Earnings call transcript: Cibus Nordic Q1 2025 sees stable growth

Cibus Nordic Real Estate (CIBUS) reported its Q1 2025 earnings, showcasing a robust financial performance with a 28% increase in rental income and a 30% rise in net operating income year-on-year. According to InvestingPro data, the company’s stock currently trades at $16.80, showing a 20.6% return over the past year. While the company faces short-term profitability challenges, analysts expect positive earnings this year with a forecasted EPS of $1.09. Key financial metrics such as earnings per share (EPS) stood at €0.42, while the net asset value (NAV) per share increased by 8% to €12.6.

Key Takeaways

• Rental income grew by 28% year-on-year.
• Net operating income increased by 30% year-on-year.
• The stock price rose by 0.22% post-earnings announcement.
• Successful integration of Forum Estates acquisition.
• Commitment to monthly dividends of €0.90 per share.

Company Performance

Cibus Nordic Real Estate has demonstrated strong performance in Q1 2025, with significant growth in both rental income and net operating income. The company’s strategic focus on daily goods properties and its expansion across Europe have contributed to these positive results. Cibus remains the only listed Nordic real estate company focused on this niche, providing a competitive edge over its peers.

Financial Highlights

• Revenue from rental income: Up 28% year-on-year.
• Net operating income: Up 30% year-on-year.
• Profit from property management: €38 million, up from €12.2 million.
• Earnings per share: €0.42.
• Net asset value: €965 million or €12.6 per share, an 8% increase.

Outlook & Guidance

Cibus aims to continue growing its earnings capacity per share while further integrating its Benelux platform. The company is focused on optimizing its balance sheet and seeking cash earnings per share accretive transactions. Cibus has reiterated its commitment to achieving climate neutrality by 2030 and maintaining monthly dividends of €0.90 per share.

Executive Commentary

CEO Christian Fredriksen emphasized the company’s strategic focus, stating, "Converting food into yield," highlighting the resilience of the supermarket sector. He added, "We’re a buy and hold player," reinforcing Cibus’s long-term investment strategy.

Risks and Challenges

• Potential divestment of non-core assets could impact future earnings.
• Challenges in further integrating the Benelux platform.
• Macroeconomic pressures and market saturation in the real estate sector.
• Interest rate fluctuations affecting refinancing efforts.
• Competition from other European real estate firms.

Q&A

During the earnings call, analysts inquired about the company’s plans for potential divestment of non-core assets from the Forum Estates portfolio. Cibus is exploring acquisition opportunities in stable grocery markets, actively managing its property portfolio with strategic sales and purchases.

Full transcript - ​Cibus Nordic Real Estate (CIBUS) Q1 2025:

Conference Moderator: Welcome to the Cybus Q1 twenty twenty five Report Presentation. For the first part of the presentation, participants will be in listen only mode. During the questions and answers session, participants are able to ask questions by dialing 5 on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now I will hand the conference over to CEO, Christian Fredriksen and CFO, Pia Lina Olufsen.

Please go ahead.

Christian Fredriksen, CEO, Cybus: Good morning. Good morning, everybody, and welcome to our webcast for our quarter one twenty five results. Christian speaking here and joined, as always, by Fiona. CFO. So welcome, everybody, and thank you for joining.

Let’s jump to the next slide, please, Fiona. So So my favorite slide, you will recognize this, converting food into yield. This is still what we do and are planning to continue to do. We are now doing it, though, on a pan European basis. As you will see, what’s the the biggest news in this quarterly report is, of course, that we now have we are now reporting with the two acquisitions made earlier this year in Benelux, the former estates acquisition, and the Danish portfolio of nine assets, closed also earlier this year.

And those figures are included about two of three months of this quarter. So CBIZ converting food into yield. Most of you will recognize what we’re saying here, but what we do is we’re a real estate company focused purely on daily goods properties. We’re the only listed vehicle in The Nordics to do exactly this. There are a couple of European peers and other stock exchanges in in The UK and some in Germany, but we’re the only ones listed in The Nordic.

We’ve been listed since 02/2018. We’ve been paying monthly dividends to our shareholders for this is the fifth consecutive year we’ve done that. And we’ve grown from a Finnish supermarket portfolio into the pan European grocery real estate player that we we are now. Our market cap in mid April was about €1,100,000,000, and our aim is to create these stable cash flows, which I’m gonna talk about a bit later, and also increase earnings capacity per share, which is our key key metric, which we follow internally very, very closely. So our properties in the q one twenty twenty five.

