Interim report January - June 2015
Strengthened position in the Norwegian market
APRIL–JUNE 2015 QUARTER
• Rental income amounted to MSEK 615 (386)
• Profit from property management totaled MSEK 346 (333), corresponding to SEK 2.44 per ordinary share (2.54)*
• Profit after tax amounted to MSEK 673 (333), corresponding to SEK 4.80 per ordinary share (2.54)*
• Cash flow from operating activities was MSEK 153 (67), corresponding to SEK 0.97 per ordinary share (0.51)*
INTERIM PERIOD JANUARY–JUNE 2015
• Rental income amounted to MSEK 1,203 (781)
• Profit from property management totaled MSEK 613 (399), corresponding to SEK 4.09 per ordinary share (4.02)*
• Profit after tax amounted to MSEK 1,082 (345), corresponding to SEK 7.59 per ordinary share (3.48)*
• Recognized property value of SEK 27.4 billion (17.3) includes 366 (195) directly owned properties
• Net asset value (EPRA NAV) per ordinary share was SEK 64.39 (55.08)*
• Cash flow from operating activities was MSEK 537 (134), corresponding to SEK 3.51 per ordinary share (1.35)*
* After the share split (2:1) implemented in May 2015, see below. Key figures were retroactively restated due to this.
SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER
• Hemfosa acquired community service properties in Norway – ten properties and three site leaseholds, a total of 13 preschools, at an underlying property value of MSEK 284. The preschools are located primarily in Oslo and South Norway.
• Hemfosa signed an agreement to invest approximately SEK 1 billion in the project planning and construction of a specialist hospital in Norway.
• Hemfosa divested a residential property and two housing development rights in Västerhaninge for approximately MSEK 315.
• Hemfosa continued to strengthen its central organization with the addition of one new position and has thus appointed a Head of Finance.
• In May 2015, a 2:1 share split was implemented entailing that each existing share was divided into two new shares of the same type. The number of ordinary shares at the end of the period was 131,440,208 (131,440,208), the number of preference shares at the end of the period was 10,000,000 (-).
• After the quarter, Hemfosa acquired a community service property in Karlstad. The property includes about 7,000 square meters of educational premises and is fully leased with a
20-year agreement.
COMMENTS FROM THE CEO
During the second quarter of 2015, our focus was largely on our new market in Norway – partly in integration of previous acquisitions, and partly in new interesting transactions that are in line with our strategic focus on community service properties and stable cash flows. At the same time, we are able to report a continued stable trend during the quarter, with improved profit from property management and higher earnings.
We took the first step into the Norwegian market for community service properties through several major acquisitions during the first quarter of the year. There is great potential and we foresee numerous opportunities in the Norwegian market that we would like to secure at an early stage. To generate an efficient management of the Norwegian property portfolio, we are now establishing a proprietary property management organization in Norway, which we will successively develop.
A WELL-CONCEIVED HOSPITAL PROJECT THAT OPENS THE DOOR TO MORE OPPORTUNITIES
In June, we were able to take another important step to strengthen Hemfosa’s position in Norway by signing an agreement to invest in a specialist hospital that is to be constructed at a central location close to Gardermoen Airport, outside Oslo, where the activities of two existing hospitals will be co-located. From the beginning, we have a 25-year lease in place with LHL, a Norwegian association with extensive experience in running specialist clinics in Norway. The project is very sound, with well-conceived planning, and collaboration with reputable partners bodes well for a stable process. This establishment will also open the door to more opportunities in the Gardermoen area, which is to be developed into a large health campus.
In June, we also implemented a transaction in Norway when we acquired a total of 13 preschools, primarily in the Oslo region and the southern part of the country. The acquisition entails long-term and stable earnings for Hemfosa, with a signed 20-year lease, while we are also expanding our portfolio in the preschool area. With both of these transactions, we confirm Hemfosa’s position as a strong player in community service properties in the Norwegian market. And we want more.
CONTINUED STREAMLINING OF THE PORTFOLIO
The Swedish market for property transactions remains extremely active, with many parties interested in each object. This applies in general and also particularly in our prioritized segment, Community Service Properties. At the same time, we feel secure knowing that Hemfosa’s financial strength, power of implementation and experience puts us in a special position and we also
recognize the potential for favorable transactions in the future – but although we know that we can be quick, we only want transactions that are right for us. A liquid market is also a great opportunity for us to streamline the existing portfolio by divesting objects that are not prioritized, in line with what we did in June when we divested residential properties and housing development rights.
We usually say that Hemfosa’s world is about recognizing beauty and finding opportunities not yet seen by anyone else – almost like gathering a valuable collection of art. On this note, we will continue to conscientiously develop our collection of fine properties with strong cash flows.
Jens Engwall, CEO
For further information, please contact:
Jens Engwall, CEO
Phone: +46 70 690 65 50, Email: jens.engwall@hemfosa.se
Karin Osslind, CFO
Phone: +46 70 794 93 37, Email: karin.osslind@hemfosa.se
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