Correction regarding impairment of goodwill and reporting of sale of subsidiaries and repurchase of bonds for the fourth quarter 2023

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Samhällsbyggnadsbolaget i Norden AB (publ) ("SBB") published on 27 February 2024 the year-end report for 2023 in which errors have been identified in connection with the finalisation of the annual report for 2023. The errors are attributable to the human factor. SBB has produced a correction sheet for the year-end report for 2023 which is available on SBB's website. It should be read together with the year-end report published on 27 February 2024. The errors identified and corrected relate to the impairment test of goodwill, the reporting of sale of subsidiaries and the reporting of bond repurchases. This has effects on the items: Change in value of properties, Impairment of goodwill, Interest income and similar items, Results of early repayment of loans, Deferred tax and Profit for the year, discontinued operations.

The correction sheet concerns, among other things, that the item Impairment of goodwill has been adjusted from SEK -1,150 million to 0. The correction has a positive effect on the result for the corrected fourth quarter of 2023. The result for the year has been adjusted from SEK -22,740 million to SEK -21,590 million. The interest coverage ratio, continuing and discontinued operations, has been adjusted from 2.3 to 2.1. See table below for more information.

2023-01-01 – 2023-12-31
Consolidated income statement (SEKm) Year end report
published 2024-02-27
Correction After correction
Changes in value, property -13,277 -44 -13,321
Goodwill impairment -1,150 1,150 -
Operating profit -12,430 1,106 -11,324
Interest income and similar items 420 -154 266
Results of early repayment of loans -118 154 36
Profit before tax -22,285 1,106 -21,179
Deferred tax 2,013 555 2,569
PROFIT FOR THE PERIOD, continuing operations -20,488 1,661 -18,827
Profit for the period, discontinued operations -2,251 -511 -2,763
PROFIT FOR THE PERIOD -22,740 1,150 -21,590
Consolidated balance sheet (SEKm)
Goodwill 1,542 1,150 2,692
Total fixed assets 101,255 1,150 102,405
TOTAL ASSETS 106,957 1,150 108,107
Retained earnings, incl. comprehensive income for the year -9,117 1,150 -7,967
Equity attributable to Parent Company shareholders 16,759 1,150 17,909
Total equity 35,981 1,150 37,131
Key ratios
Return on equity -46% 3% -43%
Non-pledged quota 1.58 0.02 1.6
EPRA earnings (company-specific), SEKm -612 -710 -1,322
EPRA earnings (EPS) (company-specific), SEK/share -0.42 -0.49 -0.91
EPRA earnings after dilution (EPS) (company specific), SEK/share -0.42 -0.49 -0.91
Adjusted equity/assets ratio 36% 1% 37%
Long-term net asset value (EPRA NRV), mSEK 17,873 1,015 18,888
Long-term net asset value (EPRA NRV), SEK/share 12.29 0.7 12.99
Long-term net asset value (EPRA NRV) after dilution, SEK/share 12.29 0.7 12.99
Earnings per Class A and B ordinary share before dilution, continuing operations -15.05 1.14 -13.91
Earnings per Class A and B ordinary share after dilution, continuing operations -15.05 1.14 -13.91
Earnings per Class A and B ordinary share before dilution, discontinued operations -2.51 -0.35 -2.86
Earnings per Class A and B ordinary share after dilution, discontinued operations -2.51 -0.35 -2.86
Interest coverage ratio, continuing operations 2.0 -0.2 1.8
Interest coverage ratio, continuing and discontinued operations 2.3 -0.2 2.1

The corrected consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity and consolidated cash flow statement are presented on the following pages.

