Interim / Quarterly Report • Jul 20, 2022
Interim / Quarterly Report
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Economic occupancy rate 30 June 2022
• Valuations of investment properties yielded an increase in fair value of SEK 253.8 million (35.2)
Jan-Jun 2022 30 June 2022 SEK 87.6million SEK 4,389million 95%
Net operating income
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Rent revenue | 54.0 | 45.5 | 104.5 | 90.6 | 187.8 |
| Net operating income | 46.2 | 39.6 | 87.6 | 76.4 | 155.8 |
| Income from property management | 16.1 | 21.9 | 36.4 | 41.2 | 86.2 |
| Income from property management excl. currency effects | 24.1 | 20.3 | 44.4 | 41.2 | 86.2 |
| Income from property management excl. currency effects per share, SEK | 0.41 | 0.34 | 0.75 | 0.79 | 1.46 |
| Net income for the period | 129.9 | 20.1 | 288.1 | 60.9 | 209.7 |
| Net income for the period per share, SEK | 2.20 | 0.34 | 4.88 | 1.03 | 3.56 |
| Net loan-to-value ratio, % | 37.0 | 35.1 | 37.0 | 35.1 | 38.3 |
| Equity/assets ratio, % | 54.2 | 54.8 | 54.2 | 54.8 | 53.9 |
| Interest-coverage ratio, multiple | 2.8 | 2.8 | 2.7 | 2.6 | 3.0 |
| Economic occupancy rate, % | 95.0 | 95.1 | 95.0 | 95.1 | 93.0 |
| Return on equity, % | 5.0 | 0.9 | 11.2 | 2.9 | 9.2 |
| Surplus ratio, % | 85.5 | 87.2 | 83.8 | 84.4 | 83.0 |
Property value
The past quarter's uncertainty has proved challenging for many, especially the property sector. High inflation combined with a higher risk premium on financing has led to interest rate increases for both real estate companies and individuals. While the war in Ukraine is first and foremost a terrible humanitarian tragedy, it has also caused supply chain disruptions and led to longer delivery times and sharp price increases for goods such as building materials.
Those property companies that finance their operations by issuing bonds are hit first and hardest. As a result, we are now seeing players who need to divest large portfolios, which is also creating opportunities for acquisitions.
At the end of the first six-month period, we had an unutilised credit framework of SEK 345.0 million and cash of SEK 252.9 million, which means that, under existing loan agreements, we have an acquisition capacity of about SEK 1.5 billion at our disposal. During the quarter, additional green financing was raised for the fully leased logistics property that we took into possession. This took place at a considerably lower cost of funds than the original financing raised by Annehem in connection with the IPO in December 2020. Annehem does not raise capital by issuing bonds, but borrows money from the four largest banks in Sweden, who we perceive to be excellent partners.
We are extremely proud that Nasdaq approved our application for Nasdaq Green Equity Designation on 9 May.
However, we are humbly aware that there is still much to be done since we, as a property company and therefore major energy consumer, need to work together with others to make every contribution we can to this important and absolutely necessary transition.
During the quarter, Annehem took possession of a logistics property in Almnäs, Södertälje. The property has a strong sustainability profile with Swedish Green Building Council Silver combined with energy class B. The property has been fully leased to PostNord, which is totally in line with our strategy to increase our exposure in an area we refer to as "fine logistics."
In 2020, we concluded acquisition agreements for two housing projects at good levels. We will take the first project in Malmö into possession during Q1 2023 and the second project in Gothenburg during Q2 2024. Both projects will be environmentally certified and hold energy class B.
While the pandemic is unfortunately not completely over, the impact on Annehem has been very limited from an economic perspective. Our tenants have obviously been affected like everyone else, but we have found effective solutions together for handling the desired transition via the opportunities that our flexible premises offer. Concessions on rents related to the pandemic amounted to slightly less than SEK 0.5 million since the pandemic started.
During the year, net operating income increased 14.7 percent. The economic occupancy rate was 95.0 percent and the average contract length was 5.5 years. On 30 June, the property value was SEK 4,388.5 million and we noted a capital appreciation of SEK 111.2 million, or 2.7 percent, during the quarter. Higher inflation had a positive impact on our rent revenue, since 97.0 percent of the rental value is derived from index-linked leases. During the quarter, we also noted slightly lower return requirements for our modern office properties in Sweden, while return requirements increased slightly in Oslo and remained unchanged in Helsinki. The net loan-to-value ratio amounted to 37.0 percent.
One segment that has performed well is modern offices in areas well served by public transport, where demand remains high according to several property assessment reports. They report strong demand where tenants have to make fast decisions because these types of office spaces quickly find new tenants. We have also noted a strong direct market for modern offices, where transactions have closed with lower return requirements than in the preceding quarter. The pandemic has accelerated a process
Jörgen Lundgren, CEO
that has been ongoing for many years. A company's needs for flexibility have increased since it is now more difficult to know when and how often employees will be coming into the office.
This obviously affects property owners like us to varying degrees. The ability to work remotely is fundamentally something positive that, in some cases, could be an advantage for a company in a recruitment process. At the same time, there are employees who have difficulty in working from home due to lack of space, for example. The need to meet co-workers is important for sharing experiences and understanding, which in turn generates creativity and energy.
About 70.0 percent of Annehem's rent revenue comes from modern, flexible and sustainable offices in areas well served by public transport. We are obviously happy about that and will do everything we can to take advantage of the opportunities that also exist in the challenging times we are facing. Annehem has the privilege of working with reputable tenants with long leases.
More and more economists are warning that inflation will lead to a more sustained rise in prices. In the past 12 months (May 2021-May 2022), the Consumer Price Index rose by 7.3 percent in Sweden, 7.0 percent in Finland and 5.7 percent in Norway. Historically high levels for all countries. The Swedish Riksbank has raised its rates twice this year – the latest by a full 50 basis points – and is predicting an interest rate of 3-4 percent over the next few years. The unemployment rate is expected to continue gradually falling in all three countries during 2022 and 2023.
Next year, rent levels for office properties in Stockholm are expected to increase with the index, which is 5-6 percent, and then fall back to 2-3 percent depending on inflation. According to Nordea Economic Outlook (2/2022), the price of homes is expected to fall about 10 percent due to higher interest rates, despite continued population growth. For rental property projects, we have noted a 50-100 bps increase in the return requirement in the market.
Annehem has been relatively cautious with acquisitions in the strong real estate market we have had for some time, with subsequently very low return requirements. We are now seeing a sharp market correction, especially in the housing segment. That provides opportunities to make successful acquisitions at completely new levels. Annehem is well-equipped to take advantage of these opportunities, with a strong balance sheet and good liquidity and available credit. Demand for our modern, flexible and sustainable offices in areas well served by public transport remains very strong. That gives us the confidence and strength to continue our growth journey towards our communicated financial growth targets.
In autumn 2021, Annehem decided to hedge the interest-rate risk for additional credit volumes with long maturities and now has a three-year fixed-interest rate. We are expecting higher interest rates that are not only driven by macroeconomic factors but also by new capital adequacy requirements, which are increasing banks' funding costs.
As I will be stepping down from my position at Annehem on 14 August, I would like to take this opportunity to thank all employees for your commitment and the fantastic work we have done together. I would also like to wish my successor, Monica Fallenius, the best of luck.
CEO
Jörgen Lundgren
Annehem Fastigheter owns and manages high-quality commercial, community service and residential properties located near good transport links. The properties are located in growth areas in the Nordics and possess a clear environmental profile. Annehem Fastigheter builds lasting relationships and value through management close to customers.
Annehem Fastigheter is to always be the number one choice for customers and employees wherever we choose to operate.
