International rating agency Scope Affirms Summus Capital OÜ’s Issuer Rating at BB/Stable

10:07 6.09.2023

Scope Ratings GmbH (Scope) reiterates its BB/Stable issuer rating for Summus Capital OÜ (Summus) and maintains the BB rating for the senior unsecured debt category. The affirmation reflects Scope’s expectation that Summus’ real estate portfolio will remain resilient, even amid mounting pressures on property valuations and escalating interest rates.

The company’s business risk profile, evaluated at BB, is underpinned by its diverse portfolio in Baltic capital cities, marking them as second-tier investment markets with a stable demand from tenants. Scope-adjusted total assets experienced a modest growth of 5% YoY, concluding at EUR 412m by the end of 2022. The procurement of two significant properties—Depo DIY and Damme shopping center—compensated for the divestiture of a smaller production and warehouse facility in Tartu.

Summus’ buy-and-hold investment strategy ensures consistent rental cash flows. The portfolio amassed a net annual rental income of EUR 28m in 2022, marking a growth of 29% YoY. Despite potential challenges posed by escalating energy costs, profitability, indicated by the Scope-adjusted EBITDA margin, remained robust at above 80% as of end-June 2023.

As of June 2023, the portfolio enjoys a strong occupancy rate of 97%. Scope anticipates this figure to remain stable, thanks to Summus’ environmentally certified office buildings.

“We’re pleased to maintain our BB rating even in a demanding economic environment. Based on our solid financials we remain dedicated to delivering stability and value to our stakeholders,” said Aavo Koppel, member of the management board of Summus Capital.

Summus has an outstanding EUR 10m senior unsecured corporate bond as of end-June 2023, with a tenor of three years, a fixed coupon rate of 6.75%, and quarterly payments. The outlook remains consistent at Stable, integrating Scope’s projection of reinforced cash generation through rental growth, with an expected occupancy rate staying above 97%.

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