Logistea AB (publ) ($LOGIA)

Welcome to Logistea Q1 Report for 2026. [Operator Instructions] Now I will hand the conference over to CEO, Niklas Zuckerman; and CFO, Philip Lofgren. Please go ahead.

Good morning, everyone, and welcome to the presentation of Logistea's First Quarter of 2026. And here present myself, Niklas Zuckerman, and Philip Lofgren. As always, we'll take any questions after the presentation. We have, during the beginning of the year, continued to deliver on our business plan, meaning building a platform and portfolio of long lease properties within logistics, warehouse, and light industrial. The main focus for continuous growth is the Nordics, and we have only during the quarter of this -- the first quarter of this year, acquired properties at a value of SEK 1.3 billion in Sweden and Finland. As I said, the focus has been to invest and develop fully leased properties, long leases, and stable and profitable tenants. The average lease duration is 9.1 years, and we're showing an overall occupancy rate of 97%. We have had a flying start of the year, and this quarter is probably our strongest quarter ever. The income is up 21%. The net operating income is up 23%, and the income from property management is up to SEK 148 million in the quarter, representing an increase by 29%. We have, during the quarter, acquired properties at a value of SEK 1.3 billion, and we're coming back to those. We have also had a very good start of the year when it comes to leasing, and I'm extremely proud to show a positive net leasing of SEK 22 million for the first 3 months. The income from property management per share in the earnings capacity is up 26% in 1 year. And we're finally positioned to continue to grow via acquisitions, developments, and investments in our own portfolio with a cash balance of SEK 574 million. The yield gap remains high, 2.5%, where we have seen lower cost of debt over time and a fairly stable net initial yield. And as I said, we are now at a total property value of SEK 17.4 billion. As I just said, we have had a very strong start of the year, both a lot of nice and well-positioned properties. The first three transactions on this page we presented in the Q4 call since they were signed at that time. And the last one is a property in Uleåborg, in Finland that we completed during the first quarter -- announced and completed during the first quarter. Fully leased property on a 9-year lease, where the net initial yield amounted to well above 10%. This portfolio is a sale and leaseback transaction that we did with DSV. It comprises six properties, all cross-dock terminals and leased to DSV on 10-year leases, so 10-year leases on all of the six properties. Obviously, we like the tenant DSV. We also like the size of the properties, all between 7,000 and 8,000 square meters, meaning that we have low residual risk. And the reason for that is that there are many tenants on the Swedish market requiring between 1,000 and 3,000 square meters when it comes to the cross-dock premises. Purchase price, SEK 587 million, which reflects a net initial yield of approximately 7%. And when summarizing all of the closed transactions of this year, you can see that we bought at an average net initial yield of 7.4%, average lease term of 9 years and the total rental value is SEK 97 million. The income from property management per share will increase by SEK 0.12 following these transactions. And as I said, high quality overall, long leases and good and profitable tenants. As for the lettings, we've been very successful and here are the largest leases signed in the first 3 months of this year. The first and the third one are leases signed in Karlskoga. Majority of the new leases are with a large company within the defense industry and the total net letting effect in Karlskoga is more than SEK 10 million on an annual basis. In Ljungby, we have signed another lease with Hårds, a 3PL operator. And the last one is in Gothenburg, where we have transformed the former big box and logistics property into a pure big box retail property. We have prolonged the leases with Elgiganten and signed new leases with the retail tenants, Elon, and Granngården, and the net letting effect is roughly SEK 5 million. And to summarize the largest leases so far, roughly SEK 90 million. Worth mentioning is that SEK 18 million of those are not yet included in the earnings capacity. And basically, since the leases have not yet started. They will commence or start Q2 to Q4, as you can see. And to give you a full picture of the reported net letting looking a bit further down, taking into account all leases, both signed, renegotiated and terminated, we're reporting a net letting of SEK 22 million. And then it's actually time to give you an update on our Lockryd site. The one of you that has followed the company for long know that this is a site that we've been working on for now four years. The zoning plan gained legal force in March, and we on Logistea have an option to buy the entire site. It's roughly 800,000 square meters of land or approximately 500,000 square meters of building rights. There are ongoing discussions with several tenants for new developments, even though nothing is signed. And also worth mentioning on this site is that we have an agreement with Vattenfall for delivery of 150 megawatts of power. So hopefully, coming back to this site once we have something signed. Moving on to the run rate, where you can see the rental value amounts to SEK 1.267 billion and the net income amounting to SEK 1.159 billion. Income from property management in the run rate is SEK 672 million, representing an increase of 35% in 1 year. More on the earnings capacity and now per share. We are reporting SEK 1.32 as of the first quarter. to be compared to SEK 1.18, three months ago, so per year-end, and that's an increase by 12% in that time period. Also worth mentioning, if you're looking back 2 years, we almost doubled the earnings capacity per share. So looking at the Q1 figure in 2024 compared to now, it's almost a double amount. The portfolio composition has changed slightly over the past year. Percentage of Sweden and Finland has increased and obviously, because we have bought properties mostly in Sweden and Finland. And the BEWI share has now decreased to 23% of the total income. That was a number that was 31% following the merger with KMC Properties. So now 23%. We still have the absolute majority of our leases indexed and of course, linked to CPI. The WAULT is 9.1 years. And as you can see, more than 83% of all the leases expires in 2031 or later. Valuation yield as per first quarter amounts to 7.2%. And as I've mentioned, extremely good leasing quarter and the net letting of plus SEK 22 million. And with that, I hand over to you, Philip.

