JM — Interim / Quarterly Report 2018

Jul 13, 2018

JM GROUP INTERIM REPORT JANUARY – JUNE 2018

SOME STABILIZATION OF THE HOUSING MARKET IN STOCKHOLM - STABLE DEVELOPMENT ON OTHER MARKETS

JANUARY – JUNE 2018

Revenue decreased to SEK 8,179m (8,644) and operating profit decreased to SEK 1,032m (1,188). The operating margin was 12.6 percent (13.7)

Profit before tax decreased to SEK 997m (1,430) 1). Profit after tax was SEK 776m (1,177) 1)

Return on equity for the past twelve months decreased to 30.7 percent (41.6) 1). Earnings per share for the first six months were SEK 11.10 (16.50) 1)

Consolidated cash flow including net investment in properties was SEK –222m (1,294)

The number of sold residential units decreased to 1,099 (1,735) and housing starts were 1,417 (1,719)

1) Including gains of SEK 275m from the sale of the participations in Småa AB in 2017

APRIL – JUNE 2018

Revenue decreased to SEK 4,125m (4,399) and operating profit decreased to SEK 504m (618). The operating margin was 12.2 percent (14.0)

Profit before tax decreased to SEK 485m (601). Profit after tax amounted to SEK 377m (471)

Consolidated cash flow including net investment in properties was SEK –204m (293)

The number of residential units sold decreased to 619 (871) and housing starts were 847 (906)

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	8,179	8,644	4,125	4,399	16,543	17,008
Operating profit	1,032	1,188	504	618	2,213	2,369
Operating margin, %	12.6	13.7	12.2	14.0	13.4	13.9
Profit before tax	997	1,430	485	601	2,146	2,579
Cash flow from operating activities	–222	1,294	–204	293	497	2,013
Return on equity, %					30.7	38.7
Equity/assets ratio, %	38	39				40
Earnings per share, SEK	11.10	16.50	5.40	6.70	25.60	31.00
Number of residential units sold	1,099	1,735	619	871	2,464	3,100
Number of housing starts	1,417	1,719	847	906	3,571	3,873
Number of residential units in current production	7,814	7,641				8,200
Revenue according to IFRS	7,869	8,651	4,044	4,494	16,493	17,275
Operating profit according to IFRS	1,013	1,225	506	643	2,244	2,456
Earnings per share according to IFRS, SEK	10.90	16.90	5.40	6.90	25.90	31.90

IFRS 15 Revenue from Contracts with Customers is applied to the consolidated income statement and balance sheet, which means that revenue and profit and loss for JM's operations outside of Sweden, JM International, are reported according to the completed contract method. Segment reporting and project management are reported according to the percentage of completion method. The consolidated statements in accordance with IFRS are presented on pages 21-22. For definitions of key financial figures, see the document entitled "Definitions of key financial figures" at jm.se/investors.

Unless otherwise specified, the analysis and comments in this interim report are based on JM's segment reporting.

Cover photo: Nor, Täby Park, Täby

GROUP

"The housing market in Stockholm has continued to be cautious, but there was some stabilization during the second quarter. The cautious market applies in particular to new production of homes with a long time until occupancy. However, customers' willingness to sign a contract early in the process increased slightly during the quarter.

Lower sales and a lower number of housing starts in Stockholm decreased the current production volume during the first six months. We are planning for more housing starts during the second six months provided that the housing market continues to stabilize and planning processes continue to be stable. Housing starts in Stockholm during the second quarter were supported by a normal level of reservations, and profitability continued to be good in the current production volume.

The housing operations in the rest of Sweden are showing good profitability in a market that is primarily stable, but the sales rate was slightly slower.

In Norway, the level of activity on the housing market was good with a slight increase in prices, and the housing market in Finland was stable during the second quarter. Our business in the foreign operations has developed well in 2018, including good land acquisitions.

We have noted that the supply of residential development properties in Stockholm is relatively high, and JM has a very good position to take advantage of the possibilities for acquisitions that may arise. In the rest of Sweden, competition for land has declined slightly. JM's strong financial position also supports our decision to prioritize the start of new housing projects.

In Finland, we acquired a property in Alberga, Esbo. The local planning, with final approval, allows for the development of 850 residential units, making this a strategically important acquisition in Helsinki.

In Norway, we signed an agreement with the real estate company Entra to together develop a new neighborhood in Bryn, Oslo, which has good public transportation connections. The deal is conditional on finalized local planning, which is expected in 2023. JM will be responsible for the development of around 600 residential units, and Entra will be responsible for commercial properties.

Two of the projects we started during the quarter were in the new neighborhood Täby Park north of Stockholm. Täby Municipality is planning for 6,000 residential units and 5,000 work places here on the old racing field. JM is one of several companies that was chosen to develop Täby Park; it will be one of our largest and most exciting projects. Once Täby Park is completed, this will open up connections with the rest of Täby at the same time as the new neighborhood will have its own character. The goal is to build an urban environment that is environmentally, socially and economically sustainable. We started production in the Nor project, which has 132 tenant-owned apartments in a block featuring a pergola and allotments on a large, shared roof terrace. To contribute to green areas and sustainable transport, we are planning a bike room with a simpler bike shop. Project Nor meets a high standard in terms of the climate and the environment. It is one of JM's first projects certified in accordance with the Nordic Swan Ecolabel, which has opened the door to green financing. We also started the Manegen project in Täby Park, which has a total of 128 rental apartments.

We are well-positioned with a good project portfolio that we continue to improve for the housing of the future, at the same time as our strong balance sheet offers us freedom of action."

Johan Skoglund, President and CEO

MARKET, SALES AND HOUSING STARTS JANUARY – JUNE 2018

The housing market in Stockholm continued to be cautious during the first six months, but prices stabilized. Lower sales and a lower number of housing starts decreased the current production volume during the first six months of the year. Housing starts in Stockholm during the first six months were supported by a normal level of reservations, and profitability continued to be good in the current production volume.

The housing operations in the rest of Sweden are showing good profitability in a market that is primarily stable but with a somewhat slower sales rate.

In Norway, the level of activity on the housing market was good with a slight increase in prices, and the housing market in Finland was stable during the first six months.

Population growth in our main markets, coupled with continued low interest rates, supports demand for housing.

The number of residential units sold in the form of signed contracts decreased to 1,099 (1,735) 1). The percentage of sold or reserved homes in relation to current production amounts to 58 percent (75), with an interval of 60-65 percent considered normal. JM Residential Stockholm sold 342 residential units (742), JM Residential Sweden sold 451 (669), JM International sold 306 (324) and JM Property Development sold 0 (0).

The number of housing starts was 1,417 (1,719) 2). JM Residential Stockholm started production on 455 residential units (754), JM Residential Sweden on 553 (679), JM International on 281 (286) and JM Property Development on 128 (0).

In addition to demand, planning processes continue to be an important criterion for the rate of housing starts.

The number of residential units in current production amounted to 7,814 (7,641), of which 681 are rental units and residential care units (416).

1) Of which 0 rental units and residential care units (0). 2) Of which 128 rental units and residential care units (0).

