Diös - Strong year despite challenging environment
Revenue of SEK 1,878m (1,854), +1% y-o-y Net lettings up 19% in 2020 to SEK 51m (43) ‘21e P/CE of 10x vs. sector average of 18. 4x Revenue of SEK 1,878m (1,854), +1% y-o-y Income from property mgmt. (IFPM) grew by 1% in 2020 to 1% below ABGSCe in Q4.
Diös reported no further rental discounts in Q4 following SEK -33m in Q3 and Q2, or 1. 8% reductions of full-year income; 97% of Q1’21 rents had been collected. CEPS grew by 2% y-o-y and the cash yield (CEPS/EPRA NAVPS) maintained a high level (9.
1% vs. 9. 0% in 2019).
Net letting in the quarter reached SEK 9m (11m), or SEK 51m (43m) for FY’20. TTM net lettings have remained positive for as long back as we have tracked the data (2014) and peers, i. e.
FABG and ATRLJ, have reported recurring negative figures in Q3 and Q4. The board proposed a dividend of SEK 3. 3 vs.
1. 65 in ’19 (revised from 3. 3 at AGM) and ABGSCe 3.
5. SEK +327m value changes in Q4 (89) and +198m FY’20 EPRA NAVPS grew 11% y-o-y adj. for DPS to SEK 80 (vs.
ABGSCe 77). Value revisions amounted to 1. 4% in Q4 (ABGSCe at 0.
0%) and +0. 8% FY’20. The retail exposure remains a risk, but we retain our forecast of a +2% uplift in ’21e and ’22e.
Q4 saw Diös Q4 successfully convert 3,800 sqm of B-class retail space into A-class offices for Tele2 in Sundsvall, and there are plans for similar conversions to come. CF from invest. activities amounted to SEK 1,415m in 2020 (1,331m).
We raise our ‘21e-‘23e CF from invest. activities to SEK 1,500 (1,000). We expect a CEPS contribution to EPRA NAV of ~13% annually adj.
for DPS, which takes EPRA NAVPS to SEK 88 and SEK 96 in ’21e and ’22e, respectively. ~50% discount even with 9% cash yield and limited risk Diös’ book value per sqm is 17,107 SEK/sqm. However, the P/EPRA NAVPS of 96% implies an implicit value per sqm of 16,423 SEK/sqm, or a fall of 4.
2%. We think the NIY of 5% (adj. for projects) and the cash earnings yiel.
