Quarterly Report • Jul 31, 2020
Quarterly Report
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"In the second quarter of 2020, K-Fastigheter presented its strongest quarterly profit on record. New construction of HOMES in the first half of 2020 equaled 102 percent of all new construction starts for the full year 2019."
In the second quarter 2020, K-Fastigheter started construction of 95 Apartment Block apartments in Vallensbæk Strand just south of Copenhagen.
K-Fastigheter is a project development, construction and property company focused primarily on rental housing properties, which, as of 30 June 2020, accounted for 89 percent of the property value of the completed property portfolio and 85 percent of the contractual rent. On 30 June 2020, K-Fastigheter's property holding had a total lettable area of approximately 143,000 square meters distributed over 1,865 apartments and some 120 commercial contracts with total contractual rental income of approximately SEK 207 million annually. The project portfolio comprises some 4,150 apartments under construction and in project development.
Cross-functional work allows K-Fastigheter to generate a profit at all stages. In the period January–June 2020, 75 percent of Group profit after tax was derived from project development and construction, and 25 percent from property management.
K-Fastigheter's overarching objective is to generate value for the Company's shareholders. Over a business cycle, the generation of value is measured as growth in long-term net asset value per share.
The target is to generate growth in net asset value and profit from property management while maintaining a stable and sound financial position and with balanced financial risk-taking, meaning that:
1 April: K-Fast Danmark starts construction on Vallensbæk 7cq in Vallensbæk Strand just south of Copenhagen, K-Fastigheter's first establishment outside Sweden. The Group plans to build 95 Apartment Block apartments on the plot.
16 April: K-Fastigheter and BoKlok have entered a collaboration relating to the construction of up to 1,000 apartments over the next three years. The companies share a concept-based approach to construction, which optimizes cost efficiency.
15 May: Swedish business magazine Affärsvärlden conducted a review of all Swedish IPOs completed in 2019. A total of 42 companies were examined and of these, K-Fastigheter was selected as the winner in two categories.
Rental income amounted to SEK 96.8 million (71.6) for the period, up 35 percent year-on-year. Of the SEK 25.2 million increase, 30 percent was derived from properties acquired in the period, 52 percent from rental income from completed properties, and 18 percent from increased rental income from comparable holdings.
Income from project development and construction operations totaled SEK 207.9 million (126.6), of which SEK 9.6 million (7.7) related to external projects.
| Financial ratios (see definitions on page 27) | 2020 Apr–Jun |
2019 Apr–Jun |
2020 Jan–Jun |
2019 Jan–Jun |
2019 Jan–Dec |
|---|---|---|---|---|---|
| Rental income, SEK million | 49.0 | 38.6 | 96.8 | 71.6 | 156.8 |
| Profit from property management, SEK million | 19.5 | 16.7 | 35.0 | 27.8 | 52.9 |
| Comprehensive income for the period, SEK million | 111.3 | 90.0 | 203.6 | 133.4 | 365.3 |
| Net investments in investment properties, SEK million | 575.6 | 430.9 | 1,084.7 | 568.3 | 1,061.1 |
| Investment properties, SEK million | 5,751.5 | 3,704.8 | 5,751.5 | 3,704.8 | 4,396.7 |
| Long-term net asset value (NAV), SEK million | 2,818.0 | 1,394.1 | 2,818.0 | 1,394.1 | 2,540.2 |
| Number of apartments under management | 1,865 | 1,418 | 1,865 | 1,418 | 1,711 |
| Number of apartments under construction | 1,249 | 565 | 1,249 | 565 | 700 |
| Number of apartments under project development | 2,888 | 1,172 | 2,888 | 1,172 | 1,340 |
| Interest coverage ratio, multiple | 2.7 | 3.0 | 2.6 | 2.8 | 2.6 |
| Equity/assets ratio, % | 39.1% | 28.5% | 39.1% | 28.5% | 41.8% |
| Loan-to-value ratio, % | 53.4% | 61.0% | 53.4% | 61.0% | 40.2% |
| Profit from property management, SEK per share | 0.58 | 0.67 | 1.03 | 1.11 | 2.05 |
| Growth in profit from property management per share, % | -13.8% | 89.1% | -7.0% | 52.7% | 24.6% |
| Long-term net asset value (NAV), SEK per share | 83.15 | 55.76 | 83.15 | 55.76 | 74.96 |
| Growth in long-term net asset value (NAV), per share, % | 5.6% | 9.3% | 10.9% | 14.9% | 54.4% |
| Earnings per share, SEK* | 3.28 | 3.60 | 6.01 | 5.34 | 14.14 |
| Number of shares outstanding at the end of the period, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 33,889 |
| Average number of shares outstanding during the period, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 25,830 |
*There are no potential shares (e.g. convertibles) in the company, and accordingly no dilution effect.
The following table shows completed acquisitions of building rights and investment properties, construction starts and completed projects and renovations carried out under K-Fastigheter's renovation concept in the second quarter 2020.
Other significant events in the second quarter:
K-Fastigheter has signed a Letter of Intent with BoKlok regarding jointly developing housing units in Helsingborg.
K-Fastigheter to acquire 60 rental apartments located in Gävle, due to be completed in 2021, from BoKlok.
On 8 July 2020, K-Fastigheter signed an agreement with the municipality of Älmhult relating to the acquisition of the properties Röret 1 and Kedjan 1 in Älmhult. A legally detailed development plan has been approved, and planning permission is expected to be received in the fourth quarter 2020. On the property, K-Fastigheter intends to build a maximum of 85 rental apartments over 5,534 square meters, distributed over 16 Low Rise apartments, 39 Apartment Blocks and 30 Lateral Low-Rise apartments. The total estimated rental value is SEK 9.6 million. K-Fastigheter will take possession of the property once planning permission has gained legal force. The purchase price amounts to SEK 5.1 million.
| Number of | Estimated rental value | Purchase price | ||||
|---|---|---|---|---|---|---|
| Properties | Municipality | Transfer date | apartments | Area (m2) | (SEK million) | (SEK million) |
| Örnen 33 | Växjö | 30 Apr 2020 | 101 | 7,441 | 14.1 | 272.0 |
| Turbanen 2 & 3 | Hässleholm | 30 Sep 2020 | 30 | 2,040 | 2.1 | 31.0 |
| Høje-Taastrup 4ee & 4ef | Høje-Taastrup | 1 Oct 2021 | 36 | 3,600 | 8.3 | 154.7 |
| Construction | ||||||
|---|---|---|---|---|---|---|
| Properties | Municipality | scheduled to commence |
Number of apartments |
Area (m2) | Estimated rental value (SEK million) |
Purchase price (SEK million) |
| Vallensbæk 7cq | Vallensbæk | Q2 2020 | 95 | 7,747 | 19.5 | 83.2 |
| Trollet 1* | Växjö | Q2 2020 | 48 | 3,403 | 5.7 | 17.7 |
| part of Sätra 108:29* | Gävle | Q2 2020 | 60 | 3,876 | 7.0 | 29.0 |
| part of Fredriksskans 2:17* | Gävle | Q1 2021 | 88 | 6,000 | 10.5 | 18.7 |
| Oppebygård 1:17* | Nyköping | Q3 2020 | 100 | 7,297 | 11.3 | 19.0 |
| Nödinge 5:93* | Ale | 2023 | 130 | 8,600 | 15.3 | 32.4 |
| Expected | Number of | Estimated rental value | ||||
|---|---|---|---|---|---|---|
| Properties | Municipality | completion | apartments | Area (m2) | (SEK million) | |
| Dirigenten 1 and Sångaren 1 | Helsingborg | Q3 2021 | 15 | 1,410 | 2.3 | |
| Hällan 1 | Hässleholm | Q3 2021 | 38 | 2,527 | 4.4 | |
| Hässjan 1 and Högaffeln 1 | Malmö | Q3 2022 | 62 | 3,822 | 8.5 | |
| Vallensbæk 7cq | Vallensbæk | Q4 2021 | 95 | 7,747 | 19.5 | |
| Kokhuset 1 | Hässleholm | Q2 2022 | 38 | 2,808 | 4.6 | |
| Trollet 1* | Växjö | Q4 2021 | 48 | 3,403 | 5.7 | |
| part of Sätra 108:29 | Gävle | Q4 2021 | 60 | 3,876 | 7.0 |
| Number of | Rental value | |||||
|---|---|---|---|---|---|---|
| Properties | Municipality | Move in | apartments | Area (m2) | (SEK million) | |
| Hovrätten 20 | Kristianstad | 1 May 2020 | 17 | 1,039 | 1.9 | |
| Intendenten 4 and 5 | Hässleholm | 1 Jun 2020 | 21 | 1,701 | 2.7 | |
| Tygelsjö 54:31 (T-O ass.) | Malmö | 30 Jun 2020 | 30 | 2,236 | - | |
| K-Fast 2.0 | Q1 2020 | Q2 2020 | |
|---|---|---|---|
| Number of apartments renovated | 17 | 11 | |
| Increase in rental value (SEK million) | 0.4 | 0.2 | |
*Property not yet handed over.
We find ourselves in a dramatic new reality where people's lives and health are at risk from the spread of Covid-19, at the same time as the world's economies are facing an unprecedented slowdown. It's in this context that we're presenting our strongest quarterly profit on record, while building a platform for continued growth through acquisitions of attractive building rights – our most important raw material. "
At national level, sales of new-build tenant-owner apartments slowed down in the second quarter of 2020. For example, Sweden's leading property portal, Hemnet, reported that sales decreased by 29 percent. We are noticing this in our project development operations, with significantly fewer competitors active on the transaction market for building rights compared to the same period last year. These factors favor growth in our project portfolio, reflected in the numerous transactions K-Fastigheter completed in the first half of the year.
In construction, we are also finding that suppliers of construction-related products and services are more willing to negotiate price. We have secured delivery of critical components for the remainder of the year, and built up an inventory of products that we expect will be hard to access in the event of further factory stoppages as a result of a second wave of Covid-19. Our counter-cyclical business model has been put to the test and has handled the effects of the pandemic very well to date. Given the current situation, we need to do all we can to minimize the risks to our employees, tenants and other stakeholders.
K-Fastigheter offers attractive HOMES on the Swedish and Danish housing market and benefits from operating in a less severely affected sector. We are active in countries with social welfare systems that assist affected parties with financial support. The absolute majority of our tenants have good payment ability, and in connection with new lettings we establish the tenant's payment ability by requiring annual income from full time employment or equivalent remuneration corresponding to at least three times the annual rent.
To summarize, Covid-19 still implies considerable uncertainty for the economy. In this environment, K-Fastigheter continues to work towards our operational and financial goals which feel realistic, and I am very confident about our business model and our ability to reach these targets.
The first six months of the year were intense and rewarding, with accelerating production and development of our proprietary conceptual HOMES. I summarized the first quarter as "record-breaking" and the same phrase works well to present the first half-year. I am proud to see what our incredible employees have achieved, and how well prepared we are ahead of our continued growth journey. This is a conservative sector, and concept building solutions have gone from being something no one wanted to work with to becoming part of the solution to the housing shortage.
In the first half of 2020, we completed 68 apartments and started construction of 619, which means that the number of apartments in production has increased from 700 apartments at the beginning of the year to 1,249 at the end of the first six months, an increase of 78 percent. In the second quarter of 2020, K-Fastigheter presented its strongest quarterly profit on record. New construction of HOMES in the first half of 2020 corresponded to 102 percent of all new construction starts for the full year 2019. This would not have been possible without our efficient concept buildings, and the cost-efficient construction and management the concept implies.
In addition, our project portfolio of properties where construction has not yet started increased by 116 percent, from 1,340 to 2,888 apartments in the first six months. This growth constitutes good advance planning and also ensures K-Fastigheter's future growth.
Our total holding of HOMES under management, in production, in the project portfolio and completed acquisitions where we have not yet taken possession totaled 6,151 apartments as of 30 June 2020. On the basis of rental values as of 30 June 2020, and adding projected rental values for HOMES in production and project development, and completed acquisitions where K-Fastigheter has not yet taken possession, we have ensured growth in rental values of some 240 percent from the current level.
| 0 | 1,000 | 2,000 | 3,000 | 4,000 | 5,000 | 6,000 | |||
|---|---|---|---|---|---|---|---|---|---|
| 1,865 apartments under management |
1,249 apartments under production |
2,888 apartments under project development |
|||||||
| apartments to be taken into possession gradually during 2020/ 2021 |
149
Our ongoing production of 1,249 HOMES indicates a total acquisition cost for proprietary production of 73 percent of the anticipated market value, which implies a profit margin in the form of unrealized value changes associated with new production of 27 percent.*
In the first half of 2020, all of 75 percent of profit after tax was derived from the Project Development and Construction business areas. I cannot emphasize enough that we are much more than a property company, which the results outlined above clearly illustrate.
Profit from property management for the period increased by 26 percent year-on-year. However, profit from property management per share made negative progress, mainly due to an increased number of shares in the current period, and to a lesser extent due to the measures taken to strengthen the organization for future growth. The increase is entirely in line with our stated strategy of preparing the organization for future growth, from today's 1,865 apartments under management to a potential 6,151 apartments under management derived from secured deals and our project bank. In the same way, we are also building our project development and construction organization, including the associated facilities for the manufacture of building components. We returned a strong surplus ratio of 67 percent, which would amount to 69 percent excluding rental losses.
Net asset value per share was SEK 83.15 at the end of the period, corresponding to growth of 10.9 percent since 31 December 2019. This is well in line with our set targets. This is despite the write-down of part of our commercial holding in the quarter.
The completion of two acquisitions in Denmark in the first half of 2020 was particularly pleasing. The acquisitions included an attractive plot in Vallensbæk Strand, 20 km south of Copenhagen, where construction has already started, and ongoing production of 36 townhouses in Høje-Taastrup where we will take possession after completion of the project. In April, we secured a promising collaboration with BoKlok, owned by Skanska and IKEA. Alongside K-Fastigheter, BoKlok is the largest concept building operator in Sweden. We focus on rental apartments, while BoKlok's focus is on tenant-owner apartments. Together, we can create attractive urban development projects with mixed access rights. The goal is to jointly generate transactions relating to 1,000 apartments over three years, and we have already completed four transactions under the collaboration at the end of the first half-year.
To conclude, our share with the ticker KFAST B performed well (+57 percent) in the second quarter, holding up well against the OMX Stockholm Mid-Cap index (+33 percent) and the OMX Stockholm Real Estate index (+5 percent).
I would like to thank our shareholders and partners for the confidence you have shown us, and alongside my excellent team I will continue to work to retain it looking ahead.
- Jacob Karlsson, July 2020
*The expected profit on the project, defined as the difference between expected market value and estimated acquisition cost, has been included as an unrealized value change at 20 percent at the time of construction start and 80 percent on a rolling basis during the construction process at a pace with costs paid. Fore more information see Note 16 Investment Properties in the Annual Report 2019.
On 30 June 2020, the Group's property portfolio comprised 71 completed investment properties1 , as well as three out of four stages in the Helsingborg Brigaden 7 & 8 project, and one of three stages in the Växjö Örnen 33 project now occupied, distributed over a total of 116,214 square meters of residential and 26,633 square meters of commercial space. In addition, the Group had 19 ongoing construction projects, distributed over 80,508 square meters of residential and 588 square meters of commercial space. Furthermore, K-Fastigheter has 16 projects in progress at the project development phase, at various stages of building permit application or project planning, of which 11 are projects for which K-Fastigheter has yet to take possession of the land.