Thank you, Niklas. Yes, the quarter has been really strong, both operationally, but also financially. So the key takeaways from my side are the strong increased earnings and the decreased cost of financing. [indiscernible] The revenue for the quarter increased to SEK 301 million compared to the same quarter last year of SEK 248 million and the last quarter of SEK 285 million. The increase is mainly due to acquisitions and leasing activities during the quarter, but also a smaller contribution from the like-for-like portfolio. The net operating income came out at SEK 266 million, an increase from SEK 216 million in the same quarter last year. Contributors to the increase are acquisitions and increases in the like-for-like portfolio. So looking at the like-for-like portfolio, if we exclude the FX effect between the periods, the underlying growth in the like-for-like were 1.8%, both for the revenues and for the net operating income. And during the quarter, we have adjusted and reclassified more costs for internal property management by around SEK 5 million. The costs, they are reclassified from central administration up to the property expenses, affecting both the net operating income and the like-for-like numbers. Both the revenues and the net operating income were affected positively by FX changes from the beginning of the year. So SEK 1 million in the quarter, which is mainly due to the stronger Norwegian kroner against the Swedish krona. Net operating margin was stable and was in the last 12-month period around 91%. The adjusted operating margin, where we exclude rent supplements from the revenues came in at around 97%. And profit from property management came out at SEK 143 million, and we are very happy to be beating the estimates by around 3.5%. Finally, profit from property management per share. The quarterly outcome were positive by 7.5% from the last quarter and 18% up from the same quarter last year. On a 12-month basis, the increase was 33%, mainly driven by acquisitions and again, a lower cost of financing. And in previous earnings call, we've indicated that we wanted our loan-to-value ratio to increase in order to create more return on equity while keeping the other key ratios in place. And in the first quarter, the loan-to-value ratio has increased from 48.4% to 50.6%. And we see that we can stretch the LTV up even higher to around 50% to 55%, especially with the transaction pace we've had in the first quarter. In previous transactions, the loan-to-value ratio has been around 60%. And in the quarter, we have also refinanced loans, increasing the loan amount by around SEK 220 million, leaving the cash balance at the end of the quarter at around SEK 574 million. The interest hedging ratio has decreased a bit in the quarter, going down from 73% to 64%. No derivatives have matured, but no new derivatives have been signed either. And this is due to the volatile and in our analysis, overpriced interest market. This means that the whole decrease is linked to the growth of the loan portfolio. During the quarter, we have renegotiated bank -- existing bank financing of around SEK 1.1 billion and raised another SEK 1.3 billion in connection with closing of transactions, resulting in a decreased average banking margin, which at the end of the quarter was 160 basis points. The SEK 1.1 billion being refinanced of the existing debt was refinanced at a margin almost 70 basis points lower than in the previous terms. And also, we've put a lot of focus on decreasing the amortization rate down in order to free up cash flow. In the quarter, the average amortization rate decreased from 3% to 2.5%, meaning around SEK 40 million in liquidity per annum will be available in the operations. We will continue to focus on the amortization rate in upcoming loan discussions with banks. And as you can see, Logistea continues to deliver on its financial targets. Profit from property management on a last 12-month basis was 32% higher than in the previous period last year. And looking at a 5-year average, the increase is around 73%. The NRV per share increased 14% since the same quarter last year. And if we exclude the paid dividend from this, the increase was 15%, which is same as the 5-year average and in line with the financial target. As I said before, the loan-to-value has increased during the quarter related to new financing in connection to transactions, but also refinancing activities where we have successfully increased the loan amounts. And last, the interest cover ratio is continuing to increase marginally now at 2.6x compared to 2.2x a year ago. So the takeaways from the finance side are strong increases in the earnings, both in the outcome but also in the earnings capacity. Good position to continue to grow with our solid balance sheet and improved margins in the banks on both new loans in the current loan portfolio and in the current loan portfolio opens up for increased earnings. So now I will hand back to you, Niklas.

