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K2A Knaust & Andersson — Annual Report 2022
Feb 14, 2023
3067_10-k_2023-02-14_01002caa-4d81-4e28-ad51-77dc7b70195b.pdf
Annual Report
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Year-end report 2022 K2A Knaust & Andersson Fastigheter AB (publ)
YEAR-END REPORT 2022
OCT-DEC 2022
- § Rental income amounted to SEK 105.0 million (79.7)
- § Net operating income amounted to SEK 64.6 million (49.6)
- § Profit from property management amounted to SEK -13.1 million (131.9)
- § Value changes from investment properties amounted to SEK -303.7 million (371.4)
- § Net profit for the period amounted to SEK -274.3 million (433.6) and earnings per ordinary share amounted to SEK -3.40 (4.86)
JAN-DEC 2022
- § Rental income increased to SEK 374.7 million (272.7)
- § Net operating income amounted to SEK 243.0 million (183.9)
- § Profit from property management amounted to SEK 127.6 million (167.6)
- § Value changes from investment properties amounted to SEK 1.5 million (741.9)
- § Net profit for the period amounted to SEK 159.1 million (756.5) and earnings per ordinary share amounted to 1.08 SEK (8.10)
- § Total number of apartments under management at the end of the period amounted to 5,012 (3,910)
- § The Board of Directors proposes that a dividend of SEK 0.15 per ordinary share (0.15) be paid to ordinary shareholders. The Board of Directors proposes that a dividend be paid to preference shareholders in accordance with the Articles of Association, which means a quarterly dividend of SEK 5.00 per preference share (a total of 20.00 per year).
Property value EPRA NRV attributable to ordinary
Number of apartments in property and project portfolio
9,877 10,150 MSEK 2,414 MSEK
shareholders
| 2022 | 2021 | 2022 | 2021 | |
|---|---|---|---|---|
| KEY FIGURES, SEK MILLION | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Rental income | 105.0 | 79.7 | 374.7 | 272.7 |
| Operating surplus | 64.6 | 49.6 | 243.0 | 183.9 |
| Profit from property management | -13.1 | 131.9 | 127.6 | 167.6 |
| Unrealised value change, investment properties | -303.7 | 371.4 | 1.5 | 741.9 |
| Profit after tax | -274.3 | 433.6 | 159.1 | 756.5 |
| Number of managed units | 5,012 | 3,910 | 5,012 | 3,910 |
| Number of units under production | 1,348 | 2,025 | 1,348 | 2,025 |
| Number of units in projects | 3,517 | 3,808 | 3,517 | 3,808 |
| Total number of units | 9,877 | 9,743 | 9,877 | 9,743 |
| Net loan-to-value ratio, % | 63.8 | 59.0 | 63.8 | 59.0 |
| Interest coverage ratio, 12 months, times | - | - | 1.8 | 1.9 |
| Long-term net reinstatement value (EPRA NRV) | 3,383.5 | 3,365.9 | 3,383.5 | 3,365.9 |
| EPRA NRV attributable to ordinary shareholders | 2,414.3 | 2,396.4 | 2,414.3 | 2,396.4 |
| EPRA NRV per ordinary share, SEK | 28.12 | 27.91 | 28.12 | 27.91 |
| Growth in EPRA NRV per ordinary share, % | - | - | 0.7 | 54.6 |
Number of apartments under management added (last 12 months)
Change in property value (last 12 months)
Growth in EPRA NRV attributable to ordinary shareholders (last 12 months)
1,102 1,691 MSEK 18 MSEK
Due to rounding, the figures presented in this T report may not always add up to exact totals and percentages may differ from the exact percentages. Comparative figures in parentheses in this report refer to profit items for the corresponding period in the previous year and as of the previous balance sheet date.
K2A subscribed for shares corresponding to 10.3 per cent of the number of shares and 1.6 per cent of the votes in the housing developer Boet Bostad
K2A issued green senior unsecured bonds of SEK 300 million under the company's MTN programme K2A hired Pontus Ekerljung as Public
K2A was named the winner of Symbios, the award that praises Swedish companies that succeed in combining responsibility with profitable growth
K2A postponed a number of construction starts that were planned for 2022 and 2023. The consequence was that K2A notified the majority of the employees in K2A Trähus and delayed growth targets of 10,000 homes under management in 2025
K2A arranged Almedalen's greenest stage for housing debate during the politicians' week in Visby 5/7
K2A was named one of three winners for publishing the best sustainability report in a review of all companies listed on Nasdaq OMX Stockholm's Mid Cap by Sthlm Kommunikation & IR
Johan Knaust received the Sustainable Leadership Award, which is presented by The Swedish Association for Sustainable Business
- Nyköping and Södertälje with a total lettable area of
Relations Manager
K2A committed to the Science Based Target initiative (SBTi) as part of the company's efforts to combat climate change
K2A was appointed main developer for the Västra Stadsdelsnoden (Western District Node) community development project in Uppsala
The government approved a lease agreement with the Police Authority and the Swedish Prison and Probation Service for renting a total of 42,500 m2 in Västerås. Total annual rental value of SEK 95 million for 20 years
§ Acquired GotlandsHem's 204 student apartments with a total lettable area of 5,203 sqm
With 269 MWh, K2A tripled its own production of solar energy during the first half of the year compared with the same period last year
Johan Knaust was nominated for the award Person of the Year in Sustainable Construction at the Sweden Green Building Awards
14/10 K2A became an associated member of Public Housing Sweden 25/10
K2A's newbuilt student apartments in Barkarbystaden was nominated to Studentbostadspriset 2022
13/4
3/6
Q2
Q1
22/2
7/4
15/3
3/2
19/5
22/6
Q3
4/7
29/9
Q4
27/10
8/12
K2A Knaust & Andersson Fastigheter AB (publ) 3
CEO statement
2022 will go down in history as one of the most tumultuous years in a very long time. Russia's invasion of Ukraine changed not only the European security situation and the economic environment in general, but also the playing field for European real estate markets. War and uncertainty continue and are likely to also leave their mark on 2023.
2023 is the year in which K2A turns ten. It has been an eventful decade for K2A, in which we have gradually grown into the company we are today, with a strong management portfolio of housing in attractive locations in attractive towns and cities. 83 per cent of K2A's property portfolio consists of homes built in 2015 or later with a good rent level, high energy efficiency and an occupancy rate of close to 100 per cent. 94 per cent of the property value in the investment portfolio is made up of properties in the Stockholm and Mälardalen regions and the major university towns. The properties are in good locations in each town or city, and all our student housing is close to campus.
We also have environmentally certified homes, built with climate-friendly materials and offering low to very low energy consumption. Regardless of how property prices develop overall in the coming years, I believe that K2A's properties will continue to be attractive assets characterised by high quality, attractive locations and stable rental income.
K2A is characterised by a strong green profile with a longterm plan to build up a significant portfolio of attractive, high-quality residential properties in strong growth locations. This vision has not changed. The significant turmoil in the world and rising interest rates have had a major impact on the real estate market, and for a long-term player like K2A, this means that the company must prioritise financial stability over growth. K2A acted swiftly by increasing the availability of capital, as well as laying off staff in our timber house factories and entering into additional derivative contracts.
Rising interest costs also affect certain financial ratios. The interest coverage ratio will fall from current levels of 1.8 as rising interest costs are not matched by corresponding rent increases in the short term. However, the effect of market interest rates continuing to rise will be offset by the derivatives in the form of interest rate swap contracts entered into by K2A. At the end of 2022, we had entered into interest rate swap contracts with a notional amount of SEK 2,075 million, and at the end of January 2023, we entered into additional interest rate swap contracts of SEK 1,500 million. K2A thus holds interest rate swap contracts with a total notional value of SEK 3,575 million. Combined with our fixed-rate loans, this means that 82 per cent of K2A's interest bearing liabilities at year-end are interest rate protected. Excluding construction credit, the share of interest rate protected loans was 95 per cent. The average fixed interest rate for these interest rate swap contracts is 0.95 per cent. For K2A, the derivatives provide a significant hedge against the impact of rising interest rates, and K2A estimates that the interest coverage ratio in 2023 and 2024 will not fall below the company's risk limit of 1.5.
Due to market developments in 2022, K2A decided to press pause on the vast majority of new construction starts. Given the changing conditions in the construction and capital markets, with continued significant global uncertainty, 2023 will be a year of consolidation for K2A. The main focus will be on efficiency improvements in management to strengthen the operating surplus margin, completing ongoing projects in production and securing additional liquidity by disposing of assets to strengthen the balance sheet, financial ratios and cash flow. In this way, the balance sheet is adapted to an environment of higher interest rates while capacity for financing further growth is also freed up.
It is difficult to predict today when K2A will start construction for new projects, but this will hopefully take place in 2024, given that the market is in better balance. Sharp increases in input prices, energy prices increasing several times over and rising capital costs have put a dampener on the construction sector. According to Boverket's – the Swedish National Board of Housing, Building and Planning – December forecast, the number of construction starts in 2023 is expected to be less than half of those in 2021.
However, the need for housing will not decline just because less housing is being built. A growing population, urbanisation and a slowdown in construction will create even greater demand for existing housing. It is also reasonable that demand for rental housing will increase further in a period of recession and higher interest rates, when fewer households are willing, able or confident enough to buy their home. A clear sign of the growing interest is that K2A's own housing queue grew in 2022 from 42,700 to 96,000 people, an increase of 125 per cent. We also see that we have virtually no vacant homes in any of our locations.
Stockholm is K2A's most important market. In 2022, K2A was allocated land in three sites in southern Stockholm and received planning notification to build apartment buildings on properties we previously acquired in the district of Bromma. Today, of the 3,517 development rights available to K2A, more than half, 1,838, are located in the County of Stockholm. In Stockholm, the conditions for value-creating real estate development are completely different from those in the rest of Sweden. Both rents and property values are higher there. This means that project development in Stockholm is still very profitable, despite higher interest and construction costs. For these reasons, growth is likely to resume in Stockholm with the planned construction start of our project in the Slakthusområdet area (Stockholm Meatpacking District) in early 2024. However, K2A will not start projects unless the conditions are right. Being focused on the long term requires controlled growth.
Rent negotiations have been a hot topic of debate in the wake of high inflation. Many people believe that rent growth for housing is not inflation-proof, but what we see historically is that the growth is sensitive to inflation and has always been compensated for rising inflation over time. This year, inflation will be higher than rent increases, but based on historical data, it is reasonable to assume that rent increases over time will be adequate to balance the rising inflation. Additionally, it is noteworthy that market rents are not applied to rental apartments in Sweden, which means that the rent increases take place from levels below what the unregulated market may be willing to pay for rental housing in attractive locations. For commercial premises, the rent level is often indexed in agreements, which means substantial rent increases in the wake of high inflation. These increases, in combination with a weaker economy, may result in the contracted rent level ending up higher than the market rent for newly signed leases. Given these circumstances, I believe that the discussion regarding the rental trend for residential versus commercial premises has the potential to be misleading. The rent for housing is being raised from lower levels and there is a high willingness to pay among tenants, in combination with well established social safety nets for tenants whose ability to pay has been negatively impacted.
Also, at the turn of the year, new legislation came into force that provides for arbitration in rent negotiations. Starting with the 2023 negotiations, property owners and the Swedish Union of Tenants can turn to an independent arbitrator to settle the issue of rent growth if the parties are unable to reach an agreement. The new legislation will contribute to reasonable rent growth without protracted negotiations.
