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Catena AB reported a strong performance for the first quarter of 2025, with earnings per share (EPS) from property management reaching 6.6, surpassing the expected 6.12. Rental income also exceeded forecasts, coming in at 644 million SEK against the anticipated 637.84 million SEK. Following the announcement, Catena AB’s stock rose by 2.95%, reflecting investor confidence in the company’s growth strategies. With a market capitalization of $2.85 billion, the company has demonstrated consistent growth, achieving a 17.05% revenue increase over the last twelve months according to InvestingPro data.
Key Takeaways
- Catena AB’s EPS from property management exceeded forecasts by 7.8%.
- Rental income increased by 31% year-over-year.
- The stock price increased by 2.95% post-earnings announcement.
Company Performance
Catena AB demonstrated robust growth in Q1 2025, with significant increases in rental income and profits from property management. The company’s strategic acquisitions and ongoing projects have reinforced its position in the logistics sector, contributing to its strong financial results. The positive market reaction indicates investor confidence in Catena’s ability to navigate a cautious market environment.
Financial Highlights
- Rental income: 644 million SEK, up 31% year-over-year.
- Profit from property management: Increased by 40%.
- EPS from property management: 6.6, up 18% year-over-year.
- Net Operating Surplus: Grew by 36%.
- Loan-to-Value (LTV) ratio: 37.8%.
Earnings vs. Forecast
Catena AB’s EPS of 6.6 surpassed the forecast of 6.12, representing a 7.8% positive surprise. The rental income also exceeded expectations, contributing to the company’s strong financial performance for the quarter.
Market Reaction
Following the earnings announcement, Catena AB’s stock price increased by 13 SEK, or 2.95%. This movement aligns with the company’s positive earnings surprise and reflects investor confidence in its growth prospects. Based on InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels. The company has maintained dividend payments for 19 consecutive years and has raised its dividend for 9 straight years, demonstrating strong financial discipline.
Outlook & Guidance
Catena AB expects strong cash flows in the coming quarters, supported by its robust balance sheet and strategic growth initiatives. The company is actively assessing acquisition opportunities and anticipates continued growth in its logistics and transport segments. Analysts tracked by InvestingPro forecast continued sales growth for the current year, with revenue expected to grow by 20%. For detailed analysis and comprehensive insights, investors can access the full Pro Research Report, available exclusively to InvestingPro subscribers.
Executive Commentary
CEO Jorgen Eriksson stated, "We are very well positioned with favorable conditions for continued growth," highlighting the company’s strategic focus and market positioning. Chief Treasury Officer David Silvso added, "We assess the market on a daily basis," emphasizing the company’s proactive approach to navigating market dynamics.
Risks and Challenges
- Geopolitical uncertainties may impact market conditions.
- Oversupply in logistics markets could pressure rental rates.
- Dependence on major customers like DSV increases revenue concentration risk.
Q&A
During the earnings call, analysts inquired about Catena’s recent acquisition in Denmark and its strategy for tenant acquisition. The company confirmed no immediate tenant for the new property but expressed confidence in securing tenants due to ongoing discussions with potential customers.
Full transcript - Catena AB (CATE) Q1 2025:
Conference Moderator: And This call will be conducted by CEO, Jorgen Eriksson and Chief Treasury Officer, David Silvso. Now I will hand the conference over to CEO, Jorgen Eriksson. Please go ahead.
Jorgen Eriksson, CEO, Caterina: Hi, and welcome, everyone, to q one presentation for the first quarter twenty twenty five. And here is the agenda for this conference call with, as always, a summary of the of the quarter, a business overview, and then following a business update, going over to the sustainability and the financial updates, and some takeaways from today before the q and a session. So next slide, please. So here is the summary of q one twenty twenty five. We have a stable progress in what so what cautious market.
