Our 'BB' issuer rating on NP3 Fastigheter AB (publ) is unchanged following the publication of its first-quarter 2022 results.
Ambitious growth focus continues
NP3's first-quarter report was in line with our expectations. Revenues in the quarter were SEK 364m (compared with SEK 291m in the first quarter of 2021) and NCR-adjusted EBITDA was SEK 226m (SEK 177m). The NCR-adjusted EBITDA margin for the last 12 months improved to 71.5% from 69.4% a year earlier.
During the quarter, NP3 continued to pursue its rapid growth ambitions, entering into agreements to acquire 18 properties in central and northern Sweden with a total market value of SEK 727m. The transactions will close in the second and third quarters of 2022. Since the reporting date, the company has signed agreements to acquire an additional four properties valued at SEK 285m.
Financial position unchanged despite intense acquisition activity
NP3's NCR-adjusted loan-to-value (LTV) ratio (taking into account our 50% debt treatment of preference shares) was 61.9%, compared with 61.1% a year earlier. The company's net interest coverage was 3.1x, broadly unchanged from a year earlier. As of 31 Mar. 2022, NP3's average fixed interest period was 2.0 years with 65% of interest rates set to mature over the next 12 months. We expect interest coverage to decrease in the course of the year but remain well above covenant levels.
Figure 1. NP3 key credit metrics, 2018–Q1 2022
| SEKm | 2018 | 2019 | 2020 | 2021 | LTM to 31 Mar. 2022 |
|---|---|---|---|---|---|
| Total revenue | 842 | 1,006 | 1,091 | 1,238 | 1,310 |
| NCR-adj. EBITDA | 546 | 668 | 766 | 890 | 937 |
| NCR-adj. EBITDA-margin | 64.8% | 66.4% | 70.2% | 71.9% | 71.5% |
| NCR-adj. investment properties | 10,496 | 11,474 | 12,665 | 17,441 | 17,968 |
| NCR-adj. net debt | 6,797 | 7,165 | 7,983 | 10,768 | 11,122 |
| Total assets | 10,677 | 11,937 | 13,352 | 18,718 | 19,921 |
| NCR-adj. net debt/EBITDA | 12.4x | 10.7x | 10.4x | 12.1x | 11.9x |
| NCR-adj. EBITDA/net interest | 3.2x | 3.2x | 3.0x | 3.1x | 3.1x |
| NCR-adj. net LTV | 64.8% | 62.5% | 63.0% | 61.7% | 61.9% |
| Average remaining lease term (years) | 4.3 | 4.2 | 4.2 | 4.1 | 4.0 |
| Occupancy rate | 93.0% | 91.7% | 93.0% | 93.0% | 93.0% |
| Average debt maturity (years) | 2.7 | 2.2 | 1.9 | 2.9 | 2.8 |
| Average fixed-interest period (years) | 2.2 | 2.4 | 1.7 | 2.0 | 2.0 |
This commentary does not constitute a rating action.
Contacts:
Marcus Gustavsson, analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com
Yun Zhou, analyst, +46732324378, yun.zhou@nordiccreditrating.com