EV Digital Invest AG Revises Financial Forecast Amid Real Estate Crisis

EV Digital Invest AG has updated its financial outlook due to an ongoing real estate crisis, significantly lowering its income guidance for FY24. The company's new income estimate now stands between €2.3m and €2.7m, down from the previous range of €4.9m to €5.8m. This revision is well below the previous year's income of €4.5m and the prior estimate of €5.6m.

EBIT has also been reduced, now projected between €-3.5m and €-4.1m, compared to the earlier estimate of €-1.9m. Analyst Frederik Jarchow attributes these cuts to several factors, including project defaults, delayed interest rate cuts, and slower-than-expected normalization of construction costs and real estate prices.

On a positive note, EVDI has diversified its business model, expanding into areas such as deposit accounts, renewable energy projects, ETFs, and holistic wealth management. This diversification aims to reduce dependency on the cyclical real estate market.

To address capital needs during this challenging period, EVDI will issue two convertible bonds totaling €2.5m, supported by the majority shareholder. Despite the adverse short-term outlook, this move underscores shareholder commitment.