Thank you. And looking ahead and to summarize, as Philip said, a record quarter for us, both when it comes to new acquisitions and new leases signed. We continue to have good and attractive funding sources. We have managed to -- or the LTV is slightly up. But with that said, we still believe there is still room. And as Philip and I mentioned, almost SEK 600 million was of cash at the end of the quarter, meaning that we can continue to take advantage of good investment opportunities when they occur, both acquisitions, but also developments and investments into our own portfolio. So extremely happy with the quarter and looking to do more of the same in the coming quarters. And with that, we open up for questions. Thank you.

[Operator Instructions] The next question comes from Fredrik Skjerven from ABG Sundal Collier.

I have two questions, if I may. The first one is on the timing of the SEK 18 million letting where tenants have not yet -- already that have moved in. Your presentation shows the move-ins for each quarter. Is there any material rental discounts in the beginning of these leases that one should be aware of?

No is the answer to that one. No rebate that we should be aware of. And as we tried to explain, the upcoming SEK 18 million will come over the quarters of this year.

Yes. That's good. Okay. Second question is on the NOI margin. It's up year-over-year. You write, it's due to lower rental losses or tenant bankruptcies and lower utility and media costs. At the same time, I guess, Q1 was a lot colder this year than last year and the like-for-like NOI growth is zero. So it looks from the outside like it's more sort of M&A mix than costs going down in the existing portfolio. So maybe if you can add something here or help me understand this figure a bit better.

Sure. The operating margin is mainly driven by transactions and acquired properties. But also, I would say, good management where we've renegotiated leases so that we have tenants taking more of the, so to say, utility costs, electricity and heating costs, which improves the operating margin.

All right. So would it be fair to assume that the year-over-year improvement or increase now in Q1 is also representative, all else equal, obviously, into Q2 and Q3 then?

Yes, correct. Correct.

The next question comes from Philip Hallberg from Nordea.

So starting off, you mentioned the bank loans that you had renegotiated in the quarter with, I think you mentioned almost 70 bps lower credit margins. Could you give us some indications where the margins ended up following the new terms, which credit margin you achieved?

