Earnings call transcript: Cibus Nordic Real Estate sees rental income surge in Q2 2025

Cibus Nordic Real Estate reported strong financial performance for the second quarter of 2025, with a significant increase in rental income and a slight decline in its stock price. The company emphasized its strategic acquisitions and expansion across Europe, contributing to its robust results. According to InvestingPro analysis, the company maintains a "GOOD" overall financial health score of 2.62 out of 5, with particularly strong marks in growth and price momentum. Despite these achievements, the stock saw a minor dip of 0.93%, closing at 182.95, reflecting mixed investor sentiment.

[Get access to 10 more exclusive InvestingPro Tips for Cibus Nordic Real Estate and discover hidden opportunities in the real estate sector.]

Key Takeaways

• Rental income rose by 35% to €41.3 million.
• Net Operating Income (NOI) increased by 28% to €39.1 million.
• Stock price decreased by 0.93% following the earnings report.
• The company acquired 18 properties across 5 countries.
• Cibus has a strong focus on the grocery real estate sector.

Company Performance

Cibus Nordic Real Estate demonstrated robust performance in Q2 2025, driven by strategic acquisitions and a focus on the grocery real estate market. The company expanded its pan-European platform, acquiring properties in Belgium, the Netherlands, Denmark, Finland, and other countries. This expansion contributed to a 35% increase in rental income and a 28% rise in Net Operating Income compared to the previous year. The company continues to position itself as a leader in the Nordic grocery real estate sector.

Financial Highlights

• Revenue: €41.3 million, up 35% year-over-year.
• Net Operating Income: €39.1 million, an increase of 28%.
• Earnings after tax: €13.7 million, translating to €0.17 per share.
• Property values: €2.4 billion.
• Net Loan-to-Value (LTV): 55%.

Market Reaction

Cibus Nordic Real Estate’s stock price experienced a slight decline of 0.93%, closing at 182.95. The stock is trading near its 52-week high, with InvestingPro data showing a strong 19.02% return over the past year. Analyst consensus remains positive with a 1.75 rating (where 1 is Strong Buy), with price targets ranging from $15.48 to $22.31. The market’s reaction may be attributed to broader market trends and the mixed sentiment towards the company’s earnings report despite its strong financial performance.

[Unlock comprehensive analyst forecasts and detailed valuation metrics with InvestingPro’s exclusive Research Report for Cibus Nordic Real Estate.]

Outlook & Guidance

Looking forward, Cibus aims to continue growing its earnings capacity per share and optimizing its balance sheet. InvestingPro forecasts indicate strong growth potential, with revenue expected to increase by 17% in FY2025 and EPS projected at $1.02. The company plans to execute accretive transactions and explore opportunities in new European markets. Cibus remains committed to maintaining its monthly dividend and is open to more sale-leaseback transactions to enhance cash flow.

Executive Commentary

Christian Fredriksen, CEO, emphasized the company’s focus on stable cash flows and strategic growth. "Converting food into yield" and "We grow when we see attractive opportunities" were key messages, highlighting Cibus’s commitment to leveraging its strong market position in the grocery real estate sector. Pia Lina Olofsson, CFO, reiterated the importance of stable cash flows for the company’s long-term success.

Risks and Challenges

• Interest Rate Fluctuations: With 97% of its debt interest rate hedged, changes in interest rates could impact financial performance.
• Market Saturation: As Cibus expands, entering new markets may present challenges.
• Economic Conditions: Macroeconomic factors in Europe could affect tenant demand and property values.
• Currency Fluctuations: Operating across multiple European countries exposes Cibus to currency risk.
• Regulatory Changes: Changes in real estate regulations could impact operations.

Q&A

During the earnings call, analysts focused on the company’s acquisition strategy and its impact on cash flow. Executives highlighted the potential for increased market activity in the grocery real estate sector and expressed openness to various acquisition sizes and formats. The potential for more sale-leaseback transactions was also discussed, emphasizing the company’s strategic focus on accretive growth.

Full transcript - ​Cibus Nordic Real Estate (CIBUS) Q2 2025:

Conference Moderator: Welcome to the Cybus Q Now I will hand the conference over to CEO, Christian Fredriksen and CFO, Pia Lina Olofsson. Please go ahead.

Christian Fredriksen, CEO, Cibus: Well, good morning all. Welcome to CIBA’s second quarter results presentation. We’re speaking to you today from our office in Stockholm. Christian Frederiksen, CEO, speaking now.

Pia Lina Olofsson, CFO, Cibus: I’m Pierreina Ulovsson, CFO.

Christian Fredriksen, CEO, Cibus: And it’s in the middle of summer here in Stockholm, and we apologize. There’s a strict no drilling policy in the building. We are, but someone thought all office buildings were empty. So apologies for any drilling in the background noise here from from somewhere in the building. Right.

Right. Let’s jump into things. CBUS, converting food into yield. That’s our slogan. It still is, and it tells exactly what we do.

It’s still a fantastic slogan because it says what we do, I e, grocery daily goods real estate in Europe. So converting food into yield. Looking at our portfolio and what we do these days is we’re still the only listed pure daily goods real estate vehicle in The Nordics. We’ve been listed since 02/2018. We are now a pan European platform after our acquisition in the Benelux early this year.

We aim to create stable cash flows, increase earnings capacity per share. We have a market cap of about €1,300,000,000 and a very liquid share, which will tell you a bit about later. And also important for for many is that we pay the monthly dividends to our shareholders, and it’s a five year anniversary in October year. And looking at the map on the right, you will see also that this is the first quarter where the Forum Estates Benelux acquisition is in our books for the whole quarter. So this is what the NII looks like per country for a full quarter.