Consolidated income statement

Amounts in SEKm 01-01-202331-12-2023 01-01-202231-12-2022 01-10-202331-12-2023 01-10-202231-12-2022
Continuing operations
Rental income 4,581 5,365 1,069 1,309
Property costs
Operating costs -1,021 -1,309 -256 -378
Maintenance -257 -314 -81 -108
Property tax -95 -127 -19 -39
Net operating income 3,209 3,615 713 784
Administration -878 -809 -294 -203
Acquisition and restructuring costs -90 -120 -51 -24
Profit before financial items, value changes in properties and goodwill 2,241 2,686 368 557
Changes in value, property -13,321 -3,681 -2,828 -2,490
Capital loss on the distribution of Neobo - -3,202 - -3,202
Reversal/impairment of goodwill regarding deferred tax -227 -387 -26 -195
Goodwill impairment - -395 - -395
Results, production of residentials -17 -17 -14 -20
Operating profit -11,324 -4,997 -2,499 -5,745
Profit/loss from joint ventures and associated companies -6,017 -1,866 -1,655 -1,379
     of which, profit from property management 169 941 -147 314
     of which, change in value -2,498 -1,970 -1,607 -1,002
     of which, tax 196 -90 154 57
     of which, gain/loss on sales -3,416 - 24 -
     of which, impairment -469 -747 -79 -747
Interest income and similar items 266 238 88 58
Interest expenses and similar items -1,406 -1,054 -430 -399
Results of early repayment of loans 36 424 149 429
Translation gains/losses -144 -1,991 1,024 -580
Leasing costs -10 -19 -4 -5
Changes in the value of financial instruments -2,580 -1,560 -495 -405
Profit before tax -21,179 -10,825 -3,822 -8,025
Tax for the year -443 -277 39 -70
Deferred tax 2,569 354 468 502
Reversal of deferred tax regarding business combinations 227 387 26 195
PROFIT FOR THE PERIOD, continuing operations -18,827 -10,361 -3,290 -7,397
Profit for the period, discontinued operations -2,763 550 260 -553
PROFIT FOR THE PERIOD -21,590 -9,811 -3,031 -7,950
Profit for the period attributable to:
Parent Company shareholders -22,054 -9,634 -3,063 -7,905
Non-controlling interest 464 -177 32 -45
PROFIT FOR THE PERIOD -21,590 -9,811 -3,031 -7,950

Consolidated statement of comprehensive income

Amounts in SEKm 01-01-202331-12-2023 01-01-202231-12-2022 01-10-202331-12-2023 01-10-202231-12-2022
Profit for the period -21,590 -9,811 -3,031 -7,950
Share in the comprehensive income of joint ventures and associated companies -175 169 - 99
Translation gains/losses -1,057 427 -368 252
COMPREHENSIVE INCOME FOR THE PERIOD -22,822 -9,215 -3,399 -7,599
Comprehensive income for the period attributable to:
Parent Company shareholders -23,286 -9,038 -3,431 -7,553
Non-controlling interest 464 -177 32 -46
COMPREHENSIVE INCOME FOR THE PERIOD -22,822 -9,215 -3,399 -7,599
Earnings per Class A and B ordinary share before dilution, continuing operations -13.91 -7.61 -2.44 -5.20
Earnings per Class A and B ordinary share after dilution, continuing operations -13.91 -7.61 -2.44 -5.20
Earnings per Class D ordinary share, continuing operations 2.00 2.00 0.50 0.50
Earnings per Class A and B ordinary share before dilution, discontinued operations -2.86 -0.10 0.00 -0.49
Earnings per Class A and B ordinary share after dilution, discontinued operations -2.86 -0.10 0.00 -0.49
Earnings per Class D ordinary share, discontinued operations 2.00 2.00 0.50 0.50
Earnings per Class A and B ordinary share before dilution, total continuing and discontinued operations -15.81 -7.23 -2.26 -5.58
Earnings per Class A and B ordinary share after dilution, total continuing and discontinued operations -15.81 -7.23 -2.26 -5.58
Earnings per Class D ordinary share, total continuing and discontinued operations 2.00 2.00 0.50 0.50

