Quarterly Report • Oct 21, 2022
Quarterly Report
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January–September
Rental income increased by 7 percent to SEK 2,447 million (2,290)
Operating surplus increased by 4 percent to SEK 1,729 million (1,658)
Income from property management increased by 4 percent to SEK 1,425 million (1,372)
Profit for the period amounted to SEK 1,998 million (1,680), corresponding to earnings per share of SEK 6.50 kr (5.46)
In 12 months EPRA NRV per share has increased by 16 percent to SEK 89,28 million (79,84) adjusted for dividend of 3.00 sek per share
Wihlborgs is the leading property company in the Öresund region. Over 50,000 people have their workplace at one of our premises. People in Malmö, Lund, Helsingborg and Copenhagen all meet in city spaces designed by us, and our presence can also be felt in board rooms, club rooms and social forums as the Öresund region grows amid a wave of urban diversity and sustainability. We are a region-builder and a relations-builder.
The book value of the company's properties totals SEK 54 billion, representing an annual rental value of SEK 3.8 billion. Wihlborgs' shares are listed on the Large Cap List of Nasdaq Stockholm.
Wihlborgs specialises in efficient sub-markets in the Öresund region, where we own, manage in-house and develop commercial properties, thereby enabling tenants to grow and develop.
We work continuously to improve our property portfolio by refining and developing existing properties, completing new projects and acquiring and selling properties. Strong financial results enable value growth and dividends to our shareholders.
Wihlborgs is to ensure the company's and region's long-term sustainable development. Our focus is on responsible business, commitment to the region and its community, being an attractive employer and sustainable properties.
| Group key figures, SEK m | 2022 Jan–Sep |
2021 Jan–Sep |
|---|---|---|
| Rental income | 2,447 | 2,290 |
| Operating surplus | 1,729 | 1,658 |
| Income property management | 1,425 | 1,372 |
| Changes in value of properties | 412 | 591 |
| Changes in value of derivatives | 691 | 147 |
| Result for the period | 1,998 | 1,680 |
| Earnings per share, SEK | 6.50 | 5.46 |
| Surplus ratio, % | 71 | 72 |
| Equity/assets ratio, % | 41.0 | 41.5 |
| Occupancy rate, %* | 93 | 92 |
| EPRA NRV per share, SEK | 89.28 | 79.84 |
*) Excluding Projects & Land.
| Target | Outcome Q3 2022 |
|---|---|
| A return on equity that exceeds the risk-free interest rate by not less than six percentage points, which for the beginning of 2022 corresponds to 6.12 percent |
11.8 |
| An equity/assets ratio of no less than 30 percent | 41.0 |
| An interest coverage ratio of no less than 2.0 | 6.6 |
| The loan-to-value ratio is not to exceed 60 percent | 49.2 |
| Financial reports15 | |
|---|---|
| Key figures20 | |
| Definitions 22 | |
| Calendar23 | |
| Contact24 | |
We exist in a contradictory operating environment. On the one hand, international conflicts, the energy crisis, declining consumer confidence, financial turmoil and rising interest rates dominate the information space. On the other hand, Wihlborgs core business continues to perform very well. Let me showcase the latter from a few different angles.
Third quarter net lettings totalled SEK 18 million. This quarter makes 30 consecutive quarters with a positive numbers. And all four regions contributed positively in every quarter of 2022. If you measure net lettings over a rolling 12-month period, we have never posted such a strong result, plus SEK 154 million. This demonstrates the solid level of underlying demand and indicates the direction for our future revenues.
Vacancies continue to decrease and we are letting premises at higher rents. This is the case both when we compare the average rent per square metre in newly signed contracts versus terminated contracts, but also when we compare property rental values and rental income in like-for-like holdings. Rental income from like-for-like portfolios increased 7.4 percent year-on-year.
Our tenants appreciate our efforts, which we have noted in the customer survey that we conduct every two years. Overall customer satisfaction has risen from 75 to 78. Factors that many tenants highlight are the treatment from our staff, our proactivity, and our responsiveness when it comes to changing local needs. It is also pleasing that the area in which we are increasing most strongly is environmental concerns. The scores reinforce my conviction that our strategy is correct. Namely, that we focus on a few attractive markets and meet customers with our own staff on a daily basis.
In the third quarter, rental income increased 4 percent to SEK 848 million. Moreover, it should also be remembered that in the third quarter of 2021, we received an early lease termination payment of SEK 64 million. Adjusted for this, the increase amounted to 13 percent. The quarter's operating surplus totalled SEK 594 million, compared with SEK 612 million, including the non-recurring payment, in the same quarter of 2021.
The unusual turbulence in the energy market has increased energy costs by SEK 34 million despite us having price hedged around 80% of our estimated consumption. The extreme electricity prices in August arrived in conjunction with unusually high cooling consumption due to high attendance and hot weather. This meant we were impacted by the need to purchase a larger share of electricity at spot prices and by the increase in demand charges. These costs are included in the annual settlement of operating costs incurred after the end of the year, thus providing further incentive for ourselves and our tenants to reduce consumption going forward.
Income from property management amounted to SEK 475 million for the quarter. In pace with the renewal of our loan agreements, the interest rate base has risen and resulted in an increase in net interest expense to SEK 98 million. During the quarter, we redeemed two bonds for a total of SEK 846 million and we have not issued any new bonds. The bond market accounted for 10 percent of our borrowings at the end of the quarter. Our access to funding via bilateral bank agreements remains favourable and it may also be worth
mentioning that the Danish mortgage-credit system, which now accounts for 40 percent of our funding, continues to function very well.
In the third quarter, our properties noted positive changes in value of SEK 40 million. The change was minor in relation to the property value of just over SEK 54 billion and it stems from small adjustments to assumptions about inflation, yield requirements and lettings.
Overall, we continue to deliver strong cash flow, which provides us with a stable balance sheet with an equity/assets ratio of 41 percent and a loan-to-value ratio of 49 percent. Long-term net asset value (EPRA NRV) grew to slightly more than SEK 89 per share, up 16 percent in twelve months after adjustment for dividends distributed.
We are continuing to invest in our project development based on our cash flow. During the quarter, we signed a fifteen-year lease with Inpac for a 6,400 square metre industrial facility in Lund, a project in which Wihlborgs is investing SEK 137 million. This enables us to contribute to Inpac's development and also to create greater variation in terms of workplaces in Lund, which is otherwise very office-focused.
We are constantly evaluating acquisition opportunities, even in today's market. Two of the five properties we took possession of during the quarter are Amager Strandvej 390 and Hedegaardsvej 88 in Copenhagen, acquisitions that we announced during the summer. The properties are attractively located near Kastrup and are of a good technical standard, but also have some vacancies that we can work with. Letting efforts here have got off to an excellent start with ongoing discussions regarding most of the space. This is how we create value over time.
We maintain our focus on sustainability issues even in changing times. The results of the annual international assessment of the sustainability performance of property companies, GRESB, came in during the autumn. In this year's survey, Wihlborgs received all five stars possible and a score of 91 on a scale of 0 to 100. Moreover, Wihlborgs is the sector leader in the category of diversified listed property companies. Work continues unabated in various areas, not least in the form of a large number of projects related to energy efficiency.
Overall, Wihlborgs has a stable base in terms of tenant relationships, cash flow, project portfolio and funding sources, which enables us to focus on our core business and to continuously adapt to our tenants' needs and to help them develop their operations. In combination with our constant efforts to improve and prepare for change, this makes us well-positioned for growth. Exactly as we have planned.
Ulrika Hallengren, CEO
The war in Ukraine, rising energy prices, the higher cost of capital, the election campaign and sharply rising inflation dominated the market in the past quarter. Currently, no clear observations or indications for the future development of the rental and real estate markets are available.
Inflation, measured as CPIF, increased 9.0% year-on-year in August 2022. As a result of the rapidly rising inflation rate, the Swedish Central Bank decided to raise the repo rate from 0.75 to 1.75% at the most recent monetary policy meeting. Conditions are tough for households and record low scores were noted in the Swedish National Institute of Economic Research's Economic Tendency Survey. The indicator for the service sector, which historically follows households, has now started to decline and is currently weaker than normal. Despite the deteriorated conditions, service companies are more optimistic than normal in terms of their employment plans. Silf/Swedbank's purchasing managers' index for the service sector dipped in the third quarter and indicates a slowdown in service sector growth as industrial activity weakens and household purchasing power erodes. The index is at 55.1, where a score above 50 still indicates growth.
