Stablecoins are here to stay says BlackRock
Entra ASA, with a market capitalization of $2.08 billion, reported stable financial performance for the first quarter of 2023, with rental income holding steady and a slight increase in underlying rental income growth. According to InvestingPro analysis, the company maintains an impressive 91.39% gross profit margin, though current valuations suggest the stock is slightly overvalued. Despite challenges in the letting market, the company remains optimistic about its future prospects, driven by strategic projects and a robust public sector client base. The Norwegian economy’s stability further supports Entra’s outlook.
Key Takeaways
- Rental income for Q1 stood at NOK 774 million, showing stability.
- Net income from property management reached NOK 320 million.
- Occupancy levels are targeted to rise to 95% over the next 1-2 years.
- The company maintains a strong position with 50% revenue from public sector clients.
- Entra’s ongoing projects are progressing, with a focus on increasing occupancy.
Company Performance
Entra’s performance in Q1 2023 remained steady with a rental income of NOK 774 million, consistent with the previous quarter. The company’s underlying rental income grew by 2.6%, aligning with its modest revenue growth of 1.05% over the last twelve months. InvestingPro data reveals the company maintains a FAIR overall financial health score of 2.17, suggesting stable operational performance. Despite a challenging market environment, Entra’s strong public sector client base and diversified private tenants helped sustain its revenue streams. Subscribers to InvestingPro can access 12+ additional ProTips and comprehensive analysis about Entra’s financial health and growth prospects.
Financial Highlights
- Rental Income: NOK 774 million (flat compared to the previous quarter)
- Net Income from Property Management: NOK 320 million
- Profit Before Tax: NOK 280 million
- Cash Earnings: NOK 7.1 per share
- Net Asset Value: NOK 163 per share (up from NOK 162)
Outlook & Guidance
Entra forecasts a rental income of NOK 771 million for Q2, with expectations to gradually increase occupancy to 95% within the next 1-2 years. Trading at an EV/EBITDA multiple of 20.32x and a price-to-book ratio of 0.91, the company’s valuation metrics suggest mixed signals about its market position. The company anticipates a potential rental income upside from vacant spaces and ongoing projects. Entra’s EPS and revenue forecasts for the coming quarters and years remain stable, indicating confidence in its strategic initiatives. InvestingPro’s detailed Research Report offers comprehensive analysis of Entra’s valuation metrics and growth potential, available exclusively to subscribers.
Executive Commentary
Sonia, a company executive, expressed confidence in Entra’s strategic positioning, stating, "We have the right locations. We have attractive buildings and products." She also highlighted the company’s realistic approach to increasing occupancy, noting, "We are confident that we will bring the occupancy up to our targeted 95%, but also realistic that it may take some time."
Risks and Challenges
- Market Saturation: Increasing vacancy rates in the Oslo market could pressure rental yields.
- Project Costs: Rising costs, such as the NOK 17 million increase in the Sandvikka project, may impact profitability.
- Economic Conditions: While the Norwegian economy remains stable, global economic uncertainties could affect investor sentiment.
- Work-from-Home Trends: Continued shifts in office space utilization could impact demand.
- Lease Terminations: Significant lease terminations, amounting to NOK 117 million in annual rents, pose a risk to occupancy levels.
Entra remains focused on leveraging its strategic assets and client relationships to navigate these challenges while capitalizing on growth opportunities in the Norwegian real estate market.
Full transcript - Entra ASA (ENTRA) Q1 2025:
Sonia, Company Executive/Presenter, Entra: Good morning, all, and welcome to our first quarter presentation. Let’s start directly with the highlights. Rental income of $774,000,000 in the quarter, that is $104,000,000 below same quarter last year. When adjusting for divestments, the underlying rental income growth was 2.6%. Profit before sorry, net income from property management of $320,000,000 in the quarter.
And that means that the lower interest costs have more or less offset the negative effects of rental income. Value changes were minus NOK 32,000,000 mainly from financial instruments, leaving us then with profit before tax of $280,000,000 in the first quarter. Our net asset value increased to 163 in the quarter. And the debt metrics continued to improve this quarter with our ICR now above two point zero in the quarter. We were also very pleased to see that we have had a very active quarter in respect of financing and placed bonds of 3,100,000,000.0 in the quarter and closed also bank financing of billion, enabling us then to extend the debt maturity to four years this quarter.
