Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. Sweden
  4. Nasdaq Stockholm
  5. Pandox AB (publ)
  6. News
  7. Summary
    PNDX B   SE0007100359


Real-time Estimate Quote. Real-time Estimate Cboe Europe - 01/25 08:12:02 am
125.65 SEK   -0.67%
01/11PANDOX : Holiday Inn Brussels Airport turned the crisis into an opportunity
2021Pandox Buys Adagio Aparthotel Edinburgh in Scotland
2021Pandox acquires extended stay in Edinburgh for MGBP 40.5
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

Interim report January–September 2021

10/27/2021 | 03:58am EST
  • Revenue from Property Management amounted to MSEK 652 (630). For comparable units the increase was 11 percent, adjusted for currency effects
  • Net operating income from Property Management amounted to MSEK 553 (531). For comparable units the increase was 15 percent, adjusted for currency effects
  • Net operating income from Operator Activities amounted to MSEK 22 (-39)
  • EBITDA amounted to MSEK 550 (456)
  • Cash earnings amounted to MSEK 270 (194)
  • Cash earnings per share amounted to SEK 1.45 (1.06)
  • Profit for the period amounted to MSEK 321 (-103), including unrealised changes in value for Investment Properties of MSEK -9
  • Earnings per share amounted to SEK 1.73 (-0.56)
  • Per 30 September 2021, cash and cash equivalents and unutilised credit facilities amounted to MSEK 4,202, compared with MSEK 4,377 per 30 June 2021
  • On 23 August, Pandox board of directors appointed Liia Nõu as
    CEO. Liia Nõu has been Pandox's CFO since 2007 and acting CEO since 21 May 2021
  • Per 31 August, Maritim Hotel Nürnberg was reclassified to Operator Activities
  • Revenue from Property Management amounted to MSEK 1,774 (1,829). For comparable units, the increase was 2 percent, adjusted for currency effects
  • Net operating income from Property Management amounted to MSEK 1,485 (1,540). For comparable units the increase was 3 percent, adjusted for currency effects
  • Net operating income from Operator Activities amounted to MSEK -48(-104)
  • EBITDA amounted to MSEK 1,347 (1,321)
  • Cash earnings amounted to MSEK 517 (531)
  • Cash earnings per share amounted to SEK 2.81 (2.91)
  • Profit for the period amounted to MSEK 351 (-1,103), including unrealised changes in value for Investment Properties of MSEK -465
  • Earnings per share amounted to SEK 1.91 (-5.98)

Pandox - Interim report, January-September 2021

1 (30)

Hotel demand increased in all of Pandox's markets in the third quarter, supported by strong domestic leisure travel and increased business travel. The underlying drivers of the increase in demand were higher economic activity, lifted government restrictions and increased vaccination rates.

All in all, Pandox's total revenue and net operating income increased by 18 and 17 percent respectively compared with the third quarter of 2020. For comparable units the increase was 25 and 24 percent respectively, adjusted for currency effects. The majority of Pandox's revenue was made up of contractual minimum rents and fixed rents within Property Management. The amount contributed from revenue- based rents and revenue from Operator Activities increased as occupancy strengthened.

Occupancy for comparable units in the Property Management and

Operator Activities business segments amounted to around 55 percent (37) and 39 percent (22) respectively in the third quarter.

Pandox is an active hotel property owner that is involved throughout the value chain. In line with our active ownership strategy, on 31 August Pandox took over operation of the former Maritim Hotel Nürnberg when its lease expired. A renovation programme has begun and it will cost around MEUR 20 to upgrade and reposition the hotel with the aim of creating significant value growth. Another example of this strategy is h27 in Copenhagen, a hotel that Pandox has renovated and repositioned. As of 1 October it has been leased to Motel One under a new, attractive revenue-based lease agreement with a minimum guaranteed rent. These examples demonstrate how our business model can create value, even during a pandemic.

Pandox's financial position remains strong with a loan-to-value ratio of 49.6 percent and cash and cash equivalents and unutilised credit facilities of MSEK 4,202 as of 30 September 2021. Refinancing transactions equivalent to MSEK 1,920 were completed during the quarter and remaining facilities maturing in 2021 are expected to be refinanced in the near future.