Finally, I would like to say a few words about property valuations. There are differing views on how property prices will develop going forward. Whichever scenario you see as most likely, it is wise to reflect on which properties would be most affected if we see falling prices. What we know from history is that properties in poorer micro-locations or in places with declining populations are most at risk of being devalued in less favourable periods.
K2A's stable property portfolio, along with our extensive development rights portfolio focusing on value creation in Stockholm, is the foundation for our long-term growth. These aspects – along with the measures on the financing side that we have taken and intend to take during the 2023 year of consolidation – leads me to be positive about the future. Together with our employees who contribute their expertise throughout the value chain, I look forward to continuing to develop K2A, focusing on quality, sustainability and the long term.
THIS IS K2A
K2A Knaust & Andersson Fastigheter AB (publ) is a real estate company with a focus on long-term management of own produced rental apartments for all types of housing. The company develops and offers modern, functional apartments with efficient customer oriented management.
Mission statement
K2A's mission is to own, develop and provide long-term management of rental apartments and community service properties in Stockholm, the Mälardalen and several university/college cities across Sweden.
Objectives
Overall objective
K2A shall generate a competitive risk adjusted return for its shareholders.
Sustainability targets
- § K2A shall be climate positive by 2027.
- § K2A shall be the most sustainable real estate company.
- § All of K2A's investment properties shall be certified and undergo a climate risk assessment.
- § K2A's customers shall experience a higher level of housing satisfaction than the average renter in Sweden.
Financial targets
- § Average net operating income shall grow by at least 25 per cent per year between 2019 and 2025.
- § Average EPRA NRV attributable to ordinary shareholders shall grow by at least 20 per cent per year between 2019 and 2025.
Financial risk limits
- § The long-term loan-to-value ratio for the group shall not exceed 70 per cent.
- § The long-term interest coverage ratio for the group shall not be less than 1.5 times.
Dividend policy
Over the long-term, dividends shall amount to maximum one third of average annual profit over the past three financial years. Over the next few years, K2A will prioritise growth over dividend, which could mean that low or no dividend is paid on ordinary shares. Preference shares shall be allotted in accordance with the Articles of Association.
To achieve its targets, K2A shall
- § Focus on Stockholm, the Mälardalen and a number of university/college cities, and identify acquisition candidates and obtain land allocations for the development of rental apartments.
- § Focus on prime residential locations, student housing close to campuses and community service properties with low counterparty and/or business risk.
- § Focus on the development of high quality, space efficient and functional rental apartments suitable for industrially produced building volumes.
- § Produce apartments under own management in manufacturing facilities controlled by K2A.
Property and project portfolio
K2A's operations are concentrated to Stockholm, the Mälardalen and a selected number of university/college cities. The property and project portfolio comprises 9,877 apartments, including 5,012 managed apartments, with a total property value of SEK 10,150 million at the balance sheet date.
SUSTAINABILITY
Low-carbon value chain
K2A focuses on a sustainable planet, efficient construction and low carbon living, developing homes primarily built using locally produced and certified Swedish timber. K2A aims at being the long-term owner and manager of the properties it builds. Thus, it makes financial sense to place an emphasis on high quality, long lasting fittings and materials that can be recycled or reused. Our buildings are Nordic Swan Ecolabel-certified, providing tenants with high quality homes built with materials chosen for minimum impact on the environment and health. In line with K2A's sustainability strategy, the homes are developed and built for optimal environmental and energy performance, to support sustainable lifestyles and to help maintain or increase biodiversity. The company is proactive and climate-proofs new developments and redevelopments for future climate scenarios, ensuring that the existing property portfolio is equipped for future climate change challenges. Residential projects developed in-house install rooftop solar panels with the aim of making the properties self-sufficient in electricity. In several locations, K2A has carpools that use electric vehicles based on its own BoBil concept, exclusively for the company's tenants. Features such as digital displays in building entrances with real-time bus and train timetables promote low carbon travel. Cool boxes have been installed in a number of buildings, where grocery deliveries can be placed, making everyday life easier for tenants and reducing individual car journeys for shopping.
K2A joins GRESB
With over 1,500 real estate companies worldwide, GRESB (Global Real Estate Sustainability Benchmark) is the world's biggest sustainability benchmark for the real estate sector. It is used by investors worldwide and captures, among other things, how real estate companies are performing in terms of climate impact, sustainability management and targets for future projects. A number of real estate companies in Sweden are part of GRESB and by joining, K2A will be able to compare its sustainability performance with other companies in Sweden, the Nordic region and the rest of the world. The first year K2A will be included in the official comparison will be 2023.
K2A is now a TCFD supporter
K2A wants to take responsibility and contribute to positive change in the industry. A requirement for this is to transparently demonstrate the impact of its operations on the climate. Analysis and disclosure of climate risks is a key requirement in K2A's work to mitigate climate change, and the company has disclosed its climate-related financial risks and opportunities within the framework of the Task Force on Climate-Related Financial Disclosures, TCFD, since 2020. In 2022 K2A chose to join TCFD as a supporter, along with more than 1,000 companies worldwide. The TCFD framework shows how companies manage climate-related risks and opportunities in terms of governance, strategy, risk management, target setting and monitoring. Key areas for K2A to analyse are how policy, economics and technology may change in a world that is increasingly adapting to climate change, but also how a changing climate may physically affect the company's properties through, for example, rising sea levels or extreme rainfall.
Energy use reduced by seven per cent in 2022
In 2022, K2A worked intensively on measures to reduce energy use in its existing portfolio, while at the same time accessing a number of energy-efficient new-build projects, resulting in a reduction in energy use for both comparable portfolios and for newly constructed buildings as a whole. Energy use per square metre in the total property portfolio decreased by seven per cent in 2022 compared to the previous year. In comparable portfolios, the corresponding decrease was four per cent. This is a clear sign that the company's energy efficiency work, such as adjusting heating curves, adjusting temperatures in public areas and regulating the pressure in circulating pumps, has paid off. K2A also tripled its solar production in 2022 compared to 2021, which means 570 MWh were produced in total during the period. Work on energy efficiency measures will continue in 2023 as K2A implements ventilation measures and adaptive heating control while continuing to install solar cells on existing buildings.
GREEN FINANCING FRAMEWORK FOLLOW-UP
GREEN FINANCING FRAMEWORK FOR SHARES, JAN–DEC 2022
GREEN FINANCING FRAMEWORK
ENERGY EFFICIENCY
CO₂e emissions, kg per sqm (scope 1–31 )
1) Scope 1 refers to the company's direct emissions from own sources as company vehicles and boilers. Scope 2 refers to the company's indirect emissions from purchased energy. Scope 3 refers to the company's indirect emissions from sources such as construction materials and business travel.
GREEN BUILDINGS
| Certification and level, no.of buildings | Certified | Ongoing | Coming | Total | Ongoing | Total |
|---|---|---|---|---|---|---|
| Nordic Swan Eco-label | 20 | 16 | - | 36 | 37 | 73 |
| Miljöbyggnad nybyggnad | ||||||
| - Silver | 3 | 6 | - | 9 | - | 9 |
| Miljöbyggnad iDrift | ||||||
| - Silver | 11 | 43 | - | 54 | - | 54 |
| - Brons | 32 | 7 | - | 39 | - | 39 |
| Passivhouse/other | 3 | - | - | 3 | - | 3 |
| Total | 69 | 72 | - | 141 | 37 | 178 |
Example of green buildings – Lund Näcken
K2A's 98 rental apartments at Näcken in Södra Råbylund in Lund are being completed and ready for occupancy by April first, 2023. Näcken will be K2A's first rental apartments in Lund.
The project is produced in Swedish certified wood and will receive the Nordic Swan Eco-label.
PROPERTY AND PROJECT PORTFOLIO
K2A's activities with investment objects and projects are concentrated to Stockholm, the Mälardalen and a selected number of university/college cities.
The investment objects comprise a total of 5,012 housing apartments and a lettable area of 187,184 sqm, of which 162,422 relates to housing apartments.
INVESTMENT OBJECTS AT THE BALANCE SHEET DATE
| Investment objects | No. of | Lettable area, sqm | Property value1 | Rental value | Property costs | Operating surplus | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| per category | apts. Residential | Premises | MSEK | SEK/sqm | MSEK | SEK/sqm | MSEK | SEK/sqm | MSEK | SEK/sqm | |
| Rental apartments | 1,630 | 73,117 | 3,942 | 3,689 | 47,874 | 175 | 2,271 | 38 | 493 | 135 | 1,747 |
| Student housing | 3,220 | 73,443 | 5,180 | 3,613 | 45,948 | 204 | 2,597 | 49 | 628 | 150 | 1,903 |
| Public service properties | 162 | 15,862 | 15,639 | 947 | 30,050 | 60 | 1,893 | 9 | 290 | 50 | 1,602 |
| Total/average | 5,012 | 162,422 | 24,761 | 8,248 | 44,066 | 439 | 2,345 | 97 | 516 | 335 | 1,788 |
| Investment objects | No. of | Lettable area, sqm | Property value1 | Rental value | Property costs | Operating surplus | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| geographic distribution | apts. Residential | Premises | MSEK | SEK/sqm | MSEK | SEK/sqm | MSEK | SEK/sqm | MSEK | SEK/sqm | |
| Stockholm/Mälardalen | 2,031 | 68,801 | 4,154 | 4,126 | 56,550 | 200 | 2,736 | 37 | 506 | 160 | 2,188 |
| Student cities | 2,823 | 83,182 | 12,457 | 3,635 | 38,005 | 206 | 2,157 | 53 | 556 | 149 | 1,555 |
| Other cities | 158 | 10,439 | 8,150 | 488 | 26,252 | 33 | 1,774 | 6 | 344 | 26 | 1,422 |
| Total/average | 5,012 | 162,422 | 24,761 | 8,248 | 44,066 | 439 | 2,345 | 97 | 516 | 335 | 1,788 |
INVESTMENT OBJECTS PER CATEGORY
INVESTMENT OBJECTS, GEOGRAPHICAL DISTRIBUTION
1) The property value pertains to investment objects. At the balance sheet date, the total value of all investment properties, including the fair value of ongoing projects, was SEK 10 150 million. The difference between the property value given in this table and the information about fair value at the balance sheet date for the investment objects segment in Note 2 is essentially due to the effects of IFRS 16 and the value given for ground leases and rental contracts, which totalled SEK 121 million at the balance sheet date.
Information about investment objects in the year-end report is based on estimates and assumptions of rental value, economic occupancy rate and property costs. Information about rental value and property costs is based on estimates and pertains to the full year. Property administration is not included in property costs. Assumptions of the economic occupancy rate pertain to long-term vacancy excluding project vacancy and temporary initial vacancy during the occupancy period in connection with completion. Information about property value pertains to fair value at the balance sheet date. These estimates and assumptions are subject to uncertainty and the information set out above should not be considered a forecast.
