Diös Fastigheter (DIOS) Q1 2025 earnings summary

Executive summary

• Income from property management grew 10% year-over-year to SEK 221m in Q1 2025, with revenue rising to SEK 661m and operating surplus up 5% to SEK 427m, despite global market turbulence and stable property costs.

• Economic occupancy rate declined to 90% from 92% year-over-year, mainly due to divestments, new construction, and market vacancies.

• Surplus ratio improved to 66% from 65% year-over-year; energy efficiency rose 6.6% quarter-over-quarter.

• SEK 1.6 billion property acquisition in Umeå, 73,000 sqm, expected to add 4% to property management income per share.

• Profit after tax fell to SEK 162m from SEK 259m, mainly due to lower unrealised derivative gains and tax effects.

Financial highlights

• Like-for-like rental growth was 0.7%, below CPI of 1.6%, due to higher vacancies from asset rotation and new developments.

• Net leasing was marginally positive at SEK 1m, with positive net letting in 23 of last 25 quarters.

• 97% of commercial leases indexed, 94% tied to CPI, supporting resilient cash flows.

• Net financial items improved slightly, with average interest rate cost down to 4.2% from 4.5% year-over-year.

• Net debt/EBITDA at 10.0x; LTV at 52.8%; equity ratio at 36.9%.

Outlook and guidance

• Vacancy trend expected to improve in H2 2025 due to positive net lettings.

• Market expects further interest rate cuts from Riksbanken, supporting lower average interest rates going forward.

• Continued focus on growth through acquisitions, tenant adaptations, and asset rotation to enhance returns and maintain financial stability.

• Dividend of SEK 0.55 per share per quarter approved for 2025.

• Long-term outlook for the green transition remains robust, with accelerating growth rate.