And we report 31% increase in rental income ended up at 644,000,000 SEK driven by acquisitions, projects, and by our CPI linked contracts. Profit from property management increased by 40% in total and per share, it was up to 18%. And now we can really see the full effect from the last year’s acquisitions. We report an increase in NRV per share up to SEK $4.29, and the balance sheet remains very solid with an LTV at 37.8%. And we expect to generate strong cash flows in the coming quarters.
And with that said, in combination with our robust balance sheet, we are in a favorable condition for more growth. And next slide, please. And next slide for the business and the market update. We can note that a few transactions have been carried out in our segment, but the rather low activity in the first quarter. At the same time, we also see that more interesting objects will come out in the coming quarters.
And we are constantly looking for more properties that fit in in our strategy, which sets good locations, strong customers, and high quality. Mentioned the ecommerce figures, they have declined in January and February, but in March, there was there was a significant boost of 14% compared to March 2024. Regarding new developments, we can almost repeat what we said in the last quarter. We have ongoing discussions and still ongoing LOIs, but it takes time. And we sense a cautious approach from the customers and add to that the volatile market uncertainty in the geopolitical situation and tariffs issues and so on.
On top of that, it’s easier for many players to put on hold instead of taking new investment decisions. We have mentioned many times the regional oversupply. From many quarters, we have mentioned it, and the situation is same today. Maladale and Joernshopping had large vacancies. However, it’s pleasing that Cartena continues to maintain a high occupancy rate.
Next slide, please. Regarding our customer portfolio, Menigo has taken place in the top 10 after moving in at Landweather in our new project. DSV, our biggest customer, has moved from 20% to 19% of our contractual value. Logistics and transport is our biggest segment, standing for 50% of the contractual value. And we can see that food and beverage moved to 18%, which relates to Menego and as mentioned before.
And next slide, please. Regarding the portfolio, there has not been any bigger changes in that compared to q four. We have disposed two smaller assets in South. The rental value is up a bit, and the surplus ratio is up from 82 to 83%. Next slide, please.
And a business update. And next slide. And here we can see one of our ongoing projects, Rug Vista in Malmo, where we will complete a state of the art logistic facility of about 14,000 square meters. The project will be completed in May when Hoogh Vista will begin its occupancy as well. Next slide, please.
In the April, we announced a new deal in Denmark, where we signed a contract to acquire a new modern logistic building of 26,000 square meters. The construction work starts as we speak, and the closing is expected to be in December 2025. No lease agreement is signed at this moment, but we have started the letting job, and we hope to be successful with that during this year. The asset is located in which is one of the top logistic locations in Denmark, and that will be our first footprint in that region. Next slide, please.
Our ongoing project portfolio totals to around 1,300,000,000.0 SEK where SEK 400,000,000 is remaining investments. And when all is completed, we will almost add 90,000 square meters to our portfolio. The yield on cost on those projects is around 7%. And for new projects, we are also aiming to be around 7%. In the current market, we will not start any speculative projects at our land bank.
Next slide, please. The situation with our land bank and ongoing zoning plan processes is in the same as last quarter. We feel very confident that the land we have is in attractive logistic locations and that we can create profitable growth in the future. At the same time, we see that it’s becoming more and more difficult to get more zoned land, so the value of the land should also rise in the long term. Since there are no question of any land allocations, we are not in a hurry to get started with construction.
We do this together with our customers when they are ready to sign new leases. And next slide, please. For a leasing update, we can see that our net leasing was strong in q one. It came in with plus 47 millions for the quarter. Our whale is now at six point five years, and the letting ratio is at 96.5%, which is a really strong number.
Next slide, please, for an update around the sustainability. Next slide. The environmentally certified area is now at 53% and will increase further as projects and new acquisitions that are in the process of being certified is finalized. But happy to see that we are more than halfway to our 02/1930 goal. The scoop three is at a high level and reported on a rolling twelve month compared to last year due to finalizing many big projects.
We work with carbon dioxide budgets in all our projects to limit the CO2 emissions. And here we have made some really impressive improvements. We continue to maintain a high level of EO taxonomy alignment. For example, our turnover came in at 76% compared to 71% in last quarter, and produced energy from solar cells reached almost 10,000 10 megawatt. And on rolling twelve months, that was on sorry, on rolling twelve months.
