Quarterly Report • Nov 6, 2018
Quarterly Report
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Fastighets AB Balder Interim report
January-September 2018
Fastighets AB Balder is a listed property company which shall meet the needs of different customer groups for premises and housing based on local support. Balder's real estate portfolio had a value of SEK 114.5 billion (92.9) as of 30 September 2018. The Balder share is
Comparisons stated in parenthesis refer to the corresponding period of the previous year.
| 2018 Jan-Sep |
2017 Jan-Sep |
2017 Jan-Dec |
2016 Jan-Dec |
2015 Jan-Dec |
2014 Jan-Dec |
2013 Jan-Dec |
2012 Jan-Dec |
2011 Jan-Dec |
|
|---|---|---|---|---|---|---|---|---|---|
| Rental income, SEKm | 4,926 | 4,357 | 5,915 | 5,373 | 2,711 | 2,525 | 1,884 | 1,701 | 1,466 |
| Profit from property management, SEKm1) | 2,428 | 2,056 | 2,804 | 2,265 | 1,780 | 1,275 | 854 | 691 | 516 |
| Changes in value of properties, SEKm | 6,351 | 3,582 | 5,336 | 4,932 | 3,388 | 3,050 | 854 | 812 | 990 |
| Changes in value of derivatives, SEKm | 24 | 160 | 144 | –114 | 227 | –624 | 433 | –71 | –520 |
| Profit after tax, SEKm 1) | 7,269 | 4,971 | 7,118 | 5,474 | 4,916 | 3,128 | 1,738 | 1,162 | 812 |
| Carrying amount of properties, SEKm | 114,548 | 92,883 | 98,360 | 86,177 | 68,456 | 37,382 | 27,532 | 22,278 | 17,556 |
| Average number of shares, thousands | 180,000 180,000 180,000 173,598 162,753 161,786 159,537 159,537 158,656 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Profit after tax, SEK | 40.38 | 26.78 | 38.71 | 30.38 | 28.98 | 18.10 | 10.11 | 6.69 | 4.87 |
| Profit from property management, SEK | 13.49 | 10.59 | 14.74 | 11.89 | 9.71 | 6.64 | 4.57 | 3.73 | 3.00 |
| Outstanding number of shares, thousands | 180,000 180,000 180,000 180,000 172,397 162,397 159,537 159,537 159,537 | ||||||||
| Shareholders' equity, SEK | 218.62 | 177.55 | 185.02 | 157.63 | 128.03 | 70.10 | 52.14 | 42.15 | 35.57 |
| Long-term net asset value (EPRA NAV), SEK | 269.66 | 219.50 | 229.25 | 198.49 | 159.14 | 86.33 | 60.50 | 50.37 | 41.83 |
| Share price on the closing date, SEK | 246.60 | 211.80 | 219.40 | 184.10 | 208.70 | 110.25 | 66.00 | 37.30 | 25.30 |
1) Attributable to parent company shareholders.
2) Listed associated companies at market value refers to Collector AB (publ) and Brinova Fastigheter AB (publ).
Comments by the CEO
Balder performed strongly during Q3 with profit from property management that increased by 33 % per share. We are working tirelessly and enthusiastically to improve the profit from property management per share over time. The property value also continued to rise through investments, improved net operating income in the existing portfolio and a slightly lower yield requirement.
The property market is strong overall in our markets but we see large variations between different segments and submarkets. Despite the strong property market, I believe that we also have good potential to find reasonably good investment opportunities going forward. A positive factor to bear in mind is that Balder is expanding through a presence in more locations/markets and that we are becoming better and better as a company with time.
It is a real pleasure and privilege for me to serve as Balder's CEO. I am grateful for every day, and to all of you I meet, that you are part of my life and make all of this possible.
Now we are continuing with our work in the same way as before − strengthening the company, our balance sheet and trying to reinvest the profits generated in a smart way.
Erik Selin Chief Executive Officer
*Ecclesiastes from 1917: "What has been will be again, what has been done will be done again; there is nothing new under the sun."
Balder presents its earning capacity on a twelve-month basis in the table below. It is important to note that the current earning capacity should not be placed on a par with a forecast for the coming 12 months. For instance, the earning capacity contains no estimate of rental, vacancy, currency or interest rate changes.
Balder's income statement is also impacted by the development in the value of the real estate portfolio as well as future property acquisitions and/or property divestments. Additional items affecting the operating result are changes in value of derivatives. None of the above has been considered in the current earning capacity.
The earning capacity is based on the real estate portfolio's contracted rental income, estimated property costs during a normal year as well as administrative costs. The costs of the interest-bearing liabilities are based on the group's average interest rate level including the effect of derivative instruments. The tax is calculated using the effective tax rate during each period.
| SEKm | 2018 30 Sep |
2018 30 June |
2018 31 March |
2017 31 Dec |
2017 30 Sep |
2017 30 June |
2017 31 March |
2016 31 Dec |
2016 30 Sep |
2016 30 June |
2016 31 March |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Rental income | 6,800 | 6,665 | 6,430 | 6,240 | 5,920 | 5,860 | 5,700 | 5,800 | 5,470 | 5,325 | 5,135 |
| Property costs | –1,845 | –1,815 | –1,760 | –1,720 | –1,655 | –1,690 | –1,660 | –1,695 | –1,690 | –1,685 | –1,670 |
| Net operating income | 4,955 | 4,850 | 4,670 | 4,520 | 4,265 | 4,170 | 4,040 | 4,105 | 3,780 | 3,640 | 3,465 |
| Management and | |||||||||||
| administrative costs | –590 | –590 | –565 | –550 | –510 | –490 | –490 | –490 | –490 | –480 | –440 |
| Profit from property | |||||||||||
| management from | |||||||||||
| associated companies | 660 | 650 | 650 | 640 | 600 | 530 | 530 | 505 | 470 | 420 | 355 |
| Operating profit | 5,025 | 4,910 | 4,755 | 4,610 | 4,355 | 4,210 | 4,080 | 4,120 | 3,760 | 3,580 | 3,380 |
| Net financial items | –1,100 | –1,120 | –1,120 | –1,060 | –1,050 | –950 | –950 | –1,040 | –1,025 | –1,010 | –930 |
| Of which non-controlling | |||||||||||
| interests | –555 | –555 | –550 | –525 | –475 | –455 | –450 | –445 | –445 | –380 | –400 |
| Profit from | |||||||||||
| property management 1) | 3,370 | 3,235 | 3,085 | 3,025 | 2,830 | 2,805 | 2,680 | 2,635 | 2,290 | 2,190 | 2,050 |
| Tax | –730 | –700 | –665 | –650 | –610 | –605 | –580 | –570 | –490 | –470 | –440 |
| Profit after tax | 2,640 | 2,535 | 2,420 | 2,375 | 2,220 | 2,200 | 2,100 | 2,065 | 1,800 | 1,720 | 1,610 |
| Profit from property manage | |||||||||||
| ment per share, SEK | 18.72 | 17.97 | 17.14 | 16.81 | 15.72 | 14.47 | 13.78 | 13.52 | 11.92 | 11.55 | 10.73 |
1) Attributable to parent company shareholders.
In the current earning capacity the exchange rate at the end of the reporting period has been used for translation of the foreign subsidiaries' income statement items.
