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Selvaag Bolig ASA: Q2 2020: good margins and high dividend

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Selvaag Bolig’s EBITDA pursuant to Norwegian generally accepted accounting principles for the first half of 2020 was NOK 313 million, with a margin of 20.1 per cent. The board has resolved to pay a dividend of NOK 3.00 per share for the period.
 

“The board’s decision to pay NOK 3 in dividend for the first half reflects good results pursuant to the IFRS and a positive outlook,” explains Rolf Thorsen, CEO of Selvaag Bolig.

“We believe we’ll make good progress in the time to come. Demand is good, particularly in Greater Oslo, and great interest is being shown in projects we’re putting on sale this autumn.”

CFO Sverre Molvik says the company has chosen to pay a substantial dividend to shareholders because its capital adequacy is very good and results for the first half met expectations.

“Dividend for the second half of 2019 was cut from NOK 3 to NOK 1.50,” he observes. “We’re now paying this out as well as almost the whole ordinary IFRS profit for the first half of this year.                

“We’re able to do this because our collaboration with Urban Property means we no longer need to hold equity for land purchases to the same extent as before.”

At 30 June, Selvaag Bolig had 1 357 homes net under construction, with a combined sales value of more than NOK 6.3 billion. Seventy-eight per cent of these units were sold.
 

Highlights of the second quarter 2020 (second quarter 2019)

  • Gross sales* amounted to 186 homes (276) with a sales value of NOK 920 million (NOK 1 393 million).
  • Net sales were 142 homes (210) with a sales value of NOK 696 million (NOK 1 106 million).
  • Construction starts for 31 homes net (311), completions of 104 net (307) and deliveries of 122 net (246) to buyers.
  • Construction under way on 1 357 homes net (1 538) with a combined sales value of NOK 6 327 million (NOK 7 039 million).
  • 78 per cent (71 per cent) of homes under construction sold at 30 June.
  • 25 completed homes (48) unsold at 30 June.
  • IFRS**: Operating revenues of NOK 436 million (NOK 1 035 million), EBITDA adjusted for financial expenses NOK 75 million (NOK 316 million), corresponding to a margin of 17.3 per cent (30.5 per cent).
  • Earnings per share: NOK 0.52 (NOK 2.24).
  • NGAAP***: Operating revenues of NOK 803 million (NOK 868 million), EBITDA of NOK 153 million (NOK 211 million), corresponding to a margin of 19.1 per cent (24.4 per cent).
     

Highlights of the first half 2020 (first half 2019)

  • Dividend of NOK 3.00 per share (NOK 2.00) for first half.
  • IFRS**: Operating revenues of NOK 645 million (NOK 1 144 million), EBITDA adjusted for financial expenses NOK 193 million (NOK 307 million), corresponding to a margin of 29.9 per cent (26.8 per cent).
  • Earnings per share: NOK 12.60 (NOK 2.08), including NOK 11.01 from the Urban Property transaction.
  • NGAAP***: Operating revenues of NOK 1 560 million (NOK 1 548 million), EBITDA of NOK 313 million (NOK 366 million), corresponding to a margin of 20.1 per cent (23.6 per cent).
  • Gross sales* amounted to 382 homes (546) with a sales value of NOK 1 951 million (NOK 2 712 million).
  • Net sales were 306 homes (453) with a sales value of NOK 1 536 million (NOK 2 289 million).
  • Construction starts for 46 homes net (408), completions of 193 net (319) and deliveries of 236 net (275) to buyers.

* 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.

The live webcast can be viewed from 08.30 here. An English transcript of the presentation will be made available on the company’s website by 19 August.


Further information from
Rolf Thorsen, CEO, Selvaag Bolig ASA
Telephone: +47 901 19 373, e-mail: rt@selvaagbolig.no

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

Kristoffer Gregersen, vice president communication and marketing, Selvaag Bolig ASA
Telephone: +47 957 75 593, e-mail: kgr@selvaagbolig.no


 
Selvaag Bolig ASA is a residential property developer which controls the entire value chain from acquisition of land to sale of turnkey 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’s head office is at Ullern in Oslo.

www.selvaagboligasa.no

 

This information is subject to the disclosure requirements specified in section 5-12 of the Norwegian Securities Trading Act.
 

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