The hotel market in domestic and regional cities developed the best in the third quarter as well. In terms of country performance, the UK is again the brightest shining star, but the Nordic countries - in particular Denmark - also developed well, with occupancy in Nordic regional cities close to 2019 levels*. Towards the end of the quarter, occupancy in Danish regional cities was even higher than the corresponding period in 2019. Although development was also positive in Germany, the country's more cautious stance on restrictions limited the increase in demand compared to many other countries. However, attractive leisure destinations such as Lübeck saw record demand.

In October leisure demand in the hotel markets as a whole, in particular at weekends, remained at a good level, while business demand on weekdays increased further. One important explanation for this is that workplaces and offices started to reopen, another is the easing or removal of restrictions on the public/participants at sporting events, conferences and other events. This benefits larger cities in particular. All in all, the hotel market is now on steadier ground.

As previously communicated, Pandox is expecting the hotel market's recovery to take place in phases - provided that restrictions are eased and economic activity picks up - with six development levels and with various market segments gradually building up demand in the hotel market:

  1. Cities and countries open up and restrictions are gradually lifted
  2. Hotels open
  3. Domestic leisure travel with a growing high-paying segment
  4. Domestic business travel
  5. Conferences and international travel
  6. Group travel

Each phase will help to raise occupancy and increase revenue, which in turn will create the conditions for higher average prices and increased revenue per room.

The hotel market is currently at "Level 3" with increased elements of "Level 4" in individual markets in the form of domestic business travel.

As more and more businesses are now reopening up their offices more fully and internal travel restrictions are gradually being eased, the conditions exist for continued recovery in business travel. It also appears that the conservative attitude many businesses adopted at the height of the pandemic regarding future travel is now becoming more nuanced and there is increased demand for physical meetings again.

Demand in the hotel market is highly dependent on the degree of restrictions. The easing of restrictions that took place in the second quarter and went further in the third quarter has resulted in a clear increase in hotel demand in all Pandox's markets. It is difficult to assess how any seasonal variations in the spread of the virus and new virus mutations may be expected to impact restrictions and hotel demand.

The positive development in the hotel market shows that there is a substantial pent-up desire for travel, which is quickly converted into demand once restrictions are reduced and it becomes easier to travel. Willingness to pay for hotel accommodation is high, as illustrated by the average price development in attractive leisure destinations in the third quarter, with RevPAR in some cases significantly higher than in the corresponding quarter in 2019.

The level of economic activity in Pandox's markets is good and personal finances are strong. Vaccination rates are high and many restrictions that impact travel, conferences and events have been eased considerably or lifted altogether in most countries. Companies have also started to return to their physical workplaces, laying the foundation for more conferences and increased domestic business travel alongside continued active domestic leisure travel.

Pandox is in an attractive position as around 80 percent of all rooms are in regional and domestic cities and therefore have high exposure to domestic demand, which is the main driver of the hotel market recovery.

Currently, contractual minimum rents and fixed rents are expected to make up the majority of Pandox's total revenue. Only limited variable revenue under leases with minimum rents is being generated in 2021. Given the continued recovery in hotel demand, variable revenue is expected to materialise in 2022 in most leases that have minimum rent provisions.

Thanks to Pandox's operating model and contract mix, once demand in the hotel market picks up the revenue increase will initially be most pronounced within Operator Activities as a whole and within Property Management in the Nordics.

*Benchmarking Alliance based on open hotels.

Pandox - Interim report, January-September 2021

2 (30)

Pandox is monitoring and evaluating the business climate on an ongoing basis and is in close dialogue with tenants in the Property Management business segment regarding their respective situations. Contractual guaranteed minimum rent combined with fixed rent amounts to the equivalent of just over MSEK 1,900 on an annualised basis and these are also expected to make up most of Pandox's revenue in the fourth quarter of 2021.

Agreements are reached with tenants on temporary changes to payment terms where this is possible and appropriate. Rent payments were received in the third quarter in line with original and temporary payment terms. No reductions in hotel rents have been granted. As of

30 September 2021, accounts receivable relating to deferred rent under temporary payment terms amounted to the equivalent of MSEK 649, compared with MSEK 640 as of 30 June 2021. Payment of deferred rents is expected to begin in the fourth quarter of 2021.

Pandox received government grants in Sweden, Finland and Denmark totalling the equivalent of MSEK 7 in the third quarter (MSEK 2 in the second quarter of 2021). These have been recognised as revenue under "Other property revenue".

For more information, see pages 6, 7 and 25.

