Selvaag Bolig ASA: Improved market, good results and homes worth NOK 7 billion under construction
Selvaag Bolig was building 1 511 homes worth NOK 7 032 million at 31 March. This value is up by NOK 692 million from the same date in 2017, and 73 per cent of the units are already sold.
"Results in our projects are extremely good, and value creation in the company is high. Since income from homes sold is first recognised on delivery to the buyer, future results will also be good. Most of our deliveries take place in the second and fourth quarter and there were, as planned, few of them in the first three months," says CEO Baard Schumann.
Sales of new homes were sluggish at the beginning of the first quarter, but recovered significantly towards the end of the period and at the start of the second quarter.
"We're now selling well in all markets, and Oslo in particular has recently shown good progress. That means the average price of the flats we sell will rise in the future. Our position is strong in all the markets where we have a presence, and we're ready to meet increased demand. So we're investing continuously in central sites in areas with pressure on housing," says Schumann.
During the quarter, Selvaag Bolig further strengthened its land bank with the purchase of a site in Ski which will provide about 400 homes. The company now holds land for more than 12 000 units in all.
Highlights of the first quarter of 2018 (Q1 2017):
- Gross sales* of 216 homes (238) with a sales value of NOK 788 million (NOK 1 284 million)
- Net sales of 185 homes (190) with a sales value of NOK 693 million (NOK 984 million)
- Net construction starts for 102 homes (186), and 59 net delivered to the buyer (85)
- 1 511 homes net under construction (1 479) with a combined sales value of NOK 7 032 million (NOK 6 340 million)
- 73 per cent of homes under construction (86) sold at 31 March
- 19 completed homes unsold at 31 March (32)
- IFRS:** Operating revenues of NOK 381 million (NOK 456 million), EBITDA adjusted for financial expenses of NOK 51 million (NOK 94 million), representing a margin of 13.3 per cent (20.5)
- Earnings per share: NOK 0.34 (NOK 0.82)
- NGAAP:*** Operating revenues of NOK 572 million (NOK 818 million). EBITDA of NOK 117 million (NOK 203 million), representing a margin of 20.5 per cent (24.8)
* Net sales include Selvaag Bolig's share of joint venture projects. Gross sales include all homes in joint venture projects.
** Pursuant to the IFRS, all profit is recognised when the homes are delivered to the buyer. Profit pursuant to the IFRS accordingly derives primarily from homes which began to be built roughly two years ago.
*** The accounts pursuant to Norwegian generally accepted accounting principles (NGAAP) utilise the percentage of completion method. This means that profits are recognised on the basis of construction progress and sales in the projects. That presents ongoing value creation in the company.
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Transcript available 24 May.
Further information from
Baard Schumann, CEO, Selvaag Bolig ASA
Telephone: +47 940 80 000, e-mail: email@example.com
Sverre Molvik, CFO, Selvaag Bolig ASA
Telephone: +47 401 00 585, e-mail: firstname.lastname@example.org
Selvaag Bolig ASA is a residential property developer controlling the entire value chain from acquisition of land to sale of homes. The company has several thousand homes under development at any given time, and focuses on the growth areas in and around Greater Oslo, Bergen, Stavanger and Trondheim. Selvaag Bolig represents a continuation of Selvaag's 70-year history and experience, and offers a broad variety of property types. The company is headquartered at Ullern in Oslo.