Under IFRS, Collector AB (publ) and Brinova Fastigheter AB (publ) should not be recognised at market value when Balder reports its participation in the profit from associated companies from these companies. In order to clarify the listed associated companies at market value, Collector and Brinova is reported below at the share price as of 30 September.
| SEKm | 2018 30 Sep |
2017 30 Sep |
2017 31 Dec |
|---|---|---|---|
| Assets | |||
| Investment properties | 114,548 | 92,883 | 98,360 |
| Other fixed assets | 114 | 134 | 107 |
| Participations in associated companies 1,2) | 6,556 | 7,017 | 6,707 |
| Other receivables | 1,660 | 1,587 | 1,508 |
| Cash and cash equivalents and financial investments | 1,177 | 5,328 | 1,585 |
| Total assets | 124,055 | 106,949 | 108,268 |
| Shareholders' equity and liabilities | |||
| Shareholders' equity 3) | 46,553 | 38,003 | 39,725 |
| Deferred tax liability | 8,322 | 6,678 | 7,041 |
| Interest-bearing liabilities | 65,462 | 55,826 | 58,384 |
| –of which Hybrid capital 4) | 3,603 | 3,348 | 3,447 |
| Derivatives | 865 | 872 | 922 |
| Other liabilities | 2,853 | 5,570 | 2,196 |
| Total equity and liabilities | 124,055 | 106,949 | 108,268 |
| 1) Including Balder's market value of Collector AB (publ) Collector's share price (SEK) |
2,796 61.80 |
4,242 93.75 |
3,677 81.25 |
| 2) Including Balder's market value of Brinova Fastigheter AB (publ) Brinova's share price (SEK) |
326 17.70 |
248 13.45 |
220 11.95 |
| 3) Of which non-controlling interests | 7,201 | 6,043 | 6,422 |
| 4) 50 % of Hybrid capital is treated as equity by the rating agencies and thus decreases the interest bearing liabilities when calculating the debt/equity ratio and the net debt to total assets ratio |
1,802 | 1,674 | 1,724 |
| SEKm | 2018 30 Sep |
2017 30 Sep |
2017 31 Dec |
|---|---|---|---|
| Opening equity | 39,725 | 36,791 | 36,791 |
| Transition effect IFRS 9 | –92 | – | – |
| Total comprehensive income for the period/year | 8,034 | 5,415 | 7,791 |
| Dividend preference shares | – | –50 | –50 |
| Retiring of preference capital | – | –3,500 | –3,500 |
| Transactions with non-controlling interests | –79 | –8 | –8 |
| Dividend to non-controlling interests | –135 | – | – |
| Non-controlling interests, arising on the acquisitions of subsidiary | – | 6 | 6 |
| The change during the period/year of listed associated companies at market value | –901 | –650 | –1,304 |
| Closing equity | 46,553 | 38,003 | 39,725 |
Profit from property management for the period amounted to SEK 2,862m (2,401), of which effect of changes in exchange rates amounted to SEK 72m. Profit from property management attributable to parent company shareholders increased by 18 % and amounted to SEK 2,428m (2,056), which corresponds to an increase per share by 27 % to SEK 13.49 (10.59). Profit from property management includes SEK 485m (425) in respect of associated companies.
Net profit after tax for the period amounted to SEK 7,955m (5,430). Net profit after tax for the period attributable to parent company shareholders amounted to SEK 7,269m (4,971), corresponding to SEK 40.38 per share (26.78). Profit before tax was affected by changes in value in respect of properties of SEK 6,351m (3,582), changes in value of interest rate derivatives of SEK 24m (160) and profit from participations in associated companies of SEK 590m (741).
Rental income increased by 13 % to SEK 4,926m (4,357), of which the effect of changes in exchange rates was SEK 169m. The increase was primarily due to acquisitions, new leases and completed projects. The leasing portfolio was estimated to have a rental value on 30 September of SEK 7,062m (6,191). The average rental level for the entire real estate portfolio amounted to SEK 1,762/sq.m. (1,663) excluding project properties.
The like for like rental income has increased with 2.5 % after adjustments for currency changes.
Rental income shows a considerable diversification of risks as regards tenants, sectors and locations. The economic occupancy rate amounted to 96 % (96) on 30 September. The total rental value of unlet areas at the end of the period amounted to SEK 262m (271) on an annual basis.
Property costs amounted to SEK 1,338m (1,271) during the period, of which the effect of changes in exchange rates was SEK 48m.
Net operating income increased by 16 % to SEK 3,588m (3,086), which implies a surplus ratio of 73 % (71).
Operating costs normally vary with the seasons. The first and fourth quarters have higher costs than the other quarters, while the third quarter usually has the lowest cost level.
Balder carried out an individual internal valuation on 30 September of the entire real estate portfolio, see page 9. Unrealised changes in value during the period amounted to SEK 6,301m (3,444). Realised changes in value amounted to SEK 50m (138). The average yield requirement as of 30 September amounted to 4.8 % (5.0), which is 0.2 percentage
points lower compared to year-end. The change in value during the period is attributable to the market's lower yield requirement and improved net operating income.
Management and administrative costs amounted to SEK 436m (405) during the period, of which the effect of changes in exchange rates was SEK 19m.
Balder owns property managing and project developing associated companies, see note 15 in Balder's Annual Report for 2017, and 44.1 % in Collector AB (publ) which is listed. Brinova Fastigheter AB (publ) is also listed and Balder's share amounts to 25.5 %. In order to clarify these associated companies value in Balder, Balder also reports a consolidated statement of financial position including listed associated companies at market value, see page 5.
Profit from participations in associated companies amounted to SEK 590m (741) and Balder's participation in the associated companies profit from property management amounted to SEK 485m (425).
Profit before tax was impacted by unrealised changes in value in respect of properties and interest rate derivatives of SEK 228m (500). The tax expense for the period amounted to SEK –123m (–184).
Net financial items amounted to SEK –774m (–711), of which the effect of changes in exchange rates was SEK –30m. Changes in value of interest rate derivatives amounted to SEK 24m (160). The positive change in value of derivatives during the period is due to the fact that the interest rates have risen during the year. Unrealised changes in value do not affect the cash flow.
The average interest rate was 1.7 % (1.9) on the closing date and 1.8 % (1.9) for the period.
The group's tax cost amounted to SEK –1,385m (–1,029), of which effect of changes in exchange rates amounted to SEK –43m. Current tax for the period amounts to SEK –209m (–156), mainly attributable to Sato Oyj, and also a deferred tax expense of SEK –1,176m (–874). Current tax attributable to parent company shareholders amounted to SEK –130m (–84).
The group's deferred tax liability has been calculated as the value of the net of fiscal deficits and the temporary differences between the carrying amounts and values for tax purposes of properties and interest rate derivatives. Deferred tax liabilities amounted to SEK 8,322m (6,678).
Following the decision on changed corporate taxation, the deferred tax liability has been recomputed to the new tax rate 20.6 % regarding the Swedish operations. The measurement of the loss carry-forwards that are expected to be utilised during the years 2018-2020 has been calculated using the current tax rates for each year. Overall, a positive nonrecurring accounting effect arose of net SEK 328m for the period to and including September 2018, when the deferred tax liability was measured at the new tax rates.
In June, the Government decided to approve the proposal on changed corporate taxation. In brief, the decision means that the interest deduction will be limited to 30 % of taxable EBITDA. In addition, the tax rate is being reduced in two stages from the current rate of 22 % to 21.4 % from 2019 and to 20.6 % from 2021. The new rules apply from 1 January 2019.
Profit from property management for the third quarter of 2018 increased by 23 % and amounted to SEK 1,099m (892). Profit from property management attributable to parent company shareholders for the third quarter of 2018 increased by 24 % and amounted to SEK 943m (760) which corresponds to an increase per share of 33 % to SEK 5.24 (3.94). Profit from property management included SEK 174m (160) in respect of associated companies. Rental income amounted to SEK 1,709m (1,475) and property costs amounted to SEK 423m (366), which meant that net operating income increased by 16 % to SEK 1,286m (1,109), of which the effect of changes in exchange rates was SEK 43m. The surplus ratio amounted to 75 % (75).
Net profit after tax for the period amounted to SEK 3,600m (1,464). Profit after tax attributable to parent company shareholders amounted to SEK 3,400m (1,271) corresponding to SEK 18.89 per share (6.78). The result was affected by changes in value in respect of properties of SEK 3,348m (872), changes in value of interest rate derivatives of SEK 80m (28) and profit from participations in associated companies of SEK 185m (180).
Cash flow from operating activities before changes in working capital amounted to SEK 2,000m (1,778). Investing activities have burdened the cash flow by SEK –8,412m (–3,632).
During the period, acquisition of properties of SEK –3,566m (–3,905), investments in existing properties and projects of SEK –4,404m (–2,262), investments in property, plant and equipment, financial investments, associated companies and transactions with non-controlling interests SEK –739m (–435), dividends paid preference shares of SEK –m (–150), and realised changes derivatives SEK –m (–417) and dividend to non-controlling interests SEK –135m (–) adds up to SEK –8,843m (–7,169).
These have been financed through cash flow from operating activities of SEK 2,452m (1,636), by property divestments of SEK 266m (2,830), financial investments of SEK 7m (8), associated companies SEK –m (120), dividend from associated companies of SEK 24m (13) and net borrowings of SEK 5,286m (6,300), which adds up to SEK 8,035m (10,905).
Total cash flow for the period amounted to SEK –808m (3,737). In addition to unutilised credit facilities of SEK 7,147m (5,827), the group's cash and cash equivalents, financial investments and unutilised overdraft facilities amounted to SEK 1,527m (5,535) on 30 September.