Of the property stocks, 76 percent of properties were constructed after 2010, and Newsec assesses that 99 percent are located in category A or B positions in the communities where the Group operates. As of 30 June 2020, contractual rent totaled SEK 207.1 million, with an estimated operating surplus of SEK 149.2 million, corresponding to a surplus ratio of 72 percent. For newly produced concept buildings, the corresponding surplus ratio is some 81 percent, and approximately 58 percent for other properties in the portfolio. Of contractual rent, 85 percent pertains to housing or related rentals (such as parking) distributed over 1,865 of apartments under management at the end of the period. Contractual rent from commercial tenants is distributed over some 117 commercial contracts, with the largest tenant comprising approximately 2 percent of total contractual rental income and the 10 largest commercial tenants comprising approximately 7 percent of total contractual rental income.
At the end of the period, the book value of completed investment properties totaled SEK 4,076.3 million (3,606.9), with an average direct return requirement of 4.17 percent (4.25). The book value of new construction projects in progress amounted to SEK 1,168.6 million (447.7), and undeveloped land amounted to SEK 486.4 million (335.1). On completion, the estimated market value of new construction projects in progress amounted to SEK 3,351.1 million (1,618.5) and to approximately SEK 7,380 million (3,400) for properties currently in project development.
Of the property stocks, 87 percent of property value is located in Skåne, with the majority, 41 percent, located in northeastern Skåne (Hässleholm, Kristianstad, Osby), followed by northwestern Skåne (Helsingborg, Höganäs, Landskrona) at 39 percent.
Property value by category, 30 Jun 2020
| Property-related key data | 2020 30 Jun |
2019 30 Jun |
2019 31 Dec |
|---|---|---|---|
| Opening carrying amount, investment properties |
4,396.7 | 3,018.1 | 3,018.1 |
| +Acquisitions | 708.2 | 314.0 | 557.7 |
| + New construction | 364.8 | 253.6 | 499.7 |
| – Divestments | -1.0 | 0.0 | -2.3 |
| – Reclassification as business property | 0.0 | 0.0 | -9.3 |
| Other changes | 25.0 | 0.7 | -7.0 |
| Unrealized value changes | 257.8 | 118.4 | 339.8 |
| Closing carrying amount, investment properties |
5,751.5 | 3,704.8 | 4,396.7 |
| Of which, completed investment properties | 4,076.3 | 2,737.6 | 3,606.9 |
| of which, undeveloped land and building rights | 486.4 | 249.3 | 335.1 |
| of which, site leaseholds | 20.3 | 0.0 | 7.0 |
| Of which, ongoing construction | 1,168.6 | 717.8 | 447.7 |
| Rental value, SEK million | 2 18.0 | 161.9 | 196.6 |
| Rental income at end of period, SEK/m2 | 1,450 | 1,331 | 1,460 |
| Direct property costs, SEK/m2 | 406 | 373 | 398 |
| Operating surplus, SEK/m2 | 1,044 | 958 | 1,062 |
| Financial letting ratio at end of period | 95.0% | 97.9% | 96.9% |
| Average financial letting ratio over period | 93.8% | 97.2% | 96.8% |
| Surplus ratio over period | 67.1% | 71.0% | 68.4% |
| Lettable area, m2 | 142,847 | 119,110 | 130,486 |
| Number of apartments under management, units |
1,865 | 1,418 | 1,711 |
| Completed investment properties, SEK million |
4,076.3 | 2,737.6 | 3,606.9 |
| Completed investment properties | 4.17% | 4.41% | 4.25% |
Property value by construction year, 30 Jun 2020
K-Fast Holding AB Interim Report Q2 2020 7 1 Investment properties are properties held for the purpose of generating rental income, or value growth, or a combination of both.
| INVESTMENT PROPERTIES | Lettable area, m2 | Property value | Rental value | Letting ratio |
Contractual rent |
Property costs | Operating surplus |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Distribution of concept buildings Apartments | Housing Premises | Total SEK million SEK/m2 SEK million SEK/m2 | % | SEK million SEK million SEK/m2 SEK million SEK/m2 | ||||||||||
| Low-Rise | 456 | 34,419 | 0 | 34,419 | 1,127.5 | 32,758 | 53.9 | 1,565 | 99.4% | 53.5 | 4.8 | 139 | 48.7 | 1,416 |
| Lateral Low-Rise | 625 | 31,564 | 543 | 32,107 | 1,313.9 | 40,924 | 62.1 | 1,933 | 98.7% | 61.3 | 7.8 | 242 | 53.5 | 1,666 |
| Apartment Block | 91 | 5,955 | 0 | 5,955 | 197.2 | 33,115 | 10.5 | 1,760 | 100.0% | 10.5 | 1.6 | 263 | 8.9 | 1,496 |
| Other | 693 | 44,276 | 26,090 | 70,366 | 1,437.6 | 20,431 | 91.6 | 1,302 | 89.4% | 81.9 | 25.7 | 365 | 56.2 | 799 |
| Total/average | 1,865 | 116,214 | 26,633 142,847 | 4,076.3 | 28,536 | 218.0 | 1,526 | 95.0% | 207.1 | 39.8 | 279 | 167.4 | 1,172 | |
| Geographic distribution | ||||||||||||||
| Northwestern Skåne | 778 | 44,102 | 7,816 | 51,918 | 1,583.2 | 30,495 | 83.5 | 1,608 | 99.7% | 83.3 | 17.2 | 331 | 66.1 | 1,272 |
| Northeastern Skåne | 747 | 50,314 | 18,671 | 68,985 | 1,656.7 | 24,015 | 94.2 | 1,366 | 97.2% | 91.6 | 17.2 | 250 | 74.4 | 1,078 |
| Southwestern Skåne | 114 | 5,866 | 146 | 6,012 | 291.8 | 48,536 | 13.4 | 2,236 | 97.6% | 13.1 | 1.7 | 281 | 11.4 | 1,901 |
| Gothenburg | 14 | 990 | 0 | 990 | 32.3 | 32,626 | 1.6 | 1,654 | 100.0% | 1.6 | 0.2 | 168 | 1.5 | 1,486 |
| Southern Småland | 212 | 14,942 | 0 | 14,942 | 512.2 | 34,282 | 25.2 | 1,688 | 69.6% | 17.6 | 3.5 | 234 | 14.1 | 941 |
| TOTAL/AVERAGE | 1,865 | 116,214 | 26,633 142,847 | 4,076.3 | 28,536 | 218.0 | 1,526 | 95.0% | 207.1 | 39.8 | 279 | 167.4 | 1,172 | |
| Property administration | 18.2 | 127 | ||||||||||||
| property administration | Operating surplus incl. | 207.1 | 58.0 | 406 | 149.2 | 1,044 |
| CONSTRUCTION PROJECTS IN PROGRESS | Lettable area, m2 | Property value | Rental value | Investment (including land), SEK million1 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Distribution of concept buildings Apartments | Housing | Premises | Total SEK million | SEK/m2 SEK million | SEK/m2 | Estimated | Developed Carrying amount | ||||
| Low-Rise | 220 | 16,481 | 0 | 16,481 | 567.3 | 34,421 | 26.5 | 1,608 | 438.2 | 145.5 | 175.7 |
| Lateral Low-Rise | 620 | 35,781 | 198 | 35,979 | 1,686.0 | 46,860 | 76.2 | 2,117 | 1,193.3 | 417.4 | 575.7 |
| Apartment Block | 349 | 24,370 | 390 | 24,760 | 957.8 | 38,685 | 49.8 | 2,009 | 749.3 | 375.2 | 462.4 |
| Other | 60 | 3,876 | 0 | 3,876 | 140.0 | 36,120 | 7.0 | 1,806 | 130.9 | 0.0 | 1.8 |
| TOTAL/AVERAGE | 1,249 | 80,508 | 588 | 81,096 | 3,351.1 | 41,323 | 159.4 | 1,966 | 2,511.7 | 938.1 | 1,215.6 |
| Geographic distribution | |||||||||||
| Northwestern Skåne | 288 | 18,859 | 390 | 19,249 | 728.2 | 37,829 | 33.8 | 1,757 | 523.0 | 215.1 | 292.5 |
| Northeastern Skåne | 182 | 12,404 | 0 | 12,404 | 398.6 | 32,135 | 20.6 | 1,663 | 327.7 | 148.3 | 180.8 |
| Southwestern Skåne | 159 | 8,662 | 0 | 8,662 | 419.0 | 48,372 | 18.5 | 2,139 | 300.1 | 149.0 | 167.9 |
| Gothenburg | 295 | 17,128 | 198 | 17,326 | 887.0 | 51,195 | 39.5 | 2,283 | 598.5 | 174.3 | 271.6 |
| Southern Småland | 170 | 11,832 | 0 | 11,832 | 411.3 | 34,762 | 20.4 | 1,724 | 351.4 | 167.6 | 198.0 |
| Other* | 155 | 11,623 | 0 | 11,623 | 507.0 | 43,624 | 26.5 | 2,278 | 411.1 | 83.8 | 104.9 |
| TOTAL/AVERAGE | 1,249 | 80,508 | 588 | 81,096 | 3,351.1 | 41,323 | 159.4 | 1,966 | 2,511.7 | 938.1 | 1,215.6 |
| Distribution of concept buildings | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Low-Rise | 1,241 | 91,894 | 0 | 91,894 | 3,341.5 | 36,363 | 155.1 | 1,687 | 2,342.1 | 104.9 | 104.9 |
| Lateral Low-Rise | 969 | 59,121 | 0 | 59,121 | 2,355.2 | 39,838 | 108.6 | 1,836 | 1,625.7 | 14.0 | 14.0 |
| Apartment Block | 678 | 44,704 | 0 | 44,704 | 1,682.5 | 37,637 | 79.9 | 1,786 | 1,248.7 | 26.2 | 26.2 |
| TOTAL/AVERAGE | 2,888 | 195,719 | 0 | 195,719 | 7,379.3 | 37,704 | 343.5 | 1,755 | 5,216.4 | 145.1 | 145.1 |
| Geographic distribution | |||||||||||
| Northwestern Skåne | 950 | 73,000 | 0 | 73,000 | 2,738.0 | 37,507 | 125.2 | 1,716 | 1,830.0 | 51.5 | 51.5 |
| Northeastern Skåne | 256 | 15,735 | 0 | 15,735 | 542.9 | 34,503 | 25.9 | 1,643 | 419.8 | 55.9 | 55.9 |
| Southwestern Skåne | 585 | 35,121 | 0 | 35,121 | 1,399.9 | 39,859 | 65.8 | 1,872 | 990.4 | 17.7 | 17.7 |
| Gothenburg | 730 | 46,600 | 0 | 46,600 | 1,848.7 | 39,672 | 83.7 | 1,796 | 1,266.8 | 0.0 | 0.0 |
| Southern Småland | 179 | 11,966 | 0 | 11,966 | 424.2 | 35,453 | 21.1 | 1,764 | 345.5 | 20.0 | 20.0 |
| Other* | 188 | 13,297 | 0 | 13,297 | 425.6 | 32,005 | 21.8 | 1,641 | 363.9 | 0.0 | 0.0 |
| TOTAL/AVERAGE | 2,888 | 195,719 | 0 | 195,719 | 7,379.3 | 37,704 | 343.5 | 1,755 | 5,216.4 | 145.1 | 145.1 |
*Other refers to Copenhagen, Gävle and Nyköping
| SUMMARY | Lettable area, m2 | Property value | Rental value | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Apartments | Housing | Premises | Total SEK million | SEK/m2 SEK million | SEK/m2 | Carrying amount | |||
| Completed investment properties |
1,865 | 116,214 | 26,633 | 142,847 | 4,076.3 | 28,536 | 218.0 | 1,526 | 4,076.3 |
| Construction projects in progress | 1,249 | 80,508 | 588 | 81,096 | 3,351.1 | 41,323 | 159.4 | 1,966 | 1,215.6 |
| Project development in progress | 2,888 | 195,719 | 0 | 195,719 | 7,379.3 | 37,704 | 343.5 | 1,755 | 145.1 |
| New construction projects other | 283.8 | ||||||||
| Undeveloped land | 10.5 | ||||||||
| Site leaseholds | 20.3 | ||||||||
| TOTAL/AVERAGE | 6,002 | 392,441 | 27,221 | 419,662 | 14,806.7 | 35,282 | 720.9 | 1,718 | 5,751.5 |
1 Accrued investment refers to the total costs incurred in each construction project. The carrying amount refers to the consolidated value adjusted for Group eliminations and includes the calculated change of SEK 353.0 million in the value of investment properties.
Information in the Interim Report on completed investment properties includes estimates and judgments. Contractual rent refers to the contract value on the balance sheet date recalculated at an annualized rate. Rental value refers to contractual rent plus estimated rent for vacancies and discounts recalculated at an annualized rate. Property costs refer to budgeted property costs on an annual basis and are exclusive of property administration. The estimates and judgments involve uncertainties and the disclosures above should not be viewed as a forecast.
Details in the Interim Report regarding construction projects and project development in progress are based on estimates of the size, focus and scope of construction projects and project development in progress, and of when projects are scheduled to commence and be completed. These details are also based on estimates regarding future investments and rental value. These estimates and judgments should not be viewed as a forecast. The estimates and judgments entail uncertainties regarding the execution, design and scale, scheduling, project costs and future rental value of the projects. Details of projects in progress are reviewed regularly and estimates and judgments are adjusted as a result of projects in progress being completed or new ones being added, as well as due to changes in conditions. Financing has not been secured for projects where construction has yet to commence, meaning that financing of construction investments in project development represents a source of uncertainty.
Öllsjö 7:47 – 12 Low-Rise apartments
Brigaden 7 & 8 – 179 Lateral Low-Rise apartments
Tre Överstar 7 – 29 Apartment Block apartments
Low-Rise – flexible buildings offering considerable freedom of choice
The company's flexible one to three-story multi-family dwellings can be constructed either as semi-detached houses, terraced houses or as link houses with one or two-story apartments. The apartments are available in four sizes: one bedroom, living room and kitchen totaling 60 square meters; two bedrooms, living room and kitchen totaling 75 square meters; three bedrooms, living room and kitchen totaling 90 square meters; and three bedrooms, living room and kitchen totaling 94 square meters on two stories.
In order to meet demand on its various markets, K-Fastigheter offers a choice of floor plans in connection with each construction project. The Low-Rise housing units are built using the same methods as for traditional single-family houses. However, the Low-Rise housing units can be built as link or terraced houses, or placed on top of one another to create two-story houses with access balconies. The Low-Rise housing units offer very high functional economy, where efficient project development entirely eliminates communal spaces.
Ground level foundation plate, aerated three-layer wooden frame, delivered in prefabricated units.
K-Fastigheter's neighborhood-structure multi-family dwellings can be constructed up to ten stories in height. There are two standard space-efficient apartment formats within Lateral Low-Rise buildings: one bedroom, living room and kitchen totaling 49 square meters and two bedrooms, living room and kitchen totaling 59 square meters. It is also possible to include apartment alternatives that are either larger or smaller. To meet market demand and offer the best possible use of building rights, K-Fastigheter has chosen to make its Lateral Low-Rise as adaptable as possible with regard to floor plans and with opportunities for underground garages and commercial premises on the ground floor.