For those of you that have followed the pro form a, which we have talked about before, latest in our q four results, you will recognize many of these numbers. A a point to make there is that the Forum Estates integration has is going very, very well. I think we’re very happy to see, of course, both that the integration is working well and also that the figures are in line with what we said in the pro form a. So you’ll recognize most of these slides. Have now 640 properties, a property value of about 2,400,000,000.0, and an earnings capacity of a hundred and fifty six point three and one point three million square meters.

And if you look at our tenant share of NOI, will see that we have a very well diversified portfolio when it comes also to our NOI and and counterparty risks. You will see now that some of the household names from Europe, other parts of The Nordics, have have increased. And just summarizing some of the the figures you you will recognize before, 81% of our rental income is from noncyclical daily goods tenants, which is a high and good number. 95% of our properties are anchored by daily goods tenants, and our average property size is 2,100 square meters, which is more or less a a supermarket. We we have a supermarket portfolio, more or less, in all of our countries.

99% of our rental agreements are index linked, which is very important when it comes to growing organically just by by itself. So we tend to follow what happens in the CPI linked agreements that that’s how we grow some of our NOI. Our WALT, I know will talk a bit more about this later, but in Belgium, they there’s a statutory right for retail tenants to give every three years to give notice to leave the building. That gives us the opportunity now to to present the the WALT in two ways. The what we call the WALT, which is five point eight years, which is the the long contract in in Belgium, what’s actually in the lease.

And then then a worst case scenario is the Walt b, where every single Belgian tenant would give their three years notice if when they can. So so the truth is somewhere in between. The underlying portfolio, the the Nordic portfolio, has had a wart of about five years since since the company’s inception and is stable around that figure. And 90% of our leases are net to triple net, which shelters us from property increases the tenants and and or or on the properties. And this is a win win situation for us and the tenants because for the tenants, these stores are very important part of their operational infrastructure.

They want to be able to manage the stores and the sites in the way that they seem fit so the customers and and deliveries can get in and out in an easy way, but they don’t necessarily have to own the assets. So we’re happy to own the assets with these net and triple net leases. Creating stable cash flows also comes from a large hedging ratio. 97% of our debt is interest hedge, and we’ve been working throughout the quarter to extend that. And so in the end of the quarter, it’s two point seven years, our interest hedge maturity.

And when it comes to the actual quarterly figures, a very strong quarter. We’re happy to report today. As you see, rental income is up 28% year on year. And please remember, this is only including the new acquisitions for two of three months of the first quarter. Net operating income up 30% year on year.

And then the profit from property management amounted to €38,000,000,000, up from up from 12.2. Worth noting, of course, there’s a a very big other income post in here, which is a 20,500,000 negative goodwill post. And this arise from the acquisition of the Forum Estates portfolio where it was carried out at a discount. When it comes to earnings per tax, 31,000,000. And when it comes to the unrealized changes in value, which is minus 7,300,000 in the quarter sorry.

Just to re people people are saying that there’s an echo in the in the call? Is this something we can be assisted with? Are are people having problems with this? Let’s let’s continue and and see if if more people okay. Our moderator says she hears everything perfectly.

Okay. Let’s continue. So back. Unrealized changes in values. So when it comes to the value changes in this quarter, values were up in all of our countries apart from Finland.

So, I in six countries, they were up, and we’re happy to see that. It it’s stable yields and increasing slightly in those six markets. What we see in Finland is also stable yields and and and stable property market. What we see here is that there’s two properties where our tenant Keskov has given notice that they sooner or later will leave. And this is really nothing out of the ordinary.

This is normal course of our business. The tenant some tenants come and some tenants go. In this case, there was a a hit on value in Finland for these two assets, But I think it’s partly it’s normal course of business. And then I think we’ve already shown, as we’ve demonstrated and mentioned in in press release from last week and also in the report, that we have active plans on how to manage these types of assets. Finland, when the KESCO left one of building in Helsinki, we have now, during the quarter, sold it to a another grocery chain who will open their own store in that building.

So I I think there’s alternative use for our assets, and I think we’ve we’ve proven that. So that’s how we deal with these types of assets. Our EPRA NAV is almost a billion euros and €12.6 per share. So this is our growth timeline. A bit of a hockey stick at the end, of course, as seen with these large portfolios.

And a a comment worth making here is that we look across all of our seven markets, geographical markets, and also in the rest of Europe to see where we can get the best yield spread and the best return for our shareholders. That means that we grow only when we see cash earnings per share accretive transactions. Growth in itself is not a target we have, but we see the opportunities to grow right now. We are the only listed real estate company owning retail assets listed in Europe that are trading at a premium. And that, of course, gives us opportunities to grow.