Our net letting came in with a negative of NOK 73,000,000 this quarter. So if we move on to a few words on operations. The gross letting in the quarter was at normal levels with $98,000,000 of signed leases this quarter. The gross letting was, however, offset by terminations with annual rents of $117,000,000 in the quarter, leaving us then with the negative net letting of $73,000,000 Our occupancy is currently at 93.8%. And out of the terminations, around 25% of these is related to different public tenants terminating as they are being co located with other public entities.
And another 25% of it approximately is related to the restructuring of two leases operating within the co working and conference and event space. As I have commented on in previous quarters, we see no fundamental changes from working from home in Norway. However, there are some aspects affecting us in the short term. First of all, tenants are, to a larger extent, rethinking their workplace solutions when coming out of long leases. And this means that lease extensions as is, is much less common.
And this also means that our tenants are more open for looking into alternatives in the market, and we are operating in a more competitive environment when working on renegotiations. Secondly, the employment growth we have seen in the Oslo region the last year has predominantly been within the public sector. And public sector are increasingly looking for opportunities to cut costs through co locating, through moving to less expensive areas in the city and also transitioning from one fixed desk per employee policies to free seating with underutilization. This has been going on for some time. And in the more expensive part of the city, we have already replaced the majority of our public tenants with high quality private tenants.
However, currently, the employment growth is not strong enough to compensate for this ongoing transitioning in the public sector. This should, however, improve with an expected pickup in economic activity, also supported by future interest rate cuts. We have the right locations. We have attractive buildings and products. We have put in place the resources required to work on the letting.
And we are confident that we will bring the occupancy up to our targeted 95%, but also realistic that it may take some time. Just also before I move on, wanted to comment on the announcement earlier today that we also signed a lease contract with Yara of 11,200 square meters. And at the same time, then have terminated the lease they signed with us one year ago in a neighboring building at Skoing. This means that we now are back to the deal we originally wanted with Yara, namely prolonging their existing lease in their current headquarter location. This was not an option one year ago as they had outgrown the building, and we were pleased at that point of time that we could provide an alternative within our portfolio.
Now, however, we see that this is a good deal for us as we can extend the lease for EUR 10 without putting in any CapEx in that building. And the space they now terminate in Leikstevan 1 is one of the most attractive multi tenant buildings at Skagen. It should be suitable for a wide range of tenants. And we expect we should be able to also relet that space with less CapEx than what would have been required for the Jara deal. This Jara deal will also have a net letting effect with a negative of expected $25,000,000 in the second quarter.
It will potentially also increase our EPRA vacancy in Q1 when the existing tenants move out of the space Yara was supposed to we were supposed to prepare for Yara. But these effects are, however, already fully reflected in our rental income bridge, and it will have no cash flow effects in 2025, ’twenty six as this has already been reflected in the income bridge, as I said. Now based on what we see now, we had expected to see that we would be able to have a positive net letting in the second quarter. And that is then, of course, before we include the effects of this Jaira deal. But a clear improvement in net letting in the second quarter is expected.
If you move on to our ongoing projects, they are progressing according to plan. And based on the ongoing letting activity, we expect to see the occupancy come slightly up in our project in Bergen in the second quarter. In Sandvikka, we have increased the cost of this project with NOK 17,000,000 as we have found it appropriate to replace more parts that we originally had planned to reuse. And also, we have had some unexpected costs with the building permit requirements. And with this increased cost, the yield on cost will be 4.9 on that project, down from 5.3%.
The remaining CapEx for these projects is now around $600,000,000 We continue to have a very disciplined approach to capital allocation, prioritizing projects now related to enhancing the letting in the management portfolio. And we expect to start reporting on one refurbishment project next quarter. In these times of more uncertainty, we are, of course, very pleased to have high quality tenant base, which provides both stable and reliable cash flow. Entra’s tenant base consists, as you can see, of around 50% revenue from public sector. And the private tenants are also well diversified across different sectors with consulting services and IT as the largest stake within the private sector.
And you can also see that we have a large diversification amongst our top 20 accounts, where these clients represent collectively a total of around 50% of our revenues. Now operating our business in a sustainable manner is a strategic priority for Entra and also a prerequisite for our long term value creation as also it is one of the enablers for our green financing. We have now reported according to the EU taxonomy framework for two consecutive years. And 100% of Entra’s revenues and CapEx is taxonomy eligible. And in 2024, our taxonomy alignment was at 54% on revenues, up from 47%.
On CapEx, the share is lower, which also is, of course, natural as the quite a few of the CapEx projects have been initiated before the taxonomy framework was ready.