The number of employees on 30 September amounted to 643 persons (592), of whom 284 were women (275). Balder is organised into six regions. The head office with groupwide functions is located in Gothenburg.
The parent company's operations mainly consist of performing group-wide services but an important part relates to sales of services, principally to associated companies. Sales in the parent company amounted to SEK 197m (186) during the period.
Net profit after tax amounted to SEK 1,646m (1,474). Dividends from subsidiaries was included with SEK 1,608m (909), other net financial items amounted to SEK 30m (585) of which exchange rates differences amounted to SEK –762m (–98), changes in value of interest rate derivatives amounted to SEK 24m (150).
Reported exchange differences mainly refer to the translation of the company's euro bonds, which from a group perspective are used for hedging of foreign net investments.
On 30 September Balder owned 1,179 properties (1,145) with a lettable area of 3,993 thousand sq.m. (3,678) and a value of SEK 114,548m (92,883), including project properties. Balder's total rental value excluding project properties amounted to SEK 7,035m (6,118).
Balder's commercial properties are mainly located in the central parts of the major cities. Balder's residential properties are located in metropolitan areas and places that are growing and developing positively. Balder's ambition is to continue growing in selected markets.
| Number of properties |
Lettable area, sq.m. |
Rental value, SEKm |
Rental value, SEK/sq.m. |
Rental income, SEKm |
Economic occupancy rate, % |
Carrying amount, SEKm |
Carrying amount, % |
|
|---|---|---|---|---|---|---|---|---|
| Distributed by region | ||||||||
| Helsinki | 509 | 1,030,482 | 2,342 | 2,272 | 2,290 | 98 | 30,037 | 26 |
| Stockholm | 76 | 652,415 | 1,195 | 1,832 | 1,132 | 95 | 22,605 | 20 |
| Gothenburg | 147 | 913,426 | 1,279 | 1,400 | 1,225 | 96 | 21,812 | 19 |
| Öresund | 91 | 574,194 | 966 | 1,683 | 915 | 95 | 18,833 | 16 |
| East | 274 | 627,073 | 999 | 1,594 | 963 | 96 | 12,303 | 11 |
| North | 82 | 195,749 | 254 | 1,299 | 248 | 98 | 4,188 | 4 |
| Total | 1,179 | 3,993,339 | 7,035 | 1,762 | 6,774 | 96 | 109,778 | 96 |
| Project | 26 | 26 | 4,770 | 4 | ||||
| Total | 1,179 | 3,993,339 | 7,062 | 1,762 | 6,800 | 96 | 114,548 | 100 |
| Distributed by property category | ||||||||
| Residential | 943 | 2,428,942 | 4,368 | 1,798 | 4,255 | 97 | 62,951 | 55 |
| Office | 70 | 474,925 | 982 | 2,069 | 894 | 91 | 18,002 | 16 |
| Retail | 103 | 594,937 | 789 | 1,326 | 759 | 96 | 12,556 | 11 |
| Other | 63 | 494,535 | 896 | 1,813 | 866 | 97 | 16,269 | 14 |
| Total | 1,179 | 3,993,339 | 7,035 | 1,762 | 6,774 | 96 | 109,778 | 96 |
| Project | 26 | 26 | 4,770 | 4 |
1) The above table refers to the properties owned by Balder at the end of the period. Sold properties have been excluded and acquired properties have been estimated using full-year values. Other properties include hotel, educational, nursing, industrial and mixed-use properties.
Total 1,179 3,993,339 7,062 1,762 6,800 96 114,548 100
Öresund, 18
North, 4 Gothenburg, 20 Stockholm, 20
East, 11
The value of Balder's real estate portfolio is based on internal valuations. The properties in Sweden, Denmark, Norway and Germany are mainly valued using the cash flow based method. In Finland, in addition to the cash flow based method, the sales comparison method and valuation at acquisition cost are used. Properties under construction and real estate projects are valued at market value reduced by estimated building expenditure and project risk, which usually results in valuation at cost. On 30 September, Balder's average yield requirement amounted to 4.8 % (5.0) excluding project and development properties, which is 0.2 percentage points lower compared to year-end.
In order to quality-assure its internal valuations, Balder regularly allows parts of its portfolio to be externally valued during the period or at each year-end. Historically, deviations between external and internal valuations have been insignificant.
On 30 September, Balder had ongoing projects with an expected total investment of SEK 9.3 billion, of which about SEK 4.8 billion was already invested. Most of the ongoing projects refers to residential projects. The projects mainly comprise of about 700 apartments in Sweden, about 800 apartments in Copenhagen and about 1,000 apartments in Helsinki. The investments in Copenhagen and Helsinki relate to owner apartments for rental use and the investments in Sweden mainly refer to apartments for sale.
The overall carrying amount of Balder's properties amounted to SEK 114,548m (92,883) on 30 September. The unrealised change in value during the period amounted to SEK 6,301m (3,444) and is attributable to the market's lower yield requirement and improved net operating income.
During the period, a total of SEK 7,970m (6,033) was invested, of which SEK 3,566m (3,771) related to acquisitions and SEK 4,404m (2,262) related to investments in existing properties and projects. During the period only condominiums and land have been divested at a sales value of SEK 266m (2,873). Profit from property sales amounted to SEK 50m (138). The change in the real estate portfolio during the period is presented in the table below.
| SEKm | Number 1) | SEKm | Number 1) | |
|---|---|---|---|---|
| Real estate portfolio, 1 January | 98,360 | 1,148 | 86,177 | 1,220 |
| Investments in existing properties and projects | 4,404 | 2,262 | ||
| Acquisitions | 3,566 | 27 | 3,771 | 35 |
| Sales/Reclassifications | –216 | 4 | –2,735 | –110 |
| Change in value of investment properties, unrealised | 6,301 | 3,444 | ||
| Currency changes | 2,133 | –36 | ||
| Real estate portfolio, 30 September | 114,548 | 1,179 | 92,883 | 1,145 |
1) Number of investment properties.
| Quarter | Number | Name of property | Property category | Lettable area, sq.m. | |
|---|---|---|---|---|---|
| Acquisitions | |||||
| One | 1 | Årsta 68:1 | Uppsala | Retail | 7,558 |
| One | 1 | Flygspanaren 8 | Norrtälje | Retail | 1,884 |
| One | 1 | Inom Vallgraven 19:4 | Gothenburg | Office | 1,035 |
| One | 1 | Hemsta 14:2 | Gävle | Retail | 4,100 |
| One | 1 | Hemsta 14:3 | Gävle | Retail | 1,448 |
| One | 1 | Maden 4 | Sundbyberg | Retail | 11,137 |
| Two | 1 | Kartan 1 | Sundbyberg | Other | 20,778 |
| Two | 1 | Bollspelaren 1 | Sundbyberg | Other | 9,843 |
| Two | 1 | Terränglöparen 11 | Sundbyberg | Office | 24,807 |
| Two | 1 | Kasernen 1 | Sundbyberg | Other | 1,548 |
| Two | 1 | Kasernen 2 | Sundbyberg | Other | 1,594 |
| Two | 1 | Kasernen 3 | Sundbyberg | Other | 1,555 |
| Two | 1 | Bivacken 2 | Sundbyberg | Other | 4,687 |
| Two | 1 | Kvartermästaren 1 | Sundbyberg | Retail | 4,136 |
| Two | 1 | Murmästaren 9 | Stockholm | Residential | 4,620 |
| Two | 1 | Lakkegata 3 | Oslo, Norway | Residential | 8,551 |
| Two | 7 | Several properties | Germany | Hotel | 40,381 |
| Three | 1 | Ritmallen 2 | Sollentuna | Residential | 11,011 |
| Three | 1 | Grytan 4 | Malmö | Other | 2,790 |
| Three | 1 | Grytan 9 | Malmö | Other | 13,998 |
| Three | 1 | Backa 171:4 | Gothenburg | Office | 8,837 |
| Total | 27 | 186,298 |
Balder owns 50 % of a number of property companies where Balder handles the management and administration, for further information, see page 24-27 in Balder's Annual Report for 2017. Balder's 50 %-owned associated companies are shown in the table below together with Balder's share of 56 % (56) in Serena Properties AB where Balder has a joint control, for company website, see Serenaproperties.se.
