Interim report January - June 2016

SUCCESSFUL SHARE ISSUE AND CONTINUED STREAMLINING

QUARTER APRIL-JUNE 2016

Rental income amounted to MSEK 642 (615)

Profit from property management totaled MSEK 352 (346), corresponding to SEK 2.23 per ordinary share (2.36)

Profit after tax amounted to MSEK 703 (670), corresponding to SEK 4.62 per ordinary share (4.62)

Cash flow from operating activities was MSEK 121 (153), corresponding to SEK 0.64 per ordinary share (0.94)

INTERIM PERIOD JANUARY - JUNE 2016

Rental income amounted to MSEK 1,292 (1,203)

Profit from property management totaled MSEK 693 (613), corresponding to SEK 4.61 per ordinary share (4.13)

Profit after tax amounted to MSEK 1,357 (1,177), corresponding to SEK 9.37 per ordinary share (8.21)

Recognized property value of SEK 31.9 billion (27.8) pertains to 417 (366) directly owned properties

Net asset value (EPRA NAV) per ordinary share was SEK 81.58 (65.43)

Cash flow from operating activities was MSEK 414 (537), corresponding to SEK 2.60 per ordinary share (3.57)

SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER

In July, Joacim Sjöberg was appointed deputy CEO, taking office in October 2016. At the same time, CEO Jens Engwall announced that he planned to step down from his operational position prior to the end of 2017.

A successful new share issue, with preferential rights for holders of ordinary Hemfosa shares, contributed approximately SEK 1.8 billion to the company.

Hemfosa’s 2016 Annual General Meeting (AGM) was held on April 19. Motions adopted by the AGM included payment of a dividend of SEK 4.20 per ordinary share and of SEK 10.00 per preference share both to be paid quarterly.

Hemfosa acquired 13 school properties properties at an underlying property value of approximately MSEK 444. During the quarter, possession was taken of ten of the properties.

Söderport Fastigheter, a joint venture in which Hemfosa owns 50 percent, divested a property at an underlying property value of MSEK 170.

Hemfosa acquired a healthcare property in the Stockholm area at an underlying property value of MSEK 195.

Hemfosa took over an office property in the municipality of Fredrikstad Norway at an underlying property value of MSEK 84.

COMMENTS FROM THE CEO

During the second quarter, Hemfosa implemented a rights issue of ordinary shares that contributed just over SEK 1.8 billion to the company. Thanks to the rights issue, we can take swifter action when we identify the right acquisition targets and continue to grow our community service properties. To strengthen Hemfosa’s management and ensure that the company’s long-term strategy is implemented forcefully, we have employed Joacim Sjöberg as deputy CEO.

By focusing on community service properties, we are building a property portfolio hallmarked by stable cash flows and long-term tenants. The major acceptance of the rights issue among our shareholders was highly encouraging and strengthens us in our conviction that we are thinking correctly and doing the right things – and we now have a better platform for continuing to grow Hemfosa in our three markets in the Nordic region. We are doing this with the distinct objective of streamlining the portfolio so that community service properties will account for at least 75 percent of the property value; today, they represent 63 percent.

STRONGER PLATFORM IN THE NORDIC REGION

During the quarter, we implemented a number of favorable transactions and strengthened our profit from property management. In Sweden, we acquired 13 school properties, primarily in the Stockholm region, at a value of MSEK 444, with an exclusive option to sign an agreement in the third quarter of 2016 to acquire an additional two schools. These are properties in good locations that are fully leased to well-established school operators, and we are delighted to be able to complement our portfolio with them. In June, we also signed an agreement for the acquisition of a centrally located healthcare property in Vällingby, western Stockholm, at a value of MSEK 195, with possession to be taken in September. In the Norwegian market during the quarter, we acquired a 20-percent stake in a property company focused on community service properties, while also taking possession of the Ringstabekk senior citizens center in the municipality of Bærum in the Oslo region. We are continuing our determined and active efforts to build Hemfosa’s position as the specialist in community service properties. It is gratifying that, despite intensifying competition not least in Sweden, we are maintaining a high transaction tempo and completing acquisitions on favorable terms – which was the precondition we set when implementing the rights issue during the spring. A key prerequisite for this is the expertise, determination and market familiarity possessed by Hemfosa’s organization.

SAFEGUARDING COMPETENCIES AND SUCCESSION PLANNING

In Norway, we have continued to strengthen the organization through the appointment of an experienced head of property operations, who will focus on developing our property management, thus providing management in Norway with better prerequisites to identify and implement attractive acquisitions and projects. In Norway, we are now established with the strength we need to manage a growing portfolio and, in Finland, we are working to get an optimal organization in place. I am delighted that Joacim Sjöberg will be strengthening Group Management as Deputy CEO starting this autumn, and will thus ensure the continued building of Hemfosa Fastigheter. Joacim Sjöberg has been close to the company as a financial adviser for many years; he possesses solid strategic expertise and is highly familiar with Hemfosa’s corporate culture. With him in the organization, we can continue our efforts to achieve our objectives and I can start to plan an orderly succession and eventually focus on playing a freer role as a major shareholder and ideally as a Board member.

Meanwhile, we will devote our full force to continuing to implement value-creating business and developing the existing operations in our markets in the Nordic region.

Jens Engwall, CEO

  

  

  

For further information, please contact: 

Jens Engwall, CEO, jens.engwall@hemfosa.se, mobile +46 70 690 65 50

Karin Osslind, CFO, karin.osslind@hemfosa.se, mobile +46 70 794 93 37

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About Us

Hemfosa is a Swedish property company focusing on community service properties in the Nordic region with its largest tenants being the Swedish state and municipalities. This provides stable cash flows and a healthy yield. In order to create value, Hemfosa also aims to actively participate in the transaction market. As per June 30, 2016, Hemfosa owned properties with a total property value of approximately SEK 33.2 billion, including the company’s share of the property value in joint ventures. Hemfosa’s common share has been listed since March 2014 and its preference share since December 2014, both on Nasdaq Stockholm. Read more at www.hemfosa.se.

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