You’ll see Finland is our largest market with about 50% of NOI, and then Belgium and Denmark fight to get out to second place, about 15 of our of our NOI, and then Sweden, the third largest market fourth largest market, sorry, and then The Netherlands, Norway, and Luxembourg. You will see the the dots there for acquisitions we have carried out or announced. So I’ll be getting back to that a bit later to sort out the acquisitions we’ve done and when we announced them, etcetera. So looking at our properties at the end of the quarter 2025, 137 properties, so a very well diversified portfolio in seven countries, about €2,400,000,000 of property value, NOI of hundred and fifty six point three and one point three million square meters. And as you’ll see on the pie chart to the right, you will recognize many of these household names.

And that’s our strategy to have a well diversified tenant mix of the largest and most dominant grocery chains in each country. Digging further into our portfolio and our business, our aim is to create stable cash flows. And how do we do that? Well, we try and create stability in every part of our business. And how do we do that?

We own 81% of rental income is from non cycle daily goods tenants. 95% of our properties are anchored by daily goods tenants. Well diversified portfolio as mentioned in the number of assets. And then we continue to grow our cash flows even if we won’t be carrying or are not carrying out any acquisitions, then also through indexation growth because 99% of our leases are CPI linked, and almost all are fixed rent leases. So I much turnover at all in our whole portfolio.

Now our average world is five point nine years and has been round that number since we were created in 2000 since listing 2018 of above five years. And our average asset size is 2,100 square meters, and that’s very well diversified portfolio as well. And because our as seen here, our largest property is about 1.3% of our NOI. When creating these stable cash flows, very important also, of course, to have costs under control. And one way of doing that is as we do it is that we have nine 90% of our leases are net or triple net leases, I.

Sheltering us from any property increase, property cost increases. And that’s also a win win for our tenants. Many of our tenants, of course, are grocers. And for grocery business, the stores and the accessibility of the stores and that the stores network is functioning is very, very important. It’s operational infrastructure.

So it’s a win win for many of our tenants. They can take care of their stores themselves through our net triple net leases. And then, of course, creating stable cash flows also nine being having a large part of our interest rate hedged is important as well, and 97% of our debt is interest rate hedged. So looking into the financial summary of q two, just handing over to Pielen.

Pia Lina Olofsson, CFO, Cibus: Yeah. Thank you. Rental income increased with 35% to €41,300,000. Net operating income grew with 28% to €39,100,000. The growth in NY was lower than rental income due to that we have received an insurance compensation, which increased service income in the second quarter two thousand and twenty four.

Profit from property management amounted to €19,500,000, but excluding nonrecurring items and currency effects, it amounted to €20,000,000, and I will get back later in the presentation with more details. Earnings after tax amounted to €13,700,000 or €0.17 per share. Unrealized changes of properties was positive or flat in all countries and amounted to plus €2,700,000. Derivatives was in the second quarter, however, negative with minus €6,700,000. AirPra NRV was €12.8 per share, up €1 since second quarter last year.

Thank you.

Christian Fredriksen, CEO, Cibus: Thank you. So jumping into a a couple of the key takeaways for this quarter. It’s been a stable value generating quarter. Just picking up a couple of the operational metrics that have improved. The NOI margin improved 1.1 percentage points to almost 95% quarter on quarter.

Also, our profit from property management grew almost by 70% year on year, but also 9% quarter on quarter excluding nonrecurring items. Metrics per share is very, very important for us and fundamental in what we do. And we’re happy to show that our earnings capacity per share has continued to grow now for the eighth consecutive quarter to €1.05 per share, which is 9% increase year on year. And that’s accounting for the old number of shares prior to the equity raise we carried out now in June just because we haven’t used or deployed that capital in yet, and therefore, we feel it’s fair to use the old number of shares. What what’s been a big driver in this quarter in the increased earnings capacity has been lower financing costs.

We’ve announced a couple of points about that earlier through press releases, but just summarizing up, we have refinanced about €276,000,000 of bank financing with more than 50 basis points lower margins. And that’s led to the the net financial cost going forward has been has decreased by 1,400,000 per annum in our earnings capacity. And a couple of other metrics there. Our average credit margin is now 1.8%, so that’s in bond bond and bank debt, and that’s the all time low. That’s the lowest we’ve ever had.

And, also, our average interest cost has dropped to four point o percent, and it was that was four and a half percent one year ago. So things are moving in the right direction for us there. When it comes also to the financing maturities, we’ve seen and what we’ve been working on is extending our debt maturity. So that’s now two and a half years. And for a year ago, it’s only one point seven years.

And we’ve increased our hedge duration to two point nine years. Important to that for creating those stable cash flows, of course. And we also have 36% of our hedges are capped, which we think is an interesting and a great instrument for us to have as it protects us on the upside if it’s or interest rate upside being a cap, but also on the downside, if interest rates fall, we get a healthy value increase or cash flow increase from that as well. And the interest rate environment right now is really choppy, of course, as you know. The things and the outlooks change day by day or week by week depending on what’s happening in geopolitics and also in in European inflation.

So so happy to have a large part of our hedge as in caps. And moving then from the financing side of things, looking more operations, we’ve had a very nice leasing activity in our quarter. I’m gonna get back to that a bit later and dive into that and tell you a bit more about what we actually do on active asset management. We usually don’t talk about it that much, but this quarter, we’ve decided to tell you a bit more about that. And and there’s also a couple of case studies or one case study.

I will tell you about that later. But looking up up down, it’s what we’ve done is we’ve extended the wall to five point nine years. We’ve increased the occupancy rate, and we’ve also leased out about more than 10,000 square meter of previously vacant space so far in 2025. So very happy to see that number and that the team working very hard to let that let that space. And it’s worth mentioning there also, which I’ll come back to, is that this is predominantly not grocery space.

This is the 19% of our rental income, which is not grocery, but rather non grocery retail. That’s where we need to do the bulk of our work. That’s where tenants move, and we need to work with the vacancies. Importantly, number six here on the slide also. In June, we carried out a proactive share issue for growth.

We raised €1,000,000,000 Swedish krona, 1,000,000,000 Swedish krona, nothing else, about €9,910,000. And why did we raise that capital? Well, we saw that we have a very strong pipeline which we’ve built up over the year, and we’re happy to try and capitalize on that. So we’ve already announced a couple of transactions, and we’re looking for more. I’m building up the pipeline and executing on the previous pipeline in our seven home markets.

