Selvaag Bolig ASA: Q2 2015: strong results and dividend

Second quarter of 2015:

• IFRS: operating revenues NOK 830 million (2014: NOK 810 million), EBITDA adjusted for financial expenses NOK 151 million (NOK 125 million), representing a margin of 18.2 per cent (15.5 per cent)
  
  
• NGAAP: operating revenues NOK 858 million (NOK 830 million), EBITDA (percentage of completion method) NOK 125 million (NOK 121 million), representing a margin of 14.6 per cent (14.6 per cent)
  
  
• 232 homes delivered to buyers (236), 210 sold (255), 199 started (197)
  
  
• Land purchase for 400 homes in Oslo

First half of 2015

• IFRS: operating revenues NOK 1.59 billion (NOK 1.05 billion), EBITDA adjusted for financial expenses NOK 271.6 million (NOK 142.1 million), representing a margin of 17.1 per cent (13.5 per cent)
  
  
• NGAAP: operating revenues NOK 1.69 billion (NOK 1.52 billion), EBITDA (percentage of completion method) NOK 265.6 million (NOK 244.7 million), representing a margin of 15.8 per cent (16.1 per cent)
  
  
• 456 homes delivered to buyers (316), 518 sold (394), 483 started (274)
  
  
• Board proposes a dividend of NOK 0.70 per share for the first half

Selvaag Bolig's operating revenues according to the IFRS increased by 50 per cent from the first half of 2014. EBITDA adjusted for financial expenses rose by 91 per cent. The company's board proposes a dividend of NOK 0.70 per share for the period.

"We delivered many homes during the first half, and achieved very good results. That reflects both good sales in earlier periods and very good targeting with the projects delivered now," says CEO Baard Schumann.

The good results mean that the board has recommended paying 46 per cent of the net profit in dividend for the first half of 2015. That amounts to NOK 0.70 per share.

"Our dividend policy says that our long-term goal is to pay out up to 50 per cent of our profits. From 2015, we'll also be paying dividend twice a year to improve liquidity for our shareholders," says Schumann.

Selvaag Bolig started construction on 199 homes during the second quarter, and had 1 394 under construction at 30 June. These had a collective sales value of roughly NOK 4.9 billion. The company held 31 completed homes which had not been sold.

Eighty per cent of the units under construction at 30 June had been sold. Since sold homes are first recognised as income on delivery, this stock represents substantial assets for Selvaag Bolig in the time to come.

"We're optimistic about coming quarters. Demand for new homes is high, and properties put on sale sell fast. We're well positioned with large and attractive projects in urban areas of Norway experiencing growth pressures," says Schumann.

When calculated in accordance with the IFRS, Selvaag Bolig's operating revenues from homes delivered during the second quarter (IFRS) came to NOK 830 million and the EBITDA margin adjusted for financial expenses came to 18.2 per cent.

Operating revenues for homes under construction, calculated in accordance with Norwegian generally accepted accounting principles (NGAAP), for the period were NOK 858 million and EBITDA came to NOK 125 million - representing a margin of 14.6 per cent.

Comparable figures for the second quarter of 2014 were IFRS operating revenues of NOK 810 million and the EBITDA margin adjusted for financial expenses came to 15.5 per cent. NGAAP operating revenues were NOK 830 million, EBITDA came to NOK 121 million - representing a margin of 14.6 per cent.