Consolidated balance sheet

Amounts in SEKm 31-12-2023 31-12-2022 Amounts in SEKm 31-12-2023 31-12-2022
ASSETS EQUITY AND LIABILITIES
Fixed assets Share capital 165 165
Intangible assets Other contributed capital 26,624 26,612
Goodwill 2,692 5,283 Reserves -915 142
Total intangible assets 2,692 5,283 Retained earnings, incl. comprehensive income for the year -7,967 16,905
Equity attributable to Parent Company shareholders 17,909 43,825
Tangible assets
Investment properties 73,205 135,616 Hybrid bonds 15,741 15,741
Land lease agreements 393 829 Other reserves 1,036 1,080
Equipment, machinery and installations 106 37 Non-controlling interest 2,445 2,691
Total tangible assets 73,704 136,482 Total equity 37,131 63,337
Financial fixed assets Long-term liabilities
Share in joint ventures and associated companies 17,876 12,649 Liabilities to credit institutions 11,116 30,496
Receivables from joint ventures and associated companies 4,839 1,737 Bond loans 40,540 48,310
Derivatives 481 1,696 Derivatives 264 375
Financial fixed assets at fair value 849 2,298 Deferred tax liabilities 2,726 9,120
Other non-current receivables 1,965 939 Leasing liabilities 393 829
Total financial fixed asset 26,009 19,319 Other non-current liabilities 92 141
Total fixed assets 102,405 161,084 Total long-term liabilities 55,131 89,271
Current assets Current liabilities
Properties held for sale 155 156 Liabilities to credit institutions 7,861 3,400
Commercial papers - 1,111
Current receivables Bond loans 2,576 3,768
Derivatives 203 - Derivatives 1,290 596
Financial fixed assets at fair value 185 - Accounts payable 121 456
Accounts receivable 100 106 Current tax liabilities 99 310
Other receivables 607 1,434 Liability, cash collateral - 2,178
Prepaid expenses and accrued income 392 740 Other liabilities 726 1,185
Total current receivables 1,487 2,280 Approved dividend 2,133 834
Accrued expenses and prepaid income 1,040 1,924
Cash investments 3,845 4,429 Total current liabilities 15,845 15,762
Cash and cash equivalents 214 421 TOTAL EQUITY AND LIABILITIES 108,107 168,370
Total cash and cash equivalents and cash investments 4,060 4,850
Total current assets 5,702 7,286
TOTAL ASSETS 108,107 168,370

Consolidated changes in equity

Equity attributable to Parent Company’s shareholders Equity attributable to hybrid bonds Holdings without controlling influence Total equity
Amounts in SEKm Share capital Other contributed capital Reserves Retained earnings Total Hybrid-bond Other reserves
Opening equity, 1 Jan 2022 165 26,396 834 34,360 61,755 17,294 -149 4,071 82,971
Profit for the period - - - -9,633 -9,633 - - -177 -9,811
Other comprehensive income - - -692 1,288 596 - - - 596
Comprehensive income for the period - - -692 -8,345 -9,037 - - -177 -9,215
New share issue - 210 - - 210 - - - 210
Issue costs - - - -13 -13 - - - -13
Redemption of part of hybrid bond - - - 811 811 -1,553 15 - -727
Tax effects in equity - - - -1,214 -1,214 - 1,214 - -
Currency revaluation, hybrid bonds - 6 - 175 181 - - - 181
Dividend - - - -2,308 -2,308 - - - -2,308
Dividend hybrid bond - - - -490 -490 - - - -490
Distribution of Neobo - - - -5,946 -5,946 - - - -5,946
Divestiture to minority - - - - - - - 712 712
Redemption minority interests - - - -124 -124 - - -1,915 -2,039
Closing equity, 31 Dec 2022 165 26,612 142 16,905 43,825 15,741 1,080 2,691 63,337
Opening equity, 1 Jan 2023 165 26,612 142 16,905 43,825 15,741 1,080 2,691 63,337
Profit for the period - - - -22,054 -22,054 - - 464 -21,590
Other comprehensive income - - -1,057 -175 -1,232 - - - -1,232
Comprehensive income for the period - - -1,057 -22,229 -23,286 - - 464 -22,822
Warrants repurchase - - - -5 -5 - - - -5
Tax effects in equity - 12 - -11 1 - - - 1
Conversion of mandatory convertibles - - - 44 44 - -44 - -
Currency revaluation, hybrid bonds - - - 99 99 - - - 99
Dividend - - - -2,482 -2,482 - - - -2,482
Dividend hybrid bond - - - -548 -548 - - - -548
Interest withheld on hybrid bonds - - - 358 358 - - - 358
Acquired minority interests - - - - - - - 9,840 9,840
Redemption minority holdings - - - -98 -98 - - -10,552 -10,648
Closing equity, 31 Dec 2023 165 26,624 -915 -7,967 17,909 15,741 1,036 2,445 37,131