And as mentioned, we’ve announced this since our q one report. We’ve announced that we’ve acquired 18 properties in eight transactions in five countries with a total value of a €107,000,000. So very happy with the team performance here and that we can execute our pipeline in so many countries at at speed after we raised the capital in in mid June. Importantly, also is, of course, capital regeneration. So what we’ve been doing this quarter as well is we’ve been trimming the portfolio.

We’ve been selling nonstrategic assets, and we’ve, in this total this year, divested eight assets in three countries for about €25,000,000. And that’s great for two reasons. One, we recycle capital, making investors more converting food into yield assets, but also, of course, recycling our own capital. Earnings capacity, I mentioned already, so continued steady growth here with the eighth consecutive quarter now jumping to €1.5 per share. And as mentioned, this came this quarter mostly from lower bank and bond margins or lower bank margins and refinancing.

Looking at our property values, a big jump, of course, earlier this year with the former state of the Danish acquisitions, and then we’ll see further jumps going forward when we carry out when the acquisitions that we’ve announced already come into our books. So what I thought we’d do is we’ve been quite busy on the acquisition side, and we’ve been press releasing out these at certain different times, I thought we’d sort out what transactions we’ve done and when they actually hit our accounts. So looking from left to right, in our q one report, we had the acquisition of Jumbo. So that’s in the figures for the q one report. That was announced on the April 17.

So that was is Jumbo in in Belgium. And Jumbo is the has about 20% market share in The Netherlands and is starting to expand in Belgium. They have about a 1% market share there. But but a nice long lease with Jumbo in Bevingham in Belgium. And then we announced in June, on the June 5, two acquisitions.

We announced the Albert Heijn in in Netherlands, seen on the picture there. And also a redeveloped Neto in Denmark in Holsense with a long lease. It’s a year lease. And this used to be around a thousand, But now now it’s a Neto, and they redeveloped it, and or the the property owner redeveloped it for Neto, and then they sold it to us. So a great new acquisition for us and a great new store there.

And I kind of it’s proved also the point that when a certain tenant moves, often another grocer comes in, and this is an example of that. In April 17, we announced also an acquisition of a grocery store sale leaseback in Finland. We can now happily tell you that it was Lidl who who was the tenant there and who carried out the sale leaseback. So this is something that was done earlier this year, but will be first in our q three report. And what has happened there?

Well, it’s the same lease back. It used to be under construction, but it’s soon to open. And the picture there you see, that’s a picture taken yesterday by our by our local team who’s there looking at the asset. So a new Chinese asset in the in the East Army in Finland on a long list. And then we get to our July announcements, which were two.

Firstly, on the July 8, we announced the Tokmani transaction, which was a sale leaseback of five stores in Finland. Ten year leases, ten year walls newly signed together with Tokmani. And and the reason why there’s so many sale leasebacks now in in my perception is that there’s been a period when markets have been quite still. Local developers haven’t been quite active, so many of the of the grocers who have real estate arms have developed stores within the that want to increase their store networks. So this was an example of this.

So happy to have been carried out this sale and leaseback with with our second largest tenant, Tocmani. We also announced in July the not the sale leaseback, but under construction of a Prisma hypermarket, and that’s the s group flagship store hypermarket performing very well across Finland. Not many of these assets are owned by by a third party real estate owners. Most of them are owned by s group themselves, much like Ikka does in Sweden owning very many of the Ikka Maxis by themselves. So very happy to put our hands on this newly built or asset under construction.

And that’s a forward funding deal where we get an interest during the period, and the the construction is with the sellers, and the sellers are NREC, the the private equity urban development company. Great ESG characteristics, of course, on these assets announced in July, July 8, being newly built assets. And then moving to the three acquisitions announced here on the right in the q three report, we will see the village times two in Ein Choping and Ludwiga. The village in Ein Choping is a location I know very well. When I was at ECA, we moved the store from this location to an an out a a more outskirts location for an ex car dealership just because this location was too small for the ECA format.

But for Vilis Hemmer, this is a great location. It’s bang in the center of. Long lease semi long lease. There’s some other tenants in there as well. It used to be development residential development project, but as that market is is has come be quite tough, it’s now more of a long term resident oh, sorry, grocery retail location, which works very, very well for us.

So happy to have got our hands on that as well. And speaking of car dealerships, the next announced transaction here really is in Ludwiga. That is an ex car dealership in a new transformed light industrial to retail area. You see there’s in the background there. So the next car dealership, which has been turned into a Vilis store.

Lovelis, good location, and Vilis is, of course, doing extremely well across Sweden, one of the fastest growing grocery brand formats in Sweden. The last transaction on this slide is also something that will come into our q three figures, also announced on July 16, which is a proxy in the Meerhalt in Belgium. Meerhalt is East Of Antwerp. And it’s a nine year old. There’s, of the Belgian break options in there, but it’s a central location.

Store is performing well, and net to Ahold Delays, the the international player. And then the last transaction we’ve announced so far 2025 is this Danish transaction. Seven stores across Denmark, six of them on Zealand and one on in Jutland. 9,000 square meters, 9,100 square meters. Long walled, sunny, nice day when the pictures were taken as well.

So since our post last quarterly report, we have acquired or announced 18 assets acquisition of 18 assets in five countries in eight transactions. So very happy with our good execution and deal sourcing capabilities in all of our countries and our ability to execute since the capital raise on the June 11. As mentioned, we’re also trimming the portfolio and reusing our own capital. Just running through this quickly for you as well. Started the year, this hit our q two reports.

We divested three DIY stores in Belgium, led to Gamma, the the local DIY player, and that was above book value. In Helsinki, announced in April, we sold one ex grocery store. That was an ex Kesco, which we sold to another grocery chain, which is now turning that into its own grocer e store. And then also, we did a reverse sale and leaseback. And I think this proves a couple of things.