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
OPERATING PROFIT BY BUSINESS SEGMENT, SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	524	710	250	363	1,252	1,438
JM Residential Sweden	394	339	181	175	724	669
JM International	136	124	83	66	283	271
JM Property Development	1	24	–1	17	4	27
JM Construction	0	19	0	9	–8	11
Group-wide expenses	–23	–28	–9	–12	–42	–47
Total	1,032	1,188	504	618	2,213	2,369
Of which property sales	11	14	-	14	11	14

OPERATING MARGIN BY BUSINESS SEGMENT, %	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	17.4	19.1	16.3	19.3	19.4	20.1
JM Residential Sweden	16.9	14.7	17.0	15.2	16.7	15.5
JM International	8.6	7.7	9.6	8.2	8.8	8.3
JM Construction	0.0	1.5	0.0	1.3	–0.3	0.4

1) According to segment reporting

REVENUE, OPERATING PROFIT AND OPERATING MARGIN JANUARY – JUNE 2018

Consolidated revenue in accordance with segment reporting for the first six months decreased to SEK 8,179m (8,644). Revenue restated according to IFRS decreased to SEK 7,869m (8,651).

Operating profit according to segment reporting decreased to SEK 1,032m (1,188) and the operating margin was 12.6 percent (13.7). Operating profit restated according to IFRS decreased to SEK 1,013m (1,225). The restatement is related to JM International and had an effect on earnings of SEK –19m (37).

Properties were sold during the first six months of the year for SEK 72m (15) with gains of SEK 11m (14).

Rental income from JM's project properties increased to SEK 29m (18). Net rental income increased to SEK 17m (10).

APRIL – JUNE 2018

Consolidated revenue according to segment reporting for the second quarter decreased to SEK 4,125m (4,399). Revenue restated according to IFRS decreased to SEK 4,044m (4,494).

Operating profit according to segment reporting decreased to SEK 504m (618) and the operating margin amounted to 12.2 percent (14.0). Operating profit restated according to IFRS decreased to SEK 506m (643). The restatement is related to JM International and had an effect on earnings of SEK 2m (25).

During the second quarter, properties were sold for SEK 3m (15) with gains/losses of SEK 0m (14).

Rental income from JM's project properties increased to SEK 15m (10). Net rental income increased to SEK 9m (6).

RESIDENTIAL BUILDING RIGHTS JANUARY – JUNE 2018

The number of available building rights at the end of the first six months amounted to 36,000 (34,600), of which 20,400 (18,000) are recognized in the balance sheet. Capital tied up in building rights (development properties in the balance sheet) for residential units increased to SEK 8,827m (6,832).

During the first six months, JM purchased development properties for residential units for SEK 2,057m (737), of which SEK 1,211m relates to JM Residential Stockholm, SEK 260m to JM Residential Sweden and SEK 586m to JM International.

RESIDENTIAL UNITS IN CURRENT PRODUCTION	6/30/2018	6/30/2017	12/31/2017
Number of residential units in current production 1) 2)	7,814	7,641	8,200
Percentage of sold residential units in current production, % 3)	52	65	58
Percentage reserved residential units in current production, %	6	10	7
Percentage sold and reserved residential units in current production, %	58	75	65
1) Of which rental units and residential care units in current production in JM Property Development – are not included in the percentage of sold and reserved residential units in current production	681	416	553
Including residential units in projects where costs incurred are only reported as project properties under construction	681	416	553
2) Beginning with production start-up through final occupancy according to plan.

3) Percentage of sold residential units expressed as binding contract with the end customer.

UNSOLD UNITS	6/30/2018	6/30/2017	12/31/2017
Completed production, number of unsold units 1)	88	91	72
The number of unsold residential units in the balance sheet reported as "Participations in tenant-owners associations, etc."	79	67	82

1) After final occupancy according to plan.

1) Including rental units and residential care units in JM Property Development – not included in percentage of sold/reserved

FINANCIAL ITEMS

JANUARY – JUNE 2018

Net financial items remained at the same level as in the previous year, excluding the sale in 2017 of the participations in Småa AB.

The total interest-bearing loan stock according to segment reporting was SEK 2,323m (1,941), of which the provision for pensions comprised SEK 1,306m (1,283). At the end of the first six months of the year, the average interest rate for the total interest-bearing loan stock including pension liabilities was 2.4 percent (2.5). The average term for fixed-rate loans excluding the pension liability was 0.2 years (0.3).

Consolidated available liquidity was SEK 4,878m (5,011). Aside

from cash and cash equivalents of SEK 2,078m (2,211), this includes unutilized overdraft facilities and credit lines totaling SEK 2,800m (2,800), where credit agreements for SEK 2,400m had an average maturity of 3.5 years (2.0).

Interest-bearing net liabilities according to segment reporting totaled SEK 240m (–274) at the end of the first six months. Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 1,405m (497). Of these liabilities, SEK 719m (347) were current.

The valuation of financial assets and liabilities shows that there is no material difference between the carrying amount and the fair value.

SEK M	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
	2018	2017	2018	2017	2017/2018	2017
Financial income 1)	3	276	2	1	6	279
Financial expenses	–38	–34	–21	–18	–73	–69
Financial income and expenses	–35	242	–19	–17	–67	210
1) Of which gains from the sale of participations in Småa AB	-	275	-	-	-	275

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2018	2017	2018	2017	2017/2018	2017
Interest-bearing net liabilities(+)/receivables(–)
at beginning of period	–790	435	–748	–778	–274	435
Change in interest-bearing net liabilities/receivables	1,030	–709	988	504	514	–1,225
Interest-bearing net liabilities(+)/receivables(–)
at end of the period	240	–274	240	–274	240	–790

CASH FLOW

JANUARY – JUNE 2018

Cash flow from operating activities according to segment reporting was SEK –222m (1,294) during the first six months. Net investments in development properties resulted in a cash flow of SEK –573m (107). Holdings of repurchased residential units resulted in a cash flow of SEK –13m (–71). Consolidated cash flow attributable to project properties (sales minus investment) during the first six months was SEK –234m (–190).

APRIL – JUNE 2018

Cash flow from operating activities was SEK –204m (293) during the second quarter. Net investments in development properties resulted in a negative cash flow of SEK –255m (–15). Holdings of repurchased residential units resulted in a cash flow of SEK 0m (–32). Consolidated cash flow attributable to project properties (sales minus investment) during the second quarter was SEK –116m (–104).

RISKS AND UNCERTAINTIES

JM's risk and risk management policies are presented in the 2017 Annual Report on pages 30-33. No significant changes have occurred to change these reported risks.

CONVERTIBLE PROGRAM

The 2018 Annual General Meeting resolved that JM would raise a debenture loan with a maximum nominal value of SEK 160m by issuing a maximum of 640,000 convertible debentures with a maturity of four years aimed at all employees in Sweden.

Upon expiry of the subscription period, the loan amounts to about SEK 45m through the issue of approximately 195,900 convertible debentures.

In accordance with IAS 32, the liability and equity components of the convertible debenture loan are reported separately, which means that the debenture loan is reported in the balance sheet as a liability initially with the nominal amount excluding the equity component.

The subscribed convertible bonds may be converted to shares at a price of SEK 229 between June 1, 2021 and May 18, 2022.

Through conversion, JM's share capital could increase by a maximum of SEK 196,000, which corresponds to a dilution of 0.3 percent of the shares and votes in the company. The convertible debenture loan was settled against cash in June 2018.

HOLDINGS OF TREASURY SHARES

Holdings of treasury shares total 1,476,421.

The number of outstanding shares, excluding holdings of treasury shares, at June 30, 2018, totals 69,583,262.

PERSONNEL

The number of employees at the end of the first six months was 2,591 (2,538). The number of wage-earners was 1,004 (1,026) and the number of salaried employees was 1,587 (1,512). Current staffing is considered well balanced for the current project volume and some adjustments are made on a regular basis. Demand on the labor market is strong for qualified project development skills.

