Our 'BB' issuer rating on NP3 Fastigheter AB (publ) (NP3) is unchanged following the publication of its fourth-quarter 2021 results.
Growth of property portfolio drives strong increase in revenues and profit
NP3's revenues in the fourth-quarter of 2021 were in line with our expectations. Reported revenues were SEK 343m (compared with SEK 283m in the fourth quarter of 2020) and reported EBITDA was SEK 234m (SEK 199m). The company's last-12-month EBITDA margin increased slightly to 71.8%, compared with 70.2% a year earlier. The increases in revenues and EBITDA were due to expansion of the company's property portfolio.
Higher property values reduce loan-to-value ratio despite debt-financed acquisitions
NP3 is seeing increased interest in its target markets. This resulted in lower property yields and substantial increases in property values in the fourth quarter. Consequently, NCR-adjusted net loan-to-value (LTV) (including 50% equity treatment of preference shares) was 61.7%, a marginal decrease from 63.0% a year earlier despite several debt-financed acquisitions in 2021. NP3's other financial metrics were in line with our earlier expectations, leaving our view of financial risk at the company intact.
Figure 1. NP3 key credit metrics, 2017–2021
| SEKm | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Total revenue | 677 | 842 | 1,006 | 1,091 | 1,237 |
| NCR-adj. EBITDA | 436 | 546 | 668 | 766 | 888 |
| NCR-adj. EBITDA-margin | 64.4% | 64.8% | 66.4% | 70.2% | 71.8% |
| NCR-adj. investment properties | 7,732 | 10,496 | 11,474 | 12,665 | 17,441 |
| NCR-adj. net debt | 4,704 | 6,797 | 7,165 | 7,983 | 10,768 |
| Total assets | 7,959 | 10,677 | 11,937 | 13,352 | 18,719 |
| NCR-adj. net debt/EBITDA | 10.8x | 12.4x | 10.7x | 10.4x | 12.1x |
| NCR-adj. EBITDA/net interest | 3.6x | 3.2x | 3.2x | 3.0x | 3.1x |
| NCR-adj. net LTV | 60.8% | 64.8% | 62.5% | 63.0% | 61.7% |
| Average remaining lease term (years) | 4.1 | 4.3 | 4.2 | 4.2 | 4.1 |
| Occupancy rate | 91.0% | 93.0% | 91.7% | 93.0% | 93.0% |
| Average debt maturity (years) | 2.9 | 2.7 | 2.2 | 1.9 | 2.9 |
| Average fixed-interest period (years) | 2.4 | 2.2 | 2.4 | 1.7 | 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