Ole, Financial Executive, Entra: And we can also see that we screen fairly well relative to other real estate companies reporting on the Stockholm Real Estate Index, as you
Sonia, Company Executive/Presenter, Entra: can see on exhibit on the right side, where the average is around 31% alignment on revenues. If we move on to a few words on the market situation. Now despite the global market volatility, Norway’s economy remains solid and stable with less than 2% of our mainland GDP from exports to The USA. The direct implications of American tariffs are minimal. However, as a small open economy, we are, of course, exposed to all indirect effects.
Now supported by the sovereign wealth fund, Norway is well positioned to support and stimulate its economy as it has also proven to do in the past. And additionally, the Norwegian Central Bank has yet to initiate interest rate cuts. So monetary policies remains available as an effective tool to stimulate the economy. The CPI came in at 2.6% in March following an unexpected spike in February up to 3.6%, which then also prompted the Central Bank to delay the anticipated rate cut in March. This means that the key policy rate has been now held at 4.5% since December 2023.
And the Central Bank now expects that we can see two rate cuts of ’25 basis points this year. Market expectations are that we will see between two and three cuts. The employment growth has been slightly on the positive side through this cycle and is expected to remain positive also going forward. The economy is expected to pick up as lower interest rates and also the solid real wage growth we have seen last year and also expected for this year starts feeding into the economy in time to come. The letting activity was very active in 2022 and 2023, also feeding into the first half of twenty twenty four before it slowed slightly down after the summer last year.
This was partially also explained by the fact that we could see that there are less lease expiries in the Oslo market in 2026. And although the leasing activity slowed down a bit in the second half, we have seen improvements this first quarter with increasing activity and also some more lease searches coming out into the market. We are also aware that there are quite a lot of volumes, which are set to expire in 2027, suggesting that we will also see increasing activity throughout this year, although, of course, the heightened market uncertainty may lead to delays for some of these tenants. If you look at the vacancy graph at the top right, you can see that overall vacancy currently is around 6.5% in the Oslo market according to our consensus report and expected to increase slightly towards 7% going forward. Both in Oslo and Bergen, the vacancy varies between 68% in most clusters in these cities.
But you also see that vacancies is higher in some parts where you have typically older building stock or also in certain fringe areas. Now most of the vacancies in areas with small space, where you also have increased sublease volumes in typically in times with more uncertainty. And the competition in this segment is therefore quite strong. From the bottom right graph, you can see that there is limited new supply coming into the market, around 200,000 of the volume coming in, in 2025 and 2026 is related to the first part of the government offices and the construction city. Both of these projects are close to fully let.
And the buildings, they will be vacated, will partially be expected to take out for refurbishment and back in the market after 2027. And part of it is probably also going to be converted to hotels or resi. The moderate newbuild supply and also the current dislocation, which we are seeing between market rents and breakeven rents for newbuild projects means that we expect also to see rental growth going forward, probably also above expected inflation rates. This is also supported by our consensus market report, where you can see that they, at the top right, expect around 12% growth in the next three years. In the short term, however, we expect to see a more moderate rental income growth as after some quarters with low activity in the letting market and also more intensified competition over leases.
If we move on to transaction market, it has remained active in the first quarter. The financing markets are open and available. However, the lending sentiment is more selective due to the increased market volatility following the rise of international trade tensions. The activity was very high coming into the quarter, and we have seen transactions for a total of 15,000,000,000 close in the quarter, which is quite decent with a broad universe of buyers, both equity buyers, family offices, foreign buyers and also private equity. Following the increased volatility now in the later weeks.
We do, however, expect that the market will be a bit more in a wait and see mode until we get some more clarity on where things are going. Prime yield is currently around 4.6%. And as you can see, the expectations are that they will remain stable there this year and expectations that they will decline in line with interest rates going forward. And the expectations for yield compression have been reduced slightly compared then to what we saw in the last consensus report. Sorry.
So Ulle, a few words from you.
Ole, Financial Executive, Entra: In Q1, the financial performance was stable compared to previous periods. As you are aware of, in Q2 twenty twenty four, we divested our Trondheim portfolio. So for comparison purposes, we have marked out the Trondheim impact on rental income in the graph to the left. Rental income came in at GBP $774,000,000 in the quarter, which is more or less flat compared to July in the first quarter twenty twenty four, adjusted for the Trondheim divestment. We had a positive contribution from CPI of NOK 17,000,000 as well as positive contribution from the project portfolio of NOK 12,000,000.
