Yesterday, MLP released an ad-hoc with its preliminary Q2 EBIT and specified its FY EBIT guidance towards the upper half. In detail:

Q2 EBIT significantly above last year: Q2's preliminary EBIT came in at € 12m, +135% yoy (eNuW: € 11m; H1 EBIT: € 49m, +31% yoy). The main drivers were performance fees (amount undisclosed; eNuW: € 4.2m) and continued tailwinds from the interest rate business. Moreover, last year's EBIT was burdened by a negative € 2.8m one-off, thus serving as an easy comparable base.

Performance Fees are back: some of FERI's funds have exceeded their old HWM and hurdle rate on June 28th, which should have led to € 4.2m in performance fees for Q2 (see update from 11th July 2024). Moreover, AuMs should also have reached new records (eNuW: € 60.5bn, up 7% yoy vs. € 59.3bn in Q1), which is especially favorable for MLP, as it serves as a higher base for recurring revenues, which should increase profitability in wealth management due to operating leverage.

Banking to have remained strong: given that the ECB only lowered interest rates towards the end of Q2, the second quarter could almost fully benefit from ongoing strong interest income. Against strong interest income of € 20.3m (+29% yoy and -9% qoq; recorded as sales) we also expect heightend interest expense of € 8.2m (+ 105% yoy and -6% qoq; recorded as OPEX), which should have led to an EBIT-effective net interest income of € 12.1m (+3% yoy) in Q2, in our view. Going forward, we conservatively assume an interest rate cut by 25bps in mid Q3 to 4.00% and another 25bps reduction to 3.75% in Q4, leading to an estimated net interest income of € 48m (+1.4% yoy) for FY'24e. (see p. 2 for details)

Guidance specified at upper end, but still conservative: with yesterday's ad-hoc, MLP also specified its € 75-85m EBIT guidance towards the upper half (i.e., € 80-85m). Nevertheless, we expect a guidance beat (eNuW: € 90m; eCons: € 85m) due to (1) the later than previously anticipated ECB rate reduction (2) an ongoing recovery in real-estate from low levels and (3) the higher than expected AuMs which should lead to increasing sales in wealth management.

All in all, solid results and a slight beat of our Q2 EBIT estimate. Thus, we reiterate our BUY recommendation with unchanged PT of € 11.50, based on FCFY'24e and SOTP.