Earnings capacity per share, as mentioned, this is the the key metric for us, and happy to see that this has now grown for the seventh consecutive quarter. And the the pro form a figure of one point o four is what we hit dead on target now here in our q one earnings capacity, and that’s 8% up year on year. And as mentioned, this grows through top line indexation growth, 99% index linked leases. We have lower margins both on banks and bonds, and then there’s large acquisitions which we’ve carried out. So as a point here on the key takeaways from 2025, Improved results, NOI up 30%, as I mentioned.

Property from property management up to 38,000,000, including the negative get goodwill. EPRA NAV per share up 8%, and earnings capacity up 8% quarter on quarter, I should say, and then increased earnings capacity per share, 8% year on year. Integration is going very well and delivering according to plan for our Forum States acquisition. In 2025, I’m happy to say that we’ve also already announced some transactions. We’ve made some accretive acquisitions in daily goods assets in both Belgium and in Finland.

Very happy to see that we’re working and cooperating so well with our new Belgian colleagues, which have also allowed us to sell a number of nonstrategic assets in a couple of our markets. In Belgium, we’ve sold a number of DIY assets, which is not really converting food into yield. During the quarter, we’ve also been busy with refinancing of bank loans. As announced last week, we we carried out a refinancing of about 19% of our total total bank loans with with more than fifty fifty basis points lower margins. And then we carried out the bond earlier this year in in January at a 250 basis point spread.

And that’s moved the average credit margin of all debt with now in q one from 2.9% to 2.3. Hedging, as mentioned, we’ve extended this to two point seven years at an attractive levels. We carried out a a spread or a new hedging here in Jan in April when markets were really, really choppy and volatile and managed to get that at 1.7% 1.97%, which was was a great achievement at the time. Now we’ll see where interest rates are going. I mean, it’s it’s anyone’s guess what what’s gonna be the strongest here of the factors of driving inflation with what’s happening in The US and with what’s happening with European defense spending, etcetera, or is will central banks cut interest rates because of recession risks and the recessions we’re seeing?

So the way we handle that is we prefer to be very have a large part of our debt hedged, interest rate hedged, and extending maturities on those to make sure that we can continue to deliver stable cash flows. A point seven here on on the macro and geopolitics, I think it’s worth saying that we’re very happy and pleased that we’re in the daily goods sector. It’s a noncyclical and resilient sector. Not much not much food is imported from The US into the EU, so won’t won’t be one of the most hard hit sectors from any of this any of this continued tariff and trade wars. And, also, people need to buy and eat food irrespective of if if it’s a pandemic or if it’s high inflation or or if it’s trade wars.

So happy to be in this sector, stable cash flows, and and stable tenants with with stable margins when it comes to the larger agree large grocery chains. And then looking forward, we are happy that we have been given a 20% new mandate for the board to raise new equity. So happy that the our owners have supported us there at the EGM, which is a tool we can can use and see the right accretive acquisition opportunities. And then short on the transactions we have announced in in 2025. In q one, we bought a grocery store in Beringen.

It’s a jumbo store. Jumbo is a Dutch retail chain, which is prevalent in Belgium. It’s as mentioned, it’s an eighteen year lease, but then there’s, of course, these three year breaks. And the way that the Belgium system works, Belgian lease system works, but when tenants have this three year break option, is that the the properties are let out more or less as as shell and core, which means that the tenants often invest between 2,000 and €2,500 per square meter. So when tenants are that heavily invested, they’re not likely to to leave within a short notice.

They’re they’re invested heavily, and they they invest themselves long term into the buildings. And we acquired also a store in in Finland, a newly built or it’s a store under construction with an eighteen year lease with a major grocery chain in in the town of Isan in in in in middle in the middle of Finland. So we made acquisitions for €9,300,000, which are have been announced. Only one of those was in in q one. The Isami store is in q two.

And then when it comes to the divestments, I’m happy that we’re regenerating some of our internal capital as well. We’ve sold these DIY stores in Belgium, as mentioned, led to the DIY chain, Gamma, for $2.1010200000.0 euros. But we’ve also sold these grocery stores in Helsinki, which I mentioned. One is a store which Kesco is leaving, and then immediately, we sold that sold that at a significantly higher value than book value. We sold that to another grocery chain who wants to open a store and move in.

