The Supreme Administrative Court rejects JM’s application for leave to appeal
The Supreme Administrative Court announced on April 21, 2023, that it does not intend to hear the case between JM and Finansinspektionen with regard to JM’s annual report for 2017.
In November 2022, the Administrative Court of Appeal announced its ruling that JM must consolidate tenant-owner associations in current production in its consolidated financial statements according to IFRS. JM chose to apply for leave to appeal with the Supreme Administrative Court. The decision by the Supreme Administrative Court to not grant leave to appeal thus closes the matter, and the ruling by the Administrative Court of Appeal becomes legally binding. Under this ruling, the tenant-owner associations formed through JM’s residential development must be consolidated in JM’s consolidated financial statements according to IFRS.
Changed accounting principle
As of fiscal year 2023, JM, according to IFRS, consolidates ongoing projects with Swedish tenant-owner associations during the production phase up until the point in time that the home buyers of the residential units take over occupancy. Accordingly, JM recognizes the projects in the balance sheet as work in progress and interest-bearing liabilities. Revenue and expenses for the projects are recognized as the home buyers take over occupancy of the residential units. The changed accounting principle entails that JM will recognize all residential projects that are developed in-house in Sweden, Norway and Finland according to the completed contract method. Revenue from residential development through tenant-owner associations in Sweden was previously recognized over time.
To provide a correct overview of JM’s earnings trend over time with regard to residential development through tenant-owner associations, JM will continue to present segment reporting where revenue in these projects is recognized in accordance with the percentage of completion method. The reporting of financial key ratios will also take these conditions into consideration, which is in line with JM’s internal governance model. Neither JM’s risk profile nor existing financing agreements are impacted by this accounting change.
Restated tables
The changed accounting principle for legal consolidation according to IFRS has been applied retroactively from January 1, 2022. The tables attached present the restatement of the new accounting principles for segment reporting and legal consolidation per quarter in 2022 and per opening balance on January 1, 2023.
| CONDENSED CONSOLIDATED INCOME STATEMENT 2022, SEK M | Reported IFRS | Effect of restatement | Restated IFRS |
| Revenue | 15,747 | 276 | 16,023 |
| Production and operating costs | −12,607 | −317 | −12,925 |
| Gross profit | 3,140 | −41 | 3,098 |
| Selling and administrative expenses | −1,108 | −1,108 | |
| Gains/losses on the sale of property, etc | −11 | −11 | |
| Operating profit | 2,021 | −41 | 1,980 |
| Financial income and expenses | −89 | −89 | |
| Profit before tax | 1,933 | −41 | 1,891 |
| Taxes | −404 | 9 | −395 |
| Profit for the period | 1,529 | −32 | 1,496 |
| CONDENSED CONSOLIDATED BALANCE SHEET 12/31/2022, SEK M | Reported IFRS | Effect of restatement | Restated IFRS |
| ASSETS | |||
| Non-current assets | 565 | 565 | |
| Project properties | 932 | 932 | |
| Development properties | 8,465 | 8,465 | |
| Utilization of site leasehold rights | 513 | 513 | |
| Participations in tenant-owners associations, etc. | 308 | 308 | |
| Work in progress | 5,095 | 10,507 | 15,602 |
| Current receivables | 6,664 | −2,897 | 3,767 |
| Cash and cash equivalents | 1,840 | 311 | 2,151 |
| Total current assets | 23,818 | 7,921 | 31,739 |
| Total assets | 24,383 | 7,921 | 32,304 |
| Equity and liabilities | |||
| Equity | 8,725 | −684 | 8,041 |
| Non-current interest-bearing liabilities | 892 | 892 | |
| Other non-current liabilities | 414 | 414 | |
| Non-current provisions | 2,646 | −177 | 2,468 |
| Total non-current liabilities | 3,952 | −177 | 3,774 |
| Current interest-bearing liabilities | 7,593 | 7,887 | 15,480 |
| Other current liabilities | 3,992 | 895 | 4,887 |
| Current provisions | 122 | 122 | |
| Total current liabilities | 11,707 | 8,782 | 20,489 |
| Total equity and liabilities | 24,383 | 7,921 | 32,304 |
| Key figures 2022 | Reported IFRS | Effect of restatement | Restated IFRS |
| Operating margin, % | 12.8 | −0.4 | 12.4 |
| Debt/equity ratio, multiple | 0.9 | 1.0 | 1.9 |
| Equity/assets ratio, % | 36 | −11 | 25 |
| Earnings per share, SEK | 22.70 | −0.50 | 22.20 |
| Q. 4 2022 | Q. 3 2022 | Q. 2 2022 | Q. 1 2022 | |||||||||
