Cibus: Stable operations in Q2 and the company targets expansion to other Nordic countries - Nordea

Cibus posted Q2 net operating income of EUR 18.5m, up 22% y/y on the back of acquisitions and in line with our and Infront consensus estimates. Income from property management (IFPM) was EUR 10.8m, up 39% y/y and 9% below our estimate and 6% below consensus. However, IFPM included EUR 0.83m in negative one-offs and adjusting for this, IFPM was slightly better than consensus and somewhat below our estimate. The one-offs relate to costs for list change and negative FX in financials. EPS of EUR 0.29 was slightly better than our and consensus estimate of EUR 0.28. Fair value changes were EUR +2.4m. ERPA EPS was EUR 12.3 (SEK 125) and net LTV was 60.1%. Earnings capacity-based IFPM per share increased to EUR 1.18 from EUR 1.15 at the end of Q1 as a result of acquisitions made during Q2. The company sees a number of acquisition targets, and considers expanding outside of Finland and Sweden into other Nordic countries o nce COVID-19-related restrictions end. Cibus is currently trading at a 75% premium to EPRA NAV, which we find 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 2021E-23E is 4.6-5.2% and Cibus distributes a monthly dividend. We expect a slightly positive share price reaction on the Q2 report which, was largely in line with expectations adjusting for one-offs, and the fact that the share was down 8% yesterday apparently on a recommendation downgrade.