Welcome to the Cibus Nordic Real Estate Audiocast with Teleconference Q4 2021. Today, I'm pleased to present CEO Sverker Källgården and CFO Pia-Lena Olofsson. For the first part of this call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session.
Thank you very much, and once again, welcome to the Q4 interim report Audiocast for Cibus Nordic Real Estate. Thank you all for listening in to our call on this rather turbulent day. As said, speaker today is myself, Sverker Källgården, the CEO, and with me is Pia-Lena Olofsson, the group CFO. Let's go to the slide with a summary of the period. Pia-Lena will take us through all the numbers, and I'll jump straight into the board's recommendation to the annual general meeting regarding dividend as presented today. The board of directors intends to propose to the 2022 annual general meeting that a new share class D will be established with a bonus issue being made to existing shareholders in connection with this.
They also propose that the dividend will be increased by 5% to 0.99 euro cents per existing share to be distributed to all share classes. Accordingly, current shareholders will receive a dividend equivalent to 0.99 euros for each existing shares held and divided between 12 dividend payment dates. All share classes are to receive monthly dividends. The board intends to submit the complete proposal for decision in connection with a notice convening the annual general meeting. Next slide, please. Significant events during the period. Well, we had a busy quarter. It started in November when we bought a single asset in Finland with S Group as tenants. Then we acquired a grocery store in Sweden currently under construction with Willys as a tenant.
On the same day, we acquired Charlottenberg Handelspark with ICA and Lidl as anchor tenants. On the 13th of November, we completed acquisitions of 72 grocery stores from Sagax and also welcomed Sagax as new shareholders in the company. That private placement increased the numbers of shares from 40 to 42 million shares. On the first, we updated our growth targets. The management team and the board of directors, we estimate that the company will be able to double the portfolio value, property value of its portfolio to EUR 2-2.5-3 billion and meet the criteria for an investment grade credit rating by the end of 2023.
On December the 7th, we announced that we had implemented the rights issue of 2 million shares, raising EUR 492 million to the company. We made eight new acquisitions in Norway that almost doubled our Norwegian portfolios with NorgesGruppen, Rema 1000, Coop, and Kiwi as anchor tenants. On the last day of December, we announced that the number of shares and vote in Cibus amounted to 44 million, and the share capital in Cibus now was EUR 440,000. Next slide, please. On the seventeenth of February at the extra general meeting, the board was given authorization to issue up to 10% new shares up to the annual general meeting. The purpose of the rights issues are to pay for acquisitions.
On the same day, the nomination committee's proposal to the board was announced on the annual general meeting. The nomination committee proposes that Patrik Gylling, Elisabeth Norman, Victoria Skoglund, and Stefan Gattberg are reelected as members of the board, and that Nils Styf is elected as a new board member. The nomination committee further suggests reelection of Patrik Gylling as Chairman of the Board. Next slide, please. What is Cibus Nordic? Well, Cibus Nordic is a real estate company focused on daily goods properties. We fill them with strong tenants to provide dependable income to our shareholders. We are listed since March 2018 and on the main list since June 2021. We have a clear Nordic focus, and as the first company in the Nordics, we pay out monthly dividend to our shareholders.
Currently, 0.94 EUR for the current twelve months up to the annual general meeting. Next slide, please. The story about Cibus is the story about portfolio diversification. Traditionally, these kind of assets has been owned as either single assets or in small portfolios of maybe 2-5 assets, which meant that there was a very high-risk concentration, and you came into a weak negotiation position with the tenants. The banks realized this that if the tenant leaves, you lose all your cash flow, so the bankability was low, which meant you had a very high risk, but also a high return business. What Cibus realized is that if you own 400 of these properties, then you diversify the risk and lower the concentration.
None of our assets is worth more than 2% of our combined NOI, which means that the risk concentration is very, very low. By owning such a large amount of properties, you become an active counterparty with a tenant and not just a landlord to negotiate rent with. The banks realize this, so the bankability is much higher, which means that you lower the risk, but you have the same return as for a single asset. Due to the risk factor of owning single asset or small portfolios, we can buy assets 50-100 basis points higher than the existing portfolio is trading at and produce value-creating growth for our shareholders. Next slide, please. What sets Cibus apart from other retail, because a lot of investors put Cibus on the retail shelf.
