Diös - Beat on value revisions also in Q2
Adj. for EO item, cash flow came in as expected FYe property value changes of 3. 7% vs. 2.
0% 13x P/CE TTM vs. peers at 17-19x Divestment to Magnolia: an indication of more transactions IFPM came in ~12% above cons. at SEK 288m, but when adj.
for a SEK 30m one-off, it was precisely in line. A similar deviation was true for NOI. A few terminations that we deem to have been of a non-recurring nature have negatively impacted net leasing in H1, but this figure revamped to positive in Q2 (SEK 1m - from SEK -2m in Q1).
One such termination was the early termination of Casino Cosmopol in Sundsvall, resulting in a SEK 30m one-off gain in Q2 (net ~SEK 28m when including missed rental income). This vacancy will be filled soon, and overall occupancy is expected to come up in Q3 & Q4, acc. to management.
The ~SEK 72m building rights divestment to Magnolia late in Q2 is a positive as this indicates demand for further divestments of Diös’ building rights portfolio, which it has many times stated is too big to keep for itself. Evident unrealised value changes even in Q2 Unrealised value changes (properties) amounted to SEK 262m or 1. 0% of property values vs.
ABGSCe at 0. 5%. Thanks to high revisions also in Q1 (SEK 418m), unrealised value changes (properties) in H1 were at 2.
6% and we move our ‘21e value changes to 3. 7% (3. 2% after Q1 and 2.
0% after Q4). Yield compressions, building rights and improved NOIs in offices and residentials explain the value changes. EPRA NAVPS was SEK 84.
9 (SEK 73. 8 a year ago) while we had estimated SEK 83. 8.
Historically high valuation with unprecedented opportunities At 12. 8x P/CE TTM and 1. 1x P/NAV last reported, Diös trades at historically high multiples; however, planned infrastructure investments in the region of more than SEK 1tn should certainly have a positive effect on Diös.
Peers like Wihlborgs, Kungsleden and Nyfosa trade at 17. 1-19. 0x P/CE TTM and 1.
0-1. 4x P/NAV last reported. Diös’ ~15% run from its one-year.