And total installed output on our roofs is now almost 70 megawatts. And And now over to David for some financial update.
David Silvso, Chief Treasury Officer, Caterina: Thank you, Jurgen. Good morning, everyone. This slide illustrates the strength of our underlying earnings with year over year growth across all key metrics. Rental income increased by 31%, as pointed out earlier, largely driven by acquisitions. Net operating surplus grew by 36%, and profit from property management rose by 40%, reflecting continued scalability and cost control.
Earnings per share from property management increased by 18% to 6.6 compared to last quarter, underlying our ability to convert top line growth into shareholder value. Even in a volatile macro environment, our model continues to deliver resilient earnings with operational leverage. Next slide, please. This slide highlights the composition of our rental income growth from the first quarter twenty twenty five. Total rental income, as I just, mentioned, grew by 31% year over year.
And as you can see, it’s primarily driven by acquisitions, which contributed over 25%. Our completed development projects added a further 5.3%, including the recently finalized 42,000 square meters facility in the Gothenburg region of Herida, fully leased to Manigo. Like for like rental income increased by 2.2%, mainly reflecting CPI linked indexation, but also some, rent negotiation uplifts. These results underline our ability to drive growth through a diversified approach of combining strategic acquisitions, selective development and solid operational performance. And going over to next slide.
Let me start with an overview of our capital structure and the broader macroeconomic context. As everyone is aware of, right now, this remains a market shaped by elevated geopolitical uncertainty with selective capital availability. While these dynamics present clear challenges, they also reward disciplined capital allocation and long term focus, which is what we tend to focus on. From our perspective, the first quarter offered relative stability. Our earnings contributed positively to equity even after a drag from currency effects driven by a stronger Swedish currency on our Danish net assets.
And our EPRA NRV continues to show steady improvement quarter after quarter. We see this as a reflection of our underlying resilience and the quality of our assets. Although we did not execute any major capital movements in this quarter, we’ve maintained a strong focus on Readiness. Our financing strategy remains anchored in diversification, and we are continuously assessing opportunities to optimize cost and flexibility. Looking ahead, we believe volatility is likely to persist, but so will opportunity.
Our approach is to stay proactive and well capitalized. Passing on to next slide, please. Our financial position remains strong with all key metrics well within policy and covenant limits. During the quarter, we made the strategic decision to consolidate our credit ratings and continue with Fitch as our sole provider. This streamlining reflects our confidence in both our credit profile and in our ability to communicate it clearly to the market.
Fitch also reaffirmed our triple b rating in February, recognition of our prudent financial management and long term focus. Combined with our stable balance sheet, this ensures continued access to capital on competitive terms. And next slide, please. We continue to recycle debt during the quarter, refinancing 650,000,000 in bank loans and issuing a new 500,000,000 bond at favorable terms, three years STEIBOR plus 95 basis points. This reflects our strategy of actively optimizing our funding cost while maintaining a diversified maturity profile.
Our liquidity position remains strong at 3,600,000,000.0, and we continue to manage it actively. In light of ongoing market volatility, we deliberately maintain a healthy liquidity buffer, not only to safeguard operations, but to remain agile and ready to act. At the same time, we ensure efficient use of that capital, generating 8,000,000 in interest income during the quarter. And passing on to next slide, please. As economic uncertainty grows and European central banks move toward rate cuts, managing interest exposure remains as always, a top priority.
In the first quarter, a 700,000,000 forward started interest rate swap was activated, bringing our hedge ratio currently to 63%. This reinforces our ability to navigate rate volatility and supports stable cash flow generation ahead. And next slide and back to Jurgen.
Jorgen Eriksson, CEO, Caterina: Thank you, David. Our capital deployment has been at very low levels during this quarter, which means no acquisitions, just a few divestments of two smaller properties totaling to 25 millions. And development CapEx ended at $2.64 millions. These investments relates, among others, to ongoing projects in Ramlaasa and Malmo. And next slide, please.