The design of the Lateral Low-Rise concept has focused sharply on achieving a substantial living space in relation to the façade area. In K-Fastigheter's assessment, the Lateral Low-Rise concept has a significantly smaller façade area in relation to living space than the average for newly produced apartments in Sweden. In connection with construction, this is significant because a smaller façade entails lower consumption of materials and fewer working hours required to complete the project. In a long-term management perspective, a smaller façade area reduces maintenance costs and exposes a smaller area to cold, which reduces the building's total energy consumption.
Supporting concrete structure with flooring units and concrete separating walls between apartments and lightweight external wall units.
K-Fastigheter's Apartment Blocks are square-footprint multi-family dwellings which can be constructed with heights of four to ten stories. The Apartment Blocks have four apartments on each floor: two with one bedroom, living room and kitchen totaling 62 square meters and two with two bedrooms, living room and kitchen totaling 71 square meters. All apartments are equipped with spacious 27 square-meter balconies facing two directions. The Apartment Block is particularly suited for construction on difficult terrain, and multiple designs are available for the ground floor. On plots with uneven terrain, the ground floor can be constructed to include a semi-basement. The Apartment Blocks can also be extensively adapted to meet the different requirements set for different building rights regarding story height, any premises, internal or external refuse rooms and storage rooms for the apartments. K-Fastigheter has continued to develop the Apartment Block concept on the basis of this experience, resulting in the concept Apartment Block Plus. Apartment Block Plus is a rectangular structure containing six apartments per story. Apartment Block Plus is a hybrid, which allows for more choice, and can be built as a freestanding apartment block, or as two buildings connected at the gables, which creates a structure similar to K-Fastigheter's Lateral Low-rise housing units.
The Apartment Block is K-Fastigheter's concept building with the highest degree of prefabrication, where the structural elements already include complete electrical mains and drain vaults. The Apartment Block has also been designed specifically for costefficient long-term property management, including wall structures that provide access to all drain stacks from the staircase, which makes it possible to replace drain stacks without requiring tenants to move out. Thanks to innovative construction, a high degree of pre fabrication and balcony constructions that remove the need for scaffolding, the Apartment Block construction process is very time effective.
Entirely concrete structure with sandwich exterior walls, uniform walls separating apartments and floor units. The roof is available in three options: pent, pitched or hipped. The façade color can be individualized and there is a selection of balcony railings to choose from.
Kristianstad
On 30 April 2020, K-Fastigheter took possesion of the second of the two phases of the Folkparken neighborhood in central Växjö. The property totals 13,091 square meters distributed over 171 apartments with a total rental value of some SEK 24.2 million. The acquisition was made through the Boro Group, and Peab has been responsible for construction. Stage two encompasses 7,441 square meters distributed between 101 apartments with a rental value of approximately SEK 14.1 million. Tenants will move in gradually between May and September 2020.
On Maltgatan in central Hässleholm, K-Fastigheter has acquired the residential properties Turbanen 2 and Turbanen 3 with a total of 2,040 square meters distributed over 30 apartments. The buildings were constructed in 1944 and have been renovated gradually. The ambition is to upgrade the apartments at a pace with tenants' gradually relocating, in accordance with K-Fastigheter's renovation program K-Fast 2.0. Rental value SEK 2.1 million. The purchase price was SEK 31.0 million. Handover 30 September 2020.
At Skjeberg Alle in Høje-Taastrup, some 2o km west of central Copenhagen, K-Fastigheter has acquired Høje-Taastrup 4ee & 4ef. The property is located in an area with new-build rental and tenant-owner apartments close to retail services and with good transport links to central Copenhagen. A total of 36 terraced house apartments over 3,600 square meters will be built on the property, with construction carried out by Borohus Danmark ApS. Handover will take place upon completion, no later than 1 October 2021. Estimated rental value approximately DKK 5.9 million. Purchase price approximately DKK 110.0 million.
At Hovrätten 20 in Kristianstad, where K-Fastigheter already has a commercial property, K-Fastigheter has built 17 new apartments over a total of 1,039 square meters. Rental value SEK 1.9 million. Peab has been responsible for construction and tenants started moving in on 1 May 2020.
In the T4 area in Hässleholm, on the property Hässleholm Intendenten 4 & 5, K-Fastigheter completed 21 new Low Rise apartments over a total of 1,701 square meters. Rental value SEK 2.7 million. Construction was carried out by K-Fastigheter and tenants moved in on 1 June 2020. After completion, K-Fastigheter owns 124 apartments in the T4 area, of which 72 Low Rise apartments.
In Tygelsjö, 1o km south of central Malmö, K-Fastigheter, in collaboration with SkåneVärden, completed 30 Low Rise apartments on behalf of tenant-owner association Tygelsjö Ängspark. The project was K-Fastigheter's only remaining tenant-owner project and all tenantowner rights were sold upon handover in June 2020.
At Dirigenten 1 and Sångaren 1 in Ödåkra just north of Helsingborg, close to Väla shopping center and with good transport links to Helsingborg, K-Fastigheter will construct 15 Low-Rise apartments with a rental value of approximately SEK 2.3 million. Tenants are scheduled to move in during September 2021.
At Hällan 1 in central Hässleholm next to the central station, K-Fastigheter will build 38 Apartment Block apartments over a total of 2,527 square meters with a rental value of some SEK 4.4 million. Tenants are scheduled to move in during September 2021.
At Hässjan 1 and Högaffeln 1 at Elinegård in Malmö, adjacent to the ongoing construction project Höfånget 1 and close to amenities such as Hyllie train station and Emporia shopping center, K-Fastigheter will construct 62 Lateral Low-Rise apartments over a total of 3,822 square meters with a rental value of some SEK 8.5 million. Tenants are scheduled to move in during July 2022.
In Vallensbæk Strand, just south of Copenhagen, with good transport links and next to the sea, K-Fastigheter will construct 95 Apartment Block apartments over a total of 7,747 square meters with a rental value of some SEK 19.5 million. Tenants are scheduled to move in during December 2021.
At Trollet 1 in Telestad just south of Växjö, K-Fastigheter, in collaboration with Skanska/BoKlok, will build 48 apartments over a total of 3,403 square meters with a rental value of some SEK 5.7 million. Exterior standard according to Skanska/BoKlok's concept and interior standard according to K-Fastigheter's concept. Tenants are scheduled to move in during December 2021.
K-Fastigheter is continuing construction in the T4 area in Hässleholm, building 38 Low-Rise apartments in the Kokhuset 1 property. Construction encompasses a total of 2,808 square meters with a rental value of some SEK 4.6 million. Tenants are scheduled to move in during April 2022.
In part of Sätra 108:29 in Gavlehov in Gävle, next to Gävle horse racing track, K-Fastigheter, in collaboration with Skanska/BoKlok, will construct 60 apartments over a total of 3,876 square meters with a rental value of some SEK 7.0 million. Tenants are scheduled to move in during October 2021.
| (SEK million) | 2020 Apr–Jun |
2019 Apr–Jun |
2020 Jan–Jun |
2019 Jan–Jun |
Rolling 4 quarters 2019 Jul– 2020 Jun |
2019 Jan–Dec |
|---|---|---|---|---|---|---|
| Rental income | 49.0 | 38.6 | 96.8 | 71.6 | 181.9 | 156.8 |
| Project and contracting sales | 4.8 | 6.2 | 9.3 | 7.7 | 30.3 | 28.6 |
| Other operating income | 0.1 | 0.1 | 0.3 | 0.3 | 1.8 | 1.9 |
| Net sales | 53.8 | 44.8 | 106.4 | 79.6 | 214.1 | 187.3 |
| Operations | -6.9 | -5.0 | -15.8 | -11.6 | -27.7 | -23.5 |
| Maintenance | -2.3 | -0.4 | -4.2 | -1.5 | -10.2 | -7.5 |
| Property tax | -0.8 | -0.9 | -1.8 | -1.3 | -4.1 | -3.6 |
| Property administration | -4.5 | -3.2 | -10.0 | -6.8 | -18.2 | -15.0 |
| Property management costs | -14.5 | -9.6 | -31.8 | -21.1 | -60.2 | -49.5 |
| Project and contracting costs | -3.6 | -7.7 | -7.5 | -9.5 | -24.9 | -26.8 |
| Gross profit | 35.8 | 27.6 | 67.1 | 49.0 | 129.0 | 111.0 |
| of which, gross profit from property management (operating surplus) | 34.5 | 29.1 | 64.9 | 50.8 | 121.4 | 107.3 |
| Of which, gross profit from project and contracting operations | 1.3 | -1.6 | 2.1 | -1.8 | 7.6 | 3.7 |
| Central administration | -7.1 | -11.7 | -17.2 | -18.9 | -40.4 | -42.1 |
| Depreciation/amortization and impairment | -2.0 | -0.2 | -3.2 | -2.7 | -15.6 | -15.2 |
| Profit from participations in Group, associated and jointly controlled companies | 4.2 | 39.8 | 3.7 | 41.4 | 23.3 | 61.0 |
| Net interest income | -11.9 | -8.5 | -23.1 | -15.8 | -42.6 | -35.3 |
| Profit before changes in value | 18.9 | 47.0 | 27.3 | 52.9 | 53.7 | 79.3 |
| Of which, profit from property management | 19.5 | 16.7 | 35.0 | 27.8 | 60.1 | 52.9 |
| Change in value of investment properties | 136.4 | 70.8 | 257.8 | 118.4 | 479.2 | 339.8 |
| Changes in value of derivatives and other | -16.0 | -8.0 | -29.8 | -6.1 | -11.0 | 12.7 |
| Profit before tax | 139.3 | 109.9 | 255.3 | 165.3 | 521.9 | 431.8 |
| Tax on profit for the period | -27.6 | -19.9 | -51.3 | -31.9 | -85.9 | -66.5 |
| Profit for the period | 111.7 | 90.0 | 204.0 | 133.4 | 435.9 | 365.3 |
| Other comprehensive income | -0.4 | 0.0 | -0.4 | 0.0 | -0.4 | 0.0 |
| Comprehensive income for the period | 111.3 | 90.0 | 203.6 | 133.4 | 435.5 | 365.3 |
| Profit for the period attributable to | ||||||
| Parent Company's shareholders | 111.3 | 90.0 | 203.6 | 133.4 | 435.5 | 365.3 |
| Non-controlling interests | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Profit after tax per share, SEK/share | 3.28 | 3.60 | 6.01 | 5.34 | 14.40 | 14.14 |
The following profit and cash flow items relate to the period 1 January – 30June 2020. Comparative items relate to the corresponding period in the previous year. Balance Sheet items and comparative figures relate to the position at the end of the period in the current and previous year. All amounts are indicated in SEK million.
The impact of the Covid-19 pandemic on management, project and construction operations has been limited to date, and K-Fastigheter has not experienced any significant impact on its results of operations or financial position in the period up until the publication of this report. All construction projects in progress and existing planning applications have proceeded according to plan in the period, new construction has started without delays and rental income has only been marginally affected as the rental settlements reached to date mainly relate to temporary rent relief.
Net sales were SEK 53.8 million (44.8) in the second quarter and SEK 106.4 million (79.6) in the period. Rental income was SEK 49.0 million (38.6) in the second quarter, an increase of 35 percent in the period. Of the SEK 25.2 million increase of the period, 30 percent was derived from properties acquired in the period, 52 percent from rental income on completed properties, and 18 percent from increased rental income on comparable holdings.
| Rental income trend (SEK million) |
2020 Jan–Jun |
2019 Jan–Jun |
2019 Jan–Dec |
|---|---|---|---|
| Properties owned at start of the period | 76.2 | 41.8 | 133.0 |
| Completed properties | 13.0 | 13.7 | 12.9 |
| Acquired properties | 7.6 | 16.1 | 10.9 |
| Rental income | 96.8 | 71.6 | 156.8 |
During the second quarter, K-Fastigheter entered into a number of agreements with commercial tenants relating to rent relief. Rent relief totaled SEK 0.4 million and is repayable by 31 March 2021. The proportion of late payments increased marginally in the second quarter 2020. Of total announced rents for the second quarter 2020, 98.5 percent (98.8) had been paid as of 30 June 2020, against 99.1 percent (98.6) as of 31 March 2020.
At the end of the period, the letting ratio was 95.0 percent (97.9) and the average letting ratio during the period was 93.8 percent (97.2). The lower letting ratio in the period was primarily due to an ongoing project in Växjö acquired by K-Fastigheter in January 2020, with tenants moving in gradually during the spring. Although the letting ratio was zero as of the transfer date, it has increased gradually and the rate of completion is generally high. In those parts of the stocks that have been under management for a longer time, the financial letting ratio remains very high.
Income from project and construction operations amounted to SEK 207.9 million (126.6), of which SEK 198.2 million (119.0) related to construction for Group companies that has been capitalized for the Group's own purposes. Assignments for external clients accounted for SEK 9.6 million (7.7), representing the Group's final tenant-owner project. The change in year-on-year terms was partly due to increased construction activity, but also because more projects are in the late construction stages, where the rate of production is generally higher.
Property management costs totaled SEK 31.8 million (21.1) for the period, corresponding to an increase of 51 percent year-on-year. The increase was primarily attributable to costs relating to completed and acquired properties for the year, and to a lesser extent, 30 percent, to cost increases in comparable holdings, mainly due to full year effects. Property administration amounted to SEK 10.0 million (6.8) and mainly increased due to expanded organizational resources for managing the growing property portfolio. The surplus ratio for the period amounted to 67.1 percent (71.0), and the comparative figures were mainly affected by higher property administration costs and a lower financial letting ratio in the period.
Operating costs for management operations normally vary according to a seasonal pattern, where costs are higher in the first and fourth quarters compared to the rest of the year.
| Property cost trend (SEK million) |
2020 Jan–Jun |
2019 Jan–Jun |
2019 Jan–Dec |
|---|---|---|---|
| Properties owned at start of the period | -16.6 | -9.4 | -29.7 |
| Completed properties | -2.4 | -1.5 | -3.1 |
| Acquired properties | -2.8 | -3.4 | -1.8 |
| Direct property costs | -21.8 | -14.4 | -34.5 |
| Property administration | -10.0 | -6.8 | -15.0 |
| Property management costs | -31.8 | -21.1 | -49.5 |
Costs relating to the project and construction operations comprise direct project-related costs and fixed costs for the construction organization. The part of operations involving external construction has been reported in the Income Statement. Project and contracting operations for Group property management activities have been capitalized as work for the Group's own purposes and have been reported net in the Income Statement under 'Project and contracting costs'.
Costs for property administration and central administration for project and construction operations were reduced by relief granted for social security expenses. The relief amounted to SEK 1.1 million in the period March–June 2020.
Central administration, which includes company management, project development, IR/communications, HR, IT and finance, amounted to SEK 17.2 million (18.9) for the period. The increased cost was mainly due to efforts to strengthen central organization resources with the aim of preparing for future growth and other demands placed on a listed company. For the corresponding period 2019, central administration costs included SEK 7.2 million relating to the IPO completed in 2019. Costs in the period were positively affected by SEK 0.3 million in relief for social security expenses awarded for the period March–June 2020.
