Our 'BBB+' issuer and issue ratings on Heba Fastighets AB (publ) are unchanged following the publication of its first-quarter 2022 results.
Interest income from joint ventures boosts EBITDA ratio
Heba reported revenues of SEK 117.3m for the first quarter of 2022, up from SEK 106.6m in the corresponding period of 2021, as new acquisitions and projects that entered the portfolio during 2021 improved revenues. The company's reported net operating income ratio was broadly unchanged at 65.7% (65.9% in the first quarter of 2021), while its NCR-adjusted EBITDA ratio for the 12 months ended 31 Mar. 2022 increased to 65.6% (62.7%), supported by interest income from joint ventures.
Short-term refinancing needs covered by back-up facilities
Heba's credit metrics are in line with our expectations, with an NCR-adjusted loan-to-value (LTV) ratio of 40.7% and a net interest coverage ratio of 4.6x. The company's 3.6-year average fixed-interest period provides some cushion against expectations that interest rates will increase, but will still affect interest coverage over the longer term. The company has debt of SEK 1.8bn maturing during 2022, covered by the company's back-up facilities of SEK 1.9bn.
Figure 1. Heba key credit metrics, 2018–Q1 2022
| SEKm | 2018 | 2019 | 2020 | 2021 | LTM to 31 Mar. 2022 |
|---|---|---|---|---|---|
| Total revenue | 380 | 388 | 394 | 450 | 460 |
| NCR-adj. EBITDA | 222 | 232 | 244 | 294 | 302 |
| NCR-adj. EBITDA-margin | 58.4% | 59.7% | 62.0% | 65.5% | 65.6% |
| NCR-adj. investment properties | 9,656 | 10,293 | 12,213 | 14,831 | 15,036 |
| NCR-adj. net debt | 3,532 | 3,492 | 4,985 | 6,024 | 6,114 |
| Total assets | 9,724 | 10,399 | 12,776 | 15,516 | 16,138 |
| NCR-adj. net debt/EBITDA | 15.9x | 15.1x | 20.4x | 20.5x | 20.2x |
| NCR-adj. EBITDA/net interest | 4.1x | 4.4x | 4.3x | 4.6x | 4.6x |
| NCR-adj. net LTV | 36.6% | 33.9% | 40.8% | 40.6% | 40.7% |
This commentary does not constitute a rating action.
Contacts:
Mille Fjeldstad, analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com