BUSINESS SEGMENTS JM RESIDENTIAL STOCKHOLM

The JM Residential Stockholm business segment develops residential projects in Greater Stockholm. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units.

The average prices on the existing home market did not change during the second quarter. The supply of homes continued to be high, and in particular in some local markets.

Competition for well-situated land for housing is judged to be relatively low at the same time as the supply of properties for housing development is relatively high. However, prices of building rights are still at a level that requires selective acquisition.

The housing market in Stockholm continued to be cautious during the second quarter, particularly with regard to new production. However, there was some stabilization during the second quarter. Customers are showing strong interest in JM's projects, but are taking a cautious approach to signing contracts early in the process. However, willingness to sign a contract early in the process increased slightly during the second quarter. Residential units available for sale in the business segment largely have planned occupancy in 2019 and 2020.

Housing starts in Stockholm during the second quarter were

supported by a normal level of reservations, and profitability continued to be good in the current production volume. The plan is for more housing starts during the second six months provided that the housing market continues to stabilize and planning processes continue to be stable.

The business segment's revenue decreased to SEK 3,005m (3,718). The decreased revenue in the second quarter is due to lower sales and a lower number of housing starts over the past few quarters. Operating profit decreased to SEK 524m (710). Profit was burdened by the lower sales. The operating margin was 17.4 percent (19.1).

Cash flow during the first six months is in balance taking into consideration the increase in development properties.

Production was started in the second quarter on 240 residential units in apartment buildings in Danderyd and Täby.

During the second quarter, JM purchased building rights in Solna corresponding to about 50 residential units.

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	3,005	3,718	1,530	1,878	6,438	7,151
Operating profit 1)	524	710	250	363	1,252	1,438
Operating margin, %	17.4	19.1	16.3	19.3	19.4	20.1
Average operating capital					4,919	4,450
Return on operating capital, %					25.5	32.3
Operating cash flow	208	873	285	375	938	1,603
Carrying amount, development properties	5,185	4,074				4,406
Number of available building rights	13,600	13,000				13,400
Number of residential units sold	342	742	225	388	752	1,152
Number of housing starts	455	754	240	454	1,144	1,443
Number of residential units in current production	3,387	3,598				3,842
Number of employees	924 2)	875				877
1) Of which property sales	0	6	0	6	0	6

2) Of which 42 employees who previously belonged to JM Construction.

JM RESIDENTIAL SWEDEN

The JM Residential Sweden business segment develops residential projects in growth areas in Sweden, excluding Greater Stockholm. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units. Contracting operations are also conducted to a limited extent.

The average prices on the existing home market did not change in the business segment during the second quarter. There were small changes on individual markets within the business segment.

The supply on certain local markets continues to be large. Competition for land for residential purposes has eased slightly. Interest in JM's projects is stable, and customers' willingness to sign a contract early in the process is at a normal level.

The business segment's revenue increased to SEK 2,334m (2,299) and operating profit increased to SEK 394m (339). The operating margin increased to 16.9 percent (14.7). The profit and the margin improved as a result of strong demand and an increase in prices in recent years. However, the sales rate was slightly slower during the first six months of 2018.

A decrease in working capital had a positive impact on cash flow for the first six months.

Production was started in the second quarter on 267 residential units in apartment buildings and single-family homes in Malmö, Staffanstorp, Lund and Gothenburg.

During the second quarter, JM purchased building rights corresponding to 500 residential units in Lund, Staffanstorp, Gothenburg, Linköping and Uppsala.

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	2,334	2,299	1,065	1,153	4,344	4,309
Operating profit 1)	394	339	181	175	724	669
Operating margin, %	16.9	14.7	17.0	15.2	16.7	15.5
Average operating capital					949	892
Return on operating capital, %					76.3	75.0
Operating cash flow	492	468	260	–29	640	616
Carrying amount, development properties	1,476	1,225				1,540
Number of available building rights	10,300	10,000				10,100
Number of residential units sold	451	669	207	348	1,084	1,302
Number of housing starts	553	679	267	336	1,285	1,411
Number of residential units in current production	2,280	2,279				2,351
Number of employees	595	598				590
1) Of which property sales	0	-	-	-	0	-

JM INTERNATIONAL

The JM International business segment develops residential projects primarily in Norway and Finland. Revenue and profit for the business segment is reported according to the percentage of completion method. Contracting operations are also conducted to a limited extent in Norway, and as of 2018 they are reported in the JM Construction business segment. Comparative figures have been restated.

Business segment revenue amounted to SEK 1,574m (1,615) and operating profit was SEK 136m (124). The operating margin was 8.6 percent (7.7).

Cash flow during the first six months is burdened by investments in development properties.

NORWAY

Prices on the existing home market in Norway also increased slightly during the second quarter, and the level of activity was good. The time to signing a contract is somewhat longer than in previous years.

JM Norway's revenue amounted to SEK 1,344m (1,352) and operating profit was SEK 127m (121). The operating margin was 9.4 percent (8.9).

During the second quarter, 146 residential units (105) were sold and production began on 173 units (76). Housing starts during the second quarter consist of residential units in apartment buildings in Oslo, Bergen and Porsgrunn and single-family homes in Drammen, Skien and Larvik. The number of residential units in current production amounted to 1,207 (1,074).

The low level of housing starts during the first six months is in line with the annual plan, and this number will increase during the year assuming a stable market and stable planning conditions.

During the first six months, JM purchased building rights corresponding to 570 residential units in the Oslo region and 24 in Bergen.

Available building rights correspond to 7,900 residential units (7,800).

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	1,574	1,615	864	808	3,221	3,262
- of which JM Norway	1,344	1,352	740	654	2,769	2,777
Operating profit 1)	136	124	83	66	283	271
- of which JM Norway	127	121	77	65	269	263
Operating margin, %	8.6	7.7	9.6	8.2	8.8	8.3
- of which JM Norway	9.4	8.9	10.4	9.9	9.7	9.5
Average operating capital					2,444	2,175
Return on operating capital, %					11.6	12.5
Operating cash flow	–157	147	–249	69	–185	119
Carrying amount, development properties	2,156	1,533				1,545
Carrying amount, project properties	5	12				7
Number of available building rights	11,400	10,700				10,500
Number of residential units sold	306	324	187	135	628	646
Number of housing starts	281	286	212	116	877	882
Number of residential units in current production	1,466	1,348				1,454
Number of employees	429	392				406
1) Of which property sales	11	-	-	-	11	0

FINLAND

The housing market in the Helsinki region was stable during the second quarter. The housing market is in balance and activity is good.

During the second quarter, 40 residential units (30) were sold and production began on 39 units (40). Housing starts during the second quarter consisted of residential units in single-family homes outside of Esbo, Helsinki. The number of residential units in current production amounted to 259 (274).

During the quarter, JM purchased building rights corresponding to 609 residential units.

Available building rights correspond to 3,300 residential units (2,700).

BELGIUM

JM closed its operations in Belgium in Q1 2017. JM is still the owner of one development property and one residential unit that are for sale. During the second quarter, 1 residential unit (0) was sold.

Available building rights correspond to 200 residential units (200).

JM PROPERTY DEVELOPMENT

The JM Property Development business segment primarily develops rental units, residential care units and commercial properties in Greater Stockholm. The business segment's entire portfolio comprises project development properties. This business segment also includes JM@home as of January 1, 2018, which offers economic and technical management services to tenant-owners associations as well as home services.

Business segment revenue decreased to SEK 30m (37), of which rental income was SEK 28m (18). Operating profit was SEK 1m (24). The operating profit was burdened by start-up costs for the new business operations, JM@home.

