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K2A Knaust & Andersson Interim / Quarterly Report 2022
3067_10-q_2022-10-26_98dbfc3f-c42d-4bbe-9650-b712ac37832e.pdf
Interim / Quarterly Report
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Interim report January – September 2022 K2A Knaust & Andersson Fastigheter AB (publ)
INTERIM REPORT JANUARY – SEPTEMBER 2022
JUL-SEP 2022
- § Rental income amounted to SEK 96.3 million (70.7)
- § Net operating income amounted to SEK 67.3 million (51.7)
- § Profit from property management amounted to SEK 16.7 million (16.4)
- § Value changes from investment properties amounted to SEK -28.7 million (10.5)
- § Net profit for the period amounted to SEK 10.1 million (21.6) and earnings per ordinary share amounted to SEK -0.08 (0.06)
JAN-SEP 2022
- § Rental income increased to SEK 269.7 million (193.1)
- § Net operating income amounted to SEK 178.4 million (134.3)
- § Profit from property management amounted to SEK 140.8 million (35.7)
- § Value changes from investment properties amounted to SEK 307.1 million (370.5)
- § Net profit for the period amounted to SEK 433.4 million (322.9) and earnings per ordinary share1 amounted to 4.48 SEK (3.23)
- § Total number of apartments under management at the end of the period amounted to 4,885 (3,754)
| Number of apartments in property and project portfolio |
Property value | EPRA NRV attributable to ordinary shareholders |
||||||
|---|---|---|---|---|---|---|---|---|
| 9,872 | 10,228 | MSEK | 2,740 | MSEK | ||||
| 2022 | 2021 | 2022 | 2021 | 2021 Oct- | 2021 | |||
| KEY FIGURES, SEK MILLION | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2022 Sep | Jan-Dec | ||
| Rental income | 96.3 | 70.7 | 269.7 | 193.1 | 349.3 | 272.7 | ||
| Operating surplus | 67.3 | 51.7 | 178.4 | 134.3 | 228.0 | 183.9 | ||
| Profit from property management | 16.7 | 16.4 | 140.8 | 35.7 | 272.7 | 167.6 | ||
| Unrealised value change, investment properties | -28.7 | 10.5 | 307.1 | 370.5 | 678.5 | 741.9 | ||
| Profit after tax | 10.1 | 21.6 | 433.4 | 322.9 | 867.0 | 756.5 | ||
| Number of managed units | 4,885 | 3,754 | 4,885 | 3,754 | 4,885 | 3,910 | ||
| Number of units under production | 1,448 | 1,913 | 1,448 | 1,913 | 1,448 | 2,025 | ||
| Number of units in projects | 3,539 | 3,770 | 3,539 | 3,770 | 3,539 | 3,808 | ||
| Total number of units | 9,872 | 9,437 | 9,872 | 9,437 | 9,872 | 9,743 | ||
| Net loan-to-value ratio, % | 61.6 | 60.6 | 61.6 | 60.6 | 61.6 | 59.0 | ||
| Interest coverage ratio, 12 months, times | - | - | - | - | 1.8 | 1.9 | ||
| Long-term net reinstatement value (EPRA NRV) | 3,709.1 | 2,872.3 | 3,709.1 | 2,872.3 | 3,709.1 | 3,365.9 | ||
| EPRA NRV attributable to ordinary shareholders | 2,739.7 | 1,901.4 | 2,740.2 | 1,901.4 | 2,739.7 | 2,396.4 | ||
| EPRA NRV per ordinary share, SEK | 31.91 | 22.14 | 31.91 | 22.14 | 31.91 | 27.91 | ||
| Growth in EPRA NRV per ordinary share, % | - | - | - | - | 44.1 | 54.6 | ||
Number of apartments added to the property and project portfolio (last 12 months)
Change in property value (last 12 months)
890 2,649 MSEK 838 MSEK
Growth in EPRA NRV attributable to ordinary shareholders (last 12 months)
A right of use asset that was previously reported as Depreciation among property costs is, as of October 2021, reported under Change in value of investment properties. The correction has not had any effect on the Group's balance sheet or equity. Note 3 reports the effects in the income statement and cash flow analysis. Due to rounding, the figures presented in this interim report may not always add up to exact totals and percentages may differ from the exact percentages. CORRECTION - THIS INTERIM REPORT HAS BEEN CORRECTED ACCORDING TO PRESS RELEASE ON OCTOBER 26, 2022.
