Interim report Quartiers Properties January - September 2023

Quartiers Properties AB (publ) today publishes the company's interim report for the third quarter of 2023.

JULY - SEPTEMBER 2023

• Revenue from operator activities totalled KSEK 41,164 (38,166), including KSEK 37,100 for Boho Club, which thus increased its revenue compared with the corresponding period in 2022 by 27.2%. Other income from operator activities refers to the rental operation at Quartiers Marbella Apartments.
• Net sales totalled KSEK 64,104 (78,385), corresponding to a decrease of 18.2%. The decrease can be attributed to fewer apartments sold during the quarter compared to the corresponding quarter in 2022. 
• Operating profit before depreciation (EBITDA) amounted to KSEK 9,129 (7,556), corresponding to an improvement of KSEK 1,573. EBITDA adjusted for previous revaluations of apartments sold during the period amounted to KSEK 19,845.
• Income from the sale of properties during the period totalled KSEK 22,940 (40,219) and related to the sale of five apartments in the Hacienda Collection.
• The company's cash flow from operating activities including the sale of operational properties amounted to KSEK 9,236 (23,882).
• Gross profit improved by KSEK 1,185 and amounted to KSEK 9,586 (8,401).
• Profit after tax totalled KSEK 302 (6 076).
• Earnings per share for the period amounted to SEK 0.01 (0.11). 

JANUARY - SEPTEMBER 2023

• Net sales amounted to 182 195 (167 355) KSEK corresponding to a growth of 8,9%.
• Operating profit before depreciation (EBITDA) amounted to KSEK 3,319 (333), corresponding to an improvement of KSEK 2,986. EBITDA adjusted for previous revaluations of apartments sold during the period amounted to KSEK 39,027.
• Revenue from operator activities totalled KSEK 83,559 (73,367), corresponding to growth of 13.9%. Revenue from the sale of properties during the period totalled KSEK 98,636 (93,988) and relates to the sale of 20 apartments in the Hacienda Collection.
• The company's cash flow from operating activities including divestment of operating properties amounted to KSEK 60,369 (31,057).
• Gross profit improved by KSEK 5,416 and amounted to KSEK 7,932 (2,516).
• The result after tax amounted to -22 150 (-23 584) KSEK.
• Earnings per share for 1 January - 30 September 2023 amounted to SEK -0.38 (-0.45). 
• Reported equity as of 30 September 2023 amounted to 223 135 (253 559) KSEK.
• The company's net asset value as of 30 September 2023 amounted to KSEK 320,839 (320,172), corresponding to SEK 5.56 (5.55) per share. The net asset value has been adjusted for the preference shareholders' share of equity corresponding to KSEK 81,238 and accumulated unpaid dividends and penalty interest on unpaid dividends of KSEK 27,426.

SIGNIFICANT EVENTS IN THE THIRD QUARTER

• An extraordinary general meeting on 20 July decided to resume the quarterly distribution of the company's preference shares starting on 30 September.
• On 23 August, the municipal council of Marbella municipality approved the company's proposed modification of the current zoning plan for the Centro Forestal Sueco property. The decision significantly increases the likelihood that Quartiers will obtain 20,000 new square metres of building rights on its properties in Marbella, as previously communicated.

SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD.

• On 4 October, the company entered into a cooperation agreement with Nowonomics AB and QQM Fund Management regarding the establishment and marketing of joint property funds. As part of the collaboration, Quartiers Properties is investing a total of SEK 12.6 million in Nowonomics AB (publ) ("Nowo") via two directed issues. The first issue of SEK 6.3 million was carried out on 4 October and the second part will be carried out in January 2024.
• On 2 November, the company signed an agreement with Taylor Wimpey de España S.A.U to sell the Altura160 project in Benahavís for a purchase price in EUR equivalent to SEK 107.2 million. Payment will be made in cash, thereby freeing up a cash flow of SEK 97.7 million over the next 13 months.