PROPERTIES UNDER MANAGEMENT
| Rental | ||||||
|---|---|---|---|---|---|---|
| Total | No. of | value | ||||
| Property | Municipality | Category | Completed | area, sqm | apartments | MSEK |
| On 1 January, 2022 | ||||||
| Rental apartments | R | 57,809 | 1,301 | 138.1 | ||
| Student housing | S | 56,534 | 2,396 | 143.7 | ||
| Community service properties | C | 34,733 | 222 | 58.8 | ||
| Future projects | F | 1,666 | 0 | 3.4 | ||
| Sum | 150,743 | 3,919 | 344.0 | |||
| Added, full year 2022 | ||||||
| Soluppgången 1 | Växjö | R | 2022 | 4,816 | 60 | 9.0 |
| LSS Motala | Motala | C | 2022 | 505 | 6 | 1.6 |
| LSS Enköping 2 | Enköping | C | 2017 | 680 | 6 | 1.5 |
| LSS Nyköping 2 | Nyköping | C | 2020 | 486 | 6 | 1.6 |
| LSS Södertälje | Södertälje | C | 2017 | 532 | 6 | 1.5 |
| Skärvet 11 | Växjö | R | 2022 | 3,664 | 56 | 6.4 |
| Barkarby 2:60, lott A | Järfälla | S, C | 2022 | 6,311 | 205 | 22.6 |
| Startbanan 3 | Örebro | R | 2022 | 3,198 | 115 | 7.9 |
| Biologen 3 | Växjö | R | 2022 | 4,124 | 70 | 7.4 |
| Förrådet 4 | Sundsvall | S | 2022 | 5,335 | 237 | 14.8 |
| Korpralen 1, stage 1 | Visby | S | 2022 | 1,850 | 74 | 5.4 |
| Rekylen 1, Järnvägen 6 & 7 | Visby | S | 1994/1999/2000 | 5,203 | 204 | 10.2 |
| Development properties | Stockholm | F | - | 750 | 5 | 1.7 |
| Sidsjöhöjden 14 | Sundsvall | R | 1945/2010 | 1,782 | 27 | 2.5 |
| Hortonomen 1 | Växjö | S | 2022 | 2,640 | 100 | 6.2 |
| Sum | 41,876 | 1,177 | 100.3 | |||
| Divested, full year 2022 | ||||||
| LSS Eslöv | Eslöv | C | 1915 to 2010 | -1,480 | -13 | -1.5 |
| Care properties Malmö, Sjöbo and Burlöv | C | 1980/1987/1999 | -3,955 | -71 | -4.0 | |
| Sum | -5,435 | -84 | -5.4 | |||
| Total | 187,184 | 5,012 | 438.9 |
1) C=Community service properties, S=Student housing, R=Rental apartments, F=Future projects
ONGOING PROJECTS
TOTAL PROPERTY AND PROJECT PORTFOLIO
The information about ongoing projects in the year-end report is based on estimates of the size, focus and scope of ongoing projects, and when the project is expected to start and finish. In addition, the information is based on assumptions of future project costs and rental value. These estimates and assumptions should not be considered a forecast. The estimates and assumptions are subject to uncertainty regarding the implementation, design and size, time frames, project costs and future rental value of the projects. The information about ongoing projects is periodically reviewed and estimates and assumptions are adjusted as ongoing projects are completed or added, and as circumstances change. For projects where construction has not yet started, financing has not been procured, which means that financing of ongoing projects is subject to uncertainty.
| Total | Rental | |||||||
|---|---|---|---|---|---|---|---|---|
| Construction | area, | No. of | value | |||||
| Projects in production | Municipality | Category1 | Status2 | start | Completed | sqm | apartments | MSEK |
| Bottenhavet 21 (new construction) | Örebro | S | 4, 2018 | 4, 2023 | 1,024 | 36 | 2.3 | |
| Näcken 1 | Lund | R | 1, 2021 | 2, 2023 | 3,497 | 98 | 8.2 | |
| Sala backe 50:1 & 2 | Uppsala | R | 1, 2021 | 4, 2023 | 11,350 | 216 | 20.0 | |
| Glidet 1 | Luleå | R | 2, 2021 | 2, 2023 | 4,600 | 95 | 8.9 | |
| Vallan 1 | Luleå | R | 2, 2021 | 4, 2023 | 5,400 | 115 | 10.1 | |
| Diskusen 2 | Växjö | R | 2, 2021 | 3, 2023 | 6,863 | 185 | 15.2 | |
| Kornknarren 2 | Västerås | R | 2, 2021 | 1, 2024 | 2,463 | 62 | 5.2 | |
| Intervallet 7-9 | Linköping | S, C | 3, 2021 | 3, 2023 | 3,177 | 112 | 7.6 | |
| Forntiden 2 | Västerås | R | 4, 2021 | 2, 2023 | 6,747 | 155 | 14.4 | |
| Äppellunden 1 | Umeå | R | 4, 2021 | 2, 2023 | 3,852 | 83 | 7.5 | |
| Rödalen 1 | Norrtälje | R | 1, 2022 | 4, 2023 | 10,785 | 191 | 19.4 | |
| Bredsand 1:282 | Enköping | C | 2, 2022 | 1, 2023 | 1,350 | - | 2.4 | |
| Sum | 61,108 | 1,348 | 121.3 | |||||
| Other ongoing projekcts | ||||||||
| Slakthusområdet (student housing) | Stockholm | S | 6 | 2024 | 2026 | 6,175 | 250 | |
| Slakthusområdet (preschool) | Stockholm | C | 6 | 2024 | 2026 | 1,130 | - | |
| Slakthusområdet (gym) | Stockholm | C | 6 | 2024 | 2026 | 2,300 | - | |
| Brohuvudet 13-16 | Sundsvall | S | 6 | 2024 | 2026 | 1,850 | 86 | |
| Förseglet 9, lot D | Västerås | R | 6 | 2024 | 2027 | 5,420 | 145 | |
| Abboten 7 | Sundsvall | R | 6 | 2025 | 2027 | 7,022 | 187 | |
| Björksätra | Stockholm | R | 2 | 2025 | 2027 | 5,200 | 120 | |
| Korpralen 1 | Gotland | S | 1 | 2025 | 2027 | 1,634 | 76 | |
| Stora Sköndal | Stockholm | R | 4 | 2025 | 2027 | 7,900 | 248 | |
| Timmerfallet | Stockholm | S | 1 | 2025 | 2027 | 4,300 | 200 | |
| Torpa-Sjöbo 2:1, stage 1 | Borås | R | 4 | 2025 | 2027 | 10,200 | 274 | |
| Vansta 5:28 | Nynäshamn | R | 2 | 2025 | 2027 | 5,480 | 140 | |
| Ekersvägen | Örebro | R | 3 | 2026 | 2028 | 10,500 | 200 | |
| Harklövern 1 | Karlstad | R | 6 | 2026 | 2028 | 3,282 | 88 | |
| Juliana 8 | Västerås | S | 6 | 2026 | 2028 | 975 | 45 | |
| Sidsjöhöjden 4 (new production) | Sundsvall | R, S | 6 | 2026 | 2028 | 2,250 | 60 | |
| Skutkrossen 16 | Stockholm | R | 1 | 2026 | 2028 | 3,000 | 70 | |
| Trädan 27 | Växjö | S | 6 | 2026 | 2028 | 1,935 | 90 | |
| Visborg 1:9 (part of) | Gotland | S | 1 | 2026 | 2028 | 3,763 | 175 | |
| Isaberg 1 | Stockholm | R | 1 | 2027 | 2029 | 3,400 | 95 | |
| Torpa Sjöbo 2:1, stage 2 | Borås | R | 2 | 2027 | 2029 | 4,150 | 110 | |
| Bygeln 2 & 8 (part of) | Stockholm | R | - | 2027 | 2030 | 7,000 | 140 | |
| Örbyleden | Stockholm | R | 2 | 2027 | 2029 | 7,100 | 175 | |
| Sum | 105,966 | 2,974 | ||||||
| Total per balance-sheet day | 167,074 | 4,322 | ||||||
| Co-owned projects, number of apartments and area attributable to K2A | ||||||||
| Flogsta 22:3 | Uppsala | S | 4 | 2024 | 2026 | 9,360 | 143 | |
| Ångpannan 12 | Västerås | C | 6 | 2023 | 2026 | 21,250 | - | |
| Viby 19:3 | Upplands-Bro | R | 6 | 2023 | 2029 | 23,520 | 400 | |
| Sum | 54,130 | 543 |
Total 221,204 4,865
1) C=Community service properties, S=Student housing, R=Rental apartments, F=Future projects
2) Depending on the current phase of each zoning plan, K2A takes a percentage of the assumed fair value of the building permits into account. 1 = Planning notification (25 per cent), 2 = Start memorandum (50 per cent), 3 = Planning programme (50 per cent), 4 = Public consultation (75 per cent), 5 = Exhibition (75 per cent), 6 = Zoning plan approved (100 per cent)
EARNING CAPACITY PROPERTY MANAGEMENT OPERATIONS
In order to provide an overview of K2A's future expected earning capacity at profit from property management level, a table has been created. The earning capacity is based on the company's investment objects (including agreed but not yet accessed acquisitions) as well as the earning capacity from ongoing projects in production after these have been completed and occupied.
Assumptions
The rental value of each investment object and ongoing project in production that is included in current earnings is presented in the "Property and project portfolio" section of the year-end report.
Rental value and property costs are based on full year estimates. Vacancy refers to an assumed long-term vacancy rate.
The earning capacity refers to property management operations, which include investment objects (including agreed but not yet accessed acquisitions) and ongoing projects in production. Projects in which construction has not yet started are not included. For that reason, only estimated central administrative costs attributable to property management operations are included. Central costs attributable to project development have therefore been excluded. Additional investments refer to estimates of total production costs for the investment objects and ongoing projects in production that are included in current earnings, less the accumulated portion that K2A had invested by the balance sheet date. Additional investments for acquired but not yet accessed investment objects are based on the purchase price.
For more information, refer to the "Property and project portfolio" section in the year-end report.
EARNINGS CAPACITY
| SEK million | Investment objects |
Acquired, not accessed investment properties |
Ongoing projects in production |
Group | Total |
|---|---|---|---|---|---|
| Rental value | 438.9 | - | 121.3 | 560.1 | |
| Vacancies | -7.6 | - | -1.5 | -9.1 | |
| Rental income | 431.2 | - | 119.8 | 551.0 | |
| Total property costs, including administration | -126.7 | - | -32.5 | -159.2 | |
| Operating surplus | 304.5 | - | 87.3 | 391.8 | |
| Central administration, property management | -18.5 | -18.5 | |||
| Net interest income/expense | -252.3 | ||||
| Profit from property management | 121.0 | ||||
| Remaining investments | 22.7 | - | 1,254.8 | 1,277.5 |
SENSITIVITY ANALYSIS
The table below shows the theoretical income effect on profit from property management on the group's earning capacity. The theoretical income effect on profit from property management has been estimated by changing one of the following factors at a time:
| Change | Effect on operating surplus, SEK million | |
|---|---|---|
| Rental value | +/-5 per cent | +/- 28.0 |
| Occupancy rate | +/- 1 percentage points | +/- 5.6 |
| Property cost | +/-10 per cent | -/+ 15.9 |
| Interest expense | +/- 1 percentage point | -/+ 33.4 |
THE GROUP'S STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY
| 2022 | 2021 | 2022 | 2021 | ||
|---|---|---|---|---|---|
| SEK million | Note | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Rental income | 105.0 | 79.7 | 374.7 | 272.7 | |
| Property costs | |||||
| Operating costs | -28.0 | -19.8 | -88.4 | -62.3 | |
| Maintenance | -5.0 | -4.1 | -14.8 | -8.5 | |
| Property tax | -1.5 | -1.1 | -3.9 | -2.7 | |
| Depreciation | -0.4 | -0.1 | -1.1 | -0.4 | |
| Property administration | -5.6 | -4.9 | -23.4 | -15.0 | |
| Total property costs | -40.4 | -30.0 | -131.7 | -88.8 | |
| Operating surplus | 64.6 | 49.6 | 243.0 | 183.9 | |
| Central administration, property management | -2.3 | -5.7 | -16.3 | -19.8 | |
| Central administration, project development | -4.3 | -11.9 | -42.7 | -38.5 | |
| Gain/loss from joint ventures | -34.4 | 123.1 | 71.8 | 127.8 | |
| - whereof operating surplus | -0.3 | 0.0 | -0.4 | 1.2 | |
| - whereof value change, investment properties | -34.1 | 123.1 | 72.2 | 126.6 | |
| Net interest income/expense | -36.7 | -23.2 | -128.1 | -85.8 | |
| Profit/loss from property management | -13.1 | 131.9 | 127.6 | 167.6 | |
| Value changes | |||||
| Investment properties, unrealised | 2 | -303.6 | 371.4 | 3.5 | 741.9 |
| Investment properties, realised | -0.1 | - -2.0 |
- | ||
| Participations in other companies | - 8.2 |
-7.8 | 8.2 | ||
| Derivatives | -5.9 | 7.0 | 92.9 | 24.6 | |
| Profit/loss before tax | -322.7 | 518.5 | 214.3 | 942.3 | |
| Current tax | 0.0 | -0.2 | -0.3 | -0.5 | |
| Deferred tax | 48.4 | -84.6 | -54.9 | -185.3 | |
| Net profit/loss for the period/year | -274.3 | 433.6 | 159.1 | 756.5 | |
| Net profit/loss for the period/year attributable to: | |||||
| Parent Company shareholders | -274.1 | 433.4 | 159.5 | 755.5 | |
| Non-controlling interests | -0.1 | 0.3 | -0.4 | 1.0 | |
| Earnings per share | |||||
| Earnings per ordinary share, before and after dilution, SEK |
-3.40 | 4.86 | 1.08 | 8.10 | |
| Average number of outstanding ordinary shares, before and after dilution |
85,865,300 85,865,300 85,865,300 | 85,659,841 |
Net profit for the period/year corresponds to comprehensive income for the period/year and thus only one income statement is presented without a separate statement of other comprehensive income.
