All right. Thank you. Once again, warm welcome to the Cibus Nordic Q2 report presentation. Let's move on to slide number three, summary of the period, please. As usual, Pia-Lena will take us through the numbers later on in the presentation, and I'll focus on the significant events. After a relatively calm first quarter, it really took off during Q2. Acquisitions during the quarter amounted to EUR 130 million, and the acquisitions of the portfolio from Sagax of 72 properties worth around EUR 72 million will be partly paid by 2 million new Cibus shares. The transaction is targeted to close and the shares to be issued during the fourth quarter of 2021. Cibus was also approved for listing on Nasdaq Stockholm, and the first day of trading on Nasdaq Stockholm's main list was Tuesday, June 1st, 2021.
We also signed a collaboration agreement with Järntorget to jointly develop the part of Cibus Swedish property portfolio that is not used for daily goods retail. Cibus will have no cost to the project, receive parts of the profit when finalized. The main reason for this is that we have such a small organization totally focused on our core business. Järntorget have the resources to scan our portfolio for unused land. Our contribution in this is land today valued to zero in our books. Next slide, please. Significant events after the end of the period. We have continued to grow by acquiring another three properties in Sweden with Coop as anchor tenants. Next slide, please. A few slides about Cibus Nordic and what kind of company we are and our business model.
We are a real estate company focused on daily goods properties that are filled with strong tenants that provide dependable income to our shareholders. We have been listed since March 2018 and on the Nasdaq Stockholm's mid-cap list since June 2021. We have a clear Nordic focus. We pay out monthly dividends to our shareholders. The annual general meeting decided on the dividends for the EUR 0.94 for the coming 12 months. Next slide, please. The story about Cibus is the story about portfolio diversification. Traditionally, these kind of assets have been owned as single assets or in small portfolios of two to five assets, which means that the owner had a very high-risk concentration. If the tenant left, he or she lost all his cash flow. You came in a weak negotiation position with the tenants.
The banks realized this, so the bankability was very low, which meant it was a high-risk but also a high-return business. What Cibus realized is that if you own 300 properties, you diversify the risk and lower the concentration. None of our assets stands for more than 2.5% of our NOI. In fact, just one of the assets stands for more than 2% of the NOI. The concentration is very low. When you own quite a few properties with a handful of tenants, you become an active cooperative with the tenants and not just a landlord. The bankability is much higher, which means that you lower the risk, but you have the same return as for single assets.
Due to the risk factor of owning one or two of these properties, it's a fact that we can buy assets 50-100 basis points higher than the existing portfolio is trading at, and therefore produce value-creative growth for our shareholders. Next slide, please. What about e-commerce and the effects on our business? The Swedish Retail Institute produced a report about the effects on Amazon's entry to the Nordic countries. As you can see, you have a scale going from low to high. On the far right, you have high effect, you have electronic books and toys. On the other hand, in the far left corner, you have daily goods with a very low effect. Next slide, please. We can see that in our own portfolio that there is a resilience towards e-commerce. We have seen a negligible negative effect.
Even during the pandemic, when online trading has accelerated, the share of online trading is around 4%. A large share of that volume is click and collect from our stores. If you look worldwide, you can see very few operators that make a profit on online food sales due to the fact that the margins are low and the cost of handling and distributing the food in a safe way out to the end consumers are very high. On the other hand, we see a notable positive effect as our existing stores, they work as a natural distribution network for non-daily goods purchased online that can be delivered to supermarkets who act as pickup points for other goods. Next slide, please.
Cibus is an active property manager with our own organization. That sets us apart in our segment that we can actively work with our portfolio and with new acquisitions. You can see it realized with that we are buyers of both large portfolios, but also single asset units. Next slide. Sustainability. Well, we are driven by the conviction that we in our decisions about our real estate portfolio can contribute to responsible social development. Apart from that, the amount of solar panel plants have grown from 26 - 32. So far, 2021, we have signed a collaboration with Järntorget. One of the reasons why we chose Järntorget was their ambitious sustainability goals in their projects. All homes will carry the Nordic Swan Ecolabel. Next slide, please. What about the corona effect on our business?