Net rental income for project properties was SEK 17m (10).

Cash flow during the first six months is negative due to ongoing investments in project properties.

Within the Dalénum area on Lidingö, the occupancy rate in the remaining commercial buildings that will not be demolished is 91 percent. Within the Bolinder area in Kallhäll, Järfälla, the occupancy rate in the buildings that will not be demolished is 94 percent.

The Dalénum rental project and its 97 apartments were completed in 2016. All apartments are rented out.

During the second quarter, production was started on a rental project, the Manegen project in Täby, with 128 apartments. Production is also ongoing in four rental apartment projects: the Tjärtunnan project in Stureby, Stockholm, 187 residential units with occupancy in 2018; the Spaken project in Hägernäs, Täby, 136 residential units with occupancy planned for 2018/2019; the Alphyddan project in Sickla, Nacka, 93 student apartments with occupancy planned for 2018; and Alba Lilium, Bredäng, Stockholm, 137 residential units with occupancy planned for 2019.

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	30	37	15	19	53	60
Operating profit 1)	1	24	–1	17	4	27
Average operating capital					1,036	800
Return on operating capital, %					0.4	3.4
Operating cash flow	–265	–148	–156	–77	–533	–416
Carrying amount, development properties	10	10				10
Carrying amount, project properties	1,330	779				1,067
Number of available building rights 2)	700	900				800
Number of residential units sold 2)	-	-	-	-	-	-
Number of housing starts 2)	128	-	128	-	265	137
Number of residential units in current production 2)	681	416				553
Number of employees	48	31				35
1) Of which property sales	-	8	-	8	-	8

2) Refers to rental units and residential care units.

JM CONSTRUCTION

The JM Construction business segment carries out construction work for external and internal customers in Greater Stockholm and Oslo. Contracting operations conducted in Norway are reported in the JM Construction business segment as of January 1, 2018. Comparative figures have been restated.

Demand in the contracting market in Stockholm is good. Both the building and civil engineering markets are stable, although there is tough competition for the assignments. Demand in the contracting market in Oslo is also good. Orders are good in the business segment with a large number of projects in current production.

Business segment revenue increased to SEK 1,467m (1,229), of which the operations in Norway amounted to SEK 327m (214), and the operating profit decreased to SEK 0m (19). The profit was affected by a negative revaluation in current projects in the Swedish operations. A long-term project is underway in the business segment to raise profitability.

An increase in working capital had a negative impact on cash flow during the first six months of the year.

The business segment received a number of assignments during the second quarter, of which the largest was development work in Norra Djurgårdsstaden for the City of Stockholm.

The largest ongoing assignments are a new operational area at Arlanda Airport (Swedavia), land work in the Stockholm Norvik freight harbor in Nynäshamn (Ports of Stockholm), new production of a school (Vallentuna Municipality), new production of apartment buildings in Norra Djurgårdsstaden (HSB and Riksbyggen) and new production of apartment buildings in Tyresö (Småa and Riksbyggen). The largest ongoing project in the Norwegian operations is the new production of apartments in Strømmen, Oslo (JM Norge).

	JANUARY–JUNE			APRIL–JUNE		FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue 1)	1,467	1,229	769	677	2,989	2,751
Operating profit	0	19	0	9	–8	11
Operating margin, %	0.0	1.5	0.0	1.3	–0.3	0.4
Operating cash flow	–94	–32	60	–63	24	86
Carrying amount, development properties	42	50				42
Number of employees	440	492				462
1) Of which internal	231	254	118	136	502	525

GROUP – SEGMENT REPORTING

CONDENSED CONSOLIDATED INCOME STATEMENT

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	8,179	8,644	4,125	4,399	16,543	17,008
Production and operating costs	–6,589	–6,942	–3,324	–3,513	–13,295	–13,648
Gross profit	1,590	1,702	801	886	3,248	3,360
Selling and administrative expenses	–569	–528	–297	–282	–1,046	–1,005
Gains/losses on the sale of property	11	14	0	14	11	14
Operating profit	1,032	1,188	504	618	2,213	2,369
Financial income and expenses	–35	242	–19	–17	–67	210
Profit before tax	997	1,430	485	601	2,146	2,579
Taxes	–221	–253	–108	–130	–353	–385
Profit for the period	776	1,177	377	471	1,793	2,194
Other comprehensive income	93	–38	6	–24	121	–10
Comprehensive income for the period	869	1,139	383	447	1,914	2,184
Earnings per share 1), diluted, SEK	11.10	16.50	5.40	6.70	25.60	31.00
Average number of shares, diluted	69,779,427	71,264,130	69,804,462	71,053,647	70,086,965	70,844,023

1) Net profit for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

ACCORDING TO SEGMENT REPORTING, SEK M	6/30/2018	6/30/2017	12/31/2017
ASSETS
Non-current assets	226	213	209
Project properties	1,335	791	1,074
Development properties	8,869	6,892	7,543
Participations in tenant-owners associations, etc.	322	269	309
Current receivables 1)	3,813	3,477	3,698
Cash and cash equivalents	2,078	2,211	2,572
Total current assets	16,417	13,640	15,196
Total assets	16,643	13,853	15,405
EQUITY AND LIABILITIES 2)
Equity	6,285	5,381	6,178
Non-current interest-bearing liabilities	255	223	203
Other non-current liabilities	686	150	273
Non-current provisions	2,850	2,371	2,656
Total non-current liabilities	3,791	2,744	3,132
Current interest-bearing liabilities	762	435	332
Other current liabilities	5,682	5,184	5,654
Current provisions	123	109	109
Total current liabilities	6,567	5,728	6,095
Total equity and liabilities	16,643	13,853	15,405
1) Of which receivables from property sales	79	61	83
2) Of which liabilities for property acquisition	1,439	570	794

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–JUNE	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2018	2017	2017
Opening balance at beginning of period	6,178	5,158	5,158
Total comprehensive income for the period	869	1,139	2,184
Dividend	–765	–675	–675
Conversion of convertible loan	-	8	10
Equity component of convertible debentures	3	1	1
Buy-back of shares	-	–250	–500
Closing balance at the end of the period	6,285	5,381	6,178

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2018	2017	2018	2017	2017/2018	2017
Cash flow from operating activities before change in
working capital and taxes	1,206	1,365	450	709	2,936	3,095
Paid tax	–398	–220	–137	–121	–539	–361
Investment in development properties, etc. 1)	–1,827	–1,133	–878	–542	–3,188	–2,494
Payment on account for development properties, etc. 2)	1,241	1,169	623	495	2,110	2,038
Investment in project properties	–236	–190	–118	–104	–536	–490
Sale of project properties	2	-	2	-	8	6
Change in current liabilities/receivables	–210	303	–146	–144	–294	219
Cash flow from operating activities	–222	1,294	–204	293	497	2,013
Cash flow from investing activities	–3	304 3)	–2	–3	–7	300 3)
Loans raised	554	140	505	119	628	214
Amortization of debt	–74	–121	–26	–16	–251	–298
Buy-back of shares	-	–250	-	–125	–250	–500
Dividend	–765	–675	–765	–675	–765	–675
Cash flow from financing activities	–285	–906	–286	–697	–638	–1,259
Cash flow for the period	–510	692	–492	–407	–148	1,054
Cash and cash equivalents at end of the period	2,078	2,211	2,078	2,211	2,078	2,572
1) Of which investment in participations in tenant-owners associations and freehold residential units	–393	–283	–213	–121	–685	–575
2) Of which the sale of participations in tenant-owners associations and freehold residential units	380	212	213	89	663	495
3) Of which SEK 310m refers to the sale of the participations in Småa AB.