EVENTS 2022
| 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 |
§ Acquired 12 community service apartments in Nyköping and Södertälje with a total lettable area of Q1 1,018 sqm § Started 191 rental apartments in Norrtälje and 74 temporary student apartments in Visby 3/2 § K2A was allocated to develop 175 rental apartments 22/2 |
|---|---|
| K2A issued green senior unsecured bonds of SEK 300 million under the company's MTN programme |
within the property Stockholm Örby 4:1 15/3 K2A hired Pontus Ekerljung as Public Relations Manager |
| K2A committed to the Science Based Target initiative (SBTi) as part of the company's efforts to combat climate change K2A's CEO Johan Knaust was nominated for Sustainable Leadership, which is awarded by the NMC Network for Sustainable Business |
§ Construction start of LSS housing in Enköping with Q2 a total lettable area of 1,350 m2 § Land allocation was obtained for 120 rental apartments within the Stockholm Sätra 2:1 property 7/4 § Received notice for zoning plan for 200 student apartments in Bromma, Stockholm 13/4 |
| 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 was appointed main developer for the Västra 17/5 Stadsdelsnoden (Western District Node) community development project in Uppsala 19/5 3/6 The government approved a lease agreement with the Police Authority and the Swedish 22/6 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 Q3 |
| K2A arranged Almedalen's greenest stage for housing debate during the politicians' week in Visby |
§ Acquired GotlandsHem's 204 student apartments with a total lettable area of 5,203 5/7 sqm 4/7 |
| 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 |
With 269 MWh, K2A tripled its own 29/9 production of solar energy during the first half of the year compared with the same period last year Q4 Johan Knaust was nominated for the award Person of the Year in Sustainable Construction at the Sweden Green Building Awards 5/10 K2A became an associated member of 14/10 Public Housing Sweden 25/10 |
K2A Knaust & Andersson Fastigheter AB (publ) 3
CEO statement
There is no doubt that the past six months have been turbulent for the Swedish real estate market. Rising interest rates, increased inflation and other external factors have led to concerns and a sharp decline in real estate shares, and K2A's shares have been no exception.
When K2A was founded in 2013, it was with the aim of building a company that develops apartments with a view to managing them indefinitely. We have persevered and have grown development by development, investment by investment, construction start by construction start at the pace that our finances allowed. Throughout this time, we have been careful to build in attractive locations in growing housing markets. This has enabled us to create a strong portfolio of 4,885 homes under management and a further 1,448 under construction.
K2A's financial risk management strategy is principally based on good access to liquidity. As the operating environment changes, with rising interest rates and other challenges for the real estate sector, this strategy becomes even more important and more central to our decisions. This is why we acted early to reduce financial risk in the company. Just a few weeks after Russia invaded Ukraine, we issued SEK 300 million of green bonds to ensure access to capital. Since then, we have continued to be proactive, by reducing the workforce and postponing several planned project start-ups. At present, it is not possible to predict when project development will resume due to the turbulent environment. However, we believe that the housing shortage in the locations where we operate will persist and that the postponed investments will remain attractive projects in the future.
At 30 September, we had a total of 1,448 homes under construction, which are expected to be completed in 2022 and 2023. These are projects that started in 2020 and 2021. The timetable for these projects remains unchanged, ensuring growth in these years. Furthermore, these projects are affected to a very limited extent by price increases, either due to the high percentage of completion or because they are forward transactions negotiated at fixed prices. These investments represent the vast majority of the investments to be completed and financed by K2A, while the projects not yet started are future opportunities.
Over the last 12 months, our portfolio has grown by 1,131 homes, an increase of 30 per cent. As I mentioned earlier, we have a further 1,448 homes nearing completion in the ongoing projects under construction. Most will be completed in 2023. Applications for investment support (Sv. Investeringsstöd) have been submitted for all housing in ongoing projects and the majority have already been approved. This investment support allows for lower rent and, consequently, a lower risk of vacancies. The additional housing will help strengthen cash flow in our management operations. Our housing is consistently in top locations and of a high standard, and all homes will be environmentally certified.
Our vacancy rate has been low for some time. The portfolio is essentially fully let, which is a strong indication that our focus on high standards and good locations is valued by customers. We also have an efficient organisation for the entire customer acquisition chain, and our housing queue is key to quickly filling vacancies that arise at the start of a new academic year. At 30 September, we had over 80,000 people registered in our housing queue, which is double the number at the start of the year.
K2A is the green real estate company and has the most ambitious emissions targets in the sector. That's something I'm proud of. But as well as being a pioneer, K2A also aims to inspire others. This year, for the first time, we organised our own full day of debate on housing and social issues during Almedalen Week in Visby, Gotland, bringing together representatives from politics and business. This is a key tool for engaging more people in the important discussion about how to reduce emissions from the construction and property sector, which account for more than a fifth of Sweden's greenhouse gas emissions.
Our sustainability work also continues to be recognised outside our organisation. In October, I was proud to receive this year's Sustainable Leadership award from NMC The Swedish Association for Sustainable Business. A few weeks prior, K2A was one of three companies to receive the award for Best Sustainability Report of the Year 2021, and earlier this year we won the Symbios award for our ability to combine sustainability work with financial returns.
The capital market's interest in investing in green assets continues to grow, supporting access to liquidity for companies at the forefront of sustainability efforts.
I like to say that environmental sustainability future-proofs our business. However, rising electricity prices have made it clear that being proactive on sustainability offers business benefits in the shorter term too. In 2022, we generated three times as much solar electricity as we did in the same period in 2021, while also reducing our energy use through smarter working practices, digitalisation and by optimising our operations. This results in both a reduced carbon footprint and lower overall electricity and heating costs.
K2A will continue to grow development by development, investment by investment, construction start by construction start at the pace that our finances allow. The pace will be slower amid current global economic conditions than in more prosperous times. By avoiding short-term risks, we are laying the foundations for our long-term growth, which is fundamental for a company whose time horizon is measured in decades, not quarters.