Well, our business model is non-cyclical and works whatever economic cycle we're in, and we have seen a limited negative effect during corona. The grocery sales are on record levels. Our tenants have handled the increased demand professionally, and approximately 90% of our income comes from leading food chains. More than 98% of our invoiced rents have been paid for Q2 2021, and about 99% of our invoiced rents have been paid for the first half. For last year, over 99% of the invoiced rents were paid. The effect is very limited. Next slide, please. What about growth? Well, we see a market that continues to be strong and unaffected by the corona pandemic. There are prospects for us to look at, and you can see as we have acquired already this year for EUR 130 million.
There are a lot of acquisitions that can be made in the market. Finland and Sweden are still our main markets, but the other Nordic markets are being monitored. We have a strong cash position. The pipeline is strong regarding possible acquisitions. Normal growth within our growth target, which is between EUR 50 million-EUR 100 million, will be financed through cash and bank or bond financing. If we see opportunities for more rapid growth, that may lead to an equity raise or a hybrid bond to secure the LTV within the company financial target. As you can see, we have met our growth targets ever since we were listed on the stock exchange. 2018 and 2019 and half of 2020, we had a growth target of EUR 50 million, then it was revised to EUR 50 million-EUR 100 million in 2020.
So far in 2021, we have significantly met that target. Next slide, please. Looking at the shareholders list as of the last day of June 2021, the Fourth AP Fund is still the largest shareholder, followed by BMO Global Asset Management, Marija Dragičević, and Dragfast. In total, the 15 largest shareholders own approximately 42% of the company. Cibus have 38,000 shareholders as of the last day of June. Next slide, please. Looking at the share price performance, there is an average daily volume of around SEK 32 million with more than 2,500 transactions a day. On June 30th, the share price was SEK 204.4, and total share return since January 1st, 2020 was 50%. Today, just before we started the presentation, we were trading at around SEK 225. Next slide, and over to Pia-Lena for the financial overview.
Thank you, Sverker. I will start at the Q2 2021 in brief. Here you see some key figures for the second quarter. Rental income grew with 21% to EUR 19.8 million. Net operating income increased with 22% to EUR 18.5 million. Profit from property management was EUR 10.8 million, and earnings after tax, EUR 11.7 million or EUR 0.29 per share. Next slide, please. Looking at the P&L in more detail, as I mentioned, net operating income was EUR 18.5 million. Administration costs include items affecting comparability of EUR 400,000, mainly due to the cost for the list change to Nasdaq's main list. Net financial items include a negative exchange loss of EUR 430,000. Unrealized changes in value of investment properties was EUR 2.5 million this quarter, compared to EUR 3 million in Q2 2020.
We have low current tax in the quarter due to the use of loss carried forward and also taxable depreciation on building inventory. Next slide, please. Our current earnings capacity on a 12-month basis shows a Net operating income of EUR 76 million with the properties that we have taken possession of at the end of June 2021. The portfolio from Sagax, for example, is not included since we have not taken possession of these properties yet. Profit from property management was EUR 47.1 million or EUR 1.18 per share. Profit per share has increased with 9% from June last year. Next slide, please. We had 307 properties at the end of the second quarter, and the property value was EUR 1,331,000,000 , and we had 784,000 sq m. Our anchor tenants, Kesko, S-Group, and Lidl stand for over 90% of our NOI. Next slide.
Looking at our two segments, Finland and Sweden, 85% of our net operating income comes from Finland and 15% from Sweden. Of property value, 84% is in Finland and 16% in Sweden. Next slide. Cibus strategy is to give our shareholders stable and rising dividend that increase over time. Our dividend policy says that we should increase our dividend with 5% per year, and we are the first company in the Nordics paying dividends monthly. The dividend yield was 4.7% for the share price at the end of the second quarter. Next slide. Looking at the balance sheet, we have property value, as I mentioned before, of EUR 1,331,000,000. Senior debt was EUR 645 million, giving a loan-to-value ratio on senior debt of 48.5%.
