Continued high levels of activity generating significant value
D. Carnegie & Co AB (publ) reports for the third quarter of 2017 a sharp increase in income from property management, SEK 135 million, compared with SEK 109 million for the second quarter of the previous year. Profit before tax is up to SEK 525 million compared to SEK 364 million for the third quarter of the previous year. For the first nine months, income from property management amounted to SEK 295 million, compared with SEK 217 million for the corresponding period previous year. Profit after tax for January-September amounted to SEK 1,229 million compared with SEK 999 million corresponding period previous year.
Earnings per share after tax were SEK 15.86 (12.92). The adjusted equity (EPRA NAV) increased 34 percent compared to the corresponding quarter 2016 and amounted to SEK 122.04 per share (91.26) as of 30 September 2017.
- Rental income increased to SEK 1,085 million (963)
- Net operating income increased to SEK 583 million (477)
- Income from property management increased to SEK 295 million (217)
- Changes in the value of investment properties of SEK 1,246 million (1,124), corresponding to 6.4 percent
- Profit before tax increased to SEK 1,565 million (1,200)
- Profit after tax increased to SEK 1,229 million (999)
- Earnings per share increased to SEK 15.86 (12.92) before dilution and increased to SEK 15.79 (12.76) after dilution
Q3, Juli-September 2017
- Rental income increased to SEK 383 million (333)
- Net operating income increased to SEK 231 million (190)
- Income from property management increased to SEK 135 million (109)
- Changes in the value of investment properties of SEK 514 million (290), corresponding to 2.6 percent
- Profit before tax increased to SEK 652 million (434)
- Profit after tax increased to SEK 525 million (364)
- Earnings per share increased to SEK 6.76 (4,71) before dilution and increased to SEK 6.73 (4,64) after dilution
Significant events during the third quarter
- In the beginning of September it was announced that Ulf Nilsson decided to step down as CEO of D. Carnegie & Co. Svein Erik Lilleland, current board member, was appointed as interim CEO.
Statement from the CEO
Continued high levels of activity generating significant value
• 351 apartments renovated during the quarter, totaling 1,116 so far this year
• 22 percent NOI increase during the quarter compared to last year
• 50 percent increase in profit before tax during the quarter compared to last year
• EPRA NAV increased by 20 percent so far this year to SEK 122/share
Softening of the For-Sale Market
There has been some discussion lately about the state of the for-sale residential market in Sweden. The number of apartments currently on the market for sale has hit a nine-year high and price growth has started to soften. On the supply side, there has also been an increase in construction over the last few years. Contrary to the forsale market, the dynamics of the rental market across Sweden, and in Greater Stockholm in particular, remain strong, with a supply shortage and long tenant waiting lists. As we look ahead we feel confident about the state of the rental market and its fundamentals.
Business Improvement Districts (BID) Project
We have participated in the startup of a BID project in Märsta. BID is a collaboration between stakeholders in the area. The cooperating parties consist of the municipality, property owner, center owner, police, church, local tenant association and many others. The project aims at making the center area of Valsta a more attractive place through well-funded jointly financing initiatives.
Geothermal Heating Project in Jordbro
Sweden’s largest geothermal heating project – by number of drill meters - has continued in Q3 according to plan and will be operational during the coming season. The plant will heat 1,112 households. In addition to the reduced environmental impact, we also estimate that the heating cost of these properties will decrease by about 40 percent. During the quarter, another geothermal heating plant has been commissioned in Eskilstuna.
Fun for our Youth and Kids
We are partners with one of Swedens strongest sports brands - AIK Football. Together with AIK, D. Carnegie & Co arranges soccer for young people every week in Husby and during the summer we arranged three football camps for kids in our areas. We also invited 1000 of our tenants to see the derby match between AIK and Djurgårdens IF. 22 of our tenants’ children who participated in the activities walked with the players on to the pitch before the match, which was greatly appreciated by the kids and their families.
We have also had 300 young people employed through a summer job project in our housing areas with various important tasks for them to handle like painting, repairs, cleaning and more.
In the beginning of September, Ulf Nilsson, D. Carnegie & Co’s CEO, decided to step down. We, the management team and the board of directors want to take this opportunity to thank him for his service to the company. He built the company to where it is today and we are all thankful for this. He will be missed at the office and we all wish him the best of luck in his future endeavors.
Stockholm October 27, 2017
SVEIN ERIK LILLELAND
CEO (Interim), D. Carnegie & Co
This information is information that D. Carnegie & Co AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, at 7 a.m. CEST on October 27, 2017.
About D. Carnegie & Co
D. Carnegie & Co is a property company focusing on residential properties in the Greater Stockholm region and other growth areas. The company’s business concept is to own property portfolios slated for a gradual renovation of apartments in conjunction with the natural turnover of tenants. This can take place quickly and cost-efficiently thanks to extensive experience from the company's renovation method which, among other things, means that no evacuation needs to take place. In addition to this, the company creates value through the development of building rights in existing portfolios. The market value of the company’s properties amounted to SEK 20,594 million on 30 September 2017. The total rental value amounted to SEK 1,562 million annually on 30 September 2017. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed on Nasdaq Stockholm.