Castellum (CAST) Q3 2024 earnings summary

Executive summary

• Property value at SEK 155 billion, with 74% in Nordic metropolitan areas and SEK 9.5 billion in annual contracted rent; economic occupancy rate at 91.2%.

• Net operating income up 3.9% to SEK 5,134 million and income from property management up 11.7% to SEK 3,735 million year-over-year.

• Net income for Jan–Sep 2024 was SEK 368 million, a turnaround from SEK -5,281 million last year.

• High sustainability focus: 64% of property value certified, 20% self-generated electricity, and solar panel targets accelerated.

• Moody's upgraded credit rating to Baa3 with a positive outlook, supporting a successful EUR 500 million Eurobond issue.

Financial highlights

• Like-for-like portfolio income increased by SEK 78 million (2.8%), mainly from indexation; total income for Jan–Sep 2024 was SEK 7,405 million.

• Direct property costs decreased by SEK 30 million (-1.9%), with electricity costs down SEK 115 million year-over-year.

• Net leasing was negative at SEK -10 million after two positive quarters, mainly due to high termination rates.

• Property values written down by SEK 1.6 billion (-1.2%) for the period, a smaller decline than last year.

• Net investments for Jan–Sep 2024 were SEK -327 million, with SEK 1,588 million in projects and SEK 1,969 million in property sales.

Outlook and guidance

• Investment level guidance set at a minimum of SEK 2.5 billion annually, with focus on existing projects and selective acquisitions.

• Regional cities and office segment remain resilient, with stable occupancy and cautious business investment.

• Average interest cost expected to remain stable through 2025, subject to market rates.

• Tax as a percentage of property management income expected to rise slowly over time.

• Company aims to remain disciplined, prioritizing quality and return in new investments.