Apart from the 50 %-owned associated companies, Balder owns 44.1 % (44.1) in Collector AB (publ), 31 % (31) of Tornet Bostadsproduktion AB, 25.5 % (25.5) of Brinova Fastigheter AB (publ), 49 % (49) in Sjaelsö Management ApS, 20 % (20) in SHH Bostad AB and 25 % (–) in Rosengård Fastighets AB. For more information about these associated companies, see each companys website: Collector.se, Tornet.se, Brinova.se, Sjaelsoemanagement.dk, Shhbostad.se and Rosengardfastigheter.se.
| Number of properties 2) |
Lettable area, sq.m. |
Rental value, SEKm |
Rental value, SEK/sq.m. |
Rental income, SEKm |
Economic occupancy rate, % |
Carrying amount, SEKm |
Carrying amount, % |
|
|---|---|---|---|---|---|---|---|---|
| Distributed by region | ||||||||
| Stockholm | 58 | 145,605 | 209 | 1,434 | 204 | 98 | 3,818 | 42 |
| Gothenburg | 18 | 104,004 | 128 | 1,228 | 122 | 96 | 1,767 | 19 |
| Öresund | 24 | 66,903 | 98 | 1,459 | 97 | 99 | 1,578 | 17 |
| East | 24 | 93,362 | 102 | 1,096 | 96 | 94 | 1,240 | 13 |
| Total | 124 | 409,874 | 536 | 1,309 | 519 | 97 | 8,403 | 91 |
| Project | 2 | 2 | 784 | 9 | ||||
| Total | 124 | 409,874 | 539 | 1,309 | 521 | 97 | 9,187 | 100 |
| Total | 124 | 409,874 | 539 | 1,309 | 521 | 97 | 9,187 | 100 |
|---|---|---|---|---|---|---|---|---|
| Project | 2 | 2 | 784 | 9 | ||||
| Total | 124 | 409,874 | 536 | 1,309 | 519 | 97 | 8,403 | 91 |
| Other | 17 | 89,832 | 94 | 1,042 | 92 | 98 | 1,464 | 16 |
| Retail | 57 | 219,132 | 250 | 1,139 | 239 | 96 | 3,243 | 35 |
| Office | 13 | 38,500 | 85 | 2,200 | 80 | 94 | 1,393 | 15 |
| Residential | 37 | 62,411 | 108 | 1,738 | 107 | 99 | 2,303 | 25 |
1) The above table refers to the properties owned by the associated companies at the end of the period. Sold properties have been excluded and acquired properties have been estimated using full-year values. Other properties include hotel, educational, nursing, industrial and mixed-use properties. 2) Refers to the entire portfolio of the associated companies.
| SEKm | 2018 30 Sep |
2017 30 Sep |
2017 31 Dec |
|---|---|---|---|
| Assets | |||
| Properties | 9,187 | 7,598 | 7,999 |
| Other assets | 90 | 67 | 41 |
| Cash and cash equivalents | 163 | 147 | 105 |
| Total assets | 9,440 | 7,812 | 8,145 |
| Shareholders' equity and liabilities | |||
| Equity/interest-bearing shareholder loan | 4,270 | 3,284 | 3,474 |
| Deferred tax liability | 489 | 419 | 443 |
| Interest-bearing liabilities | 4,420 | 3,995 | 4,107 |
| Other liabilities | 261 | 114 | 121 |
| Total equity and liabilities | 9,440 | 7,812 | 8,145 |
In order to limit the risk of lower rental income and consequently a weakened occupancy rate, Balder strives to develop long-term relationships with the company's existing customers. Balder has a good diversification as regards the distribution between commercial properties and residential properties as well as the geographical distribution. The diversification strengthens the possibilities of maintaining a steady and satisfactory occupancy rate. Balder's commercial leases have an average lease term of 7.8 years (7.5). Balder's 10 largest leases represent 5.5 % (5.5) of total rental income and the average lease term amounts to 12.2 years (11.4).
No individual lease accounts for more than 0.9 % (0.8) of Balder's total rental income and no individual customer accounts for more than 4.0 % (4.3) of total rental income.
| Maturity date | Number of leases |
Proportion, % | Contracted rent, SEKm |
Proportion, % |
|---|---|---|---|---|
| 2018 | 139 | 5 | 29 | 0 |
| 2019 | 1,204 | 40 | 305 | 4 |
| 2020 | 577 | 19 | 253 | 4 |
| 2021 | 542 | 18 | 338 | 5 |
| 2022– | 546 | 18 | 1,686 | 25 |
| Total | 3,008 | 100 | 2,611 | 38 |
| Residential 1) | 37,090 | 4,124 | 61 | |
| Car park 1) | 4,838 | 18 | 0 | |
| Garage 1) | 3,800 | 46 | 1 | |
| Total | 48,736 | 6,800 | 100 |
1) Normally runs subject to a period of notice of three months.
Annual rental income per maturity
22023202520242026202−
Maturity structure of commercial
Balder has assets in Sweden, Norway, Denmark, Finland and Germany which means that the Group is exposed to currency risks. Balder therefore has a diversified financing structure where we use bonds and bank financing in several currencies. The single largest source of funding is bonds issued on the European bond market in Euro, followed by bank loans in various currencies, a MTN programme in Swedish kronor and a commercial paper programme in Euro and Swedish kronor. In addition to these financing sources, Balder also has issued Hybrid capital which has a maturity of 60 years and is considered as 50 % equity by the credit rating agencies. Balder has Investment Grade ratings from credit rating agencies Moody's and S&P.
Balder's Board of directors adjusted the financial target regarding net debt to total assets in the year-end report 2017, the net debt to total assets shall over time not exceed 50 %. the outcome as of 30 September amounted to 50.4 %.
| Financial Key ratios | 2018 30 Sep |
2017 30 Sep |
2017 31 Dec |
|---|---|---|---|
| Interest-bearing liabilities excl. Hybrid capital, SEKm | 61,859 | 52,478 | 54,936 |
| Hybrid capital, SEKm | 3,603 | 3,348 | 3,447 |
| Available liquidity including confirmed loan commitments, SEKm | 8,674 | 7,862 1) | 7,875 |
| Average fixed credit term, years | 5.0 | 5.5 | 5.5 |
| Average interest rate refixing period, years | 3.3 | 3.7 | 4.0 |
| Net debt to total assets (financial covenant 2) < 65), % | 50.4 | 48.9 | 50.9 |
| Interest coverage ratio (financial covenant 2) > 1,8), times | 4.7 | 4.4 | 4.3 |
| Secured debt/Total assets (financial covenant 2) < 45), % | 19.6 | 22.6 | 21.9 |
| Credit rating S&P | BBB Stable outlook |
BBB Stable outlook |
BBB Stable outlook |
| Credit rating Moody's | Baa3 Positive outlook |
Baa3 Positive outlook |
Baa3 Positive outlook |
| Calculation of net debt | |||
| Interest-bearing liabilities excl. Hybrid capital, SEKm | 61,859 | 52,478 | 54,936 |
| Hybrid capital (50 % is treated as equity by rating agencies), SEKm | 1,802 | 1,674 | 1,724 |
| Cash and cash equivalents and financial investments, SEKm | –1,177 | –1,828 1) | –1,585 |
| Net debt | 62,483 | 52,324 | 55,075 |
1) Cash and cash equivalents is decreased by SEK 3,500m which referred to future payment to preference shareholders on 12 October 2017. 2) Financial covenants refers to obligations that Balder has to its financiers in the form of financial key ratios.
| Financial targets | Target | Outcome 3) | |
|---|---|---|---|
| Equity/assets ratio, % | min. | 35.0 | 37.5 |
| Net debt to total assets, % | max. | 50.0 | 50.4 |
| Interest coverage ratio, times | min. | 2.0 | 4.7 |
3) Key ratios including listed associated companies at market value.
