Summary of period April – June 2018
- Net sales for projects run entirely by SSM totaled 73.1 MSEK (168.4).
- Operating profit was 1.4 MSEK (19.7) and the operating margin was 1.9% (11.7).
- Cash flow from operating activities was 85.9 MSEK (-230.7).
- 33 pre-purchase agreements signed during the quarter.
- The Sollentuna Hills project was split into two projects of 94 cooperative apartments and 94 rental units respectively. Production in the rental project started under SSM’s own management.
- During the quarter, the company’s terms and conditions for bonds were amended. As a result, the company may now start production of apartments that have a lower sales rate than today, provided the sales rate for all of the company’s cooperative apartments under productions is at least 60 percent.
- SSM named finalist to develop a new city district in Sollentuna.
- Group management grew when Maria Boudrie joined as Chief Legal Officer and Christer Ljung as Chief Purchasing Officer.
Summary of period January – June 2018
- Net sales for projects run entirely by SSM totaled 168.6 MSEK (304.9).
- Operating profit was 9.3 MSEK (40.9) and the operating margin was 5.5% (13.4).
- Cash flow from operating activities was 28.7 MSEK (-232.2).
- 39 pre-purchase agreements signed during the period.
- Production started by SSM (own management) for Täby Turf and Sollentuna Hills, a total of 273 rental units. There is no revenue recognition for rental projects run under SSM’s own management.
- A letter of intent was signed regarding the exclusive right to acquire 1,200 building rights in Segeltorp, Rotebro, Spånga and the central parts of Täby with a project value of 3.5 billion SEK.
- A land allocation was granted by the City of Stockholm for 100 student housing units in Brommaplan.
- An early consultation for Tellus Towers took place during the spring. A decision by the City Planning Administration from the early consultation is expected during the fall of 2018 after which an ordinary consultation will take place.
There were no significant events after the balance sheet date.
Mattias Roos, President & CEO, comments on the quarter:
“The cautious atmosphere in the housing market continued into the second quarter of 2018, although it has stabilized somewhat. Our sales rate continued to develop slowly but positively during the quarter, but it is significantly lower than the figures SSM and the market reported during the same quarter last year. On the reporting date, we had signed 55 pre-purchase agreements during the year. In some of our projects where sales have started, we have not yet begun converting booking agreements into pre-purchase agreements, which has impacted the number of pre-purchase agreements that can potentially be signed during the year. The sales rate for projects in production was 95.8 percent at the end of the quarter.
A lower level of activity in our ongoing production will impact the company’s profit development in the near future and the operating profit for the quarter totaled 1.4 MSEK. The operating margin was 1.9 percent as a result of lower net profits and lower participations from joint ventures. Cash flow from current operations increased significantly during the period and amounted to 85.9 MSEK, which is mainly attributable to the fact that significant parts of the Turbinhallen project are in the final stages of occupation and completion. We are continuing to optimize projects by using our own employees and also intensifying work to strengthen our logistics and material handling. During the quarter, the company’s terms and conditions for bonds were amended, which will allow SSM to start production in projects that have an initial sales rate that is lower than today, provided the sales rate for all of the cooperative apartments SSM has in production is at least 60 percent. This amendment will give us the desired level of flexibility for continued growth.
The structural housing shortage in the Greater Stockholm area is substantial. Given the calibration that is going on in the market, with SSM’s affordable and space-efficient homes, we believe that we are well positioned for when current and future Stockholmers adapt to the prevailing conditions. Our competitive customer offer is also confirmed by the fact that SSM has completed approximately 770 homes in the past 18 months, all of which are sold out.”
The information in this press release is such, which SSM Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 07.30 CET on August 28, 2018.
About SSM Holding AB (publ)
SSM produces functionally smart and affordable homes with attractive common areas, close to public transport and the city center for the company’s target group – the urbanites of tomorrow. The company envisions a housing market that is accessible to as many people as possible and aspires to produce 60 percent cooperative apartments, 30 percent rental units and 10 percent student housing. SSM is the leading property developer in its niche within the Greater Stockholm area and in June 2018, the company had approximately 6,500 building permits in its portfolio. SSM was listed on Nasdaq Stockholm (Mid-cap) on April 6, 2017. www.ssmlivingroup.com