Annehem Fastigheter creates attractive and sustainable meeting places and homes. We believe that workplaces, meeting places and homes are tools for nurturing growth and attractiveness. The positive development of our customers in turn creates growth and attractiveness in the cities in which we operate.
Annehem Fastigheter's current property portfolio has the following geographic range:
Rent revenue amounted to SEK 54.0 million (45.5), other property income amounted to SEK 11.8 million (11.2), and total property expenses to SEK 19.6 million (17.0), which means that net operating income increased to SEK 46.2 million (39.6). The positive trend for rent revenue was mainly attributable to the additional properties compared with the year-earlier period.
Other property income amounted to SEK 11.8 million (11.2) and comprised invoiced operating costs, income from short leases and from the rental guarantees issued by Peab for the properties Stenekullen 2, Ultimes I&II and Jupiter 11, which amounted to SEK 1.8 million (2.4) for the quarter. Rental guarantees were issued for 100 percent of the vacant spaces in Stenekullen 2 (from 1 June 2020), Ultimes I&II (from 1 July 2020) and Jupiter 11 (from 1 May 2021) by Peab. These guarantees are valid until the vacant spaces are leased, but for no longer than 36 months from the issuing date.
Income from property management amounted to SEK 16.1 million (21.6) in the quarter. Interest expenses amounted to SEK 13.6 million (11.4), which are somewhat higher than the year-earlier quarter, due to higher borrowing in order to finance the additional properties, and higher costs for interest-rate swaps. Other financial items amounted to SEK -7.9 million (1.3) and mainly comprised currency effects of SEK 0.9 million (-4.6) and changes in value of currency futures of SEK -8.8 million (5.9), which had a negative impact on income from property management.
The effects of unrealised changes in value of properties amounted to SEK 111.2 million (5.5). The effects of changes in value of fixed-interest derivatives amounted to SEK 32.9 million (0.4).
Tax expense for the period amounted to SEK 30.3 million (7.4). Tax expense is due primarily to deferred tax on the growth in value of the property portfolio and the fair value measurement of fixed-interest derivatives.
Income for the period amounted to SEK 129.9 million (20.1).
Rent revenue amounted to SEK 104.5 million (90.6), other property income amounted to SEK 22.2 million (20.8), and total property expenses to SEK 39.1 million (35), which means that net operating income increased to SEK 87.6 million (76.4). The positive trend for net operating income was mainly attributable to the additional properties compared with the year-earlier period.
Other property income amounted to SEK 22.2 million (20.8) and comprised invoiced operating costs, income from short leases and from the rental guarantees issued by Peab for the properties Stenekullen 2, Ultimes I&II and Jupiter 11, which amounted to SEK 3.8 million (5.4) for the first six months. Rental guarantees were issued for 100 percent of the vacant spaces in Stenekullen 2 (from 1 June 2020), Ultimes I&II (from 1 July 2020) and Jupiter 11 (from 1 May 2021) by Peab. These guarantees are valid until the vacant spaces are leased, but for no longer than 36 months from the issuing date.
Income from property management amounted to SEK 36.4 million (40.9) in the quarter. Interest expenses amounted to SEK 26.0 million (23.3), which are higher than for the year-earlier period, due to higher borrowing in order to finance the additional properties. Other financial items amounted to SEK - 8.1 million (2.9) and mainly comprised currency effects of SEK 6.7 million (4.6) and changes in value of currency futures of SEK -14.8 million (-1.7).
The effects of unrealised changes in value of properties amounted to SEK 253.8 million (35.2). The effects of changes in value of fixed-interest derivatives amounted to SEK 68.4 million (0.3).
Tax expense for the period amounted to SEK 70.4 million (15.5). Tax expense is due primarily to deferred tax on the growth in value of the property portfolio and the fair value measurement of fixed-interest derivatives.
Income for the period amounted to SEK 288.1 million (60.9).
Income from property management per quarter excl. currency effects
The value of the Company's investment properties amounted to SEK 4,388.5 million (3,545.9) on 30 June 2022. Of the total value, SEK 2.0 million comprised the effect of lease value of leasehold rights in the Kamaxeln 2 property.
The fair value of properties is based on internal valuations conducted on 30 June 2022. During the first six months, Annehem Fastigheter also invested in existing properties with a value amounting to SEK 6,2 million (34.7) on 30 June 2022. The value of the properties in Finland and Norway on 30 June 2022 was positively impacted by the stronger EUR/SEK rate compared with 31 December 2021, yielding a total effect of SEK 29,4 million.
The Company's equity amounted to SEK 2,575.4 million (2,123.9).
Interest-bearing liabilities totalled SEK 1,878.6 million (1,542.0), of which SEK 2.0 million comprised lease liability attributable to ground rents. During the second quarter, Annehem acquired the Almnäs 5:28 property and therefore raised financing of SEK 57.9 million. During the first quarter, Annehem Fastigheter utilised a further SEK 75.0 million of the credit facility that the Group secured in December 2020, amounting to a total of SEK 1,936 million, distributed between SEK, NOK and EUR. On 30 June 2022, SEK 345.0 million remained unutilised.
During the quarter, cash flow from operating activities amounted to SEK -0.8 million (25.7). The change was mainly attributable to higher income from property management, and higher operating receivables and lower operating liabilities. For the first six months, the corresponding figure was SEK 30.4 million (38.7).
Cash flow from investing activities for the quarter amounted to SEK -90.0 million (-143.2), and pertained to acquisition of the Almnäs 5:28 property. For the first six months, the corresponding figure was SEK - 95.9 million (-165.7), and pertained to additional investments for the completion of Ledvolten, which was acquired in December 2021, and investments in Valhall Park and Ljungbyhed Park.
Cash flow from financing activities for the quarter amounted to SEK 55.3 million (-24.3), related to financing of the Almnäs 5:28 property and repayment of the credit facility of SEK -2.6 million. The corresponding figure for the first six months was SEK 130.3 million (-24.3), where the quarter-on-quarter difference derived from drawing on the existing credit facility of SEK 75.0 million.
Cash flow for the quarter amounted to SEK -35.5 million (-141.8), where the corresponding figure for the first six months was SEK 64.9 million (-151.3).
Annehem received Nasdaq Green Equity Designation on 9 May, which is a milestone for the company. Companies with more than 50 percent of their investments allocated to activities considered green, more than 50 percent of their revenue deriving from business activities considered green, and less than 5 percent of their revenue derived from fossil fuel activities, may apply for the Green Equity Designation. CICERO Shades of Green provided an external review of the Company's sustainability activities. The review showed that 73 percent (61) of the rental value and 86 percent (79) of the fair value of properties was green, according to CICERO Shades of Green 2021.
This is a good start, but based on Annehem's efforts in 2021 and what we will do in 2022, Annehem foresees the potential for further improvements related to our share of green income and investments. Annehem's property portfolio, which largely comprises modern, newly built office properties in expansive cities, provides the Group with favourable conditions to meet the demands made regarding green rent revenue.
Annehem's sustainability work, which is focused on work processes, property management and property transactions, was further formalised in 2021 by setting goals and ensuring follow-up. Based on the 2021 outcome, Annehem has the goal of reducing its energy consumption by at least 9.0 percent by 2024. Moreover, Annehem has a goal for 90.0 percent of its property value to be sustainable by 2024 in accordance with the EU Taxonomy Regulation and to reduce carbon emissions by 30.0 percent by 2024. An important focus area in sustainability for Annehem includes work environment, health and social issues, where work is conducted on the basis of the UN Sustainable Development Goals. The sustainability goals will be followed up and reported to the market annually.
