Our 'BB-' issuer rating on Studentbostäder i Norden AB (publ) is unchanged following the publication of its first-quarter 2022 results.
Higher revenues and improvement in margins
Studentbostäder's revenues in the first quarter were SEK 73.5m (compared with SEK 51.3m in the first quarter of 2021) and NCR-adjusted EBITDA was SEK 34.4m (21.9m). The company's NCR-adjusted last-12-month EBITDA margin increased slightly to 45%, compared with 44% for the full year 2021. The improvement in margin is a result of more efficient property management in combination with higher margins of properties acquired in 2021.
Unchanged financial position
As of 31 Mar. 2022, Studentbostäder's NCR-adjusted net loan-to-value (LTV) ratio was 63.0%, almost unchanged from 62.9% a quarter earlier. The company's NCR-adjusted net interest coverage remains weak at 1.6x, but is in compliance with covenant levels. We expect the completion of development projects and previously announced acquisitions to support interest coverage in the upcoming quarters, while higher market interest rates will have a negative impact. Regardless of the net effect, covenant headroom remains limited.
Figure 1. Studentbostäder key credit metrics, 2018–Q1 2022
| SEKm | 2018 | 2019 | 2020 | 2021 | LTM to 31 Mar. 2022 |
|---|---|---|---|---|---|
| Total revenue | 19 | 102 | 150 | 234 | 257 |
| NCR-adj. EBITDA | 3 | 40 | 64 | 103 | 116 |
| NCR-adj. EBITDA margin | 16.2% | 39.1% | 42.4% | 44.0% | 45.1% |
| NCR-adj. investment properties | 894 | 2,098 | 3,573 | 5,649 | 6,126 |
| NCR-adj. net debt | 630 | 1,430 | 1,835 | 3,555 | 3,860 |
| Total assets | 925 | 2,154 | 3,921 | 5,935 | 6,298 |
| NCR-adj. net debt/EBITDA | 207.7x | 35.8x | 28.8x | 34.5x | 33.4x |
| NCR-adj. EBITDA/net interest | 1.0x | 1.9x | 2.1x | 1.6x | 1.6x |
| NCR-adj. net LTV | 70.5% | 68.2% | 51.4% | 62.9% | 63.0% |
| Average remaining lease term (years) | n.a. | n.a. | n.a. | n.a. | n.a. |
| Occupancy rate | 100.0% | 97.0% | 89.0% | 96.0% | 95.0% |
| Average debt maturity (years) | n.a. | 2.6 | 1.9 | 3.5 | 3.1 |
| Average fixed-interest period (years) | n.a. | 1.7 | 1.7 | 2.1 | 1.8 |
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