Cibus: Q1 IFPM below consensus, earnings capacity-based EPS continues to increase - Nordea

Cibus posted Q1 net operating income of EUR 28.1m, up 2% y/y and 1% below Infront consensus. Income from property management (IFPM) excluding one-offs was EUR 12.5m, up 6% y/y but 9% below our estimate, and 7% below consensus. The reported IFPM was EUR 12.2m. Reported IFPM included EUR -0.3m of one-off items (FX differences). Fair value changes were EUR -22.3m (1.2% of portfolio) as average valuation yield expanded by ~0.1pp and was 6.5% (6.4% in Q4 2023). Also, a writedown was made on an asset in Lahti, leased to Kesko, from where Kesko will move out in 2-3 years. Discussions are ongoing to find a new tenant/solution for the property. Earnings capacity-based IFPM per share was slightly up q/q at EUR 0.96 from EUR 0.95 owing to higher rental income. Net financial expenses in earnings capacity is EUR 51.3m versus EUR 51.5m in Q4. EPRA NRV was EUR 11.9 (SEK 138), down from EUR 12.5 in Q4. Cibus is currently trading at a 2% premium to EPRA NRV and an implied yield of 6.5%. Cibus has effectively capped interest rates until H1 2025 and the average interest rate was 4.6% versus 4.5% at the end of 2023. We expect a slightly negative share price reaction on the IFPM miss and relatively large negative fair value changes. However, the sustainable 7.5% dividend yield should offer support.