One is that if a if a tenant leaves, then there’s most often another grocer who wants to come in. That’s what and sometimes if they have their own real estate arms, we can sell it to an attractive price. This was a significantly above book value, these these transactions. And and what’s the reverse sale and leaseback? And what we want to do is we want to create long term relationships with our tenants.

Operational infrastructures and stores are very, very important for them. And therefore, what we like to do is to engage with them in helping them develop their store networks. And in this case, s group came to us and wanted to buy a store in a to be over the order to redevelop it, perhaps add some building rights, add some residential on top. And the only ones who really can unlock that value is someone who actually can close the store and actually redevelop the whole thing. So happy as as long as the price is right, we’re happy to do this sale this reverse sale in its backs, just both making money and creating a a good relationship with our tenants.

And also announced far in 2025, we sold a an exproche store in to the municipality for urban development that’s being being turned into a or being knocked down to be turned into an elderly care home, I understand. So happy to help municipalities develop. In Belgium, we’ve sold the CAA fashion store, which is, of course, nonstrategic for us. And in in Belgium, we have sold the spa store also as a reverse and sale release back back to spa to help them with their planning. So, right, I hope that sorted out a bit of the the many transactions we’ve done this year so far.

And I mentioned earlier that let’s dig into a bit more about letting activity, and and what are we doing a bit behind the scenes. And let’s this quarter, tell you a bit now about what we’re doing. We have a stable underlying business, as you know, and stable occupancy rates, which are which are around 94 to 95% have happened historically. And what my thought we’d dig into is to show you a bit about how we work behind the scenes, so to speak. So we negotiate, of course, and renew a lot of leases.

That’s the stickiness in the grocery assets that we own. So in so far in 2025, we’ve renewed about 70 leases in over 90,000 square meters across several countries. And those include those larger packages, which I I mentioned where we maybe have thirty, forty leases at once with one of our larger tenants. That’s a it’s a good negotiation for both. There’s bargaining power from both sides in those kind of negotiations.

And those renewals and packages and the things we’ve done in approximately five years extension So so that’s not five years from it wasn’t zero years when we started. So the average Walt is is, of course, longer than five years. But in total, for these transactions, for these renewals, about five years extension. And this quarter included a five year extension for our largest assets in Finland. So that has now a more than nine year wall.

So then that’s also an example of how we actually proactively extend our leases long before they actually come to maturity. And then in the middle of the slide here, when we talk about new lettings, I thought I’d characterize these for you in how the four main types of lettings that that are in the grocery sector. One is when a grocery player leaves a location for whatever reason that maybe they they want a bigger store and that that site doesn’t work for for that. That could be one reason. In some cases, just because the the the brand name of that particular grocer or that price perception doesn’t really work in that market is one example.

And then what we do is we let it to another grocer. And I’m gonna show you the next page a couple of examples of of what we do here in this. The second type of app of new letting we do is grocery to non grocery. That’s when actually a grocery location doesn’t work anymore for for anyone or that it’s a great grocery location, but perhaps the other chains who are active because it is a it is a market where there are not many players around. They then we can let it to a non grocery.

Because in most locations, there is they are attractive retail locations. So for other grocers oh, sorry, for other retail tenants or perhaps for urban developers or or for other types of tenants. A third type is, of course, when non grocery is left to grocery. An example of this is not something we’ve done in this quarter, but, for example, the car dealership in Ludovico, which I told told you about. That used to be a a non grocery, and that’s non grocery.

There there’s also a trend in Sweden with a couple of of paddle courts, way too many paddle courts in Sweden. They’re now being turned into grocery locations instead. So that’s another example. And and then the fourth type is the the where the bulk of our work is done is when a non grocery tenant moves out, and we fill it up with an with another grocery tenant or a non grocery tenant. These are the types of of natural changes to a retail location that happen.

But a lot of work is done there, that’s also one of the reasons why we like to buy and own as much grocery and daily goods as we can just because the stickiness and is lower and the stability of the cash flows is is much better. So summarizing what we’ve done in 2025, 33 leases in four countries with new lettings. Very happy with the walls we received. Very happy with the attractiveness also on on yield on the rental levels. And and also to point out here, this quarter, we’ve let more than 10,500 square meters of previous vacancy.

So so that’s great work from the teams working on this vacancy throughout 2025, and that that’s about 0.8% of our total visible area. So good work for everyone. And then as mentioned, a couple of examples of letting activity. So grosser to grosser, two of those leases in the quarter, for example, to Tukmani in Finland and to a local grocery chain in in The Netherlands. When it comes to grocer to non grocer, we have led three of those areas in this count this case to three different discounters, like, Rusta, Action, and the Action and the, of course, Benelux brand names.

Non gross to gross, so we haven’t done any of that activity this quarter, but we’ve been more active on the non gross to non gross type. So here’s a couple of examples of those brand names which we’ve been active within fill in filling up for vacant space. And then we’ve also carried out two store extensions, one for for K Group, Kesco, and one for Topine. And I’ll tell you about one of those later. So in terms of trying to tell you a bit more about what we’ve been up to this this quarter, so we’ve led to 10.5 or 10,500 square meters of new of previously vacant space.

And then the last slide for me on the operations here is a case study of what we’ve done in the Kmart in Kupio in Finland. We want to work close to our tenants and help them to develop their store networks. And this is an example of this and what we’ve done this year and decided on this year. So Kesco wanted to extend the store for store network reasons. The asset was built in 1972, so it it needed a could need a a facelift anyway.

But in this case, we decided together with Kesco that we would build a a a whole new store. So together with Kesco, we are opening a new store. We will double the lettable area to 800 square meters. We signed new lease with them, so the vault is extended from one year to thirteen years. We invest about €2,000,000, and we also acquired the neighboring retail premises to facilitate the project.

We have an attractive yield on cost, an attractive IRR, and it it’s a turnkey contract with an experienced contractor in order, of course, to to avoid any or mitigate any construction risks here. And and this contractor, they’ve been building for Cascade for years. And, of course, we get a a very nice uplift in EPC ratings as well. And here’s the Keskin announcement for for what we’ve done. So so I I take I think the takeaway from from this section and from the case study is, yes, we’re busy with transactions, but also every quarter, we are adding value to our portfolio through these kind of active asset management measures.

