Our 'BBB-' long-term issuer rating on Catena AB (publ) is unchanged following the publication of its third-quarter results.
Strong rental income performance in line with our expectations
Catena's rental income for the third quarter was broadly in line with our expectations and some 12% higher than in the corresponding quarter of 2020. The company's NCR-adjusted EBITDA margin for the past 12 months remained stable at 76.4%, compared with 76.0% a year earlier, and above our estimate of around 74% over our forecast period through 2023.
Strong credit metrics following equity injection in second quarter of 2021
As of 30 Sep. 2021, Catena's NCR-adjusted loan-to-value (LTV) ratio was 45.6%, while NCR-adjusted net debt/EBITDA was 9.8x, exceeding our forecast figures, which take into account assumed acquisitions that have not yet been realised. Our view of financial risk remains unchanged, reflecting our expectations that financial gearing will stay around current levels or increase somewhat, while keeping within policy levels.
Figure 1. Catena key credit metrics, 2017–Q3 2021
| SEKm | 2017 | 2018 | 2019 | 2020 | LTM to 30 Sep. 2021 |
|---|---|---|---|---|---|
| Total revenue | 894 | 1,093 | 1,187 | 1,268 | 1,356 |
| NCR-adj. EBITDA | 641 | 798 | 873 | 970 | 1,036 |
| NCR-adj. EBITDA-margin | 71.7% | 73.0% | 73.5% | 76.5% | 76.4% |
| NCR-adj. investment properties | 13,131 | 14,721 | 16,601 | 18,947 | 22,307 |
| NCR-adj. net debt | 7,473 | 8,236 | 8,984 | 9,658 | 10,164 |
| Total assets | 14,247 | 15,985 | 17,770 | 20,399 | 24,056 |
| NCR-adj. net debt/EBITDA | 11.7x | 10.3x | 10.3x | 10.0x | 9.8x |
| NCR-adj. EBITDA/net interest | 3.2x | 3.6x | 3.9x | 4.2x | 4.2x |
| NCR-adj. net LTV | 56.9% | 55.9% | 54.1% | 51.0% | 45.6% |
| Average remaining lease term (years) | 0 | 0 | 4.9 | 5 | 5 |
| Occupancy rate | 94.7% | 95.9% | 95.0% | 96.2% | 95.9% |
| Average debt maturity (years) | 1.9 | 1.4 | 1.3 | 2.2 | 3.2 |
| Average interest fixing (years) | 4.1 | 3 | 2.3 | 3.1 | 3 |
This commentary does not constitute a rating action.
Contacts:
Marcus Gustavsson, analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com
Mille Fjeldstad, analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com