And I think that’s exactly what we see and I’ve talked about before when it comes to grocery, that more or less all of the major chains across Europe want to grow. In Lidl, in Sweden, for example, they want to open a hundred stores as soon as they can. Ika is opening a ten, fifteen, 20 new Ika Maxis, which is their hypermarket. So so there’s a lot of pressure when it comes to opening new stores and wanting more space. And and I think this if you compare this to other sectors where where there’s a bit of questions on on what’s occupancy rates, what’s going forward.

When it comes to grocery, demand is very strong for these locations or for this the store type. In q two, we also sold a former Koop store in Oslo, Sweden, where we chose to sell it to the municipality so they can continue to do a a an urban development of that site. So so that’s another example of the alternative use for our property. So we managed the the takeaway conclusion here is in all these countries, we we managed to sell properties at above book values.

Unidentified Speaker: And

Christian Fredriksen, CEO, Cybus: then over to oh, yes. Thank you. Thank you. Just a yes. Just a a quick point on the one plus joint venture, which you’ll find in our reports as well.

This is a very interesting new source of growth for CBUS. This is something that Forum of States had set up with this developer with the developer, TS thirty three. What this joint venture is, we own about 31%. It’s about five retail properties there. And what TS thirty three does is it builds newly built retail assets or grocery assets.

And when the grocery assets are completed, this joint venture has the right of first refusal to purchase these new grocery stores. And OnePlus has a strong pipeline of these supermarket opportunities, and it it is a potential additional source of of growth. And it’s well governed, and we can say no to yes or no to to things, which is great. Yeah. Over to you, Theo.

Pia Lina Olufsen, CFO, Cybus: Thank you. So looking at the the net operating income, it was €36,600,000 for the first quarter. Administration costs now include the office in Ghent with 12 employees from foreign states. We have a nonrecurring income item of plus €20,500,000, which comprises of the negative goodwill, which arose in connection with acquisition of foreign states since the acquisition was made to a discount to the net assets. Net financial items includes an exchange rate change of minus €900,000, mainly due to the stronger SEAC.

Profit from property management, excluding nonrecurring items and exchange rate differences was 18,400,000.0. We sold two properties in Finland, which gave a realized change in investment properties of plus EUR 2,400,000.0. We had somewhat increased underlying property value in all countries except Finland, as Christian mentioned, where we had a negative unrealized changes mainly due to two properties where KESSCO had announced notice of future termination. Earnings for the for the quarter was €31,000,000 or €0.42 per share. Earnings capacity, first of sorry.

The earnings capacity, the 04/01/2025, so it’s a net operating income of a hundred and €56,300,000, which is an increase of 37% since the 04/01/2024. Profit from property management minus the expense for the hybrid bond and adding back noncash items amounted to €79,200,000 or €1.4 per share, which is an increase of 8% since the 04/01/2024. And after the period, as we announced the April 17, we announced the outcome of the refinancing of bank loans of €232,500,000 at reduced credit margins by more than 0.5 percentage points. Since the earnings capacity is a snapshot, the April 1, the lower financings costs are not included in the earnings capacity. Looking at the net operating income, the effect of changes in occupancy was fairly unchanged since q four at minus 2%.

Indexation increased NOI with plus 1.9%. And as you can see, it is the acquisition that is mainly driving growth. Segments is countries, and we now have seven countries. Belgium, Netherlands, and The Luxembourg is part of the group since the January 27 this year. So their part of the NOI will be higher in the second quarter.

Our property value, Finland has 47%, Denmark seventeen %, and Belgium is the third largest with 16%. Looking at the balance sheet at the end of the first quarter, property value was €2,400,000,000, secured debt €1,200,000,000 giving a loan to value on secured debt of 50.6%. Unsecured bonds was 247, no, €245,000,000, giving a net loan to value of 58.7%. Net asset value after NAV was €965,000,000 or €12.6 per share, which is an increase of 8% since the last quarter. The weighted average remaining lease time is shown in the graph on the top, both without Belgian termination rights, which then is a vote of 5.8 or with Belgian termination rights, which then is four point two years.

In Belgium, as Christian said, the tenants of retail properties have the right to terminate the lease every third year. And to minimize that risk, this is usually offset by that the tenants invest significantly in the premises in the premises and thus want to stay. Looking at funding, as you can see, bank financing is still the largest part of Sybil’s external funding with 81%. And as we said, we have done refinancing after the period at much lower margins. We have senior unsecured bonds.