Property value stayed stable and ended up in the period with a positive value change of 103,000,000, which correlates to 0.2% of the total portfolio before adjustments. The average weighted valuation yield exit yield for the portfolio is at 5.9% by the end of the period, and the EPRA net initial yield came in to 5.6%. Next slide, please. And so some takeaways from today. For the first, Caterina closes a quarter with very stable progress in somewhat cautious market.
Secondly, now we can see that all the profitable investments that we did last year generate a much higher income from property management per share, up 18% compared to to last quarter. And the third point is we are very well positioned with favorable conditions for continued growth. And with that said, we will open up for q and a. Please.
Conference Moderator: The next question comes from Oscar Lindquist from ABG Sundal Collier. So
Oscar Lindquist, Analyst, ABG Sundal Collier: in just if we start on in the p and l, you mentioned a one off in in in property costs. Can you quantify that number?
Jorgen Eriksson, CEO, Caterina: That one from with the insurance. Yeah. There are
Oscar Lindquist, Analyst, ABG Sundal Collier: Yeah. With the insurance claim.
Jorgen Eriksson, CEO, Caterina: Yeah. So we have those up in the in in the property cost as well, but that’s an accounting matter, so you cannot have the income on the top line. So they are within the p and l on both sides, so to speak.
Oscar Lindquist, Analyst, ABG Sundal Collier: Okay. And how much?
Jorgen Eriksson, CEO, Caterina: It was close to 5,000,000, I think.
Oscar Lindquist, Analyst, ABG Sundal Collier: Okay. And then on transaction, you mentioned better activity in the Danish market. Can you elaborate on sort of how it differs from the market in Sweden? You mentioned it’s better aligns with your strategic view with acquisitions in Denmark? Is it related to asset quality or liquidity or pricing or
Jorgen Eriksson, CEO, Caterina: Yes. I think it’s a mix of what you mentioned, but we can, all in all, see also when we also take the financing perspective, it will be a better deal for us. It’s more profitable. But with with that said, we are looking into a lot of cases both in in Sweden and Denmark. As I said before in this call, we do see that there will come out some more opportunities in the Swedish market going forward as well.
But then on the other hand, you never know what’s happened tomorrow now in this volatile market. Some sellers, they have decided to go try the market, and then they they withdraw it again. So it’s it’s almost from day to day, actually. It’s it’s quite uncertain out there.
Oscar Lindquist, Analyst, ABG Sundal Collier: And on the on the acquisition you’ve done now in q two in Denmark, do you have a tenant for that building, or is it on speculation? Or
Jorgen Eriksson, CEO, Caterina: It’s it’s it’s on speculation when we signed this SBA. So no no tenant signed, but now we are out with the the working with the letting job, and it’s it’s it’s looking good. And we have a quite long period of doing that job. So we feel confident with the case.
David Silvso, Chief Treasury Officer, Caterina: And I think just adding to that, it’s a once it’s the it’s a very rare opportunity to find a property like that. So that’s that’s basically the reason, we are doing this because usually and most what Jorgen mentioned about the development where we would rather not pursue any speculative developments, but this is a a fantastic opportunity given the the location. Yeah. And adding to that also,
Jorgen Eriksson, CEO, Caterina: we hadn’t had the opportunity to just acquire the land. It was a total package deal. And in Denmark, we have a 0% in in vacancy, so we do need to have something to work with for the sales team.
Oscar Lindquist, Analyst, ABG Sundal Collier: Yeah. Sounds good. And then I mean, your net debt to EBITDA is seven times, your LTV is 38%. So you have quite some headroom to your financial targets. On sort of a long term basis or a normalized level, where should we expect you to be?
David Silvso, Chief Treasury Officer, Caterina: Yes. That’s a very good, fair question, of course. But we we make we try to assess the market on a daily basis, basically. And given how the market tends to shift these days. What we know now and what we feel very comfortable about is to stay around 40%.