Annehem works according to a sustainability strategy, which among other aspects, includes proactive efforts by Annehem Fastigheter to secure certification for its properties. To date, the Sadelplatsen 3 property in Solna is certified according to BREEAM Good, Carl Berner Torg, Oslo, and Ledvolten 1 are certified according to BREEAM Very Good, and Stenekullen 2, Malmö, and Jupiter 11 are certified in accordance with Swedish Green Building Council Silver. In Helsinki, Ultimes I&II are certified according to LEED Platinum. Partille Port 11:60 and Sadelplatsen 4 are certified in accordance with BREEAM In Use Very Good. During the quarter, we also took possession of a logistics property in Södertälje. The property was built for PostNord, which has signed a 10-year lease. The building was environmentally certified in accordance with Swedish Green Building Council Silver, with energy class B. This acquisition also includes one development right in this expansive logistics area.
Annehem Fastigheter owned assets in the form of fully developed properties on 30 June 2022 at a fair value of SEK 4,388.5 million. All properties are 100-percent owned by the Company. The properties largely comprise modern, flexible and environmentally compatible commercial, community service and residential properties.
As per June 30, 2022, net lettings amounted to SEK 4.7 million (15.8), distributed among newly signed leases amounting to SEK 7.8 million (18.8), less terminated leases amounting to SEK 3.1 million (3.0).
| Annualised rental | |||||
|---|---|---|---|---|---|
| Additional properties, | value, | Fair value incl leasing, | |||
| names | City | From | Area, sqm | SEK million | SEK million |
| Almnäs | Södertälje | 2022-05-31 | 2,158 | 4.7 | 105.0 |
| Ledvolten | Stockholm | 2021-12-07 | 4,268 | 13.1 | 341.1 |
| Jupiter 11 | Helsingborg | 2021-05-01 | 4,807 | 8.4 | 137.0 |
| Summa | 11,233 | 26.1 | 583.1 |
| Rent | Annualised | Fair value incl | ||||
|---|---|---|---|---|---|---|
| Property | Property name | City | Area, sqm | revenue SEK million |
rental value, SEK million |
leasing1 , SEK million |
| Valhall Park, Ängelholm | Barkåkra 50:3 | Ängelholm | 51,564 | 33.6 | 35.1 | 427.0 |
| Ljungbyhed Park | Sjöleden 1:5-1:17 | Ljungbyhed | 73,234 | 26.3 | 32.0 | 205.1 |
| Kamaxeln | Kamaxeln 2 | Malmö | 950 | 1.4 | 1.4 | 18.6 |
| Peab Center Malmö | Stenekullen 2 | Malmö | 4,937 | 14.0 | 14.0 | 247.2 |
| Peab Center Helsingborg | Jupiter 11 | Helsingborg | 4,807 | 8.4 | 8.4 | 137.0 |
| Peab Center Solna | Sadelplatsen 3 | Stockholm | 12,455 | 38.5 | 38.5 | 1,046.0 |
| Sadelplatsen 4 | Sadelplatsen 42 | Stockholm | 13,494 | 14.1 | 17.4 | 380.0 |
| Ledvolten | Ledvolten | Stockholm | 4,268 | 13.1 | 13.1 | 341.1 |
| Almnäs | Almnäs 5:28 | Södertälje | 2,158 | 4.7 | 4.7 | 105.0 |
| Partille Port | Partille 11:60 | Partille | 6,431 | 12.8 | 12.8 | 199.0 |
| Ulimes I&II inkl Parking | Ultimes | Helsingfors | 17,015 | 63.4 | 63.4 | 962.6 |
| Carl Berner Torg | Carl Berner Torg | Oslo | 3,640 | 14.0 | 14.0 | 320.0 |
| Total | 194,953 | 244.2 | 255.0 | 4,388.5 |
1) Leasing refers to ground leases amounting to SEK 2 million to Kamaxeln.
2) The property largely comprises a garage (475 spaces) and, in addition, office premises of 2,994 sqm.
| Changes in the property portfolio | Apr-Jun | Jan-Jun | Full year | ||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| At beginning of the period | 4,160.3 | 3,406.1 | 3,994.1 | 3,317.5 | 3,317.5 |
| Acquired properties | 105.0 | 131.0 | 105.0 | 131.0 | 410.9 |
| Investments in existing properties | 1.6 | 12.2 | 6.2 | 34.7 | 52.5 |
| Unrealised changes in fair value | 111.2 | 5.5 | 253.8 | 35.2 | 172.9 |
| Currency effect on properties abroad | 10.4 | -9.0 | 29.4 | 27.4 | 40.3 |
| At end of the period | 4,388.5 | 3,545.9 | 4,388.5 | 3,545.9 | 3,994.1 |
During the second quarter, Annehem took possession of the Almnäs 5:28 property in Södertälje with an underlying property value of SEK 96.5 million. During the first six months of 2022, investments were made in existing properties totalling SEK 6.2 million, where the investments were primarily related to the Ledvolten property and Valhall Park.
In 2020 and 2021, Annehem Fastigheter signed agreements with Peab to acquire properties when completed. During the second quarter, Annehem took possession of one of these properties, Almnäs 5:28, with an underlying property value of SEK 96.5 million.
In addition, Annehem signed an agreement with Peab in 2020 for the acquisition of residential properties at an underlying property value of SEK 385.0 million, with possession to be taken in 2022/23 and 2024, respectively.
At least once every year Annehem commissions complete valuations from external appraisal institutes for all properties in the portfolio. The appraisers who conduct the external fair-value calculations of the properties in Annehem's portfolio are to be a property appraiser authorised by Samhällsbyggarna, or similar Nordic association. The external valuations are to be conducted in accordance with guidelines from IPD Svenskt Fastighetsindex.
The fair value of properties is based on internal valuations conducted on 30 June 2022. As per 31 August 2021, external valuations were conducted by independent appraisers. During the year, fair value increased by SEK 253.8 million, primarily due to lower return requirements. During the year, Annehem Fastigheter also invested in existing properties with a value amounting to SEK 6.2 million on 30 June 2022. Investments are primarily attributable to the completion of the Ledvolten property, which was acquired in December 2021. The properties are measured at fair value where classification is conducted at level 3 in accordance with IFRS 13.
Neither the war in Ukraine nor the coronavirus pandemic has led to any loss of revenue by Annehem Fastigheter to date in 2022.
| Earnings capacity, SEK million | 2022-06-30 |
|---|---|
| Adjusted rent revenue | 254.9 |
| Vacancy | -10.7 |
| Rent revenue | 244.2 |
| Property expenses | -67.4 |
| Property tax | -10.6 |
| Net operating income | 166.2 |
| Other operating income | 4.4 |
| Central administration | -38.3 |
| Net financial items | -50.0 |
| Income from property management | 82.3 |
Annehem Fastigheter presents its earnings capacity on a 12-month basis on 30 June 2022 in the table above. The earnings capacity is not a forecast for the current year or the next 12 months but should only be viewed as a theoretical snapshot and is solely presented as an illustration. The current earnings capacity does not include an assessment of the future trends for rents, vacancy rates, property expenses, interest rates, changes in value, purchases or sales of properties or other factors.
The current earnings capacity is based on the properties owned on 30 June 2022 and their financing, after which the current earnings capacity illustrates the subsequent annualised earnings for Annehem Fastigheter. Transactions with possession after 1 July are not therefore included in the calculation.
Annehem Fastigheter's income statement is also affected by the value growth in the property portfolio and future property acquisitions and/or property sales. None of the above were taken into account in the current earnings capacity.
The earnings capacity is based on the property portfolio's contracted rent revenue, current property expenses and administration costs. Costs for interest-bearing liabilities used the Group's average interest-rate level.