Swedbank's report on regional development forecasts that the economic slowdown will impact all regions, though the downturn is expected to be milder than during both the financial crisis and the Covid-19 pandemic. As labour shortages remain high in all regions, only a limited increase in unemployment is expected. South Sweden is expected to be hit hard by high electricity prices and Swedbank's estimate indicates inflation in excess of 14% during the winter. A substantial construction sector slowdown is expected in Skåne as the county received the most investment support for rental housing in the 2017–2021 period. On a rolling annual basis, employment growth in South Sweden was highest in the Malmö-Lund region (also includes Helsingborg and other municipalities) at over 4% in the second quarter. This was just over a percentage point up on the rest of South Sweden.
In SEPREF's (the Swedish Property Research Forum) consensus forecast for the third quarter of 2022, prime rent remains unchanged at SEK 3,000/m². Yield requirements have risen from 4.0% to 4.18% since the second quarter and 75% expect yield requirements to rise in the coming year.
In the first six months of 2022, transaction volume was high and initiated deals were substantially completed. According to Pangea, transaction volume in Sweden totalled SEK 8 billion in August and September, which was below normal. Cushman & Wakefield reported falling vacancy rates in Malmö as a whole from 7.5% in the spring to 7.0%, with the largest declines in Hyllie and Västra Hamnen. Prime rents remained unchanged during the period and office yield requirements rose marginally.
The transaction volume in Denmark was at a more stable level, around DKK 8 billion for August and September. According to Newsec, vacancies continued to decline in the Copenhagen area and office rents and yield requirements are posting weak increases.
Comparative figures for income statement items relate to values for the corresponding period 2021 and balance sheet items as of 2021-12-31.
Rental income amounted to SEK 2,447 million (2,290) corresponding to an increase by 7 percent. Of the rental income, service income accounted for SEK 259 million (211).
The change in rental income compared to the previous year is shown in the table below. The increase in income from property tax depends on decisions from the general property assessment in 2022. The increase of the service income from the canteen operations in Denmark is mainly due to a greater presence of the tenants in the properties after the pandemic.
| Rental income Jan-Sep 2021 | 2 290 |
|---|---|
| Early redemption Q3 2021 | -64 |
| Acquisitions | 42 |
| Currency effect | 20 |
| Canteens Denmark | 13 |
| Debited property tax | 10 |
| Index | 40 |
| Completed projects, | |
| new leases and renegotiations | 97 |
| Rental income Jan-Sep 2022 | 2 447 |
At the end of the period the occupancy rate for investment properties, excluding Projects & Land, is 93 percent (92).
During the period new leases were signed to a value of SEK 202 million (207) on an annualized basis. Lease terminations totalled SEK 115 million (159). This represents a net letting of SEK 87 million (48).
Cancellable rental value, SEK m
20 % Rental income from ten largest tenants
23 %
Rental income from governmental tenants
Total real estate costs amounted to SEK 718 million (632). Increased operating costs of SEK 46 million compared with the previous year are mainly due to continued rising energy prices, which account for SEK 30 million of the increase excluding acquisitions. Energy costs are included in the supplements paid by the tenants. Increased activity in the Danish canteen business has led to increased costs. Of the increased property tax of SEK 22 million, SEK 12 million refers to decisions from the general property assessment in Sweden that came in quarter 3 but refer to the entire period January to September. Acquisitions of properties during the past year have led to increased property costs by SEK 14 million. Reduced reserves for rental receivables have meant positive rental losses during the period of SEK 1 million (-1). The historical summary at the bottom of page 17 illustrates how costs vary over the different quarters of the year.
The operating surplus amounted to 1,729 million (1,658) representing a surplus ratio of 71 percent (72). Of the change, SEK 29 million (-47) was attributable to property acquisitions and divestments, in addition, currency effects have affected by SEK 13 million (-11). Last year a compensation for early termination of leases affected the operating surplys positively by SEK 64 million.
The costs for central administration were SEK 67 million (61).
Net interest totalled SEK -243 million (-226), of which interest income accounted for 10 million (10). The interest expense for the period, incl. realized effects from interest rate derivatives, was 253 million (236). The leasehold amounted to 3 million (3). Interest expense relating to interest rate derivatives amounted to SEK 17 million (44). At the end of the period, the average interest rate, including the cost of credit agreements, was 1.72 percent, compared with 1.32 percent at year-end.
Profit participation in joint ventures amounted to SEK 9 million (4). Income from property management amounted to SEK 1,425 million (1,372).
The pre-tax profit, i.e. after value changes on properties and derivatives, was SEK 2,528 million (2,110). During the period, value changes on properties amounted to SEK 412 million (591). Increased market interest rates have entailed positive value changes on derivatives amounting to SEK 691 million (147) of which SEK 699 million (155) are attributable to interest rate derivates and -8 million (-8) to other financial items.
The profit after taxes was SEK 1,998 million (1,680). Total tax amounted to SEK 530 million (430), of which current tax SEK 32 million (44) and deferred tax SEK 498 million (386).
In July, Wihlborgs acquired two properties totalling 53,000 m² in close proximity to Kastrup. There are metro stations with direct access to central Copenhagen on the doorsteps of each property. The acquisitions are part of Wihlborgs' ambition to offer existing and new tenants excellent office premises close to Copenhagen city centre.
The summaries below are based on Wihlborgs' property portfolio as of 30 September 2022. Rental income relates to contracted rental income on an annual basis as of 1 October 2022.
The operating surplus is based on the properties' earning capacity on an annual basis based on rental income for October 2022, operating and maintenance costs, property administration on a rolling twelve-month basis and property tax.
Wihlborgs' property portfolio consists of commercial properties in the Öresund region, located in Malmö, Helsingborg, Lund and Copenhagen. The property portfolio 30 September 2022 consisted of 305 properties (299) with a lettable area of 2,231,000 m2 (2,143,000). 7 of the properties (7) are leasehold rights.
The properties' carrying amount was SEK 54,488 million (50,033), which corresponds to the estimated market value. The total rental value was SEK 3,757 million (3,472) and the contracted rental income on annual basis SEK 3,451 million (3,128). The like-for-like increase in rental value was 6.1 percent while contracted rental income increased by 7.4 percent compared to 12 months previously.
The economic occupancy rate for Office/Retail properties was 93 percent (92) and for Logistics/Production properties 92 percent (93). The rental value for Office/Retail properties represented 84 percent and Logistics/Production properties 15 percent of the total rental value.
The operating surplus from investment properties, excluding property administration and Projects/Land, is SEK 2,625 million (2,401) which with a carrying amount of SEK 51,085 million (47,194) corresponds to a yield of 5.1 percent (5.1). Broken down by property category, this is 5.0 percent (4.9) for Office/Retail and 6.2 percent (6.3) for Logistics/ Production.
| 13 % 6% 21 % 40 % Entire property stock |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2022-10-01, | 2021-10-01, | Percent | |||||||
| SEK m | SEK m | ||||||||
| Rental value | 3,757 | 3,322 | + 13.0 | ||||||
| Rental income | 3,451 | 2,991 | + 15,4 |
| Like-for-like* | 81% 16 % |
23 % | |
|---|---|---|---|
| Ofce/Retail Lund 2022-10-01, |
2021-10-01, | Helsingborg Percent |
|
| SEK m | SEK m | ||
| Rental value | 3,491 | 3,291 | + 6.1 |
| Rental income | 3,247 | 3,022 | + 7.4 |
*Exklusive projekt & land
In autumn 2023, new facilities for contract manufacturer and long-term Wihlborgs tenant Inpac will be finished at Tomaten 1 in Lund. The facility encompasses 6,400 m² and will comprise offices, warehouses, production and technical facilities. The initial lease period is 15 years.