GROUP KEY FIGURES

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, %	2018	2017	2018	2017	2017/2018	2017
Operating margin	12.6	13.7	12.2	14.0	13.4	13.9
Return on equity					30.7	38.7
Return on capital employed					27.8	35.1
Debt/equity ratio, multiple	0.0	-				-
Equity/assets ratio	38	39				40

ACCORDING TO SEGMENT REPORTING

REVENUE BY COUNTRY

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Sweden	6,278	6,815	3,063	3,492	12,742	13,279
Norway	1,671	1,566	938	753	3,349	3,244
Finland	213	261	119	153	434	482
Belgium	17	2	5	1	18	3
Total	8,179	8,644	4,125	4,399	16,543	17,008

REVENUE BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	3,005	3,718	1,530	1,878	6,438	7,151
JM Residential Sweden	2,334	2,299	1,065	1,153	4,344	4,309
JM International	1,574	1,615	864	808	3,221	3,262
JM Property Development	30	37	15	19	53	60
JM Construction	1,467	1,229	769	677	2,989	2,751
Elimination	–231	–254	–118	–136	–502	–525
Total	8,179	8,644	4,125	4,399	16,543	17,008

OPERATING PROFIT BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE JULY–JUNE		FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	524	710	250	363	1,252	1,438
JM Residential Sweden	394	339	181	175	724	669
JM International	136	124	83	66	283	271
JM Property Development	1	24	–1	17	4	27
JM Construction	0	19	0	9	–8	11
Group-wide expenses	–23	–28	–9	–12	–42	–47
Total	1,032	1,188	504	618	2,213	2,369

OPERATING MARGIN BY BUSINESS SEGMENT

		JANUARY–JUNE	APRIL–JUNE		JULY–JUNE	FULL-YEAR
%	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	17.4	19.1	16.3	19.3	19.4	20.1
JM Residential Sweden	16.9	14.7	17.0	15.2	16.7	15.5
JM International	8.6	7.7	9.6	8.2	8.8	8.3
JM Construction	0.0	1.5	0.0	1.3	–0.3	0.4

AVERAGE OPERATING CAPITAL BY BUSINESS SEGMENT

JULY–JUNE	FULL-YEAR
SEK M 2017/2018	2017
JM Residential Stockholm 4,919	4,450
JM Residential Sweden 949	892
JM International 2,444	2,175
JM Property Development 1,036	800

RETURN ON OPERATING CAPITAL BY BUSINESS SEGMENT

	JULY–JUNE	FULL-YEAR
%	2017/2018	2017
JM Residential Stockholm	25.5	32.3
JM Residential Sweden	76.3	75.0
JM International	11.6	12.5
JM Property Development	0.4	3.4

ACCORDING TO SEGMENT REPORTING

OPERATING CASH FLOW BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	208	873	285	375	938	1,603
JM Residential Sweden	492	468	260	–29	640	616
JM International	–157	147	–249	69	–185	119
JM Property Development	–265	–148	–156	–77	–533	–416
JM Construction	–94	–32	60	–63	24	86

DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT

CARRYING AMOUNT, SEK M	6/30/2018	6/30/2017	12/31/2017
JM Residential Stockholm	5,185	4,074	4,406
JM Residential Sweden	1,476	1,225	1,540
JM International	2,156	1,533	1,545
JM Property Development	10	10	10
JM Construction	42	50	42
Total	8,869	6,892	7,543

AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT

NUMBER	6/30/2018	6/30/2017	12/31/2017
JM Residential Stockholm	13,600	13,000	13,400
JM Residential Sweden	10,300	10,000	10,100
JM International	11,400	10,700	10,500
JM Property Development 1)	700	900	800
Total	36,000	34,600	34,800
Including those carried in the balance sheet (development properties)
JM Residential Stockholm	8,100	7,500	7,800
JM Residential Sweden	6,400	5,700	6,100
JM International	5,700	4,700	4,600
JM Property Development 1)	200	100	200
Total	20,400	18,000	18,700

RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
NUMBER	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	342	742	225	388	752	1,152
JM Residential Sweden	451	669	207	348	1,084	1,302
JM International	306	324	187	135	628	646
JM Property Development 1)	-	-	-	-	-	-
Total	1,099	1,735	619	871	2,464	3,100

HOUSING STARTS BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
NUMBER	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	455	754	240	454	1,144	1,443
JM Residential Sweden	553	679	267	336	1,285	1,411
JM International	281	286	212	116	877	882
JM Property Development 1)	128	-	128	-	265	137
Total	1,417	1,719	847	906	3,571	3,873

RESIDENTIAL UNITS IN CURRENT PRODUCTION

NUMBER	6/30/2018	6/30/2017	12/31/2017
JM Residential Stockholm	3,387	3,598	3,842
JM Residential Sweden	2,280	2,279	2,351
JM International	1,466	1,348	1,454
JM Property Development 1)	681	416	553
Total	7,814	7,641	8,200

1) Refers to rental units and residential care units.

ACCORDING TO SEGMENT REPORTING

PROJECT PROPERTIES, GROUP

CARRYING AMOUNT, SEK M	6/30/2018	6/30/2017	12/31/2017
Properties under development	1,100	548	837
Completed rental unit properties	224	225	224
Completed commercial properties	11	18	13
Total	1,335	791	1,074

DEVELOPMENT PROPERTIES, GROUP

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
CARRYING AMOUNT, SEK M	2018	2017	2018	2017	2017/2018	2017
Opening balance at beginning of period	7,543	7,121	8,607	6,922	6,892	7,121
New purchases	2,057	737	661	382	3,337	2,017
Transferred to production	–786	–927	–411	–388	–1,393	–1,534
Other	55	–39	12	–24	33	–61
Closing balance at the end of the period	8,869	6,892	8,869	6,892	8,869	7,543

GROUP FIVE-YEAR OVERVIEW

ACCORDING TO SEGMENT REPORTING, SEK M	2017	2016	2015	2014	2013
Revenue	17,008	15,752	14,447	13,869	12,652
Operating profit	2,369	2,011	1,590	1,716	1,576
Profit before tax	2,579	1,951	1,518	1,641	1,517
Total assets	15,405	12,848	12,230	12,545	11,394
Cash flow from operating activities	2,013	1,957	–230	978	898
Interest-bearing net liabilities (+)/receivables (–)	–790	435	1,198	–337	–642
Operating margin, %	13.9	12.8	11.0	12.4	12.5
Return on equity, %	38.7	31.4	24.8	26.5	25.1
Equity/assets ratio, %	40	40	38	37	40
Earnings per share, SEK	31.00	21.20	15.50	16.00	14.50
Dividend per share, SEK	11.00	9.50	8.25	8.00	7.25
Number of available building rights	34,800	32,500	31,100	29,400	27,700
Number of residential units sold	3,100	3,843	3,770	3,195	3,265
Number of housing starts	3,873	4,187	3,731	3,445	2,953
Number of residential units in current production	8,200	7,984	7,212	6,375	5,609

