SAMHÄLLSBYGGNADSBOLAGET I NORDEN AB (PUBL): INTERIM REPORT JANUARY – SEPTEMBER 2022 IN BRIEF

  • Rental income increased by 32 percent to SEK 5,597m (4,235).
  • The operating surplus increased by 27 percent to SEK 3,776m (2,965).
  • Cash flow from operating activities before changes in working capital was SEK 2,673m (1,746).
  • Profit before tax decreased to SEK -1,706m (15,746), of which:

– Profit from property management is included in the amount of SEK 1,735m (2,067). The profit from property management includes costs for early repayment of loans and other items affecting comparability of SEK -1,512m (-324).

– Changes in the values of properties are included in the amount of SEK -981m (11,982).

– Result from associated companies/JV amounted to SEK -488m (585). A write-down of SEK 500m has been made to the shares in JM.

– Changes in the values of financial instruments are included in the amount of SEK -1,155m (1,366).

  • The loss for the period was SEK -1,861m (profit: 13,296) after the deduction of deferred tax of SEK 58m (-2,290) and current tax of SEK -214m (-160), corresponding to earnings per Class A and B ordinary share of SEK -1.65 (8.56) before dilution.
  • The value of the property portfolio amounted to SEK 154.5bn (149.3).
  • The long-term net asset value (EPRA NRV) was SEK 58,316m (64,516), corresponding to SEK 40.10 (44.46) per share.

THE THIRD QUARTER IN BRIEF

  • Rental income increased to SEK 1,888m (1,459).
  • Net operating income increased to SEK 1,333m (1,088).
  • Operating profit was SEK 397m (873).
  • Adjusted for non-cash exchange rate fluctuations, non-recurring costs and changes in value and tax in joint ventures, our profit from property management increased by 24 percent to SEK 1,144m (925).
  • Cash flow from operations before changes in working capital amounted to SEK 884m (608).
  • Net income after tax for the period amounted to SEK -2,081m (4,003), corresponding to earnings per share of SEK -1.53 (2.63) before dilution.

” Being responsive to change and adapting to changing conditions will be SBB’s greatest strength. Adaptation is the basis for long-term sustainability. Adaptation requires a capacity for new thinking, creativity and resolve. We hope that the measures listed below, which are currently being implemented, will demonstrate precisely this.

1) Divestments

We have stated clearly that we will conduct divestments to strengthen our balance sheet. From the sales that have been completed SEK 2bn remains to be disbursed. Beyond this, we have agreed to additional sales for about SEK 0.8m that are to be disbursed in the fourth quarter and announced a letter of intent for about SEK 9bn. In the fourth quarter, we expect to sell shares in joint ventures for about SEK 2bn. And we will continue to sell assets.

2) Diversified financing

SBB enjoys a close and long-term relationship with its banks. At the same time, SBB is working actively to broaden its sources of funding. This is also why, after the end of the quarter, SBB signed a credit facility of EUR 750m with one of the world’s largest banks.

3) A new housing company to be distributed to shareholders

This morning, SBB announced that the Group is considering implementing a transaction whereby a sub-Group to SBB, focusing on residentials, will be distributed to A- and B-shareholders applying the “Lex Asea” rules, with Bostadsbolaget subsequently being listed on Nasdaq First North. Bostadsbolaget’s balance sheet is initially estimated at about SEK 18bn, equivalent to approximately 10 percent of SBB’s total balance sheet. Bostadsbolaget would only hold bank financing, with an LTV of 55 percent. The transaction will enable increased secured lending in SBB due to the streamlining of the operations.

4) Minority owner with long-term capital

SBB has identified two subsidiaries suitable for bringing in long-term minority owners. Both Swedish and international advisers have been engaged and intensive efforts together with advisers and investors are in progress. However, to date no decisions have been made.

Strongest net operating income to date, high interest coverage ratio and a strong increase in cash flow

We report a negative profit after tax as a consequence of changes in value: negative changes in the value of JV’s including write down of JM, negative changes in the value of residential properties and unrealized exchange rate differences.

The core business continued to deliver strong net operating income over the quarter. Our net operating income for the third quarter was SEK 1,333m, the highest to date. Net operating income over the nine-month period increased by 27 percent, from SEK 2,965m to SEK 3,776m. This has contributed to a strong interest coverage ratio corresponding to a multiple of 4.8, despite rising interest rates. For the first nine months of 2022, cash flow from operating activities before changes in working capital increased from SEK 1,746m to SEK 2,673m, an increase of 53 percent. Adjusted for non-cash exchange rate fluctuations, non-recurring costs and changes in value and tax in joint ventures, our profit from property management was SEK 3,247m for the first nine months of 2022, up 36 percent. The adjusted profit from property management increased by 24 percent to SEK 1,144m for the third quarter of 2022. The results of the core business paves the way for the persistence to deliver at least an unchanged dividend to our approximately 350,000 shareholders.

Ilija Batljan
CEO and Founder

Attachment: Interim Report January – September 2022

The Interim Report can also be found in the following link: corporate.sbbnorden.se/en/reports-and-presentations/.

For further information, please contact:

Ilija Batljan, CEO and Founder of Samhällsbyggnadsbolaget i Norden AB, [email protected]

This information is information that Samhällsbyggnadsbolaget i Norden AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above on 27 October 2022, at 08:00 CET.