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 apartments. 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 9,872 apartments, including 4,885 managed apartments, with a total property value of SEK 10,228 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 to be the long-term owner and manager of the properties it builds. Therefore, 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 highquality 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 the period January to September 2022, K2A increased its generation of solar electricity by 200 per cent on 2021, corresponding to total generation of 526 MWh during the period. K2A has carpools in several locations 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 also promote low-carbon travel. And 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 wins award for best sustainability report 2021
It's important to K2A to highlight the company's systematic and active sustainability work and to communicate the efforts it makes. It was gratifying that K2A was named one of three winners for the best sustainability report in September following a review of all companies listed on Nasdaq OMX Stockholm's Mid Cap list. The sustainability reports of listed companies for 2021 were reviewed and compared by Sthlm Kommunikation & IR, which is behind the award. This is the fifth consecutive year that the agency has chosen the best three sustainability reports on the Stockholm Stock Exchange.
K2A certified as
Nasdaq ESG Transparency Partner
K2A has been committed to focusing on sustainability since the company's inception in 2013, endeavouring to get better every year at transparently demonstrating how it contributes to sustainable social development. In August, K2A was certified as a Nasdaq ESG Transparency Partner, which is Nasdaq's accreditation specifically for companies that demonstrate a commitment to market transparency and raising environmental standards. The certification is based on the sustainability data compiled and reported by the company for 2021. The Nasdaq Genium Consolidation Feed allows current and prospective investors to access the data and compare us with other companies.
GREEN FINANCING FRAMEWORK FOLLOW-UP GREEN FINANCING FRAMEWORK FOR SHARES, JUL 2021–SEP 2022
Breakdown according to definition in the green financing
GREEN FINANCING FRAMEWORK
Green finance performance, MSEK
ENERGY EFFICIENCY
1) The difference in energy use and CO2-emissions in this report compared to earlier reports is due to adjusted emission factors from property electricity. 2) 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
| Certified properties under management | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Certification and level, no. of buildings | Certified | Ongoing | Coming | Total | Ongoing | Total | |||
| Nordic Swan Eco-label | 13 | 23 | - | 36 | 41 | 77 | |||
| Miljöbyggnad nybyggnad | |||||||||
| - Silver | 3 | 8 | - | 11 | - | 11 | |||
| Miljöbyggnad iDrift | |||||||||
| - Silver | 11 | 49 | - | 60 | - | 60 | |||
| - Brons | 32 | 9 | - | 41 | - | 41 | |||
| Passive house/other | 3 | - | - | 3 | - | 3 | |||
| Total | 62 | 89 | - | 151 | 41 | 192 |
Example of green buildings –Växjö Biologen
K2A's 70 rental apartments at Biologen next to the lake Trummen in Växjö were completed in the spring of 2022. The property borders K2A's property Ekologen.
The project is produced in Swedish certified wood and has the environmental label MB Nybyggnad Silver.
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 4,885 housing apartments and a lettable area of 182,761 sqm, of which 158,135 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 | 1,607 | 72,220 | 3,807 | 3,806 | 50,057 | 166 | 2,188 | 36 | 478 | 128 | 1,679 |
| Student housing | 3,116 | 70,053 | 5,180 | 3,552 | 47,216 | 188 | 2,499 | 45 | 597 | 138 | 1,833 |
| Community service properties | 162 | 15,862 | 15,639 | 947 | 30,063 | 55 | 1,751 | 9 | 291 | 46 | 1,460 |
| Total/average | 4,885 | 158,135 | 24,626 | 8,305 | 45,441 | 410 | 2,241 | 90 | 495 | 312 | 1,705 |
| 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/Mälar Valley | 2,031 | 68,801 | 4,154 | 4,289 | 58,785 | 189 | 2,597 | 38 | 525 | 148 | 2,029 |
| Student cities | 2,696 | 78,895 | 12,322 | 3,528 | 38,679 | 189 | 2,076 | 46 | 506 | 139 | 1,522 |
| Other cities | 158 | 10,439 | 8,150 | 488 | 26,252 | 31 | 1,655 | 6 | 320 | 25 | 1,327 |
| Total/average | 4,885 | 158,135 | 24,626 | 8,305 | 45,441 | 410 | 2,241 | 90 | 495 | 312 | 1,705 |
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 10,228.1 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 91.6 million at the balance sheet date.
Information about investment objects in the interim 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
| Total No. of Property Municipality Category Completed area, sqm apartments On 1 January, 2022 Rental apartments R 57,809 1,301 Student housing S 56,534 2,396 Community service properties C 34,733 222 Future projects F 1,666 - Sum 150,743 3,919 Added, first nine months 2022 Soluppgången 1 Växjö R 2022 4,816 60 Lilla Berg 1:4 & 1:5 (LSS Motala) Motala C 2022 505 6 Centrum 15:7 Enköping C 2017 680 6 Svarvaren 10 Nyköping C 2020 486 6 Måsnaryd 1:4 Södertälje C 2017 532 6 Skärvet 11 Växjö R 2022 3,664 56 Barkarby 2:60, lott A (Barkarbystaden) Järfälla S, C 2022 6,311 205 Startbanan 3 Örebro R 2022 3,198 115 Biologen 3 Växjö R 2022 4,124 70 Förrådet 4 Sundsvall S 2022 5,335 237 Korpralen 1, etapp 1 Visby S 2022 1,850 74 Rekylen 1, Järnvägen 6 & 7 Visby S 1994/-99/2000 5,203 204 Development properties Stockholm S - 750 5 Sum 37,454 1,050 Divested, first nine months 2022 LSS Eslöv Eslöv C 1915 to 2010 -1,480 -13 Care properties Malmö, Sjöbo and Burlöv C 1980/-87/-99 -3,955 -71 |
value MSEK |
|---|---|
| 133.9 | |
| 136.5 | |
| 54.7 | |
| 3.0 | |
| 328.1 | |
| 8.7 | |
| 1.4 | |
| 1.6 | |
| 1.4 | |
| 1.4 | |
| 5.8 | |
| 21.3 | |
| 7.0 | |
| 6.7 | |
| 15.1 | |
| 5.3 | |
| 9.9 | |
| 1.3 | |
| 86.8 | |
| -1.5 | |
| -4.0 | |
| Sum -5,435 -84 |
-5.4 |
| Acquired, not accessed properties (additional information - not included in p&l or balance sheet) | |
| Sidsjö 2:41 Sundsvall R 1945/2010 1,650 27 |
2.6 |
| Sum 1,650 27.0 |
2.6 |
| Total 184,412 4,912 |
412.1 |
1) C=Community service properties, S=Student housing, R=Rental apartments, F=Future projects
K2A Knaust & Andersson Fastigheter AB (publ) 9
ONGOING PROJECTS, GEOGRAPHICAL
ONGOING PROJECTS
The estimated investment for the projects under construction and what remains to be paid are shown in the table below.
