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Selvaag Bolig ASA: Q3 2020: good sales and more construction starts

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Selvaag Bolig had operating revenues of NOK 707 million in the third quarter, and a margin of 21.3 per cent.

Ongoing value creation in the group is presented through the operating margin, based on progress and sales in projects under way.

Good sales and production characterised the quarter, with EBITDA pursuant to Norwegian generally accepted accounting principles (NGAAP) of NOK 150.5 million and a margin of 21.3 per cent.

The level of activity in the group is high. During the quarter, Selvaag Bolig started construction of 196 new homes and completed 212.

At 30 September, the group had 1 342 homes under construction with a combined sales value of NOK 6.66 billion – up by NOK 330 million from the previous quarter. Seventy-seven per cent of these units had been sold by 30 September.

“We’ve been little affected by the pandemic, and our level of activity is high,” says CEO Sverre Molvik.

“Sales in the quarter were good and that will contribute to value creation over time.

“Sales and profit pursuant to the International Financial Reporting Standards (IFRS), based on deliveries of homes sold about two years ago, are rather lower in this quarter. That’s because a batch of smaller units was delivered at an average price below that achieved in a normal project.”

He added that profitability in the projects is good. “We have a solid portfolio of projects in growth areas. Our strong market position and high level of activity lay the basis for good results in the time to come.”

Selvaag Bolig sold homes for more than NOK 3 billion during the first nine months. At 30 September, it had just over 550 homes on sale.
 

Highlights of the third quarter 2020 (third quarter 2019)

  • Gross sales* amounted to 209 homes (192) with a sales value of NOK 1 104 million (NOK 914 million)
  • Net sales were 178 homes (159) with a sales value of NOK 910 million (NOK 756 million)
  • Net construction starts for 196 homes (174), net completions of 212 (203) and net deliveries of 212 to buyers (243)
  • Net construction under way on 1 342 homes (1 510) with a combined sales value of NOK 6 660 million (NOK 7 192 million)
  • 77 per cent (72 per cent) of homes under construction sold at 30 September
  • 19 (34) completed homes unsold at 30 September
  • IFRS**: Operating revenues of NOK 706 million (NOK 810 million), EBITDA adjusted for financial expenses NOK 128 million (NOK 254 million), corresponding to a margin of 18.1 per cent (31.3 per cent)
  • Earnings per share: NOK 1.10 (NOK 1.97)
  • NGAAP***: Operating revenues of NOK 707 million (NOK 650 million), EBITDA of NOK 151 million (NOK 172 million), corresponding to a margin of 21.3 per cent (26.5 per cent)
 

Highlights of the first nine months of 2020 (first nine months of 2019)  

  • IFRS**: Operating revenues of NOK 1 351 million (NOK 1 954 million), EBITDA adjusted for financial expenses NOK 321 million (NOK 561 million), corresponding to a margin of 23.7 per cent (28.7 per cent)

  • Earnings per share: NOK 13.71 (NOK 4.05), including NOK 11.01 from the Urban Property transaction.
  • NGAAP***: Operating revenues of NOK 2 267 million (NOK 2 198 million), EBITDA of NOK 463 million (NOK 538 million), corresponding to a margin of 20.4 per cent (24.5 per cent)
  • Gross sales amounted to 591 homes (739) with a sales value of NOK 3 058 million (NOK 3 633 million)
  • Net sales were 484 homes (612) with a sales value of NOK 2 450 million (NOK 3 048 million)
  • Net construction starts for 242 homes (582), net completions of 405 (522) and net deliveries of 448 to buyers (518)
 

* 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 12 November.

 

       

Further information from:
Sverre Molvik, CEO, Selvaag Bolig ASA
Telephone: +47 40 10 05 85, e-mail: smo@selvaagbolig.no

Kristoffer Gregersen, vice president communications and market, Selvaag Bolig ASA
Telephone: +47 95 77 55 93, e-mail: kgr@selvaagbolig.no

 

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. The company is headquartered at Ullern in Oslo.

www.selvaagboligasa.no/en

 

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

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