GROUP QUARTERLY OVERVIEW

ACCORDING TO SEGMENT REPORTING, SEK M	2018			2017
INCOME STATEMENT	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	4,125	4,054	4,551	3,813	4,399	4,245
Production and operating costs	–3,324	–3,265	–3,659	–3,047	–3,513	–3,429
Gross profit	801	789	892	766	886	816
Selling and administrative expenses	–297	–272	–254	–223	–282	–246
Gains/losses on the sale of property	0	11	0	-	14	-
Operating profit	504	528	638	543	618	570
Financial income and expenses	–19	–16	–17	–15	–17	259
Profit before tax	485	512	621	528	601	829
Taxes	–108	–113	–15	–117	–130	–123
Profit for the period	377	399	606	411	471	706
CONSOLIDATED BALANCE SHEET	6/30	3/31	12/31	9/30	6/30	3/31
ASSETS
Non-current assets	226	221	209	211	213	215
Project properties	1,335	1,193	1,074	878	791	688
Development properties	8,869	8,607	7,543	6,984	6,892	6,922
Participations in tenant-owners associations, etc.	322	309	309	267	269	205
Current receivables	3,813	3,828	3,698	3,524	3,477	3,173
Cash and cash equivalents	2,078	2,564	2,572	2,557	2,211	2,619
Total current assets	16,417	16,501	15,196	14,210	13,640	13,607
Total assets	16,643	16,722	15,405	14,421	13,853	13,822
EQUITY AND LIABILITIES
Equity	6,285	6,664	6,178	5,653	5,381	5,725
Non-current interest-bearing liabilities	255	220	203	333	223	259
Other non-current liabilities	686	700	273	150	150	150
Non-current provisions	2,850	2,846	2,656	2,405	2,371	2,321
Total non-current liabilities	3,791	3,766	3,132	2,888	2,744	2,730
Current interest-bearing liabilities	762	336	332	204	435	334
Other current liabilities	5,682	5,831	5,654	5,564	5,184	4,932
Current provisions	123	125	109	112	109	101
Total current liabilities	6,567	6,292	6,095	5,880	5,728	5,367
Total equity and liabilities	16,643	16,722	15,405	14,421	13,853	13,822
CASH FLOW STATEMENT	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
From operating activities	–204	–18	145	574	293	1,001
From investing activities	–2	–1	–3	–1	–3	307
From financing activities	–286	1	–128	–225	–697	–209
Total cash flow for the period	–492	–18	14	348	–407	1,099
Cash and cash equivalents at end of the period	2,078	2,564	2,572	2,557	2,211	2,619
INTEREST-BEARING NET LIABILITIES/RECEIVABLES	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Interest-bearing net liabilities(+)/receivables(–)
at beginning of period	–748	–790	–727	–274	–778	435
Change in interest-bearing net liabilities/receivables	988	42	–63	–453	504	–1,213
Interest-bearing net liabilities(+)/receivables(–)
at end of the period	240	–748	–790	–727	–274	–778
DEVELOPMENT PROPERTIES	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Carrying amount at beginning of period	8,607	7,543	6,984	6,892	6,922	7,121
New purchases	661	1,396	803	477	382	355
Transferred to production	–411	–375	–228	–379	–388	–539
Other	12	43	–16	–6	–24	–15
Carrying amount at end of period	8,869	8,607	7,543	6,984	6,892	6,922
KEY RATIOS	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Operating margin, %	12.2	13.0	14.0	14.2	14.0	13.4
Debt/equity ratio, multiple	0.0	-	-	-	-	-
Equity/assets ratio, %	38	40	40	39	39	41
Earnings per share, SEK	5.40	5.70	8.60	5.80	6.70	9.90
Number of available building rights	36,000	34,900	34,800	34,800	34,600	33,600
Number of residential units sold	619	480	684	681	871	864
Number of housing starts Number of residential units in current production	847	570	1,183	971	906	813
	7,814	7,672	8,200	7,739	7,641	7,901

BUSINESS SEGMENT QUARTERLY OVERVIEW

ACCORDING TO SEGMENT REPORTING, SEK M	2018			2017
JM RESIDENTIAL STOCKHOLM	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,530	1,475	1,820	1,613	1,878	1,840
Operating profit 1)	250	274	397	331	363	347
Operating margin, %	16.3	18.6	21.8	20.5	19.3	18.9
Average operating capital	4,919	4,663	4,450	4,374	4,354	4,345
Return on operating capital, % 2)	25.5	29.3	32.3	32.6	32.3	31.0
Operating cash flow	285	–77	225	505	375	498
Carrying amount, development properties	5,185	5,229	4,406	3,941	4,074	4,121
Number of available building rights	13,600	13,300	13,400	13,300	13,000	12,800
Number of residential units sold	225	117	197	213	388	354
Number of housing starts	240	215	324	365	454	300
Number of residential units in current production	3,387	3,510	3,842	3,837	3,598	3,714
1) Of which property sales	0	-	-	-	6	-
JM RESIDENTIAL SWEDEN	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,065	1,269	1,094	916	1,153	1,146
Operating profit 1)	181	213	181	149	175	164
Operating margin, %	17.0	16.8	16.5	16.3	15.2	14.3
Average operating capital	949	897	892	898	893	967
Return on operating capital, % 2)	76.3	80.0	75.0	68.4	67.2	55.7
Operating cash flow	260	232	159	–11	–29	497
Carrying amount, development properties	1,476	1,394	1,540	1,486	1,225	1,322
Number of available building rights	10,300	10,200	10,100	10,100	10,000	9,800
Number of residential units sold	207	244	301	332	348	321
Number of housing starts	267	286	360	372	336	343
Number of residential units in current production	2,280	2,210	2,351	2,196	2,279	2,169
1) Of which property sales	-	0	-	-	-	-
JM INTERNATIONAL	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	864	710	926	721	808	807
Operating profit 1)	83	53	84	63	66	58
Operating margin, %	9.6	7.5	9.1	8.7	8.2	7.2
Average operating capital	2,444	2,273	2,175	2,106	2,074	2,028
Return on operating capital, % 2)	11.6	11.7	12.5	12.0	12.0	10.3
Operating cash flow	–249	92	–207	179	69	78
Carrying amount, development properties	2,156	1,932	1,545	1,497	1,533	1,394
Carrying amount, project properties Number of available building rights	5 11,400	8 10,600	7 10,500	14 10,500	12 10,700	13 10,100
Number of residential units sold	187	119	186	136	135	189
Number of housing starts	212	69	362	234	116	170
Number of residential units in current production	1,466	1,399	1,454	1,290	1,348	1,602
1) Of which property sales	0	11	0	-	-	-
JM PROPERTY DEVELOPMENT	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	15	15	12	11	19	18
Operating profit 1)	–1	2	3	0	17	7
Average operating capital	1,036	910	800	697	623	550
Return on operating capital, % 2)	0.4	2.4	3.4	6.0	7.9	5.6
Operating cash flow	–156	–109	–203	–65	–77	–71
Carrying amount, development properties	10	10	10	10	10	35
Carrying amount, project properties	1,330	1,185	1,067	864	779	675
Number of available building rights 3)	700	800	800	900	900	900
Number of residential units sold 3)	-	-	-	-	-	-
Number of housing starts 3)	128	-	137	-	-	-
Number of residential units in current production 3)	681	553	553	416	416	416
1) Of which property sales	-	-	-	-	8	-
3) Refers to rental units and residential care units.
JM CONSTRUCTION	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	769	698	833	689	677	552
Operating profit	0	0	–13	5	9	10
Operating margin, %	0.0	0.0	–1.6	0.7	1.3	1.8
Operating cash flow	60	–154	40	78	–63	31
JM OTHER	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue (elimination)	–118	–113	–134	–137	–136	–118
Operating profit (Group-wide expenses)	–9	–14	–14	–5	–12	–16

2) Calculated on 12-month rolling profits and average capital.

