3 2024)Current Period (Q1 2025)Trend
Internal & external growthUnderwriting development/redevelopment; build-to-suit at Maui BP; new ATM; credit facility extension Executed 75-year ground lease; raising total FFO guidance; opportunity for self-storage JV equity Positive, cautious macro
Industrial vacancy/backfill50k sf vacancy telegraphed; prospecting backfills ~75% backfilled at Kaka‘ako; lease contingency noted Improving with execution risk
Tariffs/macroNot prominentSteel +~8%; pre-purchase/store materials; watch tenant health metrics; minimal real-time impact Managing inflation/logistics
Land operations simplificationOngoing monetization; strong 2024 margins; carry cost reduction Sold ~90 acres; JV contingencies resolution drove income; caution on one-time nature Continuing, episodic impact
Cost discipline (G&A)-$4.2M y/y reduction in 2024; expect flat to -$0.01/share improvement in 2025 Q1 G&A ~$7.0M, -$0.2M y/y; reiterated moderation Stable to modest improvement
Portfolio mix/officeOffice small (~2.9% of NOI Q1 2025); non-strategic; potential capital recycling Office NOI down y/y; remains small Deprioritized

Management Commentary

  • Lance Parker: “We started the year strong... improving our CRE portfolio performance, internal and external growth and streamlining our business and cost structure... [achieved] CRE Same-Store NOI growth of 4.2%” .
  • Lance Parker: “We converted five acres of non-income producing land into an income producing ground lease…” .
  • Clayton Chun: “We reported $0.30 of CRE and corporate FFO per share... total FFO was $0.36... land operations FFO included ~$2.2M margin from agricultural land sales and ~$3M of JV income…” .
  • Lance Parker: “We are focusing on the things that we can control… pre-purchasing tariff‑impacted construction materials… screen real‑time tenant health metrics…” .

Q&A Highlights

  • Self-storage ground lease: 75-year term; ~87k net rentable sq ft planned; ~$0.01 FFO/share in 2025; potential to invest ~20% of equity in JV structure .
  • Tariff/macro: steel up ~8%; A&B pre-purchased and stored materials onsite; tenant conversations show minimal real-time leasing impact so far .
  • Kaka‘ako backfill: ~60k+ sf leased across two floors; economic day 1; landlord/tenant capital obligations outstanding; contingency could reverse occupancy if unresolved .
  • One-time JV income: ~$3M in Q1; management does not expect similar unusual items over the balance of 2025 .

Estimates Context

  • Revenue: Actual $53.7M vs consensus $50.8M* — beat by $2.9M (~5.8%).
  • EPS: Actual $0.29 vs consensus $0.155* — beat by $0.135 (~87%).
  • Adjusted EBITDA: Actual $32.2M vs consensus $26.7M* — beat by ~$5.5M (~20.6%).
  • Estimate breadth modest (# of estimates: revenue=3; EPS=2)*, increasing sensitivity to one-offs (e.g., land ops JV income).
    Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Guidance raised for FY2025 FFO and net income; CRE & Corporate FFO and Same-Store NOI growth maintained — signaling confidence in core operations amid macro caution .
  • Occupancy and leasing spreads remain healthy; retail and industrial occupancy up; blended spreads 10.2% support rent growth and NOI trajectory .
  • Ground lease at Maui Business Park adds recurring income in 2025 and opens adjacency into self-storage with optional JV equity — a catalyst for multiple expansion if replicated .
  • Watch contingency resolution at Kaka‘ako Commerce Center; successful execution would sustain occupancy gains and NOI momentum; failure would be a near-term headwind .
  • Land operations will be episodic; Q1 JV income was one-time — model core CRE performance and avoid extrapolating Land Ops contributions .
  • Balance sheet/liquidity robust: ~$324M liquidity; net debt/TTM Adjusted EBITDA 3.6x; ~97% fixed-rate debt — supportive of development/redevelopment and selective acquisitions .
  • Dividend maintained at $0.225/share for Q2 2025; income profile stable while growth initiatives progress .