The rental value, compared with the previous quarter, has risen as a result of renegotiations and also taking into account rental guarantees for a number of properties during the period. Rental guarantees were issued for vacant spaces in the properties Stenekullen 2 (from 1 June 2020), Ultimes I&II (from 1 July 2020) and Jupiter 11 (from 1 May 2021) by Peab, and apply for 36 months from the date of acquisition. If the vacancies are leased to other tenants, the guarantees are not paid. At the end of June 2022, the economic occupancy rate was 95.0 percent.
On 30 June 2022, Annehem Fastigheter had interest-bearing liabilities of SEK 1,878.6 million, yielding a loan-to-value ratio of 37.0 percent. The interest-bearing liabilities on 30 June 2022 comprised external loans amounting to SEK 1,878.6 million and lease liabilities, pertaining to ground leases, amounting to SEK 2.0 million.
| Jan-Jun | Full year | |||
|---|---|---|---|---|
| SEK million 2021 |
2022 | 2021 | 2021 | |
| Interest-bearing liabilities at beginning of th 1,542.0 |
1,721.3 | 1,546.9 | 1,546.9 | |
| New external bank loans #REFERENS! |
132.9 | 69.0 | 234.0 | |
| Change in lease liability1 69.0 |
-0.2 | - | -87.9 | |
| Amortisations of external bank loans2 -87.9 |
-2.6 | -82.6 | - | |
| Changes in capitalised loan costs -8.0 |
0.9 | 1.8 | 3.4 | |
| Currency effects 16.2 |
26.2 | 6.9 | 24.9 | |
| Interest-bearing liabilities at end of the peri 1,878.6 |
1,878.6 | 1,542.0 | 1,721.3 |
1) Pertains to the redemption of lease liabilities in 2021 when exercising a call option in a ground lease attributable to the Ultimes properties.
| Jan-Jun | Full year | |||
|---|---|---|---|---|
| 2021 | 2022 | 2021 | 2021 | |
| Debt / equity ratio, multiple 0.7 |
0.7 | 0.7 | 0.7 | |
| 2.2 Average interest rate, % |
2.2 | 2.1 | 2.2 |
Available liquidity
| Jan-Jun | Full year | |||
|---|---|---|---|---|
| SEK million 2021 |
2022 | 2021 | 2021 | |
| Cash and cash equivalents 252.9 |
252.9 | 298.7 | 190.2 | |
| Unused loan facility 420.0 |
345.0 | 420.0 | 420.0 | |
| Total 672.9 |
597.9 | 718.7 | 610.2 |
| Year | Capital2 | Interest | Share, % |
|---|---|---|---|
| within a year | - | 47.2 | 2% |
| 1-2 years | 1,876.6 | 47.2 | 97% |
| 2-3 years | - | 0.6 | 0% |
| 3-4 years | - | 0.6 | 0% |
| more than 4 years 1 | 2.0 | 0.6 | 0% |
| Total at the end of the period | 1,878.6 | 96.0 | 100% |
1) Pertains to lease liability for ground leases that are regarded as perpetual.
2) The capital amount pertains to undiscounted values. The balance sheet includes borrowing fees in interest-bearing liabilities.
| Fixed interest-rates | Capital1 | ||||
|---|---|---|---|---|---|
| Year | SEK million | Share, % | SEK million | Share, % | |
| within a year | 132.9 | 8% | - | - | |
| 1-2 years | 1,048.7 | 56% | 1,876.6 | 100% | |
| 2-3 years | - | - | - | - | |
| 3-4 years | - | - | - | - | |
| more than 4 years | 697.0 | 37% | 2.0 | 0% | |
| Total at the end of the period | 1,878.6 | 100% | 1,878.6 | 100% |
1) The capital amount pertains to undiscounted values. The balance sheet includes borrowing fees in interest-bearing liabilities.
The average interest rate for the second quarter of 2022, based on a weighted average of interestbearing liabilities at 1 January and 30 June, respectively, was 2.15 percent. The effect of changes in average interest rates on profit is presented in the table below:
| Change, %-points | SEK million | |||
|---|---|---|---|---|
| +/- 0.5% | +/- | 9.4 | ||
| +/- 1.0% | +/- | 18.8 | ||
| +/- 1.5% | +/- | 28.2 |
| Shareholders | Numbers of shares | Capital, % | Votes, % |
|---|---|---|---|
| Ekhaga Utveckling AB | 12,548,695 | 21.2 | 48.5 |
| Familjen Paulsson | 2,410,666 | 4.1 | 7.8 |
| Volito AB | 4,900,000 | 8.3 | 6.3 |
| DNB Bank ASA | 2,935,229 | 5.0 | 2.4 |
| Peabs Vinstandelsstiftelse | 2,403,800 | 4.1 | 2.0 |
| Carnegie Spin-off | 1,750,000 | 3.0 | 1.5 |
| UBS SWITZERLAND AG, W8IMY | 259,769 | 0.4 | 1.4 |
| Familjen Kamprads Stiftelse | 1,720,000 | 2.9 | 1.4 |
| Handelsbanken Microcap Norden | 1,346,969 | 2.3 | 1.1 |
| PEAB-fonden | 1,200,000 | 2.0 | 1.0 |
| 10 largest share owners, sum | 31,475,128 | 53.3 | 73.4 |
| Other share owners | 27,517,420 | 46.8 | 26.6 |
| Total | 58,992,548 | 100.0 | 100.0 |
The coronavirus pandemic has had a major global impact It remains difficult to assess when we will return to a completely stable situation, since the spread of infection continues and new virus variants are emerging. The level of vaccination also varies strongly between continents and between countries in Europe. The fact that people are now starting to return to work has led to a discussion as to how the division between working from home and at the office will be in the future. For Annehem, this means that companies could seek more flexible contract solutions and that leasing efforts could thus take longer and be at lower rent levels than earlier. This could influence the value of our properties. The repercussions of the coronavirus pandemic on Annehem Fastigheter in 2022 have not resulted in any loss of revenue to date.
The invasion has demanded a radically redrawing of the security policy map. We do not yet know exactly what this new map will look like, and will probably not know for some time. However, we can already see the effects on international trade and the flip side of the just-in-time concept when deliveries are delayed or simply fail to arrive. This is increasing the need for self-sufficiency for both companies and nations.
For the property sector, the uncertainty surrounding costs for new projects is most evident – their lead times and energy prices – which overall have pushed up inflation to levels not seen for about 30 years. Inflation is forcing the Riksbank to raise interest rates. We will go from zero to a couple of percent in a short period of time, as it looks at the time of writing.
For a more detailed description of Annehem's risks, refer to the Risks section on page 21, and the Risks and risk management section of Annehem's 2021 Annual Report.
Annehem Fastigheter had an average of 18 full-time employees during both the second quarter and the first six months of 2022. Including resources working on a consultative basis, the number of employees amounts to 20. Annehem Fastigheter had 18 employees and three resources on consulting basis during the 2021 comparative period.
This report has not been reviewed by the Company's auditors.
Interim report January-September 2022 27 October 2022
The Board of Directors and the CEO give their assurance that the interim report provides a true and fair overview of the development of the Parent Company's and the Group's operations, their financial position and performance, and describes material risks and uncertainties facing the Parent Company and other companies in the Group.
Ängelholm, 19 July 2022
Göran Grosskopf Karin Ebbinghaus Lars Ljungälv Chairman of the Board Board member Board member
Axel Granlund Pia Andersson Anders Hylén Board member Board member Board member
Henrik Saxborn Jesper Göransson Jörgen Lundgren
Board member Board member CEO
This information is information that Annehem Fastigheter AB (publ) 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 below, on 20 July 2022 at 8:00 a.m. CEST.
