Cibus: Strong operations in Q3 and earnings capacity-based EPS turned to a positive trend - Nordea

Cibus posted Q3 net operating income of EUR 31.0m, up 18% y/y but included as much as EUR 2.7m in one-offs. Adjusted for one-off NOI was in line with Infront consensus. Income from property management (IFPM) excluding one-offs was EUR 14.2m, down 3% y/y and 8% above our estimate, and 16% above consensus. Reported IFPM included EUR -0.1m of negative one-offs in financial items. Fair value changes were EUR -5.4m (0.3% of portfolio) as yields expanded slightly and average valuation yield was 6.2% (6.1% in Q2). Earnings capacity-based IFPM per share was up q/q at EUR 0.93 from EUR 0.91 owing to slightly lower financial expense. Net financial expenses in earnings capacity is EUR 51.1m versus EUR 52.1m in Q2. EPRA NRV was EUR 13.0 (SEK 150), flat from EUR 13.0 in Q2. Cibus is currently trading at a ~25% discount to EPRA NRV and an implied yield of 7.1% versus the average valuation yield of 6.2%. Cibus has effectively capped interest rates until H1 2025. We expect a clearly positive share price reaction as balance sheet measures are coming through, the earnings capacity-based EPS turned to a positive trend and should support the EUR 0.9 being sustainable and underlying business is performing as expected.