We have our unsecured bonds of EUR 194 million, giving a net loan-to-value of 60.1%, which is within our finance policy target of being between 55%-65% LTV. We have issued our first hybrid bond of EUR 30 million, and that is a part of equity. Our net asset value, IFRS NAV, was EUR 491 million or EUR 12.30 per share. Next slide, please. Our average remaining lease time was 5.2 years at the end of the quarter, and it has, as you can see on the graph below, been quite stable around five years historically. This is since we renew our leases on a regular basis and also buy new properties with usually long lease contracts. Next slide. At the end of the quarter, we had five bank loans with a total of EUR 645 million.
The average floating margin is three months EURIBOR or STIBOR, depending on currency, plus 1.7%. Our weighted average tenor is three years. 66% of the bank loans are hedged with interest rate derivatives. All bank loans are long-term. The first matures in two years. Then we have two senior unsecured bonds, one green SEK bond of SEK 600 million, and one euro bond of EUR 135 million. We also have our newly issued hybrid bond of EUR 30 million. Next slide. Our funding strategy in the medium term is still to have 50% or more our external funding as bank financing. We do, however, intend to be active on the bond market as well, and have during the second quarter established an MTN program that covers both unsecured and also hybrid bonds.
Normal growth, as Sverker said, will be financed with generated cash and bank loans, while larger portfolios or faster growth will be financed with bonds in combination with hybrid bonds or equity to keep LTV within our finance policy thresholds between 55 and 65 LTV. Next slide. In the long term, however, our funding strategy is to reach investment grade in credit rating, and then the debt structure will need to change. Also is the reason for us to establish the MTN program. Over to you, Sverker.
Thank you. A few words about the future and what we're focusing on at the moment. Now that we have delivered on our promises to the market regarding building the company organization and moving to the main list at Nasdaq, have a clear focus on growth. We will continue to grow in Finland and in Sweden. We are also now looking at new geographies in the Nordics. We hope that the countries will open up so that we can travel to both Norway and then more prospects. We have also the hope of being included in the EPRA Index fairly shortly. Next slide, please. Last but not least, what about the primary reasons to invest in the Cibus share? Well, first, we produce a high and stable yield. From the outset, Cibus has never lowered our dividend in euro per share from one quarter to the next.
There is the potential for favorable value growth. As we have our strategy of acquiring individual properties or portfolios with a higher yield requirement than the existing portfolio is trading at, combined with the annual growth target of EUR 50 million-EUR 100 million, that generates potential for favorable long-term growth in the share value. We have gradually rising monthly dividends. We aim to gradually increase them by 5% annually. We are in a segment with a long-term resilience and stability as the grocery and daily goods sector has experienced stable non-cyclical growth over time. That's about all for us, so please move on to the Q&A section.
Ladies and gentlemen, we are now ready to take your questions. If you wish to ask a question, please press zero one on your telephone keypad. The first question comes from Svante Krokfors from Nordea. Please go ahead.
Yes, good morning. Svante from Nordea. Hope you can hear me.
Yes. Good morning.
Morning.
Loud and clear.
Good. Just two questions to Sverker and one to Pia-Lena. If I start with Sverker, is there any changes in yields in the market? That's the first question. Anything that you observe? You had a EUR 2.4 million positive change.
Yes. Not dramatically, no. We haven't seen any dramatic changes in yields in acquisitions. Of course, our evaluators, they look at all the deals that have been made, but no, not really. No dramatic changes in yields, no.
Relating to that, your implied yield has been going quite significantly down as the share has gone up. Is this something that kind of impacts your negotiations with potential sellers?
It can have that impact. As you saw, Sagax chose to have part of the payment for the portfolio in new printed Cibus shares, which is very promising for us that we can use the share as a payment method, and that Sagax which is a high-quality company, wants to be part of the Cibus journey. That's very positive for Cibus.
Okay, thank you. Any observations about institutional competitors that you have? Do you meet them in these acquisitions or is it more kind of bilateral discussions?
The competition is more or less the same that it has been, but that you probably have seen Svenska Handelsfastigheter have acquired Tre Kronor, which makes it one competitor less, but it's more or less the same gang out there.