The difference between Cibus and all other retail is that we see—we have a resilience towards e-commerce. We see a negligible negative effect. Even during the pandemic, the share of online trading rose to around 5%. A large share of that volume was click and collect from our stores. If you look worldwide, you see very few operators that can make profit on online food sales due to the low margins and the high costs of distributing the food to the end consumer. On the other hand, we see a notable positive effect from e-commerce as our existing stores work as a natural distribution network for other goods online, which is it creates strong footfall to our stores. Next slide, please. We also set apart in this segment that we are an active property manager.
We have our own organization that actively works both with our existing portfolio and also with new acquisitions. Next slide, please. Sustainability. Well, Cibus, we are driven by the conviction that we earn in our decisions about our real estate portfolio can contribute to a responsible social development. In our acquisitions and the management of our properties, we have the ambition to promote sustainable development for both tenants as for a living community, and that this contributes to a good long-term profit development for our shareholders. Looking at energy today, we have 39 of our property which have solar panels, and the annual carbon dioxide reduction they generate is about 690 tons, which is equivalent to the electricity consumption for approximately 2,600 apartments. We have set the goal to have zero emissions by 2030. Next slide. Growth.
Well, as I said, we have set an ambitious growth target to grow our portfolio value to EUR 2.5 billion-EUR 3 billion by the end of 2023. We have started working on that. We have a property value of around EUR 1.5 billion at the moment. We see Finland, Sweden, and Norway as our main markets, but we are also interested in Denmark, so that is a market that is monitored at the moment. We have a strong cash position and also a very strong pipeline regarding possible acquisitions in all Nordic countries. As we said earlier, we received a mandate to issue up to 10% new shares, and we have made a slight organization change. That's that Lauri Tiensuu now has the role as Head of Business Development.
His focus areas are new markets, but also special projects for the company. For example, ESG and how to get carbon dioxide neutral by 2030. Next slide, please. Looking at the shareholders list as of 31st of December 2021. The Fourth AP Fund was still the largest shareholder, followed by AB Sagax, Columbia Threadneedle, Dragfast, and Marjan Dragicevic. In total, the 15 largest shareholders held 41.6% of the company, and Cibus had 41,000 shareholders. Next slide, please. Looking at the share price performance, average daily volume is around 37 million SEK with about 2,000 transactions per day. Looking at the share price on the last day of December, the share price was 290.8 SEK, and total share return since January 1st, 2021 was 113%.
Due to the unease of the stock exchange, the share price has fallen and is now trading at around SEK 240. Today, we are up by 3.1% on a very nervous stock. Next slide, please, and over to Pia-Lena for the financial overview.
Thank you, Sverker. I will present some key figures for the fourth quarter. Rental income was EUR 21.6 million. Net operating income grew with 22% to EUR 20.4 million. Profit from property management was EUR 12.8 million, and earnings was EUR 16.4 million or 0.38 EUR per share. Next slide, please. Looking at the PNL in more detail, as I mentioned, net operating income was EUR 20.4 million for the quarter. We have non-recurring items in administration costs of about EUR 100,000 for consultancy fees for the analysis of new markets and for the preparation of the new growth targets. We also have items affecting comparability in net financial items of arrangement fees of EUR 293,000 on a loan that we have refinanced during the quarter.
We also have a positive exchange rate change of EUR 213 thousand. Unrealized changes in value of investment properties was EUR 6.3 million, and this was mainly due to our acquisitions during the quarter, but also we see some yield compression in Sweden. We have low current tax due to the use of loss carried forward and taxable depreciation on building inventory. Next slide, please. Our current earnings capacity on a 12-month basis show a net operating income of EUR 85.8 million, with the properties that we had taken possession of at the end of 2021. Profit from property management plus expenses for the hybrid bond was EUR 54.9 million or EUR 1.25 per share. Next slide. Here is a snapshot of our portfolio at end of 2021. We had 400 properties.