Pandox benefitted from relief programmes within Operator Activities in Belgium, Germany, Canada, the UK and the Netherlands equivalent to around MSEK 15 in the third quarter (MSEK 98 in the second quarter of 2021), most of which is for previous periods. This is recognised as a cost reduction within "Costs" in Operator Activities.

In addition, around MSEK 10 (MSEK 26 in the second quarter of 2021) was transferred directly from authorities to Pandox's employees in the form of salary support for furloughed personnel. These amounts are therefore not included in Pandox's numbers.

For more information, see pages 6, 7 and 25.

At the end of the third quarter Pandox's total costs were on a par with revenues from contractual minimum rent and fixed rent.

For more information, see pages 6 and 7.

Remaining planned investments in 2021 amount to the equivalent of around MSEK 230.

For more information, see page 9.

Pandox performs internal valuations of its hotel property portfolio and investment properties are recognised at fair value in accordance with accounting standard IAS 40. Operating properties are recognised at cost less depreciation and any impairment. Internal valuations of operating properties are reported for disclosure purposes only and these are included in EPRA NRV calculations.

The valuation model incorporates an accepted and proven cash flow model where the future cash flows the hotel properties are expected to generate are discounted based on the market's yield requirements. The valuation is based on the hotel's business plan which is updated at least twice a year and takes into consideration, among other things, developments in underlying operator activities, market development, the contract situation, operating and maintenance issues and investments aimed at maximising the hotel property's cash flow and return in the long term. External valuations of all properties are normally carried out annually by independent property appraisers. The external appraisers complete a more in-depth inspection at least every three years or in conjunction with major changes to the properties. The external valuations provide an important reference point for Pandox's internal valuations, to the extent that differences compared with internal valuations are analysed to challenge the internal valuation.

Pandox has a robust valuation process and a consistent valuation approach. At the end of the third quarter Pandox valued the hotel properties based on the same method and the established cash flow model used since the IPO in 2015 as reviewed and approved by the independent auditor appointed by the stock exchange.

Pandox has mainly managed uncertainties associated with the Covid- 19 pandemic through the cash flow forecasts that are the basis for the valuations. Uncertainty about the pandemic's impact on future cash flows remains high. The uncertainty has, however, diminished due to increased vaccination rates, eased government restrictions and the strength of the hotel market's recovery. There is still some uncertainty about possible long-term and lasting effects of Covid-19 on the hotel market in general.

The pandemic's effects on valuation yields cannot be established yet with reasonable certainty, mainly because there is insufficient supporting evidence in transaction markets for the hotel property valuation process. Under normal circumstances Pandox's estimated yields tend to be very similar to those obtained from external property appraisers. These are in turn based on the market yield, which, subject to availability, has been derived from transactions of comparable hotel properties. However, the increased complexity due to the Covid-19 pandemic has led to increased uncertainty about the future and a higher degree of estimates and assessments of the market's yield requirements as well. The higher degree of yield requirement assessments has resulted in a greater deviation between Pandox's yield requirements and certain yield requirements used by the external property appraisers in their calculations. Pandox's management of the complexity and the necessary assessment has been discussed and analysed internally within the Company and by Pandox's Audit Committee, Finance Committee and the Board of Directors on an ongoing basis. Pandox believes that the Covid-19 pandemic is transitional in nature and will have a limited effect on long-term yield requirements.

Pandox is carefully monitoring the parameters that impact valuations. As the effects of Covid-19 become clearer, it is expected to be possible to estimate valuation yield and future cash flows with greater precision.

As a reference point for Pandox's internal valuations, 129 external valuations have been completed during the past 12 months. It is Pandox's lenders who decide, or in certain cases participate in decisions on, which external appraiser to retain, which hotel properties to appraise and when this should take place.

The external valuations show a large spread both within and between markets, which reflects the continued significant uncertainty and varying external valuation approaches. Around 83 percent of the properties have been subject to external valuation over the past 12 months and the outcomes are overall around 5 percent lower than Pandox's internal valuations - ranging from around +7 percent to around -15 percent per country/region. Hotel properties in the Nordic region are all showing a lower difference and spread between Pandox's and the external appraisers' valuations, while hotel properties outside the Nordic region are showing a greater difference.

The difference in the valuations of hotel properties outside the Nordic region is mainly explained by the fact that the external valuations were carried out during a particularly challenging period in the pandemic, with external property appraisers raising the hotel property yield requirements based on an assumption of long-term and sustained negative effects from Covid-19. See page 23 for information on the properties' market value by country.