Okay, thank you, Sverker. Pia-Lena, could you remind us about?
Sure
Regarding the FX impact in your, or the one-off, so to say, in your net financial, how can you help us how to model that?
Yes, I can help you. We do have exposure in FX. We had FX effect of - EUR 430,000 in the quarter. Much of this is, of course, unrealized. It's definitely value the FX that we have and an FX effect on that.
Okay, thank you. That's all from me.
Thank you.
Thank you.
Thank you. The next question comes from Matias Arola from Inderes. Please go ahead.
Hi, Sverker and Pia-Lena.
Hi, there.
Hope you're doing well.
Yes.
Yes.
I have two questions related to your strategy and to Nordic expansion. The first one is that, is there some reason that after the last year's good deal larger portfolio transactions have provoked so heavily here in Finland, or why have not we seen bigger transactions in Sweden?
Well, probably because we have a few more competitors in Sweden that own these kind of properties and have a fairly similar business strategy than Cibus. There haven't been so many large portfolios for sale, but also that the institutional companies that Svante talked about, they are holding on to the properties as well in Sweden. There haven't been any larger portfolios out there for sale. The reason is, I guess that the owners, they like these kind of properties as much as we do.
Yes. You have ambitions to expand it, and complete bigger transactions also in Sweden?
Absolutely. The strength about Cibus and having our own organization is that we can grow by buying three assets or one asset or four assets in smaller deals, and many smaller deals put together becomes a large portfolio. That's one of the strengths about Cibus, that we have Peter in Sweden and Lauri in Finland that can scan the market and make these kind of acquisitions often and very quickly.
Yes. The second question, when we are considering your Nordic expansion, do you have any preferences between Norway and Denmark?
Not really. The preference we have is that we aim to do the best deals we possibly can for our shareholders. If those deals are in Finland or Sweden or in Norway or Denmark, it is not at all critical for us. If we can see that the yields are too low in Denmark or Norway, we will wait a bit and continue to buy in Finland and Sweden. If we see potential for valuable acquisitions in value-accretive acquisitions in Norway and Denmark, we will look at them and make bids. We constantly scan the markets and put the money where it works best for our shareholders.
Yes. Okay. I guess that there are no fundamental changes between the years in Norway, Denmark, and Sweden and Finland.
Not really. There are differences in legislation, of course. For example, in Norway, you can charge the tenant with quite a lot of cost. All this is calculated when we do the acquisition. The yields are taking this into considerations, or our proposals or bids are taking this into consideration. At the end of the day, you have to have an acquisition yield that is value- accretive. If you know the market, you can make bids in all of the markets.
Okay. Thank you. Those were all my questions.
All right. Thank you.
Thank you.
Thank you. Ladies and gentlemen, let me remind you, if you wish to ask a question, you can press zero one on your telephone keypad. The next question comes from Stefan John from SEB. Please go ahead.
Hello. Thank you. A couple of questions. First, on the fair value changes, EUR 2.4 million in the quarter. Where is it derived from? Is there any yield changes in there? If you could indicate what is your average valuations at the end of the quarter?
Yeah. We do have some changes in yield in Sweden, especially. Also, that we have acquired some new properties also that do have some deferred tax that we revalued the properties with. Otherwise, we usually do not revalue new properties after the first quarter. It's a little bit yield in Sweden difference, yield compression, and then also that we have deferred tax that have an effect on the valuation.
Are you willing to indicate what kind of yield you currently are in average?
No, we don't disclose that. We have not done that.
Okay. There's very small changes on the vacancies. The vacancies are going up slightly. Is that due to mix with new properties coming in, or are you seeing a slight movement there the last two, three quarters?
The vacancies are on a normal level because these vacancies we have are not whole properties. It's small areas or small vacancies in connection with the supermarket or the food store. It might be a vacant office on the second floor or a hairdresser that has moved out, and we are leasing it to another company. It's fairly normal, and it's not a trend. This is the kind of level that the vacancy is typically are in a large portfolio like Cibus.
Someone moved out, and you're waiting for someone else to come in, more or less. Is that what you're saying?