Property value was EUR 1.5 billion, and we had 867,000 sq m. Properties with the large grocery store tenants, Kesko, Tokmanni, Coop, S-Group, and Lidl stand for more than 9% of the net operating income. Next slide. Looking at our segments, we now have three countries, Finland, Sweden, and Norway. During 2021, Finland gave 84% of the NOI, Sweden 15%, and Norway 1%. Out of property value, 81% was attributable to Finland, 16% Sweden, and 3% Norway. Next slide. Cibus' strategy is to give our shareholders stable and reliable dividend that increase over time. Our dividend policy says that we should increase our dividend with 5% per year.
As like I said, the board proposes to the annual general meeting that dividend increase with 5% to 0.99 EUR per share, divided into all types of shares if additional share classes are introduced. All shares will have monthly dividends. As like I said, also, a complete proposal will be published in connection with the convening of the annual general meeting. Next slide. If you look at the balance sheet, as I said before, property value was EUR 1.5 billion. Senior debt was EUR 724 million, giving a loan to value on secured debt of 48.3%. We have our two senior unsecured bonds of EUR 194 million, giving a net loan to value of 57.8%.
Our hybrid bond is part of equity, but not in the net asset value. EPRA NRV was EUR 592 million or 13.5 EUR per share. Next slide, please. Our average remaining lease time was five years at the end of 2021. As you can see in the graph on the bottom right, it has been very stable around 5 years in the past. Next slide. Regarding funding, we have bank financing of EUR 724 million. The average floating interest margin is three-month EURIBOR, STIBOR or NIBOR plus 1.7%. Our weighted average term was 2.6 years. 66% of the bank loans are hedged with interest rate derivatives, and the first loan matures in 1.5 years.
We have our two senior unsecured bond, one green SEK bond of SEK 600 million, and one euro bond of EUR 135 million, plus the hybrid bond of EUR 30 million. Next slide, please. One of Cibus' goals is to reach the criteria for investment grade in credit rating by the end of 2023. Cibus is now reviewing our capital and debt structure to see how we can meet our target. A part of this work is that the board proposed to extend the article of association with another share class D. Over to you, Fredrik.
Thank you, Pia-Lena Olofsson. What about the future? What are the focus areas going forward? We see the Danish market very interesting and hope to enter the market during 2022 if something interesting comes out. Otherwise, we look at continued growth in Finland, Sweden, and Norway. Of course, investment-grade credit rating, we are starting to structure our capital and debt to meet the criteria by the end of 2023. Next slide, please. The primary reasons to invest in the Cibus share. Well, firstly, we produce a high and stable yield. From the outset, Cibus has never lowered our dividend in euros per share from one quarter to the next. There is a potential for favorable value growth.
We have a growth target that we should grow to EUR 2.5 billion-EUR 3 billion at the end of 2023, and that generates potential for favorable long-term growth in share value. We have gradually rising monthly dividends, and we aim to gradually increase them by 5% annually. Last but not least, we are in a segment with long-term resilience and stability. Especially at the unease times like this, Cibus' model, our business model has proven its stability and resilience towards any hiccup in the market. We are in a very long-term, resilient, and stable position. Thank you. That's all for us. Please now if you have any questions.
Thank you. 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 the line of Svante Krokfors from Nordea. Please go ahead.
Thank you, and good morning, Sverker and Pia-Lena. Thank you for the presentation.
Good morning, Svante.
Morning. A couple of questions, perhaps more on a general note. Is there any changes in the competitive landscape? It appears that, looking at your fair value changes, there doesn't seem to be much aggressive buying going on in the market.
No, the competitive landscape is more or less the same as it's been for the last couple of years. It's business as usual.
Thanks. Regarding the Danish market that you are looking into, could you give some explanation a bit around the differences between or that separates Denmark from the other three Nordic countries in your segment?
Absolutely. We see Scandinavia as one large market. The situation is more or less the same in all Nordic countries. There are a handful of operators. Finland stands out being a clear duopoly. Otherwise, in Sweden, Norway, and Denmark, there are three to five competitors that have the food market. Denmark is fairly similar to Norway due to the density of the amount of food stores. There are a lot of food stores in Denmark, and they are, I think, rather small if you compare to Finland and Sweden, where we have the hypermarkets. What stands out in Denmark is really the financing situation, though, where you can have...