Corp. ID. No. 559220-9083 Address: Drottning Kristinas Esplanad 10 Box 808 SE-169 28 Solna [email protected]
JÖRGEN LUNDGREN CEO Telephone: +46 76 843 05 08 E-mail: [email protected]
JAN EGENÄS CFO Telephone: +46 70 593 71 38 E-mail: [email protected]
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Rent revenue | 54.0 | 45.5 | 104.5 | 90.6 | 187.8 |
| Other property income | 11.8 | 11.2 | 22.2 | 20.8 | 39.1 |
| Total income | 65.8 | 56.6 | 126.7 | 111.4 | 226.9 |
| Property expenses | |||||
| Operating costs | -10.8 | -9.2 | -23.3 | -19.0 | -37.5 |
| Maintenance costs | -2.4 | -1.7 | -3.1 | -3.7 | -9.2 |
| Property tax | -2.7 | -2.2 | -5.3 | -4.6 | -9.6 |
| Property administration | -3.8 | -4.0 | -7.5 | -7.6 | -14.8 |
| Net operating income | 46.2 | 39.6 | 87.6 | 76.4 | 155.8 |
| Central administration | -9.1 | -8.3 | -16.9 | -16.8 | -30.4 |
| Other operating income | 3.2 | 1.3 | 4.2 | 3.2 | 9.9 |
| Other operating costs | -2.6 | -0.9 | -4.5 | -1.6 | -4.9 |
| Interest epenses | -13.6 | -11.4 | -26.0 | -23.3 | -44.1 |
| Other financial items 1 | -7.9 | 1.3 | -8.1 | 2.9 | 0.0 |
| Income from property management | 16.1 | 21.6 | 36.4 | 40.9 | 86.2 |
| Changes in values of properties, unrealised | 111.2 | 5.5 | 253.8 | 35.2 | 172.9 |
| Changes in values of derivatives | 32.9 | 0.4 | 68.4 | 0.3 | 3.0 |
| Income before tax for the period | 160.1 | 27.5 | 358.5 | 76.4 | 262.1 |
| Current tax | - | -0.5 | 0.0 | -0.8 | 0.2 |
| Deferred tax | -30.3 | -6.8 | -70.4 | -14.7 | -52.6 |
| Net income for the period attributable to the company shareholders | 129.9 | 20.1 | 288.1 | 60.9 | 209.7 |
| Average numbers of shares, before and after dilution | 58,992,548 | 58,992,548 | 58,992,548 | 58,992,548 | 58,992,548 |
| Earnings per share, before and after dilution, SEK | 2.20 | 0.34 | 4.88 | 1.03 | 3.56 |
1) Other financial expenses comprise exchange-rate effects and realised and unrealised effects of currency futures.
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Profit for the period | 129.9 | 20.1 | 288.1 | 60.9 | 209.7 |
| Other comprehensive income | |||||
| Items that will be reclassified to profit or loss | |||||
| Change in market value of derivative instruments | -0.2 | 0.8 | -0.4 | 1.9 | 1.5 |
| Fiscal effect on derivative instruments | 0.0 | -0.2 | 0.1 | -0.4 | -0.3 |
| Translation differences from foreign operations for the period | 10.1 | 3.9 | 11.7 | 3.5 | 7.1 |
| Total other comprehensive income | 9.9 | 4.6 | 11.3 | 5.0 | 8.3 |
| Comprehensive income for the period attr. to parent company sharehold | 139.8 | 24.7 | 299.5 | 65.9 | 218.0 |
| SEK million | 2022-06-30 | 2021-06-30 | 2021-12-31 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible fixed assets | 0.1 | 0.1 | 0.1 |
| Investment properties | 4,388.5 | 3,545.9 | 3,994.1 |
| Equipment and machinery | 5.6 | 3.9 | 4.2 |
| Derivative instrument | 82.4 | - | 0.7 |
| Other fixed assets | 1.0 | 0.6 | 0.8 |
| Total fixed assets | 4,477.6 | 3,550.5 | 3,999.8 |
| Current assets | |||
| Accounts receivables | 3.7 | 2.3 | 3.1 |
| Current receivables | 14.4 | 20.1 | 24.4 |
| Derivative instruments | 0.0 | 3.2 | 5.6 |
| Cash and cash equivalents | 252.9 | 298.7 | 190.2 |
| Total current assets | 271.0 | 324.3 | 223.3 |
| TOTAL ASSETS | 4,748.6 | 3,874.8 | 4,223.1 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 0.5 | 0.5 | 0.5 |
| Other contributed capital | 1,786.9 | 1,786.9 | 1,786.9 |
| Reserves | 15.0 | 0.2 | 5.0 |
| Retained earnings including net income for the year | 773.0 | 336.3 | 483.5 |
| Equity attributable to parent company shareholders | 2,575.4 | 2,123.9 | 2,275.9 |
| Non-current liabilities | |||
| Current interest-bearing liabilities | 1,878.6 | 1,542.0 | 1,721.3 |
| Derivative instruments | 9.6 | - | 1.4 |
| Other non-current liabilities | 1.7 | 1.6 | 3.1 |
| Deferred tax liabilities | 210.8 | 104.8 | 139.1 |
| Provisions for pensions | 1.2 | 2.5 | 1.0 |
| Total non-current liabilities | 2,101.9 | 1,650.9 | 1,865.9 |
| Current liabilities | |||
| Derivative instruments | 2.1 | - | 1.7 |
| Accounts payable and other liabilities | 7.7 | 21.1 | 11.9 |
| Current tax liabilities | 0.0 | 4.3 | 4.0 |
| Other current liabilities | 61.5 | 74.7 | 63.6 |
| Total current liabilities | 71.3 | 100.1 | 81.3 |
| Total liabilities | 2,173.1 | 1751,j0 | 1,947.2 |
| TOTAL EQUITY AND LIABILITIES | 4,748.6 | 3,874.8 | 4,223.1 |
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Income from property management | 16.1 | 21.9 | 36.4 | 41.2 | 86.2 |
| Items not affecting cash flow | |||||
| Depreciation | 0.5 | 0.3 | 0.8 | 0.6 | 1.2 |
| Unrealised currency effects | 1.2 | 1.7 | -6.0 | 3.9 | -8.3 |
| Changes in working capital | |||||
| Operating receivables | -3.9 | -3.3 | 9.4 | -15.6 | -18.4 |
| Operating liabilities | -14.6 | 5.1 | -10.1 | 6.0 | -4.6 |
| Cash flow from operating activities | -0.8 | 25.7 | 30.4 | 38.7 | 56.1 |
| Investing activities | |||||
| Investments in existing properties | -1.6 | -12.2 | -6.2 | -34.7 | -52.5 |
| Acquisitions of investment properties | -88.5 | -131.0 | -88.5 | -131.0 | -410.9 |
| Divestment of fixed assets | - | - | - | - | 4.9 |
| Investments in machinery and equipment | - | - | -1.3 | - | -0.5 |
| Cash flow from investing activities | -90.0 | -143.2 | -95.9 | -165.7 | -458.9 |
| Financing activities | |||||
| Borrowings | 57.9 | 69.0 | 132.9 | 69.0 | 234.0 |
| Repayment of loans | -2.6 | -93.3 | -2.6 | -93.3 | -87.9 |
| Cash flow from financing activities | 55.3 | -24.3 | 130.3 | -24.3 | 146.1 |
| Cash flow for the period | -35.5 | -141.8 | 64.8 | -151.3 | -256.7 |
| Cash and cash equivalents at the beginning of the period | 290.0 | 439.4 | 190.2 | 448.0 | 448.0 |
| Exchange rate difference in cash and cash equivalents | -1.6 | 1.0 | -2.2 | 2.0 | -1.1 |
| Cash and cash equivalents at the end of the period | 252.9 | 298.7 | 252.9 | 298.7 | 190.2 |
| SEK million | 2022-06-30 | 2021-06-30 | 2021-12-31 |
|---|---|---|---|
| Opening balance, equity | 2,275.9 | 2,057.9 | 2,057.9 |
| Net income for the period | 288.1 | 60.9 | 209.7 |
| Other comprehensive income for the period | 11.3 | 5.0 | 8.3 |
| Comprehensive income for the period | 299.5 | 65.9 | 218.0 |
| Closing balance, equity attributable to Parent Company shareholders | 2,575.4 | 2,123.9 | 2,275.9 |
