Citycon (Hold, TP: EUR10.30) - Hybrid funding solution cuts EPS
Citycon’s NOI was in line with our forecasts and Infront consensus, but was lower on reporting lines, while the 2020 DPS suggestion beat our forecasts. NAV dropped again QOQ as shopping centres continue to see higher yield requirements on low investor demand, but we also note that reported operational KPIs remain stable. As Citycon has issued a hybrid bond (EUR350m), we have updated our forecasts and cut EPS/FFO forecasts; we include hybrids in our NIBD adj. and adjust for the hybrid payouts in our EPS/FFO forecast, as we do for all peers. We reiterate our HOLD and our EUR10.3 target price.Citycon is an active owner, operator and developer of shopping centers. Co. aims to increase its net yield from shopping centers over the long term through active retail property management and systematic redevelopment efforts. Co. is involved in the day-to-day operations of its shopping centers. As of Dec. 31, 2011, Co. owned a total of 36 shoppings centers: 23 in Finland, 9 in Sweden, 3 in Estonia, and one in Lithuania. Co. also owns 43 other retail properties: 36 in Finland and 7 in Sweden and one undeveloped lot in Finland. Co. manages two commercial shopping centers in Finland.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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