They have something called realkredit loans, which is kind of a bond situation. But it runs through the banks, which makes the Danish market very interesting when it comes to project financing. Otherwise, legislation is more or less the same, long leases and a stable market.
Thank you. Then the question about the D shares not that surprising given your investment grade ambitions. Could you give your own words about your reasoning behind introducing D shares?
Yeah. It's part of our work when it comes to reaching investment grade. We want to have different tools in the toolbox. This is something that we are, and the board especially is involved in and preparing for the annual general meeting.
Okay. Thank you. I think that's all from me this time around.
Thanks. Thanks a lot, Svante.
The next question comes from the line of Joonas Ilvonen from Evli. Please go ahead.
Hello, Sverker and Pia-Lena. It's Joonas from Evli.
Hi, Joonas.
Hello.
First question regarding your EUR 2.5 billion-EUR 3 billion asset target. You must have made a pretty thorough assessment of the whole Nordic daily goods property store market. What would you say? How large is this total market? Or in other words, what kind of a market share would this around EUR 3 billion figure imply?
Yeah. I haven't got the total number for the whole of Scandinavia. If we look upon Finland, which is our largest market and we have the largest share of our portfolio, we own 10% of all food stores in Finland. Which says that there are a lot more food stores still to be bought in Finland. We're the largest market share in Finland. You can understand that there are a lot more stores in Norway, Sweden, and Denmark to be bought. The market has not dried up, and there are still plenty of properties to be bought.
Okay. Next question regarding. I mean, you already touched upon this investment creating a capital structure review. Well, your net LTV ratio already knocked down a bit, but it's still pretty close to 60%. Would you be able to put some color at this point on where you might want to land? I mean, your current policy is that the lower limit is 55%, but at least my feeling is that maybe you might have to go even a bit below that.
Yes, that is true. We will need to reach to be around 50%, I believe. We have also said that we are going to revise our financial policy targets when it comes to LTV further on. The first stage now is for us to grow and then later on in this period up to the end of 2023, then we will restructure debts and capital structure. Yes, there will be revision of those. That's the financial policy targets of the LTV going forward.
All right. Maybe if you could just elaborate on the yield levels. I mean, you say you see some yield compression in Sweden, but I mean, other than that, this whole market we have talked about for a few years that it has been pretty steadily valued at around 6% or so, no major yield compression. How is the situation in Finland and do you see, like, this whole recent discussion about yields and interest rates and whatnot? What kind of an effect it might have on valuations?
We see that the yield compression. We see the same kind of situation in Sweden and Norway and possibly even Denmark, when we're looking into that market, that we can buy assets at larger portfolios and very good assets at around 5%-5.5%, creating value, creating growth for the shareholders. Finland is a bit above that, still a bit above that, but my guess is that Finland will pick up as well. I hope and I believe that we will see some yield compression in the Finnish market as well.
Okay. That's all from me. Thanks.
Thanks.
Once again, ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. The next question comes from the line of Matias Ahola from Inderes. Please go ahead.
Hi, Pia-Lena and Sverker.
Hello.
Hi, Matias.
Joonas already asked almost all my questions, but I have one left. Now, this is also related to your growth target. How should we think your growth target? Is the asset target based on assumption about flat yields, or have you counted this company in any yield compression?
We hope for a slight yield compression as well, but mostly, of course, the growth is made by acquisitions, but some yield compressions might help us along the way.
Yes. Did I hear right that the investment grade rating requires an LTV ratio around 50%?
Yes, that's correct.
Yes. Okay. Thanks. I have no further questions.
Thank you.
Once again, it's zero one to register for a question. There are currently no further questions from the phone line.
Are there any on mail?
We received one regarding the D shares and the bonus issue. Will that go to the current shareholders? Yes, the bonus issue will go to the shareholders of Cibus.
Of course, there will be a record date for owning the shares at some point, but.
If they're decided at the annual general meeting.
Yes, exactly.
It's just a proposal from the board.
Yeah. All right, so no further questions. Once again, thank you for dialing in at Cibus interim report for the Q4 2021, and hopefully we'll hear from you again in the next quarter. Thanks, and bye-bye.
Thank you. Bye.