Years
0 2005 Q2Q3Q4Q12006 Q2Q3Q4Q12007 Q2Q3Q4Q12008 Q2Q3Q4Q12009 Q2Q3Q4Q1 2010Q2Q3Q42011 Q1Q2Q3Q42012 Q1Q2Q32013 Q4Q1Q2Q32014 Q4 2015 2016 2017 2018 Fixed interest term, years
| Interest maturity structure on 2018-09-30 | Fixed interest term | Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 | |
|---|---|---|---|
| Year | SEKm | Interest, % | Proportion, % |
| Within one year | 27,761 | 0.8 | 42 |
| 1–2 years | 4,348 | 2.1 | 7 |
| 2–3 years | 5,731 | 2.4 | 9 |
| 3–4 years | 7,155 | 1.8 | 11 |
| 4–5 years Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 Q2 |
4,650 | 3.0 | Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 7 |
| 5–6 years Q4Q1Q2Q3Q4Q1Q2Q3 |
853 | 2.8 | 1 |
| 6–7 years | 6,998 | 2.1 | 11 |
| Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 7–8 years |
6,457 | 2.3 | 10 |
| 8–9 years | – | – | – |
| 9–10 years | – | – | – |
| Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 > 10 years |
1,508 | 3.2 | 2 |
| Total | 65,462 | 1.7 | 100 |
| Year | SEKm | Proportion, % |
|---|---|---|
| Within one year | 8,803 | 13 |
| 1–2 years | 10,744 | 16 |
| 2–3 years | 10,041 | 15 |
| 3–4 years | 6,712 | 10 |
| 4–5 years | 7,175 | 11 |
| 5–6 years | 2,412 | 4 |
| 6–7 years | 7,092 | 11 |
| 7–8 years | 5,936 | 9 |
| 8–9 years | 156 | 0 |
| 9–10 years | 144 | 0 |
| > 10 years | 6,245 | 10 |
| Total | 65,462 | 100 |
Fixed credit term
After the end of the reporting period, Balder has together with institutional capital entered into an agreement with Castellum to acquire a real estate portfolio including office, warehouse and logistic properties in Stockholm and Gothenburg. Balder's share is 49 %. The acquisition comprises 38 properties with a lettable area of 174 thousand sq.m. and is acquired for approximately SEK 1,800 million before deduction for deferred tax. Closing is scheduled to 31 December 2018.
After the end of the reporting period no other significant events has occured.
Balder receives fees from associated companies and Erik Selin Fastigheter AB for property and company management services. These fees amounted to SEK 38m (32) during the period and are reported in management and administrative costs. In addition, services are bought from Collector AB (publ). All transactions have been priced on market terms.
Balder's operations, financial position and results may be affected by a number of risks and uncertainty factors. These are described in the Annual Report for 2017, on pages 54-57. Otherwise, no significant changes has been noted.
Balder applies IFRS (International Financial Reporting Standards) as adopted by the European Union in its consolidated accounts and the interpretations of these (IFRIC). This interim report is prepared in accordance with IAS 34, Interim Financial Reporting. In addition, relevant provisions of the Swedish Annual Accounts Act and the Swedish Securities Markets Act have also been applied. The parent company has prepared its financial statements in accordance with the Annual Accounts Act, the Securities Markets Act and RFR 2, Accounting for Legal Entities. The accounting principles follow those reported in the Annual Report 2017.
From and including 1 January 2018, the Group has adopted the following new standard:
The change with IFRS 9 compared to previously applied principles relates to the new model for measurement of credit losses. The model measures expected credit losses by taking account of future-oriented information. Compared with the previous model, which was based on actual losses, this will mean an earlier recognition of credit losses. In the Annual Report for 2017, the impact of the transition was presented in Note 1 with an increased provision for
accounts receivable losses, which had a net effect on equity of SEK –16m. In connection with the preparation of the Q1 report, it has also been noted that the associated company Collector reported an impact of the transition with regard to recognition of expected credit losses, whereupon the total impact of the transition on the Balder Group's equity amounted to SEK –92m for the introduction of IFRS 9. In accordance with the standard's transitional arrangements, comparative figures have not been restated for 2017.
Besides this the accounting policies and calculation methods applied are unchanged compared with the Annual Report for 2017.
IFRS 16 will impact the Balder Group's accounting of the leases where the company is a lessee. It is expected that the introduction of the standard will have a limited impact on the financial statements, as the Group essentially operates as a lessor, and leases where the Group is a lessee only arise to a limited extent relative to the rest of the Group's operations. The effects will be quantified during the year and will be reported in the Year-end report and the Annual Report for 2018.
The Annual General Meeting on 8 May 2018 resolved that the nomination committee shall be composed of one representative for each of the two largest shareholders or ownership spheres in addition to Lars Rasin, who represents the other shareholders. The names of the other two members and the owners they represent shall be announced not later than six months before the Annual General Meeting and shall be based on known ownership immediately prior to publication.
In accordance with this resolution, Balder's nomination committee, based on ownership as of 30 September 2018 and known changes subsequently, Lars Rasin, Chairman, Jesper Mårtensson, representing Erik Selin Fastigheter AB and Rikard Svensson, representing Arvid Svensson Invest AB.
The Annual General Meeting will be held in Gothenburg on Wednesday 8 May 2019. Shareholders who wish to contact the nomination committee can do so via e-mail to [email protected].
Gothenburg 6 November 2018
Erik Selin Chief Executive Officer
Fastighets AB Balder (publ), corp. id. no. 556525-6905
We have reviewed the condensed interim financial information (interim report) for Fastighets AB Balder (publ) as of 30 September 2018 and for the nine-month period that ended on this date. The Board of Directors and the Chief Executive Officer are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of the interim report consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially smaller in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing practices. The procedures performed in a review do not
enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Accordingly, the conclusion expressed based on a review does not constitute the same level of assurance as a conclusion based on an audit.
Based on our review, nothing has come to our attention that give us reason to believe that the interim report, in all material respects, is not prepared for the Group in compliance with IAS 34 and the Swedish Annual Accounts Act and for the Parent Company in compliance with the Swedish Annual Accounts Act.
Gothenburg 6 November 2018 Öhrlings PricewaterhouseCoopers AB
Bengt Kron Authorised Public Accountant Auditor in charge
Helén Olsson Svärdström Authorised Public Accountant
| SEKm | 2018 July-Sep |
2017 July-Sep |
2018 Jan-Sep |
2017 Jan-Sep |
2017/2018 Oct-Sep |
2017 Jan-Dec |
|---|---|---|---|---|---|---|
| Rental income | 1,709 | 1,475 | 4,926 | 4,357 | 6,484 | 5,915 |
| Property costs | –423 | –366 | –1,338 | –1,271 | –1,762 | –1,695 |
| Net operating income | 1,286 | 1,109 | 3,588 | 3,086 | 4,723 | 4,220 |
| Management and administrative costs | –143 | –137 | –436 | –405 | –574 | –543 |
| Participations in the profits of associated companies | 185 | 180 | 590 | 741 | 860 | 1,010 |
| – of which profit from property management | 174 | 160 | 485 | 425 | 644 | 583 |
| – of which changes in value | 68 | 41 | 228 | 500 | 403 | 675 |
| – of which tax | –57 | –21 | –123 | –184 | –187 | –248 |
| Other income/costs | 2 | 4 | –2 | 6 | –0 | 8 |
| Net financial items | –220 | –243 | –774 | –711 | –1,047 | –984 |
| Profit including changes in value and tax in associated companies | 1,109 | 912 | 2,967 | 2,717 | 3,961 | 3,711 |
| – of which Profit from property management | 1,099 | 892 | 2,862 | 2,401 | 3,744 | 3,284 |
| Changes in value | ||||||
| Changes in value properties, realised | 14 | 1 | 50 | 138 | 96 | 184 |
| Changes in value properties, unrealised | 3,334 | 871 | 6,301 | 3,444 | 7,972 | 5,115 |
| Changes in value derivatives | 80 | 28 | 24 | 160 | 8 | 144 |
| Changes in value total | 3,428 | 900 | 6,374 | 3,742 | 8,075 | 5,443 |
| Profit before tax | 4,537 | 1,812 | 9,341 | 6,459 | 12,036 | 9,154 |
| Income tax | –937 | –349 | –1,385 | –1,029 | –1,742 | –1,386 |
| Net profit for the period/year | 3,600 | 1,464 | 7,955 | 5,430 | 10,294 | 7,769 |
| Net profit for the period/year attributable to: | ||||||
| Parent company shareholders | 3,400 | 1,271 | 7,269 | 4,971 | 9,416 | 7,118 |
| Non-controlling interests | 200 | 193 | 687 | 459 | 878 | 650 |
| 3,600 | 1,464 | 7,955 | 5,430 | 10,294 | 7,769 | |
| Other comprehensive income – items that may be subsequently | ||||||
| reclassified to profit or loss | ||||||
| Translation difference relating to foreign operations | –38 | –140 | 13 | –116 | 26 | –103 |
| Cash flow hedges after tax | 42 | 11 | 52 | 102 | 72 | 121 |
| Participation in other comprehensive income of associated companies | –2 | 0 | 13 | –1 | 18 | 4 |
| Total comprehensive income for the period/year | 3,603 | 1,335 | 8,034 | 5,415 | 10,410 | 7,791 |
| Total comprehensive income for the period/year attributable to: | ||||||
| Parent company shareholders | 3,477 | 1,202 | 7,035 | 4,909 | 9,032 | 6,906 |
| Non-controlling interests | 126 | 133 | 1,000 | 505 | 1,379 | 885 |
| 3,603 | 1,335 | 8,034 | 5,415 | 10,410 | 7,791 | |
| Profit from property management | 1,099 | 892 | 2,862 | 2,401 | 3,744 | 3,284 |
| Of which non-controlling interests part of Profit from property | ||||||
| management | –156 | –133 | –434 | –345 | –568 | –480 |
| Profit from property management attributable to parent company | ||||||
| shareholders | 943 | 760 | 2,428 | 2,056 | 3,176 | 2,804 |
| Profit from property management per share, SEK | 5.24 | 3.94 | 13.49 | 10.59 | 17.64 | 14.74 |
| Profit after tax per share, SEK | 18.89 | 6.78 | 40.38 | 26.78 | 52.31 | 38.71 |
Thers is no dilutive effect as no potential shares arise.
