Selvaag Bolig ASA: Q3 2017: Land purchase in Oslo and good outlook for results

Selvaag Bolig sold homes with a sales value of NOK 2 867 million in the first nine months of 2017.

"The market is substantially quieter than in earlier periods, but our sales have nevertheless been good. We have good homes in the right locations, and great faith in continued good progress. Among other moves, we have therefore entered into an agreement to buy sites associated with the Bjerke Travbane race track, one of the best remaining development plots in Oslo. This acquisition could provide more than 1 500 homes, says CEO Baard Schumann

Selvaag Bolig had operating revenues of NOK 1.97 billion in the first nine months, and a margin of 19.7 per cent.

"We deliver good results and will be continuing to do so," says Schumann. "As expected, few deliveries were made during the third quarter viewed in isolation but we are due to complete 336 homes in the next quarter. We're due to complete 850 homes in 2018, and 86 per cent of these are already sold. We can therefore already say that we'll be delivering a good 2018."

Selvaag Bolig has a total of 1 582 homes with a sales value of NOK 7 047 million under construction, and 78 per cent of these are already sold.

Third quarter 2017 (2016 figures in brackets)

• Gross sales* of 207 homes (298) with a sales value of NOK 843 million (NOK 1 234 million)
• Net sales of 178 homes (277) with a sales value of NOK 684 million (NOK 1 130 million)
• 1 582 homes net under construction (1 464) with a combined sales value of NOK 7 047 million (NOK 5 775)
• 78 per cent of homes under construction (90 per cent) sold at 30 September
• 99 per cent of homes due for completion in 2017 sold, and 86 per cent of those for completion in 2018
• IFRS:** Operating revenues of NOK 379 million (NOK 387 million), EBITDA adjusted for financial expenses of NOK 45 million (NOK 92 million), corresponding to a margin of 11.8 per cent (23.8 per cent)
• Earnings per share: NOK 0.18 (NOK 0.63)
• NGAAP:*** Operating revenues of NOK 498 million (NOK 941 million), EBITDA of NOK 103 million (NOK 203 million), corresponding to a margin of 20.7 per cent (21.6 per cent)
• Agreement on purchase of land at Bjerke to provide 1 500 homes
• Construction started for 77 homes net (223), while 75 net were delivered to the buyer (129)

           
First nine months

• Gross sales* of 632 homes (1 000) with a sales value of NOK 2 867 million (NOK 3 962 million)
• Net sales of 533 homes (883) with a sales value of NOK 2 316 million (NOK 3 600 million)
• IFRS:** Operating revenues of NOK 1 970 million (NOK 2 115 million), EBITDA adjusted for financial expenses of NOK 383 million (NOK 344 million), corresponding to a margin of 19.5 per cent (16.3 per cent)
• Earnings per share: NOK 2.57 (NOK 1.98)
• NGAAP:*** Operating revenues of NOK 2 282 million (NOK 2 564 million), EBITDA of NOK 576 million (NOK 470 million), corresponding to a margin of 25.3 per cent (18.3 per cent)
• Construction started for 582 homes net (706), while 382 net were delivered to the buyer (615)

* 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.

An English transcript of the presentation will be made available at www.selvaagboligasa.no/en and e-mailed to contacts within 24 hrs.

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