That is 16% of our financing. And the January 10 year, we did a new bond of €50,000,000, which was issued with a four year tenure at a margin of two fifty basis points over Eurobor. For CBUS, stable cash flows is very important, and CBUS continue to have a high degree of hedging with 97% of our loans hedged. Based on the earnings capacity and taking all the interest rate hedging in consideration, an increase of the market interest rate with one percentage point would affect profit with one point minus €1,500,000 annually. And a decrease of one percentage point of market rates would affect profit with plus €2,700,000.

And why an interest rate reduction has a a greater impact is due to that we have interest rate caps, which is about 42% of of the hedging on loans. Looking at the key metrics, net LTV was 58.7%. And since the the funds raised through the directed share user has been deployed, It’s slightly higher than before and also that we have the new bond. The covenant in the MTM program is 70% net LTV, so good headroom to that. Interest rate coverage ratio was 2.3 times, and also well above the covenant of 1.5 times.

The net debt to EBITDA increased in the quarter due to the we’ve done the acquisitions, which has increased the depth, while the EBITDA is built over time. And if you use the earnings capacity, the forward looking net debt EBITDA, is 10 times. Cbus, generate stable cash flow so we can pay out the dividend to our shareholders on a monthly basis. This year, we have a five year anniversary of paying out monthly dividends. At the AGM, they decided on an unchanged dividend of €0.90 per share paid out in 12 installments.

And the dividend yield on the share price at the end of the quarter was 6.9%. Looking at the share price performance, the share price at the end of the quarter was a hundred and 48.05 SEK per share. And CBIZ is a very liquid share with more than twice the average than other real estate companies with a market cap of 10,000,000,000 SEK at Nasdaq.com. I’m not having a easy web at the computer and jumping. So just a good snapshot of our shareholders, which we are very proud of, and they’ve been with us for a very long time.

And we’re also happy that we have 55,000 shareholders. Over to you, Christian.

Christian Fredriksen, CEO, Cybus: Thank you. Thank you. So speaking a bit about the future, let’s jump and talk about our our common future on this globe, ESG. We try and do is we want to provide sustainable marketplaces, and ESG is an important factor for real estate. I mean, real estate in general is is one of the one of our and heating of real estate is an important contributor to global greenhouse gases, of course.

CBIZ has a path to climate neutrality 2030 to become climate neutral. We have reported in our annual report for 2024, We voluntarily reported under the CSRD reporting directive. And among other things, we can show there that 49% of our assets are taxonomy aligned, up from 3031%. And this is, by the way, at at the end of the year. These are figures from from the q four figures.

And what’s interesting as well is that we have 79, almost 80% of our tenants have their own SPTI goals, which is what we’ve been talking about before is that our tenants are consumer facing companies, grocery tenants with large aspirations within ESG themselves, and that feels great. But, of course, returns are the most important thing for us, and let let’s not forget that. But if we can do some good along the way, that that’s great. When it comes to the financing, we, of course, have our green and sustainable financing framework in place. But I think what’s worth listing here as well is the s in ESG.

These these assets and the supermarkets and supermarket chains, they are a part of social infrastructure in our societies. An important part of all this resilient society is feeding a population. Feed people need to eat in in pandemics and people in times of crises. And as I wrote in the CEO comments, I I think in a a perfect example of this is what we see in Finland, where the Finnish government and the and the grocery chains have launched a an initiative to make 300 grocery stores across the country into self sufficient distribution points for grocery even if there’s no electricity. So the the government and the chains are cooperating in making sure that these sites and these continue to operate even if there’s power shortage, even if it’s times of crisis, and a a place where you can meet, get information, and also charge your mobile phones, etcetera.

So so very interesting initiative there in Finland, which kind of, I think, proves the point this is an important part of infrastructure. Also, health, the place to meet. For many people, the supermarket is the is the place to meet if you’re a if you live alone. Slow cashier, and we’ve talked about before. Important for us and what we can add to this is is to see what we can do to create safe and accessible marketplaces for everybody.

And then when it comes to what we’re looking at moving forward, I think these are the main six areas. We want to continue to grow earnings capacity per share in all parts of the business, and we grow the earnings capacity as you’ve seen both through acquisitions and through organic growth, through indexation, and cost control, etcetera. So it’s all about creating that earnings capacity per share. Continue to work with and further integrate our platform for growth in the Benelux, the Forum Estates platform. We will continue to work with balance sheet optimization, refinancing, and hedging.

Very important, of course, now with what we’re seeing, the turmoil and volatility in the financial markets. We want to continue to create these stable cash flows and deliver to our shareholders. We want to look at cash earnings per share accretive transactions. We see interesting opportunities in our seven existing markets, and we’re actively evaluating other opportunities and other markets in Europe. I’m proud of the team.

