Cibus: Dividend cut by 9% but target is to continue to grow dividend – Q4 results below consensus due to financial costs - Nordea

Cibus posted Q4 net operating income of EUR 26.5m, up 30% y/y on the back of acquisitions and 1% above our estimate and 2% above Infront consensus. Income from property management (IFPM) was EUR 12.4m, down 3% y/y and 21% below our estimate and 17% below consensus. However, IFPM included EUR 1.6m of negative one-offs. Adjusting for these, IFPM was 11% below our estimate and 7% below consensus. Fair value changes were EUR -24.5 (~1.3% of portfolio) as average valuation yield expanded by ~20 bps. Earnings capacity-based IFPM per share was down q/q at EUR 1.16 from EUR 1.27 owing mainly to increased financial expenses. Net financial expenses in earnings capacity is EUR -44.3m, we were at EUR -41.3m for 2023. EPRA NRV was EUR 14.7 (SEK 162), down from EUR 15.2 in Q3. Cibus is currently trading at a 15% discount to EPRA NRV and an implied yield of 6.3% versus the average valuation yield of ~6.0%. 75% of Cibus debt is bank loans with an average interest rate margin of 1.6% and EUR 65m of debt maturities within next 22 months. The hedging ratio is 70% on bank loans. The dividend was cut to EUR 0.90 from EUR 0.99 while consensus expected a dividend of EUR 1.04. The company expects to be able to grow the dividend from the new base level. We expect a negative share price reaction.