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Revenue | 10.4 | 7.0 | 20.7 | 14.4 | 34.5 |
| Administration costs | -9.5 | -9.0 | -17.8 | -16.8 | -32.0 |
| Operating result | 0.9 | -2.0 | 2.9 | -2.4 | 2.5 |
| Financial items | |||||
| Financial net | 11.9 | 16.2 | 31.8 | 18.9 | 30.8 |
| Result after financial items | 12.7 | 14.2 | 34.7 | 16.5 | 33.4 |
| Appropriations | - | - | - | - | -3.1 |
| Result before tax | 12.7 | 14.2 | 34.7 | 16.5 | 30.3 |
| Deferred tax | -2.2 | -0.2 | -5.5 | 0.2 | 0.1 |
| Result for the period | 10.5 | 14.0 | 29.2 | 16.3 | 30.4 |
| SEK million | 2022-06-30 | 2021-06-30 | 2021-12-31 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible fixed assets | 0.1 | 0.1 | 0.1 |
| Equipment and machinery | 1.8 | 0.3 | 0.8 |
| Financial fixed assets | |||
| Shares in Group companies | 16.6 | 14.3 | 16.6 |
| Long-term receivables, Group companies | 1,970.8 | 1,928.2 | 1,998.8 |
| Other fixed assets | 1.0 | 0.6 | 0.8 |
| Total financial fixed assets | 1,988.3 | 1,943.1 | 2,016.2 |
| Total fixed assets | 1,990.2 | 1,943.5 | 2,017.1 |
| Accounts receivables | 11.7 | 9.4 | 17.0 |
| Accounts receivables from related parties | 1.2 | 5.1 | 5.9 |
| Derivative instruments | 35.4 | 1.0 | 0.7 |
| Cash and cash equivalents | 47.8 | 65.8 | 8.7 |
| Total curret assets | 96.1 | 81.2 | 32.2 |
| TOTAL ASSETS | 2,086.3 | 2,024.7 | 2,049.3 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | |||
| Share capital | 0.5 | 0.5 | 0.5 |
| Unrestricted equity | |||
| Retained earnings | 2,023.9 | 1993,5 | 1,993.5 |
| Result for the year | 29.2 | 16.3 | 30.4 |
| Total equity | 2,053.6 | 2,010.3 | 2,024.4 |
| Provisions | |||
| Provision for pensions and similar obligations | 1.2 | 0.7 | 1.0 |
| Provision for deferred tax | 5.5 | 0.3 | 0.0 |
| Total provisions | 6.7 | 1.0 | 0.9 |
| Current liabilities | |||
| Derivative instruments | 11.7 | - | 3.2 |
| Liabilities to Group companies, accounts payable | 3.1 | 1.5 | 5.4 |
| Accounts payable | 1.3 | 1.0 | 1.8 |
| Current tax liabilities | 0.0 | 3.7 | 3.3 |
| Other current liabilities | 9.9 | 7.7 | 10.4 |
| Total current liabilities | 26.0 | 13.5 | 24.0 |
| TOTAL EQUITY AND LIABILITIES | 2,086.3 | 2,024.7 | 2,049.3 |
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2021 | 2021 | 2022 | 2021 | 2021 |
| Result before tax | 12.7 | 14.2 | 34.7 | 16.5 | 30.3 |
| Items not affecting cash flow | |||||
| Depreciations | 0.2 | 0.1 | 0.4 | 0.2 | 0.4 |
| Unrealised currency effects | -0.7 | - | -26.2 | - | 1.7 |
| Tax paid | - | -0.1 | 0.0 | -0.1 | - |
| Changes in working capital | |||||
| Operating receivables | -16.3 | -1.5 | -5.2 | -15.0 | -21.8 |
| Operating liabilities | 17.2 | 0.7 | 6.6 | -33.3 | -25.0 |
| Cash flow from operating activities | 13.0 | 13.4 | 10.3 | 31.7 | -14.3 |
| Investing activities | |||||
| Shares in group companies | - | - | - | - | -4.1 |
| Investments in machinery and equipment | -1.6 | -0.6 | - | -0.7 | -0.5 |
| Investments in intangible fixed assets | - | - | - | -0.1 | - |
| Cash flow from investing activities | -1.6 | -0.6 | 0.0 | -0.8 | -4.6 |
| Financing activities | |||||
| Changes interest-bearing receivables, Group companies | -39.3 | -137.7 | 28.1 | 97.9 | 27.3 |
| Cash flow from financing activities | -39.3 | -137.7 | 28.1 | 97.9 | 27.3 |
| Cash flow for the period | -27.8 | -124.9 | 38.4 | 65.4 | 8.4 |
| Cash and cash equivalents in the beginning of the period | 75.7 | 190.6 | 8.7 | 0.4 | 0.4 |
| Cash and cash equivalents at the end of the period | 47.8 | 65.8 | 47.8 | 65.8 | 8.7 |
The Parent Company had income related to invoiced management fees and expenses related to personnel and external services, including communication, legal and auditing.
No special risks exist for the Parent Company, in addition to those named for the Group in the Risks section.
The interim report is designed in accordance with the EU endorsed IFRS standards and the EU endorsed interpretations of applicable standards, IFRIC. This condensed consolidated interim report was prepared in accordance with IAS 34 Interim Financial Reporting, and applicable provisions of the Swedish Annual Accounts Act. The interim report for the Parent Company was prepared in accordance with Chapter 9 of the Swedish Annual Accounts Act, Interim reports. The accounting policies for the Group and the Parent Company are the same accounting policies and applied calculation bases as in the most recent annual report.
Disclosures in accordance with IAS 34.16A occur in the financial statements and also in associated notes in other parts of the interim report.
The preparation of the interim report requires management to make assessments, estimations and assumptions that affect the application of accounting policies and the recognised amounts of assets, liabilities, income and expenses. The final outcome can deviate from the results of these estimations and assessments.
Annehem Fastigheter's portfolio is measured in the balance sheet at fair value and changes in value are recognised in profit or loss. The fair value is based on internal measurements that are performed regularly and the properties are also valued each year by external independent appraisers, in accordance with the valuation policy. The value of properties is not only affected by the supply and demand in the market but by several other factors, partly property-specific factors such as leasing rate, rent level and operating costs, partly market-specific factors such as direct-return requirement and cost of capital derived from comparable transactions in the property market. A deterioration in property and marketspecific conditions can lead to a drop in the value of properties, which could have an adverse impact on Annehem Fastigheter's operations, financial position and earnings.
The valuation also requires an assessment and assumptions of future cash flows and determination of the discount factor (return requirement). As a means of reflecting this uncertainty in assumptions made and assessments, the property value is normally stated in an uncertainty range of +/- 5–10 percent.
The properties are measured at fair value where classification is conducted at level 3 in accordance with IFRS 13.
At the end of 2021, there was approximately SEK 2 million in loss carryforwards that had not been capitalised.
