Summary
Digital Realty Trust, Inc. (DLR) reported its financial results for the period ending June 29, 2016. The company demonstrated revenue growth, driven primarily by its "pre-stabilized and other" properties, largely due to the recent Telx acquisition. This segment saw significant increases in rental and interconnection revenues. However, operating expenses also rose, particularly in rental property operating and maintenance, property taxes, and depreciation and amortization, again heavily influenced by the Telx integration and ongoing development projects. The company continues its strategy of investing in and developing data centers, with a substantial portfolio of 140 properties encompassing approximately 25.8 million rentable square feet, including space under active and future development. DLR maintains a conservative leverage ratio, with debt representing approximately 26% of its total enterprise value as of June 30, 2016. The company also highlighted recent property sales and strategic dispositions, including the sale of a Paris facility and a four-property data center portfolio, aimed at optimizing its real estate assets.
Financial Highlights
31 data points| Revenue | $514.93M |
| Operating Expenses | $402.64M |
| Operating Income | $112.30M |
| Interest Expense | $59.91M |
| Net Income | $50.38M |
| EPS (Basic) | $0.19 |
| EPS (Diluted) | $0.19 |
| Shares Outstanding (Basic) | 146.82M |
| Shares Outstanding (Diluted) | 147.81M |
Key Highlights
- 1Total operating revenues increased by approximately $94.6 million to $514.9 million for the three months ended June 30, 2016, compared to $420.3 million in the prior year period. For the six months ended June 30, 2016, revenues grew by $192.2 million to $1.02 billion.
- 2The "Pre-Stabilized and Other" segment revenue surged due to the Telx acquisition, with rental and interconnection revenues contributing significantly, showing an increase of $48.5 million and $46.6 million respectively for the quarter, and $90.5 million and $91.7 million for the six-month period.
- 3Operating expenses increased by $89.4 million (3 months) and $218.2 million (6 months) primarily due to higher rental property operating and maintenance, property taxes, and depreciation and amortization, largely driven by the Telx acquisition and development projects.
- 4As of June 30, 2016, DLR owned 140 properties with approximately 25.8 million rentable square feet, including 1.5 million square feet under active development and 1.2 million square feet held for future development.
- 5The company's debt to total enterprise value ratio was approximately 26% as of June 30, 2016, indicating a conservative leverage position.
- 6DLR completed several strategic property sales, including a facility in Paris and a four-property portfolio, aiming to optimize its asset base and generate proceeds.
- 7The company's primary currency exposures are to the British pound sterling, Euro, and Singapore dollar, and it notes the potential impact of the UK's referendum on withdrawal from the European Union on foreign currency exchange rates and global markets.