Klövern AB: Year-End Report January-December 2016
Post# of 301275
»» Income increased by 6 per cent to SEK 2,876 million (2,718).
»» The operating surplus increased by 7 per cent to SEK 1,891 million (1,766).
»» Profit from property management increased by 13 per cent to SEK 1,180 million (1,043).
»» Changes in value of properties amounted to SEK 1,709 million (1,252).
»» Net profit increased by 13 per cent to SEK 2,259 million (2,008), corresponding to SEK 2.11 (1.83) per ordinary share.
»» After taking possession of 32 properties for SEK 1,484 million, sale of 15 properties for SEK 630 million and investments of SEK 1,626 million, the value of the property portfolio amounted to SEK 39,234 million.
»» The Board of Directors proposes a dividend of SEK 0.40 (0.35) per ordinary share to be paid in four instalments of SEK 0.10.
»» The Board of Directors proposes a dividend of SEK 20.00 (20.00) per preference share to be paid in four instalments of SEK 5.00.
Statement by the CEO
Record profit with continued expansion in combination with further streamlining of the property portfolio Klövern reports a record result for 2016. Profit from property management showed strong development while continued positive changes in value contributed to the good result. Profit before tax increased to SEK 2,756 million, to be compared with the preceding year's record profit of SEK 2,541 million. Net moving-in, strong rental development, acquisitions and cost control contributed to the positive development. During the year we have made acquisitions in Stockholm, Malmö, Lund and Gothenburg. A number of less prioritized properties have also been divested in order to further streamline the property portfolio. Project development operations are making good progress and we see great potential in new future projects of commercial premises as well as residential.
Klövern's results for 2016 beat all our previous records. A continued stable and strong development of profit from property management in combination with low interest rates and good value development of the property portfolio led to a 2016 profit before tax of SEK 2,756 million, to be compared with the previous year's record profit of SEK 2,541 million.
The rental market continues to be strong which is reflected in positive net moving-in during the fourth quarter as well as during full year 2016 when we achieved a total net moving-in of SEK 20 million.
During the fourth quarter we concluded transactions which reinforce Klövern's position in Malmö, Lund and Gothenburg. At the same time the portfolio was further concentrated by divestment of the property holdings in Säter and agreement to divest all of our holdings in Karlskrona. In all during 2016, Klövern acquired 32 properties, divested 15 properties and signed contracts to divest 13 additional properties. Geographic streamlining and expansion in selected growth cities will continue to be guiding stars for Klövern's transaction activities during 2017.
Klövern's project development has, in line with our strategy, expanded in recent years. During 2016 we have invested SEK 1,626 million (1,386) in new and profitable projects. During the year, major projects have been successfully completed for the Swedish Transport Agency, StayAt and Tele2, among other. We experience strong demand in our ongoing projects such as the office/hotel building S7 in Västerås, the office building Skeppet in Karlstad and the Gamlestaden district in Gothenburg. We see great potential for value creation through future project development, both as regards offices and housing. In all, we make the assessment that our investments in projects will be at about the same level in 2017 as in 2016.
Klövern Living is working with a large number of different residential development projects which we - in the long term - assess can lead to between 8,000 and 12,000 apartments in Stockholm, Uppsala, Västerås, Karlstad and Linköping among other places. Our assessment is that Klövern Living will start production of at least 200-300 apartments in 2017/2018 and at least 300-500 apartments in 2019/2020.
Klövern's financial strength improved during 2016. The adjusted equity ratio was 36.7 per cent at the end of December, an increase during the year towards our long-term goal of 40 per cent. At the same time, the interest coverage ratio improved to 2.9, which in combination with an average period of fixed interest of 2.6 years provide good resistance against potentially higher interest rates.
Due to the profit development and positive changes in value, EPRA NAV continued to develop well and amounted to SEK 11.70 at the end of the year, a rise of 23 per cent during 2016.
Overall, we are very satisfied with developments during 2016 and market conditions appear good for a continued healthy development in 2017.
Rutger Arnhult, CEO Klövern
Rutger Arnhult, CEO, +46 70-458 24 70, rutger.arnhult@klovern.se Lars Norrby, IR, +46 76-777 38 00, lars.norrby@klovern.se
Klövern is a real estate company committed to working closely with customers to offer them efficient premises in Swedish growth regions. Klövern is listed on Nasdaq Stockholm. For further information, see www.klovern.se .
Klövern AB (publ), Bredgränd 4, 111 30 Stockholm. Phone: +46 8-400 500 50. E-mail: info@klovern.se.
This information is information that Klövern AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 07:30 CET on 10 February 2017.
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