We’re working very hard. We’re a small team. We used to be 12 people. We are now 24 with the the Benelux team, a small but but diligent and forward leaning team, which I’m very proud of of what we’re doing. And I’m very happy to see that we’ve carried out these transactions earlier this year with our Benelux team and and the strong Nordic teams continue to deliver as well.

And lastly, but definitely not least, we’re committed to deliver shareholder value by continuing to convert food into yield. And that that’s just a commercial break. That’s why. So let’s move to, to the q and a.

Unidentified Speaker: And

Conference Moderator: The next question comes from Oscar Lindquist from ABG Sundal Collier. A

Unidentified Speaker: couple of questions from me. If we start on the transactions announced last week, Yeah. Are there any more sort of noncore assets that you would like to divest from the former sales portfolio?

Christian Fredriksen, CEO, Cybus: Yes. There there are a number of assets. They had slightly less grocery converting food deal assets than we do. The we as in Seabras Nordic. So, yes, there there are a couple of more assets we’re we’re looking into, how we should treat them going forward.

But, I mean, there’s there’s strong cash flowing assets and with strong tenants, just not kind of nonstrategic for us as as we like to convert food into yield, but but there’s nothing wrong with them, and and they’re cash flow producing. So the price needs to be right for us.

Unidentified Speaker: Alright. And could you give any indication of the volume here?

Christian Fredriksen, CEO, Cybus: No. Not not really. We’ll you’ll hear about it when when and when it happens, then and when it happens.

Unidentified Speaker: Yeah. Yeah. Sure. Sure. And also on the transactions that you announced, could you give sort of net impact on rental income?

Christian Fredriksen, CEO, Cybus: We’re not giving

Unidentified Speaker: that investments and the acquisitions?

Christian Fredriksen, CEO, Cybus: We’re we’re not giving that figure. But but so far, they’re they’re they’re they’re minor acquisitions, of course. Two acquisitions of two stores. So so quite a small impact so far from acquisitions this year.

Unidentified Speaker: Okay. And I I’m correct in assuming that these transactions are not reflected in the earnings capacity. Right?

Christian Fredriksen, CEO, Cybus: Yes. The the jumbo asset in is because we closed that in during q one, and the earnings capacity is forward looking from April 1.

Unidentified Speaker: Sure. Okay. And then on acquisitions, can you give any insight insight there on on where you’re looking, what markets look the most interesting, and do you have any ongoing discussions?

Christian Fredriksen, CEO, Cybus: Yeah. I think we’re we’re looking I think the strength that CBUS has being in in seven countries and and being able to look at more countries is that we are investigating where we can find the best return for our shareholders. As communicated previously, what we’re looking for is is stable grocery markets. I mean, stable in the the the tenants are performing well. There’s there’s dynamics among the tenants which works well.

We’re also looking for kind of stable economies but unstable real estate guidelines and rules and zoning plans, etcetera. And but we we don’t necessarily, as many others investors, maybe need to look at so stable real estate markets. I mean, we’re a buy and hold player. Many other investors are are kind of need to time things, time buying and selling. As we’re a buy and hold player, we feel we can look a bit more freely there as long as the dynamics are right and the assets bought are cash earnings per share accretive from day one.

Unidentified Speaker: Okay. And then finally on refinancing, you refinanced 20% approximately of your bank debt now in April, and the margin on average was down 50 basis points. How would you say that this translates to the remainder of your bank? Do you have the same potential here?

Pia Lina Olufsen, CFO, Cybus: I mean we do have good dialogue with the banks, and they are continuing to giving us support. I want to have more volume. I want to do more business with Silva. So yes, it’s looking good, but we will come back with the refinance we do also going forward. But we have positive dialogue with the banks.

Unidentified Speaker: Okay. And then one final question on on the the new JV one plus. Could you give any indication of should we expect to see some material contributions in the near term, or how’s the pipeline looking here?

Christian Fredriksen, CEO, Cybus: No. I wouldn’t say material contributions. It’s it’s a pretty small joint venture. It had it holds five assets right now. And the developer is not a huge developer, but but they have very good relations with the grocers.

It’s it’s more of a a a future time future potential pipeline of new assets. And we want to lift it forward also because it it is an it is an interesting fountain of new potential growth. And we’re happy to look into to see if there’s more opportunities out like that out there in the markets.

Unidentified Speaker: Sure. Thank you. That’s all for me.

Conference Moderator: The next question comes from Victor Hoekenhammer from Pareto Securities. Please go ahead.