During the third quarter there have been 25 external valuations of Pandox properties (13 in Sweden, 5 in Finland, 4 in Norway and 3 in Germany). Overall these are around 3 percent higher than Pandox's internal valuations - ranging from around +8 percent to around +1 percent per country.

In the third quarter the unrealised changes in value amounted to MSEK -9 for Investment Properties. The unrealised changes in value for Operating Properties amounted to MSEK 57.

Since the start of the Covid-19 pandemic in the first quarter of 2020 the unrealised changes in value have totalled MSEK -2,244 for Investment Properties and MSEK -954 for Operating Properties, equivalent to a combined reduction of -5.0 percent, mainly explained by lower anticipated cash flows.

For more information, see pages 9 and 23 and 25.

Pandox - Interim report, January-September 2021

3 (30)

Pandox's financial position is strong. As of 30 September 2021 the net loan-to-value ratio was 49.6 percent and cash and cash equivalents plus unutilised credit facilities amounted to MSEK 4,202.

Pandox's debt financing consists exclusively of credit facilities from 11 Nordic and international banks secured mainly by mortgage collateral. Credit facilities maturing in less than one year amount to MSEK 3,909, of which MSEK 2,307 will mature in December 2021. Pandox's refinancing transactions during the quarter amounted to the equivalent of around MSEK 1,920 and remaining facilities maturing in 2021 are expected to be refinanced in the near future.

At the Group level, Pandox's financial covenants are:

  1. Loan-to-valueratio at a level where Pandox's financial loan-to- value target provides comfortable headroom
  2. Interest coverage ratio at a level where revenue from contractual minimum rents and fixed rents alone provides satisfactory headroom

Pandox has a positive and close dialogue with its lenders on refinancing and adjustment of terms and covenants in existing credit agreements taking Covid-19 into account. In the third quarter, lenders provided waivers in individual credit agreements.

For more information, see page 10 and 11.

In certain countries there are programmes in place that cover a specific percentage of companies' fixed costs. There is in general no rent support for property owners. Since the beginning of the pandemic, tenants in Germany and the UK have been able to postpone rent payments and to

Pandox - Interim report, January-September 2021

capitalise and pay their rents subsequently over an extended period. This possibility has been extended until 25 March 2022 in the UK but has expired in Germany. Germany has introduced income support for companies that were affected by restrictions in November and December 2020. This transitioned into fixed cost support for 2021 which has been extended at various points in time and will now continue until 31 December 2021.

In the third quarter, other than the above-mentioned fixed cost support in Germany, the main form of relief that was still available and could be used in Pandox's various markets was furlough support.

Pandox intends to apply for additional government grants in 2021 to cover past costs and these will be recognised when the amounts are known.

To address the financial impact of Covid-19 on Pandox, certain fiscal measures have been implemented, for example correction of preliminary tax payments, and deferral of VAT payments and property tax. Tax payments, mainly VAT for 2020 and the first nine months of 2021, equivalent to around MSEK 80 have, for example, been deferred. Around half of the deferred amount is expected to be paid in 2021 and the remainder in the first quarter of 2022.

Pandox has taken a cautious approach with respect to certain relief programmes that may involve an additional cost. This was done to lower the one-time effect when the Covid-19 crisis is over and relief packages expire. Pandox is continually monitoring all new tax incentives that are offered in the jurisdictions where the Company operates and will act when it is deemed appropriate to do so.

4 (30)

Hotel demand increased in all Pandox's markets in the third quarter as the restriction situation gradually improved. Since the UK reopened on 17 May and removed all of its domestic coronavirus restrictions on 19 July, other countries where Pandox operates have followed suit at varying paces. Overall the majority of restrictions that impact travel, conferences and events have been entirely or at least partially lifted. However, various types of restrictions and obstacles are still impacting international travel, although there has been improvement here as well. With respect to the important transatlantic air travel between the EU/UK and the USA, some easing of restrictions is planned for the beginning of November.

An improved restriction situation combined with high economic activity and strong personal finances raised occupancy in Europe to around 59 percent* in the third quarter. This was the strongest quarter since the outbreak of the pandemic, with occupancy almost double that in the second quarter 2021.