| On-going projects in production, SEK million | 30 September 2022 | ||||||
|---|---|---|---|---|---|---|---|
| Total investment | Paid | Remaining payments | Equity* | ||||
| Projects developed in-house | 1 385 | 1 095 | 289 | -54 | |||
| Forward transactions | 1 315 | 97 | 1 218 | 245 | |||
| Total | 2 700 | 1 193 | 1 508 | 190 |
* The amount K2A must contribute that is not financed with a bank loan. The amount is net after reception of government investment support.
The information about ongoing projects in the interim 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.
ONGOING PROJECTS
| 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 | |
| Hortonomen 1 | Växjö | S | 4, 2020 | 4, 2022 | 2,573 | 100 | 6.6 | |
| Näcken 1 | Lund | R | 1, 2021 | 2, 2023 | 3,497 | 98 | 7.2 | |
| Sala backe 50:1 & 2 | Uppsala | R | 1, 2021 | 1, 2023 | 11,350 | 216 | 21.4 | |
| Glidet 1 | Luleå | R | 2, 2021 | 2, 2023 | 4,600 | 95 | 8.1 | |
| Vallan 1 | Luleå | R | 2, 2021 | 4, 2023 | 5,400 | 115 | 9.6 | |
| Diskusen 2 | Växjö | R | 2, 2021 | 3, 2023 | 6,863 | 185 | 14.2 | |
| Kornknarren 2 | Västerås | R | 2, 2021 | 1, 2024 | 2,463 | 62 | 5.0 | |
| Intervallet 7-9 | Linköping | S | 3, 2021 | 3, 2023 | 3,177 | 112 | 7.1 | |
| Forntiden 2 | Västerås | R | 4, 2021 | 2, 2023 | 6,747 | 155 | 13.4 | |
| Äppellunden 1 | Umeå | R | 4, 2021 | 2, 2023 | 3,852 | 83 | 7.0 | |
| Rödalen 1 | Norrtälje | R | 1, 2022 | 3, 2023 | 10,785 | 191 | 20.5 | |
| Bredsand 1:282 | Enköping | C | 2, 2022 | 3, 2023 | 1,350 | 0 | 2.4 | |
| Sum | 63,681 | 1,448 | 124.9 | |||||
| Other on-going projekcts | ||||||||
| Slakthusområdet (student housing) | Stockholm | S | 6 | 2023 | 2025 | 6,175 | 250 | |
| Slakthusområdet (preschool) | Stockholm | C | 6 | 2023 | 2025 | 1,130 | 0 | |
| Slakthusområdet (gym) | Stockholm | C | 6 | 2023 | 2025 | 2,300 | 0 | |
| Stora Sköndal | Stockholm | R | 4 | 2024 | 2026 | 7,900 | 248 | |
| Björksätra | Stockholm | R | 1 | 2024 | 2026 | 5,200 | 120 | |
| Brohuvudet 13-16 | Sundsvall | S | 6 | 2024 | 2026 | 1,850 | 86 | |
| Förseglet 9, lot D | Västerås | R | 6 | 2024 | 2026 | 5,420 | 145 | |
| Örvbyleden | Stockholm | R | 2 | 2025 | 2027 | 7,100 | 175 | |
| Timmerfallet | Stockholm | S | 1 | 2025 | 2027 | 4,300 | 200 | |
| Vansta 5:28 | Nynäshamn | R | 2 | 2025 | 2027 | 5,480 | 140 | |
| Korpralen 1, stage 2 | Gotland | S | 1 | 2025 | 2027 | 1,634 | 76 | |
| Alliero 25 | Sundsvall | R | 6 | 2025 | 2027 | 7,022 | 187 | |
| Harklövern 1, stage 2 | Karlstad | R | 6 | 2025 | 2027 | 3,282 | 88 | |
| Torpa-Sjöbo 2:1, stage 1 | Borås | R | 3 | 2025 | 2027 | 10,200 | 274 | |
| Skutkrossen 16 (projekt) | Stockholm | R | 1 | 2026 | 2028 | 3,000 | 70 | |
| Visborg 1:9 (del av) | Gotland | R | 1 | 2026 | 2028 | 3,763 | 175 | |
| Sidsjöhöjden 4 (new production) Trädan 27 |
Sundsvall Växjö |
R, S R |
5 6 |
2026 2026 |
2028 2028 |
2,250 1,935 |
60 90 |
|
| Sätra | Västerås | S | 6 | 2026 | 2028 | 6,240 | 126 | |
| Juliana 8 | Västerås | R | 6 | 2026 | 2028 | 975 | 45 | |
| Jakobsbergsplatsen | Västerås | S | 2 | 2026 | 2028 | 1,900 | 36 | |
| Ekersvägen3 | Örebro | C | 3 | 2026 | 2028 | 10,500 | 200 | |
| Isaberg 1 (projekt) | Stockholm | R | 1 | 2027 | 2029 | 3,400 | 95 | |
| Torpa Sjöbo 2:1, stage 2 Sum |
Borås | R | 2 | 2027 | 2029 | 4,150 107,106 |
110 2,996 |
|
| Total per balance-sheet day | 170,787 | 4,444 | ||||||
| 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 | 224,917 | 4,987 |
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)
3) The project pertains to a site that include parts of several properties where the property has not been subdivided, which is why the final property designation is not yet known.