GROUP – IFRS

CONDENSED CONSOLIDATED INCOME STATEMENT

		JANUARY–JUNE			APRIL–JUNE JULY–JUNE
ACCORDING TO IFRS, SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	7,869	8,651	4,044	4,494	16,493	17,275
Production and operating costs	–6,298	–6,912	–3,241	–3,583	–13,214	–13,828
Gross profit	1,571	1,739	803	911	3,279	3,447
Selling and administrative expenses	–569	–528	–297	–282	–1,046	–1,005
Gains/losses on the sale of property	11	14	0	14	11	14
Operating profit	1,013	1,225	506	643	2,244	2,456
Financial income and expenses	–35	242	–19	–17	–67	210
Profit before tax	978	1,467	487	626	2,177	2,666
Taxes	–219	–266	–109	–137	–360	–407
Profit for the period	759	1,201	378	489	1,817	2,259
Other comprehensive income
Items that will be reclassified as income
Translation differences from the translation of foreign operations	109	–19	31	–7	84	–44
Items that will not be reclassified as income
Restatement of defined-benefit pensions	–36	–22	–36	–22	39	53
Tax attributable to other comprehensive income	8	5	8	5	–9	–12
Comprehensive income for the period	840	1,165	381	465	1,931	2,256
Net profit for the period is attributable to shareholders of the Parent
Company	759	1,201	378	489	1,817	2,259
Comprehensive income for the period is attributable to shareholders of
the Parent Company	840	1,165	381	465	1,931	2,256
Earnings per share 1), basic, attributable to shareholders of the
Parent Company, SEK	10.90	16.90	5.40	6.90	26.00	32.00
Earnings per share 1), diluted, attributable to shareholders of the
Parent Company, SEK	10.90	16.90	5.40	6.90	25.90	31.90
Number of outstanding shares at end of period	69,583,262	70,664,525	69,583,262	70,664,525	69,583,262	69,583,262
Average number of shares, basic	69,583,262	71,074,062	69,583,262	70,861,606	69,903,318	70,642,592
Average number of shares, diluted	69,779,427	71,264,130	69,804,462	71,053,647	70,086,965	70,844,023

1) Net profit for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

ACCORDING TO IFRS, SEK M	6/30/2018	6/30/2017	12/31/2017
ASSETS
Non-current assets	226	213	209
Project properties	1,335	791	1,074
Development properties	8,869	6,892	7,543
Participations in tenant-owners associations, etc.	322	269	309
Work in progress	2,962	2,015	2,291
Current receivables	3,148	2,903	2,949
Cash and cash equivalents	2,078	2,211	2,572
Total current assets	18,714	15,081	16,738
Total assets	18,940	15,294	16,947
EQUITY AND LIABILITIES 1) 2)
Equity	6,121	5,200	6,043
Non-current interest-bearing liabilities	255	223	203
Other non-current liabilities	686	150	273
Non-current provisions	2,808	2,325	2,619
Total non-current liabilities	3,749	2,698	3,095
Current interest-bearing liabilities	2,913	2,221	1,728
Other current liabilities	6,034	5,066	5,972
Current provisions	123	109	109
Total current liabilities	9,070	7,396	7,809
Total equity and liabilities	18,940	15,294	16,947
Pledged assets	531	569	744
Contingent liabilities	8,608	10,163	9,993
1) Of which project financing JM International	2,503	1,786	1,857
2) Of which liabilities for property acquisition	1,439	570	794

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–JUNE
ACCORDING TO IFRS, SEK M	2018	2017	2017
Opening balance at beginning of period	6,043	4,951	4,951
Total comprehensive income for the period	840	1,165	2,256
Dividend	–765	–675	–675
Conversion of convertible loan	-	8	10
Equity component of convertible debentures	3	1	1
Buy-back of shares	-	–250	–500
Closing balance at the end of the period	6,121	5,200	6,043

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
ACCORDING TO IFRS, SEK M	2018	2017	2018	2017	2017/2018	2017
Cash flow from operating activities before change in
working capital and taxes	1,187	1,402	452	734	2,967	3,182
Paid tax	–398	–220	–137	–121	–539	–361
Investment in development properties, etc. 1)	–1,827	–1,133	–878	–542	–3,188	–2,494
Payment on account for development properties, etc.2)	1,241	1,169	623	495	2,110	2,038
Investment in project properties	–236	–190	–118	–104	–536	–490
Sale of project properties	2	-	2	-	8	6
Change in current liabilities/receivables	–810	298	–432	–61	–586	522
Cash flow from operating activities	–841	1,326	–488	401	236	2,403
Cash flow from investing activities	–3	304 3)	–2	–3	–7	300 3)
Loans raised	554	140	505	119	628	214
Amortization of debt	–74	–121	–26	–16	–251	–298
Loans raised, project financing	869	299	458	139	1,362	792
Amortization of debt, project financing	–250	–331	–174	–247	–1,101	–1,182
Buy-back of shares	-	–250	-	–125	–250	–500
Dividend	–765	–675	–765	–675	–765	–675
Cash flow from financing activities	334	–938	–2	–805	–377	–1,649
Cash flow for the period	–510	692	–492	–407	–148	1,054
Cash and cash equivalents at end of the period	2,078	2,211	2,078	2,211	2,078	2,572
1) Of which investment in participations in tenant-owners associations and freehold residential units	–393	–283	–213	–121	–685	–575
2) Of which the sale of participations in tenant-owners associations and freehold residential units	380	212	213	89	663	495

3) Of which SEK 310m refers to the sale of the participations in Småa AB.

ACCOUNTING PRINCIPLES

This interim report for the first six months of 2018 has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The consolidated accounts were prepared in accordance with the International Financial Reporting Standards (IFRS). Since the Parent Company is an enterprise within the EU, only EU-approved IFRS are applied. The Parent Company's accounts were prepared in accordance with RFR 2.

The accounting principles and methods of calculation for the Group have not changed compared to the description on pages 82-85 of the 2017 Annual Report with two exceptions: IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments apply as of January 1, 2018. However, the transition to IFRS 15 and IFRS 9 has not had any impact on the Group's or the Parent Company's performance and financial position. For more information regarding the implementation and the principles of IFRS 15 and IFRS 9, refer to pages 82-85 in the 2017 Annual Report.

JM APPLIES THE FOLLOWING NEW STANDARDS AS OF 2018

IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS

IFRS 15 refers to the recognition of revenue from contracts and the sale of certain non-financial assets.

JM makes the assessment that the reporting of the project development of residential units in Sweden can continue to occur with the application of the percentage of completion method. The contracts with the tenant-owners association are entered into simultaneously, are priced as a single unit and are assessed to constitute a performance obligation. Since JM is contractually obligated to deliver a specific building and during the course of the project is entitled to payment, the assessment is made that revenue must be reported over time, i.e. using the percentage of completion method.

With regard to corresponding business in Norway and Finland, the assessment is made that there is no entitlement to payment, which means that, in the same manner as today, revenue must be reported at a specific point in time, i.e. completion.

The assessment is also made that revenue in JM Construction can continue to be reported using the percentage of completion method since the construction is carried out on land that the customer controls.

PARENT COMPANY

CONDENSED INCOME STATEMENT, PARENT COMPANY

As a whole, IFRS 15 is not considered to result in any changes to JM's revenue recognition principles.