| Analysis per property category in each management area | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Area/ property category |
Number of properties |
Area, m2 thousand |
Carrying amount, SEK m |
Rental value, SEK m |
Rental value, SEK/m2 |
Economic occupancy rate, % |
Rental income, SEK m |
Operating surplus incl. property admin., SEK m |
Surplus ratio, % |
Operating surplus excl. property ad min., SEK m |
Yield excl. property admin., % |
| Malmö | |||||||||||
| Office/Retail | 51 | 445 | 18,097 | 1,100 | 2,474 | 95 | 1,042 | 799 | 77 | 838 | 4.6 |
| Logistics/Production | 30 | 141 | 2,048 | 152 | 1,081 | 94 | 143 | 113 | 79 | 122 | 5.9 |
| Projects & Land | 20 | 29 | 1,631 | 23 | 803 | - | 6 | -6 | - | -4 | - |
| Total Malmö | 101 | 614 | 21,776 | 1,276 | 2,077 | 93 | 1,191 | 907 | 76 | 956 | 4.4 |
| Helsingborg | |||||||||||
| Office/Retail | 38 | 280 | 8,444 | 581 | 2,078 | 90 | 522 | 392 | 75 | 410 | 4.9 |
| Logistics/Production | 58 | 369 | 3,647 | 338 | 917 | 91 | 307 | 216 | 70 | 234 | 6.4 |
| Projects & Land | 12 | 1 | 239 | 1 | 1,538 | - | 1 | 0 | - | 1 | - |
| Total Helsingborg | 108 | 649 | 12,330 | 920 | 1,418 | 90 | 830 | 609 | 73 | 645 | 5.2 |
| Lund | |||||||||||
| Office/Retail | 25 | 231 | 7,863 | 583 | 2,521 | 93 | 540 | 385 | 71 | 425 | 5.4 |
| Logistics/Production | 4 | 23 | 282 | 20 | 895 | 94 | 19 Hyresvärde |
14 | 74 | 16 Hyresvärde |
5.6 |
| Projects & Land | 4 | 7 | 612 | 13 | 1,924 | - | per fastighetskategori 1 |
-4 | - | per område -2 |
- |
| Total Lund | 33 | 261 | 8,757 | 617 | 2,363 | 91 | 561 | 395 | 71 | 438 | 5.0 |
| Copenhagen | Logistics/Production 15 % |
Projects/Land 1% |
25% | Copenhagen | Malmö 34% |
||||||
| Office/Retail | 50 | 576 | 9,890 | 876 | 1,520 | 92 | 807 | 490 | 61 | 534 | 5.4 |
| Logistics/Production | 9 | 61 | 815 | 63 | 1,030 | 94 | 59 | 46 | 77 | 47 | 5.8 |
| Projects & Land | 4 | 69 | 921 | 6 | - | - | 3 | -14 | - | -14 | - |
| Total Copenhagen | 63 | 707 | 11,625 | 944 | 1,336 | 92 | 869 | 522 | 60 | 568 | 4.9 |
| Total Wihlborgs | 305 | 2,231 | 54,488 | 3,757 | 1,684 | 92 | 3,451 | 2,433 | 70 | 2,607 | 4.8 |
| Total excluding projects and land |
265 | 2,125 | 51,085 | 3,714 | 1,747 | 93 | 3,439 | 2,456 | 71 | 2,625 | 5.1 |
By year-end the valuation of all Wihlborgs' properties is carried out by external valuers. In the valuation of the properties as of September 30, 2022 about some ten properties have been valued externally and the rest internally. The valuation has meant that the property value has increased by SEK 412 million (591). Inflation assumptions affecting revenues in 2023 and 2024 have been raised at the same time as the yield requirements in valuations have been increased. The net effect of these two changes is close to zero. The remaining part comes from new leases, renegotiations and project development.
Fair value has been determined using a combination of a yield-based method and a location-price method, in which transactions completed in the sub-markets concerned are analysed in order to calibrate the parameters for the yieldbased method. The value is considered to correspond to the yield value that is calculated from normally five-year cash flow analyses. The value of newbuild projects in progress is determined as the value as if the project were complete, less deduction of the remaining cost. Undeveloped land and other upgrade projects are valued according to the location-price method. The method for valuation is the same as previously. There is a comprehensive description of the method for valuation of properties on pages 82-83 and 106-107 in the Company's 2021 Annual Report.
As of 30 September 2022 the carrying amount for the properties is SEK 54,488 million (50,033).
| Changes in carrying amount of properties | |||||||
|---|---|---|---|---|---|---|---|
| Changes | Group total, SEK m | ||||||
| Carrying amount 1 January 2022 | 50,033 | ||||||
| Acquisitions | 2,369 | ||||||
| Investments | 996 | ||||||
| Properties sold | -1 | ||||||
| Change in value | 412 | ||||||
| Currency translations | 679 | ||||||
| Carrying amount 30 September 2022 | 54,488 |
Investments in the property portfolio totalled SEK 996 million (755). Approved investments in ongoing projects amount to SEK 3,560 million, of which 1,175 million had been invested at the end of period.
The Groups liquid assets totalled SEK 790 million (695) including unutilized overdraft facilities.
At the end of the period unutilized credit facilities amounted to SEK 1,188 million (2,520).
| Investments in progress >SEK 50 million, 30 September 2022 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Property | Category of use |
Municipality | Completion date |
Lettable area, m2 |
Occupancy rate, % |
Estimated investment, SEK m |
Expended 2022-09-30, SEK m |
||
| Raffinaderiet 3 | Office/Retail | Lund | Q1 2023 | 5,800 | 75 | 190 | 131 | ||
| Snårskogen 5 | Logistics/Production Helsingborg | Q1 2023 | 2,200 | 100 | 60 | 20 | |||
| Huggjärnet 13 | Logistics/Production Helsingborg | Q2 2023 | 8,000 | 65 | 108 | 53 | |||
| Literbuen 16-18 | Office/Retail | Copenhagen | Q2 2023 | 8,000 | 0 | 79 | 2 | ||
| Pulpeten 5 | Office/Retail | Malmö | Q2 2023 | 16,000 | 85 | 804 | 404 | ||
| Kunskapen 1 | Office/Retail | Lund | Q3 2023 | 6,000 | 50 | 244 | 81 | ||
| Tomaten 1 | Logistics/Production Lund | Q4 2023 | 6,400 | 100 | 137 | 3 | |||
| Rausgård 21 | Logistics/Production Helsingborg | Q1 2024 | 25,000 | 100 | 420 | 16 | |||
| Posthornet 1 | Office/Retail | Lund | Q4 2024 | 9,900 | 0 | 448 | 9 | ||
| Bläckhornet 1 | Office/Retail | Malmö | Q1 2025 | 16,600 | 0 | 884 | 22 | ||
| Total | 103,900 | 3,374 | 741 |
| Share, % | 58 | 7 | 28 | 4 | 3 | ||
|---|---|---|---|---|---|---|---|
| Total | 1,297,860 | 144,836 | 618,601 | 93,083 | 76,681 | 2,231,062 | 100 |
| Copenhagen | 521,639 | 8,334 | 125,567 | 12,515 | 38,7144 | 706,769 | 32 |
| Lund | 196,950 | 14,656 | 35,616 | 4,429 | 9,2223 | 260,873 | 12 |
| Helsingborg | 226,544 | 78,568 | 290,512 | 40,789 | 12,7872 | 649,200 | 29 |
| Malmö | 352,727 | 43,278 | 166,907 | 35,350 | 15,9591 | 614,220 | 27 |
| m2 | m2 | Production, m2 | Health care, m2 | m2 | m2 | % | |
| Area | Office, | Retail, | Logistics/ | Education/ | Misc., | Total, | Share, |
1) Includes 10,275 m2 hotel.
