Castellum (CAST) Q1 2026 earnings summary

Executive summary

• Income and net operating income declined year-over-year due to higher vacancies and costs, but net income surged to SEK 1,299M from SEK 2M, driven by property value gains and cost reductions.

• Positive net leasing of SEK 82M, mainly from a major lease to Ericsson in Hagastaden, though overall leasing activity remains slow.

• Nine properties were divested for SEK 5.6B, generating a profit of SEK 750M, with major divestments scheduled to close in Q2 and Q3 2026.

• Nearly 24 million shares repurchased for SEK 2.7B at an average price of SEK 113 per share, as part of a SEK 3.4B buyback program.

• Continued focus on cost control, sustainability, and a "Back to Basics" strategy emphasizing prudent capital use and asset divestments.

Financial highlights

• Net operating income declined 3.4% year-over-year to SEK 1,519M, with like-for-like NOI down 5.8%.

• Property values increased by SEK 416M (0.3%), mainly due to the Hagastaden Infinity project and AP7 divestment.

• Property portfolio valued at SEK 138.1B as of March 31, 2026.

• Loan-to-value (LTV) ratio rose to 37.5%, up from 35.3% year-over-year.

• SEK 17.8B in cash and unutilized credit facilities, supporting strong liquidity.

Outlook and guidance

• Leasing market remains slow, with expectations for continued sluggishness before improvement.

• No dividend proposed for the 2026 AGM; focus remains on share buybacks and maintaining a strong balance sheet.

• The company targets a minimum 10% return on equity over the cycle and will continue capital returns if returns are inadequate.