The CEO comments

It is with great pride that I reflect on our journey and share the company's progress. With the successful sale of project Altura160 and a significant number of apartments in Hacienda del Señorio de Cifuentes, we have started a new phase in our growth journey. Project Altura160 is being sold at a premium of SEK 62.9 million compared to book value and we are releasing cash of SEK 97.7 million over the next 13 months.

Our dedicated and skilled Boho Club operations team has once again outperformed itself and despite macroeconomic setbacks, we have managed to increase our revenue by 27 per cent from 2022 - a year that was already strong for the hotel industry. Our strategic decision to focus purely on hotel properties has started to pay off.

The closedown of our aparthotel - its last operational day was 31 October - has played an important role. It has not only generated a positive cash flow that we reinvested in the property, but also transformed the site into a vibrant and desirable destination. Our operations team, with its personalised approach and service-oriented mentality, has succeeded in creating lasting value, which is reflected, among other things, in the sale of Altura160.

In our endeavour to improve our hotel properties, we have also taken important steps forward on the Golden Mile. We have been rewarded for our efforts to obtain additional building rights, which means that we are approaching a potential increase in value of approximately SEK 860 million, corresponding to SEK 15 per ordinary share.

With the success of the Hacienda del Señorio de Cifuentes and Altura160, we now look forward to replicating these achievements on the Golden Mile, an opportunity that could be a game-changer for our company.

To ensure continued growth, we are now working to structure the company for the future. In collaboration with Nowonomics AB, we are developing a fund structure that aims to effectively secure a continuous supply of capital for long-term investments. In Spain, we are also exploring the possibility of integrating parts of our property portfolio into a Spanish property fund - the most cost-effective way of managing profitable properties and attracting international investors directly to our projects.

Today we are in a stronger position than ever with a more focused and cost-effective structure than before. We look forward with confidence to utilising the tools we have established to drive the company towards profitable and balanced growth.

Finally, don't miss the chance to visit Marbella this autumn. With temperatures just above 20 degrees and bright sunshine, it is my personal favourite time to enjoy the Costa del Sol.

Marcus Johansson Prakt
CEO

Quartiers Properties AB (publ) is required to disclose this information under the EU Market Abuse Regulation. This information was provided for publication through the agency of the contact person above at 08.00 a.m. on 9 November 2023.

Please address questions to:

Quartiers Properties
Marcus Johansson Prakt, Chief Executive Officer
Email: marcus.prakt@quartiersproperties.se
Phone: +46 72 018 59 98

The company in brief

Quartiers Properties is a Swedish property development company with a focus on excellent design and quality, and is active on the Spanish Costa del Sol. The company was founded in 2014, since when it has built up a portfolio of investment properties and project properties. The company develops, sells and rents out properties.

Quartiers Properties owns and manages Boho Club, which is a boutique resort in Marbella’s Golden Mile district with a restaurant and 40 hotel rooms. The project has won awards for its design and architecture, and since its launch in 2019, both the hotel and the restaurant have established themselves as leading venues in Marbella. Visit Boho Club website www.bohoclub.com to book a hotel room or reserve a table at the restaurant. The restaurant is open daily, serving breakfast, lunch and dinner.

Quartiers Marbella Apartments is an apartment complex in Benahavís, the neighbouring municipality to Marbella, where Quartiers runs apartment rental operations. The apartments are ideal for short- and long-term accommodation and are popular among families, as well as groups visiting Marbella for leisure purposes, fitness holidays or to play golf. Visit our website www.quartiersmarbella.com to book your apartment.

Hacienda Collection is an apartment project in Benahavís just outside Marbella, where Quartiers Properties is selling apartments that are ready for immediate occupancy. The apartments are located in a gated community featuring wonderful views of the Mediterranean. These apartments feature a large, open floorplan with big windows, high-end kitchen, separate laundry room and 2–3 bedrooms. The spacious terraces offer plenty of scope for spending time with family and friends. Visit the website for additional information and to book an online or in-person viewing:  www.haciendacollection.es.

Mangold is the company’s Certified Adviser. Mangold can be contacted on +46 (0)8 503 015 50 or by emailing ca@mangold.se.