| SEKm | 2018 30 Sep |
2017 30 Sep |
2017 31 Dec |
|---|---|---|---|
| Assets | |||
| Investment properties | 114,548 | 92,883 | 98,360 |
| Other fixed assets | 114 | 134 | 107 |
| Participations in associated companies | 5,449 | 4,356 | 4,699 |
| Other receivables | 1,660 | 1,587 | 1,508 |
| Cash and cash equivalents and financial investments | 1,177 | 5,328 | 1,585 |
| Total assets | 122,948 | 104,288 | 106,260 |
| Shareholders' equity and liabilities | |||
| Shareholders' equity 1) | 45,447 | 35,341 | 37,718 |
| Deferred tax liability | 8,322 | 6,678 | 7,041 |
| Interest-bearing liabilities | 65,462 | 55,826 | 58,384 |
| –of which Hybrid capital 2) | 3,603 | 3,348 | 3,447 |
| Derivatives | 865 | 872 | 922 |
| Other liabilities | 2,853 | 5,570 | 2,196 |
| Total equity and liabilities | 122,948 | 104,288 | 106,260 |
| 1) Of which non-controlling interests | 7,201 | 6,043 | 6,422 |
| 2) 50 % of Hybrid capital is treated as equity by the rating agencies and thus decreases interest bearing liabilities when calculating the debt/equity ratio and net debt to total assets ratio |
1,802 | 1,674 | 1,724 |
| SEKm | 2018 30 Sep |
2017 30 Sep |
2017 31 Dec |
|---|---|---|---|
| Opening equity | 37,718 | 33,479 | 33,479 |
| Transition effect IFRS 9 | –92 | – | – |
| Total comprehensive income for the period/year | 8,034 | 5,415 | 7,791 |
| Dividend preference shares | – | –50 | –50 |
| Retiring of preference capital | – | –3,500 | –3,500 |
| Transactions with non-controlling interests | –79 | –8 | –8 |
| Dividend to non-controlling interests | –135 | – | – |
| Non-controlling interests arising on the acquisition of subsidiary | – | 6 | 6 |
| Closing equity | 45,447 | 35,341 | 37,718 |
| SEKm | 2018 July-Sep |
2017 July-Sep |
2018 Jan-Sep |
2017 Jan-Sep |
2017 Jan-Dec |
|---|---|---|---|---|---|
| Net operating income | 1,286 | 1,109 | 3,588 | 3,086 | 4,220 |
| Other income/costs | 2 | 4 | –2 | 6 | 8 |
| Management and administrative costs | –143 | –137 | –436 | –405 | –543 |
| Reversal of depreciation | 5 | 6 | 14 | 18 | 19 |
| Net financial items paid | –288 | –236 | –890 | –757 | –961 |
| Taxes paid | –84 | –17 | –275 | –170 | –235 |
| Cash flow from operating activities before change in working capital | 777 | 729 | 2,000 | 1,778 | 2,508 |
| Change in operating receivables | –12 | –133 | –103 | –97 | –86 |
| Change in operating liabilities | 126 | 39 | 555 | –45 | 69 |
| Cash flow from operating activities | 891 | 634 | 2,452 | 1,636 | 2,490 |
| Acquisition of properties | –727 | –2,831 | –3,566 | –3,905 | –4,936 |
| Acquisition/Divestment of property, plant and equipment | –6 | –2 | –21 | –16 | –27 |
| Purchase of financial investments | –136 | –20 | –358 | –24 | –41 |
| Acquisition of shares in associated companies/Capital contribution to associated | |||||
| companies | –0 | –224 | –250 | –387 | –456 |
| Investment in existing properties and projects | –1,536 | –670 | –4,404 | –2,262 | –3,718 |
| Transactions with non-controlling interests | –94 | –6 | –111 | –8 | –8 |
| Sale of properties | 152 | 84 | 266 | 2,830 | 2,830 |
| Sale of financial investments | 1 | – | 7 | 8 | 7 |
| Sale of shares in associated companies | – | 120 | – | 120 | 120 |
| Dividend paid from associated companies | – | – | 24 | 13 | 13 |
| Cash flow from investing activities | –2,345 | –3,549 | –8,412 | –3,632 | –6,215 |
| Dividend paid for preference shares | – | –50 | – | –150 | –150 |
| Redemption of preference capital | – | – | – | – | –3,500 |
| Dividend paid to non-controlling interests | – | – | –135 | – | – |
| Changes in value derivatives, realised | – | –199 | – | –417 | –417 |
| Loans raised | 1,999 | 9,682 | 9,359 | 21,453 | 24,896 |
| Amortisation/redemption of loans sold properties/changes in | |||||
| overdraft facilities | –680 | –4,415 | –4,073 | –15,154 | –17,110 |
| Cash flow from financing activities | 1,319 | 5,019 | 5,152 | 5,733 | 3,719 |
| Cash flow for the period/year | –136 | 2,105 | –808 | 3,737 | –6 |
| Cash and cash equivalents at the start of the period/year | 608 | 2,919 | 1,281 | 1,287 | 1,287 |
| Cash and cash equivalents at the end of the period/year | 472 | 5,023 | 472 | 5,023 | 1,281 |
| Cash and cash equivalents | 472 | 5,023 | 472 | 5,023 | 1,281 |
| Unutilised overdraft facilities | 350 | 207 | 350 | 207 | 350 |
| Unutilised credit facilities | 7,147 | 5,827 | 7,147 | 5,827 | 5,940 |
| Financial investments | 705 | 305 | 705 | 305 | 305 |
| Available liquidity including confirmed credit commitments | 8,674 | 11,362 | 8,674 | 11,362 | 7,875 |
| SEKm | 2018 July-Sep |
2017 July-Sep |
2018 Jan-Sep |
2017 Jan-Sep |
2017/2018 Oct-Sep |
2017 Jan-Dec |
|---|---|---|---|---|---|---|
| Rental income | ||||||
| Helsinki | 588 | 498 | 1,717 | 1,510 | 2,251 | 2,044 |
| Stockholm | 274 | 229 | 771 | 674 | 1,017 | 920 |
| Gothenburg | 308 | 279 | 921 | 851 | 1,222 | 1,153 |
| Öresund | 242 | 176 | 652 | 474 | 844 | 666 |
| East | 240 | 240 | 697 | 689 | 926 | 919 |
| North | 57 | 53 | 169 | 159 | 224 | 214 |
| Total | 1,709 | 1,475 | 4,926 | 4,357 | 6,484 | 5,915 |
| Net operating income | ||||||
| Helsinki | 432 | 359 | 1,198 | 989 | 1,562 | 1,352 |
| Stockholm | 214 | 179 | 596 | 514 | 786 | 704 |
| Gothenburg | 239 | 220 | 691 | 630 | 922 | 861 |
| Öresund | 195 | 133 | 507 | 362 | 655 | 510 |
| East | 164 | 179 | 481 | 482 | 641 | 642 |
| North | 42 | 39 | 115 | 110 | 155 | 151 |
| Total | 1,286 | 1,109 | 3,588 | 3,086 | 4,723 | 4,220 |
The group's internal reporting of operations is divided into the above segments. Total net operating income corresponds with reported net operating income in the income statement. The difference between net operating income of SEK 3,588m (3,086) and profit before tax of SEK 9,341m (6,459) consists of changes in value of properties of SEK 6,351m (3,582), other income/costs SEK –2m (6), management and administrative costs of SEK –436m (–405), participations in profits of associated companies of SEK 590m (741), net financial items of SEK –774m (–711) and changes in value of derivatives of SEK 24m (160).
