Cibus: Q3 operationally in line, growth targets postponed - Nordea

Cibus posted Q3 net operating income of EUR 26.2m, up 36% y/y on the back of acquisitions and 1% above our estimate and Infront consensus. Income from property management (IFPM) was EUR 14.7m, up 17% y/y but 3% below our estimate and 9% below consensus. However, IFPM included EUR 0.4m of negative exchange rate losses and EUR 1.4m costs from bond redemption premium and reversal of capitalised arrangement fees. Adjusting for these, IFPM was 9% above our estimate and 2% above consensus. Fair value changes were EUR 8.9m positive (~0.5% of portfolio). Earnings capacity-based IFPM per share was down q/q at EUR 1.27 from EUR 1.34 owing to increased financial expenses. EPRA NRV was EUR 15.2 (SEK 165). Cibus is currently trading at a 6% discount to EPRA NRV and an implied yield of 5.7% versus the average valuation yield of ~5.6%. During Q3 Cibus has refinanced a loan of EUR 200m with an unchanged margin. The CEO also comments that bank relationships remain strong, in our view implying that bond maturities could be refinanced with bank loans if needed. We expect a neutral share price reaction. The EPRA NRV premium turning into a discount makes the compounder case less attractive as Cibus, in order to reach its growth targets and investment grade rating, will need to issue new shares. We expect a neutral share price reaction.