Cibus: Solid Q4 operations and plan to introduce class D shares - Nordea

Cibus posted Q4 net operating income of EUR 20.4m, up 22% y/y on the back of acquisitions and 2% above our and 4% above Infront consensus estimates. Income from property management (IFPM) was EUR 12.8m, up 37% y/y and 3% below our estimate and 1% above consensus. IFPM included EUR 0.2m in net negative one-offs and adjusting for this, IFPM was 3% better than consensus and 1% below our estimate. EPS of EUR 0.38 was clearly better than our EUR 0.30 and slightly above consensus estimate of EUR 0.36. Fair value changes were EUR +6.3m. ERPA NRV was EUR 13.5 (SEK 145 on current FX rate) Consensus expected EPRA NRV of EUR 13.1. Net LTV was 57.8%, down from 60.1% in Q3. The dividend proposal is EUR 0.99 versus consensus and our estimate of EUR 0.99. Earnings capacity-based IFPM per share increased from EUR 1.18 at the end of Q3 to EUR 1.25 at the end of Q4. The Board intends to propose to the AGM that a new share class ( D) will be established, with a bonus issue being made to existing shareholders in connection with this. In the CEO comment, it is repeated that Cibus is committed to the target of doubling the portfolio size by the end of 2023 and targeting investment grade (IG) rating. Also, Cibus is looking at opportunities to enter the Danish grocery property market. Cibus is currently trading at a ~60% premium to EPRA NRV, which we find more than justified given the stable operations and strong dividend focus. Cibus has an edge to its mainly unlisted peers in that it can pay with its own shares, which makes Cibus an attractive compounder case in Nordic real estate, justifying the premium valuation. The dividend yield for 2022E-23E is 4.7-4.9% and Cibus distributes a monthly dividend. Given the increase in IFPM per share, Cibus should be well positioned to grow the dividend by at least 5% annually. We conclude that the report was in line with expectations and Cibus is well-positioned to execute o n its growth targets, backed by the introduction of class D shares to further support balance sheet and enabling IG rating eventually.