TOTAL PROPERTY AND PROJECT PORTFOLIO
Total property and project portfolio per category Total property and project portfolio, geographic distribution
Barkarbystaden
K2A Knaust & Andersson Fastigheter AB (publ) 12
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 interim 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 is based on the purchase price.
For more information, refer to the "Property and project portfolio" section in the interim report.
EARNINGS CAPACITY
| SEK million | Investment objects |
Acquired, not accessed investment properties |
On-going projects in production |
Group | Total |
|---|---|---|---|---|---|
| Rental value | 409.5 | 2.6 | 124.9 | 537.0 | |
| Vacancies | -7.5 | 0.0 | -2.0 | -9.6 | |
| Rental income | 402.0 | 2.6 | 122.9 | 527.5 | |
| Total property costs, including administration | -116.9 | -0.8 | -35.7 | -153.4 | |
| Operating surplus | 285.1 | 1.7 | 87.2 | 374.0 | |
| Central administration, property management | -18.0 | -18.0 | |||
| Net interest income/expense | -234.9 | ||||
| Profit from property management | 121.2 | ||||
| Remaining investments | 54.0 | 45.0 | 1,487.3 | 1,586.3 |
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 | +/- 26.9 |
| Occupancy rate | +/- 2 percentage points | +/- 10.7 |
| Property cost | +/-10 per cent | -/+ 15.3 |
| Interest expense | +/- 1 percentage point | -/+ 64.5 |
THE GROUP'S STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY
| 2022 | 2021 | 2022 | 2021 | 2021 Oct- | 2021 | ||
|---|---|---|---|---|---|---|---|
| SEK million | Note | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2022 Sep | Jan-Dec |
| Rental income | 96.3 | 70.7 | 269.7 | 193.1 | 349.3 | 272.7 | |
| Property costs | |||||||
| Operating costs | -19.6 | -13.3 | -60.5 | -42.6 | -80.3 | -62.3 | |
| Maintenance | -2.1 | -1.0 | -9.8 | -4.3 | -13.9 | -8.5 | |
| Property tax | -1.1 | -0.5 | -2.4 | -1.6 | -3.5 | -2.7 | |
| Depreciation | -0.3 | -0.1 | -0.7 | -0.2 | -0.9 | -0.4 | |
| Property administration | -5.9 | -4.2 | -17.8 | -10.1 | -22.7 | -15.0 | |
| Total property costs | -29.0 | -19.1 | -91.3 | -58.8 | -121.3 | -88.8 | |
| Operating surplus | 67.3 | 51.7 | 178.4 | 134.3 | 228.0 | 183.9 | |
| Central administration, property management | -4.4 | -5.1 | -14.0 | -14.1 | -19.8 | -19.8 | |
| Central administration, project development | -10.6 | -7.5 | -38.4 | -26.6 | -50.4 | -38.5 | |
| Gain/loss from joint ventures | -2.8 | 0.2 | 106.2 | 4.8 | 229.3 | 127.8 | |
| - whereof operating surplus | -0.0 | 0.2 | -0.1 | 1.2 | -0.0 | 1.2 | |
| - whereof value change, investment properties | -2.8 | - | 106.3 | 3.6 | 229.3 | 126.6 | |
| Net interest income/expense | -32.9 | -22.8 | -91.4 | -62.6 | -114.5 | -85.8 | |
| Profit/loss from property management | 16.7 | 16.4 | 140.8 | 35.7 | 272.7 | 167.6 | |
| Value changes | |||||||
| Investment properties, unrealised | 2 | -28.7 | 10.5 | 307.1 | 370.5 | 678.5 | 741.9 |
| Investment properties, realised | -1.7 | - | -1.9 | - | -1.9 | - | |
| Participations in other companies | -7.0 | - | -7.8 | - | 0.4 | 8.2 | |
| Derivatives | 42.0 | 4.3 | 98.8 | 17.6 | 105.8 | 24.6 | |
| Profit/loss before tax | 21.4 | 31.2 | 537.0 | 423.8 | 1,055.5 | 942.3 | |
| Current tax | -0.1 | -0.3 | -0.3 | -0.3 | -0.5 | -0.5 | |
| Deferred tax | -11.2 | -9.3 | -103.3 | -100.6 | -188.0 | -185.3 | |
| Net profit/loss for the period/year | 10.1 | 21.6 | 433.4 | 322.9 | 867.0 | 756.5 | |
| Net profit/loss for the period/year attributable to | |||||||
| Parent Company shareholders | 10.3 | 21.0 | 433.6 | 322.2 | 867.0 | 755.5 | |
| Non-controlling interests | -0.3 | 0.6 | -0.3 | 0.7 | 0.0 | 1.0 | |
| Earnings per share | |||||||
