A strong close to an important year

QUARTER October-December 2014

  • Rental income amounted to MSEK 422 (407)

  • Profit from property management totaled MSEK 179 (90), or SEK 2.50 per common share (3.60)*

  • Profit after tax amounted to MSEK 390 (90), corresponding to SEK 5.70 per common share (3.60)*

  • Cash flow from operating activities was MSEK 247 (105), or SEK 3.60 per common share (5.30)*

PERIOD JANUARY-DECEMBER 2014

  • Rental income amounted to MSEK 1,612 (1,584).

  • Profit from property management totaled MSEK 821 (323), corresponding to SEK 14.70 per common share (12.90)*

  • Profit after tax amounted to MSEK 962 (231), or SEK 17.30 per common share (7.40)*

  • Recognized property value of SEK 24.4 billion (16.3) derives from 353 (195) directly owned properties.

  • Net asset value (EPRA NAV) per common share was SEK 119.90 (116.40).

  • Cash flow from operating activities was MSEK 627 (261), corresponding to SEK 11.20 per common share (10.40)*

  • The Board proposes a dividend of SEK 6.00 per common share with a quarterly payment of SEK 1.50 per each common share, as well as a dividend of SEK 20.00 per preference share with a quarterly payment of SEK 5.00 per preference share.

* The number of common shares at year-end was 65,720,104 (25,000,000), the number of preference shares at year-end was 5,000,000 (-)

SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER

  • Hemfosa issued 5,000,000 new preference shares, which contributed MSEK 1,591 to the company after deductions for issuance costs. The preference share was listed on Nasdaq Stockholm on December 12.

  • During the fourth quarter of 2014, Hemfosa implemented a number of major property acquisitions. Properties were acquired for a total of SEK 6.4 billion, with community service properties accounting for SEK 4.2 billion.

  • The largest acquisition of community service properties was implemented in November in an exchange transaction. Hemfosa acquired 60 community service properties valued at nearly SEK 3.3 billion and divested a site leasehold in Huddinge valued at slightly more than SEK 1.1 billion.

  • Another large property portfolio consisting of community service properties, office and logistics properties valued at SEK 2.0 billion was acquired in November.

  • In December 2014, Hemfosa acquired the remaining 50 percent of a previously half-owned property portfolio with a market value of SEK 1.3 billion.

  • After year-end, Hemfosa divested nine logistics properties valued at approximately SEK 0.9 billion.

  • In early 2015, Hemfosa took the first step into the Norwegian market through the acquisition of eight community service properties in the Oslo region for a price of SEK 3.0 billion.

  • In February 2015, Hemfosa signed an agreement to acquire community service properties in western Sweden at a value of SEK 0.4 billion.

  • The Board intends to propose a two-for-one split of the company’s common share.

 

Comments from the CEO

A strong close to an important year

The fourth quarter marked the close of a very important year for Hemfosa, which we ended on a strong note. Over a three-month period, we implemented more transactions than we have ever done, resulting in a significant expansion of the property portfolio – particularly in the prioritized Community Service Properties segment – completely in line with our strategy. We also further strengthened our financial position during the quarter, through the successful issuance of the preference shares that were listed on Nasdaq Stockholm in December.

Strategic transactions at a fast pace

We have our sight set on growth and many of the discussions held during the year resulted in the completion of several key strategic acquisitions during the quarter. One such transaction was the exchange transaction with Hemsö in November, in which we acquired community service properties valued at nearly SEK 3.3 billion and also divested a site leasehold to Hemsö as part of the deal. This means that in one transaction, we were able to add 60 properties to our Community service properties segment, with the precise category of tenants that we want; homes for the elderly, schools and healthcare facilities, but also police and the judicial system – stable operations, generally with long leases. In November, we also acquired some 50 properties in southern and western Sweden for approximately SEK 2 billion from Castellum – an attractive portfolio with stable cash flows.

Extended leases with major tenants

In our ongoing management and development of the property portfolio, we extended several leases with major tenants during the quarter, including the Police Authority in Sollentuna and the National Courts Administration in Alingsås, where we will be implementing conversions and expansions in both instances.

For us at Hemfosa, it has always been important to be alert and open to various forms of attractive property projects, in which we become involved only when the properties have been completed and leases signed with the tenants. In December, we signed such a project with Skanska, whereby we are acquiring three properties with long leases for residential care with occupancy in 2016.

We keep our promises

When I look back at 2014, I can confirm that we did what we aimed to do. We listed the company in March and I feel that the stock market has appreciated Hemfosa and our business concept with a focus on properties with stable cash flows.

We have significantly increased the property portfolio, primarily in high-quality community service properties. We continued to develop the existing portfolio and have also formed a stronger organization that can cope with continued growth. Best of all, we have increased our earnings capacity and strengthened our financial position. We are very satisfied with this and see continued potential for Hemfosa to expand in 2015.

A new and highly exciting feature is the acquisitions we implemented in Norway early in 2015. This is when we took the first step into the Norwegian market through the acquisition of eight community service properties in the Oslo region. As we see it, Norway offers numerous attractive business opportunities and our objective is to continue to expand both there and in Sweden, our principal market. Now that the market is liquid, we will also capitalize on the opportunities to divest unprioritized properties and to instead acquire properties or develop the property portfolio.

Jens Engwall, CEO


Hemfosa Fastigheter AB (publ) may be legally obliged to publish under the Securities Market Act and/or the Financial Instruments Trading Act. The information was issued for publication on February 18, 2015 at 07:30 a.m (CET).


For further information, please contact:

Jens Engwall, CEO
Tel: +46 70 690 65 50, mail: [email protected]

Karin Osslind, CFO
Tel: +46 70 794 93 37, mail: [email protected]