Our 'BBB-' long-term issuer rating on CA Fastigheter AB (CA Fastigheter) is unchanged following the publication of its year-end 2021 results.
Earlier-than-expected project sale boosts annual EBITDA
CA Fastigheter's rental income for full-year 2021 was in line with our projections. The company reported proceeds from the sale of a co-operative housing project during the fourth quarter. We had previously expected the sale to be booked in the first quarter of 2022. The project sale resulted in full-year EBITDA exceeding our expectations by SEK 100m, though this will reduce our 2022 projections by a similar amount. As a result of the project sale, adjusted EBITDA to net interest improved to 7.5x (or 5.8x excluding the sale). Both figures are well above our projection of 3.2x for the full year. Although CA Fastigheter's average interest costs have fallen, the higher interest coverage ratios reflect some reported financial income which is excluded in our adjusted metrics. The company's reported EBITDA margin fell to 31% in 2021 due to the project sale. Excluding the impact of the sale on the project portfolio, the EBITDA margin fell only slightly, to 52.1% from 53.4% in 2020.
Revaluations reduce loan-to-value ratio
As a result of annual revaluations of the investment portfolio, CA Fastigheter's NCR-adjusted loan-to-value (LTV) ratio fell to 36.4% in the fourth quarter from 40.3% a quarter earlier. The SEK 1.1bn valuation adjustment increased the portfolio value to SEK 15.0bn, while the company reduced its total debt by nearly SEK 300m during the quarter.
Figure 1. CA Fastigheter key credit metrics, 2017–2021
| SEKm | 2017* | 2018* | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Total revenue | 1,063 | 931 | 667 | 786 | 1,553 |
| NCR-adj. EBITDA | 400 | 339 | 316 | 364 | 482 |
| NCR-adj. EBITDA-margin | 37.6% | 36.4% | 47.3% | 46.3% | 31.0% |
| NCR-adj. investment properties | 12,441 | 12,083 | 12,967 | 13,704 | 14,969 |
| NCR-adj. net debt | 4,807 | 3,894 | 5,304 | 5,424 | 5,445 |
| Total assets | 7,616 | 7,824 | 14,724 | 15,331 | 17,688 |
| NCR-adj. net debt/EBITDA | 12.0x | 11.5x | 16.8x | 14.9x | 11.3x |
| NCR-adj. EBITDA/net interest | 3.2x | 2.2x | 2.9x | 3.2x | 7.5x |
| NCR-adj. net LTV | 38.6% | 32.2% | 40.9% | 39.6% | 36.4% |
| Occupancy rate | 92.2% | 92.6% | 93.7% | 94.5% | 95.3% |
| Average debt maturity (years) | na | na | na | 2.1 | 2.5 |
| Average fixed-interest period (years) | na | na | na | 4.0 | 3.5 |
This commentary does not constitute a rating action.
Contacts:
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
Yun Zhou, analyst, +46732324378, yun.zhou@nordiccreditrating.com