Interim Report January - June 2017
• Rental income amounted to MSEK 858 (642) in the quarter and MSEK 1,580 (1,292) in the period
• Profit from property management totaled MSEK 699 (352) in the quarter, corresponding to SEK 4.25 per ordinary share (2.23), and to MSEK 1,146 (693) in the period, corresponding to SEK 6.92 per ordinary share (4.61)
• Profit after tax amounted to MSEK 874 (703) in the quarter, corresponding to SEK 5.31per ordinary share (4.62), and to MSEK 1,860 (1,357) in the period, corresponding to SEK 11.33 per ordinary share (9.37)
SIGNIFICANT EVENTS DURING AND AFTER THE PERIOD
• Five properties in central Örnsköldsvik, Sweden, were acquired at an underlying property value of MSEK 858
• 19 properties in Karlskrona, Sweden, were acquired at an underlying property value of MSEK 750
• 16 community service properties in a total of ten towns in Sweden, were acquired at an underlying property value of MSEK 135
• An agreement was signed to acquire a portfolio of ten community service properties located centrally in Halmstad for an underlying property value of MSEK 1,066 with possession to be taken in September
• In Norway after the end of the quarter, three service community properties were acquired one in Central Tønsberg, one in Eidsvoll Municipality, and one in Bergen with a combined underlying property value of approximately MNOK 392
COMMENTS FROM THE CEO
Acquisitions boost earnings
Hemfosa is now delivering on the long-term acquisition work that we have been conducting ever since the 2016 new issue. During the second quarter, we signed agreements for the acquisition of properties valued at approximately SEK 3 billion, predominantly community service properties in prime locations in expansive midsize and large cities in Sweden. These are typical Hemfosa transactions: major and complex portfolio transactions that we have worked on for a protracted period.
With ten properties in central Halmstad, Hemfosa will become an important player in community service properties in this city when it takes possession of the portfolio in September. We see interesting opportunities to develop the properties through increased leasing to community service operations and also by building new premises. In Karlskrona, we have already taken possession of the 19 properties we acquired with primarily tenants in the community services sector, such as the Police Authority, the National Board of Housing, Building and Planning and the Swedish Coast Guard. Thanks to already having our own personnel in the area, there is good potential to both add value to existing properties and enhance operational efficiency. The third major acquisition comprised a number of properties in central Örnsköldsvik and an office property in Uppsala that we took possession of during the second quarter.
I am both proud and delighted to have succeeded in finalizing these acquisitions of properties that ideally suit Hemfosa, in a competitive market in which increasing numbers of players are showing an interest in the community service segment. Including the current acquisitions, Hemfosa’s role as the Nordic specialist in properties for health and care, school and judicial services is clarified. At the same time, our earnings capacity is substantially enhanced. At the end of the period, annual earnings totaled
approximately SEK 1.7 billion, up 8 percent during the quarter, while we also showed a stable trend in both net operating income and profit from property management. As a result of the additional acquisitions we have now completed, the increase will continue during the autumn. During the early part of 2018, Hemfosa will become the sole owner of healthcare properties in Gardermoen,
Oslo, under the agreement we signed in March this year, which will further boost our earnings.
Including the currently agreed and implemented transactions, we have put the capital received from last spring’s share issue to work. We have also succeeded excellently in refinancing our liability side, by issuing a number of financial instruments during the winter and spring. Interest in the issues was substantial, thus resulting in favorable terms. During the quarter, we also implemented Hemfosa’s first incentive plan targeted at all employees. The considerable interest, whereby 89 percent of the maximum number of warrants on offer were acquired, is proof of strong internal confidence in Hemfosa’s continued development.
During the autumn, we will continue to work to provide the best premises for the most important operations in society. We will work on integrating the newly acquired properties into Hemfosa and on evaluating opportunities for development and adding value. In parallel, we are working on ongoing investments in existing properties for, among other tenants, Internationella Engelska Skolan, the Swedish Migration Agency and the Swedish Prison and Probation Service.
Jens Engwall, CEO
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