But this was offset by divestments in addition to the Trondheim portfolio, which had a negative impact of EUR 22,000,000 as well as a negative like for like of EUR 9,000,000 in the quarter. Adjusted for all divestments, our underlying growth is 2.6% in the quarter. Compared to the fourth quarter of twenty twenty four, our rental income grew from EUR $767,000,000 to NOK $774,000,000. However, this is 9,000,000 below what the bridge highlighted in our fourth quarter presentation. And the reason for this are mainly related to two items.
First, we had the restructuring of a lease contract, where parts of the lease was converted to a turnover based contract. And secondly, we also had another event and conference tenant, which is in restructuring, as Sonia mentioned earlier. Net income from property management came in at $320,000,000, and this is slightly down from NOK $325,000,000 in the first quarter of last year. The loss of revenues from all the divestments was partly compensated by less interest costs due to lower debt levels as well as lower operational costs. Profit before tax came in at $280,000,000, and this includes negative value adjustments of SEK 32,000,000 in the quarter.
Moving then to our sorry about that. Okay, Hernan? Yes? Moving then to our profit and loss statement. I already gone through the rental income, but I will give you some flavor on the other cost items.
Our OpEx came in at 66,000,000, which is 8.5% of the rental income. This is in line with historical levels. The OpEx is down from 78,000,000 in the first quarter of twenty twenty four, and this is due to the mentioned divestments we talked about earlier as well as strict cost control. Admin costs came in at 47,000,000, which is down from NOK 50,000,000 in the same quarter last year. This is in line with expectation, and we have previously highlighted that we target admin costs for the full year at around NOK 200,000,000.
Net realized financials came in at NOK $349,000,000. This includes NOK 11,000,000 from one off costs related to the bank refinancing we conducted in the first quarter. I will come back with more information regarding the bank refinancing later on in the presentation. The net realized financials is also 79,000,000 below what we reported in the first quarter of twenty twenty four. And the lower interest cost is mostly due to reduced debt level with nearly 7,000,000,000 following all the divestments we have completed.
But also that our interest rate is on a net interest bearing debt is about 30 bps lower than we had in the same quarter last year. And I will also come back later on in the presentation with net interest costs going forward. As you can see, we had limited impact from value changes, both in our properties as well as our hedge instruments, and this gave then a profit before tax in the end of NOK $280,000,000. Moving over to our per share data. Cash earnings came in at NOK 7.1 per share in the first quarter.
This is flat compared to the fourth quarter. While on the right hand side, you can see the net asset value continues slight improvement in the quarter and came in at NOK 163 per share, up from NOK 162 per share in the fourth quarter. In addition to this, we have distributed NOK 37 in dividend since the IPO in 2014. So adding this, the total return have averagely been 9% since the IPO. Moving then over to our rental income development.
Looking forward, the model indicates that the rental income will be $771,000,000 in the second quarter, slightly down from NOK $774,000,000 reported in the first quarter. The Q2 rental income is, however, 10,000,000 below what the bridge highlighted in our fourth quarter presentation. And this is mainly a spillover effect from the two special situations, which also impacted the first quarter, as presented earlier, as well as some negative other negative impact from the negative net letting we had in the first quarter. The negative net letting we now had three quarters in a
Moderator/Q&A Facilitator, Entra: row
Ole, Financial Executive, Entra: are lowering the rental income trend, as you can see in this graph. However, this graph is not a guidance. It just highlights the income trend based on existing contracts and reported events. There is significant upside potential to the rental graph going forward, especially in the latter part, and we are obviously chasing these potentials. The most important value drivers here is to rent out existing vacant space, which has a potential value of GBP $216,000,000.
In addition to this, we also have available space in the ongoing project portfolio, which has a potential value of $44,000,000 per year. And lastly, we obviously also target to relet the space that will be available in the future due to the negative let letting we have had now three quarters in a row. Moving then over to our property value, which increased to 63,000,000,000 in the quarter. Net value changes in our investment properties was flat in the quarter with an insignificant reduction of 6,000,000. There are limited movements in all value drivers in the quarter, and the deviation between the pressures are relatively low, and this has also come down over the last two to three quarters.
As Sonia mentioned earlier, the valuation looks to have bottomed out, and yields are expected to come slightly down over the next few years. CapEx came in at $385,000,000, which is mostly related to the four projects that we report on and is ongoing at the moment. We will continue to have a disciplined investment strategy given the current interest rate as well as rent levels. The decision to renegotiate Yara is also partly driven by being more CapEx conscious, as in this case, the tenant will remain in the same site with an as is lease with no CapEx for us. And lastly, you can see that the portfolio net yield is at 4.86%.
