Our 'BBB' issuer and issue ratings on Bonnier Fastigheter AB are unchanged following the publication of its results for the first four months of 2022.
Operations stable with projects progressing according to plan
Bonnier Fastigheter's reported revenues remained stable in the four months to April at SEK 226m (compared with SEK 223m in the corresponding period of 2021). Operating margins were stable, while net profit was weighed down by negative unrealised value changes in the company's shareholdings in Baltic property operator Eastnine which have been negatively impacted by Russia's invasion of Ukraine. We do not view this as a major cause for concern as the holdings account for only a small proportion of Bonnier Fastigheter's balance sheet. The company's development projects are progressing according to plan, with price increases and generally softer market conditions having little effect on ongoing work. In the period under review, Bonnier Fastigheter acquired a 50% stake in Trecore Fastigheter AB, which owns retail properties in which supermarket operator ICA is the main tenant. The remaining 50% is owned by ICA's own property subsidiary, ICA Fastigheter.
Financial risk remains low despite increased leverage
As of 30 Apr. 2022, Bonnier Fastigheter's NCR-adjusted net loan-to-value (LTV) ratio was 30.8% compared with 23.6% as of end-2021. The increase was primarily due to the company's investment in Trecore. Interest coverage remains strong at 8.9x. Although financial leverage has increased somewhat, we regard financial risk as low.
Figure 1. Bonnier Fastigheter key credit metrics, 2019–T1 2022
| SEKm | 2019 | 2020 | 2021 | LTM to 30 Apr. 2022 |
|---|---|---|---|---|
| Total revenue | 712 | 740 | 675 | 678 |
| NCR-adj. EBITDA | 476 | 497 | 431 | 429 |
| NCR-adj. EBITDA-margin | 66.9% | 67.2% | 63.9% | 63.3% |
| NCR-adj. investment properties | 13,717 | 14,038 | 15,614 | 15,718 |
| NCR-adj. net debt | 3,447 | 2,997 | 3,688 | 4,837 |
| Total assets | 13,972 | 14,540 | 16,829 | 18,443 |
| NCR-adj. net debt/EBITDA | 7.2x | 6.0x | 8.6x | 11.3x |
| NCR-adj. EBITDA/net interest | 7.2x | 7.8x | 9.6x | 8.9x |
| NCR-adj. net LTV | 25.1% | 21.3% | 23.6% | 30.8% |
| Average remaining lease term (years) | - | - | - | - |
| Occupancy rate | 96.0% | 95.0% | 93.0% | 92.0% |
| Average debt maturity (years) | 3.7 | 2.6 | 2.8 | 2.5 |
| Average fixed-interest period (years) | 1.3 | 1.2 | 2.1 | 1.9 |
This commentary does not constitute a rating action.
Contacts:
Marcus Gustavsson, analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com
Yun Zhou, analyst, +46732324378, yun.zhou@nordiccreditrating.com