Interim report January - March 2015

Active start for 2015

January - March 2015 quarter

Rental income amounted to MSEK 589 (395)
Profit from property management totaled MSEK 266 (67), corresponding to SEK 3.57 per ordinary share (2.10)*
Earnings for the quarter attributable to Parent Company shareholders amounted to MSEK 416 (12), corresponding to SEK 5.95 per ordinary share (0.36)*
Recognized property value of SEK 27.1 billion (16.4) includes 361 (194) directly owned properties
Net asset value (EPRA NAV) per ordinary share was SEK 126.19 (105.47)
Cash flow from operating activities was MSEK 420 (69), corresponding to SEK 6.01 per ordinary share (2.06)*

* At the end of the quarter, the number of ordinary shares was 65,720,104 (61,372,278), while the number of preference shares was 5,000,000

Significant events during and after the quarter 

In early 2015, Hemfosa took the first step into the Norwegian market through the acquisition of eight community service properties in the Oslo region for a consideration of SEK 3.0 billion.
In February, Hemfosa divested nine logistics properties valued at approximately SEK 0.8 billion.
In February, Hemfosa agreed to invest in community service properties and one logistics property at a value of approximately SEK 0.2 billion.
In February 2015, Hemfosa acquired community service properties in western Sweden at a value of SEK 0.4 billion.
There are no sigificant events after the quarter.

Comments from the CEO

22015 began as actively as 2014 ended — with several strategic acquisitions, divestments of non-priority properties and a number of lease extensions.
This
precise combination of transactions is the core of Hemfosa’s value creation and a logical continuation of the successful journey we have commenced.

Norway - a new market with continued potential
During the quarter, we took the first step into the Norwegian market through the acquisition of eight community service properties with an underlying value
of SEK 3 billion. The properties
are located in the Oslo region and we currently have an excellent initial portfolio in the form of long-term leases, low risks
and stable counterparties. We see continued major potential for
us to expand and to now establish an internal management and development organization
to
strengthen our position in the Norwegian market.

Sweden - manage, develop and seize opportunities
As most of you know, we are currently conducting business in a distinctly low interest-rate environment and it is not easy to find and implement favorable
transactions of a straightforward
nature. We will continue to be active with a view to capturing the opportunities that arise and where Hemfosa’s size, flexibility
and expertise will be at its best, perhaps by acquiring individual
properties and highly complex portfolios. In line with our confirmed strategy, we increased our
portfolio of community service properties in Sweden during the quarter, through the acquisition of properties valued at a total of approximately SEK 0,5 billion.
Community service properties therefore accounted for 57 percent of Hemfosa’s total
property value. At the same time, we also divested properties valued at
nearly SEK 1 billion, with a
portfolio in the less prioritized segment, Logistics properties, accounting for the largest proportion. In our management operation,
we renegotiated and extended several leases and signed new
leases with long-term tenants. We see this as confirmation that Hemfosa is perceived as a sensitive
and competent landlord that meets the needs of its tenants, which in turn means that we are able to sign leases that will generate stable, strong cash flows.

Increased earnings - equipped for continued growth
We also increased profit from property management during the first quarter to MSEK 266, compared with MSEK 67 in the year-earlier period. We continue to focus
on increasing earnings
capacity and I am proud that our earnings capacity at the end of the quarter was SEK 1.3 billion compared with SEK 0.6 billion a year earlier.
I have the privilege to lead a competent, equal opportunities and expanding organization, where we jointly shape a strong corporate culture that is continuously
developing and driven by
good business. Hemfosa aims to be the largest and best owner of community service properties, implement complex transactions and divest
holdings that do not fit, thus increasing the quality of the
property portfolio. Continued growth requires financing, and this is why the Board will request a mandate at
this year’s Annual General Meeting to issue new preference shares. We want to be
ready if opportunities arise. At the same time, we will continue to develop our
operation by acquiring
properties with strong cash flows, which in turn will generate shareholder value and facilitate higher dividends. Not such a bad equation.

Jens Engwall, CEO



For further information, please contact:

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

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

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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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