Consolidated cash flow statement, condensed

Amounts in SEKm 01-01-202331-12-2023 01-01-202231-12-2022 01-10-202331-12-2023 01-10-202231-12-2022
Operating activities
Profit before tax, continuing operations -21,179 -10,825 -3,822 -8,023
Profit before tax, discontinued operations -6,090 276 -2,268 -827
Adjustment for non-cash flow items
    Depreciation 6 10 - 2
    Changes in value, property 18,051 4,571 5,281 3,590
    Capital loss on the distribution of Neobo - 3,202 - 3,202
    Dissolution of goodwill after property sales 797 387 26 195
    Goodwill impairment 1,794 395 - 395
    Results, production of residentials 17 17 14 19
    Profit from joint ventures and associated companies 6,017 1,866 1,655 1,379
    Changes in the value of financial instruments 2,580 1,560 495 405
Dividends from joint ventures and associated companies 283 304 - 7
Net interest income 1,818 2,878 -747 634
Interest paid -2,236 -1,059 -803 -153
Interest received 220 196 136 58
Paid tax -856 -294 -241 -80
Cash flow from operating activities before changes in working capital 1,222 3,485 -276 802
Cash flow from changes in working capital
Increase (-)/Decrease (+) of operating receivables 1,057 164 944 533
Increase (+)/Decrease (-) of operating liabilities -929 -1,529 -153 -53
Cash flow from operating activities 1,350 2,120 514 1,283
Investment activities
Investments in properties -2,901 -5,250 -524 -1,280
Property sales - 171 - 18
Acquisitions of subsidiaries less acquired cash and cash equivalents -1,629 -9,367 -507 -364
Disposals of subsidiaries less cash and cash equivalents 12,675 9,677 8,219 1,409
Investments/divestitures in equipment, machinery and installations -75 1 -3 7
Investments/disposals in joint ventures and associated companies 2,470 475 193 1,896
Change in receivables from joint ventures and associated companies 781 2,159 790 154
Cash flow from financial assets -194 1,772 320 203
Change in other non-current receivables -998 -728 -41 -863
Cash flow from investing activities 10,129 -1,090 7,767 1,181
Financing activities
Issue hybrid bonds - - - 10
Issue costs - -15 - -15
Warrants repurchase -5 - -1 -
Redemption of hybrid bonds - -727 - -727
Redemption of mandatory convertible 1 - - -
Dividend paid -1,659 -2,837 - -601
Distribution of cash and cash equivalents in Neobo - -231 - -231
Divestiture to minority 9,057 712 19 712
Redeemed minority shares - -2,040 - -223
Borrowings 21,544 62,038 394 19,459
Repayment of loans -38,885 -59,710 -6,326 -21,243
Change in cash collateral -2,048 -3,429 -617 5
Changes in other non-current liabilities raised -52 -202 -77 -90
Cash flow from financing activities -12,047 -6,440 -6,609 -2,943
Profit/loss for the period -568 -5,410 1,673 -479
Cash and cash equivalents at the beginning of the period 4,429 9,837 2,186 4,941
Profit/loss for the period, continuing operations -568 -5,410 1,673 -479
Exchange rate change in cash and cash equivalents -16 2 -14 -35
Cash and cash equivalents at the end of the period 3,845 4,429 3,845 4,429
of which, liquid funds attributable to discontinued operations - 57 - 57

For further information, please contact:
Helena Lindahl, Treasury Director, ir@sbbnorden.sepress@sbbnorden.se

This information is such that Samhällsbyggnadsbolaget i Norden AB (publ) is obliged to publish in accordance with the EU Market Abuse Regulation. The information was submitted by the above contact persons for publication on 30 April 2024 kl. 15:30 CEST.

Samhällsbyggnadsbolaget i Norden AB (publ) (SBB) is the Nordic region’s leading property company in social infrastructure. The Company’s strategy is to long term own and manage social infrastructure properties in the Nordics and rent regulated residential properties in Sweden, and to actively work with property development. Through SBB’s commitment and engagement in community participation and social responsibility, municipalities and other stakeholders find the Company an attractive long-term partner. The Company’s series B shares (ticker SBB B) and D shares (ticker SBB D) are listed on Nasdaq Stockholm, Large Cap. Further information about SBB is available at www.sbbnorden.se.

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