Yes. It might be a small office on the second floor that is not in focus for us. Of course, it's on our to-do list, but it's not critical for the operations to lease the 50 or 75 sq meter office on the second floor.
Good. You talked a little bit about competition for assets in Sweden. Are you thinking at all or you are seeing any opportunities in other countries like maybe Norway as a third alternative, or do you still see more opportunities in Finland and Sweden?
We see opportunities, but as we've said the last couple of years, is that it's very hard to buy properties when you can't travel and look at them. We hope that it will open up, and everyone in the company has had two shots of vaccine, so hopefully we can travel to Norway and Denmark and look at properties now and make bids.
Good. Thank you.
Thank you.
Thank you. The next question comes from Svante Krokfors from Nordea. Please go ahead.
Yes. Hi again. A couple of follow-up questions. Coming back to Norway and Denmark as new markets, could you a bit elaborate on the market structure? I don't know the market at all. Could you elaborate a bit on what kind of owners you have there? Are there similar institutional investors as in Sweden, especially?
Norway is fairly similar to Sweden and Finland. You have not so much institutional owners, but there are a couple of companies, and also the grocery companies themselves own the stores. The market is fairly similar to Sweden and Finland. Also, the tenant structure, there are the three major companies, NorgesGruppen, REMA 1000, and Coop that have the majority of the market in Norway. The tenant structure is also fairly similar. Denmark, on the other hand, is a bit more fragmented where you have these kind of pension companies where wealthy Danes can invest in properties, and they own quite a few of these stores. It's a bit different situation in Denmark, but there are portfolios in Denmark as well. It is fairly similar to the market, not so much institutional-owned properties in Norway and Denmark.
Okay, thanks. That's very helpful. Follow up on Stefan's question on vacancies. Do you have any big vacancies? Do you have any properties where the majority is vacant?
Yes, we have one, but as it is fairly small in consideration to the total portfolio, it's not significant at all. We're working with it, and hopefully we can lease it this year.
You haven't seen any change in how Kesko and S-Group behaves around Finland? I guess they don't want to give up market share in any areas.
No, not at all. They're doing extremely well both of the companies. Of course, they like to maintain the market position, and they have Lidl in looking at Lidl also wants to expand, so it is a healthy competition in Finland, which makes Kesko and S-Group want to stick to their locations.
Okay, thanks. On the Järntorget cooperation, I might have missed if you mentioned it, but how is that progressing, and when could we start to see some development on that side?
You won't see any development in the coming year, because we're starting from zero. All the planning permissions for all of our properties in Sweden are for food or retail. Firstly, they have to scan the portfolio to see if there is any unused land that might be a bit of grass or a small part where there are trees today. Then they have to make the planning change for residential use. It will take a while, but we thought it was very interesting when we got this opportunity. As I said, today, this land is valued to zero in our books. There might be a potential, but it's a fairly long time before we can see any effect in our books.
Okay. That's very clear. Thanks a lot.
Thank you.
Thank you. Ladies and gentlemen, there are no further questions at this time. Dear speakers, back to you.
We do have one question from the website, and it says, "Please talk through the warrants for the CEO with regards to the magnitude and also annual recurrence. If you could please explain in context of the overall remuneration structure. Thank you." We have described the programs that we have on page 10 in the quarterly report. Sverker here has one program, option program, that runs for three years. Of course, all warrants are bought at market value when the program starts. We have two additional programs in place, and those are for management, but not for Sverker. Sverker bought one larger warrant for three coming years but then changed the structure. Now we have one program each year. Since Sverker had the first program, he has not been included in the two other programs.
It's the other parts of the management team who have those warrants. That's how the structure is made. Overall, the remuneration committee looks up at the market and of course, wants to give market value remuneration, and it's both fixed income and also variable income that is on goals set by the board each year. Yeah.
Yeah. Please read on page 10.
Page 10.
Q2 report.
Quarterly report.
Yeah.
Yeah.
Okay. No further questions?
No, not from the website.
All right. Thank you all for listening, and welcome back when we produce or present the Q3 report in November.
Yeah.
Okay. Thank you. Bye-bye.
Thank you.