SkiStar AB's Q3 2024/25: A Winter Sports REIT's Resilience and Strategic Momentum

SkiStar AB (OM:SKIST), a leading Nordic winter sports and resort operator, has delivered another robust quarter, underscoring its ability to navigate seasonal challenges while positioning itself as a growth engine for the winter sports REIT sector. Amid rising operational costs and shifting consumer demands, the company's Q3 results—released in June 2024—highlight a blend of tactical execution and long-term vision. Here's why investors should take notice.

Operational Strengths: Outperforming the Seasonal Cycle

SkiStar's Q3 revenue rose 6% to SEK 81 million, driven by record-breaking performance in its core segments. The ski school division, now a global leader, welcomed 108,000 students (+4.5% YoY), while total skiing days surged 7% to 6.1 million. These metrics are critical for winter REITs, as they directly tie to recurring revenue streams and customer retention.

Retail sales also shone, with EQPE clothing brand revenue jumping 32% to SEK 13 million. This diversification beyond lift tickets and rentals is a key growth catalyst, reducing reliance on snow-dependent activities. The company's focus on year-round offerings—such as summer mountain coasters and cycling trails—further mitigates seasonal volatility, a trend other REITs are watching closely.

Investment in Sustainability and Infrastructure: Future-Proofing the Business

SkiStar's SEK 330 million capital expenditure for the 2024/25 winter season is a bold move, but strategically aligned with its goals. The investments include:
- A new chairlift in Trysil, enhancing guest experience and accessibility.
- Expanded snow production systems, crucial for consistent snow cover amid climate shifts.
- A pilot fossil-free skiing operation at Hammarbybacken, aiming to meet its 2030 carbon neutrality target.

These moves not only address climate-related risks but also align with investor demand for ESG compliance. For winter REITs, climate adaptation is non-negotiable, and SkiStar's proactive stance could set a benchmark.

Challenges and Cost Management: Navigating Headwinds

Not all metrics were flawless. Personnel costs rose due to the acquisition of Trysilguidene and shifts in social security policies. However, aggressive cost control measures kept overall expenses in check, enabling a 16% EBIT margin—closer to the 18% target.

The company's debt-to-EBITDA ratio improved to 1.7x, below its 2.5x target, signaling financial discipline. This stability is vital for REITs, which rely on steady cash flows to support dividends. SkiStar's dividend policy, targeting 40–60% of annual profit, remains attractive for income investors.

Booking Momentum and Sector Relevance

With pre-bookings for the 2024/25 season up 9%—led by demand from Denmark and Germany—SkiStar is well-positioned for another strong winter. This bodes well for the broader winter sports REIT sector, as international tourism and discretionary spending rebound post-pandemic.

Critically, SkiStar's success hinges on its ability to balance growth with sustainability—a challenge many REITs face. Its dual focus on infrastructure (e.g., chairlifts, snow tech) and experiential offerings (ski schools, retail) creates a moat against competitors.

Investment Implications: A Buy Signal for Winter REIT Bulls

For investors in winter REITs, SkiStar's Q3 results are a confidence booster. Key takeaways:
1. Resilience in Execution: The company is managing costs and adapting to climate risks while expanding revenue streams.
2. Dividend Stability: With a 1.7x debt ratio and strong pre-bookings, dividends are secure.
3. Sector Leadership: SkiStar's strategic investments could drive industry-wide standards for sustainability and infrastructure.

Risk Factors: Overreliance on Nordic markets, potential snow variability, and global economic slowdowns remain risks. However, the company's diversified revenue and international guest growth mitigate these concerns.

Conclusion: A Winter REIT to Watch in 2025

SkiStar's Q3 performance reinforces its status as a resilient operator in a seasonal industry. With a clear path to margin expansion, sustainable investments, and strong booking trends, the company is primed to outperform peers. For investors in winter sports REITs, this is a buy-and-hold story—especially ahead of its Q3 report webcast on June 19, 2025, where further details on growth and sustainability could emerge.

In a sector increasingly defined by climate adaptation and experiential value, SkiStar is proving it can ski uphill while others slip.