Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cibus Nordic Real Estate AB (FRA:6N5, Financial) reported a strong quarter with rental income up 28% year-on-year.
- The company has a well-diversified portfolio with 81% of rental income from non-cyclical daily goods tenants.
- Cibus Nordic Real Estate AB (FRA:6N5) has a high degree of interest rate hedging, with 97% of its debt interest hedged.
- The company successfully refinanced 19% of its total bank loans at more than 50 basis points lower margins.
- Cibus Nordic Real Estate AB (FRA:6N5) continues to pay a monthly dividend, celebrating its five-year anniversary of this practice.
Negative Points
- The company reported a negative goodwill post of EUR20.5 million due to the acquisition of the Forum Estates portfolio.
- Unrealized changes in property values resulted in a EUR7.3 million decrease, particularly affecting properties in Finland.
- There are concerns about potential tenant departures, as seen with Kesko's notice to leave two properties in Finland.
- The net debt-to-EBITDA ratio increased due to recent acquisitions, with a forward-looking ratio of 10 times.
- The company faces potential risks from the Belgian statutory right for retail tenants to give notice every three years.
Q & A Highlights
Q: Are there any more non-core assets from the Forum Estates portfolio that Cibus Nordic Real Estate AB plans to divest?
A: Yes, there are a few more assets under consideration for divestment. These assets are strong cash-flowing with solid tenants but are non-strategic for Cibus, which focuses on converting food into yield. The decision to sell will depend on the right price being offered. - Christian Fredrixon, CEO
Q: Can you provide insights on the markets that look most interesting for acquisitions and any ongoing discussions?
A: Cibus is exploring stable grocery markets with well-performing tenants and stable economies. The company is a buy-and-hold player, allowing it to look beyond just stable real estate markets. The focus is on cash earnings per share-accretive assets from day one. - Christian Fredrixon, CEO
Q: How does the occupancy rate compare between the Nordic and Continental European portfolios?
A: The higher occupancy rate in the quarter is primarily due to the Forum Estates deal. The Nordic portfolio remains stable, with business as usual in extending leases with grocery players. - Pia-Lena Olofsson, CFO
Q: What is the impact of the recent refinancing on the average secured credit margin?
A: The specific impact on the average secured credit margin has not been disclosed yet, but it will be detailed in the Q2 report. The refinancing has been positive, with ongoing supportive dialogue with banks. - Pia-Lena Olofsson, CFO
Q: Are there any surprises, positive or negative, encountered during the integration of Forum Estates?
A: The integration has proceeded as planned, with no surprises. The figures align with expectations, and the company has successfully executed transactions quickly, including selling non-strategic assets and acquiring new ones in Belgium. - Christian Fredrixon, CEO
Q: Would Cibus consider selling core assets if they can be sold at a premium?
A: While Cibus is primarily a buy-and-hold player, it is open to offers for core assets if the price is right. However, the focus remains on creating a diversified portfolio and investing in core assets. - Christian Fredrixon, CEO
Q: Is there any specific reason for Kesko's notice of termination on certain assets?
A: The notice of termination from Kesko is part of the normal course of business for grocers, often due to strategic reasons like relocating to better retail locations or demographic changes. There is no specific issue with Kesko, and Cibus has already sold one of the vacated properties to another grocer. - Christian Fredrixon, CEO
Q: Can you clarify the vacancy impact on the like-for-like comparison?
A: The vacancy impact is stable, with a minor change from previous quarters. The figure reflects a comparison between April 1, 2025, and April 1, 2024, accounting for rental guarantees that expired in Denmark, leading to expected vacancies. - Pia-Lena Olofsson, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