| SEKm | 2018 30 Sep |
2017 30 Sep |
2017 31 Dec |
|---|---|---|---|
| Investment properties | |||
| Helsinki | 30,037 | 25,680 | 26,918 |
| Stockholm | 22,605 | 17,272 | 17,675 |
| Gothenburg | 21,812 | 17,959 | 19,376 |
| Öresund | 18,833 | 13,062 | 14,591 |
| East | 12,303 | 10,939 | 11,402 |
| North | 4,188 | 3,241 | 3,334 |
| Total carrying amount excluding project | 109,778 | 88,154 | 93,297 |
| Project | 4,770 | 4,729 | 5,063 |
| Total carrying amount including project | 114,548 | 92,883 | 98,360 |
The carrying amounts of properties have during the period changed by investments, acquisitions, divestments, unrealised changes in value and currency changes, with SEK 3,119m in Helsinki region, SEK 4,930m in the Stockholm region, SEK 2,436m in the Gothenburg region, SEK 4,242m in the Öresund region, SEK 854m in the North region and by SEK 901m in the East region. The group's projects has decreased by SEK –293m. Sato's property portfolio is divided between the regions Helsinki and East. The real estate holdings in Norway is classified in the North region and the properties in Germany in the Öresund region.
| 2018 July-Sep |
2017 July-Sep |
2018 Jan-Sep |
2017 Jan-Sep |
2017/2018 Oct-Sep |
2017 Jan-Dec |
|
|---|---|---|---|---|---|---|
| Share-related 1) | ||||||
| Average number of shares, thousands | 180,000 | 180,000 | 180,000 | 180,000 | 180,000 | 180,000 |
| Profit after tax, SEK | 18.89 | 6.78 | 40.38 | 26.78 | 52.31 | 38.71 |
| Profit after tax excluding unrealised changes in value, SEK |
4.18 | 3.17 | 13.73 | 9.92 | 18.17 | 14.36 |
| Profit from property management, SEK | 5.24 | 3.94 | 13.49 | 10.59 | 17.64 | 14.74 |
| Net operating income, SEK | 5.80 | 4.91 | 16.04 | 13.72 | 21.11 | 18.79 |
| Outstanding number of shares, thousands | 180,000 | 180,000 | 180,000 | 180,000 | 180,000 | 180,000 |
| Shareholders' equity, SEK | 218.62 | 177.55 | 218.62 | 177.55 | 218.62 | 185.02 |
| Long-term net asset value (EPRA NAV), SEK | 269.66 | 219.50 | 269.66 | 219.50 | 269.66 | 229.25 |
| Share price on the closing date, SEK | 246.60 | 211.80 | 246.60 | 211.80 | 246.60 | 219.40 |
| Property-related | ||||||
| Rental value full-year, SEK/sq.m. | 1,762 | 1,663 | 1,762 | 1,663 | 1,762 | 1,724 |
| Rental income full-year, SEK/sq.m. | 1,696 | 1,590 | 1,696 | 1,590 | 1,696 | 1,651 |
| Economic occupancy rate, % | 96 | 96 | 96 | 96 | 96 | 96 |
| Surplus ratio, % | 75 | 75 | 73 | 71 | 73 | 71 |
| Carrying amount, SEK/sq.m. | 27,490 | 23,969 | 27,490 | 23,969 | 27,490 | 24,952 |
| Number of properties | 1,179 | 1,145 | 1,179 | 1,145 | 1,179 | 1,148 |
| Lettable area, sq.m. thousands | 3,993 | 3,678 | 3,993 | 3,678 | 3,993 | 3,739 |
| Profit from property management, attributable to | ||||||
| parent company shareholders, SEKm | 943 | 760 | 2,428 | 2,056 | 3,176 | 2,804 |
| Financial | ||||||
| Return on equity, % | 15.0 | 9.3 | 22.3 | 17.8 | 26.4 | 22.6 |
| Return on total assets, % | 7.0 | 5.2 | 9.7 | 8.0 | 11.3 | 9.9 |
| Interest coverage ratio, times | 6.0 | 4.7 | 4.7 | 4.4 | 4.6 | 4.3 |
| Equity/assets ratio, % | 37.5 | 35.5 | 37.5 | 35.5 | 37.5 | 36.7 |
| Debt/equity ratio, times | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 |
| Net debt to total assets, % | 50.4 | 48.9 2) | 50.4 | 48.9 2) | 50.4 | 50.9 |
| 2018 July-Sep |
2017 July-Sep |
2018 Jan-Sep |
2017 Jan-Sep |
2017/2018 Oct-Sep |
2017 Jan-Dec |
|
|---|---|---|---|---|---|---|
| Share-related 1) Shareholders' equity, SEK |
212.47 | 162.77 | 212.47 | 162,77 | 212.47 | 173.86 |
| Financial | ||||||
| Return on equity, % | 15.5 | 10.1 | 23.3 | 19.8 | 27.9 | 24.7 |
| Return on total assets, % | 7.1 | 5.3 | 9.8 | 8.3 | 11.5 | 10.2 |
| Equity/assets ratio, % | 37.0 | 33.9 | 37.0 | 33.9 | 37.0 | 35.5 |
| Debt/equity ratio, times | 1.4 | 1.5 | 1.4 | 1.5 | 1.4 | 1.5 |
| Net debt to total assets, % | 50.8 | 50.2 2) | 50.8 | 50.2 2) | 50.8 | 51.8 |
1) There is no dilutive effect as no potential shares arise.
2) Cash and cash equivalents is decreased by SEK 3,500m which referred to future payment to preference shareholders on 12 October 2017.
| SEKm | 2018 July-Sep |
2017 July-Sep |
2018 Jan-Sep |
2017 Jan-Sep |
2017/2018 Oct-Sep |
2017 Jan-Dec |
|---|---|---|---|---|---|---|
| Net sales | 56 | 65 | 197 | 186 | 263 | 252 |
| Administrative costs | –64 | –69 | –196 | –196 | –278 | –278 |
| Operating profit | –8 | –4 | 1 | –11 | –14 | –26 |
| Profit from financial items | ||||||
| Dividends from subsidiaries | – | – | 1,608 | 909 | 1,608 | 909 |
| Other net financial items | 558 | 313 | 30 | 585 | –205 | 350 |
| – of which exchange rate differences | 207 | 55 | –762 | –98 | –1,229 | –565 |
| Changes in value of derivatives | 80 | 28 | 24 | 150 | 8 | 133 |
| Profit before appropriations and taxes | 630 | 336 | 1,663 | 1,633 | 1,397 | 1,367 |
| Appropriations | ||||||
| Group contributions paid | – | – | – | – | –41 | –41 |
| Profit before tax | 630 | 336 | 1,663 | 1,633 | 1,355 | 1,326 |
| Deferred tax | –130 | –74 | –17 | –159 | 51 | –92 |
| Net profit for the period/year 1) | 500 | 262 | 1,646 | 1,474 | 1,406 | 1,234 |
1) The parent company has no items reported in other comprehensive income and therefore total comprehensive income for the period/year is equal with net profit for the period/year.
| SEKm | 2018 30 Sep |
2017 30 Sep |
2017 31 Dec |
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 11 | 25 | 9 |
| Financial non-current assets | 6,762 | 5,352 | 5,472 |
| Receivables from group companies | 41,959 | 34,999 | 36,790 |
| Current receivables | 215 | 256 | 199 |
| Cash and cash equivalents and financial investments | 877 | 5,087 | 1,152 |
| Total assets | 49,825 | 45,718 | 43,621 |
| Shareholders' equity and liabilities | |||
| Shareholders' equity | 11,283 | 9,877 | 9,637 |
| Interest-bearing liabilities | 32,385 | 26,764 | 28,774 |
| –of which Hybrid capital | 3,603 | 3,348 | 3,447 |
| Liabilities to group companies | 5,356 | 4,886 | 4,443 |
| Derivatives | 388 | 396 | 412 |
| Other liabilities | 413 | 3,796 | 355 |
| Total equity and liabilities | 49,825 | 45,718 | 43,621 |
Balder's share is listed on Nasdaq Stockholm, Large Cap segment. The company's market capitalisation as of 30 September amounted to SEK 44,388m (41,615).
