K-Fast Holding AB (publ): Interim report January–September 2021

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Financial ratios for the period 1 January30 September 2021



  Financial ratios     2021 
  Rental income, SEK million 68.2  51.0  190.7   147.7   203.9 
  Profit from property management, SEK million  29.8   21.2  74.4   56.2  75.3 
  Comprehensive income for the period, SEK million  313.0   99.9  685.6   303.5   473.1 
  Investment properties, SEK million 8,765.6   6,128.1   8,765.6   6,128.3  6,853.5 
  Long-term net asset value (NAV), SEK million 4,561.8   3,444.8   4,561.8   3,444.8  3,661.2 
  Number of apartments under management 2,448  2,043  2,448   2,043  2,237 
  Number of construction starts, apartments 79  100  535  719  912 
  Number of apartments under construction  1,634   1,284   1,634   1,284  1,311 
  Number of apartments under project development  5,723   3,356   5,723   3,356  3,880 
  Interest coverage ratio, multiple  2.9   2.7   2.8   2.   2.6 
  Equity/assets ratio, %  36.7%   42.5%   36.7%   42.5%   41.9% 
  Loan-to-value ratio, % 55.1%  42.2%   55.1%   55.1%   46.7% 
  Profit from property management, SEK per share*  0.14   0.10   0.35  0.27   0.36 
  Growth in profit from property management per share, % 36.0%   -7.3%  25.9%  -7.0%   6.3% 
  Long-term net asset value (NAV), SEK per share* 21.19   16.00  21.19   16.00  17.00 
  Growth in long-term net asset value (NAV), per share, %  8.9%   15.4%  24.6%   28.1%  36.1% 
  Earnings per share, SEK* 1.45   0.48   3.17   1.48    2.29 
  Number of shares outstanding at the end of the period, millions*  215.3   215.3   215.3   215.3    215.3 
  Average number of shares outstanding during the period, millions*   215.3   207.9     215.3   204.9   207.5 

*Adjusted for 6:1 share split on 7 June 2021.

A Message from the CEO

These are eventful times and the third quarter 2021 was no exception.The period included major transactions, collaborations, exciting projects,potential concrete shortages and a name change. For K-Fastigheter, this creates new opportunities and I am proud that we are continuously advancing our position while managing unexpected situations and turning negative situations to our advantage.

Let me begin with the supply of concrete. The handling of Swedish producer Cementa’s environmental permits has resulted in a situation that is damaging for the entire sector, leading to uncertainty and price increases that will need to be managed in both the short and long term. For our subsidiary, which recently changed its name to K-Prefab, cement supply is a key factor for producing a sustainable range of concrete frames and other prefabricated concrete products. Cementa has been our main supplier for many years, and we have recently added additional suppliers to ensure all K-Prefab’s deliveries to its customers, including K-Fastigheter, in 2022 regardless of the outcome for the Slite plant. The right type of concrete is part of our offering of climate positive concrete frames, although we also make high demands on other raw materials used. For example, we use only reclaimed steel in our reinforcement bars.

I frequently mention our value creation processes and want to take this opportunity to highlight this again. The total acquisition value of our proprietary ongoing production corresponds to approximately 70 percent of the market value on completion, based on market value as of the end of the third quarter, compared to some 72 percent for the corresponding period of the previous year. Increased efficiency contributes to balance the cost increases on raw materials and inputs that we noted during the period. This KPI, which we internally term “PTV” (production to value), indicates a margin on new construction of as much as 29.5 percent. We recognize this margin as unrealized value changes in line with projects being completed. The margin should be viewed as our gross margin on project development and construction, as it is directly attributable to the cost efficiency of our projects. This is not to be confused with unrealized value changes in the holding of completed investment properties, even if the items are recognized on the same line for accounting purposes.

K-Fastigheter’s three concept buildings are a pre-requisite for becoming a Nordic market leader on the rental market. Since inception, the company has focused sharply on cost efficiency and introducing a concept-based approach. This is something that we benefit from every day in our negotiations and construction projects. With K-Prefab included in the Group, we now have an even greater opportunity to engage with the entire construction chain. K-Fastigheter’s strong production and logistics process has attracted the attention of the construction industry, and we were one of three finalists in the sector awards for LEAN Builder of the Year 2021 in October. We would like to congratulate the winner, JM Logistik, who has inspired us to improve even further.

