Selvaag Bolig ASA: Q4 2016: Strong results, increased dividend and secure revenues

A record year for both sales and profits was achieved by Selvaag Bolig in 2016. That resulted in higher dividend payments and a very good outlook for profits.

Selvaag Bolig had operating revenues of NOK 3 billion in 2016 and an EBITDA margin of 17.1 per cent after adjusting for financial expenses. Ninety-eight per cent of the homes being completed in 2017 and 87 per cent of those scheduled for completion next year are already sold. Strong results and a good outlook mean that the board proposes a dividend of NOK 0.95 per share for the second half of 2016. That will give a total dividend of NOK 1.60 per share for the year.

"We did very well in 2016, selling 1 044 homes for NOK 4.36 billion in all. That's the largest number of homes and the highest sales value in our history. Price trends for new housing also boosted our results," says CEO Baard Schumann.

"The good market has allowed us to start construction early in many projects, and has meant that a large proportion of the units being completed over the next two years are already sold. In other words, we'll be delivering good profits and high margins in the time to come - with the risk low at the same time."

At 31 December 2016, Selvaag Bolig had 1 356 homes worth NOK 5.7 billion under construction. Eighty-five per cent of these were sold. It had 43 completed but unsold homes at the same date.

The company strengthened its land portfolio even further during 2016, in part through the purchase of the Fornebu Sentrum site in cooperation with the Mohn family. Due to be the terminus for the Fornebu metro line and providing space for more than 2 000 homes, this is the largest land purchase in the company's history. Its land bank in the Greater Oslo area could accommodate more than 8 000 units.

"We've got off to a good start in 2017, and are optimistic about market trends in our core areas over coming years. Interest rates are low, while population growth and centralisation create a big demand for new homes in areas where we are strongly positioned," says Schumann.

Highlights of 2016

• Value of homes sold NOK 4 360 million (2015: NOK 3 214 million)
• 1 044 homes sold (2015: 935), construction started for 902 (2015: 858) and 869 (2015: 893) delivered to the buyer
• Average sales price NOK 4.2 million (2015: NOK 3.4 million)
• 1 356 homes under construction (2015: 1 339) with a sales value of NOK 5 709 million (2015: NOK 4 740 million)
• 98 per cent of homes for completion in 2017 and 87 per cent for 2018 are sold
• IFRS:* Operating revenues of NOK 3 000 million (2015: NOK 3 246 million), EBITDA adjusted for financial costs of NOK 514.4 million (2015: NOK 538.9 million) corresponding to a margin of 17.1 per cent (2015: 16.6 per cent)
• Earnings per share: NOK 3.21 (2015: NOK 3.00)
• NGAAP:** Operating revenues of NOK 3 511 million (2015: NOK 3 229 million), EBITDA of NOK 683 million (2015: NOK 492 million) corresponding to a margin of 19.5 per cent (2015: 15.2 per cent)
• NOK 1 268 million (2015: NOK 881 million) in added value for the land bank
• The board proposes a dividend of NOK 0.95 per share for the second half of 2016. That will bring the total dividend for the year to NOK 1.60 per share (2015: NOK 1.50).

Highlights of the fourth quarter

• Value of homes sold NOK 764 million (2015: NOK 751 million)
• 161 homes sold (2015: 209), construction started for 196 (2015: 171) and 254 (2015: 235) delivered to the buyer
• Average sales price NOK 4.8 million (2015: NOK 3.6 million)
• IFRS: Operating revenues of NOK 886 million (2015: NOK 882 million), EBITDA adjusted for financial costs of NOK 170 million (2015: NOK 133 million) corresponding to a margin of 19.2 per cent (2015: 15.1 per cent)
• Earnings per share: NOK 1.24 (2015: NOK 0.72)
• NGAAP: Operating revenues of NOK 947 million (2015: NOK 718 million), EBITDA of NOK 213 million (2015: NOK 105 million) corresponding to a margin of 22.5 per cent (2015: 14.6 per cent)

* Pursuant to the IFRS, revenue is recognised when the homes are delivered to the buyer. Profit pursuant to the IFRS accordingly derives primarily from homes where construction was started 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 based on 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