With that said, it could be, 45 in in six months from now if we feel that if we feel confident about that and if, we can find profitable enough investments. So I think what how you should read, it from from our perspective is we have our financial policy, and we will make sure to stay within those, with those within that framework. But other than that, we assess this on a daily basis.
Oscar Lindquist, Analyst, ABG Sundal Collier: Okay. And if we move over to projects then, can you share any insights on on ongoing discussions? How how has it been progressing compared to q four?
Jorgen Eriksson, CEO, Caterina: Absolutely. At a certain moment, we we felt that now it’s it’s it’s rather quiet. But then just a couple of weeks ago, there is a lot more ongoing discussions again. So it it’s shifting very fast. But it’s as I said before, it it takes time, and it’s not don’t hear in the market that customers they are very eager, and they really need to have something finalized within ten months or twelve months.
It’s more discussions on on on the longer run, so to speak. But a bit more activity again, so we we are hopeful. But at the same time, we have to respect the the volatile market and the uncertainty there is as well. So, yeah, that’s what’s kind of the flavor I can give to that discussion.
Oscar Lindquist, Analyst, ABG Sundal Collier: Okay. And do you do you do you think it’s reasonable to expect any any any larger project starts in, say, the coming three to six months?
Jorgen Eriksson, CEO, Caterina: We we hope, and there could be some. But, I mean, that’s depends also what you what what what you mean larger. So don’t I don’t expect a new El Giganten of 90,000 square meters in in the coming quarter, but some projects is is possible.
Oscar Lindquist, Analyst, ABG Sundal Collier: Okay. Perfect. Thank you. That’s all for me. Thank you.
Conference Moderator: The next question comes from Ki Bin Shervantur from SEB. Please go ahead.
Ki Bin Shervantur, Analyst, SEB: Yes. Thank you and good morning. I just one question first on this Danish acquisition that you made in the quarter. So you mentioned that you also have some type of extra land, so you will be able to maybe add some letable area on that. Could you maybe elaborate on how much letable area could be added on the land that you have?
I
Jorgen Eriksson, CEO, Caterina: don’t really hi, Kevin. I don’t follow you on that one that we had more
Ki Bin Shervantur, Analyst, SEB: You mentioned yes. For the acquisition that you made for the property under construction, you mentioned that you have some excess land, which was included in this acquisition. With excess land, how much leftable area could you maybe add if you made some type of extension or another building on that premise?
Jorgen Eriksson, CEO, Caterina: Then I think you have misinterpreted me. We we we will go for those 26,000 square meters. That is all we can build on that land. So sorry if I said something else, but I don’t follow
Ki Bin Shervantur, Analyst, SEB: you Okay. And then okay. But then I have a question on the acquisition itself. So you say that’s a rental value of DKK17.5. And if we assume 90% NOI margin, the yield is about 5.5%.
Is that something that’s in line with your estimates also for this one?
Jorgen Eriksson, CEO, Caterina: It’s it’s it’s higher. You should assume a much higher margin, actually.
Ki Bin Shervantur, Analyst, SEB: Okay. And also on this new project that you with the contract with Speed, do you have any type of investment value for this project and yield on cost?
Jorgen Eriksson, CEO, Caterina: On the speed project, that’s that’s in that joint venture that we have together with Platso. That’s it’s a part of the acquisition when we acquired BocaPura. So that one will go into Cartena, and then it will go out again. That will not end up in in in our balance sheet as we have done with some of the other deals in that former pocket, if you can recall that setup.
Ki Bin Shervantur, Analyst, SEB: Okay. And then I just have a final question on the NY margin. And also just a follow-up on this insurance claim that you had with EUR 5,000,000. If I interpret correctly, it’s EUR 5,000,000, which is netted out from costs and income or how should we interpret
Jorgen Eriksson, CEO, Caterina: Correct. So there
Ki Bin Shervantur, Analyst, SEB: the effect from this? Yeah.
