Selvaag Bolig ASA: Q1 2017: Large value creation and high margins

Good progress continues to be made by Selvaag Bolig. At 31 March, the company had homes worth NOK 6.34 billion under construction. Eighty-six per cent were already sold, and the value was NOK 1.31 billion higher than at the same time last year. 

"We're continuing to deliver good results and margins, and our value creation is substantial. We've already sold 99 and 87 per cent of the homes due for completion in 2017 and 2018 respectively. In other words, we'll be continuing to deliver good results in the time to come." says CEO Baard Schumann.

During the first quarter, Selvaag Bolig further strengthened its land portfolio with the purchase of four sites in Oslo, Ski and Trondheim which will provide about 750 homes net in total. Plans call for sales to start for all these sites from 2019.

"Our sales have been very good in recent years, and we're investing in centrally located sites in areas experiencing growth pressures. The housing market has been rather quieter so far this year than in earlier periods, particularly in Oslo. But we're nevertheless selling steadily and well in all our projects. In the Stavanger area, on the other hand, the market is better than for a long time, and we've had a successful sales start in May. We occupy a strong position in this market," says Schumann.

Highlights of Q1 2017 (Q1 2016 figures in brackets)

• Gross sales* of 238 homes (294) with a sales value of NOK 1 284 million (NOK 1 156 million)
• Net sales of 190 homes (280) with a sales value of NOK 984 million (NOK 1 056 million)
• Average sales price net of NOK 5.2 million (NOK 3.8 million)
• Average sales price gross of NOK 5.4 million (NOK 3.9 million)
• Construction started for 186 homes net (230) and 85 net delivered to the buyer (179)
• 1479 homes net (1 386) under construction with a combined sales value of NOK 6 230 million (5 031)
• 86% of units under construction (80) sold at 31 March
• 32 completed homes (58) unsold at 31 March
• IFRS:** Operating revenues of NOK 456 million (NOK 624 million), EBITDA adjusted for financial costs of NOK 94 million (NOK 91 million) corresponding to a margin of 20.5 per cent (14.6 per cent)
• Earnings per share: NOK 0.82 (NOK 0.45)
• NGAAP:*** Operating revenues of NOK 818 million (NOK 815 million), EBITDA of NOK 203 million (NOK 132 million) corresponding to a margin of 24.8 per cent (16.1 per cent)

* 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.


Further information from
Baard Schumann, CEO, Selvaag Bolig ASA
Telephone: +47 940 80 000, e-mail: bs@selvaagbolig.no

Sverre Molvik, CFO, Selvaag Bolig ASA
Telephone: +47 401 00 585, e-mail: smo@selvaagbolig.no