Our 'A-' issuer and issue ratings on Heba Fastighets AB (publ) (Heba) are unchanged following the publication of its third-quarter results. The outlook is negative.
Continued stability in line with our expectations
Heba's rental income for the third quarter was in line with our estimates and some 14% higher than in the corresponding quarter of 2020. The NCR-adjusted EBITDA margin for the last 12 months ended 30 Sep. 2021 was 61.4%, in line with our expectations and testament to the continued stability of the company's management portfolio. Heba's average interest rate on borrowing continued to decrease in the quarter, below our expectations, while the average fixed interest period was 3.3 years. The company also received interest on lending to joint ventures that was above our previous estimates.
Growth ambitions maintained
During the quarter, Heba continued to grow, acquiring several properties, finalising projects and entering into new agreements. We expect Heba to continue assessing projects and properties for acquisitions to maintain its pace of growth, and we still see the loan-to-value ratio increasing as the company progresses.
Figure 1. Heba key credit metrics, 2017–Q3 2021
| SEKm | 2017 | 2018 | 2019 | 2020 | LTM to 30 Sep. 2021 |
|---|---|---|---|---|---|
| Total revenue | 335 | 380 | 388 | 394 | 431 |
| NCR-adj. EBITDA | 187 | 221 | 232 | 240 | 265 |
| NCR-adj. EBITDA-margin | 55.8% | 58.0% | 59.7% | 60.9% | 61.4% |
| NCR-adj. investment properties | 8,771 | 9,656 | 10,293 | 12,213 | 13,664 |
| NCR-adj. net debt | 3,221 | 3,532 | 3,492 | 4,985 | 5,656 |
| Total assets | 8,804 | 9,724 | 10,399 | 12,776 | 14,882 |
| NCR-adj. net debt/EBITDA | 17.2x | 16.0x | 15.1x | 20.8x | 21.4x |
| NCR-adj. EBITDA/net interest | 3.7x | 4.1x | 4.4x | 4.6x | 5.5x |
| NCR-adj. net LTV | 36.7% | 36.6% | 33.9% | 40.8% | 41.4% |
This commentary does not constitute a rating action.
Contacts:
Mille Fjeldstad, analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com
Marcus Gustavsson, analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com