Delivering for our tenants

Hembla AB (publ) reports for the second quarter of 2019 an increased profit after tax amounting to SEK 428 million compared to SEK 1 672 million for the second quarter of the previous year. For the first half of 2019, profit after tax amounted to SEK 1,004 million compared with SEK 1 827 million for the corresponding period previous year.

Earnings per share after tax amounted to SEK 4.64 (18.41). The adjusted equity (EPRA NAV) increased by 24 percent compared to the second quarter 2019 and amounted to SEK 181.25 per share (145.98) at the end of the period.

1 January – 30 June 2019

Rental income increased to SEK 956 million (852) 

Net operating income increased to SEK 488 million (431)

Income from property management increased to SEK 164 million (119)

Unrealized changes in the value of investment properties amounted to SEK 1,125 million (2,061)

Changes in the value of financial instruments of SEK -6 million (-44)

Profit before tax amounted to SEK 1,306 million (2,116)

Profit after tax amounted to SEK 1,004 million (1,827)

Earnings per share amounted to SEK 10.90 (21.45) before dilution and amounted to 10.87 (21.40) after dilution

Statement from the CEO 


During the first half of 2019, we achieved a profit after tax of SEK 1,004 million, where the increase in revenue was driven partly by a larger portfolio compared with the same period last year, and that we continue to renovate apartments at a high rate. We have completed 732 renovations so far this year. Worth mentioning on the cost side is the restructuring reserve related to the reorganization, which has had a negative impact of SEK -25 million on the result for the period. This change is expected to yield in excess of SEK 10 million in annual savings going forward. Except an improved result, we believe that we will see both more satisfied tenants and employees.

Organizational changes

A major organizational change was launched this year. The purpose of the new organization is to be able to deliver our promise to always put the tenant first. It is about delivering first-class service to our tenants and at the same time offering our employees opportunities professional development.

Our service- and maintenance organization is now structured in different companywide functions working with common methods, processes and routines. The launch of the new organization was carried out without major difficulties, thanks to solid preparatory work and highly motivated employees.

My strong belief is that change must be allowed time. It is important to have a humble attitude and understanding that change often is a long process that involves much more than arrows and boxes in an organizational chart. It is about a new culture emerging and it is a process that does not end just because the new organization is physically in place. The journey continues in another form and in the new organizational structure. Therefore, we will continue to invest both time and resources in order to ensure successful and lasting change, which will result into a more effective and efficient structure over time. This also includes optimization of IT where we have developed a strategic plan to better support our business.

I am convinced that in the next tenant survey we will see evidence of how our new organization has improved the tenants’ experiences of us as a landlord and the service we offer.

Client service

The most important motive for our change process is to improve our service offering to our tenants. An important part of this is the development of our customer service function. During the second quarter, we have further strengthened this function and when the books for the second quarter are closed we have 16 employees on site who each week answer over 2,000 tenant contacts via telephone, email and social media. Today, we can offer our tenants service in 13 different languages through our centralized customer service organization. A centralized customer service center with high availability is something that our tenants clearly requested in our annual surveys. It feels great to be able to deliver in accordance with the tenants’ wishes.

Strategic development plans and dialogue

During the second quarter, we also strengthened our focus on the strategic development of our communities and districts. Our vision of creating vibrant communities includes many different aspects from social sustainability and the development of commercial offerings to physical measures in our properties and outdoor environments. Projects like the ones recently completed in Husby and Rinkeby are a demonstration of our commitments and focus in this respect. In order to coordinate our efforts, we established a new role in the company in the form of a city district development manager. This is a key role for the long-term development of our properties, communities and for the strategy ahead.