Victor Hoekenhammer, Analyst, Pareto Securities: Hi, Cristiano and Fialina. Thanks for a great presentation. Starting with the occupancy rate now above 95%, how does that compare between Nordic and Continental European portfolios of yours?

Pia Lina Olufsen, CFO, Cybus: Yes, I can take that. Yes, we had higher occupation occupation rates in the former states deal, which is contributing to the higher occupation rate that we have in the in the quarter. But otherwise, it’s quite stable in the Nordics and the other parts also. But the increase in occupation was due to the foreign mistakes too.

Christian Fredriksen, CEO, Cybus: A comment on the Nordic Nordic side of things is, I mean, it’s business as usual. We we extend leases with grocery players. We we’ve let some of the non grocery space as and when there is some vacancies. But but, Peyland, I mentioned, it’s it’s a stable quarter as expected.

Victor Hoekenhammer, Analyst, Pareto Securities: Sounds good. And then just a final question on refinancing of bank loans as mentioned. What is the average secured credit margin now after last week’s announcement?

Pia Lina Olufsen, CFO, Cybus: I mean, we haven’t commented on that, unfortunately, so I cannot do it on this call. But of course, it will have an effect, which we will disclose in the Q2 report.

Victor Hoekenhammer, Analyst, Pareto Securities: Okay. Perfect. That was all. Thank you.

Christian Fredriksen, CEO, Cybus: Thank you, Victor.

Conference Moderator: The next question comes from Svante Krogfors from Nordea. Please go ahead.

Svante Krogfors, Analyst, Nordea: Good morning. Svante from Nordea. Thank you, Christian and Pielen for the presentation. Actually, most of my questions have already been answered, but a couple of them left. So perhaps first on you have now been integrating foreign mistakes for some months.

Is there any negative or for that matter, positive surprises that you have encountered? Or has everything been as planned?

Christian Fredriksen, CEO, Cybus: No. Everything has been been as planned. I think I mean, we did a very extensive due diligence during 2024. I’m very happy that the figures, of course, surprising to us, but now we can present that the figures really match up to what we’ve said. I think a positive surprise I was surprised.

I’m I’m happy to see that that we’ve been managed to do these transactions so so fast and hit the really hit the ground running together in in selling these nonstrategic assets and also buying one asset in in Belgium.

Svante Krogfors, Analyst, Nordea: Thank you. And then a question a bit touching on earlier question here, but I mean you now have authority to issue 20% new shares that would enable around about €500,000,000 in acquisitions. Would you look at completely new markets? Or would you primarily use the base that you have in foreign mistakes?

Christian Fredriksen, CEO, Cybus: I I would say both. I would say when if and when we find the right cash earnings per share accretive opportunities, then then as long as it meets the criteria mentioned earlier about new markets, then then we would would be happy to enter a market. I think the the Forum Estates acquisition and also the the large Danix acquisitions we did kind of prove the point that that we are we are able to do so. But, of course, a company should grow in kind of a a a steady flow if possible. But I feel that we we’ve managed to integrate foreign mistakes.

That’s worked very well. And if the opportunities arise, then we’re happy to look at at other things as well.

Svante Krogfors, Analyst, Nordea: Thank you. And then perhaps a final one. Do you have any comments on changes in the transaction market in your operating countries recently? Or is it similar as it was three months ago?

Christian Fredriksen, CEO, Cybus: Yeah. No. That’s a good question. Thanks. I forgot to touch upon that in the presentation.

I you summarizing, Sweden, hot. Lots of lots of institutional private investors chasing grocery assets. Retail parks with grocery in it, we mostly only want the grocery, not the other things, the the building materials or the gardening or or the sporting goods. But there’s a lot of investors, both institutional and also private individuals, both private equity and also more kind of syndicates looking at these assets in Sweden. We see the same thing in Denmark, very very active market.

And and The Netherlands is a very active market when it comes to real estate transactions in general and for our our segments with with various types of of pooled capital buying a number of of these grocery assets. So I’d say most of the transactions happened, of course, before all the major turmoil in the markets from after the April 2. But in general, lots of interest And and in my view, supermarkets are and should be one of the most resilient sectors when it comes to the the trade wars and other things happening. Because they’re high yielding, they’re stable tenants, everyone needs to to eat and buy food, the the small liquid assets or or can be small, at least the ones we target, and then should be a very interesting property segment for many going forward.

Conference Moderator: The next question comes from Vinci Aliyah from Kempen.

Vinci Aliyah, Analyst, Kempen: Hi, good morning Christian and Pierre Elena. Hope you had a wonderful Christmas break. A couple of questions for me. First one, of course, I appreciate that you’re selling noncore assets and vacant assets, but would you consider selling some more core assets as long as you can sell them at a premium?

