Our 'BBB+' issuer and issue ratings on Fastighets AB Stenvalvet (publ) (Stenvalvet) are unchanged following the publication of its second-quarter results.
Margins increase in most segments
Stenvalvet's revenues for the second quarter were broadly in line with our expectations, but with improved net operating income margins in most property segments. The company's net operating income margin for the quarter was 74.4%, up from 72% in the corresponding quarter of 2020 and above our expectation of 71-72% for our forecast period through 2023. The NCR-adjusted EBITDA margin rose above 67% in the period, a level where we expect it to remain.
Portfolio value sharply higher
The value of Stenvalvet's property portfolio increased by SEK 2.1bn during the quarter to SEK 15.7bn, largely due to unrealised value changes. This reduced the NCR-adjusted net loan-to-value (LTV) ratio to 40.7% as of 30 Jun. 2021, compared with 45.4% as of 31 Mar. 2021, which was well below our previous expectation of 45-47% through 2023. As a result of the one-off valuation increase, we have revised our net LTV expectations downwards to 41-43% for 2021-2023. The company's NCR-adjusted net debt/EBITDA and NCR-adjusted EBITDA/net interest metrics were largely in line with our expectations.
Figure 1. Stenvalvet key credit metrics, 2017–H1 2021
| SEKm | 2017 | 2018 | 2019 | 2020 | LTM to 30 Jun. 2021 |
|---|---|---|---|---|---|
| Total revenue | 742 | 812 | 888 | 890 | 904 |
| NCR-adj. EBITDA | 503 | 541 | 586 | 595 | 606 |
| NCR-adj. EBITDA-margin | 67.8% | 66.6% | 66.0% | 66.9% | 67.0% |
| NCR-adj. investment properties | 9,941 | 11,105 | 12,070 | 13,564 | 15,810 |
| NCR-adj. net debt | 4,770 | 5,121 | 5,112 | 6,143 | 6,437 |
| Total assets | 10,321 | 11,484 | 12,541 | 13,990 | 16,891 |
| NCR-adj. net debt/EBITDA | 9.5x | 9.5x | 8.7x | 10.3x | 10.6x |
| NCR-adj. EBITDA/net interest | 6.2x | 5.7x | 5.5x | 5.4x | 5.5x |
| NCR-adj. net LTV | 48.0% | 46.1% | 42.4% | 45.3% | 40.7% |
This commentary does not constitute a rating action.
If you have any questions, please contact:
Mille O. Fjeldstad, credit rating analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com
Marcus Gustavsson, credit rating analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com