SAMHÄLLSBYGGNADSBOLAGET I NORDEN AB (PUBL): YEAR IN BRIEF

  • Rental income increased by 26 percent to SEK 7,447m (5,930).
  • The operating surplus increased by 21 percent to SEK 4,881m (4,047).
  • Cash flow from operating activities before changes in working capital increased with 42 percent to SEK 3,485m (2,459).
  • Profit before tax decreased to SEK -10,548m (29,294), of which:
    • Profit from property management is included in the amount of SEK 2,391m (3,286). The profit from property management includes costs for early repayment of loans and other items affecting comparability of SEK 304m (-241).
    • Changes in the values of properties are included in the amount of SEK -4,571m (21,360).
    • Profit from associated companies/joint ventures is included in the amount of SEK -1,866m (2,814). Impairment of SEK -551m was recognized in the shareholding in JM.
    • Changes in the values of financial instruments are included in the amount of SEK -1,560m (2,487).
  • Profit for the year was SEK -9,811m (25,601) after the deduction of deferred tax of SEK 645m (-3,698) and current tax of SEK -294m (-247), corresponding to earnings per Class A and B ordinary share of SEK -7.23 (17.17) before dilution.
  • The value of the property portfolio amounted to SEK 135.6bn (149.3).
  • The long-term net asset value (EPRA NRV) was SEK 45,579m (64,516), corresponding to SEK 31.34 (44.46) per share.
  • The Board of Directors proposes a dividend of SEK 1.44 (1.32) per series A and B share and a dividend of SEK 2 (2) per series D ordinary share. SBB will make it possible for shareholders to choose whether the dividend on Class A and B ordinary shares, as well as on Class D shares, should be reinvested in Class B shares (according to a so-called DRIP – Dividend ReInvestment Plan) or paid out in cash.

THE FORTH QUARTER IN BRIEF

  • Rental income increased to SEK 1,850m (1,695).
  • Net operating income increased to SEK 1,105m (1,082).
  • The profit from property management was SEK 656m (1,220), of which the profit from property management excluding unrealized currency translation loses was SEK 1,236m (989).
  • Net income after tax for the quarter amounted to SEK -7,949 million (12,305), corresponding to earnings per share of SEK -5.58 (8.20) after dilution.

”Let me start by affirming that our core operations continue to deliver. In 2022, our profit from property management, excluding unrealized exchange rate fluctuations, increased by 38 percent, from SEK 3,168m to SEK 4,382m. Cash flow from operating activities before changes in working capital increased by 42 percent over the year, from SEK 2,459m to SEK 3,485m. These secure and strong cash flows (backed up by an average lease duration of slightly more than ten years) are delivered by a well-diversified portfolio of assets that generate shareholder value at all stages in the economic cycle. In November 2022, a 49-percent holding was sold for SEK 9.2bn (plus a contingent purchase consideration of SEK 1.2bn) to the Brookfield Super-core Infrastructure Fund (one of the world’s largest infrastructure funds). Our key debt ratios at the end of the year do not include agreed and committed payments to SBB of SEK 10.5 billion, of which the Brookfield deal is SEK 9.2 billion. These will be reported in the first quarter of 2023. We do have a strong interest coverage ratio corresponding to a multiple of 3.9 times, despite rising interest rates. We continue to deliver, and we will not stop until we have strengthened our credit rating and regained the full confidence of the market. Accordingly, the Board of Directors has decided to prioritize the following points: 1) SBB’s Board of Directors has resolved to assess the conditions for IPO of the subsidiary Sveafastigheter. Ahead of the listing, Sveafastigheter will own residential properties and projects through directly owned companies, joint ventures and listed shares for a total of about SEK 15bn. Of this, the net asset value in SBB is equivalent to about SEK 8bn. SBB intends to divest around 70 percent of the shares in the company in connection with the listing. 2) SBB is currently in discussions regarding the sale of properties for an additional SEK 6bn. Our successful efforts from last year are continuing and SBB intends to prioritize sales with the aim of strengthening the balance sheet and reducing the company’s indebtedness. 3) Brookfield Super-core Infrastructure Fund and SBB have agreed to prioritize growth within Europe over the upcoming years. A process has been initiated to develop the strategy for establishing these operations. 4) SBB has built its first solar park, which produces 10 GWH of electricity. SBB will continue to invest in renewable energy with the aim of becoming self-sufficient in renewable electricity by 2030. 5) SBB’s ownership in JM is a strategic long-term holding that fits well with the company’s strategy of owning unique assets.

SBB’s rolling 12-month earnings capacity per Class A and B share comes in at SEK 2.11. Beyond that, income for 2023 increased by SEK 0.19 per Class A and B ordinary share through the completion of new production projects. In summary, income from property management operations amounted to SEK 2.30 per Class A and B share. The stable inflation-protected cash flow from SBB’s core operations ensures continued strong dividends for our approximately 350,000 shareholders. For the 2023 Annual General Meeting, the Board proposes a dividend of SEK 1.44 per ordinary A and B share, split between 12 monthly dividends. In a similar way currently offered by Brookfield in Canada, SBB will make it possible for shareholders to choose whether the dividend on Class A and B ordinary shares, as well as on Class D shares, should be reinvested in Class B shares (according to a so-called DRIP – Dividend ReInvestment Plan) or paid out in cash. The idea is to make it possible for shareholders, who so desire, to straightforwardly reinvest their dividends into new Class B shares in SBB without incurring any transaction costs. SBB continues to focus fully on its core business of delivering much-needed social infrastructure. In 2022, we have delivered and are working with full confidence to continue delivering a good return to our shareholders and credit investors.” comments Ilija Batljan, CEO and Founder of Samhällsbyggnadsbolaget i Norden AB.

Attachment: Year-end Report January – December 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 23 February 2023, at 08:00 CET.