| Income statement, SEK M | Repor-ted IFRS | Effect of restat-ement | Restated IFRS | Repor-ted IFRS | Effect of restat-ement | Re-stated IFRS | Repor-ted IFRS | Effect of restat-ement | Re-stated IFRS | Repor-ted IFRS | Effect of restat-ement | Re-stated IFRS |
| Revenue | 5,240 | 1,784 | 7,024 | 3,004 | -416 | 2,589 | 3,668 | -527 | 3,140 | 3,835 | −565 | 3,270 |
| Production and operating costs | -4,134 | -1,628 | -5,762 | -2,413 | 453 | -1,961 | -2,932 | 464 | -2,467 | −3,128 | 394 | −2,734 |
| Gross profit | 1,106 | 156 | 1,261 | 591 | 37 | 628 | 736 | -63 | 673 | 707 | −171 | 536 |
| Selling and administrative expenses | -288 | -288 | -243 | -243 | -320 | -320 | −258 | −258 | ||||
| Gains/losses on the sale of property, etc. | -3 | -3 | -9 | -9 | -6 | -6 | 7 | 7 | ||||
| Operating profit | 816 | 156 | 970 | 339 | 37 | 376 | 410 | -63 | 347 | 457 | −171 | 286 |
| Financial income and expenses | -26 | -26 | -21 | -21 | -20 | -20 | −21 | −21 | ||||
| Profit before tax | 789 | 156 | 944 | 318 | 37 | 355 | 390 | -63 | 327 | 436 | −171 | 265 |
| Taxes | -160 | -32 | -192 | -72 | -7 | -79 | -81 | 12 | -68 | −91 | 36 | −56 |
| Profit for the period | 630 | 124 | 753 | 246 | 30 | 276 | 309 | -51 | 259 | 344 | −135 | 209 |
| Earnings per share, SEK | 9.60 | 1.90 | 11.50 | 3.70 | 0.40 | 4.10 | 4.50 | −0.70 | 3.80 | 5.00 | −2.00 | 3.00 |
| 12/31/2022 | 09/30/2022 | 06/30/2022 | 03/31/2022 | |||||||||
| BALANCE SHEET, SEK M | Repor-ted IFRS | Effect of restat-ement | Restat-ed IFRS | Repor-ted IFRS | Effect of restat-ement | Restat-ed IFRS | Repor-ted IFRS | Effect of restat-ement | Re-stated IFRS | Repor-ted IFRS | Effect of restat-ement | Re-stated IFRS |
| ASSETS | ||||||||||||
| Non-current assets | 565 | 565 | 545 | 545 | 545 | 545 | 599 | 599 | ||||
| Project properties | 932 | 932 | 1,369 | 1,369 | 1,225 | 1,225 | 896 | 896 | ||||
| Development properties | 8,465 | 8,465 | 8,607 | 8,607 | 8,336 | 8,336 | 7,995 | 7,995 | ||||
| Utilization of site leasehold rights | 513 | 513 | 626 | 626 | 356 | 356 | 287 | 287 | ||||
| Participations in tenant-owners associations, etc. | 308 | 308 | 339 | 339 | 389 | 389 | 330 | 330 | ||||
| Work in progress | 5,095 | 10,507 | 15,602 | 4,946 | 10,187 | 15,133 | 4,277 | 9,557 | 13,834 | 4,175 | 8,996 | 13,171 |
| Current receivables | 6,664 | −2,897 | 3,767 | 6,216 | −3,213 | 3,003 | 6,517 | −3,064 | 3,453 | 6,004 | −2,851 | 3,153 |
| Cash and cash equivalents | 1,840 | 311 | 2,151 | 1,902 | 284 | 2,186 | 2,481 | 276 | 2,757 | 4,115 | 608 | 4,723 |
| Total current assets | 23,818 | 7,921 | 31,739 | 24,004 | 7,258 | 31,263 | 23,582 | 6,769 | 30,350 | 23,801 | 6,753 | 30,555 |
| Total assets | 24,383 | 7,921 | 32,304 | 24,549 | 7,258 | 31,807 | 24,127 | 6,769 | 30,896 | 24,400 | 6,753 | 31,153 |
| Equity and liabilities | ||||||||||||
| Equity | 8,725 | −684 | 8,041 | 8,080 | -806 | 7,274 | 7,947 | −836 | 7,111 | 8,662 | -786 | 7,876 |
| Non-current interest-bearing liabilities | 892 | 892 | 1,016 | 1,016 | 744 | 744 | 636 | 636 | ||||
| Other non-current liabilities | 414 | 414 | 374 | 374 | 373 | 373 | 374 | 374 | ||||
| Non-current provisions | 2,646 | −177 | 2,468 | 2,783 | −209 | 2,574 | 2,972 | −217 | 2,755 | 3,007 | −204 | 2,803 |
| Total non-current liabilities | 3,952 | −177 | 3,774 | 4,173 | −209 | 3,964 | 4,089 | −217 | 3,872 | 4,017 | −204 | 3,813 |
| Current interest-bearing liabilities | 7,593 | 7,887 | 15,480 | 7,765 | 6,876 | 14,641 | 7,767 | 6,625 | 14,392 | 7,573 | 7,150 | 14,723 |
| Other current liabilities | 3,992 | 895 | 4,887 | 4,394 | 1,397 | 5,791 | 4,182 | 1,197 | 5,379 | 4,003 | 594 | 4,597 |
| Current provisions | 122 | 122 | 137 | 137 | 142 | 142 | 144 | 144 | ||||
| Total current liabilities | 11,707 | 8,782 | 20,489 | 12,295 | 8,273 | 20,569 | 12,091 | 7,822 | 19,913 | 11,721 | 7,744 | 19,464 |
| Total equity and liabilities | 24,383 | 7,921 | 32,304 | 24,549 | 7,258 | 31,807 | 24,127 | 6,769 | 30,896 | 24,400 | 6,753 | 31,153 |
For additional information, please contact:
Claes Magnus Åkesson, acting CFO, +46 (0)8 782 89 71, cfo@jm.se
JM is one of the leading developers of housing and residential areas in the Nordic region. Operations focus on new production of homes in attractive locations, with emphasis on expanding metropolitan areas and university towns in Sweden, Norway and Finland. We are also involved in project development of commercial premises and contract work, primarily in the Greater Stockholm area. JM should promote long-term sustainability work in all of its operations. Annual sales total approximately SEK 16 billion and the company has about 2,500 employees. JM is a public limited company listed on NASDAQ Stockholm, in the Large Cap segment. More information is available at www.jm.se/en.