| Earnings per ordinary share, before and after dilution, SEK |
-0.08 | 0.06 | 4.48 | 3.23 | 9.35 | 8.10 | |
| Average number of outstanding ordinary shares, before and after dilution |
85,865,300 85,865,300 85,865,300 85,590,602 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 | 2022-09-30 | 2021-09-30 | 2021-12-31 |
|---|---|---|---|---|
| ASSETS | ||||
| Intangible and tangible assets | ||||
| Investment properties | 3 | 10,228.1 | 7,578.7 | 8,458.4 |
| Owner-occupied properties | 25.9 | 15.1 | 14.4 | |
| Equipment | 17.7 | 14.3 | 17.9 | |
| Licences | 5.4 | 1.5 | 6.3 | |
| Total tangible assets | 10,277.1 | 7,609.6 | 8,497.0 | |
| Financial assets | ||||
| Participations in joint ventures | 386.4 | 144.6 | 267.7 | |
| Participations in other companies | 153.4 | 82.2 | 101.0 | |
| Other non-current receivables | 114.2 | 143.1 | 148.3 | |
| Derivatives | 148.7 | 18.6 | 25.6 | |
| Total financial assets | 802.7 | 388.5 | 542.6 | |
| Total non-current assets | 11,079.8 | 7,998.1 | 9,039.6 | |
| Current assets | ||||
| Inventories | 8.1 | 11.7 | 15.8 | |
| Accounts receivable | 1.4 | 1.4 | 1.5 | |
| Tax assets | 3.9 | 2.4 | 1.5 | |
| Receivables from joint ventures | 4.9 | 7.2 | 6.8 | |
| Other receivables | 95.3 | 97.8 | 107.1 | |
| Prepaid expenses and accrued income | 21.9 | 16.6 | 11.8 | |
| Cash and cash equivalents | 378.8 | 239.8 | 379.2 | |
| Total current assets | 514.4 | 376.9 | 523.6 | |
| Total assets | 11,594.2 | 8,375.0 | 9,563.2 | |
| EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Share capital | 547.9 | 118.6 | 547.9 | |
| Other contributed capital | 942.0 | 942.0 | 942.0 | |
| Hybrid bond | 450.0 | 450.0 | 450.0 | |
| Retained earnings including net profit/loss for the period/year | 1,328.7 | 977.6 | 965.6 | |
| Equity attributable to Parent Company shareholders | 3,268.7 | 2,488.2 | 2,905.6 | |
| Equity attributable to non-controlling interests | 0.4 | 2.1 | 0.7 | |
| Total equity | 3,269.1 | 2,490.3 | 2,906.2 | |
| Non-current liabilities | ||||
| Deferred tax liabilities | 588.6 | 400.7 | 485.3 | |
| Non-current lease liabilities | 163.7 | 73.2 | 81.7 | |
| Non-current interest-bearing liabilities | 6,088.6 | 3,903.4 | 4,345.4 | |
| Total non-current liabilities | 6,840.9 | 4,377.3 | 4,912.4 | |
| Current liabilities | ||||
| Current interest-bearing liabilities | 1,196.2 | 1,265.0 | 1,456.8 | |
| Current lease liabilities | 16.9 | 12.3 | 12.6 | |
| Accounts payable | 65.7 | 78.3 | 100.7 | |
| Tax liabilities | 6.1 | 3.5 | 5.1 | |
| Other liabilities | 58.0 | 47.5 | 49.4 | |
| Accrued expenses and deferred income | 141.1 | 100.9 | 120.0 | |
| Total current liabilities | 1,484.1 | 1,507.4 | 1,744.5 | |
| Total liabilities | 8,325.0 | 5,884.7 | 6,656.9 | |
| Total equity and liabilities | 11,594.2 | 8,375.0 | 9,563.2 |
THE GROUP'S STATEMENT OF CHANGES IN EQUITY
| Attributable to Parent Company shareholders | ||||||
|---|---|---|---|---|---|---|
| Non | ||||||
| contributed | Retained | controlling | ||||
| SEK million | Share capital | capital | Hybrid 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 | 322.2 | 0.7 | 322.9 | |||
| 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 |
| Cost, hybrid bond | - | - | - | -18.6 | - | -18.6 |
| Resolved dividend, ordinary shares | - | - | - | -8.5 | - | -8.5 |
| Resolved dividend, preference shares | - | - | - | -36.1 | - | -36.1 |
| Total transactions with owners | 0.6 | 24.0 | 450.0 | -70.7 | - | 403.8 |
| Closing equity, 30 Sep 2021 | 118.6 | 941.9 | 450.0 | 977.6 | 2.1 | 2,490.3 |
| Opening equity, 1 Jan 2022 | 547.9 | 941.9 | 450.0 | 965.6 | 0.7 | 2,906.2 |
| Profit/loss for the period | 433.6 | -0.3 | 433.4 | |||