Activity remained high, even in a quarter that included the holiday period. We signed an agreement relating to the acquisition of properties in Kristianstad, Hässleholm, Värmdö and Nyköping, and started construction of a further 79 apartments. This resulted in a total of 535 new construction starts for apartments in 2021.

Including the planned construction starts of apartments in the final three months of the year, we will reach our goal of 1,000 construction starts in a financial year. Although, advance planning in the project bank is good and we are on target internally, planning approvals are occasionally taking slightly longer. Should the necessary decisions be delayed, this could mean a shift into the coming quarters. This has only had a negligible effect on us and we have all the resources needed in place for achieving our operational goal of 1,300 annual construction starts for apartments by 2023. At the end of the period, the total building and project portfolio encompassed 7,357 apartments, which represents an increase of 59 percent compared to the corresponding period in the preceding year.

Our business model with in-house project development, construction and management, and investing in and developing our building rights, is the optimum method for creating value and strong cash flows over time. In the first nine months of the year, this generated unrealized value changes of SEK 752.0 million, almost double the figure realized in the corresponding period of the previous year. In addition, profit from property management increased by SEK 18.2 million.

Profit for the period amounted to SEK 682.6 million, up 125 percent year-on-year. NAV per share increased by 25 percent in the first nine months of the year. In the same period, rental income increased by 29 percent and profit from property management by 32 percent year-on-year. Vacancies improved in the third quarter and the financial letting ratio amounted to 97 percent at the end of the quarter. For us, the most important thing is that our tenants are happy and pleased with us, and now we can also rejoice over that our houses are appreciated by the community. The Hässleholm council awarded the 2021 City building award to our concept building in the T4 district!

We continuously strengthen K-Fastigheter by employing more highly skilled staff. Since the previous quarter, we have welcomed 19 new colleagues and are looking for more potential staff to join us in making history in one of Sweden’s most innovative companies. Two new colleagues joined Group management in the quarter, Leif Astikainen and Martin Johannesson. Leif is responsible for K-Fastigheter’s HR function, and serves as Deputy CEO and HR Manager of the subsidiary K-Prefab AB, and Martin is Head of the Property Management business area. To secure K-Fastigheter’s long-term supply of building rights, Group management will be expanded to also include Magnus Persson, Business Development Manager from November.

The fundamental ambition is to create shareholder value that benefits everyone in the K-Fastigheter Group. We have a strong Balance Sheet and a modern property holding in attractive locations with considerable development and project potential. Alongside my competent colleagues, this means that I am confident that we will see a positive conclusion to 2021 and a strong start to 2022.

Jacob Karlsson, November 2021

A complete Interim report January-September 2021 is attached and also published on the Groups website, under the heading Financial reports.

For further information, please contact:
Jacob Karlsson, CEO, K-Fast Holding AB, e-mail: jacob.karlsson@k-fastigheter.se, telephone: +46 738 219 626
Martin Larsson, Deputy CEO/CFO, e-mail: martin.larsson@k-fastigheter.se, telephone: +46 703 533 160
Anders Antonsson, Head of Investor Relations, e-mail: anders.antonsson@k-fastigheter.se, telephone: +46 708 730 900

This information is such that K-Fast Holding AB is obliged to disclose in accordance with the EU’s Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 a.m. CET on 12 November 2021.


In a recorded presentation, to be published at 8:30 a.m. CET on Friday 12 November 2021, K-Fastigheter’s President and CEO, Jacob Karlsson, and CFO, Martin Larsson, are commenting on the Group’s Interim report January - September 2021. The presentation is held in Swedish. Link to the presentation: www.k-fastigheter.se/en/investors/presentations.
Questions may be addressed in writing to ir@k-fastigheter.se with answers being compiled on an ongoing basis during the day and being published on www.k-fastigheter.com/en.

This disclosure contains information that K-Fast Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 12-11-2021 08:00 CET.



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K-Fast Holding AB: Interim report January-September 2021
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Profit growth of 125 percent thanks to stronger links throughout the chain
Jacob Karlsson, CEO of K-Fast Holding AB