THE GROUP'S STATEMENT OF FINANCIAL POSITION
| SEK million | Note | 2022-12-31 | 2021-12-31 |
|---|---|---|---|
| ASSETS | |||
| Intangible and tangible assets | |||
| Investment properties | 2 | 10,149.7 | 8,458.4 |
| Owner-occupied properties | 25.8 | 14.4 | |
| Equipment | 17.5 | 17.9 | |
| Licences | 5.2 | 6.3 | |
| Total tangible assets | 10,198.3 | 8,497.0 | |
| Financial assets | |||
| Participations in joint ventures | 352.0 | 267.7 | |
| Participations in other companies | 153.4 | 101.0 | |
| Other non-current receivables | 39.6 | 148.3 | |
| Derivatives | 142.9 | 25.6 | |
| Total financial assets | 687.8 | 542.6 | |
| Total non-current assets | 10,886.1 | 9,039.6 | |
| Current assets | |||
| Inventories | 2.3 | 15.8 | |
| Accounts receivable | 1.2 | 1.5 | |
| Tax assets | 3.0 | 1.5 | |
| Receivables from joint ventures | 10.7 | 6.8 | |
| Other receivables | 120.1 | 107.1 | |
| Prepaid expenses and accrued income | 20.4 | 11.8 | |
| Cash and cash equivalents | 298.0 | 379.2 | |
| Total current assets | 455.6 | 523.6 | |
| Total assets | 11,341.7 | 9,563.2 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 547.9 | 547.9 | |
| Other contributed capital | 942.0 | 942.0 | |
| Hybrid bond | 450.0 | 450.0 | |
| Retained earnings including net profit/loss for the period/year | 1,045.9 | 965.6 | |
| Equity attributable to Parent Company shareholders | 2,985.8 | 2,905.6 | |
| Equity attributable to non-controlling interests | 0.3 | 0.7 | |
| Total equity | 2,986.1 | 2,906.2 | |
| Non-current liabilities | |||
| Deferred tax liabilities | 540.2 | 485.3 | |
| Non-current lease liabilities | 189.1 | 81.7 | |
| Non-current interest-bearing liabilities | 5,109.6 | 4,345.4 | |
| Total non-current liabilities | 5,838.9 | 4,912.4 | |
| Current liabilities | |||
| Current interest-bearing liabilities | 2,233.7 | 1,456.8 | |
| Current lease liabilities | 20.5 | 12.6 | |
| Accounts payable | 76.3 | 100.7 | |
| Tax liabilities | 7.3 | 5.1 | |
| Other liabilities | 39.9 | 49.4 | |
| Accrued expenses and deferred income | 138.9 | 120.0 | |
| Total current liabilities | 2,516.6 | 1,744.5 | |
| Total liabilities | 8,355.6 | 6,656.9 | |
| Total equity and liabilities | 11,341.7 | 9,563.2 |
THE GROUP'S STATEMENT OF CHANGES IN EQUITY
| Attributable to Parent Company shareholders | ||||||
|---|---|---|---|---|---|---|
| Other | Non | |||||
| contributed | Hybrid | Retained | controlling | |||
| SEK million | Share capital | capital | bond | earnings | interests | Total equity |
| Opening equity, 1 Jan 2021 | 118.0 | 917.9 | - | 726.1 | 1.4 | 1,763.5 |
| Profit/loss for the period | - | - | - | 755.5 | 1.0 | 756.5 |
| New share issue, Series B ordinary shares | 0.6 | 25.5 | - | - | - | 26.1 |
| Costs for new issue of Series B ordinary shares | - | -1.5 | - | - | - | -1.5 |
| New issue, hybrid bond | - | - | 450.0 | - | - | 450.0 |
| Costs for issue of hybrid bond | - | - | - | -7.5 | - | -7.5 |
| Bonus issue, ordinary shares | 429.3 | - | - | -429.3 | - | - |
| Payment, hybrid bond | - | - | - | -25.4 | - | -25.4 |
| Resolved dividend, ordinary shares | - | - | - | -8.5 | - | -8.5 |
| Resolved dividend, preference shares | - | - | - | -36.1 | - | -36.1 |
| Acquisition of participations from non-controlling interests | - | - | - | -9.2 | -1.7 | -10.9 |
| Total transactions with shareholders | 429.9 | 24.0 | 450.0 | -516.0 | -1.7 | 386.1 |
| Closing equity, 31 Dec 2021 | 547.9 | 942.0 | 450.0 | 965.6 | 0.7 | 2,906.2 |
| Opening equity, 1 Jan 2022 | 547.9 | 942.0 | 450.0 | 965.6 | 0.7 | 2,906.2 |
| Profit/loss for the period | - | - | - | 159.5 | -0.4 | 159.1 |
| Payment, hybrid bond | - | - | - | -30.2 | - | -30.2 |
| Resolved dividend, ordinary shares | - | - | - | -12.9 | - | -12.9 |
| Resolved dividend, preference shares | - | - | - | -36.1 | - | -36.1 |
| Total transactions with shareholders | - | - | - | -79.2 | - | -79.2 |
| Closing equity, 31 Dec 2022 | 547.9 | 942.0 | 450.0 | 1,045.9 | 0.3 | 2,986.1 |
THE GROUP'S CASH FLOW STATEMENT
| SEK million Oct-Dec Oct-Dec Jan-Dec Jan-Dec Operating activities Profit/loss from property management -13.1 131.9 127.6 167.6 Adjustments for non-cash items 48.2 -114.7 -42.8 -109.5 Tax paid -0.6 -0.7 -0.6 -0.7 Change in inventories 5.8 -4.1 13.5 0.0 Change in operating receivables 45.6 -9.3 61.7 -142.2 Change in operating liabilities -38.7 79.8 -97.4 150.2 Cash flow from operating activities 47.3 82.8 62.0 65.3 Investing activities Acquisition of investment properties -45.9 -215.3 -687.9 -982.7 Investments in investment properties -113.0 -315.7 -889.5 -939.8 Deposits paid for acquisition of investment properties 0.1 -3.9 - -96.3 Divested investment properties -0.1 - 86.8 - Lending to joint ventures -2.6 - -2.6 - Investments in other non-current assets -0.2 -18.2 -63.0 -68.6 Cash flow from investing activities -161.7 -553.1 -1,556.1 -2,087.3 Financing activities New share issue - - - 26.2 Costs for new share issue - 0.0 - -1.5 Issue of hybrid bond - - - 450.0 Costs for issue of hybrid bond - -0.5 - -7.5 Loans raised 75.0 653.5 1,687.6 2,090.1 Repayment of loans -19.9 -13.5 -159.0 -481.5 Repayment of lease liability -4.2 -3.1 -13.8 -10.9 Acquisition of participations, from non-controlling interests - -10.9 - -10.9 Investments in derivatives - - -24.3 - Payment, hybrid bond -8.3 -6.8 -28.6 -20.2 Dividend, ordinary shares - - -12.9 -8.5 |
|---|
| Dividend, preference shares -9.0 -9.0 -36.1 -36.1 |
| Cash flow from financing activities 33.6 609.6 1,412.9 1,989.1 |
| Cash flow for the period -80.9 139.3 -81.2 -32.9 |
| Cash and cash equivalents at the beginning of the 378.8 239.8 379.2 412.1 |
| period/year Cash and cash equivalents at the end of the period/year 298.0 379.2 298.0 379.2 |
SEGMENT REPORTING
| INVESTMENT | ONGOING | UNDISTRIBUTED | ||||||
|---|---|---|---|---|---|---|---|---|
| PROPERTIES | PROJECTS | ITEMS | GROUP | |||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
| SEK million | jan-dec | jan-dec | jan-dec | jan-dec | jan-dec | jan-dec | jan-dec | jan-dec |
| INCOME STATEMENT | ||||||||
| Rental income | 373.1 | 270.9 | 1.6 | 1.9 | -0.0 | -0.0 | 374.7 | 272.7 |
| Property costs | -127.9 | -86.1 | -2.7 | -2.8 | -1.1 | 0.0 | -131.7 | -88.8 |
| Operating surplus | 245.2 | 184.8 | -1.1 | -0.9 | -1.1 | -0.0 | 243.0 | 183.9 |
| Central administration | -16.3 | -19.8 | -42.7 | -38.5 | - | - | -59.0 | -58.3 |
| Gain/loss from joint ventures | - | - | - | - | 71.8 | 127.8 | 71.8 | 127.8 |
| - whereof operating surplus | - | - | - | - | -0.4 | 1.2 | -0.4 | 1.2 |
| - whereof value change, investment properties |
- | - | - | - | 72.2 | 126.6 | 72.2 | 126.6 |
| Net interest income/expense | -85.8 | -54.2 | 1.7 | 0.4 | -44.0 | -31.9 | -128.1 | -85.8 |
| Profit/loss from property management | 143.1 | 110.8 | -42.1 | -39.1 | 26.7 | 95.9 | 127.6 | 167.6 |
| Value changes | ||||||||
| Investment properties, unrealised | -221.2 | 577.1 | 224.6 | 164.8 | - | - | 3.5 | 741.9 |
| Investment properties, realised | -0.3 | - | -1.7 | - | - | - | -2.0 | - |
| Participations in other companies | - | - | - | - | -7.8 | 8.2 | -7.8 | 8.2 |
| Derivatives | - | - | - | - | 92.9 | 24.6 | 92.9 | 24.6 |
| Profit/loss before tax | -78.3 | 687.9 | 180.8 | 125.8 | 111.8 | 128.7 | 214.3 | 942.3 |
| Current tax | - | - | - | - | - | - | -0.3 | -0.5 |
| Deferred tax | - | - | - | - | - | - | -54.9 | -185.3 |
| Profit/loss for the period | - | - | - | - | - | - | 159.1 | 756.5 |
| BALANCE SHEET | ||||||||
| Non-current assets | 8,369.0 | 6,732.2 | 2,212.0 | 2,170.7 | 305.1 | 136.7 | 10,886.1 | 9,039.6 |
| Current assets | 224.8 | 123.5 | 126.8 | 137.7 | 109.0 | 262.5 | 455.6 | 523.6 |
| Total assets | 8,593.8 | 6,855.7 | 2,338.8 | 2,308.4 | 414.1 | 399.2 | 11,341.7 | 9,563.2 |
| Non-current liabilities | 4,271.3 | 3,147.1 | 1,183.7 | 1,130.2 | 383.9 | 635.0 | 5,838.9 | 4,912.4 |
| Current liabilities | 1,515.8 | 1,163.0 | 524.4 | 574.8 | 481.4 | 6.7 | 2,516.6 | 1,744.5 |
| Total liabilities | 5,787.1 | 4,310.2 | 1,708.2 | 1,705.1 | 865.3 | 641.7 | 8,355.6 | 6,656.9 |
| Total equity | - | - | - | - | - | - | 2,986.1 | 2,906.2 |
| Total equity and liabilities | - | - | - | - | - | - | 11,341.7 | 9,563.2 |
THE GROUP'S KEY FIGURES
| 2022 | 2021 | 2022 | 2021 | |
|---|---|---|---|---|