Write-downs in the period includes the scrapping of construction components in connection with the company's K-Fast 2.0 renovation program. Write-downs relating to expected credit losses were also included, and increased by SEK 0.6 million in the second quarter due to adjustments in the simplified (management overlay) and general methods (default rates). The aim is to make allowances for increased uncertainty resulting from the Covid-19 pandemic.
Profit from participations in Group and associated companies amounted to SEK 3.7 million (41.4), positively affected by SEK 3.9 million from the divestment of a tenant-owner project in Tygelsjö. All associated and jointly controlled companies are project companies where income is recognized when a project is completed. For the corresponding period in 2019, profit from shares in Group and associated companies was significantly affected by the distribution of assets in jointly owned Balder Skåne AB and profit in Novum Samhällsfastigheter AB, which divested a project in Falkenberg in the period.
Net interest income for the period amounted to SEK -23.1 million (-15.8). At the end of the period, the average interest rate was 1.85 percent (1.84), including the effects of interest rate derivatives. Interest expenses in the period were affected by increased interest-bearing liabilities relating to acquisition of investment properties and new construction, as well as a higher base rate in the period. Credit margins were stable in the period.
The interest coverage ratio for the period amounted to a multiple of 2.6 (2.8) and was adversely affected by lower net interest income, which was not fully offset by increased profit from property management.
Rental income amounted to SEK 19.5 million (16.7) for the period an increase of 17 and 26 percent respectively year-on-year. Profit from property management totaled SEK 1.03 per share (1.11), a reduction of 7 percent year-on-year. The decrease was mainly due to an increased number of shares following the IPO in November 2019. Profit from property management was positively affected by the continued sharp increase in rental income, and negatively affected by lower surplus ratio due to increased property administration costs, higher central costs and reduced net interest income. The increase in property administration and central administration is primarily due to changes in central organization aimed at meeting future growth and the requirements made on a listed company.
Unrealized value changes in investment properties for the period were SEK 257.8 million (118.4), distributed between SEK 53.6 million (47.1) for properties under management and SEK 204.3 million (71.3) for construction projects in progress.
Of unrealized changes in value for new construction in progress, properties completed during the period accounted for SEK 0.3 million (3.2). The remaining SEK 204.0 million (68.1) was attributable to properties under construction at the end of the period. At the end of the period the direct return requirement in the valuation of new construction in progress amounted to 3.97 percent (4.16).
Of unrealized changes in value for properties under management, SEK 19.9 million (38.3) related to acquisitions during the period. Of the remaining unrealized value changes in investment properties, improved net operating income contributed SEK 16.4 million (10.0), while changed valuation assumptions contributed SEK 17.2 million (-1.3). In total, the average direct return requirement for properties under management was 4.17 percent (4.41).
The average direct return requirement for the entire property portfolio, including undeveloped land, building rights and new construction in progress, amounted to 4.09 percent (4.31) at the end of the period. The fact that the average direct return requirement decreased in the period, despite the prevailing market uncertainty, should be seen in the light of K-Fastigheter's gradually changed property portfolio, focusing
on housing construction in attractive locations and a lower share of commercial premises. Of unrealized value changes for properties under management of SEK 53.6 million in the period, housing increased by SEK 65.3 million, and commercial premises and building rights decreased by SEK 11.8 million.
| Change in value (SEK million) |
2020 Jan–Jun |
2019 Jan–Jun |
2019 Jan–Dec |
|---|---|---|---|
| Change in net operating income | 16.4 | 10.0 | 26.5 |
| Construction projects in progress | 204.3 | 71.3 | 186.4 |
| Land and unutilized building rights | -4.7 | 0.0 | 12.7 |
| Change in return requirement | 21.9 | -1.3 | 51.2 |
| Acquisitions | 19.9 | 38.3 | 62.9 |
| Divestments | 0.0 | 0.0 | 0.0 |
| Total | 257.8 | 118.4 | 339.8 |
Value changes on derivatives and other items totaled SEK -29.8 million (-6.1) in the period, distributed over value changes in interest rate derivatives of SEK -25.7 million (-6.1) and unrealized exchange rate losses of SEK -4.1 million (0.0). Developments in the second quarter were primarily due to lower market rates, which had a negative impact on the market value of the Group's interest rate derivatives, and a stronger SEK, which had a negative impact on the Group's foreign net assets. The Group's derivatives consist of interest rate derivatives, intended to mitigate the Group's interest rate risk. The fair value of the Group's derivatives was SEK -38.5 million (-12.8) at the end of the period. The value change in interest rate derivatives does not affect cash flow and at maturity the value of the derivatives is always zero.
| Tax calculation, 30 Jun 2020 (SEK million) |
2020 Jan–Jun |
Base |
|---|---|---|
| Tax on profit before tax | 255.3 | |
| Tax rate, % | 21.4% | |
| Tax in accordance with applicable tax rate | -54.6 | 255.3 |
| Tax attributable to previous years | 0.0 | 0.0 |
| Effect of changed tax rates | 1% | -4.7 |
| Non-taxable income | 1.2 | -5.6 |
| Other unrecognized costs | 1.1 | -5.2 |
| Total | -51.3 | 239.7 |
| Reported in the Income Statement | -51.3 | |
|---|---|---|
| Percentage of profit before tax, % | 20.1% |
| Total | 32.1 | 156.0 |
|---|---|---|
| Other items | 0.8 | 4.1 |
| Interest-rate derivatives | 7.9 | 38.5 |
| Properties | 0.1 | 0.7 |
| Net interest income | 10.4 | 50.5 |
| Tax-loss carry forwards | 12.8 | 62.2 |
| Total | 369.5 | 1,793.6 |
|---|---|---|
| Other items | 0.5 | 2.3 |
| Untaxed reserves | 0.7 | 3.4 |
| Properties, under construction | 72.7 | 353.0 |
| Properties, completed | 295.6 | 1,434.9 |
Current tax for the year amounted to SEK 1.2 million (9.9). Deferred tax amounted to SEK 50.1 million (21.9), affected by unrealized value changes in properties totaling SEK 257.8 million (118.4). The relatively higher tax rate for the comparative period in 2019 was due to a conservative assessment of the effects of new regulations in 2019 for taxdeductible interest expenses.
Tax has been calculated at 21.4 percent on current taxable profit. Deferred tax liabilities and tax receivables have been calculated at the lower tax rate of 20.6 percent, applicable from 2021, since K-Fastigheter estimates that the deferred tax will not be settled until 2021 or later. The new tax rules also entail certain restrictions on the tax deductible for interest expenses, which is expected to entail an unutilized net interest deductible of approximately SEK 19.3 million for the period. Since this effect primarily affects Group companies with properties under construction during the year (with low or zero earnings relative to interest on construction credits), and because future income from these properties is expected to be used to make deductions for interest expenses, the tax deductible for interest expenses has been reported as a deferred tax asset.
The Balance Sheet for 30 June 2020 states the net value of the deferred tax assets and deferred tax liabilities.
Other comprehensive income includes translation differences relating to K-Fastigheter's foreign operations, which totaled SEK -0.4 million (0) in the period.
For the second quarter 2020, comprehensive income amounted to SEK 111.3 million (90.0). Comprehensive income for the period amounted to SEK 203.6 million (133.4) and earnings per share amounted to SEK 6.01 (5.34).
| 2020 | 2019 | 2019 | |
|---|---|---|---|
| (SEK million) | 30 Jun | 30 Jun | 31 Dec |
| Assets | |||
| Tangible non-current assets | |||
| Investment properties | 5,751.5 | 3,704.8 | 4,396.7 |
| Business properties | 19.7 | 7.5 | 19.9 |
| Equipment | 16.2 | 9.3 | 14.0 |
| Total tangible non-current assets | 5,787.4 3,721.5 4,430.6 | ||
| Financial non-current assets | |||
| Profit from participations in associated and jointly controlled companies and other non-current receivables |
47.6 | 24.1 | 43.8 |
| Total financial non-current assets | 47.6 | 24.1 | 43.8 |
| Total non-current assets | 5,834.9 3,745.6 | 4,474.5 | |
| Current assets | |||
| Inventories | 0.2 | 0.3 | 0.2 |
| Accounts receivable | 6.0 | 41.9 | 43.6 |
| Other receivables | 40.4 | 17.5 | 29.6 |
| Prepaid costs and accrued income | 96.7 | 19.5 | 25.5 |
| Current investments | 0.0 | 38.6 | 0.0 |
| Cash and cash equivalents | 274.8 | 49.7 | 779.0 |
| Total current assets | 418.2 | 167.4 | 877.9 |
| Total assets | 6,253.1 3,913.0 | 5,352.3 |
| 2020 | 2019 | 2019 | |
|---|---|---|---|
| (SEK million) | 30 Jun | 30 Jun | 31 Dec |
| Equity and liabilities | |||
| Equity | |||
| Share capital | 54.2 | 0.1 | 54.2 |
| Other capital contributions | 877.9 | 0.0 | 877.9 |
| Profit brought forward including the profit for the period | 1,510.0 | 1,114.3 | 1,306.4 |
| Total equity | 2,442.0 | 1,114.3 2,238.5 | |
| Non-current liabilities | |||
| Deferred tax liability | 337.4 | 248.1 | 288.9 |
| Long-term interest-bearing liabilities | 2,868.6 | 1,853.0 | 2,281.3 |
| Derivative instruments | 38.5 | 31.7 | 12.8 |
| Other provisions and non-current liabilities | 8.7 | 12.9 | 18.1 |
| Total non-current liabilities | 3,253.2 2,145.7 2,601.0 | ||
| Current liabilities | |||
| Current interest-bearing liabilities | 446.8 | 531.7 | 363.1 |
| Accounts payable | 61.5 | 36.5 | 57.6 |
| Current tax liabilities | 0.0 | 5.6 | 5.7 |
| Other current liabilities | 19.0 | 23.6 | 23.2 |
| Accrued costs and prepaid income | 30.6 | 55.7 | 63.3 |
| Total current liabilities | 557.9 | 653.0 | 512.9 |
| Total liabilities | 3,811.1 2,798.7 3,113.9 | ||
| Total equity and liabilities | 6,253.1 3,913.0 5,352.3 |
| (SEK million) | Number of shares outstanding |
Share capital |
Other capital contributions |
Profit brought forward |
Total Equity |
|---|---|---|---|---|---|
| Equity, as per 1 January 2019 | 500 | 0.1 | 0.0 | 981.1 | 981.2 |
| Comprehensive income for the period | 133.4 | 133.4 | |||
| Equity, as per 30 June 2019 | 500 | 0.1 | 0.0 | 1,114.2 | 1,114.3 |
| Comprehensive income for the period | 231.9 | 231.9 | |||
| Bonus issue and share split | 24,999,500 | 39.9 | -39.9 | 0.0 | |
| Capital contributions after deduction of transaction costs | 8,888,528 | 14.2 | 877.9 | 892.1 | |
| Equity, as per 31 December 2019 | 33,888,528 | 54.2 | 877.9 | 1,306.4 | 2,238.5 |
| Comprehensive income for the period | 203.6 | 203.6 | |||
| Closing balance as per 30 June 2020 | 33,888,528 | 54.2 | 877.9 | 1,510.0 | 2,442.0 |
The Extraordinary General Meeting on 19 August 2019 approved a bonus issue and share split 50,000:1. Other capital contributions for the 2019 fiscal year are recognized net of transaction costs of SEK 31.5 million related to a new share issue in connection with the launch of the company's shares on the Nasdaq Stockholm exchange in November 2019.
At the end of the period, the value of investment properties totaled SEK 5,751.5 million (4,396.7), distributed over completed investment properties at SEK 4,076.3 million (3,606.9), undeveloped land and building rights at SEK 486.4 million (335.1), site leases at SEK 20.3 million (7.0) and construction in progress at SEK 1,168.6 million (447.7). During the period, SEK 377.5 million (254.3) was invested in new construction, extensions and remodeling. During the period, acquisitions totaled SEK 708.2 million (314.0). No significant disposals (0.0) were conducted during the period.
| 2020 | 2019 | 2019 | |
|---|---|---|---|
| Investment properties (SEK million) | Jan–Jun | Jan–Jun | Jan–Dec |
| Opening carrying amount | 4,396.7 | 3,018.1 | 3,018.1 |
| +Acquisitions | 708.2 | 314.0 | 557.7 |
| + New construction | 364.8 | 253.6 | 499.7 |
| + Extensions and rebuilds | 12.7 | 0.7 | 5.9 |
| – Divestments | -1.0 | 0.0 | -2.3 |
| – Reclassification as business property | 0.0 | 0.0 | -9.3 |
| – Other reclassifications | 12.2 | 0.0 | -12.9 |
| +/- Unrealized changes in value | 257.8 | 118.4 | 339.8 |
| of which, completed investment properties | 58.2 | 47.1 | 140.7 |
| of which, undeveloped land and building rights | -4.7 | 0.0 | 12.7 |
| of which, construction in progress | 204.3 | 71.3 | 186.4 |
| Closing carrying amount | 5,751.5 | 3,704.8 | 4,396.7 |
| of which, completed investment properties | 4,076.3 | 2,737.6 | 3,606.9 |
| of which, undeveloped land | 486.4 | 249.3 | 335.1 |
| of which, site leaseholds | 20.3 | 0.0 | 7.0 |
| of which, construction in progress | 1,168.6 | 717.8 | 447.7 |
On submission of this Interim Report, information has been obtained from independent valuation experts, among others, to confirm the positions adopted by the company regarding fair value as of 30 June 2020. There is no information to indicate that this position should be revised and transactions during the spring, even if fewer compared to the previous year, confirm that the trend towards lower direct return requirement for housing continues. There is uncertainty regarding the long-term effects, and will be further commented in future reports. For further information on K-Fastigheter's valuation principles, see the 2019 Annual Report (Valuation section or Note 16 Investment properties).
At the end of the period, cash and cash equivalents amounted to SEK 274.8 million (779.0). In addition, K-Fastigheter has an unutilized overdraft facility of SEK 90.0 million (90.0).
At the end of the period, consolidated equity attributable to the Parent Company's shareholders amounted to SEK 2,442.0 million (2,238.5), corresponding to SEK 72.06 per share (66.05). The increase is explained by the profit for the period of SEK 203.6 million (133.4).
At the end of the period, the long-term net asset value (NAV) amounted to SEK 2,818.0 million (2,540.2), corresponding to SEK 83.15 per share (74.96). The long-term net asset value per share increased by 11 percent compared with 31 December 2019.
At the end of the period, consolidated interest-bearing liabilities amounted to SEK 3,315.4 million (2,644.3), of which SEK 446.8 million (363.1) was classified as current interest-bearing liabilities. Interestbearing liabilities are distributed between first mortgages for completed investment properties of SEK 2,681.1 million (2,331.9), construction credits of SEK 611.9 million (303.2), leasing liabilities of SEK 22.5 million (9.2) and operating credits of SEK 0.0 million (0.0). The loan-tovalue ratio for the Group's completed investment properties amounted to 53.4 percent (40.2). The increase in interest-bearing liabilities is primarily explained by the financing of ongoing new construction, as well as acquisitions.