Over to you, Jenna.

Pia Lina Olofsson, CFO, Cibus: Thank you. So let’s talk a little bit about significant events. Let me see here. So the April 10, we had our AGM, and it was resolved that there will be an unchanged dividend of €0.90 per share paid in 12 installments. The board also received a mandate to issue up to 20% new shares, of which 7.6% of the 20% have been used in the directed share issue that was done the June 11.

Stefan Gatberg was elected new chairman of the board and still not Lindhak as new board member. All other board members were reelected. And then there was adopted to to invest incentive programs. And then we have also employed the head of sustainability and investment manager. We have carried out, as Christian has said, a lot of acquisitions, but which he has gone through.

And also, as we disclosed the June 11, we did the directed share issue, raising more than 1,000,000 siek at a subscription price of 172.6 siek, which are present at pre amounting it by an RV of about 25. And after the period, we have done more acquisition as also Christian said. So looking into more details, we have nonrecurring expenses of €500,000 in the quarter based on the resolution by the AGM to establish a warrant program both for The Nordics and the bell Belgium and to subsidize the option premium. Net financials include a cost of €500,000 in the quarter for the reversal of arrangement fees, and this cost is not classified as non recurring. A large part of our interest bearing debt have been refinanced and corresponding future reversals are not deemed to be relevant in the near future.

Profit from property management, excluding nonrecurring items and exec exchange effects amounted to €20,000,000, and unrealized changes in value of properties amounted to 2,700,000.0. And as I said before, all countries had increasing or flat values for the second quarter. Looking at the earnings capacity, rental income this quarter is slightly lower than in q one twenty twenty five due to the divestments that have been made. Property expense is also lower, especially in Belgium. We also see effects of lower cost due to our energy efficient investments that we made.

We have a higher administration cost due to newer larger offices in both Stockholm and in Helsinki since we have a large organization. And net financial is significantly lower due to that we have received lower margins in our large refinancing of bank loans. Profit from property management, excluding excluding noncash noncash items, plus the expense for the hybrid bond amounted to €1.00 5 per share, which is an increase with 9% since the July 1. The net operating income in a like for like portfolio earnings capacity shows how the portfolio owned by CBIZ on the 07/01/2024 has developed up until the July 1. The negative effect of the changes in occupancy amounted to minus €1,800,000,000 or minus 1.6 percent.

Of this, only about 25% relates to daily goods properties, and half of this relates to one property in Denmark where we have ongoing negotiations with another group, daily goods tenants. Another part of the daily goods vacancy relates to the property in K Market in Kopio that that Christian mentioned just just a while ago here, where the current lease is terminated to develop a new larger store on the same site for the same tenants. The effect of change of occupancy for a sold property relates to the property in Helsinki, Finland, which we sold to another grocery, which we have previously communicated. The effect of index amounted to 1,600,000 or plus 1.4%. Finland, in particular, experienced low inflation during the period, and then, of course, that affects the CPI increase.

The effect of acquired properties increased net operating income by 37.1%. In total, net operating income in earnings capacity increased by 36.3% to a 156,300,000.0. Zebes segments are countries. And as Christian said earlier, Finland is still the largest with 50% of NOI and 48% of property value. Denmark is the next largest with 15% of NOI and 17% of the property value.

But close by is Belgium that have 50% of 15% of the NOI and 16% of the value. Looking at the balance sheet at the end of the second quarter, property value was one it was €2,400,000,000. Secured debt was €1,200,000,000, giving a loan to value on secured debt of 50.6%, which was unchanged from the last quarter. We have unsecured bonds of €243,000,000, but also the funds from the share issue in June is in other net assets, giving a net loan to value of 55%. The net loan to value is expected to increase again when the funds have been deployed.

If we deduct the funds from the share issue, the net LTV was 58.7%, which also would be unchanged since q one. Net asset net asset value, the EBRA NRV was €52,054,000,000 or €12.8 per share, which is an increase from €12.6 per share in q one. The weighted average unexpired lease term, the vault, is shown in the graph above with both without a Belgian termination rights, which was five point nine years and with the Belgian termination rights with which is down at four point four years. In Belgium, the tenants of retail properties have a statutory rights to terminate the leases every third year. And to minimize the risk, the tenant would leave is usually offset by that the tenants invest significantly in the premises.

Looking at the graph below, you see that the vault continues to be stable. During the first half year of twenty twenty five, we have prolonged nearly 70 leases with major tenants. Regarding funding, the average interest rate is now 4%, down from four and a half percent one year ago. Bank financing is still the largest part of CIBUS funding with 81% of total funding. This quarter, we’ve been able to lower the bank mark bank margin to 1.5%.

We have refinanced loans of €276,000,000 during the second quarter, lowering the margin on those loans with more than 0.5 percentage points. We have, after the period, refinanced additional €24,000,000 of bank loans at a zero one percentage point lower margin. We have acquired when we acquired Formis States, not all of the subordinated loans were converted to Seabee’s shares. And during the quarter, we have called on the rest of the outstanding subordinate loans, which amounts to €12,200,000. And they will be repaid in mid September with the funds that we received from the share issue in June.

Oscar Lindquist, Analyst, ABG Sundal Collier: Mhmm.

Pia Lina Olofsson, CFO, Cibus: For Sybis, stable cash flows are very important. Sybis continue to have a high degree of hedging with 97% hedging on our loans. We have during the quarter prolonged the average fixed interest maturity to two point nine years, and we continue also after the end of the quarter to do additional forward starting hedging. Based on the earnings capacity and taking all of the interest rate hedges in consideration, an increase of the market interest rate with one percentage point would affect profit with minus €1,800,000 annually. A decrease of one percentage point of the market interest rate would affect profit with plus two €4,400,000 annually.

