Our 'BBB' issuer and issue ratings on Bonnier Fastigheter AB are unchanged following the publication of its results for the last four months of 2021.
Legal approval of Värtahamnen zoning plan marks next phase of development strategy
Bonnier Fastigheter's reported revenues in the last four months of 2021 were SEK 226m (compared with SEK 250m in the corresponding period of 2020). The decline was due to the combined effect of acquisitions and divestments in the course of year. Since end-2021, a first zoning plan for a planned project in Stockholm's Värtahamnen district has gained legal approval, meaning that the company can move forward with development. Construction of a first building is expected to start in 2023. The company's other development projects are progressing according to plan.
Financial risk profile remains in check
As of 31 Dec. 2021, Bonnier Fastigheter's NCR-adjusted net loan-to-value (LTV) ratio was 23.6%, up 2pp year on year, but still at very low levels. Interest coverage has strengthened, partly due to a lower average interest rate. However, we expect the company's credit metrics to weaken somewhat as its substantial development projects gain momentum in 2022 and 2023.
Figure 1. Bonnier Fastigheter key credit metrics, 2017–2021
| SEKm | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Total revenue | 523 | 591 | 712 | 740 | 675 |
| NCR-adj. EBITDA | 330 | 379 | 476 | 497 | 431 |
| NCR-adj. EBITDA-margin | 63.2% | 64.2% | 66.9% | 67.2% | 63.9% |
| NCR-adj. investment properties | 10,118 | 12,705 | 13,717 | 14,038 | 15,614 |
| NCR-adj. net debt | 1,950 | 3,538 | 3,447 | 2,997 | 3,685 |
| Total assets | 10,432 | 12,782 | 13,972 | 14,540 | 16,823 |
| NCR-adj. net debt/EBITDA | 5.9x | 9.3x | 7.2x | 6.0x | 8.5x |
| NCR-adj. EBITDA/net interest | 4.6x | 5.8x | 7.2x | 7.8x | 9.6x |
| NCR-adj. net LTV | 19.3% | 27.8% | 25.1% | 21.3% | 23.6% |
| Average remaining lease term (years) | n.a. | n.a. | n.a. | n.a. | n.a. |
| Occupancy rate | 95.0% | 95.0% | 96.0% | 95.0% | 93.0% |
| Average debt maturity (years) | n.a. | n.a. | 3.7 | 2.6 | 2.8 |
| Average fixed-interest period (years) | n.a. | n.a. | 1.3 | 1.2 | 2.1 |
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