2) Includes 1,819 m2 residential
3) Includes 8,215 m2 hotel
4) Includes 5,600 m2 hotel
In the third quarter, three properties were acquired in Denmark. The properties Hedegaardsvej 88 and Amager Strandvej 390 near Kastrup comprise a total of 53,000 m2 and Lersø Parkalle 107 3,300 m2 . At Berga and Väla Norra in Helsingborg, respectively, Pilbågen 6 and Snårskogen 1 were acquired.
| Property transactions January–September 2022 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | Property | Municipality | Management area | Category | Area, m2 |
Price, SEK m |
Operating surplus 2022, SEK m1 |
|||
| Acquisitions | ||||||||||
| Q2 | Österport 7 | Malmö | Malmö City | Office | 11,000 | |||||
| Q2 | Flintyxan 6 | Helsingborg | Helsingborg Yttre | Land | - | |||||
| Q3 | Lersø Parkalle 107 | Copenhagen | Copenhagen South | Office | 3,310 | |||||
| Q3 | Pilbågen 6 | Helsingborg | Helsingborg Yttre | Logistics/Production | 16,400 | |||||
| Q3 | Snårskogen 1 | Helsingborg | Helsingborg Yttre | Office | 8,600 | |||||
| Q3 | Hedegaardsvej 88 | Copenhagen | Copenhagen South | Office | 26,400 | |||||
| Q3 | Amager Strandvej 390 | Copenhagen | Copenhagen South | Office | 26,758 | |||||
| Total acquisitions 2022 | 92,468 | 2,369 | 15 | |||||||
| Sales | ||||||||||
| Q1 | Barrikaden 3 | Helsingborg | Helsingborg Yttre | Project/Land | - | |||||
| Total sales 2022 | 0 | 1 | 0 |
1) Operating surplus from properties acquired and sold that are included in the results for the period.
Wihlborgs' sustainability agenda focuses on the areas where our operations have the greatest impact and can make the greatest difference. The goals for the Group to achieve in 2022 are established and monitored quarterly, with particular regard to environmental certifications, energy consumption and climate impact.
One prioritised area that engages large portions of the management organisation is investing in the certification of existing office properties in Sweden according to Miljöbyggnad In-Use. Despite intense work on certification during the year, the target of certifying 80 percent of Swedish office space will not be reached in 2022. The goal is to reach this target under 2023.
Wihlborgs works continuously to reduce its properties' energy consumption and climate impact. For several years now, only renewable energy has been procured in Sweden, while in Denmark all purchased electricity – and a substantial proportion of district heating – is produced with renewable energy. Most of the gas used for heating the properties in Denmark is now biogas.
The goal for 2022 is for direct (Scopes 1 and 2) CO2 emissions to not exceed 1.5 kg/m2 , which was achieved in the last two years. Moreover, in the longer term – by 2030 – the aim is to halve climate-impacting emissions across the entire value chain (Scope 3) compared with the base year 2020.
Year-on-year, energy consumption increased slightly in the third quarter. GHG emissions also increased, mainly due to a larger recharging of refrigerants. Older cooling equipment is gradually being replaced with more energy-efficient units that utilise propane as the refrigerant with minimal climate impact.
| Key figures - sustainable properties | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Measure | Target | 2022 | 2021 | 2022 | 2021 | 2021 | |||
| (as of Dec | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan–Dec | ||||
| 2022) | 3 months | 3 months | 9 months | 9 months | 12 months | ||||
| Environmental certifications | % of floor area (office, Sweden) | > 80 | 46 | 33 | 46 | 33 | 36 | ||
| CO2 emissions (scope 1 & 2) |
kg CO2 e/m2 |
< 1.5 | 0.23 | 0.16 | 0.74 | 0,87 | 1.40 | ||
| Energy use | kWh/m2 | < 95 | 15.9 | 14.9 | 68.6 | 73.6 | 102.2 |
Within the real estate industry and society at large, interest in energy efficiency improvements has increased significantly during the year in pace with rising energy prices. Ongoing property maintenance and improvements to the properties' energy performance are implemented in line with Wihlborgs climate roadmap and ambitions to continuously optimise property operation.
A variety of measures that gradually reduce property energy consumption can be used to achieve energy efficiency improvements. One innovation that significantly reduces the energy input to a property is Wihlborgs' proprietary cooling heat pump. The need for purchased energy is reduced by recycling heat and cooling in the property together with the existing district heating and cooling system. In the Neptun 6 and Sankt Jörgen 21 properties in Malmö, such a cooling heat pump has helped reduce district heating use by 74 and 53 percent respectively, and the consumption of electricity by 5 and 32 percent respectively.
GRESB is a benchmarking tool that measures and evaluates sustainability at property companies from an investor perspective. In this year's edition, Wihlborgs is awarded a maximum of five stars as one of the world's most sustainable real estate companies and is named a global leader in the listed diversified real estate company sector. Since 2019, Wihlborgs has raised its rating from 72 to 91 percent in 2022.
Wihlborgs compiles an annual sustainability report prepared according to the Annual Accounts Act, GRI Standards, EPRA Sustainability Best Practice Recommendations (sBPR) and TCFD guidelines for reporting climate-related risks. We follow up on prioritised sustainability topics and goals in each interim report. We also provide information about current activities and events during the quarter that have a bearing on our sustainability agenda. More information about our sustainability agenda is available on Wihlborgs' website. Read more at www.wihlborgs.se/en/about-us/sustainability/
As of 30 September 2022 equity totalled SEK 23,077 million (21,948) after SEK 922 million was paid as a dividend during the second quarter. The equity/assets ratio stood at 41.0 percent (42.9).
Current financing, September 2022 Total debt: SEK 26.8 bn
The group's borrowings as of 30 September amounted to SEK 26,816 million (23,278) with an average interest rate including costs for credit agreements of 1.72 percent (1.32).
With consideration to the company's net debt of SEK 26.8 billion, the loan-to-value ratio is 49.2 percent (46.5) as a percentage of property values.
The loans' average fixed interest period including effects of derivatives on 30 September 2022 amounted to 2.2 years (2.9). The average loan maturity, including commited credit facilities, amounted to 6.1 years (6.0). 10% of outstanding borrowings come from the bond market. During the coming 4 quarters bonds amounting to SEK 636 m are due for repayment.
| Structure of interest and loan maturities as of 30 September 2022 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Interest maturity | Loan maturity | ||||||||
| Matures, year |
Loan amount, SEK m |
Av. interest rate, % |
Credit ag., SEK m |
Utilised, SEK m |
|||||
| 2022 | 14,103 | 1.89 | 0 | 0 | |||||
| 2023 | 3,778 | 1.30 | 1,207 | 986 | |||||
| 2024 | 1,788 | 1.43 | 5,594 | 5,594 | |||||
| 2025 | 1,916 | 1.42 | 11,146 | 10,179 | |||||
| 2026 | 1,252 | 1.62 | 585 | 585 | |||||
| >2026 | 3,979 | 1.71 | 9,472 | 9,472 | |||||
| Total | 26,816 | * 1.70 |
28,004 | 26,816 |
*) Excluding costs for credit agreements.
Wihlborgs use interest rate derivatives in order to reduce the risk level in the loan portfolio. A summary of the terms is shown in the table below.
| Interest rate derivatives portfolio 30 September 2022 | ||||
|---|---|---|---|---|
| Interest rate swaps | ||||
| Maturity | Amount, SEK m | Interest, % | ||
| 2022 | 565 | 0.39 | ||
| 2023 | 2,430 | 0.39 | ||
| 2024 | 1,788 | 0.41 | ||
| 2025 | 1,788 | 0.42 | ||
| 2026 | 1,252 | 0.59 | ||
| >2026 | 2,504 | 0.70 | ||
| Total | 10,327 | 0.50 |
Rising market interest rates have meant an increased value in Wihlborgs' interest rate derivative portfolio, which at the end of the period amounted to 730 million (31).
Interest-rate derivatives are recognised at fair value in accordance with IFRS 9. All derivatives are classified in level 2 in accordance with IRS 13. For information on the valuation approach for interest rate derivatives, see page 100 of the 2021 Annual Report.
Average net debt relative to rolling 12-month operating
income amounted to 11.0 times (10.7). 0 2 4 6 8 10 12 2017 2018 2019 2020 2021 Q3 2022
Net debt/EBITDA
Kvartetten (Pulpeten 5), where the first tenants will move in during early 2023, is one of the first office buildings in Sweden to be pre-certified under NollCO2. This means that the property will achieve a net zero climate impact over its lifetime according to current calculation models. Apart from Kvartetten, Wihlborgs has two registered NollCO2 projects and another in the planning stage.
At the end of the period, the number of FTEs at Wihlborgs was 256 (250) of which 105 (104) were in property service. Of the total number of FTEs 77 (77) were in Malmö, 36 (34) in Helsingborg, 32 (31) in Lund and 111 (108) in Copenhagen. The average age of employees is 44 år and women make up 42 (42) percent.
The parent company owns no properties, but deals with questions relating to the stock market and joint Group functions for administration, management and borrowing. The parent company's turnover is mostly related to the billing of services to Group companies.
