Interim Report January - March 2015
• Rental income amounted to SEK 296.4 million (21.2)
• Net operating income was SEK 120.2 million (7.5)
• Income from property management amounted to SEK 2.2 million (1.2)
• Change in value of properties amounted to SEK 133.2 million (29.9)
• Changes in the value of derivatives had an impact on earnings of SEK -74.6 million (-)
• Profit after tax amounted to SEK 47.4 million (26.2)
• Earnings per share amounted to SEK 0.7 (1.0), basic/diluted
Significant events during the first quarter
• D. Carnegie & Co initiated a process to be listed on a regulated market, NASDAQ Mid Cap
• D. Carnegie & Co refinanced two loans for a total of about SEK 3.8 billion. After refinancing the average maturity of the the Company’s liabilities to credit institutions (excluding outstanding convertible loans) is 4.5 years, and the average interest rate on the loan portfolio is 2.47 percent.
Significant events after the first quarter
• D. Carnegie & Co acquired three properties in Stockholm with a total of 1,009 apartments
• D. Carnegie & Co issued a bond loan for SEK 1,000 million with a maturity of three years, STIBOR 3 month + 3.75 percent
Statement from the CEO
During the first quarter of 2015 we refinanced more than half of our bank loans and succeeded both in extending the maturity and fixed-interest term of the loans while sharply reducing our interest expense.
On 5 March this year, we paid off old loans and replaced them with new loans for a total of SEK 3.8 billion. The majority of the new loans will run for seven years with fixed rates over the same period. D. Carnegie & Co now has an average remaining maturity of over 4.5 years and an average interest rate of less than 2.5%. This means that we have successfully taken advantage of the favorable money market position and substantially reduced both our interest rate risk as funding risk, at the same time that we have reduced our costs.
We have otherwise continued to renovate both apartments and properties in general, such as stairwells, facades, roofs and laundries, investing over SEK 45 million during the quarter.
In an appendix to this report D. Carnegie & Co includes an annual earning capacity report as of March 31, 2015 to provide guidance in addition to the formal quarterly report, since we acquired the majority of the stock after the first quarter of 2014. Earning capacity indicates a current net operating income at this time of SEK 541 million (see further appendix 1). However, this is not a forecast for the future and does not include expected changes in rent or costs.
The period was characterized in part by the process prior to relisting and in part by refinancing, both of which had a negative impact on income from property management during the period, due to non-recurring costs. However, both will have a positive impact on the Company's future business and earnings. We are also pleased to note that the valuation we carried out at the end of March 2015 showed an increase in value of more than SEK 134 million in the first quarter.
After the end of the period we also issued a three-year bond loan amounting to 1,000 million with a 3.75 percent margin.
Stockholm April 23, 2015
ULF NILSSON
CEO of D. Carnegie & Co
For more information, please contact:
Ulf Nilsson, CEO, D. Carnegie & Co, +46 (0)8 121 317 25
Per-Axel Sundström, CFO, D. Carnegie & Co, +46 (0)8 121 317 25
About D. Carnegie & Co
D. Carnegie & Co is a property company focusing on residential properties in the Greater Stockholm region and other growth areas. The company’s business concept is to own property portfolios slated for a gradual renovation of apartments in conjunction with the natural turnover of tenants. This can take place quickly and cost-efficiently thanks to extensive experience from the Bosystem renovation method. In addition to this, the company creates value through the development of building rights in existing portfolios. The market value of the company’s properties amounted to MSEK 11,521 on 31 December 2014 and the total rental value is estimated at MSEK 1,161 annually. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co has been listed on NASDAQ Firth North Premier since 11 December 2014. The company’s Certified Adviser is G&W Fondkommission.
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