| Payment, hybrid bond | - | - | - | -21.5 | - | -21.5 |
| Resolved dividend, ordinary shares | - | - | - | -12.9 | - | -12.9 |
| Resolved dividend, preference shares | - | - | - | -36.1 | - | -36.1 |
| Total transactions with shareholders | - | - | - | -70.5 | - | -70.5 |
| Closing equity, 30 Sep 2022 | 547.9 | 941.9 | 450.0 | 1,328.7 | 0.4 | 3,269.1 |
THE GROUP'S CASH FLOW STATEMENT
| 2022 | 2021 | 2022 | 2021 | 2021 Oct- | 2021 | |
|---|---|---|---|---|---|---|
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2022 Sep | Jan-Dec |
| Operating activities | ||||||
| Profit/loss from property management | 16.7 | 16.4 | 140.8 | 35.7 | 272.7 | 167.6 |
| Adjustments for non-cash items | 7.4 | 2.9 | -91.1 | 5.2 | -205.8 | -109.5 |
| Tax paid | - | - | - | - | -0.7 | -0.7 |
| Change in inventories | 7.9 | 9.9 | 7.7 | 4.1 | 3.5 | 0.0 |
| Change in operating receivables | 31.9 | -30.9 | 16.1 | -133.0 | 6.8 | -142.2 |
| Change in operating liabilities | -41.7 | 94.5 | -58.7 | 70.4 | 21.1 | 150.2 |
| Cash flow from operating activities | 22.2 | 92.9 | 14.7 | -17.5 | 97.5 | 65.3 |
| Investing activities | ||||||
| Acquisition of investment properties | -126.3 | -341.7 | -642.0 | -767.4 | -857.3 | -982.7 |
| Investments in investment properties | -196.3 | -181.2 | -776.5 | -624.1 | -1,092.1 | -939.8 |
| Deposits paid for acquisition of investment properties | -0.1 | -86.1 | -0.1 | -92.3 | -4.0 | -96.3 |
| Divested investment properties | 1.0 | - | 86.9 | - | 86.9 | - |
| Investments in other non-current assets, net | -6.4 | -3.5 | -62.8 | -50.4 | -81.0 | -68.6 |
| Cash flow from investing activities | -328.0 | -612.4 | -1,394.4 | -1,534.2 | -1,947.5 | -2,087.3 |
| Financing activities | ||||||
| New share issue | - | - | - | 26.2 | - | 26.2 |
| Costs for new share issue | - | -1.5 | - | -1.5 | 0.0 | -1.5 |
| Issue of hybrid bond | - | - | - | 450.0 | - | 450.0 |
| Costs for issue of hybrid bond | - | - | - | -7.0 | -0.5 | -7.5 |
| Loans raised | 103.9 | 257.9 | 1,612.5 | 1,436.6 | 2,266.0 | 2,090.1 |
| Repayment of loans | 1.0 | -221.2 | -139.0 | -468.0 | -152.6 | -481.5 |
| Repayment of lease liability | -4.0 | -2.6 | -9.6 | -7.8 | -12.7 | -10.9 |
| Acquisition of participations, non-controlling interests | - | - | - | - | -10.9 | -10.9 |
| Investments in derivatives | - | - | -24.3 | - | -24.3 | - |
| Payment, hybrid bond | -6.9 | -6.7 | -20.3 | -13.4 | -27.1 | -20.2 |
| Dividend, ordinary shares | - | - | -12.9 | -8.5 | -12.9 | -8.5 |
| Dividend, preference shares | -9.0 | -9.0 | -27.1 | -27.1 | -36.1 | -36.1 |
| Cash flow from financing activities | 84.9 | 16.8 | 1,379.4 | 1,379.5 | 1,988.9 | 1,989.1 |
| Cash flow for the period | -220.9 | -502.6 | -0.3 | -172.2 | 139.0 | -32.9 |
| Cash and cash equivalents at the beginning of the | 599.7 | 742.5 | 379.2 | 412.1 | 239.8 | 412.1 |
| period/year | ||||||
| Cash and cash equivalents at the end of the period/year | 378.8 | 239.8 | 378.8 | 239.8 | 378.8 | 379.2 |
SEGMENT REPORTING
| INVESTMENT | ONGOING | UNDISTRIBUTED | ||||||
|---|---|---|---|---|---|---|---|---|
| PROPERTIES | PROJECTS | ITEMS | GROUP | |||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
| SEK million | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep |
| INCOME STATEMENT | ||||||||
| Rental income | 268.1 | 192.3 | 1.6 | 0.8 | -0.0 | -0.1 | 269.7 | 193.1 |
| Property costs | -88.5 | -62.9 | -2.1 | -1.3 | -0.7 | 5.4 | -91.3 | -58.8 |
| Operating surplus | 179.7 | 129.4 | -0.5 | -0.5 | -0.8 | 5.4 | 178.4 | 134.3 |
| Central administration | -14.0 | -14.1 | -38.4 | -26.6 | - | - | -52.5 | -40.6 |
| Gain/loss from joint ventures | - | - | - | - | 106.2 | 4.8 | 106.2 | 4.8 |