Moving then over to our debt metrics, which continued to improve in the quarter. On the left hand side, you can see the interest coverage ratio has bottomed out and improved from 1.91 to 1.98 in the quarter, measured over the last twelve months. Isolated in Q1, the ICR came in at 2.07. On the right hand side, you can also see that the leverage ratio also improved slightly with a 0.2 percentage point and came in at 49.1%. And the net debt to EBITDA was flat at 11.7%.
We expect to continue a gradual improvement in our debt metrics going forward, And this is supported by continued capital discipline as well as potential value increases and lower interest rates. Moving to our financial position. So in Q1, we have created a solid financial platform and extended our average time to maturity of our total debt from three point one years to four point zero years. And we have done this by issuing 3,100,000,000 in new bond debt at attractive terms under a new loan agreement as well as refinanced to NOK 17,000,000,000 in bank debt. And thereby, we have increased our financial resilience in the current volatile market.
As you can see in the graph to the right, we have 9,400,000,000.0 in undrawn credit facilities. That falls due in 2028 and 2029. And with that, we have ample liquidity room for the next twenty four months. Sixty two percent of our debt is now green financing, and we have the capacity to issue more green debt, if required, due to our existing environmental friendly asset portfolio. And lastly, you can see that Moody’s affirmed our rating and outlook in April.
We will continue to have a conservative approach when it comes to leverage as well as interest risk going forward. And to have a good access to bond market, we will maintain an investment grade rating throughout all parts of the cycle as we have done in the past. With now a new bank debt structure in place, as well as a gradual improvement in credit metrics and continue to be capital disciplined, we believe that we have set the path for a rating upgrade in the future. Moving then to our cost of debt. So we have had some questions regarding our interest rate going forward.
And to give further transparency, we have then reworked our cost of debt slide. The interest rate on our interest bearing debt came in at 3.89%, as you can see in this graph. However, we do have other financial costs that adds to the net realized financials, which we report in our quarterly report. The all in net financials came in at 4.44%, but this included fourteen one offs related to the bank refinancing, which impacted 14 basis points. As you can see in this graph, the gap between the interest rate on our interest bearing debt and the net financial net realized financial has increased since the late twenty twenty three.
And there are several reasons for this. First is that in ’24 sorry, in 2021, we issued several bonds at a discount, which reduces the interest on our interest bearing debt, but adds a noncash amortization. Second is that we have increased commitment fees in the period as we prefer to have a significant liquidity buffer while we were renegotiating with our banks. And this has now been completed in the first quarter. And lastly, due to much higher project activity in 2021 to 2023, we capitalized much more interest cost than we can today due to a lower project activity.
And these three elements offset each other from 2021 to 2023, but not so much from late twenty twenty three and onwards. Going forward, we do expect this gap to be gradually be reduced due to a combination of lower commitment fees as well as reduced amortization of bond discounts. Seeing that we have had several questions on our interest costs going forward as well as that we have reworked this slide and a new bank facility refinanced our bank structure. We will give you an indication of net realized financials going forward in this quarter. Based on the current Nibar forward curve, our existing hedge positions as well as our expected credit margins, We forecast a net realized financials in 2025 of 1,330,000,000.00 and NOK 1,270,000,000.00 in 2026.
However, this may change due to shifts in LIBOR curve investments and other factors. And with that, Sonia, I leave it to you.
Sonia, Company Executive/Presenter, Entra: Do we have sound on this one? Yes. Okay. Closing remarks. First of all, we are operating in a very solid and stable Norwegian economy.
And the public spending will continue to stabilize the economy. And lower interest rates and real wage growth expect is also expected to stimulate the economy going forward. When we get our first rate cuts, which still are anticipated to come in 2025. We have established a very flexible platform for our long term financing with the great job which has been done through the year and concluded this quarter. And this also provides resilience and the capability to get financing from where we find it most attractive going forward.
Our high quality tenant base provides also stability in respect of cash flows. And we continue to see promising letting market fundamentals and expect also that we will see letting market activity pick up, knowing that there is quite a lot of leases to be extended in the market in 2027. Of course, also a bit depending on how the economic sentiment evolves. Breakeven rents for new builds above market rents continue to support also that we should see rental growth over time. And there is now quite a bit of upside in our portfolio, and we continue to work hard to deliver on growth opportunities within the reversion potential and the vacant space in our portfolio.