And why an interest rate reduction have a greater impact is due to our interest rate caps, which is 36% of our total hedging. Looking at key metrics, net LTV was 55% end of q two. The share issue issue in June have a temporary lower than net LTV and is expected to increase again when the raised funds have been deployed. If deducting the funds from the share issue, the net LTV would be at 58.7%. The interest cover ratio continues to be stable at 2.3 times and is well above the covenant of 1.5 times.

The net debt to EBITDA is at 11.1 times. The share issue has lowered the debts temporarily. So in the graph to the right, we have deducted the raised funds from the forward looking net debt to EBITDA. And without the reduction, the net debt to EBITDA forward looking would be at 9.4 times at the end of the second quarter. Sybis generates stable cash flows, so we can pay out dividends to our shareholders on a monthly basis.

The dividend yield on the closing price of 187 siek was 5.4%. Total return, share price performance, and dividend have been 9% for the first half year of twenty twenty five. And the average annual total return since SeaVisc was listed 2018 up to end of q two twenty twenty five, including reinvesting dividends, was 15.6%.

Christian Fredriksen, CEO, Cibus: And just about I may add a point there. That’s that’s fine. That’s exactly on the digit, the same number that Vivo has mentioned.

Pia Lina Olofsson, CFO, Cibus: Exactly. Total

Christian Fredriksen, CEO, Cibus: return, albeit over twenty years, of course. But happy to see that return on.

Pia Lina Olofsson, CFO, Cibus: Yeah. Zebus is a liquid share. Zebus share was traded at 1.6 times its market cap, which is 60% more than the average for other real estate companies on Nasdaq Stockholm with a market cap above 10,000,000,000 siege. Seabiz continued to have strong support from our shareholders, many who have been shareholders for several years. The total number of shareholders continue to grow, and we now have 57,000 shareholders.

Over to you, Christian.

Christian Fredriksen, CEO, Cibus: Thank you, Pierre Lena. So I thought that I will discuss this quite quickly so we can leave some time for some q and a, of course, as well. So not to jump over the ESG slide because it’s unimportant, but just to save a bit of time. On the contrary, it’s very important. One thing we’d just like to say here is, of course, ESG is very important for both us and our tenants.

Up on the right, there is a picture of our newly opened playground in one of our assets. So creating these social infrastructure meeting points for everyone and accessible main meeting points. Moving forward. So what were we gonna focus on going forward? Well, of course, continue to grow earnings capacity per share in all parts of the business.

We now have a pan European platform, the CBIZ real estate platform, which is a great platform for further growth, and we are looking for further growth. It’s worth mentioning here as well, of course, is we are now considered a pan European player, and that’s evident in a lot of the dialogues we have in Mainland Europe as we are seeing as a a multi country player in a very niche focus. So people pick up the phone slots, which is great to see. Continue to point number three here, continue to focus on balance sheet optimization, refinancing, and hedging, of course. And then as mentioned, to carry out these cash earnings per share accretive transactions, execute on the opportunities in our existing markets, continue to grow our pipeline, but then also, as mentioned in press releases as well, actively evaluating opportunities in in new markets in Mainland Europe.

Very happy with the team, of course, competent, experienced employees to together are taking pan European action, and very happy about the ongoing integration with our colleagues at former Forum Estate. And we are committed every day to deliver shareholder value by converting food into yield. So then just moving to a commercial break maybe here to get some advertisements for our new web page, which was released this morning. It’s a fresh and up new web page. I think the most interesting point maybe is the clickable map you will find out.

There’s a picture of it here down to your right. So if you go onto our web page, you can find a clickable map of all of our 637 assets where you can flick and get a picture and some information. Great if you’re out traveling with your family across The Nordics or or or Benelux this summer and want to pull by any of our assets and do some shopping. Okay. That’s another commercial break slide.

So let’s move on to the q and a. A.

Conference Moderator: The next question comes from Oscar Lindquist from ABG Sundal Collier. Please go ahead.

Oscar Lindquist, Analyst, ABG Sundal Collier: Hi. Sorry. I hope you can hear me. Yes. So on acquisitions, I know you can’t comment directly on sort of net initial yield.

But if you could you give an aggregated number for the acquisitions that you have announced during the quarter?

Christian Fredriksen, CEO, Cibus: No. We we don’t communicate any yields. And and the reason for that is that we we like to be in our space, and let’s try and carry out as many transactions as we can before the the segment gets too hot, so to speak. It it a lot what we do see transaction activity increasing. We’ve seen a number of Swedish players now come in both Valde and Prisma properties do transactions within our space in in Finland, for example.

So we’re we’re not communicating anything about yields more than that the transactions themselves are accretive from from day one.

Oscar Lindquist, Analyst, ABG Sundal Collier: Okay. And and could you comment sort of what your I mean, recent transaction seems to be a bit Nordic tilted. Is that where you see the best potential going forward as well?

Christian Fredriksen, CEO, Cibus: No. Not not really. I I think that’s just an effect of the the those that we have a we’ve been longer in the Nordics, of course. We have strong local relationships. We see interesting opportunities in the Benelux as well with the Forum Estates platform and the employees who’ve been inactive there for twenty five years.

Well, it’s yeah. Fifteen years. Sorry. Fifteen years in the Benelux region. So, no, we see acquisition opportunities, interesting ones in all of our home seven home markets.

Oscar Lindquist, Analyst, ABG Sundal Collier: Perfect. And then on on the Prisma acquisition, just to to understand the structure. So you you pay the full upfront price or and then you receive some sort of interest? Or or what’s the structure here?

Christian Fredriksen, CEO, Cibus: Yeah. Not quite. We as and when the construction is carried out, funds are drawn from us. So so we finance the ongoing project as and when it’s being built and completed. We we funded equity first and then senior debt coming in a bit later.

But already now an announcement about 60% of the construction was done. So it’s it’s a large quite a large amount of of the actual value was was paid out day one and now running at an an interesting interest rate for us.

Oscar Lindquist, Analyst, ABG Sundal Collier: Yeah. Perfect. And then you have streamlined the Benelux portfolio recently. Do you think is is there more to come here, or are you happy with how it’s looking now?