| Property-related key figures | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Number of managed apartments | 5,012 | 3,910 | 5,012 | 3,910 |
| Number of apartments under production | 1,348 | 2,025 | 1,348 | 2,025 |
| Number of apartments in projects | 3,517 | 3,808 | 3,517 | 3,808 |
| Total number of apartments | 9,877 | 9,743 | 9,877 | 9,743 |
| Lettable area housing properties, tsqm | 155.7 | 112.2 | 155.7 | 112.2 |
| Lettable area public properties, tsqm | 31.5 | 38.4 | 31.5 | 38.4 |
| Total lettable area, tsqm | 187.2 | 150.6 | 187.2 | 150.6 |
| Economic occupancy rate, per cent | 98.8 | 97.0 | 97.9 | 92.9 |
| Surplus ratio, per cent | 61.5 | 62.3 | 64.8 | 67.4 |
| Cash flows from investment activities, SEK million | ||||
| Investments in new construction, extension and refurbishment | -113.0 | -315.7 | -889.5 | -939.8 |
| Acquisitions | -45.9 | -219.2 | -687.9 | -1,079.0 |
| Divestments | -0,1 | - | 86,8 | - |
| Financial key figures | ||||
| Return on equity, per cent | - | - | 5.3 | 26.0 |
| Equity/assets ratio, per cent | 26.3 | 30.4 | 26.3 | 30.4 |
| Loan-to-value ratio, per cent | 64.7 | 60.7 | 64.7 | 60.7 |
| Net loan-to-value ratio, per cent | 63.8 | 59.0 | 63.8 | 59.0 |
| Average interest rate, per cent | 3.1 | 2.0 | 3.1 | 2.0 |
| Interest-coverage ratio, 12 months, times | - | - | 1.8 | 1.9 |
| Fixed-rate period, number of months | 23 | 28 | 23 | 28 |
| Average loan maturity, number of months | 23 | 27 | 23 | 27 |
| Share-related key figures | ||||
| Total number of preference shares outstanding | 1,804,800 | 1,804,800 | 1,804,800 | 1,804,800 |
| Average number of preference shares outstanding | 1,804,800 | 1,804,800 | 1,804,800 | 1,804,800 |
| Total dividend preference shares, SEK million | 9.0 | 9.0 | 36.1 | 36.1 |
| Dividend per preference share, SEK | 5.00 | 5.00 | 20.00 | 20.00 |
| Total number of ordinary shares outstanding | 85,865,300 85,865,300 85,865,300 85,865,300 | |||
| Average number of ordinary shares outstanding | 85,865,300 85,865,300 85,865,300 85,659,841 | |||
| Profit from property management per ordinary share, SEK | -0.36 | 1.35 | 0.71 | 1.24 |
| Earnings per ordinary share, SEK | -3.40 | 4.86 | 1.08 | 8.10 |
| Adjusted earnings per ordinary share, SEK | -3.40 | 4.87 | 1.08 | 8.11 |
| Equity, SEK million | 2,986.1 | 2,906.2 | 2,986.1 | 2,906.2 |
| Equity attributable to ordinary shareholders, SEK million | 2,016.9 | 1,936.7 | 2,016.9 | 1,936.7 |
| Equity per ordinary share, SEK | 23.49 | 22.55 | 23.49 | 22.55 |
| EPRA NRV, SEK million | 3,383.5 | 3,365.9 | 3,383.5 | 3,365.9 |
| EPRA NRV attributable to ordinary shareholders, SEK million | 2,414.3 | 2,396.4 | 2,414.3 | 2,396.4 |
| EPRA NRV per ordinary share, SEK | 28.12 | 27.91 | 28.12 | 27.91 |
| Growth in EPRA NRV per ordinary share (12 months), % | - | - | 0.7 | 54.6 |
PARENT COMPANY'S COMPREHENSIVE INCOME IN SUMMARY
| 2022 | 2021 | 2022 | 2021 | |
|---|---|---|---|---|
| SEK million | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Operating income | 20.3 | 9.8 | 57.8 | 32.2 |
| Operating expenses | -24.1 | -25.3 | -105.8 | -81.8 |
| Operating profit/loss | -3.8 | -15.5 | -48.0 | -49.7 |
| Profit/loss from financial items | -24.3 | 229.1 | 26.5 | 224.0 |
| Profit/loss after financial items | -28.1 | 213.5 | -21.5 | 174.4 |
| Appropriations | 26.1 | 8.4 | 26.1 | 8.4 |
| Profit/loss before tax | -1.9 | 222.0 | 4.6 | 182.8 |
| Tax | 4.7 | 7.1 | -15.6 | 3.3 |
| Net profit/loss for the period/year | 2.8 | 229.0 | -11.1 | 186.1 |
Net profit/loss for the period/year corresponds to comprehensive income for the period/year and thus only one income statement is presented without a separate statement of other comprehensive income.
PARENT COMPANY'S STATEMENT OF FINANCIAL POSITION IN SUMMARY
| SEK million | 2022-12-31 | 2021-12-31 |
|---|---|---|
| ASSETS | ||
| Intangible assets | 5.2 | 6.3 |
| Tangible assets | 2.6 | 2.2 |
| Financial assets | 2,319.8 | 2,138.9 |
| Non-current assets | 2,327.7 | 2,147.4 |
| Current assets | 1,929.8 | 1,876.5 |
| Total assets | 4,257.5 | 4,024.0 |
| EQUITY AND LIABILITIES | ||
| Restricted equity | 547.9 | 547.9 |
| Non-restricted equity | 945.5 | 1,035.8 |
| Total equity | 1,493.5 | 1,583.7 |
| Non-current liabilities | 1,113.3 | 1,190.3 |
| Current liabilities | 1,650.8 | 1,249.9 |
| Total liabilities | 2,764.0 | 2,440.3 |
| Total equity and liabilities | 4,257.5 | 4,024.0 |
PERFORMANCE ANALYSIS JANUARY-DECEMBER 2022
Rental income and occupancy rate
During the period, rental income increased to SEK 374.7 million (272.7). The increase corresponded to growth of 37.4 per cent in rental income. During the period, the economic occupancy rate was 97.9 per cent (92.9).
The increase in rental income was mainly due to the fact that K2A managed a larger property portfolio in 2022 compared with the year-earlier period, lower vacancies as well as rental increases. Rental income rose by 7.4 per cent in the comparable portfolio, of which lower vacancies contributed with 5.1 percentage points. On 31 December 2022, the lettable area in K2A's property portfolio was 187.2 tsqm, compared with 150.6 tsqm on 31 December 2021, up 24.3 per cent. On December 31 2022, the total rental value of investment objects was SEK 438.9 million (323.2) on an annual basis, up 35.8 per cent.
Rental income
| 2022 | 2021 | ||
|---|---|---|---|
| SEK million | Jan-Dec | Jan-Dec Change, % | |
| Student housing | 166.6 | 121.4 | 37.2 |
| Rental apartments | 150.5 | 110.9 | 35.7 |
| Public service properties | 57.6 | 40.4 | 42.7 |
| Total income | 374.7 | 272.7 | 37.4 |
Property costs
During the period, total property costs increased to SEK 131.7 million (88.8), up 48.2 per cent. The increase is explained below.
Property costs, Jan-Dec 2022
| Commuity | ||||
|---|---|---|---|---|
| Student | Rental | service | ||
| SEK million | housing | apts. | properties | Total |
| Operating costs | -46.2 | -33.1 | -9.1 | -88.4 |
| Maintenance | -7.3 | -4.7 | -2.9 | -14.8 |
| Property tax | -3.0 | -1.0 | - | -3.9 |
| Depreciation/amortisation | - | -1.1 | - | -1.1 |
| Direct property costs | -56.4 | -39.8 | -12.0 | -108.3 |
| Property administration | -23.4 | |||
| Total property costs | -131.7 |
Property costs, Jan-Dec 2021
| Community | ||||
|---|---|---|---|---|
| Student | Rental | service | ||
| SEK million | housing | apts. | properties | Total |
| Operating costs | -21.1 | -24.5 | -6.7 | -62.3 |
| Maintenance | -3.8 | -3.2 | -1.4 | -8.5 |
| Property tax | -2.1 | -0.6 | -0.0 | -2.7 |
| Depreciation/amortisation | -0.1 | -0.3 | - | -0.4 |
| Direct property costs | -37.1 | -28.6 | -8.2 | -73.9 |
| Property administration | -15.0 | |||
| Total property costs | -88.8 |
During the period, operations and maintenance costs, including property tax, amounted to SEK -107.2 million (-73.5), up 45.9 per cent. The increase was due to the fact that K2A managed a larger property portfolio year-on-year, increased costs for electricity, property administration and a cost for the restoration of the property Gävle Kungsbäck 2:21 after flooding in the autumn of 2021. Property costs rose 10.1 per cent in the comparable portfolio (excluding Kungsbäck 2:21).
Property administration costs amounted to SEK -23.4 million (-15.0). The increase was due to the fact that K2A managed a larger property portfolio and strengthened the organisation.
Net operating income and surplus ratio
During the period, the net operating income was SEK 243.0 million (183.9) up 32.1 per cent. The surplus ratio for the past 12 months was 64.8 per cent (67.4). The lower surplus rate is mainly explained by growth driven costs for operation and maintenance of SEK -29.2 million, higher costs for electricity of SEK -4.1 million, and costs for restoring the Gävle Kungsbäck property of SEK -2.1 million.
Central administration
Central administration costs amounted to SEK -59.0 million (-58.3), which corresponded to an increase in costs of 1.3 per cent. The central costs are allocated between K2A's two business areas – property management and project development – and costs during the period amounted to SEK -16.3 million (-19.8) and SEK -42.7 million (-38.5), respectively.
Profit from joint ventures
The share of profit during the period was SEK 71.8 million (127.8). The year-on-year decrease was largely due to value changes attributable to joint projects, which amounted to SEK 72.2 million (126.6).
