Cibus: Operationally in line – hedging activity remains high - Nordea

Cibus posted Q2 net operating income of EUR 28.1m, up 11% y/y on the back of acquisitions and in line with our and Infront consensus estimates. Income from property management (IFPM) was EUR 11.5m, down 15% y/y and 0% below our estimate, and 8% below consensus. Reported IFPM included EUR 0.8m of negative one-offs. Fair value changes were EUR -8.3m (~0.4% of portfolio) as yields expanded 5 bps and average valuation yield was 6.1% (6.1% in Q1). Earnings capacity-based IFPM per share was down q/q at EUR 0.91 from EUR 1.11 owing to increased financial expenses and increased share count. Net financial expenses in earnings capacity is EUR 52.1m versus EUR 49.9m in Q1. EPRA NRV was EUR 13.0 (SEK 153), down from EUR 14.4 in Q1, also mostly relating to increased number of shares. Cibus is currently trading at a ~30% 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 3.95% as of Q3 2023 through Q4 2024 and reach 4.05% in H1 2025. We expect a neutral to slightly negative share price reaction on the report.