Sharp increase in gross profits
Interim Report January - June 2011
- Net sales increased by 18 per cent to SEK 1,348 (1,142) m, and gross profit increased by 11 per cent to SEK 838 (752) m as a result of a larger property portfolio.
- Profit before tax was SEK 690 (168) m. Profit after tax was SEK 509 (137) m, equivalent to SEK 3.70 (1.00) per share. The profit increase is mainly due to value changes on properties and financial instruments.
- As of 30 June 2011, the property portfolio comprised 635 (592) properties with a book value of SEK 26,123 (21,501) m.
- 44 (10) properties were purchased for SEK 4,187 (799) m. 3 (39) properties were also sold for SEK 46 (906) m, generating a profit of SEK 23 (14) m. These sales affected profit for calculating dividends by SEK 28 (1) m.
- Profit for calculating dividends for the interim period was SEK 223 (219) m, equivalent to SEK 1.60 (1.60) per share.
- The estimated profit for calculating dividends for the full year 2011 is unchanged at SEK 650 m, or SEK 4.80 per share.
Second quarter (April–June)
- Net sales increased by 31 per cent because of acquisitions to SEK 747 (571) m.
- Profit before tax was SEK 139 (132) m. Profit after tax for the period was SEK 102 (80) m, equivalent to SEK 0.70 (0.60) per share.
“Results for the period Net sales for the second quarter rose by over 30 per cent to SEK 747 m, gross profit increased by 22 per cent to nearly SEK 485 m while our trading net nearly doubled to over SEK 20 m in year-on-year terms. Our acquisition from NRP is the primary explanation for this growth. Module sales, which rose 65 per cent to SEK 76 m, also helped the improvement. Significant value changes on properties and financial instruments explain our profit of SEK 690 m before tax for the first half-year, against SEK 168 m last year.
Our administration costs increased due to a larger property portfolio, Hemsö being an independent organisation, higher transaction activity to date this year and the relocation of Kungsleden’s and Hemsö’s head offices. Our funding costs increased as a result of a larger property portfolio.
Lettings market still positive The lettings market remained positive in the quarter, with rent increases on re-negotiated agreements. Given the current rate of inflation, we can also expect healthy rent growth next year. The market for modular lettings was also strong. Vacancies are limited to a small number of properties, so overall, there are good prospects for continued stability in the underlying cash flow of our properties.
The transaction market was also positive in the quarter with a fairly high number of transactions. However, the yield improvement we’ve previously seen may level off. Kungsleden’s transaction focus will sharpen when Ylva Sarby Westman, our Business Development Manager for commercial properties, joins the group management on 1 September.
In the second quarter, the transaction climate was more hesitant as a result of increased financial and economic unrest in the world. This year to date, Kungsleden has sustained a higher activity level, and we see continued opportunities to do good deals despite increased financial unrest. In an international perspective, Sweden is in a stable position with sound government finances, although there is a risk of its growth rate slowing.
Outlook Kungsleden has a geographically diversified portfolio with fairly low average rents, conferring security in uncertain times. Accordingly, our earnings look very stable going forward. We are reiterating our estimate of profit for calculating dividends of SEK 650 m.”
For more information, please contact:
Thomas Erséus, CEO Kungsleden | phone 46 (0)8 503 052 04 | mobile 46 (0)70 378 20 24
Johan Risberg, Deputy CEO Kungsleden | phone 46 (0)8 503 052 06 | mobile 46 (0)70 690 65 65
Detta pressmeddelande finns tillgängligt på svenska på www.kungsleden.se/pressmeddelanden
Kungsleden AB (publ) discloses the information in this press release according to the Swedish Securities Markets Act and/or the Swedish Financial Trading Act. The information was provided for public release on 18 August 2011 at 8:00 a.m.
Kungsleden’s strategy is to ensure sustainable high and stable returns proceeding from its existing holding, and through acquisitions and divestments. As of 30 June 2011, the property portfolio comprised 635 properties with a book value of SEK 26.1 bn. The portfolio was located in a total of 143 municipalities, mainly in southern and central Sweden. Kungsleden has been quoted on the Nasdaq OMX Stockholm since 1999.