Net interest income/expense
Net interest expense amounted to SEK -128.1 million (-85.8). The year-on-year increase in interest bearing liabilities and higher interest rates led to higher interest expense. The average interest rate on the balance sheet date was 3.1 per cent (2.0). The interest-coverage ratio for the past 12 months was 1.8 (1.9).
Value changes
During the period, unrealised changes in the value of investment properties amounted to SEK 3.5 million (741.9).
Value change, investment properties
| 2022 | 2021 | |
|---|---|---|
| SEK million | Jan-Dec | Jan-Dec |
| Investment objects | -221.2 | 577.1 |
| Ongoing projects | 224.6 | 164.8 |
| Total value change | 3.5 | 741.9 |
| Total as a percentage of opening balance | 0.0 | 12.8 |
K2A has interest rate swaps for loans with a total nominal value of SEK 2,075.0 million (1,075.0). During the period, unrealised changes in the value of derivatives amounted to SEK 92.9 million (24.6), due to changes in long-term market rates. Unrealised value changes have no impact on cash flow.
Taxes
Current tax for the period amounted to -0.3 MSEK (-0.5), which relates to estimated tax expense in newly acquired companies. Deferred tax amounted to SEK -54.9 MSEK (-185.3) and was mainly impacted by unrealised changes in the value of properties and derivatives. The corporation tax rate is 20.6 per cent.
On 31 December 2022, the group's accumulation of tax loss carryforwards amounted to SEK 343.5 million (245.9). Deferred tax is recognised on a net basis on the consolidated balance sheet.
Deferred tax liabilities recognised on balance sheet
| SEK million | 2022-12-31 | 2021-12-31 |
|---|---|---|
| Properties | 583.8 | 525.0 |
| Tax loss carryforwards | -70.7 | -50.4 |
| Untaxed reserves | 0.1 | 1.9 |
| Derivatives | 25.1 | 5.3 |
| Other items | 2.0 | 3.5 |
| Total | 540.2 | 485.3 |
General information
This document is a translation of the Swedish year-end report, in the event of discrepancies, the Swedish original will supersede the translation.
Organisation and employees
At period-end, K2A had a total of 71 employees (131). 51 people (40), of whom 19 (17) are women, are employed in project development, finance, communication and property management, with placement at K2A's head office in Stockholm or in other locations where K2A has investment objects. The remaining 20 people (91) refer to employees in the K2A Trähus subsidiary, or the company's manufacturing facilities for wooden apartments.
Significant related party transactions during the period
During the period, the Group (Parent Company) purchased project management services from Samhed Fastighets AB, Ljungskär AB, iBoP AB, Ludwig Holmgren Capital AB and C Interior Design AB for a total amount of SEK 11.6 million (7.3). These companies are owned by people who hold shares in K2A. During the period, the Group purchased ongoing legal services from Advokatfirman Lindahl for SEK 2.9 million (3.9), of which SEK 1.5 million (2.4) was invoiced to the Parent Company. Sten Gejrot is chairman of K2A's Board and a partner of Advokatfirman Lindahl.
FINANCING
Risk limits
K2A shall have limited financial risk. The most significant types of financial risk for K2A are financing risk, interest rate risk and liquidity risk. K2A's overall financial risk limits refer to:
- § The long-term loan-to-value ratio for the group shall not exceed 70 per cent
- § The long-term interest coverage ratio for the group shall not be less than 1.5 times
Assets and equity
On 31 December 2022, the value of K2A's assets were SEK 11,341.7 million (9,563.2), of which investment properties accounted for SEK 10,149.7 million (8,458.4). Cash and cash equivalents amounted to SEK 298.0 million (379.2). Equity amounted to SEK 2,986.1 million (2,906.2).
Interest bearing liabilities
On 31 December 2022, K2A had interest bearing liabilities (excluding lease liabilities) of SEK 7,343.3 million (5,802.2). The group's net loan-to-value ratio was 63.8 per cent (59.0). At period end, the average interest rate was 3.1 per cent (2.0). The realisable fair value of liabilities does not deviate materially from their carrying amounts.
INTEREST AND AVERAGE LOAN MATURITY
| 23 months (28) and the average loan maturity was 23 |
|---|
| months (27). K2A has derivative contracts totalling SEK |
| 2,075.0 million (1,075.0). K2A entered into interest rate |
| swaps with a nominal amount totalling SEK 1,500 million |
| during January 2023. At period end, loan repayments over |
| the next 12 months amounted to SEK 80.1 million (54.0). |
| Accrued transaction costs of SEK 15.6 million (20.5) |
| reduced interest bearing liabilities on the balance sheet. |
On the balance sheet date, the average interest period was
The table on interest rate structure and derivative swaps include contracts entered in January 2023.
| Interest rate structure | MSEK | % |
|---|---|---|
| Fixed interest rate | 2 464,8 | 33,5 |
| Interest-secured loans | 3 575,0 | 48,6 |
| Variable interest rate | 1 318,6 | 17,9 |
| Total | 7 358,4 | 100,0 |
| Nominal | Fixed interest | |
| Interest rate swaps contract maturity | amount, MSEK | (average), % |
| 2025 | 1,900 | 0.94 |
| 2026 | 1,200 | 1.27 |
| 2028 | 475 | 0.21 |
| Total/average | 3,575 | 0.95 |
| Fixed rate | Loan maturity, MSEK | |||||
|---|---|---|---|---|---|---|
| Due year | Volume, MSEK | Interest, per cent | Commitment | Drawn | Undrawn | |
| Variable interest rate | 2,818.6 | 4.68 | - | - | - | |
| 2023 | 272.7 | 1.78 | 2,517.6 | 2,167.8 | 349.8 | |
| 2024 | 622.5 | 1.52 | 2,036.5 | 1,885.4 | 151.2 | |
| 2025 | 1,666.1 | 1.52 | 2,957.6 | 2,954.9 | 2.7 | |
| 2026 | 1,503.9 | 2.89 | 303.9 | 303.9 | - | |
| 2027 | - | - | - | - | - | |
| 2028 | 475.0 | 2.22 | 346.4 | 46.4 | 300.0 | |
| Total/average | 7,358.9 | 3.06 | 8,162.0 | 7,358.9 | 803.7 | |
GREEN BONDS AND GREEN HYBRID BONDS
| Nom. | |||||||
|---|---|---|---|---|---|---|---|
| First issue | Maturity | Time to | amount | Base | Base rate | Current | |
| Sr unsecured FRN Green Bonds | date | date | maturity, yrs | MSEK | rate | margin, % | rate, % |
| 20/23 FRN C | 2020-08-01 | 2023-08-01 | 0.6 | 400 | Stibor 3M | 3.95 | 6.33 |
| MTN 101 | 2021-06-01 | 2024-06-01 | 1.4 | 400 | Stibor 3M | 3.25 | 5.69 |
| MTN 102 | 2021-10-01 | 2025-04-01 | 2.3 | 400 | Stibor 3M | 3.00 | 4.89 |
| MTN 103 | 2022-03-18 | 2024-12-18 | 2.0 | 300 | Stibor 3M | 4.40 | 6.93 |
| Total outstanding bonds | 1,500 | ||||||
| Hybrid bonds | 2021-01-21 | 2026-04-21 (First Call Date) | 450 | Stibor 3M | 5.95 | 7.71 | |
| Total outstanding hybrids | 450 |
K2A Knaust & Andersson Fastigheter AB (publ) 23
NOTES
Note 1 Accounting policies
K2A Knaust & Andersson Fastigheter AB (publ) complies with the IFRS (International Financial Reporting Standards) as adopted by the EU. This year-end report has been prepared in accordance with IAS 34 Interim Financial Reporting. Disclosures in accordance with IAS 34 Interim Financial Reporting have been provided in the financial statements and their related notes, and in other sections of the year-end report.
The Parent Company applies RFR 2, Accounting for Legal Entities, and prepares its interim report in accordance with Chapter 9 of the Swedish Annual Accounts Act.
The Group and the parent company apply the same accounting policies and valuation methods as in the most recent Annual Report.
Note 2 Investment properties
Valuation of properties takes place at the end of each quarter with the support of independent property valuers. Sensitivity analysis regarding reported values can be found in the section Opportunities and risks on page 25. For further information on K2A's valuation method, see the annual report for 2021 (Note 15).
Sensitivity analysis - valuation
| Key figures, per cent | 2022-12-31 | 2021-12-31 |
|---|---|---|
| Discount rate, apartments | 5.9 | 5.6 |
| Discount rate, public properties | 7.6 | 6.6 |
| Yield requirement | ||
| Apartments | 3.7 | 3.6 |
| Public properties | 5.4 | 4.7 |
| Weighted average | 3.9 | 3.8 |
The property portfolio value increased SEK 1,587.6 million (2,645.6) compared with the end of 2021.
During the period, SEK 1,601.1 million (782.6) has been transferred (without consideration) from the Ongoing project segment to Management objects. The fair value of investment properties and ongoing projects includes the right-of-use value of land lease agreements and leases and other right-of-uses, in accordance with IFRS 16 Leasing, of SEK 120.6 million (80.8).
| Change in property portfolio for Jan-Dec 2022 | ||||
|---|---|---|---|---|
| Fair value, SEK million | Investment objects |
On-going projects |
Total | |
| Property portfolio at start of period |
6,732.3 | 1,726.1 | 8,458.4 | |
| Acquisition of properties | 44.8 | 17.5 | 62.3 | |
| Asset acquisitions via subsidiaries | 227.7 | 420.1 | 647.8 | |
| Divestments | -85.8 | -1.0 | -86.8 | |
| Investments | 20.3 | 932.9 | 953.3 | |
| Acquisition/extension right-of-use assets |
50.1 | 63.2 | 113.3 | |
| Value changes | ||||
| Unrealised | -211.6 | 224.6 | 13.1 | |
| Realised | -0.3 | -1.7 | -2.0 | |
| Right-of-use assets | -9.6 | - | -9.6 | |
| Reclassified | 1,601.1 | -1,601.1 | - | |
| Property portfolio at period-end | 8,369.0 | 1,780.7 | 10,149.7 |
Change in property portfolio for Jan-Dec 2021
| Investment | On-going | ||
|---|---|---|---|
| Fair value, SEK million | objects | projects | Total |
| Property portfolio at start of period |
4,476.7 | 1,306.1 | 5,782.8 |
| Acquisition of properties | - | 48.0 | 48.0 |
| Asset acquisitions via subsidiaries | 851.2 | 102.2 | 953.4 |
| Divestments | - | - | - |
| Investments | 7.5 | 887.7 | 895.2 |
| Acquisition/extension right-of-use | 37.2 | - | 37.2 |
| assets | |||
| Value changes | |||
| Unrealised | 584.2 | 164.8 | 749.1 |
| Right-of-use assets | -7.2 | - | -7.2 |
| Depreciation | -0.1 | - | -0.1 |
| Reclassified | 782.6 | -782.6 | - |
| Property portfolio at period-end | 6,732.3 | 1,726.1 | 8,458.4 |
Note 3 Significant events after the end of the period
K2A entered into interest rate swaps with a nominal amount totalling SEK 1,500 million during January 2023.
Cash flow risks and opportunities
K2A's cash flow is mainly impacted by the performance of profit from property management and investing activities. In turn, profit from property management is mainly impacted by the performance of rental value, occupancy rate, property costs and interest expense.
Sensitivity analysis - cash flow1
| Effect on cash flow, SEK | ||
|---|---|---|
| Change | million | |
| Rental value | +/-5 per cent | +/- 28 |
| Occupancy rate | +/- 1 percentage points | +/- 6 |
| Property cost | +/-10 per cent | -/+ 16 |
| Interest expense | +/- 1 percentage point | --/+ 15 |
1) Rental income, occupancy rate and property costs are estimated on the past 12 month outcome. The sensitivity analysis for interest expense includes the effect of derivatives.