Christian Fredriksen, CEO, Cibus: No. I think there’s more to come just looking at what the what our portfolio in total has. We have 19% of our gross rental income is from nonretail tenants. And there are certain nonstrategic assets still around here and there, and we were actively looking to see what we can do on those. If the price is right, then happy to sell those and regenerate that capital.

Oscar Lindquist, Analyst, ABG Sundal Collier: Perfect. If we move over to financing

Pia Lina Olofsson, CFO, Cibus: Yeah.

Oscar Lindquist, Analyst, ABG Sundal Collier: Do you see further downside potential near term from from interest maturities? Or

Pia Lina Olofsson, CFO, Cibus: I mean, we have refinanced most of our our debt right now, so we don’t have that much in the short term to refinance. But we do see, of course, interesting opportunities when we finance our acquisitions. The banks are very supportive and very interested in financing our type of asset class. And we also see that the bond market is very strong and also interested in financing CBIX going forward. So coming financing of acquisitions look look interesting and positive.

Oscar Lindquist, Analyst, ABG Sundal Collier: And have have you seen any trend on bank margins in in recent months?

Pia Lina Olofsson, CFO, Cibus: Yes. As we as we said in the in the report and also in the presentation, I mean, we have refinanced €276,000,000 at 0.5 percentage point lower margin. And also after the period, we have refinanced €24,000,000 at 0.1 mainly percentage points lower margin. So so you see that the margins have come down.

Oscar Lindquist, Analyst, ABG Sundal Collier: The

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

Svante Kroekfors, Analyst, Nordea: Thank you. Good morning, Christian and PLN. Thank you for the presentation. Nice to hear about your letting activity. That’s much appreciated to hear your details about that.

First, I was cut off for a short while, but the €1,800,000 that is in the net operating income in a comparable portfolio, the minus due to occupancy, How fast do you expect that to be turned around? I missed some points there in the in your presentation.

Pia Lina Olofsson, CFO, Cibus: Yes. We haven’t guided on when that will be lowered. But as we said, especially the grocery part of that is is under negotiations or have been solved and and will be left out. But then, of course, it’s it’s a little leeway until that contract is is in place. Well, it’s it’s in place, but before it starts.

But, of course, we’re working actively at the vacancies, but sometimes it takes longer time before the new tenant is able to to be active in in the new premises. And that it takes time before it comes into the earnings capacity.

Christian Fredriksen, CEO, Cibus: Yeah. Because they’re just to clarify, the the earnings capacity, of is snapshot on the July 1. So any even if we’ve signed the lease, if it’s not active on July 1, it’s not in the earnings capacity. And and the bulk of everything that was signed there of the the things I mentioned there was was was signed prior to the July 1, but that but was not active. So moving in a bit later into the actual premises.

Svante Kroekfors, Analyst, Nordea: Thank you. And then on the S group or or Prisma acquisition that you made in Finland, two questions about that. I mean, this is will are you open now for more more hypermarket transactions? And the second question is how come S Group didn’t buy that property because they have they don’t know what to do with all the money that they have, and I guess they prefer to to own own most of their premises themselves.

Christian Fredriksen, CEO, Cibus: Yep. On the hypermarket question, yes, we’re happy to own hypermarkets if the local market is a hypermarket market, so to speak, where customers prefer hypermarkets. And Finland and Sweden are two markets where hypermarkets are appreciated. In Finland, of course, the KCT markets, which we own a few, and then, of course, the Prisma’s. And in Sweden, Ikemaxi, are the big grossing names.

In Norway and Denmark, for example, not hypermarket market. So so we would we that’s something we need to consider if looking at something at those markets. The same goes for Benelux and The Netherlands, not really a hypermarket market. So what we try and do in our portfolio is to find the right retail format for its specific location. So it’s more than an actual strategy to own certain types of formats.

And and and then on the second question, I think that we managed to get ahead of them maybe because they I don’t know if they were not ready. What we’ve heard rumors of is that they would like to buy this. And so we’ll see if they pick up the phone to us at some point.

Svante Kroekfors, Analyst, Nordea: Thank you. That’s interesting to hear. Then perhaps last question on you said that competition started to increase not only in Sweden, but also in Finland for assets, but nothing is shown in in the yields yet.

Christian Fredriksen, CEO, Cibus: No. Exactly. Exactly. Our our average yield is still 6.5%. Value increases that we saw, very happy to see across all of our markets since mid twenty twenty two has been more on the letting activity side of things rather than yield compression.

But looking forward, of course, with, I think, we’re back into that part of the cycle now where where Swedish companies are looking for higher yields. You go across the Baltics to Finland where I think historical evidence is that usually happens when yields become a bit too tight in Sweden for or the yield spreads were between Sweden and Finland is is attractive, and this I think that’s what we see happen. So going forward with more competition, in theory, that should lead to more to lower lower yields.

Svante Kroekfors, Analyst, Nordea: What’s your view of what the yield spread between Finland and Sweden is currently and how how it compares to to the history?

Christian Fredriksen, CEO, Cibus: Yeah. I’d say that looking back, prime yield in Sweden for for grocery, I mean, then we’re talking about a low inflation rate environment. It’s somewhere just below five, around five. But even with with sensible interest rates before 02/2015, prime yields were about 5.25. And I’d say that that’s likely higher in Finland, and especially higher, also historically, just because it’s a more illiquid market.

There’s there’s always a a liquidity risk for investors who come in and out of markets, private equity players, etcetera, who want to buy and sell assets. For us, as a long term buy and hold player of these assets, we’re not too concerned about that at all. If we see accretive transactions at attractive yields, we’re happy to do them without having to think about timing of a sale.

Svante Kroekfors, Analyst, Nordea: Okay. Thank you. That is all from me.

Christian Fredriksen, CEO, Cibus: Yes. We can please we can continue. We were asked by our moderator. We’re a bit over time, but happy to continue.