The principal owner in Fastighets AB Balder is Erik Selin Fastigheter AB, which owns 36.4 % (34.5) of the capital and 49.9 % (48.2) of the votes. Foreign ownership amounts to approximately 25 % (22) of outstanding shares.
At the end of the period, approximately 13,000 shareholders (14,000) held shares. During the period, approximately 51 million shares were traded (63) which corresponds to an average of about 278,000 shares per trading day (336,000). The annual turnover rate amounted to 38 % (47). The price of the share was SEK 246.60 (211.80) on 30 September, corresponding to an increase of 12.4 % since year-end.
On 30 September, the share capital in Balder amounted to SEK 180,000,000 distributed among 180,000,000 shares. Each share has a quota value of SEK 1, where of 11,229,432 shares are of Class A and 168,770,568 of Class B. The total number of outstanding shares as of 30 September amounts to 180,000,000. Each Class A share carries one vote and each Class B share carries one tenth of one vote.
| EPRA key ratios | 2018 Jan-Sep |
2017 Jan-Sep |
2017 Jan-Dec |
|---|---|---|---|
| EPRA NAV (Long-term net asset value), SEKm | 48,539 | 39,509 | 41,265 |
| EPRA NAV, SEK per share | 269.66 | 219.50 | 229.25 |
| EPRA Vacancy rate, % | 4 | 4 | 4 |
Share price, Net asset value (EPRA NAV)Profit from property management
SEK/share
| Owner | A shares | B shares | Total number of shares |
Capital, % | Votes, % |
|---|---|---|---|---|---|
| Erik Selin via company | 8,309,328 | 57,210,900 | 65,520,228 | 36.4 | 49.9 |
| Arvid Svensson Invest AB | 2,915,892 | 13,542,540 | 16,458,432 | 9.1 | 15.2 |
| Swedbank Robur fonder | – | 9,442,843 | 9,442,843 | 5.2 | 3.4 |
| SEB Investment Management | – | 7,832,431 | 7,832,431 | 4.4 | 2.8 |
| Länsförsäkringar fondförvaltning AB | – | 6,552,373 | 6,552,373 | 3.6 | 2.3 |
| Handelsbanken Fonder AB | – | 5,227,375 | 5,227,375 | 2.9 | 1.9 |
| Second Swedish National Pension Fund | – | 4,155,593 | 4,155,593 | 2.3 | 1.5 |
| Vanguard | – | 3,200,504 | 3,200,504 | 1.8 | 1.1 |
| CBNY-Norges Bank | – | 2,197,413 | 2,197,413 | 1.2 | 0.8 |
| Afa Försäkring | – | 1,635,806 | 1,635,806 | 0.9 | 0.6 |
| Other | 4,212 | 57,772,790 | 57,777,002 | 32.1 | 20.6 |
| Total | 11,229,432 | 168,770,568 | 180,000,000 | 100 | 100 |
The company presents a number of financial metrics in the interim report that are not defined according to IFRS (so-called Alternative Performance Measures according to ESMA's guidelines). These performance measures provide valuable supplementary information to investors, the company's management and other stakeholders since they facilitate effective evaluation and analysis of the company's financial position and performance. These alternative performance measures are not always comparable with measures used by other companies and shall therefore be considered as a complement to measures defined according to IFRS. Fastighets AB Balder will apply these alternative performance measures consistently over time. The key ratios are alternative performance measures according to ESMA's guidelines unless otherwise stated. A description follows below of how Fastighets AB Balder's key ratio's are defined and calculated.
Profit after tax in relation to average equity. The values were converted to a fullyear basis in the interim accounts without taking account of seasonal variations that normally arise in the operations with the exception of changes in value.
Profit before tax with addition of net financial items in relation to average balance sheet total. The values were converted to a full-year basis in the interim accounts without taking account of seasonal variations that normally arise in the operations with the exception of changes in value.
Profit before tax with reversal of changes in value. Reversal of changes in value and tax as regards participation in profits of associated companies also takes place. When calculating profit from property management before tax attributable to parent company shareholders, the profit from property management is also reduced with the non-controlling interests' share.
Net debt in relation to total assets.
Profit before tax with reversal of net financial items, changes in value and changes in value and tax as regards participation in profits of associated companies, in relation to net financial items.
Interest-bearing liabilities decreased by 50 % of Hybrid capital in relation to shareholders' equity.
Shareholders' equity including non-controlling interests in relation to the balance sheet total at the end of the period.
Interest-bearinging liabilities decreased by cash and cash equivalents, financial investments and 50 % of Hybrid capital which is treated as 50 % equity by the rating agencies Moody's and S&P.
Shareholders' equity in relation to the number of outstanding shares at the end of the period.
Profit from property management for the period divided by the average number of outstanding shares.
The number of outstanding shares at the start of the period, adjusted by the number of shares issued during the period weighted by the number of days that the shares have been outstanding in relation to the total number of days during the period.
Equity per share with reversal of interest rate derivatives and deferred tax according to balance sheet.
Profit attributable to the average number of shares.
Estimated net operating income on an annual basis in relation to the fair value of the properties at the end of the period.
Rental income less property costs.
Contracted rent for leases which are running at the end of the period in relation to rental value.
Classified according to the principal use of the property. The break-down is made into office, retail, residential and other properties. Other properties include hotel, educational, care, industrial/warehouse and mixed-use properties. The property category is determined by what the largest part of the property is used for.
This item includes direct property costs, such as operating expenses, utility expenses, maintenance, ground rent and property tax.
Contracted rent and estimated market rent for vacant premises.
Net operating income in relation to rental income.
1) The key ratio is operational and is not considered to be a alternative key ratio according to ESMA's guidelines.
The information in this report is such that Fastighets AB Balder (publ) is obliged to disclose according to the Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading Act. This information has been published at 08.00 a.m. on November 6, 2018.
For additional information, please contact CEO Erik Selin, telephone +46 706 074 790 or CFO Magnus Björndahl, telephone +46 735 582 929.
Overall information about the company's operations, board of directors and management, financial reporting and press releases, may be found on Balder's website, balder.se.
Year-end report 2018 27 February 2019 Annual General Meeting 8 May 2019 Interim report Jan-Mar 2019 8 May 2019 Interim report Jan-June 2019 17 July 2019 Interim report Jan-Sep 2019 25 October 2019 Year-end report 2019 27 February 2020
Fastighets AB Balder (publ) balder.se · [email protected] · Org.nr: 556525-6905
| Head office | Parkgatan 49 · Box 53 121 · 411 38 Gothenburg · Tel: +46 31-10 95 70 · Fax: +46 31-10 95 99 |
|---|---|
| Letting | Tel: +46 20-151 151 |
| Customer service Tel: +46 774-49 49 49 |
| Gothenburg | Parkgatan 49 · Box 53 121 · 411 38 Gothenburg · Tel: +46 31-10 95 70 |
|---|---|
| Timmervägen 9 A · 541 64 Skövde · Tel: +46 500-47 88 50 | |
| Helsinki | Panuntie 4 · PO Box 401 · 00610 Helsinki · Tel: +358-201 34 4000 |
| North | Forskarvägen 27 · 804 23 Gävle · Tel: +46 26-54 55 80 |
| Sandbäcksgatan 5 · 653 40 Karlstad · Tel: +46 54-14 81 80 | |
| Affärsgatan 4 D · 862 31 Kvissleby · Tel: +46 60-52 45 50 | |
| Stockholm | Drottninggatan 108 · 113 60 Stockholm · Tel: +46 8-735 37 70 |
| Vårby Allé 18 · 143 40 Vårby · Tel: +46 8-735 37 70 | |
| Öresund | Kalendegatan 26 · 211 35 Malmö · Tel: +46 40-600 96 50 |
| Esplanaden 15 · 265 34 Åstorp · Tel: +46 42-569 40 | |
| Bryggaregatan 7 · 252 27 Helsingborg · Tel: +46 42-17 21 30 | |
| Vesterbrogade 1 E, 5. sal · 1620 København V · Tel: +45-88 13 61 51 | |
| East | Hospitalsgatan 11 · 602 27 Norrköping · Tel: +46 11-15 88 90 |
| Rönnbergagatan 10 · 723 46 Västerås · Tel: +46 21-10 98 90 |
This report is a translation of the Swedish Interim Report January-September 2018. In the event of any disparities between this report and the Swedish version, the latter will have priority.
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