Annehem Fastigheter's operations comprise two operating segments, meaning the operations consist of one business operation that generates income and costs. The operating segment is organisationally divided into two different segments:
| 2022 | Jan-Jun | |||
|---|---|---|---|---|
| SEK million | Capital Region | South Region | Staff | Total |
| Rent revenue | 60.6 | 43.9 | 0.0 | 104.5 |
| Net operating income | 60.4 | 27.6 | -0.4 | 87.6 |
| Income from property management | 50.3 | 27.9 | -41.9 | 36.4 |
| Income before tax | 245.6 | 95.2 | 17.7 | 358.5 |
| Investment properties, fair value | 3,154.7 | 1,233.9 | - | 4,388.5 |
Group staff includes the Parent Company and holding companies within the Group, which are not operational companies. Transactions within Group staff include management fees and other administrative expenses.
| 2021 | Jan-Jun | |||||
|---|---|---|---|---|---|---|
| SEK million | Capital Region | South Region | Staff | Total | ||
| Rent revenue | 52.3 | 38.3 | 0.0 | 90.6 | ||
| Net operating income | 53.1 | 22.7 | 0.6 | 76.4 | ||
| Income from property management | 20.8 | 9.8 | 10.6 | 41.2 | ||
| Income before tax | 42.1 | 23.7 | 10.6 | 76.4 | ||
| Investment properties, fair value | 2,441.2 | 1,104.7 | - | 3,545.9 |
| Apr-Jun | Jan-Jun | |||||
|---|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 | |
| Property tax | 1.6 | 1.3 | 3.2 | 2.6 | 5.9 | |
| Rental guarantees | 1.8 | 2.4 | 3.8 | 0.0 | 9.4 | |
| Other property revenue | 8.4 | 7.5 | 15.2 | 13.7 | 23.8 | |
| Total other property revenue | 11.8 | 11.2 | 22.2 | 20.8 | 39.1 |
Other property income largely comprises reinvoiced media costs (electricity, heating, water) to tenants, reinvoiced property tax, compensation related to airports, rental guarantees, and income from leasing ad hoc housing.
Annehem Fastigheter holds forward exchange contracts and fixed-interest derivatives to mitigate the impact of fluctuations in currency and interest rates. The derivatives are used solely for financial hedging purposes as part of Annehem Fastigheter's financial policy, and not for speculation.
For certain hedging relationships entered into before 30 June 2021, hedge accounting was applied and the fixed-interest derivatives identified as cash flow hedging instruments were initially reported at fair value on the transaction date for the derivatives and subsequently revalued to fair value at the end of each reporting period. The effective portion of changes in the fair value of derivatives, which are referred to as cash flow hedges, is reported in other comprehensive income and accumulated in the fair value reserve in equity. For all hedged forecast transactions, the accumulated amount in the hedging reserve is reclassified to profit or loss in the same period or periods as the hedged expected cash flow affects profit. The ineffective part of changes in the fair value of the derivative is reported immediately in the result within other financial items. Fair values are based on quotations from brokers. Similar contracts are traded in an active market and the prices reflect actual transactions on comparable instruments. All of the Group's derivative instruments are classified at level 2 in accordance with IFRS 13. The accumulated amount in the hedge reserve amounted to SEK 1.5 million on 30 June 2022.
The Group holds fixed-interest derivatives in NOK, SEK and EUR, and currency futures in NOK and EUR. Until 30 June 2021, the Group hedged fixed-interest derivatives in NOK and SEK. As of 1 July 2021, the hedge accounting ceased and all derivatives are thus valued at fair value via the income statement and are presented on the line "Change in value of derivative instruments" in the consolidated income statement. If the hedge no longer meets the criteria for hedge accounting or the company cancels the identification or the hedging instrument has been sold, matured, wound up or redeemed, the hedge accounting will cease in the future. When the hedge accounting for cash flow hedges has ceased, the amount that has accumulated in the hedging reserve is retained in equity until it is reclassified to profit or loss in the same period or periods as the hedged expected cash flow affects earnings. At 30 June 2022, the market value of fixed-interest derivatives amounted to SEK -70.7 million (-2.3) and currency futures to SEK -2.0 million (1.0).
The Group deems that other carrying amounts for the stated financial assets and liabilities recognised at cost and amortised cost correspond approximately to fair value, due to short maturity dates, that reservations have been made for doubtful receivables and that any penalty interest will be charged.
Annehem Fastigheter is exposed to risk related to changes in the value of and incorrect valuation of its properties. Annehem Fastigheter's investment properties are measured at fair value in the balance sheet and realised and unrealised changes in value are recognised in profit or loss. According to Annehem Fastigheter's valuation policy, external valuation reports are to be obtained at least once each year for all properties.
The Company's operations are affected by macroeconomic factors such as the overall economic trends, national and regional economic trends, employment, production of properties, infrastructure developments, population growth, inflation and interest rates, as well as war and crises. Annehem Fastigheter operates in Stockholm, Helsinki, Oslo, Malmö and Gothenburg, which are geographic markets that the Company considers particularly attractive, based on historical data. Consequently, Annehem Fastigheter is primarily exposed to the regional economic climate in these geographic markets and there is a risk that these geographic markets will not develop as anticipated by the Company or in the same way as the markets' historical development, which could have a material negative impact on Annehem Fastigheter's operations and financial position.
Annehem Fastigheter's operations entail environmental risks and the Company is subject to environmental regulations that mean that the Company could be liable to claims in the event of noncompliance. Even if Annehem Fastigheter will conduct inspections in conjunction with the acquisition of individual properties, there is a risk that the previous property owner, or Annehem Fastigheter, failed to comply with environmental regulations or that previous property owners or operators caused pollution.
See also the section Impact of the coronavirus pandemic on page 11 and the Risks and risk management section in the 2021 Annual Report.
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| Number of shares | 2022 | 2021 | 2022 | 2021 | 2021 |
| A-shares | 6,863,991 | 6,863,991 | 6,863,991 | 6,863,991 | 6,863,991 |
| B-shares | 52,128,557 | 52,128,557 | 52,128,557 | 52,128,557 | 52,128,557 |
| Total average number of shares | 58,992,548 | 58,992,548 | 58,992,548 | 58,992,548 | 58,992,548 |
Annehem Fastigheter's operations focus on growth in cash flow from day-to-day administration, meaning growth in income from property management. The target is that income from property management per share will double within 12 to 18 months and then increase over time by an average of 20.0 percent per year. Shown below is the income from property management, excluding currency effects, which relate to the Groups currency swap derivatives and the revaluation of internal loans in NOK and EUR.
| Apr-Jun | Jan-Jun | ||||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Income before tax | 16.1 | 21.6 | 36.4 | 40.9 | 86.2 |
| Add back | |||||
| Currency effects | 7.9 | -1.3 | 8.1 | -2.9 | 0.0 |
| Income from property management excl. currency effects | 24.1 | 20.3 | 44.4 | 37.9 | 86.2 |
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| Mkr | 2022 | 2021 | 2022 | 2021 | 2021 |
| Currency swaps | -8.8 | 5.9 | -14.8 | -1.6 | -10.0 |
| Revaluation of internal loans | 0.9 | -4.6 | 6.7 | 4.6 | 10.1 |
| Currency effects | -7.9 | 1.3 | -8.1 | 2.9 | 0.0 |
| Apr-Jun | Jan-Jun | ||||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Income from property management | 16.1 | 21.6 | 36.4 | 41.2 | 86.2 |
| Currency effects | 7.9 | -1.3 | 8.1 | -2.9 | 0.0 |
| Income fr. property management excl. currency effects | 24.1 | 20.3 | 44.4 | 37.9 | 86.2 |
| Number of shares | 58,992,548 | 58,992,548 | 58,992,548 | 58,992,548 | 58,992,548 |
| Income fr. property management excl. currency effects per share | 0.41 | 0.34 | 0.75 | 0.64 | 1.46 |
Net asset value is the accumulated capital managed by the Company on behalf of its owners. Using this capital, the Company aims to generate return and growth at a low level of risk. Net asset value can be determined in various ways, with the main influence from a time perspective and the turnover rate of the property portfolio. The long-term net asset value is based on the balance sheet and adjusted for items that do not require payment in the near future, such as in the Company's case deferred tax liabilities.