Financial risk
The most significant types of financial risk for K2A are interest rate risk, financing risk and liquidity risk. Interest rate risk is defined as a not affectable increase in interest expense. Interest rate risk is expressed as the change in costs for the interest bearing liabilities, expressed in SEK, if the interest rate changed by 1 percentage point. Financing risk refers to the risk that the cost of raising new loans or other financing becomes higher and/or that the refinancing of maturing loans becomes more difficult to obtain, or can only be obtained on unfavourable terms. Liquidity risk refers to the risk that K2A is unable to meet its anticipated and/or unforeseen payment obligations. K2A needs access to liquidity in order to finance ongoing projects and its day-today operations, to pay interest and repay loans. K2A's growth target presumes good access to liquid funds so that several projects can be started and run in parallel.
The carrying amount of receivables, cash and cash equivalents, accounts payable, interest bearing liabilities and other liabilities is a reasonable approximation of their fair value.
Operational risk
K2A is in an expansion phase and has identified a number of growth-oriented targets. Risks and opportunities linked to achieving the growth targets include: continued access to new projects, key individuals, risk management in projects (regarding time, cost and quality), as well operational continuity and capacity in the company's own manufacturing facilities
Opportunities and risks in the value of properties
K2A recognises investment properties at fair value. Changes in the fair value of properties are recognised in profit or loss. Historically, changes in the fair value of properties have had a material effect on K2A's net profit for the period or year, which means that profit can be volatile. The value of the properties is determined by supply and demand, where the price is mainly dependent on the expected net operating income of the properties and the buyer's yield requirement.
Growing demand leads to lower yield requirements and therefore pushes prices up, while declining demand has the opposite effect. Similarly, a positive trend for the net operating income pushes prices up, while a negative trend has the opposite effect.
Material non-observable input to real-value valuation
| Public | ||
|---|---|---|
| properties | Apartments | |
| Expected normalised rent year 16, SEK/sqm |
2,681 | 3,256 |
| Current rent, SEK/sqm | 1,919 | 2,352 |
| Remaining duration rental contracts, years |
7.6 | n/a. |
| Expected long-term vacancy year 16, per cent |
3.3 | 1.5 |
| Current vacancy, per cent | 4.6 | 2.0 |
| Expected normalised operating profit year 16, SEK/sqm |
2,193 | 2,282 |
| Discount rate, per cent | 7.6 | 5.9 |
| Yield requirement for assessment of residual value year 16, per cent |
5.4 | 3.7 |
| Sensitivity analysis value changes, SEK million1 | Effect on real value |
||
|---|---|---|---|
| Public | Apartments | ||
| properties | |||
| Expected normalised rent | +/- 5% | +/- 20 | +/- 267 |
| Expected long-term vacancies | +/- 5% | -/+ 20 | -/+ 267 |
| Expected property costs | +/- 5% | -/+ 2 | -/+ 65 |
| Discount rate, per cent | +/- 1% | -/+ 79 | -/+ 812 |
| Yield requirement for assessment of residual value |
+/- 1% | -/+ 77 | -/+ 1,517 |
1) The ongoing projects segment is not included in the summary.
Parent Company
The Parent Company provides project management, rental administration as well as Group and company accounting. The Parent Company is also responsible for matters related to the credit market, such as borrowing and financial risk management, as well as reporting and providing information to the stock market. The Parent Company is indirectly affected by the operations of subsidiaries, which means that the Parent Company is exposed to the risks and opportunities specified for the Group.
The outside world
The ongoing war in Ukraine and the sanctions imposed as a consequence may continue to affect, for example, interest rates, inflation and exchange rates and lead to lower growth and disruptions in the global economy, financial markets and global trade. In addition, the invasion may lead to a continued high level of prices for energy and the materials needed for the company's operations, as well as disruptions and delays in deliveries.
Price increases and uncertainties regarding the availability of inputs contributed during the second quarter to K2A deciding to postpone a majority of construction starts in 2022 and 2023 and to notify personnel working in K2A Trähus production facilities. During the fourth quarter, the ongoing factory production was completed and most of the staff ended their employment.
THE SHARE AND SHAREHOLDERS
The company has four classes of shares: A, B and D ordinary shares, and preference shares. Ordinary A shares carry ten votes per share, while ordinary B and D shares and preference shares carry one vote per share.
Ordinary A and D shares are not traded on any stock market or trading venue. Ordinary B shares (K2A B) and preference shares (K2A PREF) have been listed on NASDAQ Stockholm's Main Market since 20 June 2019.
LARGEST SHAREHOLDERS AT THE BALANCE SHEET DATE
| Preference- | Total no. | % of total | % of total | ||||
|---|---|---|---|---|---|---|---|
| A-shares | B-shares | D-shares | shares | of shares | no. of shares | votes | |
| Johan Knaust and companies | 2,841,840 | 17,452,015 | 6,806,160 | 94,025 | 27,194,040 | 31.0 | 28.8 |
| Johan Ljungberg and companies | 2,412,000 | 6,995,000 | - | 13,864 | 9,420,864 | 10.7 | 17.0 |
| Johan Thorell and companies | 2,412,000 | 6,166,496 | - | 19,499 | 8,597,995 | 9.8 | 16.6 |
| Claes-Henrik Julander and companies | 2,176,800 | 5,194,622 | - | 17,659 | 7,389,081 | 8.4 | 14.7 |
| Länsförsäkringar Fastighetsfond | - | 5,577,567 | - | - | 5,577,567 | 6.4 | 3.0 |
| SEB Fonder | - | 5,284,739 | - | - | 5,284,739 | 6.0 | 2.9 |
| Verdipapirfondet Odin Eiendom | - | 3,238,190 | - | - | 3,238,190 | 3.7 | 1.8 |
| Enter Sverige | - | 2,525,174 | - | - | 2,525,174 | 2.9 | 1.4 |
| Ludwig Holmgren | 762,000 | 1,195,419 | - | 2,032 | 1,959,451 | 2.2 | 4.8 |
| Swedbank Försäkring | - | 1,697,187 | - | 18,782 | 1,715,969 | 2.0 | 0.9 |
| Humle fonder | - | 1,529,865 | - | - | 1,529,865 | 1.7 | 0.8 |
| Avanza Pension | - | 1,239,452 | - | 167,278 | 1,406,730 | 1.6 | 0.8 |
| Swedbank Fonder | - | 1,260,000 | - | - | 1,260,000 | 1.4 | 0.7 |
| Cliens Kapitalförvaltning | - | 1,033,261 | - | - | 1,033,261 | 1.2 | 0.6 |
| Handelsbanken Liv | - | 660,378 | - | 3,450 | 663,828 | 0.8 | 0.4 |
| LK Finans | - | 636,999 | - | - | 636,999 | 0.7 | 0.3 |
| Adrigo Fonder | - | 634,910 | - | - | 634,910 | 0.7 | 0.3 |
| Carnegie Fonder | - | 423,182 | - | - | 423,182 | 0.5 | 0.2 |
| Nordea Liv | - | 391,779 | - | 14,601 | 406,380 | 0.5 | 0.2 |
| Handelsbanken Fonder | - | 379,331 | - | - | 379,331 | 0.4 | 0.2 |
| Other | - | 4,938,934 | - | 1,453,610 | 6,392,544 | 7.3 | 3.5 |
| Total | 10,604,640 | 68,454,500 | 6,806,160 | 1,804,800 | 87,670,100 | 100.0 | 100.0 |
SIGNATURES OF THE BOARD OF DIRECTORS
The Board of Directors and the CEO confirm that this year-end report provides an accurate overview of the operations, financial position and performance of the Group and the Parent Company, and describes the significant risks and uncertainties faced by the Parent Company and the companies in the Group.
Stockholm, February 14, 2023
K2A Knaust & Andersson Fastigheter AB (publ)
Sten Gejrot Chairman
Ludwig Holmgren Member
Claes-Henrik Julander Member
Johan Knaust CEO and Member Ingrid Lindquist Member
Johan Ljungberg Member
Johan Thorell
Member
This year-end report has not been audited.
DEFINITIONS
Adjusted earnings per ordinary share
Net profit for the period/year less preferred dividends paid out during the period and less hybrid bond expenses relative to the weighted average number of ordinary shares outstanding during the period. Adjusted profit after tax per ordinary share is used to show the ordinary shareholders' proportion of the company's profit after tax per share.
Adjusted interest bearing liability
Interest bearing liabilities less current and non-current lease liabilities.
Currency
MSEK and SEK million corresponds to one million Swedish crowns.
Earnings per ordinary share
Profit attributable to Parent Company shareholders less preferred dividends paid out during the period and less hybrid bond expenses relative to the weighted average number of ordinary shares outstanding during the period. Profit after tax per ordinary share is used to show Parent Company shareholders' proportion of the company's profit after tax per share. The measure is defined in IFRS.
EPRA
The European Public Real Estate Association is a stakeholder organisation for listed real estate companies and investors in Europe, that sets standards with regard to financial statements.
EPRA NRV
Recognised equity with reversal of interest rate derivatives and deferred tax. EPRA NRV is used to provide stakeholders with information about K2A's long-term NRV computed in a uniform manner for listed real estate companies.
EPRA NRV attributable to ordinary shareholders
EPRA NRV less the value of all preference shares outstanding and hybrid bonds. The value of all preference shares outstanding was calculated as SEK 287.50 multiplied by the number of preference shares at the balance sheet date. SEK 287.50 corresponds to the amount per preference share that the holder has a preferential right to, before ordinary shares, in the event of the company's dissolution. EPRA NRV attributable to ordinary shareholders is used to clarify the proportion of EPRA NRV considered attributable to ordinary shareholders after the proportion attributable to preference shareholders, hybrid bond holders and non-controlling interests has been deducted.
EPRA NRV per ordinary share
EPRA NRV attributable to ordinary shareholders divided by the number of ordinary shares outstanding at the balance sheet date. EPRA NRV per ordinary share is used to show the ordinary shareholders' proportion of the company's EPRA NRV attributable to the ordinary shareholders per share.
Equity/assets ratio
Equity at period end relative to total assets at period end. The equity/assets ratio is used to show K2A's interest rate sensitivity and financial stability.
Equity per ordinary share
Equity less the value of all preference shares outstanding at the balance sheet date as well as hybrid bonds relative to the number of ordinary shares outstanding at the balance sheet date. The value of all preference shares outstanding was calculated as SEK 287.50 multiplied by the number of preference shares at the balance sheet date. SEK 287.50 corresponds to the amount per preference share that the holder has a preferential right to, before ordinary shares, in the event of the company's dissolution. Equity per share is used to show the ordinary shareholders' proportion of the company's equity per share.
IFRS
International Financial Reporting Standards. International reporting standards that have applied for listed companies in the EU since 2005.
Interest coverage ratio
Net operating income less central administrative costs attributable to property management relative to net interest income (over the past 12 months). The interestcoverage ratio is used to show how sensitive the company's earnings are to interest rate fluctuations.
Lettable area
Total area available for letting.
Loan-to-value ratio
Interest bearing liabilities relative to total assets. Interest bearing liabilities include current and non-current interest bearing liabilities. All items pertain to the balance sheet date. The loan-to-value ratio is used to show K2A's financial risk.
Net debt
Adjusted interest bearing liabilities less cash and cash equivalents.
