Studentbostäder i Norden: Both top line and IFPM above expectations - ABG

NOI of SEK 39m vs ABGSCe at SEK 42m Property value changes of SEK 33m – in line vs ABGSCe Net LTV of 60.9% (62.9% in Q1’22)

First take on Q2 results Studentbostäder delivered a Q2 report with total income of SEK 66m (+2% vs ABGSCe at SEK 65m) with a lower-than-expected NOI margin of 58.8% (ABGSCe at 64.0%), leading to a NOI of SEK 39m (ABGSCe at SEK 42m). Central administration costs include a negative one-off of SEK 1.7m while net financial expenses were SEK -21m vs ABGSCe at SEK -24m. This brings IFPM to SEK 8m (ABGSCe at SEK 8m) and SEK 10m adj. for the one-off. The number of apartments in the project portfolio of 2,903 units were down somewhat vs. 2,961 units in Q1’22. Property value changes was in line with expectations while CEPS was somewhat below, driving EPRA NRV -1% vs ABGSCe. Conclusion: solid topline (+2% vs ABGSCe) while NOI margin (-5.2 pp vs ABGSCe) was a bit soft; we expect consensus NOI estimates for 2022 to come down by ~3-4% and the share should underperform the real estate sector today.

EPRA NRV growth of 13% y-o-y Q2 property value changes amounted to SEK 33m (0.5% of property value) compared to our estimate of SEK 33m (0.5%). EPRA NRV grew 13% y-o-y and 2.3% q-o-q. The average valuation yield amounted to 3.99%, down by 4 bps q-o-q from 4.03% in Q1’22 (4.06% in Q4’21). Approximately SEK 40m of the value changes stem from projects, i.e. ~SEK -6m from investment properties. The net LTV amounted to 60.9%, down 2.0 pp q-o-q, while 5.4 pp lower than our estimate of 66.4%, driven by a later-than-expected closed acquisition. Post Q2, SBS has announced a direct share issue of SEK 125m at SEK 5.01 per share, equivalent to a discount to Q2 EPRA NRV of ~55%.

High beta in sector headwinds Studentbostäder is a relatively small and fast-growing student housing niche player. SBS has a higher share of projects than our sector average, and higher gearing. In an environment of skyrocketing development costs due to inflation, and increased interest rate expectat ... Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/studentbostader-i-norden/Equity-research/2022/8/studentbostader-i-norden---both-top-line-and-ifpm-above-expectations/