The parent company has invested SEK 11 million (6), including shareholder contribution, in shares in subsidiaries and other shares.
The parent company's income statement and balance sheet are found on page 18.
A description of all participations in joint ventures and holdings in joint operations held by Wihlborgs will be found on pages 108–109 in the Company's 2021 Annual Report.
2021-01-01 – 2022-09-30
The largest shareholder in Wihlborgs is Backahill, representing the Paulsson family, with 11.0 percent of the shares outstanding.
Shares held by owners registered abroad account for 38 percent. The number of shareholders is approximately 30,000.
| Total outstanding shares | 307,427 | 100.0 |
|---|---|---|
| Other shareholders reg. abroad | 109,148 | 35.5 |
| Other shareholders reg. in Sweden | 82,003 | 26.6 |
| Nordea funds | 3,333 | 1.1 |
| Life insurance company Skandia | 3,854 | 1.3 |
| AMF funds | 4,564 | 1.5 |
| Qviberg family | 4,890 | 1.6 |
| Bank of Norway | 7,578 | 2.5 |
| Handelsbanken funds | 9,210 | 3.0 |
| Swedbank Robur funds | 13,611 | 4.4 |
| SEB Investment Management | 17,507 | 5.7 |
| Länsförsäkringar funds | 17,853 | 5.8 |
| Backahill | 33,876 | 11.0 |
| thousands | votes, % | |
| shares, | equity and | |
| Number of | Proportion of |
Wihlborgs' future development and ability to reach its operational goals are influenced by numerous risks and uncertainties. By systematically reviewing, analysing and managing these risks and uncertainties, it is possible to limit them and concurrently create the prerequisites for continued growth.
The risks assessed as having a significant influence on the Group's earnings trend and cash flow are the variations in rental income, property costs and interest-rates. The properties are measured at fair value with changes in value in the income statement resulting in positive and negative impacts on earnings during the year. Property valuation also impacts Wihlborgs' financial position and key metrics. The extent of changes in value is partly determined by Wihlborgs' own capacity, through alteration and upgrading of properties, as well as by leases and client structures, to increase the properties' market value, and partly by external factors that affect supply and demand in the property markets where the company is active. Property valuation should take in to account an interval of uncertainty, which in a functioning market, typically consists of +/-5–10% to reflect the inherent uncertainty of assumptions and estimates.
In addition to the above, risks also include financing risks. Wihlborgs is dependent on external loans to meet its undertakings and complete transactions. Risks are managed using Wihlborgs' financial policy, which stipulates objectives, guidelines and risk limits for Wihlborgs' financial activities.
On pages 84–89 and 101–102 in the Company's 2021 Annual Report there is a comprehensive description of the risks facing the Group, how these are handled and a grading with regard to the assessed impact on the business and the probability that the risk will occur.
Developments in the rest of the world as a result of the war in Ukraine have led to an increase in the probability of financing and interest rate risk materializing compared with the assessment at the turn of the year. There is also a risk that a lack of building materials can lead to increases in costs and delays in newly started and future projects.
Wihlborgs follows the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as well as interpretations issued by the IFRS Interpretations Committee (IFRIC) as endorsed by the European Union. The Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. Information under IAS 34 p.16A is submitted in the notes and elsewhere in the interim report.
The Group applies the same accounting policies and valuation methods as in the most recent annual report. Wihlborgs assesses that none of the new or amended standards approved by the EU, or interpretations from the IFRS Interpretations Committee, that entered force after 1 January 2022, affect its results or financial position in any material sense. The Group applies the Swedish Financial Reporting Board's recommendation RFR 1, Supplementary Accounting Rules for Corporate Groups and the Parent Company applies RFR 2. The financial reports are found on page 15-19.
Malmö 21 October 2022 Wihlborgs Fastigheter AB (publ)
Ulrika Hallengren, CEO
This interim report has been subject to review by the company's auditors.
We have reviewed the interim report for Wihlborgs Fastigheter AB (publ) for the period 1 January–30 September 2022. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other generally
accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Malmö, 21 October 2022 Deloitte AB, Richard Peters, Authorized Public Accountant
| Consolidated statement of income and comprehensive income in summary | ||||||
|---|---|---|---|---|---|---|
| SEK m | 2022 Jul-Sep |
2021 Jul-Sep |
2022 Jan-Sep |
2021 Jan-Sep |
2021/2022 Oct-Sep |
2021 Jan-Dec |
| 3 months | 3 months | 9 months | 9 months | 12 months | 12 months | |
| Rental income | 848 | 813 | 2,447 | 2,290 | 3,217 | 3,060 |
| Operating costs | -125 | -99 | -370 | -324 | -488 | -442 |
| Repairs and maintenance | -29 | -24 | -76 | -67 | -110 | -101 |
| Property tax | -67 | -49 | -169 | -147 | -214 | -192 |
| Property administration | -33 | -29 | -103 | -94 | -139 | -130 |
| Total propery costs | -254 | -201 | -718 | -632 | -951 | -865 |
| Operating surplus | 594 | 612 | 1,729 | 1,658 | 2,266 | 2,195 |
| Central administration | -23 | -21 | -67 | -61 | -89 | -83 |
| Interest income | 4 | 4 | 10 | 10 | 13 | 13 |
| Interest expense | -102 | -82 | -253 | -236 | -329 | -312 |
| Leasehold rent | -1 | -1 | -3 | -3 | -4 | -4 |
| Share in results of joint ventures | 3 | 1 | 9 | 4 | 11 | 6 |
| Income from property management | 475 | 513 | 1,425 | 1,372 | 1,868 | 1,815 |
| Change in value of properties | 40 | 307 | 412 | 591 | 1,974 | 2,153 |
| Change in value of derivatives | 59 | 34 | 691 | 147 | 746 | 202 |
| Pre-tax profit | 574 | 854 | 2,528 | 2,110 | 4,588 | 4,170 |
| Current tax | -10 | -22 | -32 | -44 | -45 | -57 |
| Deferred tax | -115 | -159 | -498 | -386 | -877 | -765 |
| Profit for the period1 | 449 | 673 | 1,998 | 1,680 | 3,666 | 3,348 |
| Other comprehensive income | ||||||
| Items that will be reclassified to profit or loss for the year: | ||||||
| Translation differences on recalculation of foreign | ||||||
| operations | 110 | 32 | 289 | 58 | 298 | 67 |
| Hedging of currency risk in foreign operations | -106 | -33 | -285 | -60 | -294 | -69 |
| Tax attributable to items that will be reclassified to profit or loss for the year |
16 | 6 | 48 | 11 | 50 | 13 |
| Other comprehensive income for the period | 20 | 5 | 52 | 9 | 54 | 11 |
| Total comprehensive income for the period1 | 469 | 678 | 2,050 | 1,689 | 3,720 | 3,359 |
| Earnings per share2 | 1,46 | 2,19 | 6,50 | 5,46 | 11,92 | 10,89 |
| No. of shares at end of the period, thousands3 | 307,427 | 307,427 | 307,427 | 307,427 | 307,427 | 307,427 |
| Average no. of shares, thousands3 | 307,427 | 307,427 | 307,427 | 307,427 | 307,427 | 307,427 |
1) The entire profit/income is attributable to the parent company's shareholders.
2) Key ratios per share have been calculated based on a weighted average number of shares during the period. There are no outstanding subscription options, convertibles or
other potential ordinary shares and accordingly, no dilution effects to take into consideration.
