Cibus: Operationally fine Q1 but net financial costs - Nordea

Cibus posted Q1 net operating income of EUR 27.6m, up 27% y/y on the back of acquisitions and 1% above our estimate and 2% above Infront consensus. Income from property management (IFPM) was EUR 11.8m, down 19% y/y and 14% below our estimate and 16% below consensus. However, IFPM included EUR 1.2m of negative one-offs. Adjusting for these, IFPM was 5% below our estimate and 7% below consensus. Fair value changes were EUR -8.5 (~0.4% of portfolio) as yields expanded slightly and average valuation yield was 6.1%. Earnings capacity-based IFPM per share was down q/q at EUR 1.05 from EUR 1.16 owing to increased financial expenses. Net financial expenses in earnings capacity is EUR 49.9m versus EUR 44.3m in Q4. EPRA NRV was EUR 14.4 (SEK 163), down from EUR 14.7 in Q4. Cibus is currently trading at a 33% discount to EPRA NRV and an implied yield of 7.0% versus the average valuation yield of 6.1%. Current hedges will cap interest rate of bank loans at 4.55% as of Q3 2023 through Q2 2025. We expect a slightly negative share price reaction on weaker than expected IFPM.