Demand was largely driven by domestic tourism, or "staycations", during the summer months of July and August, with the important difference that the restriction situation was clearly better than in 2020 as a result of vaccination programmes. Regardless of country, strong domestic leisure destinations were the winners and willingness to pay for attractive hotel accommodation was also high. This resulted in good average price development. Major cities that are heavily dependent on large events and/or international demand did not do as well in relative terms, although occupancy did improve significantly in absolute numbers.

The business season got off to a positive start in September when companies started returning to their physical offices. A marked increase in demand for hotel nights and conference rooms was noted on weekdays compared with before the summer, particularly in major cities. In many markets leisure demand remained at a good level on weekends after the summer.

At the end of the quarter, and in October in particular, the restrictions on the public/participants at cultural and sporting events were eased further. This, combined with an expected increase in international travel, albeit from low levels, bodes well for further recovery in larger cities. Altogether the hotel market is now on steadier ground.

Restrictions also determined the level of demand in much of the hotel market in the third quarter. Regardless of which country and market, development was similar between regional cities and larger ones.

In the UK, which was the first to reopen in mid-May, the recovery remained strong, particularly in UK Regional where occupancy was good at around 74 percent* during the quarter, driven by domestic business and leisure demand. Positive development was also noted in London, where occupancy was around 56 percent* despite international demand remaining weak.

Although development was also positive in Germany, there was some hesitancy due to a more cautious stance on restrictions. Occupancy was, however, around 53 percent** during the quarter in Germany as a whole, with pockets of very strong growth and occupancy in attractive leisure destinations.

In the Nordic region the overall occupancy rate was 60 percent*** in the third quarter compared with 35 percent*** in the second quarter. The pattern of higher demand in regional cities compared with large metropolitan ones was still evident, with occupancy in regional cities at 67 percent*** compared with 52 percent*** in capital cities. The difference is still an effect of the fact that capital city destinations are more dependent on conferences and international demand.

  • Demand is dependent on the level of restrictions
  • The leisure segment is the first to recover, and hotels and destinations with a strong leisure offering are the most attractive in early phases
  • Hotels that are easy for guests to reach by car or train have an advantage
  • Markets with high domestic demand are recovering first
  • Potential for increased domestic and regional tourism as long as international restrictions are in place
  • For hotels with significant conference activity and that are highly dependent on international demand, the recovery takes longer
  • Good economic activity and increased household saving has created the conditions for a further increase in demand once restrictions are lifted
  • Pent-updemand for travel among individuals and companies
















46% 40% 34%


















Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Source: STR, Benchmarking Alliance. Based on open hotels. Rounded numbers.

200% 185%182%



















Pandox - Interim report, January-September 2021

5 (30)


Pandox AB published this content on 27 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2021 07:57:07 UTC.

ę Publicnow 2021
All news about PANDOX AB (PUBL)
01/11PANDOX : Holiday Inn Brussels Airport turned the crisis into an opportunity
2021Pandox Buys Adagio Aparthotel Edinburgh in Scotland
2021Pandox acquires extended stay in Edinburgh for MGBP 40.5
2021PANDOX : Summary of the Hotel Market Day 2021
2021Change in Pandox's Group Management
2021Pandox AB Announces Executive Changes
2021PANDOX'S NEW CFO : "I am passionate about good company cultures"
2021PANDOX HOTEL MARKET DAY 2021 : The big follow-up
2021PANDOX : makes large investment in Sweden's textile center
2021Pandox AB (publ) interim report January–September 2021
More news
Sales 2021 2 750 M 296 M 296 M
Net income 2021 454 M 48,9 M 48,9 M
Net Debt 2021 31 202 M 3 360 M 3 360 M
P/E ratio 2021 50,8x
Yield 2021 -
Capitalization 23 257 M 2 500 M 2 504 M
EV / Sales 2021 19,8x
EV / Sales 2022 14,8x
Nbr of Employees 604
Free-Float -
Duration : Period :
Pandox AB (publ) Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends PANDOX AB (PUBL)
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 3
Last Close Price 126,50 SEK
Average target price 161,67 SEK
Spread / Average Target 27,8%
EPS Revisions
Managers and Directors
Liia N§u Chief Executive Officer & Senior Vice President
Anneli Elisabet Lindblom Chief Financial Officer
Christian Ringnes Chairman
Aldert Schaaphok Senior VP & Director-International Operations
Bengt David Harry Kjell Vice Chairman
Sector and Competitors