INTERIM REPORT JANUARY-JUNE 2015

• Rental income of SEK 591.9 million (86.9)
• Net operating income of SEK 256.6 million (37.6)
• Income from property management of SEK 47.0 million (16.5)
• Changes in the value of investment properties and derivatives of SEK 260.4 million (77.1)
• Profit after tax of SEK 213.1 million (81.)
• Earnings per share of SEK 3.01 (1.82) before dilution
• Earnings per share of SEK 2.38 (1.82) after dilution

Significant events during the second quarter

• Three properties were acquired in Stockholm with a portfolio of 1,009 apartments
• SEK 1,000 million unsecured bond was issued with a term to maturity of three years, STIBOR 3 months + 3.75%
• Four properties were divested:  two in Södertälje and two in Eskilstuna, with the aim of streamlining the portfolio to focus on residential properties
• Approval was granted for listing on Nasdaq Stockholm’s main list, Midcap
• 60% stake in Vårberg Centrum was sold with the aim of streamlining to focus on residential properties in Greater Stockholm
• Svensk Bolig Holding halved its shareholding, from 20 million to 10 million shares

Significant events since the second quarter

• A property was acquired in Norrköping with portfolio of 285 apartments
• The earlier comunicated selling of the Göteborg property have not been finished, but it is still for sale
• Another 83 apartments have been renovated at the time of publishing of this report 

Statement from the CEO

The second quarter of the year, too, has been characterized by a high level of activity. We carried out a major issue of unsecured bond during the quarter, thereby ensuring that our capital requirements will be met over the next 2 to 3 years. We have also signed an agreement to acquire an additional 1,000 apartments in Stockholm. In addition, we have implemented a faster pace of apartment renovations, which will further improve our earnings.

On April 15, we issued unsecured bonds valued at SEK 1 billion to a large number of Swedish and international investors, primarily institutions. The proceeds will be used mainly for our extensive program of renovations, until a cash flow level is reached that is adequate for the high pace we wish to achieve. We might also apply part of the proceeds to acquire additional apartments. In addition, we have repaid the outstanding vendor note owed to Kvalitena.

During the period we have also continued to streamline our portfolio by selling, among other things, a large shopping center and a smaller shopping center, as well as a care home. We have also entered into a contract to acquire 1,000 apartments in Jordbro and Vårberg close to our earlier holdings in these areas. The acquisition took place on attractive levels with a square meter price that is clearly below what our existing properties are valued at.

During the period we have increased the pace of our apartment renovations, with the number of commenced renovations and completions apartments increasing to 126, during the first half of the year. Moreover, a further 83 apartments completed at the end of the period, but not inspected and not included in the completed number. They are now completed.

However, due to the increased volume of materials our supplier has encountered continued problems since a new warehouse has been under construction. We anticipate that the pace might be increased further during the remainder of the year when the new warehouse is completed and brought into commission. We have also continued to accelerate other investments in facades, heating plant, laundry rooms, etc. which will also increase our rental income and reduce repair and maintenance costs.

Our forecast is that aproximatly 500 apartments will be renovated during 2015.

Since we acquired a major part of the portfolio after the second quarter of 2014, in this report the Company is also publishing an annual earning capacity report as of June 30, 2015, with the aim of providing guidance over and above the formal interim report. The earning capacity report shows an ongoing net operating income at this time of SEK 522 million, which is somewhat lower than in the preceding quarter; this is due to the divestments carried out in connection with the streamlining of the portfolio (see also page 23). However, the earning capacity report does not constitute a forecast as regards the future and does not include anticipated changes in rents and costs.

We are also pleased to note that, in connection with the valuation we carried out on June 30, 2015, value increases of more than SEK 126 million were recorded during the second quarter.

On May 12, the Company was relisted on the Midcap segment on the Stockholm Stock Exchange.

Stockholm, August 13, 2015

ULF NILSSON,
CEO of D. Carnegie & Co

For more information, please contact:
Ulf Nilsson, CEO, D. Carnegie & Co, +46 (0)8 121 317 25
Per-Axel Sundström, CFO, D. Carnegie & Co, +46 (0)8 121 317 25

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. 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 MSEK 11,700 on 31 March 2015 and the total rental value is estimated at MSEK 1,190 annually. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed on Nasdaq Stockholm.

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