At the end of the period, the Group had contracted credit agreements of SEK 4,226.9 million (3,239.7), of which SEK 2,681.1 million (2,331.9) related to the financing of completed investment properties, of which SEK 403.5 million (322.0) mature for renegotiation within the next 12 months. Beyond the financing of completed investment properties, contracted credit agreements comprise building credits of SEK 1,455.8 million (817.8) and overdraft facilities and covered loans of SEK 90.0 million (90.0). At the end of the period, construction credits, and overdraft facilities and covered loans had been utilized in the amount of SEK 611.9 million (303.2) and SEK 0.0 million (0.0) respectively. On 30 June 2020, the Group's total contracted and unutilized credit facilities amounted to SEK 90.0 million (90.0), excluding construction credits.
As of 30 June 2020, the average credit term for the Group's interest bearing liabilities, relating to completed investment properties and operational premises was 2.6 years (3.2).
K-Fastigheter currently works exclusively with variable interest rate loans. In order to manage the interest rate risk, interest rate derivatives, primarily interest rate swaps, are used to adjust the interest period. The swap portfolio had a total nominal value of SEK 1,707.0 million (1,207.0) at the end of the period, of which SEK 200.0 million comprises swaps with a future start date as of 31 December 2020. At the end of the period, the fair value of the derivative portfolio was SEK -38.5 million (-12.8).
| 30 Jun 2020 30 Jun 2019 |
31 Dec 2019 | |||||
|---|---|---|---|---|---|---|
| Net asset value (SEK million) | SEK million | SEK/share | SEK million | SEK/share | SEK million | SEK/share |
| Equity according to the Balance Sheet | 2,442.0 | 72.06 | 1,114.3 | 44.57 | 2,238.5 | 66.05 |
| Reversal | ||||||
| Derivatives according to the Balance Sheet | 38.5 | 1.14 | 31.7 | 1.27 | 12.8 | 0.38 |
| Deferred tax liability according to the Balance Sheet | 369.5 | 10.90 | 248.1 | 9.92 | 310.3 | 9.16 |
| Deduction | ||||||
| Deferred tax assets according to the Balance Sheet | 32.1 | 0.95 | 0.0 | 0.00 | 21.4 | 0.63 |
| Long-term net asset value (NAV) | 2,818.0 | 83.15 | 1,394.1 | 55.76 | 2,540.2 | 74.96 |
Credit and interest maturity structure, 30 Jun 2020 (excl. construction credits and overdraft facilities)
| Interest maturity | Credit maturity | |||
|---|---|---|---|---|
| Term | Amount Average interest | Credit agreements | Utilized | |
| 0–1 years | 974.1 | 1.57% | 403.5 | 403.5 |
| 1–2 years | 7.0 | 3.47% | 264.9 | 264.9 |
| 2–3 years | 100.0 | 1.96% | 973.3 | 973.3 |
| 3–4 years | 200.0 | 1.88% | 576.5 | 576.5 |
| 4–5 years | 300.0 | 1.83% | 463.0 | 463.0 |
| > 5 years | 1,100.0 | 2.02% | 0.0 | 0.0 |
| Total | 2,681.1 | 1.85% | 2,681.1 | 2,681.1 |
Maturity structure derivatives (SEK million)
| Maturity interest rate derivatives |
Interest rate derivatives |
Forward-starting interest rate derivatives |
Interest | Value |
|---|---|---|---|---|
| 0–1 years | 0.0 | 0.0 | ||
| 1–2 years | 7.0 | 0.0 | 2.01% | -0.2 |
| 2–3 years | 100.0 | 0.0 | 0.50% | -1.2 |
| 3–4 years | 200.0 | 0.0 | 0.42% | -2.8 |
| 4–5 years | 300.0 | 0.0 | 0.37% | -4.3 |
| > 5 years | 900.0 | 200.0 | 0.56% | -30.1 |
| Total | 1,507.0 | 200.0 | -38.5 |
The average interest period on the Group's interest-bearing liabilities related to investment and business properties was 4.2 years (3.3), and the average interest rate was 1.85 percent (1.90), including the effects of interest rate derivatives, and 1.57 percent (1.62) excluding the effects of interest rate derivatives. The total proportion of variable interest rates in relation to interest bearing liabilities related to investment and business properties was 44 percent (48) and the interest rate sensitivity in the event of a one percentage point shift in loan rates amounted to SEK 11.7 million (11.2). All the above KPIs for interest rate risk, with the exception of the average interest period, have been calculated excluding swaps with a future start date.
K-Fastigheter's financing as of 30 June 2020 was exclusively comprised of borrowing from Nordic banks. Prior to the submission of this Interim Report, due to the Covid-19 pandemic K-Fastigheter has continuously gathered information from its banks to confirm the positions adopted as of 30 June 2020. The Group has continued strong support from its partner banks and assess that the supply of capital remains sufficient. For more detailed information on K-Fastigheter's financial risks and finance policy, see the 2019 Annual Report (Note 21 Financial risks and finance policies).
During the period, the Group expensed leasing fees of SEK 0.1 million (0.0), which were attributable to low-value leases. The Group has no short-term leases or variable leasing fees.
| Right-of-use assets | |||||
|---|---|---|---|---|---|
| (SEK million) | Site leaseholds Vehicles |
IT equipment Total |
Leasing liabilities |
||
| As per 1 January 2020 | 7.0 | 2.1 | 0.0 | 9.2 | 9.2 |
| Additional agreements | 0.0 | 0.3 | 0.6 | 0.9 | 0.9 |
| Amortization and depreciation | 0.0 | -0.5 | -0.1 | -0.6 | 0.0 |
| Terminated agreements | 0.0 | -0.1 | 0.0 | -0.1 | -0.1 |
| Revaluations of agreements | 13.3 | 0.0 | 0.0 | 13.2 | 13.2 |
| Interest costs | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Leasing fees | 0.0 | 0.0 | 0.0 | 0.0 | -0.7 |
| As per 30 June 2020 | 20.3 | 1.7 | 0.5 | 22.5 | 22.5 |
Group management currently identifies the following three business areas as its operating segments: Property Management, Project Development and Construction. The operating segments are monitored by the Group's CEO, the Board of Directors and the management team.
| 2020 Jan–June | Property | Project | |||
|---|---|---|---|---|---|
| Income Statement (SEK million) | Management | Development Construction | Other | Group | |
| Rental income | 96.8 | 0.0 | 0.0 | 0.0 | 96.8 |
| Other operating income | 0.0 | 0.0 | 9.6 | 0.0 | 9.6 |
| Operating costs | -31.8 | 0.0 | -7.5 | 0.0 | -39.3 |
| Gross profit | 64.9 | 0.0 | 2.1 | 0.0 | 67.1 |
| Central administration costs | -5.7 | -5.7 | -5.7 | 0.0 | -17.2 |
| Depreciation/amortization and impairment |
-1.1 | -1.1 | -1.1 | 0.0 | -3.2 |
| Profit from participations in associated companies* |
0.0 | 0.0 | 0.0 | 3.7 | 3.7 |
| Net interest income | -23.1 | 0.0 | 0.0 | 0.0 | -23.1 |
| Profit before changes in value |
35.0 | -6.8 | -4.6 | 3.7 | 27.3 |
| Value change, properties | 53.6 | 204.3 | 0.0 | 0.0 | 257.8 |
| Changes in value of derivatives | 0.0 | 0.0 | 0.0 | -29.8 | -29.8 |
| and other | |||||
| Profit before tax | 88.6 | 197.5 | -4.6 -26.1 | 255.3 | |
| Tax | -10.4 | -39.7 | 0.0 | -1.2 | -51.3 |
| Profit for the period | 78.2 | 157.8 | -4.6 -27.4 | 204.0 | |
| As per 30 June 2020 | Property | Project | |||
| Balance Sheet( SEK million) | Management | Development Construction | Other | Group | |
| Non-current assets | 4,606.6 | 1,168.6 | 19.7 | 40.1 | 5,834.9 |
| Current assets | 97.9 | 0.0 | 5.2 | 315.1 | 418.2 |
| Total assets | 4,704.5 | 1,168.6 | 24.9 | 355.2 | 6,253.1 |
| Non-current liabilities | 2,616.3 | 611.9 | 1.8 | 23.2 | 3,253.3 |
| Current liabilities | 483.2 | 0.0 | 52.8 | 21.9 | 557.9 |
| Total liabilities | 3,099.6 | 611.9 | 54.5 | 45.1 3,811.2 | |
| 2019 Jan–June Income Statement (SEK million) |
Property Management |
Project Development Construction |
Other | Group | |
| Rental income | 71.6 | 0.0 | 0.0 | 0.0 | 71.6 |
| 0.3 | 0.0 | 7.7 | 0.0 | 8.0 | |
| Other operating income Operating costs |
-21.1 | 0.0 | -9.5 | 0.0 | -30.6 |
| Gross profit | 50.8 | 0.0 | -1.8 | 0.0 | 49.0 |
| Central administration costs | -6.3 | -6.3 | -6.3 | 0.0 | -18.9 |
| Depreciation/amortization and impairment |
-0.9 | -0.9 | -0.9 | 0.0 | -2.7 |
| Profit from participations in associated companies* |
0.0 | 0.0 | 0.0 | 18.4 | 18.4 |
| Net interest income | -15.8 | 0.0 | 0.0 | 0.0 | -15.8 |
| Profit before changes in value |
27.8 | -7.2 | -9.0 | 18.4 | 30.0 |
| Value change, properties | 70.0 | 71.3 | 0.0 | 0.0 | 141.3 |
| Changes in value of derivatives and other |
-25.5 | 0.0 | 0.0 | 19.4 | -6.1 |
| 72.3 | 64.1 | -9.0 | 37.9 | 165.4 | |
| -14.4 | -14.7 | 0.0 | -2.8 | -31.9 | |
| 57.9 Property |
49.4 Project |
-9.0 | 35.1 | 133.5 | |
| Management | Development Construction | Other | Group | ||
| Profit before tax Tax Profit for the period As per 30 June 2019 Balance Sheet (SEK million) Non-current assets |
3,002.4 | 717.8 | 17.4 | 8.1 | 3,745.6 |
| Current assets | 40.4 | 0.0 | 35.1 | 91.9 | 167.4 |
| Total assets | 3,042.7 | 717.8 | 52.5 100.0 3,913.0 | ||
| Non-current liabilities | 1,190.7 | 468.7 | 3.5 | 482.8 | 2,145.7 |
* Profit from participations in Group, associated and jointly controlled companies.
Total liabilities 1,781.1 468.7 44.9 504.0 2,798.7
| Consolidated Cash Flow Statement (SEK million) | 2020 Apr–Jun |
2019 Apr–Jun |
2020 Jan–Jun |
2019 Jan–Jun |
2019 Jan–Dec |
|---|---|---|---|---|---|
| Operating activities | |||||
| Gross profit adjusted for central administration, depreciation/amortization and impairment | 26.6 | 15.6 | 46.7 | 27.4 | 53.7 |
| Adjustment for items not affecting cash flow | 2.0 | -0.2 | 3.2 | 2.3 | 15.2 |
| Dividend received | 0.0 | 116.4 | 0.0 | 116.4 | 37.1 |
| Net interest income | -11.9 | -8.5 | -23.1 | -15.8 | -35.3 |
| Tax paid/received | -0.6 | -2.1 | -1.2 | -7.6 | -1.2 |
| Cash flow from operating activities before changes in working capital | 16.1 | 121.2 | 25.6 | 122.7 | 69.4 |
| Change in operating receivables | 32.9 | -6.3 | -44.4 | -28.0 | -47.5 |
| Change in operating liabilities | -32.6 | -16.5 | -38.7 | -0.8 | 27.6 |
| Cash flow from operating activities | 16.4 | 98.4 | -57.5 | 93.9 | 49.5 |
| Investing activities | |||||
| Investments in Group, associated and jointly controlled companies | -3.2 | -0.1 | -4.9 | -0.1 | -0.1 |
| Property investments | -230.7 | -274.8 | -528.3 | -279.7 | -450.9 |
| Investments in machinery and equipment | -2.4 | -1.6 | -3.6 | -2.0 | -6.7 |
| Investments in construction in progress | -347.9 | -133.1 | -572.2 | -265.7 | -513.6 |
| Disposals of current investments | 0.0 | 72.3 | 0.0 | 72.3 | 110.9 |
| Investments in other financial non-current assets | 0.0 | -5.3 | 0.0 | -5.3 | -5.4 |
| Disposals of properties | 0.5 | 0.0 | 0.5 | 0.0 | 2.3 |
| Cash flow from investing activities | -583.7 | -342.5 | -1,108.5 | -480.3 | -863.5 |
| Financing activities | |||||
| Borrowings | 396.3 | 295.8 | 687.1 | 405.0 | 689.2 |
| Loan amortizations | -14.5 | -14.3 | -25.5 | -21.5 | -41.1 |
| Capital contributions | 0.0 | 0.0 | 0.0 | 0.0 | 892.1 |
| Dividend paid | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Cash flow from financing activities | 381.8 | 281.5 | 661.7 | 383.4 | 1,540.3 |
| Cash flow for the period | -185.5 | 37.4 | -504.4 | -3.0 | 726.3 |
| Translation difference | 0.2 | 0.0 | 0.2 | 0.0 | 0.0 |
| Opening cash and cash equivalents | 460.0 | 12.3 | 779.0 | 52.7 | 52.7 |
| Closing cash and cash equivalents | 274.8 | 49.7 | 274.8 | 49.7 | 779.0 |
Cash and cash equivalents in the Cash Flow Statement refer in their entirety to cash and bank balances.
| (SEK million) | 2020 Jan–Jun |
2019 Jan–Jun |
2019 Jan–Dec |
|---|---|---|---|
| Operating income | |||
| Net sales | 0.0 | 0.1 | 0.3 |
| Total operating income | 0.0 | 0.1 | 0.3 |
| Operating costs | |||
| Other external costs | -9.8 | -14.1 | -31.8 |
| Personnel costs | -8.0 | -5.4 | -11.7 |
| Amortization and depreciation | -0.1 | 0.0 | -0.1 |
| Total operating costs | -17.9 | -19.6 | -43.6 |
| Gross profit | -17.9 | -19.5 | -43.3 |
| Profit from financial items | |||
| Profit from participations in Group, associated and jointly controlled companies |
-0.1 | 101.0 | 124.0 |
| Net financial items | -31.0 | -31.3 | -12.2 |
| Profit after financial items | -49.1 | 50.2 | 68.5 |
| Appropriations | 0.0 | 0.0 | 26.8 |
| Profit before tax | -49.1 | 50.2 | 95.3 |
| Tax on profit for the period | 5.3 | 10.9 | 12.4 |
| Comprehensive income for the period | -43.7 | 61.1 | 107.6 |
The Parent Company owns no properties of its own. The Parent Company maintains Group-wide functions for administration, property management, financing and project development.
Sales in the Parent Company primarily relate to services invoiced to Group companies. The Parent Company's gross profit/loss for the period was SEK -17.9 million (-19.5). For the corresponding period 2019, the Parent Company costs included SEK 7.2 million relating to the IPO completed in 2019. The increase in gross profit/loss is due to increased costs in relation to strengthening the central organization to meet future growth and the requirements made on a listed company.