IFRS 9 FINANCIAL INSTRUMENTS

IFRS 9 refers to the reporting of financial instruments. It contains rules for classification and measurement of financial assets and liabilities, impairment of financial instruments and hedge accounting. JM makes the assessment that IFRS 9 could affect the measurement of some receivables, but the effect is not considered material.

For more information about JM's application of IFRS 15 and IFRS 9, refer to pages 82-85 in the 2017 Annual Report.

SEGMENT REPORTING

JM's contracting operations in Norway are reported in the JM Construction business segment as of 2018. Comparative figures for the business segments JM International and JM Construction have been restated.

		JANUARY–JUNE	FULL-YEAR
SEK M	2018	2017	2017
Net sales	5,407	6,064	11,602
Production and operating costs	–4,130	–4,687	–8,878
Gross profit	1,277	1,377	2,724
Selling and administrative expenses	–413	–380	–699
Gains/losses on the sale of property	0	14	14
Operating profit	864	1,011	2,039
Financial income and expenses	–50	301	310
Profit before appropriations and tax	814	1,312	2,349
Appropriations	-	-	–167
Profit before tax	814	1,312	2,182
Taxes	–182	–217	–288
Profit for the period	632	1,095	1,894

CONDENSED BALANCE SHEET, PARENT COMPANY

SEK M	6/30/2018	6/30/2017	12/31/2017
Assets
Non-current assets	1,508	1,094	1,221
Current assets	10,585	9,015	10,155
Total assets	12,093	10,109	11,376
Equity and liabilities
Equity	2,919	2,499	3,050
Untaxed reserves	2,360	2,170	2,360
Provisions	1,467	1,021	1,334
Non-current liabilities	736	215	340
Current liabilities	4,611	4,204	4,292
Total equity and liabilities	12,093	10,109	11,376
Pledged assets	169	169	169
Contingent liabilities	8,706	10,352	10,162

RECONCILIATION BETWEEN SEGMENT REPORTING AND IFRS

CONSOLIDATED INCOME STATEMENT

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue for the period (segment reporting)	8,179	8,644	4,125	4,399	16,543	17,008
Restatement JM International	–310	7	–81	95	–50	267
Revenue for the period (IFRS)	7,869	8,651	4,044	4,494	16,493	17,275
Operating profit/loss for the period (segment
reporting)	1,032	1,188	504	618	2,213	2,369
Restatement JM International	–19	37	2	25	31	87
Operating profit/loss for the period (IFRS)	1,013	1,225	506	643	2,244	2,456
Profit/loss for the period (segment reporting)	776	1,177	377	471	1,793	2,194
Restatement JM International	–17	24	1	18	24	65
Profit/loss for the period (IFRS)	759	1,201	378	489	1,817	2,259
CONSOLIDATED BALANCE SHEET
SEK M			6/30/2018		6/30/2017	12/31/2017
Balance sheet total (segment reporting)			16,643		13,853	15,405
Restatement JM International			–206		–345	–315
Reclassification project financing JM International			2,151		1,786	1,396
Reclassification project financing JM International, non-interest-bearing 1)			352		-	461
Balance sheet total (IFRS)			18,940		15,294	16,947
1) Billing on account to customers
CONSOLIDATED EQUITY
SEK M			6/30/2018		6/30/2017	12/31/2017
Equity (segment reporting)			6,285		5,381	6,178
Restatement JM International			–164		–181	–135
Equity (IFRS)			6,121		5,200	6,043
GROUP KEY FIGURES
%			6/30/2018		6/30/2017	12/31/2017
Equity/assets ratio (segment reporting)			38		39	40
Equity/assets ratio (IFRS)			32		34	35
CONSOLIDATED CASH FLOW
		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Cash flow from operating activities (segment reporting)	–222	1,294	–204	293	497	2,013

2018	2017	2018	2017	2017/2018	2017
–222	1,294	–204	293	497	2,013
–619	32	–284	108	–261	390
–841	1,326	–488	401	236	2,403

CONSOLIDATED INTEREST-BEARING NET LIABILITIES/RECEIVABLES

SEK M	6/30/2018	6/30/2017	12/31/2017
Interest-bearing net liabilities (+)/receivables (–) at end of period
(segment reporting)	240	–274	–790
Reclassification project financing JM International	2,151	1,786	1,396
Interest-bearing net liabilities (+)/receivables (–) at end of period (IFRS)	2,391	1,512	606

REVENUE PER BUSINESS SEGMENT ACCORDING TO IFRS 15

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	3,005	3,718	1,530	1,878	6,438	7,151
JM Residential Sweden	2,334	2,299	1,065	1,153	4,344	4,309
JM International	1,264	1,622	783	903	3,171	3,529
JM Property Development	30	37	15	19	53	60
JM Construction	1,467	1,229	769	677	2,989	2,751
Elimination	–231	–254	–118	–136	–502	–525
Total	7,869	8,651	4,044	4,494	16,493	17,275

Stockholm, July 13, 2018 JM AB (publ)

The Board of Directors and the CEO certify that the report for the first six months of the year gives a true and fair view of the Parent Company's and the Group's operations, position and results and describes the substantial risks and uncertainties faced by the Parent Company and the companies included in the Group.

Fredrik Persson Chair of Board

Kaj-Gustaf Bergh Olav Line Eva Nygren Member Member Member

Member Member Member

Kia Orback Pettersson Thomas Thuresson Åsa Söderström Winberg

Peter Olsson Jan Strömberg Employee- Employeeappointed appointed

Johan Skoglund President and Chief Executive Officer

The company's auditors did not review this interim report.

JM IN BRIEF

BUSINESS CONCEPT

With people in focus and through constant development, we create homes and sustainable living environments.

VISION

We are laying the foundations for a better life.

BUSINESS

JM is one of the leading developers of housing and residential areas in the Nordic region.

Operations focus on new production of homes in attractive locations, with the main focus on expanding metropolitan areas and university towns in Sweden, Norway and Finland. We are also involved in project development of commercial premises and contract work, primarily in the Greater Stockholm area.

JM should promote long-term sustainability work in all its operations. Annual sales total approximately SEK 17 billion and the company has around 2,600 employees. JM AB is a public limited company listed on NASDAQ Stockholm, Large Cap segment.

FINANCIAL TARGETS AND DIVIDENDS POLICY

The operating margin should amount to 10 percent, including gains/losses from property sales. The visible equity ratio should amount to 35 percent over a business cycle.

Over time, the dividend should reflect the earnings trend in total operating activities and over a business cycle on average correspond to 50 percent of consolidated profit after tax. Capital gains from property sales are a natural part of JM's project development operations and therefore are included in the calculation of dividends.

JM's financial targets are defined based on segment reporting.

DISCLOSURES

This information is information that JM AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 08.00 CET on July 13, 2018.

FOR MORE INFORMATION PLEASE CONTACT:

Claes Magnus Åkesson, CFO, Head of IR Tel. +46 8 782 89 71

FINANCIAL CALENDAR

October 25, 2018 Interim Report January - September

PRESS RELEASES, Q2 2018

July 2	JM acquiring property in Espoo, Helsinki
June 29	JM and Entra developing new neighborhood in Bryn,
	Oslo, Norway
April 27	Interim report January – March 2018
April 12	Annual General Meeting at JM AB
April 3	Anders Wimmerstedt new Production Director at JM

JM's Annual Reports, Interim Reports and other financial information are available at jm.se/investors

JM AB (publ)

Comp. Reg. No. 556045-2103 Website www.jm.se/en

Mailing address SE-169 82 Stockholm Street address Gustav III:s boulevard 64, Solna Telephone +46 8 782 87 00 Fax +46 8 782 86 00