3) Recalculation has been made for completed share split 2:1 in May 2022.
| Consolidated statement of financial position in summary | |||||||
|---|---|---|---|---|---|---|---|
| SEK m | 2022-09-30 | 2021-09-30 | 2021-12-31 | ||||
| ASSETS | |||||||
| Investment properties | 54,488 | 47,741 | 50,033 | ||||
| Right-of-use assets | 146 | 152 | 150 | ||||
| Other fixed assets | 387 | 411 | 396 | ||||
| Derivatives | 730 | 77 | 94 | ||||
| Current receivables | 248 | 246 | 164 | ||||
| Liquid assets | 343 | 205 | 315 | ||||
| Total assets | 56,342 | 48,832 | 51,152 | ||||
| EQUITY AND LIABILITIES | |||||||
| Equity | 23,077 | 20,278 | 21,948 | ||||
| Deferred tax liability | 5,100 | 4,240 | 4,622 | ||||
| Borrowings | 26,816 | 22,998 | 23,278 | ||||
| Lease liability | 144 | 151 | 149 | ||||
| Derivatives | - | 104 | 63 | ||||
| Other long-term liabilities | 45 | 59 | 45 | ||||
| Current liabilities | 1,160 | 1,002 | 1,047 | ||||
| Total equity & liabilities | 56,342 | 48,832 | 51,152 |
| Consolidated statement of changes in equity | ||||||
|---|---|---|---|---|---|---|
| SEK m | Jan-Sep 2022 | Jan–Sep 2021 | Jan-Dec 2021 | |||
| Total equity at beginning of period | 21,948 | 19,396 | 19,396 | |||
| Equity attributable to parent company's shareholders | ||||||
| Opening amount | 21,948 | 19,396 | 19,396 | |||
| Dividend paid* | -922 | -807 | -807 | |||
| Profit for the period | 1,998 | 1,680 | 3,348 | |||
| Other comprehensive income | 52 | 9 | 11 | |||
| Total equity at end of period | 23,077 | 20,278 | 21,948 |
* All shares are ordinary shares
| Consolidated cash flow statement summary | |||||
|---|---|---|---|---|---|
| SEK m | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Jan-Dec 2021 |
| Operating activities | |||||
| Operating surplus | 594 | 612 | 1,729 | 1,658 | 2,195 |
| Central administration | -23 | -21 | -67 | -61 | -83 |
| Non-cash items | 4 | -60 | 12 | -50 | 16 |
| Interest received | 4 | 1 | 36 | 2 | 2 |
| Interest paid | -96 | -88 | -254 | -242 | -312 |
| Income tax paid | -1 | 0 | -10 | -9 | -50 |
| Change in operating receivables | 61 | 68 | -54 | -21 | 0 |
| Change in operating liabilities | 68 | -62 | 31 | -145 | -78 |
| Cash flow from operating activities | 611 | 450 | 1,423 | 1,132 | 1,690 |
| Investment activities | |||||
| Acquisitions of properties | -1,992 | 0 | -2,369 | -182 | -412 |
| Investments in existing properties | -428 | -302 | -996 | -755 | -1,236 |
| Sales of properties | 0 | 3 | 1 | 3 | 3 |
| Change in other non-current assets | 1 | -22 | -1 | -38 | -35 |
| Cash flow from investment activities | -2,419 | -321 | -3,365 | -972 | -1,680 |
| Financing activities | |||||
| Dividend paid | 0 | 0 | -922 | -807 | -807 |
| Change in borrowing | 2,619 | 1,439 | 7,512 | 5,330 | 5,680 |
| Loan repayments | -908 | -1,861 | -4,617 | -4,681 | -4,766 |
| Change in other long-term liabilities | -1 | 2 | -3 | -2 | -7 |
| Cash flow from financing activities | 1,710 | -420 | 1,970 | -160 | 100 |
| Cash flow for the period | -98 | -291 | 28 | 0 | 110 |
| Opening cash flow | 443 | 496 | 315 | 205 | 205 |
| Closing cash flow | 343 | 205 | 343 | 205 | 315 |
| SEK m | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 |
|---|---|---|---|---|---|---|---|---|
| Rental income | 848 | 804 | 795 | 770 | 813 | 739 | 738 | 751 |
| Operating costs | -125 | -115 | -130 | -118 | -99 | -98 | -127 | -121 |
| Repairs and maintenance | -29 | -23 | -24 | -34 | -24 | -21 | -22 | -30 |
| Property tax | -67 | -52 | -50 | -45 | -49 | -49 | -49 | -49 |
| Property administration | -33 | -36 | -34 | -36 | -29 | -34 | -31 | -28 |
| Operating surplus | 594 | 578 | 557 | 537 | 612 | 537 | 509 | 523 |
| Income from property management | 475 | 483 | 467 | 443 | 513 | 443 | 416 | 419 |
| Profit for the period | 449 | 733 | 816 | 1,668 | 673 | 529 | 478 | 694 |
| Surplus ratio, % | 70.0 | 71.9 | 70.1 | 69.7 | 75.3 | 72.7 | 69.0 | 69.6 |
| Investment yield, % | 4.5 | 4.5 | 4.4 | 4.4 | 5.2 | 4.6 | 4.4 | 4.5 |
| Equity/assets ratio, % | 41.0 | 42.1 | 43.6 | 42.9 | 41.5 | 40.5 | 41.5 | 41.3 |
| Return on equity, % | 7.9 | 12.9 | 14.6 | 31.6 | 13.5 | 10.7 | 9.7 | 14.6 |
| Earnings per share, SEK1 | 1.46 | 2.38 | 2.66 | 5.43 | 2.19 | 1.72 | 1.55 | 2.26 |
| Income property management per share, SEK1 | 1.55 | 1.57 | 1.52 | 1.44 | 1.67 | 1.44 | 1.35 | 1.36 |
| Cash flow fr operating activities per share, SEK1 | 1.99 | 1.07 | 1.57 | 1.82 | 1.46 | 1.20 | 1.02 | 1.55 |
| EPRA NRV per share, SEK1 | 89.28 | 87.60 | 88.52 | 86.33 | 79.84 | 77.24 | 77.80 | 76.22 |
| Share price as % of EPRA NRV | 75.4 | 81.7 | 111.4 | 119.0 | 109.2 | 120.2 | 106.5 | 121.6 |
| Carrying amount of properties | 54,488 | 51,760 | 50,618 | 50,033 | 47,741 | 47,056 | 46,687 | 46,072 |
| Equity | 23,077 | 22,607 | 22,769 | 21,948 | 20,278 | 19,600 | 19,887 | 19,396 |
| Total assets | 56,342 | 53,744 | 52,168 | 51,152 | 48,832 | 48,411 | 47,964 | 46,961 |
Definitions of key ratios are available on page 23.
1) Recalculation has been made for completed share split 2:1 in May 2022.
| Property management | Malmö | Helsingborg | Lund | Copenhagen | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| SEK m | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Rental income | 888 | 816 | 611 | 548 | 420 | 387 | 527 | 540 | 2,447 | 2,290 |
| Property costs | -211 | -194 | -154 | -142 | -124 | -118 | -228 | -178 | -718 | -632 |
| Operating surplus | 677 | 622 | 458 | 406 | 296 | 268 | 299 | 362 | 1,729 | 1,658 |
In the Group's internal reporting, activities are divided into the above segments, which are the same as described in the latest annual report. For a more detailed description of segments, see the annual report for 2021 pages 45-67. The total operating surplus shown above corresponds with the operating surplus recorded in the income statement.
The difference between the operating surplus of SEK 1,729 million (1,658) and the pre-tax profit of SEK 2,528 million (2,110) consists of central administration SEK -67 million (-61), financial net SEK -246 million (-229), share in results SEK 9 million (4) and changes in value of properties and derivatives SEK 1,103 million (738).