Parent Company profit/loss before tax was SEK -49.1 million (50.2) and, in addition to increased costs for central organizational resources, was also affected by increased interest expenses as a majority of the Group's interest-bearing debt is now financed via the Parent Company. The Parent Company's profit/loss before tax was also affected by unrealized changes in the value of derivatives totaling SEK -25.8 (-25.5) and exchange rate effects related to the Group's Danish assets of SEK -4.2 million (0.0), which have been included in the parent company's net financial items. Profit for the corresponding period in 2019 was significantly affected by the distribution of the assets in Balder Skåne AB.
As of 30 Jun 2020, in addition to cash and cash equivalents, the Parent Company's assets and liabilities consisted primarily of shares in Group companies, as well as receivables from them and liabilities towards them. At the end of the period, cash and cash equivalents in the Parent Company amounted to SEK 226.6 million (771.2).
| Assets (SEK million) | 2020 30 Jun |
2019 30 Jun |
2019 31 Dec |
|---|---|---|---|
| Tangible non-current assets | |||
| Equipment | 0.4 | 0.1 | 0.5 |
| Total tangible non-current assets | 0.4 | 0.1 | 0.5 |
| Financial non-current assets | |||
| Participations in Group companies | 829.1 | 501.7 | 626.4 |
| Receivables from Group companies | 856.6 | 406.3 | 865.4 |
| Participations in associated companies | 0.1 | 0.2 | 0.1 |
| Deferred tax receivables | 18.9 | 12.1 | 13.6 |
| Total financial non-current assets | 1,704.6 | 920.3 | 1,505.5 |
| Total non-current assets | 1,705.0 | 920.4 | 1,506.0 |
| Current assets | |||
| Receivables from Group companies | 628.8 | 126.1 | 173.5 |
| Receivables from associated companies | 10.7 | 15.5 | 16.6 |
| Current tax receivables | 1.3 | 0.8 | 0.8 |
| Other current receivables | 35.2 | 17.4 | 22.5 |
| Cash and cash equivalents | 266.6 | 44.0 | 771.2 |
| Total current assets | 942.6 | 203.8 | 984.7 |
| Total assets | 2,647.5 | 1,124.2 | 2,490.7 |
| Equity and liabilities (SEK million) | 2020 30 Jun |
2019 30 Jun |
2019 31 Dec |
|---|---|---|---|
| Equity | |||
| Restricted equity | 54.2 | 0.1 | 54.2 |
| Unrestricted equity | 952.6 | 112.0 | 996.4 |
| Total equity | 1,006.8 | 112.0 | 1,050.6 |
| Non-current liabilities | |||
| Liabilities to Group companies | 0.0 | 26.8 | 0.0 |
| Long-term interest-bearing liabilities | 1,030.2 | 421.0 | 867.5 |
| Derivative instruments | 38.3 | 31.3 | 12.5 |
| Other provisions and non-current liabilities | 6.4 | 12.8 | 12.8 |
| Total non-current liabilities | 1,074.9 | 491.8 | 892.8 |
| Current liabilities | |||
| Current interest-bearing liabilities | 16.3 | 8.5 | 17.9 |
| Accounts payable | 0.4 | 3.6 | 2.4 |
| Liabilities to Group companies | 539.1 | 497.2 | 514.1 |
| Liabilities to associated companies | 0.0 | 0.8 | 0.0 |
| Other current liabilities | 6.9 | 8.7 | 6.9 |
| Accrued costs and prepaid income | 3.1 | 1.5 | 6.0 |
| Total current liabilities | 565.9 | 520.3 | 547.3 |
| Total liabilities | 1,640.7 | 1,012.1 | 1,440.1 |
| Total equity and liabilities | 2,647.5 | 1,124.2 | 2,490.7 |
Preparing financial reports in accordance with IFRS requires Group management to make assessments, estimates and assessments that affect how accounting principles are applied and the carrying amounts for assets, liabilities, income and expenses. The estimates and assumptions are based on historical experience and other factors that appear reasonable under the prevailing circumstances. The results of these estimates and assumptions are then applied in estimating the carrying amounts of assets and liabilities, which would not otherwise be evident from other sources. Actual outcomes may deviate from these estimates and assessments.
K-Fastigheter's operations, financial position and profit can be affected, directly or indirectly, by a number of risks, uncertainties and external factors, where the effect on the Group's operating profit can be controlled to varying degrees.
The Group's operations are dependent on general economic and political trends, particularly in Sweden, which can affect demand for housing and premises. All identified risks are monitored continuously and risk mitigation measures are taken to limit the effects.
The most significant opportunities and risks for the Group are commented on below. Otherwise, please refer to the Annual Report for 2019. The risk scenario for the Parent Company is the same as that for the Group.
It is K-Fastigheter's ambition to be an attractive landlord with whom tenants wish to remain and who they would recommend to others. The Group takes an active approach, with its three business areas together creating Homes that attract future tenants by establishing conditions for secure housing and working actively on aspects including location, design and space efficiency.
K-Fastigheter owns properties in several attractive locations and the Group focuses on residential properties in locations with favorable long-term demand for rented accommodation. Since large parts of K-Fastigheter's property stocks are newly constructed, the property costs are relatively low. The Group has also made a strategic decision to construct and retain buildings with an unlimited time frame, meaning that K-Fastigheter, in the short term during the construction process, often chooses more expensive solutions, which benefits the Group in the long term through lower property costs and/or increases the attractiveness of the Group's apartments.
On the whole, the assessment is that K-Fastigheter's enjoys considerable opportunities to maintain a rent level that is mutually attractive to the landlord and tenant, combined with a low vacancy ratio and low property costs.
Each quarter, K-Fastigheter's property portfolio, both completed investment properties and properties under construction, is valued either externally or internally. External valuations are performed by independent valuation institutes.
Since the valuation method for properties is based mainly on a cash flow valuation, the value is primarily driven by three parameters: rent, operating and maintenance costs and direct return requirements. The rental concept includes both the actual rent level and the vacancy risk in the property stocks. In turn, the direct return requirement represents the sum of the risk-free interest rate and the risk premium that an investor can demand for a given investment.
By continuing to build attractive homes in growth locations, it is K-Fastigheter's assessment that the Group can maintain its attractive rent levels while keeping vacancy and cost levels low. The direct return requirement is controlled by the market and is therefore more difficult for the Group to influence. K-Fastigheter deals with risk by diversifying the property stocks, by focusing primarily on residential properties where volatility in direct returns is lower and by working with conservatively set financial risk limits. Furthermore, by being active in the transaction market and by performing valuations on a quarterly basis, K-Fastigheter continuously obtains market trend data and therefore has opportunities to apply measures in good time.
| Sensitivity analysis (SEK million) | Cash flow | Fair value |
|---|---|---|
| Direct return requirement +/- 0.1% | - | 96.9 |
| Rental value +/- 1% | 2.2 | 52.3 |
| Operating and maintenance costs +/- 1% | 0.4 | 8.8 |
| Long-term vacancy ratio +/- 1% | 2.2 | 52.3 |
| Change in value of completed investment properties |
-10% | +10% |
| Property value +/- 10% | -456.3 | 456.3 |
| Loan-to-value ratio | 65% | 53% |
Financial risk consists of currency, interest rate, financing, liquidity and credit risk, all of which are regulated in the Finance policy adopted by the Board.
K-Fastigheter's finance department works operationally with these risks by, for example, interest and capital hedging the credit portfolio, maintaining a favorable and proactive dialog with the Group's partner banks and continuously monitoring the Group's liquidity situation.
The work of the finance department is governed in part by a number of internal target figures for each risk category and, in part, by the Group's overall financial targets and risk limits. This is intended to limit the financial risks, and to purposely achieve a favorable long-term trend in net financial items and to have a positive impact on consolidated profit. Furthermore, under existing loan agreements, K-Fastigheter is required to monitor and report on a number of external target figures (financial covenants) on a quarterly basis. As per 30 June 2020, these external target figures had been met.
| Financial targets | Financial targets |
Financial covenants |
Outcome 30 June 2020 |
|---|---|---|---|
| Loan-to-value ratio, % | max. 70% | max. 70.-75% | 53.4 % |
| Equity/assets ratio, % | min. 25% | min. 25% | 39.1 % |
| Interest coverage | min. multiple | min. multiple | min. multiple |
| ratio, multiple | of 1.75 | of 1.50-1.75 | of 2.6. |
Since the beginning of March 2020, society has been impacted by considerable uncertainty and insecurity, both nationally and internationally, due to the spread of the novel corona virus in Sweden and in the world. However, in connection with preparing this Interim Report, the actual impact of the spread of the coronavirus on K-Fastigheter's operations, profit and financial position has been limited. It is currently uncertain how the coronavirus will affect K-Fastigheter looking ahead, although the impact is assessed continuously and will be reported in future Interim Reports. New information will be presented in press releases when required.
K-Fastigheter has a stable business model building on cross-functional efforts in project development, construction and property management, which generate profitability at all stages. The Group holds a strong position in the Öresund region and in selected towns and cities in southern and western Sweden. K-Fastigheter has an attractive property portfolio with 85 percent of contractual rental income deriving from housing and with commercial income being spread between a large number of individual contracts.
As of 30 June 2020, K-Fastigheter had a stable financial position with an equity/assets ratio of 39.1 percent, a loan-to-value ratio of 53.4 percent and favorable liquidity with available cash and cash equivalents of SEK 365 million.
K-Fastigheter's offering meets the market's demand for quality housing at the right cost. The Group's concept buildings, developed in-house, generates conditions for cost control and financial efficiency throughout the chain, from building rights to property management over the lifetime of the building. With property stocks and a project portfolio totaling more than 6,100 apartments (1,865 in management, 1,249 in construction, about 2,800 in project development and 149 acquired but not yet possessed), K-Fastigheter has, from the outset in 2010, developed its operations as a property company with strong positions and commitments in several select locations in southwestern Sweden.
It is the Group's view that demand remains favorable in Skåne,
particularly in the Öresund region and in the Västra Götaland, Copenhagen and Mälardalen regions, and areas with structural housing shortages.
To date, the Covid-19 pandemic has not had any significant impact on the Group's operations, profit or financial position. K-Fastigheter benefits from operating in a, to date, less exposed sector, with tenants that have good payment ability despite the circumstances.
For K-Fastigheter, sustainability is a concept that spans more dimensions than focusing solely on environmental impact. K-Fastigheter values commitment in its own operations, and commitment to sustainability issues that are high on the agenda of the Group's customers, suppliers and public authorities.
K-Fastigheter mainly pursues initiatives in product development, procurement and social sustainability. K-Fastigheter's business concept is to construct concept buildings, that is, a limited number of alternative buildings that can be adapted to each location. The foundation is a systematic working method, providing optimal resource utilization and ensuring both superior quality and a beneficial working environment. By using an industrial process at proprietary production facilities, consumption of materials, logistics and other resources can be planned in detail, reducing waste, streamlining flows and lowering costs in areas that do not create value. K-Fastigheter's concept buildings are constructed with the ambition of meeting requirements corresponding to those set by the Swedish Miljöbyggnad Silver certification system, which is administrated by the Sweden Green Building Council.
K-Fastigheter participates in efforts to reduce fossil fuels dependency by, for example, installing photovoltaic cells on suitable buildings. Since early 2019, electricity has been procured exclusively from suppliers offering electricity from renewable sources, mainly wind power.
Property management is associated with certain seasonal variations primarily in tariff-related heating costs. In other regards, there are no significant seasonal variations in K-Fastigheter's operations.
K-Fastigheter's property stocks consist predominantly of newly constructed concept buildings developed in-house. The Group works continuously to maintain and upgrade the older buildings it has acquired. Under the company's "K-Fast 2.0" programme, the apartments are constantly renovated so that surfaces, plumbing, mains and technical installations correspond to the standard found in the Group's concept buildings produced in-house.
By using the same materials and fittings in its efforts both within the framework of K-Fast 2.0 and in its new construction projects, K-Fastigheter achieves larger volumes, strengthening the negotiating conditions of the company's purchasing organization.
The concept is cost-efficient and appreciated by tenants. The quality enhancements help reduce property management costs and increase the useful life of the building, while providing
opportunities to adjust rent levels among the property stocks, which, in turn, provides a satisfactory return on invested capital.
A key aspect of the implementation of K-Fast 2.0 is that renovation should entail reasonable rent increases, so that existing tenants can afford to stay long term. This has been achievable because it has been possible to keep renovation costs at an average of about SEK 4,300 per square meter. Besides cutting operating costs, raising standards through K-Fast 2.0 brings an annual rental increase of approximately SEK 320 per square meter, meaning that capital invested in K-Fast 2.0 generates an average direct return of about 7.4 percent.
On 30 June 2020, the Group owned 475 older apartments, which are added to the ongoing efforts to raise standards. Of these, 68 apartments have been renovated in accordance with K-Fast 2.0.
The Group's Parent Company is K-Fast Holding AB. At the end of the period, the Group consisted of 52 wholly-owned subsidiaries and six associated company groups. The number of employees amounted to 68 (65), of whom 18 were women (16) and 50 were men (49).
Operations are organized into three business areas: Project Development, Construction and Property Management. The relevant Business Area Managers report to, and are part of, Group management.
Group-wide functions also encompass accounting and finance, IT, IR/ communications and HR, and the Group's Heads of Treasury, Finance, IR/Communications and HR are members of Group management.
The head office is located in Hässleholm, Sweden. There are also offices in Helsingborg, Kristianstad and Landskrona, as well as a production facility in Osby. Operations are due to start in a further production plant in Hässleholm after summer 2020.
K-Fast Holding AB adheres to the IFRS standards adopted by the EU. This Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. Disclosures in accordance with IAS 34.
The Group measures all financial assets and liabilities at amortized cost, with the exception of derivative instruments, which are measured at fair value through the Income Statement. In K-Fastigheter's assessment, the reported value of financial assets and financial liabilities valued at amortized cost represents a good approximation of fair value. The Parent Company measures all financial assets and liabilities at amortized cost. For further details, see Note 21, Financial risk and finance policies in the 2019 Annual Report.
For complete accounting principles, please refer to K-Fast Holding AB's 2019 Annual Report. No accounting principles have changed from the Annual Report 2019.
The Group's related parties include all Board Members, CEO and members of company management, as well as individuals and companies closely related to them. There were no related party transactions that were not on market terms. No related party transactions have occurred beyond the amounts listed below.
In the period 1 January 2020 to 30 June 2020, ongoing agreements with related parties encompassed:
There were no transactions with closely related parties in the second quarter 2020 in addition to ongoing agreements.
K-Fastigheter's President and CEO, Jacob Karlsson, and CFO, Martin Larsson, will comment on the Group's Interim Report for the second quarter on Friday 31 July 2020 at 8:30 a.m. CEST. The presentation materials (slides + audio) will be available at www.k-fastigheter.se/en/investors/presentations. The presentation will be held in Swedish.
Questions may be addressed in writing to [email protected] with answers being compiled on an ongoing basis during the day and being published on www.k-fastigheter.se/en.
This Interim Report has not been subject to review by the company's auditors. The Board of Directors and the CEO provide their assurance that the Interim Report provides a true and fair view of the operations, financial position and profit of the Parent Company and the Group, describing the significant risks and uncertainties faced by the Parent Company and the companies within the Group.