Christian Fredriksen, CEO, Cybus: At the prices, the price is always of interest for us. We are a buy and hold player. We enjoy the cash flow and the stability of those cash flows. So so, yeah, go ahead and make us an offer, and we’ll see how how we react.

Vinci Aliyah, Analyst, Kempen: But I’m getting Alright.

Unidentified Speaker: And then

Christian Fredriksen, CEO, Cybus: a bit more concretely. I I think we’re we’re on a trajectory where where we’re creating a more diversified portfolio. We’re becoming a a larger company. There are certain economies of scale both in diversification and also becoming slightly larger. So so it would have to be something significant of interest for us to to divest some of our core assets.

I I think one should expect us more to look look at kind of continuing to divest noncore assets and investing into more core assets.

Vinci Aliyah, Analyst, Kempen: All right. And then on the KESCO assets, on the notice of termination, is this something linked more specifically to Tesco? Or is it just a coincidence? So I’m asking is or does Tesco want to be the owner of its assets? Or is it more a similar story that they can just plan to build or they can build a store nearby?

Christian Fredriksen, CEO, Cybus: Yeah. I I think that there’s no in my view, there’s no cross read that this happens to be KESCO. This is a normal course of business for a a grocer. I was seven years at ICA real estate as as you know. And sometimes you close a store because you want a bigger store.

Sometimes there’s some new infrastructure in the town, a new roundabout, which is slightly better retail location for for what you’re planning as a grocer in that specific location. Perhaps you move to a a demographic location, which is closer to your price strategy. If if you’re a high end or a low end, the discount of maybe demographics change, the and income changes in the local market. So there’s always a bit of movement, and I I think these are examples of that. But when the the they’re they’re doing something else in those locations.

And mentioned in in this the store that Kesco did leave, we could immediately sell it to another grocer for for them to open their their own store. When it when it comes to Kesco, they both lease, of course, with us, almost a 50 assets. Own some of their assets. They own through the joint venture, which they had with AMF and Ilmarinen, which they now have with Ilmarinen and and their own association, their retail association. So so they they own they they own and let just as most many grocers do.

Vinci Aliyah, Analyst, Kempen: Alright. And then maybe just one more of a clarification question. On the like for like, I see that the vacancy impact is minus 2%. But then, of course, if I look at your vacancy, and I know it’s a snapshot and impacted by the Formstates acquisition. But then as you mentioned earlier, the Nordic vacancy is more or less stable.

So then one doesn’t really match the other. Could you add a bit more color there?

Pia Lina Olufsen, CFO, Cybus: Can elaborate. I mean, both in Q3 and in Q4, that figure was 1.9%, and now it’s two So it’s it’s it’s very, very stable, so to say. So it’s not a dramatic jump in any way, you can say. So overall, it’s it’s stable in The Nordics and on the comparable portfolio as you can see. So no.

Christian Fredriksen, CEO, Cybus: Yeah. So in the end of quarter, not much happened. 0.1 percentage points.

Pia Lina Olufsen, CFO, Cybus: Exactly.

Vinci Aliyah, Analyst, Kempen: So this is more from, let’s say, q two last year.

Christian Fredriksen, CEO, Cybus: Yes. Exactly. The the that that figure, that that’s comparing the the earnings capacity 01/01/2025 oh, sorry. 04/01/2025 with 04/01/2024. And and in 2024, we we had another number of rental guarantees, for example, in Denmark, which which ran out and thereby create vacancies.

And those are the rental guarantees we which we knew at some point, point this would be extremely difficult to to let. So we knew that already when we purchased that portfolio in Denmark.

Vinci Aliyah, Analyst, Kempen: Okay. Very clear. Thank you for all the answers.

Pia Lina Olufsen, CFO, Cybus: Thank you. you.

Christian Fredriksen, CEO, Cybus: Great. Thank you.

Conference Moderator: There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions or closing comments.

Pia Lina Olufsen, CFO, Cybus: Yeah. We have no written questions, but we have one well, we have one question regarding the presentation. This will, of course, be available on the website. Sorry for the echo that some has, but you can listen in on the presentation on our website shortly later on today. It will be available.

Christian Fredriksen, CEO, Cybus: Great. Well, thank you everyone for joining us today, and all the best for a continued twenty twenty five.

Victor Hoekenhammer, Analyst, Pareto Securities: Thank you.

Christian Fredriksen, CEO, Cybus: Bye.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.