• Rental Income: Increased by 31% to SEK644 million, driven by acquisitions and CPI-linked contracts.
• Profit from Property Management: Increased by 40%, with earnings per share up 18% to SEK6.6.
• Net Operating Surplus: Grew by 36%.
• NRV per Share: Increased to SEK429.
• Loan-to-Value (LTV): Stands at 37.8%.
• Net Leasing: SEK47 million for the quarter.
• Letting Ratio: 96.5%.
• Surplus Ratio: Increased from 82% to 83%.
• Liquidity Position: SEK3.6 billion.
• Interest Income: Generated SEK8 million during the quarter.
• Hedge Ratio: 63% after activating a SEK700 million interest rate swap.
• Development CapEx: SEK264 million.
• Property Value Change: Positive change of SEK103 million, correlating to 0.2% of the total portfolio.
• EPRA Net Initial Yield: 5.6%.

• Warning! GuruFocus has detected 5 Warning Signs with FRA:T9R.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Catena AB (FRA:T9R) reported a 31% increase in rental income, reaching SEK644 million, driven by acquisitions and CPI-linked contracts.
• Profit from property management increased by 40%, with earnings per share from property management up by 18%.
• The company maintains a strong balance sheet with a loan-to-value (LTV) ratio of 37.8%, positioning it well for future growth.
• Catena AB's net leasing was strong in Q1, with a letting ratio of 96.5% and a weighted average lease expiry (WALE) of 6.5 years.
• The company is making significant progress in sustainability, with 53% of its area environmentally certified and a high level of EU taxonomy alignment.

Negative Points

• The market remains cautious with low transaction activity in the first quarter, and geopolitical uncertainties are affecting investment decisions.
• E-commerce figures declined in January and February, although there was a recovery in March.
• There is a regional oversupply issue, with large vacancies in certain areas, although Catena maintains a high occupancy rate.
• The company faces challenges in acquiring more zoned land, which could impact future growth opportunities.
• Catena AB's capital deployment was low during the quarter, with no major acquisitions and only a few divestments.

Q & A Highlights

Q: Can you quantify the one-off in property costs mentioned in the P&L? A: The one-off related to insurance in the property costs is approximately SEK5 million. This is an accounting matter where the income cannot be shown on the top line, so it appears within the P&L on both sides. - Jorgen Eriksson, CEO

Q: How does the Danish market differ from the Swedish market in terms of transactions? A: The Danish market offers better alignment with our strategic view, including asset quality, liquidity, and pricing. It is more profitable from a financing perspective. However, we are also exploring opportunities in Sweden, as more opportunities are expected to arise. - Jorgen Eriksson, CEO

Q: Is there a tenant for the new acquisition in Denmark, or is it speculative? A: The acquisition in Denmark is speculative, with no tenant signed yet. However, we are actively working on letting the property and are confident in the opportunity due to its rare location. - Jorgen Eriksson, CEO and David Silvesjo, CFO

Q: What is the expected long-term level for your financial targets, given your current headroom? A: We aim to maintain around 40% leverage, but this could increase to 45% if we find profitable investments. We assess the market daily and ensure we stay within our financial policy framework. - David Silvesjo, CFO

Q: Can you provide insights on ongoing project discussions compared to Q4? A: There has been an increase in discussions recently, although it takes time due to market uncertainties. We are hopeful for more activity, but it remains a cautious environment. - Jorgen Eriksson, CEO

Q: Is it reasonable to expect any larger project starts in the next three to six months? A: While we hope for some projects, we do not expect any large-scale developments like a new Elgiganten or 90,000 square meters in the coming quarter. - Jorgen Eriksson, CEO

Q: How does Blackstone's new pan-European logistics platform impact competition in the Nordics? A: Increased competition could lead to sharper yields and higher asset values. However, Blackstone has not done many new projects and does not own a land bank, so their impact may be more on the transaction side. - Jorgen Eriksson, CEO

Q: Can you elaborate on your investment opportunities given the current balance sheet headroom? A: We are always looking for new opportunities and assess the market daily. While this quarter was quiet, we expect to grow further in the long run, depending on market conditions and opportunities. - Jorgen Eriksson, CEO and David Silvesjo, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.