| Parent company's income statement summary | ||||||
|---|---|---|---|---|---|---|
| SEK m | Jan–Sep 2022 | Jan-Sep 2021 | Jan-Dec 2021 | |||
| Income | 158 | 165 | 223 | |||
| Expenses | -157 | -152 | -206 | |||
| Operating profits | 1 | 13 | 17 | |||
| Financial income | 1,836 | 1,088 | 1,189 | |||
| Financial expenses | -511 | -282 | -365 | |||
| Pre-tax profit | 1,326 | 819 | 841 | |||
| Appropriations | – | – | 216 | |||
| Tax | -144 | -69 | -80 | |||
| Profit for the period | 1,182 | 750 | 977 |
| Parent company's balance sheet summary | |||||||
|---|---|---|---|---|---|---|---|
| SEK m | 2022-09-30 | 2021-09-30 | 2021-12-31 | ||||
| Participations in Group companies | 9,441 | 9,430 | 9,431 | ||||
| Receivables from Group companies | 17,958 | 15,523 | 15,791 | ||||
| Derivatives | 730 | 77 | 94 | ||||
| Other assets | 295 | 335 | 316 | ||||
| Cash and bank balances | 213 | 74 | 173 | ||||
| Total assets | 28,637 | 25,439 | 25,805 | ||||
| Equity | 7,005 | 6,519 | 6,745 | ||||
| Liabilities to credit institutions | 19,596 | 16,194 | 16,403 | ||||
| Derivatives | – | 104 | 63 | ||||
| Liabilities to Group companies | 1,815 | 2,535 | 2,512 | ||||
| Other liabilities | 221 | 87 | 82 | ||||
| Total equity and liabilities | 28,637 | 25,439 | 25,805 |
| Key figures for the group | ||||
|---|---|---|---|---|
| SEK m | Jan-Sep | Jan-Sep | Oct-Sep | Jan-Dec |
| 2022 | 2021 | 2021/2022 | 2021 | |
| Financial | ||||
| Return on equity, % | 11.8 | 11.3 | 16.9 | 16.2 |
| Return on total capital, % | 5.8 | 6.9 | 8.9 | 9.8 |
| Equity/assets ratio, % | 41.0 | 41.5 | 41.0 | 42.9 |
| Interest coverage ratio, multiple | 6.6 | 6.7 | 6.6 | 6.7 |
| Leverage properties, % | 49.2 | 48.2 | 49.2 | 46.5 |
| Debt/equity ratio, multiple | 1.2 | 1.1 | 1.2 | 1.1 |
| Share-related1 | ||||
| Earnings per share, SEK | 6.50 | 5.46 | 11.92 | 10.89 |
| Earnings per share before tax, SEK | 8.22 | 6.86 | 14.92 | 13.56 |
| EPRA EPS, SEK | 4.19 | 4.10 | 5.41 | 5.33 |
| Cash flow from operations per share, SEK | 4.63 | 3.68 | 6.44 | 5.50 |
| EPRA NDV (net disposal value) per share, SEK | 75.06 | 65.96 | 75.06 | 71.39 |
| EPRA NRV (net reinstatement value) per share, SEK | 89.28 | 79.84 | 89.28 | 86.33 |
| Market value per share, SEK | 67.35 | 87.20 | 67.35 | 102.70 |
| Proposed dividend per share, SEK | - | - | - | 3.00 |
| Dividend yield, %1 | - | - | - | 2.9 |
| Total return from share, % | - | - | - | 13.6 |
| P/E-ratio I, multiple | 7.8 | 12.0 | 5.6 | 9.4 |
| P/E-ratio II, multiple | 12.1 | 16.0 | 12.4 | 9.4 |
| Number of shares at the end of period, thousands | 307,427 | 307,427 | 307,427 | 307,427 |
| Average number of shares, thousands | 307,427 | 307,427 | 307,427 | 307,427 |
| Property-related | ||||
| Number of properties | 305 | 296 | 305 | 299 |
| Carrying amount of properties, SEK m | 54,488 | 47,741 | 54,488 | 50,033 |
| Estimated investment yield, % – all properties | 4.5 | 4.4 | 4.5 | 4.5 |
| Estimated direct return, % – excl project properties | 4.8 | 4.8 | 4.8 | 4,8 |
| Lettable area, m2 | 2,231,062 | 2,119,653 | 2,231,062 | 2,142,892 |
| Rental income, SEK per m2 | 1,678 | 1,567 | 1,678 | 1,620 |
| Operating surplus, SEK per m2 | 1,091 | 1,008 | 1,091 | 1,048 |
| Financial occupancy rate, % – all properties | 92 | 90 | 92 | 90 |
| Financial occupancy rate, % – excl project properties | 93 | 92 | 93 | 92 |
| Estimated surplus ratio, % | 71 | 71 | 71 | 72 |
| Employees | ||||
| Number of FTEs at period end | 256 | 246 | 256 | 250 |
1) Recalculation has been made for completed share split 2:1 in May 2022.
The basis for key financial ratios that Wihlborgs present in the Interim report January-September 2022, are shown below, page 19. Recalculation has been made of historical key figures per share for completed share split 2:1 in May 2022.
The following financial targets have been established by the Board:
*) Risk-free interest rate is defined as the rate on a 5-year Swedish government bond.
| Unless otherwise stated, amounts are in SEK million. | 2022-09-30 | 2021-09-30 | 2021-12-31 |
|---|---|---|---|
| Return on equity | |||
| Profit for the period | 1,998 | 1,68 | 3,348 |
| Annualized | 2,664 | 2,24 | 3,348 |
| Equity, opening balance | 21,948 | 19,396 | 19,396 |
| Equity, closing balance | 23,077 | 20,278 | 21,948 |
| Average equity | 22,513 | 19,837 | 20,672 |
| Return on equity, % | 11.8 | 11.3 | 16.2 |
| Return on capital employed | |||
| Profit before tax | 2,528 | 2,11 | 4,17 |
| Interest expense (incl value changes interest derivatives) | -438 | 89 | 110 |
| Total | 2,09 | 2,199 | 4,28 |
| Annualized | 2,787 | 2,932 | 4,28 |
| Total assets, opening balance | 51,152 | 46,961 | 46,961 |
| Total assets, closing balance | 56,342 | 48,832 | 51,152 |
| Non-interest bearing debt, opening balance | -5,764 | -5,198 | -5,198 |
| Non-interest bearing debt, closing balance | -6,293 | -5,315 | -5,764 |
| Average capital employed | 47,719 | 42,64 | 43,576 |
| Return on capital employed, % | 5.8 | 6.9 | 9.8 |
| Equity/assets ratio | |||
| Equity | 23,077 | 20,278 | 21,948 |
| Total assets | 56,342 | 48,832 | 51,152 |
| Equity/assets ratio, % | 41.0 | 41.5 | 42.9 |
| Interest coverage ratio | |||
| Income from property management | 1,425 | 1,372 | 1,815 |
| Interest expense | 256 | 239 | 316 |
| Total | 1,681 | 1,611 | 2,131 |
| Interest expense | 256 | 239 | 316 |
| Interest coverage ratio, multiple | 6.6 | 6.7 | 6.7 |
| Leverage properties | |||
| Borrowings | 26,816 | 22,998 | 23,278 |
| Net value investement properties | 54,488 | 47,741 | 50,033 |
| Leverage properties, % | 49.2 | 48.2 | 46.5 |
| Debt/equity ratio | |||
| Interest-bearing liabilities | 26,972 | 23,162 | 23,440 |
| Equity | 23,077 | 20,278 | 21,948 |
| Debt/equity ratio, multiple | 1.2 | 1.1 | 1.1 |
| 2022-09-30 | 2021-09-30 | 2021-12-31 | |
|---|---|---|---|
| Earnings per share | |||
| Profit for the period | 1,998 | 1,680 | 3,348 |
| Average number of shares, thousands | 307,427 | 307,427 | 307,427 |
| Earnings per share, SEK | 6.50 | 5.46 | 10.89 |
| Earnings per share before tax | |||
| Profit before tax | 2,528 | 2,110 | 4,170 |
| Average number of shares, thousands | 307,427 | 307,427 | 307,427 |
| Earnings per share before tax, SEK | 8.22 | 6.86 | 13.56 |
| EPRA EPS | |||
| Income from property management | 1,425 | 1,372 | 1,815 |
| Tax depreciation, direct tax deductions etc | -769 | -837 | -967 |
| Taxable income from property management | 656 | 535 | 848 |
| Estimated tax on the above | -137 | -111 | -178 |
| Income from property management after deduction of estimated tax | 1,288 | 1,261 | 1,637 |
| Average number of shares, thousands | 307,427 | 307,427 | 307,427 |
| EPRA EPS, SEK | 4.19 | 4.10 | 5.33 |
| Operating cash flow per share | |||
| Operating cash flow | 1,423 | 1,132 | 1,690 |
| Average number of shares, thousands | 307,427 | 307,427 | 307,427 |
| Operating cash flow per share, SEK | 4.63 | 3.68 | 5.50 |
| EPRA NDV per share | |||
| Equity | 23,077 | 20,278 | 21,948 |
| Number of shares at year end, thousands | 307,427 | 307,427 | 307,427 |
| EPRA NDV per share, SEK | 75.06 | 65.96 | 71.39 |
| EPRA NRV per share | |||
| Equity | 23,077 | 20,278 | 21,948 |
| Deferred tax liability | 5,100 | 4,240 | 4,622 |
| Derivatives | -730 | 27 | -31 |
| Total | 27,448 | 24,545 | 26,539 |
| Average number of shares, thousands | 307,427 | 307,427 | 307,427 |
| EPRA NRV per share, SEK | 89.28 | 79.84 | 86.33 |
| Dividend yield per share | |||
| Proposed dividend, SEK | - | - | 3.00 |
| Market price per share at year end, SEK | - | - | 102.70 |
| Dividend yield per share, % | - | - | 2.9 |
| Total yield per share | |||
| Market price per share at year start, SEK | - | - | 92.70 |
| Market price per share at year end, SEK | - | - | 102.70 |
| Change in market price during the year, SEK | - | - | 10.00 |
| Dividend paid during the year, SEK | - | - | 2.63 |
| Total return per share, % | - | - | 13.6 |
| P/E ratio I | |||
| Market price per share, SEK | 67.35 | 87.20 | 102.70 |
| Earnings per share, SEK | 6.50 | 5.46 | 10.89 |
| Annualized per share, SEK | 8.67 | 7.29 | 10.89 |
| P/E ratio I, multiple | 7.8 | 12.0 | 9.4 |
| P/E ratio II | |||
| Market price per share, SEK | 67.35 | 87.2 | 102.70 |
| EPRA EPS, SEK | 4.19 | 4.10 | 5.33 |
| Annualized per share, SEK | 5.59 | 5.47 | 5.33 |
| P/E ratio II, multiple | 12.1 | 16.0 | 19.3 |
Some of the financial metrics that Wihlborgs presents in the interim report are not defined in accordance with IFRS. Wihlborgs is of the opinion that these metrics provide valuable complementary information to investors and the company's management, since they enable evaluation of the company's performance.