In addition, the projects and CPI will contribute with income growth going forward. So I think that concludes the presentation for now, and we should be ready for some questions.
Moderator/Q&A Facilitator, Entra: Yes. Thank you, Sovea and Ole. Our first question is, Entra has now seen three quarters of consecutive negative net leasing. When do you expect the operational environment to improve? Well,
Sonia, Company Executive/Presenter, Entra: I think it’s firstly, as I just said, we know that there is quite a lot of lease volumes in the market to be renegotiated in 2027, which implies that the letting activity should pick up. But then again, having said that, the most also the recent increased uncertainty also often prompts tenants to delay decisions. So the effects of that, we don’t know yet. But our expectation is that we will see a pickup in the activity in the letting market, which should definitely help improving also the operational environment. Now if you look at our portfolio, we have, in total, around 30,000,000 of lease contracts in 2025 and $80,000,000 in 2026, which yet have not been concluded.
And the outcome of these are still open. The remaining part of the portfolio or the expiries have either already been terminated or we expect to see them resigned. So the volume, which is still at risk, you could say, is quite limited and below 20%. So that should also provide some clarity that there is limited downside and quite a lot of upside for us now in our letting business.
Moderator/Q&A Facilitator, Entra: Thank you. Next question. Can you please reconcile the comment that work from home trend has reversed, but tenants are reassessing their office requirements due to hybrid working?
Sonia, Company Executive/Presenter, Entra: Yes. With that, I mean that when our tenants now are in a situation when they are renegotiating, they are coming out of leases which are seven to ten years long. And the way we work has changed over these years. It means that we use more space for meeting rooms, teams rooms and collaboration space, while individual desks can be reduced. So when you are in an existing office contract, you need, to a much larger extent, to do some kind of alternations.
And when you are looking into what kind of alternations you have to do, you are, at the same time, also more open to looking at alternatives because it’s one thing to kind of sit in the existing building and experience that we are doing refurbishments while the tenants are in the building. And then the alternative for them is maybe then just to move into something new or in another building. So when you look at the presence in the office, mobility data, people are back in the offices. But the time of the week we use the office is a bit different. And also the organizing of the office and what kind of facilities you need has changed.
Moderator/Q&A Facilitator, Entra: Thank you. How do you expect occupancy to develop going forward?
Sonia, Company Executive/Presenter, Entra: Well, I think that we, for the second quarter at least, expect that they should remain around the current levels. I think it’s difficult, to be honest, to guide more on timing on how much time we will need to bring occupancy up. What I do know is that we have a target to get back up there at 95%. We have put in place the efforts which is required to intensify the letting activity. And we have very good products.
So knowing also now that the Jaira deal will mean that the building they were supposed to move into is going to be vacated from the first quarter twenty twenty six. Our EPRA vacancy development is also going to be much dependent on how quick we are able to sign that volume. So we’re getting back up to 95%, but I do think that we will need to at least use this year and probably sometime next year before we can be there. I think it’s worth commenting on also that the effects of all the terminations which we have reported these last three quarters are also represented in the rental income bridge. So that the rental income bridge, while it’s been a very clear forecast with maybe limited upside in the past, now it also represents a picture of all known events and also represents more upside, as Ulle also touched upon.
Moderator/Q&A Facilitator, Entra: Thank you. This is a question regarding the Yara contract. Is the negative net letting of minus $25,000,000 in the second quarter included in the rental income bridge?
Sonia, Company Executive/Presenter, Entra: Yes. The net letting effect is already included in the rental income bridge because the new lease contract with Yara was expected to start in 2027. So it’s beyond the period which we are forecasting.
Moderator/Q&A Facilitator, Entra: Okay. What would be your latest funding conditions? And do you see banks more cautious in their approach?
Ole, Financial Executive, Entra: In general, we don’t see any changes from the banks. We just completed our bank refinancing in very March. Having said that, in the debt capital market, the spreads has come somewhat out from the issuance of the bonds issues we done we did in February at 125 basis points. But after that, Moody’s have affirmed our rating, and we are targeting to have a rating upgrade in the future. So we will always work to reduce our funding costs.
But right now, we don’t see any changes in the behavior from the banks.
Moderator/Q&A Facilitator, Entra: Thank you, Ole and Sonia. With that, we’ll conclude the Q and A session for today. Okay.
Sonia, Company Executive/Presenter, Entra: Thank you all for joining us today. And please feel free to get in touch if you should have any further questions. Thank you.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.