Jorgen Eriksson, CEO, Caterina: So there is 5,000,000 in costs, and they are in the property costs. So the NOI, all as equal, should be 5,000,000 higher, and then there shouldn’t be the income of 5,000,000.
Ki Bin Shervantur, Analyst, SEB: And also on the NOI margin itself, it’s looked very strong, and it’s, of course, driven by Denmark, which is also quite high margin. But are there any other factors other than that that is contributing to this quite significant improvement versus last year?
Jorgen Eriksson, CEO, Caterina: I think that’s what you said spot on the the newly acquired building. It’s it’s not only in in the Denmark asset. It’s also the the other assets that we acquired during 2224. And at the same time, we disposed one asset in in in Copenhagen last summer, which had a rather low NOI margin. So I think that’s the explanation.
Ki Bin Shervantur, Analyst, SEB: Okay. Thank you. Those were my questions.
Jorgen Eriksson, CEO, Caterina: Thank you.
Conference Moderator: More phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.
David Silvso, Chief Treasury Officer, Caterina: Yes. We have a couple of text questions. One from George Nicolaou from Blackfinch Invest. He’s asking about Blackstone, and they have announced this morning the establishment of a pan European logistics platform. And as per their public announcement, they are looking to expand significantly in The Nordics.
And he is wondering how we think about this and how we think about the way this might shape competition going forward.
Jorgen Eriksson, CEO, Caterina: Good question. All else equal with the with the more players, higher competition, it was will also lead to maybe sharper yields if there is a strong demand for for acquiring more assets. Blackstone, a mile way, as we speak, they have not done a lot of new projects. What I know, they don’t own a land bank, so I think that will be more on the transaction side. But, yeah, if they come in with a lot of money, there should be a higher demand.
At least that could be and, again, all else equally, it could lead to higher values in in our portfolio.
David Silvso, Chief Treasury Officer, Caterina: Good. And then we have one question from Pierre Emmanuel from Jefferies. And his first question relates to a breakdown of our like for like rental growth. And what we can say is that of the 2.2% that we have presented in the report, around 1.6% is related to indexation, and the rest is a mix of, reversion, rent negotiations, basically, and and some vacancy changes as well. There are also one question from, Jefferies related to if we have any, current negotiations on significant acquisitions.
And I would just like to say we are always in dialogues on on acquisitions, but there are no no, nothing that we can present at this stage. And there are also question, on tenants if if there are any changes to the wait and see attitude that we have presented earlier. And I would say it’s pretty much the the same, but there are dialogues ongoing.
Jorgen Eriksson, CEO, Caterina: Yeah. Maybe a bit more positive the last few weeks.
David Silvso, Chief Treasury Officer, Caterina: Yeah. Then we have one question from Kempen, and there was no. I think that was it.
Jorgen Eriksson, CEO, Caterina: Oh, no. I it was the some issues with the telecast, but then
David Silvso, Chief Treasury Officer, Caterina: you That’s right.
Jorgen Eriksson, CEO, Caterina: Ask about the the balance sheet. So you clearly have balance sheet headroom. Could you elaborate more on investment opportunities, please? Occupier environment is still sluggish, but how do you currently look at the acquisitions? Should we expect you to be more active similar to last year?
As we said earlier in the call, we are always looking for new opportunities. Who knows what will appear in the market? But, yes, we have headroom. As as David said before, it’s we are we don’t know if we end up at 40% or 45. We assess that on a on a daily basis, so to speak.
So, yeah, we see this quarter was very quiet. We’ll have to see what’s happening in the coming quarters. But those of you who knows, Katiana, for sure, in the long run, we will grow further on.
David Silvso, Chief Treasury Officer, Caterina: Yes. Thank you again. And, that was the last question, by text. So if no more questions, we’d like to say thank you.
Jorgen Eriksson, CEO, Caterina: Yeah. Thank you all for listening, and have a wonderful day. Thank you, and goodbye. Goodbye.
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