*New issue has raised
*
*Positive net letting since internal rental organization for all succession letting as well as project letting was established in mid May.
Financial ratios for the period 1 January-
(corresponding period in 2022 unless other stated)
- Rental income:
SEK 351.5 million (275.1) -
Profit from property management:
SEK 94.0 million (103.6) -
Profit for the period:
SEK -238.7 million (813.2) -
Net investments in investment properties:
SEK 1,764.5 million (1,874.4) -
Investment properties:
SEK 14,534.8 million (31 Dec 2022 : 13,094.6) -
Long-term net asset value (NAV):
SEK 5,702.7 million (31 Dec 2022 : 5,768.3) - Number of apartments under management: 4,078 (3,452)
- Number of construction starts, apartments: 199 (706)
- Number of apartments under construction: 1,886 (1,976)
- Number of apartments under project development: 4,290 (4,785)
- Interest coverage ratio, R12m: 1.9 multiple (2.6)
-
Equity/assets ratio: 30.8% (
31 Dec 2022 : 33.9) - Debt-to-equity ratio: 59.5% (31 Dec: 55.4)
-
Profit from property management per share:
SEK 0.44 per share* (0.48) -
Long-term net asset value (NAV) per share:
SEK 24.42 per share* (31 Dec 2022 : 26.79) - Growth in profit from property management per share: -9.3%* (39.2)
- Growth in long-term net asset value (NAV) per share: -8.8%* (13.9)
-
Earnings per share*/**:
SEK -1.25 per share (3.78)
* Adjusted for new issue of 18,180,000 Class B shares as of28 September 2023 .
** There are no potential shares (e.g. convertibles in the company, and accordingly no dilution effect).
A message from the CEO
The market conditions remain challenging. Uncertainty relating to inflationary trends and the Riksbank's outlook for the base rate are hampering the prospects of the property sector, and construction starts are down sharply. Naturally, K-Fastigheter is also affected by these developments, although our ambition is to retain our position as an aggressive operator and to continue to capitalize on the opportunities that arise on a more challenging market.
Towards the end of the quarter, K-Fastigheter completed a directed new issue. The issue raised a total of approximately
In the third quarter our construction organization completed and handed over 76 apartments to the management organization. Our housing portfolio comprised a total of 4,078 apartments at the end of the quarter, and 1,886 apartments are currently in production. Our land bank includes 4,290 apartments in various stages of development through the
In the Prefab operations, we are gradually adjusting headcount to match demand based on our order book and activity levels. We are also capitalizing on opportunities for collaboration between our production plants in order to optimize capacity. I believe that our operations are maintaining positive volume levels given the economic conditions, not least due to internal sales. In addition, volumes from external customers continue to increase, and it is pleasing to see new external housing projects.
Our rental value amounted to approximately
This is excellent progress, with growth in the rental value of 25 percent in the coming quarter alone. Our organization continues to work hard to reduce vacancies. We have done this successfully for succession letting, where more contracts were signed than were terminated in the quarter. The occupancy rate was 95.2 percent at the end of the quarter. In some locations, some vacancies remain when tenants move in; this is due to demand not quite matching the strong construction activity seen in recent years. In the short term, this has had a negative impact on vacancy levels and profit from property management. Reducing the number of vacancies is a priority, and will take some time to resolve fully. In the long term, I am convinced that we can improve the numbers through hard work.
Our properties are valued quarterly by an external valuer. The challenging market conditions and the return requirement on properties are having a negative impact on market values. The market value of completed properties and properties under construction decreased by 1.2 percent in the quarter. From the end of the second quarter 2022, when values were at their peak, we have seen a decline of just over 6 percent. However, our property values are increasing in overall terms as we are continuously completing properties, starting construction projects and acquiring new building rights. At the end of the quarter, the total property value amounted to just over
Interest rates affect the entire property sector negatively and remain a key focus in the debate about Swedish property companies' performance. K-Fastigheter currently partners with around a dozen banks and has no bond financing, unlike many other sector operators. At the end of the quarter, 81 percent of our interest-bearing liabilities related to acquisition financing, and completed investment and business properties were hedged at an average interest rate of 3.29 percent. A period of fixed interest of 2.6 years provides room to maneuver until interest rates stabilize and become more predictable.
Our business model with symbiotic business areas that benefit each other represents a strength in the current market climate. This, combined with a structural need for new housing in the form of attractive new rental apartments, means that I take a positive view of the future despite the current market conditions.
-
A complete Interim report January-
A presentation of the earnings and operations will be published on: k-fastigheter.com/en/investors/presentations
For more information, please contact:
Johan Hammarqvist, Head of Investor Relations and Communications
e-mail: johan.hammarqvist@k-fastigheter.se, telephone: +46 (0)10-167 60 99
This disclosure contains information that
K-Fastigheter is much more than a property company. Through an integrated process, we build our business in the four business areas project development, prefab, construction and property management. To enhance cost efficiency and cut construction times, K-Fastigheter has chosen to work with three concept houses, developed in-house and constructed for own management. K-Fastigheter offers close to 4,100 homes from
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