Overview

• Sweden commercial property firm's H1 net income after tax rose sharply yr/yr

• Company signed agreements to divest properties totalling about SEK 24 bln

• Castellum repurchased 39 mln shares and cancelled 15 mln shares during the period

• Castellum said it signed agreements to divest properties worth about SEK 24 bln to focus on assets with higher expected returns, per CEO Pål Ahlsén

Outlook

• Castellum says it will divest properties not expected to generate sufficiently high returns

• Company expects profitability to improve as property portfolio is streamlined

Result Drivers

• PROPERTY DIVESTMENTS - Castellum said it signed agreements to divest properties worth about SEK 24 bln to focus on assets with higher expected returns, per CEO Pål Ahlsén

• DECLINING LIKE-FOR-LIKE INCOME - Like-for-like rental income and net operating income both decreased, reflecting weaker performance in the underlying portfolio

• POSITIVE NET LEASING - Castellum reported positive net leasing of SEK 110 mln for the period, up from negative SEK 182 mln a year earlier

Company press release: ID:nMFN6TwkGY

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
H1 Net Income		SEK 1.93 bln
H1 Investments		-SEK 3.60 bln
H1 Operating Income		SEK 3.22 bln
H1 Profit From Property Management		SEK 2.30 bln

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 6 "hold" and 4 "sell" or "strong sell"

• The average consensus recommendation for the real estate rental, development & operations peer group is "buy."

• Wall Street's median 12-month price target for Castellum AB is SEK135.00, about 5.2% above its July 14 closing price of SEK128.35

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 12 three months ago

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