Catella - The harvesting season has begun - ABG

Strong Q1 beat driven by Principal Investments and PIM Underlying EPS estimates raised by 16% for 2022 2022e EV/EBIT of 6x, ~50% below avg. of peers Strong Q1 driven by Principal Investments and PIM Catella delivered another strong report, in which sales and EBIT were well above our expectations, by 10% and 40%, respectively. The operating profit attributable to Catella’s shareholders improved by SEK 127m and came in at SEK 111m in Q1’22. The main deviation compared to ABGSC estimates was Principal Investments, where the strong result was driven by the divestment of the Norrköping project. Property Investment Management (PIM) delivered another set of impressive numbers, with the operating result up 68% y-o-y in Q1, driven by higher fixed fees, where the LTM fixed fees had increased by 14% y-o-y. The AUM base continues to increase and grew by 2% q-o-q, coming in at SEK 125.5bn. The company also flags that it has an additional SEK +12bn in committed AUM capital to be put to use in the coming 9-12 months in new development projects and properties, enabling continued growth. Performance fee in PIM drives positive revisions for 2022e We raise our underlying 2022e EPS by 16% driven by the performance of the Catella European Residential fund, which we expect will deliver SEK 151m in performance fees for Q2’22. Our EBIT estimates have been raised more, by 29% for 2022, but that is partly due to an IFRS accounting effect stemming from the fact that Catella will consolidate all the income from projects in which it has controlling interest, and then deduct the non-controlling share in the non-controlling interest line, hence boosting the reported EBIT. Our 2023 and 2024 estimates have only been tweaked. 2022 is a harvest year for Catella Catella has entered a harvest period, with six additional projects scheduled to be divested in 2022. The company is facing easy comps, which is why we expect strong growth throughout the year. In our view, the company has many attractive fundamen ... Läs mer på ABG Sundal Collier