It is important to listen to the residents’ perspectives when developing our properties. Scientific research in sustainable urban development is unambiguous; influence over the living environment and its development is important for tenants’ sense of well-being. To achieve this, we as property owners must create opportunities and forums for that dialogue. An example of this is the tenant dialogue that we conducted in Husby during the quarter. We asked questions about the tenants’ view of the need for refurbishment and renovation of their neighbourhood. The focus was on the properties’ external areas such as facades and balconies. The results were clear; the tenants want a comprehensive renovation of both the buildings and the surrounding environments. In the feedback, it was also clear that such a refurbishment would positively affect the tenants’ experiences of quality of life and well-being. On the question of whether the tenants would like renovations to be carried out, despite inconveniences in the form of construction work, more than 90 per cent responds yes. This shows a strong support for our development strategy.

Focus on social sustainability

We are in the middle of the summer when the quarterly report is published. Part of the work during the spring is a preparation for the summer and our long-term approach is to strengthen the communities through social activities during the summer months.

In several communities, we contribute to the summer being filled with activities and adventures for our young residents. An example is football schools which we offer in several of our neighbourhoods. Young residents can participate free of charge and the activities are led by experienced coaches. Activities like this strengthen the whole community and create opportunities for social interaction. In Järva, for example, we support the football club Vasalunds IF, which has a well-established concept for football schools and hundreds of children attend the activities every week.

We also cooperate with municipalities to provide residents with opportunities for summer jobs. For many, it is their first job and their first formal work experience. One example of this is in Huddinge where we, together with other nearby property owners, can offer over 300 young residents summer jobs. Another example is in Uppsala where welcome 30 individuals in the district of Gottsunda/Valsätra to become a part of our team during the summer. In addition to giving the individual an opportunity for his or her first job, we are convinced that this also contributes to and strengthens the local community.

Our environmental footprint

Issues related to environmental sustainability are top-of mind in society today. This awareness is positive, although the seriousness of the challenges facing the world is worrying. There is of course an individual responsibility to take, but as an owner of real estate, with residential as our core business, we have a special responsibility to make our environmental footprint as small as possible.

     Through our refurbishments and renovations, we reduce the energy consumption and needs of our properties materially. We also add alternative and sustainable energy sources to increase the proportion of consumption that comes from CO2-neutral sources. During the quarter, we evaluated several of the solutions that we previously installed. One example is solar panels installed on roofs on some of our buildings. These have proven to be a sound investment both from a cost- and environmental perspective. Another example is geothermal heat, which we have installed in several locations. In Katrineholm, geothermal installations, new ventilation systems and solar panels have contributed to reducing CO2-emissions by about 15 tonnes per year. We are now looking at how we can implement similar energy solutions across our portfolio going forward.

During the quarter, we also continued our efforts to improve the garbage and waste management in our neighbourhoods. With over 21,000 apartments, garbage management is one of our most significant environmental footprints. During the quarter, we increased the number of information initiatives to raise awareness and compliance to recycling amongst our tenants. Within the framework of the project Clean & Safe, we collaborate with various local associations to collect and sort waste around our properties. As a property owner we have an important role to play in supporting our tenants to make the right choices from an environmental perspective.

We enter the third quarter of the year as a partly changed and stronger company with a maintained vision of creating vibrant communities with the tenants as our top priority.  

Stockholm 19 July 2019

Svein Erik Lilleland

CEO Hembla 

This constitutes information that Hembla AB is legally obliged to publish under the EU’s Market Abuse Regulation and the Swedish Securities Market Act. The information was released for publication on 19 July 2019 at 07.00 a.m. (CEST).

About Hembla

Hembla is a property company focusing on residential properties in the Greater Stockholm region and other growth areas. The company’s business concept is to own property portfolios slated for a gradual renovation of apartments in conjunction with the natural turnover of tenants. This can take place quickly and cost-efficiently thanks to extensive experience from the company's renovation method which, among other things, means that no evacuation needs to take place. In addition to this, the company creates value through the development of building rights in existing portfolios. The market value of the company’s properties amounted to SEK 32,964 million on 30 June 2019. The total rental value amounted to SEK 1,953 million annually on 30 June 2019. The economic occupancy rate is high – vacancies are virtually non-existent. Hembla is listed on Nasdaq Stockholm.