Continuing our strategy

D. Carnegie & Co AB (publ) reports for the fourth quarter of 2017 an increase in income from property management, SEK 62 million, compared with SEK 52 million for the fourth quarter of the previous year. Profit after tax is up to SEK 350 million compared to SEK 680 million for the fourth quarter of the previous year. For the year, income from property management amounted to SEK 357 million, compared with SEK 269 million for the corresponding period previous year. Profit after tax for the year amounted to SEK 1,579 million compared with SEK 1,678 million corresponding period previous year. 

Earnings per share after tax were SEK 20,34 (22.20). The adjusted equity (EPRA NAV) increased 25 percent compared to the corresponding quarter 2016 and amounted to SEK 127.90 per share (101.96) as of 31 December 2017.

January – December 2017

  •  Rental income increased to SEK 1,473 million (1,284)
  •  Net operating income increased to SEK 774 million (630)
  •  Income from property management increased to SEK 357 million (269)
  •  Changes in the value of investment properties of SEK 1,599 million (1,938), corresponding to 8.6 percent
  •  Profit before tax amounted to SEK 2,014 million (2,072)
  •  Profit after tax amounted to SEK 1,579 million (1,678)
  •  Earnings per share amounted to SEK 20.34 (22.20) before dilution and amounted to SEK 20.24 (21.93) after dilution 

October – December 2017

  •  Rental income increased to SEK 388 million (332) 
  •  Net operating income increased to SEK 191 million (154)
  •  Income from property management increased to SEK 62 million (52)
  •  Changes in the value of investment properties of SEK 390 million (802), corresponding to
    1.9
    percent
  •  Profit before tax amounted to SEK 449 million (872)
  •  Profit after tax amounted to SEK 350 million (680)
  •  Earnings per share amounted to SEK 4.51 (8.79) before dilution and amounted to SEK 4.48 (8.64) after dilution

Significant events during the fourth quarter

  •  In the end of October D. Carnegie & Co completed SEK 3,255 million refinancing.
  •  D. Carnegie & Co has entered into an agreement to acquire 1,420 apartments in the Stockholm region.
  •  D. Carnegie & Co has entered into an agreement to acquire 749 apartments in Västerås.

Significant events after the fourth quarter

  •  D. Carnegie & Co has resolved to invite shareholders to an extraordinary general meeting to be held on 23 February with a proposal to authorize the board of directors to resolve on a rights issue of up to SEK 1,500 million.
  •  In the end of January D. Carnegie & Co divested two properties in Eskilstuna to a private housing cooperative.
  •  D. Carnegie & Co announced on 21 February that Svein Erik Lilleland has been appointed permanent CEO for the company.

Statement from the CEO 

Continuing our strategy

• 507 renovated apartments during the quarter, totaling 1,673 for the full year

• Total investments in existing properties this year amounting to SEK 1,480 million

• 24 percent NOI increase during the fourth quarter compared to the same period last year

•  EPRA NAV increased by 25.4 percent this year, to SEK 127.90/share

Our path forward

I am convinced that companies with long-term ambitions must put their customers first in order to be successful. Satisfied customers are loyal and the company’s best ambassadors. For us, a residential real estate company focused on the greater Stockholm area and with a long-term ownership perspective, our tenants are our primary focus. We know that service and safety are highly valued by our tenants. Therefore, we continue our focus on these matters. We have recently strengthened our service organization with a Tenant Ombudsman, who has the task of protecting the individual tenant in certain more delicate or complex management issues.

The strategies that we have successfully pursued over the last four years remain in place, as we are firm believers that these create value for our tenants, for the local communities we operate in, and for our shareholders and other stakeholders. We have demonstrated consistently strong growth, which has enabled us to further optimize the capital structure of the company, including refinancing historic, longer leverage facilities with debt provided to us by several new large institutions. We are committed to continuing to work to further optimize the company’s capital structure, as appropriate, going forward. We are also committed to continuing our efforts to grow the portfolio through acquisitions and in the future through development on our existing land parcels.

Active on the acquisition front

In December 2017, we announced the acquisition of 1,420 apartments in the Stockholm region for SEK 2.47 billion as well as the acquisition of 749 apartments in Västerås for SEK 749 million. After these acquisitions our asset base comprises of 20,227 residential apartments with a yearly rental value of SEK 1,763 million. We are continuingly looking to further increase the size of our property portfolio, including, potentially, through further acquisitions.

Continuing optimizing our capital structure

As part of our ongoing efforts to optimize our capital structure, we completed a SEK 3,255 million refinancing in October 2017 which extended the Company’s overall debt maturity structure from 3.3 years to 5.3 years as per 31 December 2017. The facility also included a revolving capex facility amounting to SEK 750 million.

Potential rights issue

The board of directors resolved to invite all shareholders to an extraordinary general meeting on 23 February with a proposal to authorize the board of directors to resolve on a rights issue of up to SEK 1,500 million. A rights issue would contribute to funding our ongoing investments and acquisitions, and to maintaining an appropriate capital structure. We feel confident that proceeds from a rights issue can be efficiently deployed and enable us to further deliver on our financial targets.

Stockholm 23 February, 2018

SVEIN ERIK LILLELAND

CEO, 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 7.00 a.m. CET on 23 February, 2018. 

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 21,456 million on 31 December 2017. The total rental value amounted to SEK 1,576 million annually on 31 December 2017. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed on Nasdaq Stockholm.

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About Us

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 Bosystem 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 15,887 million as of September 30 2016. The total annual rental value amounted to SEK 1,366 million as of September 30 2016. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed on Nasdaq Stockholm.

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