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

Oscar Lindquist, Analyst, ABG Sundal Collier: Hi, good morning Christian and Thielena. I have to say that the map is a great addition. A quick follow-up on acquisitions. I know you can’t reveal yields, but in very broad terms, would you say the acquisition yields are in line with your portfolio or maybe slightly lower, slightly higher? And the second one on H2 activity, would you expect more portfolios to be put on the market and especially big portfolios?

Thank you.

Christian Fredriksen, CEO, Cibus: If we start with the activity side of things, I think it’s it’s fair to say that supermarket assets are becoming even more or becoming a an asset class in its own right. And what usually happens in, I mean, any market, if it’s whatever it may be, is that when when sellers potential sellers see that the transaction’s happening and that it’s liquid asset class, then that usually brings out more sellers. And and the brokers sniff that out as well and are looking for for mandates. So so let’s hope that transaction activity picks up even further. And when it comes to yields, we can say that when we’re looking at at yields, we we’re not it’s all about accretion.

So and also not buying assets or not buying poor quality assets even if the yield is very attractive and not buying too low yielding assets either because we would we like that kind of cash flow focus and cash flow accretion model that we have. And so so that said, it’s important to the accretion and the yield spread, and that’s the yield spread kind of including the monthly dividend yield that we have as a monthly dividend paying company. That’s our that’s our focus and of an attractive yield spread and an attractive cash on cash more than the actual yields themselves.

Oscar Lindquist, Analyst, ABG Sundal Collier: Alright. All clear. Thank you, and have a nice summer.

Christian Fredriksen, CEO, Cibus: Thank you. Likewise.

Conference Moderator: The next question comes from Stephanie Dossmann from Jefferies. Please go ahead.

Stephanie Dossmann, Analyst, Jefferies: Hello, Christian. Hello, Carolina. Just a follow-up question on acquisitions on the previous question. Regarding the activity on the transaction market, which is more significant currently, do you expect or could you give us some color about your budget in terms of acquisitions for H1? Would it be higher than in H for H2, sorry, higher compared to H1 if we exclude foreign state, of course?

Or so could you please give us some color on that? And maybe would it be more on a asset per asset basis or portfolios? And which kind of country are you targeting right now? And second question on the cost of debt evolution. Would you be able to give us perhaps a target or where do you see your average cost of debt lending by, let’s say, ’27?

And what is the strategy going forward on the hybrid bonds? Would you keep them? What what is the rationale there? Thank you.

Christian Fredriksen, CEO, Cibus: Okay. Great. Hello, Stephanie. Thank you for your question. Shall shall I start PLN on the acquisition side of things?

We don’t have a a target to we don’t have a a growth number or a target which we want to reach reach when it comes to growth or acquisitions there. We have a very well diversified portfolio. We have great bargaining power towards our tenants, well diversified. So so we grow when we see attractive opportunities. And when we grow, I mean, there’s three main sources of of the equity of capital.

It’s it’s the own resources we have in internal capital. It’s, of course, any regenerated capital we may have from selling nonstrategic assets. And then it’s the capital raisings that like the one we did now in June or the one we did in September. In September, we we raised about the the same number, slightly lower number, about €80,000,000, which was then deployed by mid December. So so when it comes to what you’re forecasting, I mean, it’s it’s fair to say that we raised €91,000,000 in June for to act on a pipeline and identified a concrete pipeline to act on it in a reasonable amount of time.

And of that 90,000,000, we’ve we’ve now bought assets for about a 100 or or just over a €100,000,000. So with leverage of 90,000,000 of say, it was 50% that we can, of course, buy assets for a 180 just from capital we’ve already raised now, and we we haven’t announced that many transactions yet. But then, of course, going forward, we’ll we’ll see what what acquisitions opportunities are out there. To answer your question, what types of assets? I think our strength is that we look in seven markets.

We look at both single assets. We look at put smaller portfolios, and we look at larger portfolios. And being now at a large pan European player with with two two almost two and a half billion euros, we can look at large portfolios than than maybe some others can do, which is interesting opportunity, of course. But but the same thing as always, deal dynamics are the foremost importance rather than size. So happy that we’re looking across several countries, several regions, and also be able to look at many different lot sizes.

I think sale and leaseback will continue to be important as the grocers who have tied up capital in building assets and owning assets. Perhaps they need to lighten up their balance sheets a bit to do investments more on their grocery side of in business of of their business rather than their real estate side of business. So I wouldn’t be surprised if there’s more savings packs coming out in in our markets as well going forward. And then

Pia Lina Olofsson, CFO, Cibus: Yeah. Yeah. I mean, we don’t have a target for for our cost of debt. Of course, we want it to be as low as possible. And, of course, we are negotiating with the banks, and we also have good indication from the bond market.

But, of course, as you know, there’s an uncertainty in the world and and things happen. And and that’s

Christian Fredriksen, CEO, Cibus: why

Pia Lina Olofsson, CFO, Cibus: we compare by by, you know, prolonging the interest rates maturity and so working practically with hedging and everything. But we see that there’s a lot of interest from banks and the bond market for our type of asset class to to finance that. When it comes to the hybrid bond, the first call is in September 2026. And, of course, we haven’t decided yet what will happen at that point. Kissy and I prefer to keep things simple, and we’ll see how we’ll act on that when we come closer to that date.

But, usually, we prefer to have a more simple capital structure.

Stephanie Dossmann, Analyst, Jefferies: There

Conference Moderator: 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 Olofsson, CFO, Cibus: There are no written questions.

Christian Fredriksen, CEO, Cibus: No. So thank you for listening. It was a longish call this time, but but I’m I’m happy to that you’ve listened in, and I’m we took the time to discuss a bit more about our active asset management in in this quarter to give you a bit more flavor of what we’re up to there. So that said, please have a look at our new web page and the map. And from and myself, we’re looking forward to the rest of the 2025 here and what we can get up to post summer.

So that said, happy summer to everyone when time comes for your holidays. Bye.

Pia Lina Olofsson, CFO, Cibus: Bye. Thank you.

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