The answer will be no because it's mainly with one bank, and we don't want to be too precise. I think overall, one could say for new bank loans, meaning when we buy new properties, we are in the range between 120 to maybe 140 in all of the Nordic countries and most recently, mainly Sweden and Finland. For renegotiated loans, we're in that range without giving any specific numbers. So it has come down quite dramatically in this example, roughly 70 basis points. So slightly higher than what we are seeing for the most recent transactions, but still very close to that range.

Okay. And was it made on the same duration? So it's sort of like-for-like, the 70 bps lower credit margins for the renegotiated debt.

Yes. So more or less same duration. And as Philip said, overall what we're seeing is that we're achieving lower margins when doing refinancing. And most recently, we managed to get down or the percentage of amortization as well.

Sounds like a good deal. Also just going forward then, you have some SEK 4 billion in bank debt maturing over the 2 years. It seems like this was maybe sort of a one-off with a very high margin initially and a more normal margin going forward. But is there some margin potential or potential for margin compression going forward in the bank debt that will mature in the coming years?

There is room for lower margins or get the margins down. Maybe not to the same extent that we have seen the past 18 months, but we still have a few ongoing or a few bank loans with fairly high margins. So absolutely potential, but not to the same extent that we have seen in the past 12 or 18 months.

Okay. And for the properties that you bought in Q1, just curious how have you thought about the interest rate fixing given the quite volatile interest market? Have you done more floating or some swaps or how are you...

We have done more floating. And as Philip said, the rate of fixed has come down the past quarter. But as all property companies, we monitor the swap curves on -- basically on a daily basis, and we actually did some fixing the other week. So we will continue to do fixing when the pricing is okay, so to say.

Yes. Makes sense. And also just a quick detailed question. I think Philip mentioned that you could go up to 50%, 55% loan-to-value. Just to be sure here, was that on a group level or on a secured loan-to-value basis?

On a group level, we are actually happy to do 55% or 60% on a single asset or a portfolio level. But on a group level, we're now at 50%, and that could potentially be slightly higher over time.

The next question comes from Emil Ekholm from Pareto Securities.

First, congrats on the report. A few questions from me. On the transaction market, do you see any more potential to acquire from DSV?

I would rather not comment on potential sellers. Overall, on the transaction market, we see good opportunities. And Obviously, when interest rates are up and down, that has an effect on the direct market, meaning that competition is high one month and then it's much lower the next month. So we still believe and see that we can do good transaction both during the first quarter that we have done but also for the coming 1 or 2 quarters.

Sounds fair. And you had SEK 22 million now in investments in your own portfolio. Would you say that, that is sort of a run rate now that you don't have a larger projects ongoing? Or should we expect that figure to come down further?

I think it has -- it's also given the number of leases that we have signed. It's, so to say, call it a run rate, but very much depending, obviously, on developments, but also on the maturity of the leases and how much new we're signing. So that's a good number to have in your analysis going forward.

Yes. I think my other questions have already been asked. So, that was all for me.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Good. So we -- actually, the first question written is in Norwegian. So let's see if we manage to translate that. How big share of the debt is...

Interest-fixed.

Okay. So what was it? 68%...

68%. Yes. And that has come down from 73% due to that loan portfolio is getting larger, and we haven't fixed any interest with derivatives during the quarter.

And a follow-up question on that one, how long is it fixed and 1.9 years in average?

Correct. Correct.

Next one, solid results. I suppose all advanced transactions have been closed in Q1 and will continue to close to Q2? So everything that is communicated in this report is actually closed in Q1. The majority, obviously, in the later part of Q1, but everything is closed.

And how easy is it to engage in new discussions with potential sellers?

It's -- that's what we do, so to say, ongoing and always ongoing discussions with potential sellers. Some takes longer and some is quicker. And the great advantage that we have is that we're looking at all of the Nordic countries, and we got a very good sense of where is the pricing currently and what we would like to invest in. So confident that we will continue to do good investments. That was it. So I think we'll leave you to it. And if there are any follow-up questions, please let Philip or myself know. And thanks for listening in.

Thank you. Take care.