An intensive start to the year in a still cautious market
Summary of January–March 2018
- Net sales for projects run entirely by SSM totaled 95.5 MSEK (136.4).
- Operating profit was 7.9 MSEK (21.2) and the operating margin was 8.3 percent (15.6).
- Cash flow from operating activities was SEK -57.1 million (-1.5).
- A letter of intent was concluded regarding the exclusive right to acquire 1,200 building rights in Segeltorp, Rotebro, Spånga and the central parts of Täby, with a project value of 3.5 billion SEK.
- A land allocation was granted by the City of Stockholm for 100 student housing units in Brommaplan.
- The production of Täby Turf, a 176 rental unit project, started.
- An early consultation for Tellus Towers began on March 15 and ended on April 27. A decision by the City Planning Administration is expected in June 2018.
Significant events after the balance sheet date
- Sollentuna Hills was split in two projects with 94 cooperative apartments and 94 rental units, respectively.
The conversion from booking agreements to legally binding pre-agreements was initiated in May for the cooperative apartment project. It is envisaged that the production of both projects will start in 2018.
- The Group management team grew when Maria Boudrie joined as Chief Legal Officer and Christer Ljung joined as Chief Procurement Officer.
Mattias Roos, President & CEO, commented on the quarter:
“The changed and more cautious market conditions in the Greater Stockholm housing market have had an effect and caused a shift in our sales and design processes. There are indications that households are slowly regaining confidence in the housing market. We have noted an increased number of visitors to our viewings. The sales rate for projects under production remained at a market-leading level and was 96.4 percent at the end of the quarter. In the projects that will be completed in 2018, seven unsold homes remain.
The operating profit for the quarter totaled 7.9 MSEK, reflecting the lower activity level in the current production. At 8.3 percent, the operating margin dropped to during the quarter compared with the same quarter in the previous year. SSM is strategically organized with a flexible cost base, which we benefited from when the market changed rapidly, including by reducing support from consultants and the planning speed in development projects. Early this year, we strengthened our purchasing organization to allow us to intensify this important area of work in the future.
Due to the demographics of the Greater Stockholm region and the residents’ ability to pay, the need for smaller homes is growing continuously. This is confirmed by the fact that the number of sold homes of up to 45 square meters rose in the first quarter of 2018, compared with the first quarter of the previous year. There are also signs that the price level in this housing segment has recovered faster from the negative price trend that begun in the autumn 2017. SSM’s building rights portfolio and housing product are in line the greater demand. We are therefore well positioned for continued growth.
The information in this press release is such, which SSM Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 07.30 CET on May 15, 2018.
|For further information, please contact:
|Mattias Roos||Ann-Charlotte Johansson|
|President & CEO||Chief Communications & IR Officer|
|Email: email@example.com||Email: firstname.lastname@example.org|
|Telephone: +46 (0)761-65 17 71|
About SSM Holding AB (publ)
SSM produces functionally smart and affordable homes with attractive common areas, close to public transport and the city center for the company’s target group – the urbanites of tomorrow. The company envisions a housing market that is accessible to as many people as possible and aspires to produce 60 percent cooperative apartments, 30 percent rental units and 10 percent student housing. SSM is the leading property developer in its niche within the Greater Stockholm area and in May 2018, the company had approximately 6,700 building permits in its portfolio. SSM was listed on Nasdaq Stockholm (Mid-cap) on April 6, 2017. www.ssmlivingroup.com