| SEK million | 2022-06-30 | SEK/share | 2021-06-30 | SEK/share | 2021-12-31 | SEK/share |
|---|---|---|---|---|---|---|
| Equity accoring to balance sheet | 2,575.4 | 43.7 | 2,123.9 | 36.0 | 2,275.9 | 38.6 |
| Add back | ||||||
| Deferred tax according to balance sheet | 210.8 | - | 104.8 | - | 139.1 | - |
| Interest rate derivatives | -72.8 | - | -2.3 | - | -5.6 | - |
| Long-term net asset value | 2,713.4 | 46.1 | 2,226.4 | 37.7 | 2,409.5 | 40.8 |
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Income from property management | 16.1 | 21.6 | 36.4 | 40.9 | 86.2 |
| Add back | |||||
| Interest net | 13.6 | 11.4 | 26.0 | 23.3 | 44.1 |
| Currency effects | 7.9 | -1.3 | 8.1 | -2.9 | 0.0 |
| Interest coverage, multiple | 2.8 | 2.8 | 2.7 | 2.6 | 3.0 |
| SEK million | 2022-06-30 | 2021-06-30 | 2021-12-31 |
|---|---|---|---|
| Interest-bearing liabilities | 1,878.6 | 1,542.0 | 1,721.3 |
| Cash and cash equivalents | -252.9 | -298.7 | -190.2 |
| Net interest-bearing liabilities | 1,625.7 | 1,243.3 | 1,531.1 |
| Investment properties | 4,388.5 | 3,545.9 | 3,994.1 |
| Net loan-to-value ratio, % | 37.0% | 35.1% | 38.3% |
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Income from property management | 16.1 | 21.6 | 36.4 | 40.9 | 86.2 |
| Add back | |||||
| Property expenses | 30.1 | 18.1 | 51.2 | 35.6 | 69.6 |
| Net operating income | 46.2 | 39.6 | 87.6 | 76.4 | 155.8 |
| Rent revenue | 54.0 | 45.5 | 104.5 | 90.6 | 187.8 |
| Surplus ratio, % | 85.5% | 87.2% | 83.8% | 84.4% | 83.0% |
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2022 | 2021 | 2021 |
| Net income for the period attributable to the Parent Co's shareho | 129.9 | 20.1 | 288.1 | 60.9 | 209.7 |
| Equity attributable to the Parent Company's shareholders | 2,575.4 | 2,123.9 | 2,575.4 | 2,123.9 | 2,275.9 |
| Return on equity, % | 5.0% | 0.9% | 11.2% | 2.9% | 9.2% |
| Return on equity | Profit for a rolling 12-month period in relation to average equity during the interim period. Purpose: The key figure shows the return generated on the capital attributable to the shareholders. |
|---|---|
| Gross rent | Gross rent is defined as rent revenue at a yearly basis excluding supplements and discounts. |
| Yield | Net operating income for a rolling 12-month period in relation to the properties' carrying amount, adjusted for the properties' holding period for the period. The key figure shows the return from operational activities in relation to the value of the properties. Purpose: The key figure shows the return from operational activities in relation to the value of the properties. |
| Net operating income | Net operating income includes the revenue and expenses that are directly linked to the property, that is to say, rent revenue and the expenses required for running the property, such as operating costs and maintenance costs. Purpose: The metric is used to provide comparability with other property companies and also to show the performance of the business. |
| Economic occupancy rate1) | Vacancy rent as a percentage of the gross rent at the end of the period. Purpose: The key figure facilitates the assessment of estimated rent for vacant spaces in relation to the total value of the rented and unrented floor space. |
| Property | Property held with property rights or leasehold rights. |
| Fair value of properties | Property value recognised according to balance sheet at the end of the period. Purpose: The key figure provides greater understanding of the value growth in the property portfolio and the Company's balance sheet. |
| Income from property management Income from property management is comprised of net operating income plus property management and administrative expenses and financial income and expenses. The earnings measure does not include the effects of changes in value of the investment properties and derivatives. |
|
| Income from property management excl. items affecting comparability |
Income from property management is comprised of net operating income excluding items affecting comparability, plus property management and administrative expenses and financial income and expenses. The earnings measure does not include the effects of changes in value of the investment properties and derivatives. |
| Income from property management excl. currency effects |
Income from property management is comprised of net operating income excluding currency effects, plus property management and administrative expenses and financial income and expenses. The earnings measure does not include the effects of changes in value of the investment properties and derivatives. |
| Rent revenue | Rent revenue less vacancies, rent discount and lost rent. |
| Rental value1) | Rent revenue with deductions for rent discount, plus rent surcharges and property tax for the rented space, as well as an estimate of market rent for vacant space. |
| Purpose: The key figure enables an assessment of the total potential rent revenue as surcharges are added to the charged rent revenues with an estimated market rent for vacant spaces. |
|
| Items affecting comparability | Annehem Fastigheter regards items of a non-recurring nature as items affecting comparability. |
| Currency effects | Currency effects related to currency swap derivatives and the revaluation of internal loans in NOK and ÉUR. |
| Long-term net asset value | Equity per share with the reversal of fixed-interest derivatives and deferred tax according to balance sheet. |
| Purpose: Long-term net asset value is a metric that reflects the long-term value of a property portfolio, instead of equity. |
|
| Net loan-to-value ratio | Interest-bearing liabilities, including lease liabilities, less cash and cash equivalents as a percentage of the carrying amount of the properties. Purpose: Net loan-to-value ratio is a measure of risk that indicates the degree to which the operations are encumbered with interest-bearing liabilities. |
| Net letting1) | New letting taken out during the period less terminations with notice of vacancy. |
| Interest-bearing liabilities | Interest-bearing liabilities mean all liabilities on which Annehem pays interest. These items in the balance sheet are: non-current and current liabilities to related parties, non-current and current interest-bearing liabilities (including lease liabilities) and Group account. |
|---|---|
| Interest-coverage ratio | Income from property management, including reversal of financial income, expenses and exchange-rate effects related to financial items and depreciation/amortisation as a percentage of financial income and expenses. The interest-coverage ratio is a financial target that shows how many times the Company can pay its interest charges with its profit from operational activities. |
| Purpose: The interest-coverage ratio is a measure of financial risk that shows how many times the Company can pay its interest charges with its profit from operational activities. |
|
| Debt/equity ratio | Interest-bearing liabilities in relation to equity. |
| Purpose: The debt/equity ratio is a measure of financial risk that shows the Company's capital structure and sensitivity to interest rate changes. |
|
| Equity/assets ratio | Equity in relation to total assets. |
| Purpose: Shows how large a share of the Company's assets are financed with equity and has been included to enable investors to assess the Company's capital structure. |
|
| Lettable area | The total floor area that can be rented out. |
| Purpose: Reflects the total area the Company can rent out. | |
| Underlying property value | Agreed transaction price for the property. |
| Vacancy rent | Estimated market rent for vacant spaces. |
| Purpose: The key figure specifies the potential rent revenue for fully leased spaces. | |
| Surplus ratio | Net operating income for the period as a percentage of rent revenue. |
| Purpose: The surplus ratio shows the percentage of each Swedish krona earned that the Company can keep. The key figure is a measure of efficiency that is comparable over time. |
1) The key figure is property-related and not considered to be an alternative performance measure in accordance with ESMA's guidelines.
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