Interim-report January - September 2017
• Rental income amounted to MSEK 762 (666) in the quarter and MSEK 2,342 (1,958) in the period
• Profit from property management totaled MSEK 515 (582) in the quarter, corresponding to SEK 3.09 per ordinary share (3.52), and to MSEK 1,661 (1,275) in the period, corresponding to SEK 10.01 per ordinary share (8.23). Profit from property management excluding share in profit from joint ventures amounted to MSEK 431 (358) in the quarter and MSEK 1,244 (951) in the period
• Profit after tax amounted to MSEK 775 (1,389) in the quarter, corresponding to SEK 4.73 per ordinary share before dilution (8.59), and to MSEK 2,635 (2,746) in the period, corresponding to SEK 16.06 per ordinary share before dilution (18.30)
SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER
• Community service properties were acquired in Norway at a total property value of MSEK 595, and possession was taken. The properties are located in four different municipalities and include a total leasable area of 39,000 sqm
• In Sweden, two community service properties and one commercial office property were acquired for a total of MSEK 384, and possession was taken
• After the quarter, possession was taken of ten centrally located community service properties in Halmstad for an underlying property value of MSEK 1,066
• After the quarter, on November 7, the Board of Directors of Hemfosa Fastigheter decided to evaluate the conditions for splitting the Group into two listed companies
COMMENTS FROM THE CEO
Additional acquisitions and higher earnings
We can report yet another stable quarter for Hemfosa with higher earnings, further acquisitions and a high level of activity in all regions, with a particular focus on Norway. At the same time, the Board has made a decision on the future direction of Hemfosa – it will evaluate the conditions for splitting Hemfosa into two listed companies.
We followed up the transaction-intensive first half of the year with agreements for acquisitions of several community service properties, primarily in our Norwegian market. Viewed as a whole, we completed business transactions at a value of MSEK 595 in Norway, including our first acquisition in Bergen on the Norwegian west coast, where we look forward to increasing our presence. With these latest acquisitions, we now have a property portfolio in Norway worth approximately SEK 5 billion and we can definitely do more in this country.
We invested slightly more than MSEK 190 in our existing portfolio during the quarter. We could welcome more than 550 pupils between the ages of 13 and 16 to start their school year at wonderful new premises at a property in Härnösand that we had acquired in a vacant state and subsequently extensively refurbished and customized. We are continuing to work on this property, and other properties in the portfolio, to enhance the efficiency of the technology and energy consumption. Our investments are to be financially sustainable at the same time as they should reduce the environmental footprint.
THE MOST IMPORTANT PEOPLE DESERVE THE BEST PROPERTIES
We carried out a branding campaign in the spring and summer to further increase awareness of Hemfosa. The primary target group was our most important customers – the people who are property managers in the public sector and the people that use and operate in our properties. We feel that – together with these individuals – we can add the greatest value through our way of working. Our message is encapsulated in the heading above “the most important people deserve the best properties”. What we want to say with this slogan is that we always focus on the users of our properties – our tenants – who usually are people in different types of community service operations.
EVALUATING THE CONDITIONS FOR SPLITTING HEMFOSA
It has now been eight years since we founded Hemfosa and acquired our first properties. It is five years since we listed the company and we now manage properties worth nearly SEK 40 billion. We have met the targets of our listing and have reached a substantial size and structure, which means that we are now at a point where we must decide on a strategic path regarding the form of the company in order to create the highest possible value for our shareholders going forward.
In light of this, the Board has decided to evaluate the conditions for splitting Hemfosa into two listed companies – one company concentrating on community service properties and one transaction- based, opportunistic company. The Board’s decision was published in a separate press release yesterday, November 7.
The basis for this decision is that we have generated a significant property portfolio with a growing share of community service properties with stable cash flows and see continued opportunities for high growth. At the same time, we have an extensive portfolio of commercial properties with the potential for expansion. Two specialized companies will increase opportunities for leveraging the potential of all parts of the operations and creating even greater efficiency and drive in the organizations.
We are now carrying out an in-depth analysis of the conditions for this scenario and our aim is to provide more information in the first quarter of next year. I feel a great sense of personal responsibility for helping find the best way toward future value creation and I look forward to yet another exciting chapter in Hemfosa’s history.
Jens Engwall, CEO
For further information, please contact:
Jens Engwall, CEO, email@example.com, phone +46 70 690 65 50
Karin Osslind, CFO, firstname.lastname@example.org, phone +46 70 794 93 37