Alma Íbúðafélag hf. Presents Financial Overview
During its recent meeting, the board of Alma Íbúðafélag hf. approved the consolidated financial statements for 2024.
The total rental income for the year reached 5.160 billion ISK, alongside other operational revenues of 541 million ISK. This brought the overall income of the group to 5.701 billion ISK for the year. The EBITDA reflected strong performance at 4.180 billion ISK, marking an impressive increase of 942 million ISK compared to the previous year. The group's total profit reached 6.166 billion ISK, increasing significantly by 3.970 billion ISK year-on-year. Cash flow from operations totaled 2.193 billion ISK, with a growth of 180 million ISK.
As of December 31, 2024, the group's total assets were valued at 117.5 billion ISK, of which properties accounted for 87.9 billion ISK. The ratio of interest-bearing debt to the recorded value of assets stands at 62%, with the equity of the group amounting to 40.7 billion ISK.
The board recommends a dividend payout to shareholders of 4.000 billion ISK based on the operational results of 2024.
Insights from the Management
Ingólfur Árni Gunnarsson, CEO of Alma Íbúðafélag hf., commented:
“We are quite pleased with the results from last year and thankful for the strong demand for our services. The average occupancy rate for long-term rental properties remained robust, albeit decreasing slightly from 96.1% in 2023 to 95.2% in 2024. This dip is primarily due to non-revenue-generating assets currently in the sales process.
Rental income derived from investment properties amounted to 5.160 billion ISK, an increase of 787 million ISK from the previous year, largely attributed to the leasing of newly constructed commercial properties, which had not been revenue-generating in 2023. The operating profit from the core activities before valuation adjustments and depreciation was 4.180 billion ISK, marking a year-on-year increase of 942 million ISK. The return on rental properties was recorded at 3.8% for the year, with an increase of 0.4% from the prior year. Nevertheless, management notes that the profitability from rental operations remains lower than desired in the long run, particularly in light of high real interest rates.
The valuation adjustment for the year was 2.990 billion ISK, with the adjustment for residential properties reaching 4.322 billion ISK, while the assessment for commercial properties showed a negative adjustment of 1.332 billion ISK. This decline in commercial property valuation was influenced by rising variable indexed bank interest rates, negatively impacting the company’s asset valuation.
The profit of the group was 6.166 billion ISK, significantly bolstered by the positive performance of the securities investments, totalling 4.792 billion ISK, which constitutes around 78% of the total profit. The company has made considerable investments in listed shares, particularly in real estate companies such as Eik, Heimum, and Reitum. Throughout 2024, Langisjór, the parent company of Alma, initiated a takeover bid for Eik under the legislation on takeovers and completed that process in mid-October. Brimgarðar, a subsidiary of Alma, was regarded as a partner in this takeover offer.
At the end of the year, the total value of the group’s equity in listed real estate companies was 13.327 billion ISK.
Alma Íbúðafélag hf. has continued with its asset sales that do not align with the investment policy. A total of 24 apartments were sold from the asset portfolio. The prospects for the company’s operations remain stable, with robust demand for the group’s services; however, significant increases in rental prices for long-term leases of apartments are not anticipated. A slight decline in long-term rental income is expected due to the apartments sold previously and those designated for sale this year. Expansion in long-term rental assets is not planned until apartments in Heklureitnum are delivered to the company. Nevertheless, the expectations for the company’s short-term rentals indicate a potential for greater profitability moving forward, as new units entering the short-term rental market in 2024 will generate income throughout the entire year. Revenue from leasing commercial properties is expected to align with inflation trends. However, forecasting the performance of the company’s equity in listed firms remains uncertain due to their strong underlying operations.”
For further information, please contact Ingólfur Árni Gunnarsson, CEO, at ingolfur@al.is.
Frequently Asked Questions
What is the primary income source for Alma Íbúðafélag hf.?
The primary income source consists of rental income from residential and commercial properties, along with investment revenues.
How did Alma's overall profit change in 2024?
Alma's overall profit reached 6.166 billion ISK in 2024, which is an increase of 3.970 billion ISK from the previous year.
What is the occupancy rate trend for 2024?
The occupancy rate for long-term rental properties slightly decreased from 96.1% in 2023 to 95.2% in 2024.
What investments did Alma focus on in 2024?
Alma focused on investments in listed real estate companies, capitalizing on market opportunities, particularly in Eik, Heimum, and Reitum.
What are the future expectations for Alma Íbúðafélag hf.?
The company expects stable operations with limited growth in long-term rental income but potentially greater profitability from short-term rentals in the near future.