As all companies do not apply the same approach to calculating these financial metrics, they are not always comparable to metrics used by other companies. Accordingly, these metrics should not be viewed as replacements for metrics defined under IFRS. On this page, definitions of metrics are presented that, with a few exceptions, are not defined in accordance with IFRS.
The key ratios are based on the statements of income, financial position, changes in equity and cash flow. Some of the historic data is compiled from the historical summary on page 17 In Wihlborgs' Interim Report.
Profit for the period as a percentage of average equity, excluding non-controlling interests. Average equity refers to the average of the opening and closing values for the respective period. In interim reports, the return is converted to its annualised value without taking account of seasonal variations. The ratio comprises a measure of the profitability in relation to shareholders' equity.
Earnings before interest expense, derivatives and taxes (EBIT) as a percentage of average capital employed. Capital employed is defined as total assets less non-interest-bearing liabilities and provisions. Average capital employed refers to the average of the opening and closing balances for each period. In interim reports, the return is converted to its annualised value without taking account of seasonal variations. The metric shows the return on the capital provided by shareholders and lenders without regard to interest.
Equity as a percentage of total assets at the end of the period. The ratio provides a measure of the financial strength of the company.
Income from property management, plus interest expense, divided by interest expense. The ratio measures the degree to which earnings can decline without jeopardising interest payments or, alternatively, how much interest expense can increase before income from property management becomes negative.
Borrowings as a percentage of the properties' carrying amounts. The ratio shows the degree of borrowing on the property portfolio.
Interest-bearing liabilities include borrowings, lease liabilities and any other interest-bearing liabilities.The ratio illustrates the relationship between borrowings and equity and, thereby, the gearing and financial strength.
The operating surplus, shown as a percentage of rental income. The ratio illustrates the proportion of rental income that remains after deducting property management costs.
The operating surplus shown as a percentage of the properties' average carrying amount. The average carrying amount refers to the average of the opening and closing values for the respective period. In interim reports, the yield is converted to its annualised value without taking account of seasonal variations. The ratio illustrates the yield on the property portfolio without taking account of its financing costs.
Loan liabilities minus liquid assets on the balance sheet, measured at five measurement occasions (quarterly) in the last twelve months, divided by operating surplus minus central administration, rolling twelve months. The key figure shows the company's earning capacity relative to loan debt, net.
Earnings for the period divided by the average number of shares outstanding. Definition according to IFRS.
Earnings per share before tax divided by the average number of shares outstanding.
Income from property management less the estimated tax on taxable income from property management divided by the average number of shares outstanding. Taxable income from property management is defined as income from property management less fiscal depreciation/amortisation and direct deductions. The effect of loss carryforwards is not taken into consideration.
Cash flows from operating activities divided by the average number of shares outstanding.
The closing balances for equity divided by the number of shares at the end of the period.
The closing balances for equity following the reversal of interest-rate derivatives and deferred tax according to the balance sheet, divided by the number of shares at the end of the period.
Proposed dividend as a percentage of the year-end share price.
Share price performance plus actual dividend relative to the share price at the start of the year.
Market price per share divided by earnings per share. In interim reports, the ratio is converted to its annualised value without taking account of seasonal variations.
Market price per share divided by EPRA RPS per share. In interim reports, the ratio is converted to its annualised value without taking account of seasonal variations.
Time remaining until the interest on all interest bearing debts in average has been adjusted.
Time remaining until an average of all interest bearing debts has been refinanced.
These key figures are based on the property table on page 10. The table shows the estimated rental value, rental income and property expenses on an annualised basis with an unchanged property portfolio, based on the contract stock on the first day after the end of the period.
Rental income plus estimated market-level rents for unlet space.
Operating surplus as a percentage of the carrying amount for the properties at the end of the period.
Rental income on an annualised basis divided by lettable area.
Economic occupancy rate
Rental income as a percentage of rental value.
Estimated surplus ratio Operating surplus as a percentage of rental income.
Net Lettings New lettings during the period less terminations to vacate.
Like-for-like Excludes properties that both current and comparative period are classified as projects/land, aquired or sold.
*) These key figures are operational and are not regarded as alternative key ratios according to ESMA's guidelines.
| Year-end report 2022 14 February 2023 | |
|---|---|
| Interim report Jan-March 2023 25 April 2023 | |
| Annual General Meeting 26 April 2023 |
Wihlborgs' interim reports and the Annual Report are distributed electronically. The Annual Report is printed in Swedish and sent to any shareholders notifying the Company that they wish to receive it in printed form.
| Wihlborgs Group Management joined by HR Director 31 August 2022 | |
|---|---|
| Wihlborgs to construct a 6,400 m2 facility for Inpac in Lund 24 August 2022 |
|
| Wihlborgs' building obtains the most demanding sustainability certification in the industry 28 July 2022 | |
| Försäkringskassan expands at Wihlborgs premises in Malmö 27 July 2022 | |
| Second-hand store establishes itself in Wihlborgs property in central Malmö 18 July 2022 | |
| Wihlborgs acquires properties of 52,000 m2 in Copenhagen 11 July 2022 |
|
| Interim report Jan-Jun 2022: Record new lettings for Wihlborgs 11 July 2022 | |
| Game developer moves to Wihlborgs property in central Malmö 8 July 2022 | |
| Wihlborgs lets 6,800 m2 to VA SYD7 July 2022 |
|
| Wihlborgs lets 2,000 m2 in Jägersro6 July 2022 |
|
| Wihlborgs' interim report for January-June 2022 will be presented on 11 July5 July 2022 | |
| Wihlborgs strengthens its north Helsingborg presence with two acquisitions4 July 2022 |
This interim report is information of such a kind that Wihlborgs Fastigheter AB (publ) is legally required to disclose pursuant to the EU's Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication through the agency of the contact people on the next page on 21 October 2022 at 07.30 CEST.
Being able to adapt to developments in society to remain relevant has always been our strength. Wihlborgs is growing and developing every day, especially during these challenging times. This is all so we can be the customer-centric, long-term and region-building company that we are.
Ulrika Hallengren, CEO +46 (0)40-690 57 95, [email protected]
Arvid Liepe, CFO +46 (0)40-690 57 31, [email protected]
Wihlborgs Fastigheter AB Box 97, SE-201 20 Malmö Visitors: Stora Varvsgatan 11A Tel: +46 40 690 57 00
Wihlborgs Fastigheter AB Terminalgatan 1 SE-252 78 Helsingborg Tel: +46 42 490 46 00
Wihlborgs Fastigheter AB Ideon Science Park Scheelevägen 17 SE-223 70 Lund Tel: +46 46 590 62 00
Wihlborgs A/S Mileparken 22A DK-2740 Skovlunde, Denmark Tel: +45 396 161 57
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