Net loan-to-value ratio
Net debt relative to total assets adjusted for cash and cash equivalents at period end. The net loan-to-value ratio is used to show K2A's financial risk.
Net operating income
Rental income less property costs. This key figure is a relevant indicator for measuring the profitability of the management before central costs, financial income and expense, and unrealised value changes are taken into account.
Occupancy rate, economic
Rental income in relation to rental value. Newly added investment properties are excluded from the calculation in the quarter in which they were added and the quarter thereafter. The key figure is stated as a percentage and is relevant for measuring vacancies, where a high occupancy rate in per cent means a low financial vacancy.
Profit from property management
Profit before value changes and tax. Profit from property management is a relevant key figure for measuring the profitability of the management after financial income and expense are taken into account, but not unrealised value changes.
Profit from property management per ordinary share
Profit from property management less preferred dividends paid out during the period and hybrid bond expenses relative to the weighted average number of ordinary shares outstanding during the period. Profit from property management per ordinary share is used to show the ordinary shareholders' proportion of profit from property management per share.
Rental value
Contract value plus estimated market rent for unlet space. Rental value is used to show the Group's revenue growth potential.
Required yield
The required rate of return on the residual value. Required yield is a relevant key figure for determining the reasonableness of how the properties are valued.
Return on equity
Profit for the period (over the past 12 months) as a percentage of equity at the balance sheet date. Return on equity is used to show K2A's ability to generate a profit on the shareholders' capital in the Group.
Rounding
Since amounts have been rounded to the next MSEK, the totals in the tables are not always accurate.
Surplus ratio
Net operating income adjusted for depreciation and block rental agreements relative to rental income (over the past 12 months). This key figure is a relevant indicator for measuring the profitability of the management before financial income and expense, and unrealised value changes are taken into account.
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASUREMENTS
K2A Knaust & Andersson Fastigheter AB (publ) applies the ESMA Guidelines on Alternative Performance Measures (ESMA/2015/1415). The Guidelines define an Alternative Performance Measure (APM) as "a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework", which in K2A's case, is IFRS or the Swedish Annual Accounts Act. The starting point for these APMs is that they are used by management to assess the financial performance of the company, and can therefore provide useful financial information to shareholders and other stakeholders. The following table shows how the APMs are calculated. Se the preceding section for definitions and the purpose of the key figures.
| 2022 | 2021 | 2022 | 2021 | |
|---|---|---|---|---|
| SEK million | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Profit from property management per ordinary share | ||||
| Profit from property management | -13.1 | 131.9 | 127.6 | 167.6 |
| Dividend, preference shares | -9.0 | -9.0 | -36.1 | -36.1 |
| Hybrid bond expenses | -8.7 | -6.8 | -30.2 | -25.4 |
| Adjusted profit from property management | -30.9 | 116.1 | 61.3 | 106.1 |
| Weighted average number of ordinary shares | 85,865,300 | 85,865,300 | 85,865,300 | 85,659,841 |
| Profit from property management per ordinary share, SEK |
-0.36 | 1.35 | 0.71 | 1.24 |
| Earnings per ordinary share | ||||
| Profit after tax | -274.3 | 433.6 | 159.1 | 756.5 |
| Dividend, preference shares | -9.0 | -9.0 | -36.1 | -36.1 |
| Hybrid bond expenses | -8.7 | -6.8 | -30.2 | -25.4 |
| Profit after preferred dividend and hybrid bond expenses | -292.0 | 417.8 | 92.8 | 695.0 |
| Weighted average number of ordinary shares | 85,865,300 | 85,865,300 | 85,865,300 | 85,659,841 |
| Adjusted earnings per ordinary share, SEK | -3.40 | 4.87 | 1.08 | 8.11 |
| Less non-controlling interest, SEK | 0.00 | 0.00 | 0.00 | -0.01 |
| Earnings per ordinary share, SEK | -3.40 | 4.86 | 1.08 | 8.10 |
| Equity per ordinary share | ||||
| Equity | 2,986.1 | 2,906.2 | 2,986.1 | 2,906.2 |
| Less non-controlling interests | -0.3 | -0.7 | -0.3 | -0.7 |
| Less value of preference shares | -518.9 | -518.9 | -518.9 | -518.9 |
| Less hybrid bond | -450.0 | -450.0 | -450.0 | -450.0 |
| Equity attributable to ordinary shareholders | 2,016.9 | 1,936.7 | 2,016.9 | 1,936.7 |
| Number of ordinary shares at period-end | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 |
| Equity per ordinary share, SEK | 23.49 | 22.55 | 23.49 | 22.55 |
| EPRA NRV per ordinary share | ||||
| EPRA NRV | 2,414.3 | 2,396.4 | 2,414.3 | 2,396.4 |
| Number of ordinary shares at period-end | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 |
| EPRA NRV per ordinary share, SEK | 28.12 | 27.91 | 28.12 | 27.91 |
| Surplus ratio | ||||
| Rental income | 105.0 | 79.7 | 374.7 | 272.7 |
| Operating surplus | 64.6 | 49.6 | 243.0 | 183.9 |
| Surplus ratio, per cent | 61.5 | 62.3 | 64.8 | 67.4 |
| Return on equity | ||||
| Profit after tax, rolling 12-month period | 159.1 | 756.5 | 159.1 | 756.5 |
| Closing equity | 2,986.1 | 2,906.2 | 2,986.1 | 2,906.2 |
| Return on equity, per cent | 5.3 | 26.0 | 5.3 | 26.0 |
| Equity/assets ratio | ||||
| Equity | 2,986.1 | 2,906.2 | 2,986.1 | 2,906.2 |
| Total assets | 11,346.7 | 9,563.2 | 11,346.7 | 9,563.2 |
| Equity/assets ratio, per cent | 26.3 | 30.4 | 26.3 | 30.4 |
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASUREMENTS, CONT'D
| 2022 | 2021 | 2022 | 2021 | |
|---|---|---|---|---|
| SEK million | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Interest-bearing liabilities | ||||
| Non-current interest-bearing liabilities | 5,109.6 | 4,345.4 | 5,109.6 | 4,345.4 |
| Non-current lease liabilities | 189.1 | 81.7 | 189.1 | 81.7 |
| Current interest-bearing liabilities | 2,233.7 | 1,456.8 | 2,233.7 | 1,456.8 |
| Current lease liabilities | 20.5 | 12.6 | 20.5 | 12.6 |
| Interest-bearing liabilities | 7,552.9 | 5,896.5 | 7,552.9 | 5,896.5 |
| Lease liabilities | -209.6 | -94.3 | -209.6 | -94.3 |
| Interest-bearing liabilities excluding leases | 7,343.3 | 5,802.2 | 7,343.3 | 5,802.2 |
| Net debt | ||||
| Interest-bearing liabilities excluding leases | 7,343.3 | 5,802.2 | 7,343.3 | 5,802.2 |
| Cash and cash equivalents | -298.0 | -379.2 | -298.0 | -379.2 |
| Net debt | 7,045.3 | 5,423.0 | 7,045.3 | 5,423.0 |
| Loan-to-value ratio | ||||
| Interest-bearing liabilities excluding leases | 7,343.3 | 5,802.2 | 7,343.3 | 5,802.2 |
| Total assets | 11,341.7 | 9,563.2 | 11,341.7 | 9,563.2 |
| Loan-to-value ratio, per cent | 64.7 | 60.7 | 64.7 | 60.7 |
| Net loan-to-value ratio | ||||
| Net debt | 7,045.3 | 5,423.0 | 7,045.3 | 5,423.0 |
| Total assets less cash and cash equivalents | 11,043.7 | 9,184.0 | 11,043.7 | 9,184.0 |
| Net loan-to-value ratio, per cent | 63.8 | 59.0 | 63.8 | 59.0 |
| Interest-coverage ratio, 12 months | ||||
| Operating surplus | - | - | 243.0 | 183.9 |
| Administrative expenses, property management | - | - | -16.3 | -19.8 |
| Net interest income/expense | - | - | -128.1 | -85.8 |
| Interest-coverage ratio (12 months), times | - | - | 1.8 | 1.9 |
| EPRA NRV | ||||
| Equity | 2,986.1 | 2,906.2 | 2,986.1 | 2,906.2 |
| Derivatives | -142.9 | -25.6 | -142.9 | -25.6 |
| Deferred tax | 540.2 | 485.3 | 540.2 | 485.3 |
| EPRA NRV | 3,383.5 | 3,365.9 | 3,383.5 | 3,365.9 |
| Less non-controlling interests | -0.3 | -0.7 | -0.3 | -0.7 |
| Less value of preference shares | -518.9 | -518.9 | -518.9 | -518.9 |
| Less hybrid bond | -450.0 | -450.0 | -450.0 | -450.0 |
| EPRA NRV attributable to ordinary shareholders | 2,414.3 | 2,396.4 | 2,414.3 | 2,396.4 |
| Growth in EPRA NRV per ordinary share | ||||
| OB EPRA NRV attributable to ordinary shareholders, SEK | - | - | 27.91 | 18.06 |
| CB EPRA NRV attributable to ordinary shareholders, SEK | - | - | 28.12 | 27.91 |
| Growth in EPRA NRV per ordinary share (12 months), % | - | - | 0.7 | 54.6 |
FINANCIAL CALENDAR
FINANCIAL REPORTS AND COMPANY EVENTS
| Annual report 2022 published on www.k2a.se | Week 14 2023 |
|---|---|
| Q1 Interim Report, January-March 2023 | 27 April 2023 |
| Annual General Meeting 2023 | 27 April 2023 |
| Q2 Interim Report, January-June 2023 | 17 July 2023 |
| Q3 Interim Report, January-September 2023 | 8 November 2023 |
| Year-end Report, 2023 | 14 February 2024 |
DIVIDEND, PREFERRED SHARES
| Last trading day, including right to dividend payment | 8 March 2023 |
|---|---|
| Record date for dividend payment | 10 March 2023 |
| Expected date of payment from Euroclear | 15 March 2023 |
SUGGESTED DIVIDEND, PREFERRED SHARES
| Last trading day, including right to dividend payment | 8 June 2022 |
|---|---|
| Record date for dividend payment | 12 June 2022 |
| Expected date of payment from Euroclear | 15 June 2022 |
| Last trading day, including right to dividend payment | 8 September 2022 |
| Record date for dividend payment | 12 September 2022 |
| Expected date of payment from Euroclear | 15 September 2022 |
| Last trading day, including right to dividend payment | 8 December 2022 |
| Record date for dividend payment | 12 December 2022 |
| Expected date of payment from Euroclear | 15 December 2022 |
| Last trading day, including right to dividend payment | 8 March 2022 |
| Record date for dividend payment | 12 March 2022 |
| Expected date of payment from Euroclear | 15 March 2022 |
SUGGESTED DIVIDEND, ORDINARY SHARES
| Last trading day, including right to dividend payment | 27 April 2022 |
|---|---|
| Record date for dividend payment | 2 May 2022 |
| Expected date of payment from Euroclear | 5 May 2022 |
For further information, please contact:
Johan Knaust, CEO, +46 707 40 04 50, [email protected] Christian Lindberg, Deputy CEO, +46 707 23 39 48, [email protected] Ola Persson, CFO, +46 708 32 99 93, [email protected]
The information in this report is such that K2A Knaust & Andersson Fastigheter AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above on February 14, 2023.
K2A Knaust & Andersson Fastigheter AB (publ) Nybrogatan 59, 114 40 Stockholm, [email protected], www.k2a.se, org.nr 5569437600