Hässleholm, Sweden, 31 July 2020
Erik Selin Chairman of the Board Christian Karlsson Board Member
Jesper Mårtensson Board Member
Ulf Johansson Board Member
Sara Mindus Board Member
Jacob Karlsson CEO/Board Member
On 29 November 2019, K-Fast Holding AB's Class B shares (ticker: KFAST B) were launched on Nasdaq Stockholm, Mid Cap, in the Real Estate segment. On 30 June 2020, K-Fastigheter's market capitalization was SEK 7,576.8 million. At the end of the quarter, there were approximately 3,100 shareholders.
On 30 June, there were a total 33,888,528 shares in K-Fast Holding AB distributed between 3,750,000 Class A shares and 30,138,528 Class B shares respectively. The total number of votes on 30 June 2020 was: 48,888,528.
Each Class A share conveys five votes and each Class B share conveys one vote. All shares carry equal rights to participate in the company's assets and earnings and to any surplus on liquidation. Neither Class A nor Class B shares are subject to any transfer restrictions.
During the period 1 January – 30 June 2020, approximately 3.8 million KFAST Class B shares were traded on Nasdaq Stockholm. The daily turnover of K-Fastigheter's shares on Nasdaq Stockholm averaged 30,963 shares and the average price paid was SEK 185.44. The highest price paid during the period was SEK 266.80 on 18 June 2020, and the lowest price paid was SEK 125.10 on 16 March 2020. On 30 June 2020, the share price was SEK 251.40 (last paid). Market value of all shares in the company, based on the last price paid for a Class B share on 30 June 2020, amounted to SEK 8,519.6 million.
The AGM 2020 authorized the Board of Directors to make decisions to acquire the company's Class B shares, corresponding to a maximum of 10 percent of the total number of shares issued in K-Fast Holding AB. No shares were repurchased in the period. The AGM also authorized the Board to carry out one or more new issues of Class B shares, subject to a total maximum of 4,000,000 new shares.
| Name | Class A shares* |
Class B shares* |
Total number of shares |
Total number of votes |
Percentage of capital |
Percentage of votes |
|---|---|---|---|---|---|---|
| Jacob Karlsson AB | 1,875,000 | 10,625,000 | 12,500,000 | 20,000,000 | 36.9% | 40.9% |
| Erik Selin Fastigheter AB | 1,875,000 | 10,625,000 | 12,500,000 | 20,000,000 | 36.9% | 40.9% |
| Länsförsäkringar funds | 0 | 1,331,458 | 1,331,458 | 1,331,458 | 3.9% | 2.7% |
| Capital Group | 0 | 1,133,615 | 1,133,615 | 1,133,615 | 3.3% | 2.3% |
| AP2 | 0 | 844,365 | 844,365 | 844,365 | 2.5% | 1.7% |
| AP4 | 0 | 762,376 | 762,376 | 762,376 | 2.2% | 1.6% |
| SEB funds | 0 | 533,000 | 533,000 | 533,000 | 1.6% | 1.1% |
| Handelsbanken funds | 0 | 492,509 | 492,509 | 492,509 | 1.5% | 1.0% |
| Nergården families** | 0 | 478,100 | 478,100 | 478,100 | 1.4% | 1.0% |
| Celox Group | 0 | 380,900 | 380,900 | 380,900 | 1.1% | 0.8% |
| Ten largest shareholders | 3,750,000 | 27,206,323 | 30,956,323 | 45,956,323 | 91.3% | 94.0% |
| Other shareholders | 0 | 2,932,205 | 2,932,205 | 2,932,205 | 8.7% | 6.0% |
| Total | 3,750,000 | 30,138,528 | 33,888,528 | 48,888,528 | 100.0% | 100.0% |
| Of whom, Board of Directors and Group Management |
3,750,000 | 21,876,150 | 25,626,150 | 40,626,150 | 75.6% | 83.1% |
Each Class A share confers five votes and each Class B share confers one vote Source: Euroclear and K-Fast Holding AB ** Through Mjöbäcksvillan Entreprenad Holding AB and Västkuststugan AB
There are no potential shares (e.g. Convertibles) in the company.
| Marketplace | Nasdaq Stockholm |
|---|---|
| Name of share | K-FAST Holding B |
| Ticker | KFAST B |
| ISIN code | SE0013382355 |
| Segment | Nasdaq, Mid Cap |
| Sector | Real Estate |
| Currency | SEK |
| Total number of shares outstanding | 33,888,528 |
| Total number of Class B shares listed on the Nasdaq Stockholm exchange |
30,138,528 |
| Closing price, 30 June 2020 | SEK 251,40 |
| Market price, 30 June 2020 | SEK 8,519.6 million. |
Source: Nasdaq
Share price,
The table below presents the earnings capacity of K-Fastigheter's property management operations on a 12-month basis as per 30 June 2020. Earnings ability is not a forecast for the current year or the next twelve months but is to be viewed solely as a theoretical snapshot and is presented for illustrative purposes only. Current earnings ability does not include an assessment of the future rent trends, vacancy rates, property costs, interest rates, changes in value, acquisitions or disposals of properties, or other factors.
Current earnings ability is based on properties held as per 30 June 2020 and their financing, meaning that current earning capacity illustrates the earnings of the management operations, on an annual basis, at that point in time. Transactions and completion of ongoing new construction projects with a transfer and completion date after 30 June 2020 have therefore not been included in the calculation.
The Income Statement for the management operations is also affected by development in the value of the property portfolio, as well as by upcoming property acquisitions and/or disposals. Additional items affecting earnings include changes in the value of derivatives. None of the above has been taken into account in current earnings capacity, nor in the item Profit from participations in associated companies.
Earnings ability is based on contracted rental income from the property portfolio, estimated property costs on an annual basis based on historical outcomes for properties under management, as well as property costs and central administration costs relating to business areas estimated on an annual basis based on the current scale of administration. Costs for interest-bearing liabilities have been based on current interest-bearing liabilities and current interest rates (including effects of derivative instruments) at the end of the year.
| 2020 | 2020 | 2019 | 2019 | 2019 | 2019 | 2018 | |
|---|---|---|---|---|---|---|---|
| (SEK million) | 30 Jun | 31 Mar | 31 Dec | 30 Sep | 30 Jun | 31 Mar | 31 Dec |
| Rental value | 218.0 | 207.9 | 196.6 | 177.2 | 161.9 | 136.9 | 133.4 |
| Vacancy | -10.9 | -7.3 | -6.1 | -4.7 | -3.3 | -2.9 | -0.9 |
| Rental income | 207.1 | 200.6 | 190.5 | 172.5 | 158.6 | 134.0 | 132.5 |
| Operating costs | -29.1 | -28.0 | -27.0 | -24.3 | -22.5 | -20.3 | -19.4 |
| Maintenance | -7.7 | -7.5 | -7.3 | -6.8 | -6.5 | -5.9 | -5.6 |
| Property tax/ground rent | -3.0 | -3.0 | -2.6 | -2.1 | -1.9 | -1.6 | -1.6 |
| Property administration | -18.2 | -16.9 | -15.0 | -14.3 | -13.5 | -12.8 | -12.8 |
| Operating surplus | 149.2 | 145.2 | 138.6 | 124.9 | 114.1 | 93.3 | 93.0 |
| Central administration | -11.5 | -13.4 | -9.6 | -7.8 | -7.9 | -6.1 | -4.3 |
| Net interest income | -45.9 | -45.0 | -46.9 | -38.3 | -33.1 | -31.4 | -29.0 |
| Profit from property management | 91.8 | 86.8 | 82.1 | 78.8 | 73.1 | 55.8 | 59.7 |
The following diagram illustrates current rental values for completed investment properties as per 30 June 2020 plus expected rental values of construction projects in progress of investment properties and acquired but not yet handed over investment properties as per 30 June 2020 at a pace with these properties being completed or handed over.
The information about completed properties, construction projects in progress and acquired but not yet handed over investment properties includes estimates and judgments. Rental value refers to contractual rent plus estimated rent for vacancies and discounts recalculated at an annualized rate. The assessments and assumptions involve uncertainties and the disclosures below should not be viewed as a forecast.
In the Interim Report, K-Fastigheter presents certain financial measures that are not defined in accordance with IFRS. K-Fastigheter believes that these measures provide valuable additional information to investors and management as they enable assessment of the Company's performance. Since not all companies calculate financial measures in the same way, these are not always comparable to measurements used by other companies. Accordingly, these financial measures should not
be considered as a replacement for measures defined in accordance with IFRS. The table below presents financial measures that are not defined in accordance with IFRS.
Compared with the 2019 Annual Report, the definitions of the alternative key data have not changed.
| Property-related | 2020 Apr–Jun |
2019 Apr–Jun |
2020 Jan–Jun |
2019 Jan–Jun |
Rolling 4 quarters 2019 Jul – 2020 Jun |
2019 Jan–Dec |
|---|---|---|---|---|---|---|
| Rental value, SEK million | 218.0 | 161.9 | 218.0 | 161.9 | 218.0 | 196.6 |
| Average financial letting ratio, % | 93.7% | 98.4% | 93.8% | 97.2% | 95.1% | 96.8% |
| Surplus ratio, % | 70.4% | 75.4% | 67.1% | 71.0% | 66.7% | 68.4% |
| Lettable area, m2 | 142,847 | 119,110 | 142,847 | 119,110 | 142,847 | 130,486 |
| Number of apartments under management | 1,865 | 1,418 | 1,865 | 1,418 | 1,865 | 1,711 |
| Number of apartments under construction | 1,249 | 565 | 1,249 | 565 | 1,249 | 700 |
| Number of apartments under project development | 2,888 | 1,172 | 2,888 | 1,172 | 2,888 | 1,340 |
| Financial | ||||||
| Interest coverage ratio, multiple | 2.7 | 3.0 | 2.6 | 2.8 | 2.5 | 2.6 |
| excl. stock exchange listing costs | 2.7 | 3.2 | 2.6 | 3.0 | 2.6 | 2.8 |
| Equity/assets ratio, % | 39.1% | 28.5% | 39.1% | 28.5% | 39.1% | 41.8% |
| Loan-to-value ratio, % | 53.4% | 61.0% | 53.4% | 61.0% | 53.4% | 40.2% |
| Period for which capital is tied up, years | 2.6 | 2.5 | 2.6 | 2.5 | 2.6 | 3.2 |
| Period of fixed-interest, years | 4.2 | 3.6 | 4.2 | 3.6 | 4.2 | 3.3 |
| Average interest, % | 1.85% | 1.84% | 1.85% | 1.84% | 1.85% | 1.90% |
| Net investments, SEK million | 575.6 | 430.9 | 1,084.7 | 568.3 | 1,577.5 | 1,061.1 |
| Profit from property management, SEK million | 19.5 | 16.7 | 35.0 | 27.8 | 60.1 | 52.9 |
| Long-term net asset value (NAV), SEK million | 2,818.0 | 1,394.1 | 2,818.0 | 1,394.1 | 2,818.0 | 2,540.2 |
| Share-related | ||||||
| Profit from property management per share, SEK | 0.58 | 0.67 | 1.03 | 1.11 | 1.97 | 2.05 |
| Growth in profit from property management per share, % | -13.8% | 89.1% | -7.0% | 52.7% | -2.9% | 24.6% |
| Profit after tax per share for the period, SEK | 3.28 | 3.60 | 6.01 | 5.34 | 14.40 | 14.14 |
| Long-term net asset value (NAV), SEK | 83.15 | 55.76 | 83.15 | 55.76 | 83.15 | 74.96 |
| Growth in long-term net asset value (NAV), per share, % | 5.6% | 9.3% | 10.9% | 14.9% | 49.1% | 54.4% |
| Equity per share, SEK | 72.06 | 44.57 | 72.06 | 44.57 | 72.06 | 66.05 |
| Number of shares outstanding at the end of the period, thousands |
33,889 | 25,000 | 33,889 | 25,000 | 33,889 | 33,889 |
| Average number of shares outstanding, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 30,247 | 25,830 |
| Rolling 4 quarters |
||||||||
|---|---|---|---|---|---|---|---|---|
| Rental value SEK million | 2020 Apr–Jun |
2019 Apr–Jun |
2020 Jan–Jun |
2019 Jan–Jun |
2019 Jul– 2020 Jun |
2019 Jan–Dec |
Definition | Motivation |
| A Contract value on an annual basis at end of the period, SEK million | 207.1 | 158.6 | 207.1 | 158.6 | 207.1 | 190.5 | Closing annual rent plus estimated | Rental value is used to illustrate the Group's potential income. |
| B Vacancy value on an annual basis at end of the period, SEK million | 10.9 | 3.3 | 10.9 | 3.3 | 10.9 | 6.1 | market rent for vacant space. | |
| A+B Rental value on an annual basis at end of the period, SEK million | 218.0 | 161.9 | 218.0 | 161.9 | 218.0 | 196.6 | ||
| Financial letting ratio, % | ||||||||
| A Contract value on an annual basis at end of the period, SEK million | 207.1 | 158.6 | 207.1 | 158.6 | 207.1 | 190.5 | Contractual annual rent for leases valid | This key figure illustrates the |
| B Vacancy value on an annual basis at end of the period, SEK million | 10.9 | 3.3 | 10.9 | 3.3 | 10.9% | 6.1 | at the end of the period in relation to rental value. |
financial degree of utilization of K-Fastigheter's properties. |
| A/(A+B) Financial letting ratio, % | 95.0% | 97.9% | 95.0% | 97.9% | 95.0% | 96.9% | ||
| Average financial letting ratio, % | ||||||||
| A Rental income for the period, SEK million | 49.0 | 38.6 | 96.8 | 71.6 | 181.9 | 156.8 | Rental income during the period in | This key figure illustrates the financial degree of utilization of K-Fastigheter's properties. |
| B Rental value for the period, SEK million | 52.3 | 39.2 | 103.1 | 73.7 | 191.3 | 161.9 | relation to the rental value during the period. |
|
| A/B Average financial letting ratio, % | 93.7% | 98.4% | 93.8% | 97.2% | 95.1% | 96.8% | ||
| Surplus ratio, % | ||||||||
| A Gross profit from property manage. for the period in accordance with the Income Statement, SEK million | 34.5 | 29.1 | 64.9 | 50.8 | 121.4 | 107.3 | Operating surplus in relation to rental | This key figure illustrates the |
| B Rental income for the period in accordance with the Income Statement, SEK million | 49.0 | 38.6 | 96.8 | 71.6 | 181.9 | 156.8 | income. | profitability of the property management operations. |
| A/B Surplus ratio during the period, % | 70.4% | 75.4% | 67.1% | 71.0% | 66.7% | 68.4% | ||
| Lettable area at the end of the period, m2 | 142,847 | 119,110 | 142,847 | 119,110 | 142,847 | 130,486 | Total area available for lease. | |
| Number of apartments under management at the end of the period | 1,865 | 1,418 | 1,865 | 1,418 | 1,865 | 1,711 | Total number of apartments under management at the end of the period. |
Key figure to illustrate K-Fastigheter's capacity to |
| Number of apartments under construction at the end of the period | 1,249 | 565 | 1,249 | 565 | 1,249 | 700 | Total number of apartments under construction at the end of the period. |
achieve operational targets. |
| Number of apartments under project development at the end of the period | 2,888 | 1,172 | 2,888 | 1,172 | 2,888 | 1,340 | Total number of apartments in project development at the end of the period. |
|
| FINANCIAL KEY DATA |
| A Profit from property management for the period in accordance with the Income Statement, SEK million | 19.5 | 16.7 | 35.0 | 27.8 | 60.1 | 52.9 | Profit from property management with | |
|---|---|---|---|---|---|---|---|---|
| B Depreciation/amortization and impairment attributable to property management during the | -0.7 | -0.1 | -1.1 | -0.9 | -5.2 | -5.1 | reversal of depreciation/amortization and impairment and net interest |
|
| period in accordance with the Income Statement, SEK million | income and divided by net interest income (incl. realized change in value |
|||||||
| C Net interest income for the period in accordance with the Income Statement, SEK million | -11.9 | -8.5 | -23.1 | -15.8 | -42.6 | -35.3 | of current derivative instruments). | This key figure illustrates financial risk by highlighting |
