Interim report January – March 2020

January–March 2020

• Rental income increased 13 percent driven by a growing property portfolio. The increase for the comparable portfolio was 2 percent.

• Net operating income increased 21 percent, of which 9 percent in the comparable portfolio.

• The surplus ratio was strengthened by four percentage points (five percentage points in the comparable portfolio). Low costs for heating and snow clearance are the primary reasons for the increase. During the first quarter in the preceding year, nonrecurring costs occurred, which also contributed to the increase.

• Profit from property management decreased 5 percent due to nonrecurring costs of approximately MSEK 80 in financing and central administration as a result of SBB’s acquisition.

• Unrealized changes in value amounted to nearly SEK 5 billion, which corresponded to an increase of 12 percent. Falling valuation yields were the foremost reason.

• Profit after tax increased more than eight-fold, primarily due to large value increases.

Significant events during and after the quarter

• At the end of 2019, SBB submitted a bid for Hemfosa and during the quarter, increased its holding in Hemfosa to more than 98 percent of the shares. A compulsory acquisition procedure has begun.

• Hemfosa’s shares were delisted from Nasdaq Stockholm on January 31. An Extraordinary General Meeting was held on February 19, at which a new Board of Directors was elected.

• An integration of Hemfosa into SBB commenced during the quarter. This led to a surplus of 12 persons in Hemfosa’s executive management and staff functions, which entailed a nonrecurring cost of nearly MSEK 15 that was charged to the first quarter of 2020. The long-term savings in the form of synergies in central administration will be MSEK 40 annually.

• As SBB has become the new major shareholder in Hemfosa, exemptions were negotiated to the change of control clauses in the loan agreements. The cost for these exemptions amounted to approximately MSEK 20 and were charged in their entirety to the first quarter of 2020.

• Bank loans of SEK 8 billion were repaid in advance and bond loans of SEK 1.7 billion were repurchased during the quarter. These loans were replaced by internal loans from SBB. The cost of early repayment amounted to MSEK 42 and was charged in its entirety to the first quarter of 2020.

• A property in central Stockholm was divested in March for MSEK 460, resulting in a capital gain of MSEK 51.

For further information, please contact:

Peter Anderson, CFO, +46 70 690 65 75, peter.anderson@hemfosa.se