| (A-B-C)/-B Interest coverage ratio during the period, multiple | 2.7 | 3.0 | 2.6 | 2.8 | 2.5 | 2.6 | the sensitivity of the company's performance to interest rate |
|
| D Costs during the period attributable to stock exchange listing in accordance with the Income Statement, SEK million | 0.0 | -4.4 | 0.0 | -7.2 | -6.1 | -13.3 | fluctuations. | |
| (A-B-C-D/3)/-B Adjusted interest coverage ratio during the period, multiple | 2.7% | 3.2 | 2.6 | 3.0 | 2.6 | 2.8 | Interest coverage ratio adjusted for costs attributable to stock exchange listing included in central administration. |
|
| Equity/assets ratio, % | ||||||||
| A Equity at the end of the period in accordance with the Balance Sheet, SEK million | 2,442.0 | 1,114.3 | 2,442.0 | 1,114.3 | 2,442.0 | 2,238.5 | The key figure highlights | |
| B Total equity and liabilities at the end of the period in accordance with the Balance Sheet, SEK million | 6,253.1 | 3,913.0 | 6,253.1 | 3,913.0 | 6,253.1 | 5,352.3 | Equity as a percentage of total assets at the end of the period. |
financial risk by illustrating the scale of equity in relation to |
| A/B Equity/assets ratio, % | 39.1% | 28.5% | 39.1% | 28.5% | 39.1% | 41.8% | total assets. | |
| Loan-to-value ratio, % | ||||||||
| A Interest-bearing liabilities at the end of the period in accordance with the Balance Sheet, SEK million* | 2,721.1 | 1,899.3 | 2,721.1 | 1,899.3 | 2,721.1 | 2,371.9 | ||
| B Cash and cash equivalents and net value of current investments at the end of the period in accordance with the Balance Sheet, SEK million |
274.8 | 71.6 | 274.8 | 71.6 | 274.8 | 779.0 | Net liabilities related to investment and business properties in relation to the fair value of investment and business |
Loan-to-value ratio is used to illustrate K-Fastigheter's financial risk. |
| C Investment and business properties at the end of the period in accordance with the Balance Sheet, SEK million | 4,582.4 | 2,994.4 | 4,582.4 | 2,994.4 | 4,582.4 | 3,962.0 | properties. | |
| (A-B)/C Loan-to-value ratio at the end of the period, % | 53.4% | 61.0% | 53.4% | 61.0% | 53.4% | 40.2% | ||
| Average interest, % | |||||||
|---|---|---|---|---|---|---|---|
| A Interest expense calculated at annual rate at the close of the period, SEK million | 49.6 | 34.9 | 49.6 | 34.9 | 49.6 | 44.3 | Average interest is used to Estimated annual interest on liabilities to |
| B Interest-bearing liabilities at the end of the period in accordance with the Balance Sheet, SEK million | 2,681.1 | 1,899.3 | 2,681.1 | 1,899.3 | 2,681.1 | 2,331.9 | illustrate the interest rate risk for credit institutions pertaining to investment K-Fastigheter's interest-bearing and business properties, based on current |
| A/B Average interest rate at the end of the period, % | 1.85% | 1.84% | 1.85% | 1.84% | 1.85% | 1.90% | liabilities. loan agreements, in relation to total liabilities to credit institutions pertaining to investment and business properties. |
| Net investments, SEK million | |||||||
| A Acquisitions during the period, SEK million | 353.2 | 309.3 | 708.2 | 314.0 | 951.9 | 557.7 | |
| B New construction projects during the period, SEK million | 216.1 | 121.0 | 364.8 | 253.6 | 610.9 | 499.7 | Total net investments in investment Key figure to illustrate |
| C Extensions and remodelling during the period, SEK million | 7.3 | 0.6 | 12.7 | 0.7 | 17.9 | 5.9 | and business properties and new K-Fastigheter's capacity to construction projects in progress achieve operational targets. |
| D Sales during the period, SEK million | -1.0 | 0.0 | -1.0 | 0.0 | -3.3 | -2.3 | during the period. |
| A+B+C+D Net investments during the period, SEK million | 575.6 | 430.9 | 1,084.7 | 568.3 | 1,577.5 | 1,061.1 |
*Adjusted for stage 3 of Helsingborg/Brigaden 7 & 8's share of existing construction credits (SEK 40.0 million), which, as per 30 June 2020 were not refinanced and were not, accordingly, included in interestbearing liabilities related to investment and business properties. Stages 1 and 2 of Helsingborg/Brigaden 7 & 8 have been refinanced and were included in interest-bearing liabilities related to investment and business properties as per 30 June 2020.
| Rolling 4 quarters |
||||||||
|---|---|---|---|---|---|---|---|---|
| Profit from property management, SEK million | 2020 Apr–Jun |
2019 Apr–Jun |
2020 Jan–Jun |
2019 Jan–Jun |
2019 Jul – 2020 Jun |
2019 Jan–Dec |
Definition | Motivation |
| A Gross profit from property manage. for the period in accordance with the Income Statement, SEK million | 34.5 | 29.1 | 64.9 | 50.8 | 121.4 | 107.3 | a | |
| B Central administration attributable to property management during the period in accordance with the Income Statement, SEK million |
-2.4 | -3.9 | -5.7 | -6.3 | -13.5 | -14.0 | Gross profit from property management less central administration costs and depreciation/amortization and impairment attributable to the Property Management business area and net interest income. |
This key figure illustrates the profitability of the property management operations. |
| C Depreciation/amortization and impairment attributable to property management during the period in accordance with the Income Statement, SEK million |
-0.7 | -0.1 | -1.1 | -0.9 | -5.2 | -5.1 | ||
| D Net interest income for the period in accordance with the Income Statement, SEK million | -11.9 | -8.5 | -23.1 | -15.8 | -42.6 | -35.3 | ||
| A+B+C+D Profit from property management, SEK million | 19.5 | 16.7 | 35.0% | 27.8 | 60.1 | 52.9 | ||
| Long-term net asset value (NAV), SEK million | ||||||||
| A Equity at the end of the period in accordance with the Balance Sheet, SEK million | 2,442.0 | 1,114.3 | 2,442.0 | 1,114.3 | 2,442.0 | 2,238.5 | Reported equity with reversal of deferred tax, interest rate derivatives and non controlling interests. |
a An established measure of K-Fastigheter's and other listed companies' long-term net asset value, facilitating analyses and comparisons. |
| B Derivatives at the end of the period in accordance with the Balance Sheet, SEK million | 38.5 | 31.7 | 38.5 | 31.7 | 38.5 | 12.8 | ||
| C Deferred tax liability at the end of the period in accordance with the Balance Sheet, SEK million | 369.5 | 248.1 | 369.5 | 248.1 | 369.5 | 310.3 | ||
| D Deferred tax asset at the end of the period in accordance with the Balance Sheet, SEK million | 32.1 | 0.0 | 32.1 | 0.0 | 32.1 | 21.4 | ||
| A+B+C-D Long-term net asset value (NAV) at the end of the period, SEK million | 2,818.0 | 1,394.1 | 2,818.0 | 1,394.1 | 2,818.0 | 2,540.2 | ||
| Period for which capital is tied up, years | 2.6 | 2.5 | 2.6 | 2.5 | 2.6 | 3.2 | The period for which capital is tied up with regard to liabilities to credit institutions pertaining to investment and business properties at the end of the period. |
This key figure is used to illustrate the (re-) financing risk related to K-Fastigheter's interest-bearing liabilities |
| Period of fixed-interest, years | 4.2 | 3.6 | 4.2 | 3.6 | 4.2 | 3.3 | The period for which capital is tied up with regard to liabilities to credit institutions pertaining to investment and business properties at the end of the period. |
This key figure is used to illustrate the interest rate risk for K-Fastigheter's interest-bearing liabilities. |
| SHARE-RELATED KEY DATA Long-term net asset value (NAV), SEK |
||||||||
| A Long-term net asset value (NAV) at the end of the period in accordance with the Balance Sheet, | 2,818.0 | 1,394.1 | 2,818.0 | 1,394.1 | 2,818.0 | 2,540.2 | Long-term net asset value (NAV) in relation to the number of shares outstanding at the end of the period. |
a |
| SEK million | Used to illustrate K-Fastigheter's long-term net asset value per share in a manner that is uniform for listed |
|||||||
| B Number of shares outstanding at the end of the period, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 33,889 | 33,889 | ||
| A/B Long-term net asset value (NAV) per share, SEK | 83.15 | 55.76 | 83.15 | 55.76 | 83.15 | 74.96 | companies. | |
| Growth in long-term net asset value (NAV) per share, % | ||||||||
| A Long-term net asset value (NAV) per share at the end of the period in accordance with the Balance Sheet, SEK million |
83.15 | 55.76 | 83.15 | 55.76 | 83.15 | 74.96 | Percentage change in long-term net | a Used to illustrate growth in K-Fastigheter's long-term net asset value per share in a manner that is uniform for listed companies. |
| B Long-term net asset value (NAV) per share at the end of the preceding period in accordance with the Balance Sheet, SEK million |
78.74 | 51.01 | 74.96 | 48.54 | 55.76 | 48.54 | asset value (NAV) per share during the period. |
|
| A/B-1 Growth in long-term net asset value (NAV) per share, % | 5.6% | 9.3% | 10.9% | 14.9% | 49.1% | 54.4% | ||
| Equity per share, SEK | ||||||||
| A Equity attributable to Parent Company shareholders at the end of the period in accordance with the Balance Sheet, SEK million |
2,442.0 | 1,114.3 | 2,442.0 | 1,114.3 | 2,442.0 | 2,238.5 | Equity less minority share of equity, in relation to the number of shares outstanding at the end of the period. |
a Used to illustrate K-Fastigheter's equity per share in a manner that is uniform for listed companies. |
| B Number of shares outstanding at the end of the period, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 33,889 | 33,889 | ||
| A/B Equity per share at the end of the period, SEK | 72.06 | 44.57 | 72.06 | 44.57 | 72.06 | 66.05 | ||
| Profit from property management per share, SEK | ||||||||
| A Profit from property management for the period in accordance with the Income Statement, SEK million | 19.5 | 16.7 | 35.0 | 27.8 | 60.1 | 52.9 | Profit from property management in relation to the average number of shares outstanding during the period. |
a Used to illustrate K-Fastigheter's profit from |
| B Average number of shares outstanding during the period, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 30,247 | 25,830 | property management per share in a manner that is |
|
| A/B Profit from property management per share during the period, SEK | 0.58 | 0.67 | 1.03 | 1.11 | 1.97 | 2.05 | uniform for listed companies. | |
| Growth in profit from property management per share, % | ||||||||
| A Profit from property management during the period per share, SEK | 0.58 | 0.67 | 1.03 | 1.11 | 1.97 | 2.05 | Percentage change in profit from property management per share during the period. |
a Used to illustrate the growth in K-Fastigheter's profit from |
| B Profit from property management for the preceding period per share, SEK | 0.67 | 0.35 | 1.11 | 0.73 | 2.03 | 1.64 | property management per share in a manner that is |
|
| A/B-1 Growth in profit from property management per share during the period, % | -13.8% | 89.1% | -7.0% | 52.7% | -2.9% | 24.6% | uniform for listed companies. | |
| Profit after tax per share for the period, SEK | ||||||||
| A Profit after tax for the period in accordance with the Income Statement, SEK million | 111.3 | 90.0 | 203.6 | 133.4 | 435.5 | 365.3 | Profit for the period in relation to the average number of shares outstanding during the period. |
a Used to illustrate K-Fastigheter's earnings per share in a manner that is uniform for listed companies. |
| B Average number of shares outstanding during the period, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 30,247 | 25,830 | ||
| A/B Profit after tax per share for the period, SEK | 3.28 | 3.60 | 6.01 | 5.34 | 14.40 | 14.14 | ||
| Number of shares outstanding at the end of the period, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 33,889 | 33,889 | ||
| Average number of shares outstanding during the period, thousands | 33,889 | 25,000 | 33,889 | 25,000 | 30,247 | 25,830 |
Calendar Interim Report January–September 2020 11 November 2020 Year-end report 2020 26 February 2021
K-Fast Holding AB ("K-Fastigheter") is a project development construction and property company with a strong business model that provides the company with a unique position. K-Fastigheter's business model creates opportunities to generate growth through proprietary concept buildings, offering favorable operating finances and high-quality rental apartments, and also, to a lesser degree, commercial premises. Cost-efficient construction in combination with long-term proprietary management creates strong cash flow that can be used for acquisitions of building rights in growth regions.
Through standardization and implementing smart and sustainable solutions, as well as being responsive in our dialogue with customers, suppliers and employees, K-Fastigheter fosters the right conditions for continued development towards Homes that are better and more efficient in every way.
With commitment at all levels, K-Fastigheter creates attractive Homes offering a high degree of comfort. The Group's proprietary concept buildings meets demands for better housing from tenants and social planners.
In order to increase cost efficiency and reduce construction times the company works with three concept buildings: Low-Rise, Lateral Low-Rise and Apartment Blocks.
K-Fastigheter holds a strong position in the Öresund region and in selected towns and cities in southern and western Sweden. Our vision is to become one of the Nordic region's largest operators and a leading property owner of sustainably constructed, innovative and cost-efficient concept buildings meeting the wishes and requirements of tenants seeking to establish a home for many years to come. The apartments offered by the Group is to be distinguished by the best combination of high standard, home comfort and security in the market.
Based in Hässleholm, Sweden, and with offices in strategically selected locations, K-Fastigheter currently has some 70 employees. K-Fast Holding AB's Class B-share has been listed on the Nasdaq Stockholm exchange since November 2019 under the ticker KFAST B. The largest shareholders are Jacob Karlsson AB, Erik Selin Fastigheter Aktiebolag and Länsförsäkringar funds.
Address: Bultvägen 7, SE-281 43 Hässleholm, Sweden Telephone: +46 (0)10 33 00 069 www.k-fastigheter.se
Jacob Karlsson CEO e-mail: [email protected] Telephone: +46 (0)738 219 626
Deputy CEO/CFO e-mail: [email protected] Telephone: +46 (0)703 533 160
Head of Investor Relations e-mail: [email protected] Telephone: +46 (0)709 994 970
This information is such that K-Fast Holding AB is obliged to disclose in accordance with the EU's Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 a.m. CEST on 31 July 2020.
The Interim report is published in Swedish and English. The Swedish version is the original version and takes precedence over the English should the translation differ from the original.
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