| - whereof operating surplus | - | - | - | - | -0.1 | 1.2 | -0.1 | 1.2 |
| - whereof value change, investment properties |
- | - | - | - | 106.3 | 3.6 | 106.3 | 3.6 |
| Net interest income/expense | -57.4 | -40.8 | 1.5 | -0.4 | -35.5 | -21.4 | -91.4 | -62.6 |
| Profit/loss from property management | 108.2 | 74.6 | -37.4 | -27.5 | 70.0 | -11.4 | 140.8 | 35.7 |
| Value changes, unrealised | ||||||||
| Investment properties, unrealised | 3.5 | 292.0 | 303.6 | 83.9 | 0.0 | -3.6 | 307.1 | 370.5 |
| Investment properties, realised | -0.2 | - | -1.7 | - | - | - | - | - |
| Participations in other companies | - | - | - | - | -7.8 | - | -7.8 | - |
| Derivatives | - | - | - | - | 98.8 | 17.6 | 98.8 | 17.6 |
| Profit/loss before tax | 111.5 | 366.5 | 264.5 | 56.5 | 161.0 | 2.7 | 538.9 | 423.8 |
| Current tax | - | - | - | - | - | - | -0.3 | -0.3 |
| Deferred tax | - | - | - | - | - | - | -103.3 | -100.6 |
| Profit/loss for the period | - | - | - | - | - | - | 435.3 | 322.9 |
| BALANCE SHEET | ||||||||
| Non-current assets | 8,397.1 | 6,119.3 | 2,371.4 | 1,629.2 | 311.3 | 249.7 | 11,079.8 | 7,998.1 |
| Current assets | 79.7 | 238.9 | 52.8 | 95.6 | 381.9 | 42.5 | 514.4 | 376.9 |
| Total assets | 8,476.8 | 6,358.1 | 2,424.2 | 1,724.8 | 693.2 | 292.1 | 11,594.2 | 8,375.0 |
| Non-current liabilities | 4,479.2 | 3,025.4 | 1,351.6 | 924.6 | 1,010.2 | 427.3 | 6,840.9 | 4,377.3 |
| Current liabilities | 1,154.9 | 1,118.9 | 160.2 | 341.8 | 169.0 | 46.8 | 1,484.1 | 1,507.4 |
| Total liabilities | 5,634.0 | 4,144.3 | 1,511.7 | 1,266.3 | 1,179.3 | 474.1 | 8,325.0 | 5,884.7 |
| Total equity | - | - | - | - | - | - | 3,269.1 | 2,490.3 |
| Total equity and liabilities | - | - | - | - | - | - | 11,594.2 | 8,375.0 |
THE GROUP'S KEY FIGURES
| 2022 | 2021 | 2022 | 2021 | 2021 Oct- | 2021 | |
|---|---|---|---|---|---|---|
| Property-related key figures | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2022 Sep | Jan-Dec |
| Number of managed apartments | 4,885 | 3,754 | 4,885 | 3,754 | 4,885 | 3,910 |
| Number of apartments under production | 1,448 | 1,913 | 1,448 | 1,913 | 1,448 | 2,025 |
| Number of apartments in projects | 3,994 | 3,770 | 3,994 | 3,770 | 3,994 | 3,808 |
| Total number of apartments | 10,327 | 9,437 | 10,327 | 9,437 | 10,327 | 9,743 |
| Lettable area housing apartments, tsqm | 142.3 | 107.6 | 142.3 | 107.6 | 142.3 | 110.4 |
| Lettable area public service properties, tsqm | 38.6 | 35.7 | 38.6 | 35.7 | 38.6 | 38.4 |
| Lettable area other, tsqm | 1.9 | 1.8 | 1.9 | 1.8 | 1.9 | 1.8 |
| Total lettable area, tsqm | 182.8 | 145.1 | 182.8 | 145.1 | 182.8 | 150.6 |
| Economic occupancy rate, per cent | 98.4 | 92.7 | 97.5 | 91.9 | 97.5 | 93.2 |
| Surplus ratio, per cent | 69.9 | 73.0 | 66.2 | 69.5 | 65.3 | 67.4 |
| Cash flows from investment activities, SEK million | ||||||
| Investments in new construction, extension and refurbishment | 196.3 | 181.2 | 776.5 | 624.1 | 1,092.1 | 939.8 |
| Acquisitions | 126.3 | 427.8 | 642.0 | 859.7 | 861.2 | 1,079.0 |
| Financial key figures | ||||||
| Return on equity, per cent | - | - | - | - | 26.5 | 26.0 |
| Equity/assets ratio, per cent | 28.2 | 29.7 | 28.2 | 29.7 | 28.2 | 30.4 |
| Loan-to-value ratio, per cent | 62.8 | 61.7 | 62.8 | 61.7 | 62.8 | 60.7 |
| Net loan-to-value ratio, per cent | 61.6 | 60.6 | 61.6 | 60.6 | 61.6 | 59.0 |
| Average interest rate, per cent | 2.9 | 2.0 | 2.9 | 2.0 | 2.9 | 2.0 |
| Interest-coverage ratio, 12 months, times | - | - | - | - | 1.8 | 1.9 |
| Fixed-rate period, number of months | 26 | 34 | 26 | 34 | 26 | 28 |
| Average loan maturity, number of months | 25 | 30 | 25 | 30 | 25 | 27 |
| Share-related key figures | ||||||
| Total number of preference shares outstanding | 1,804,800 | 1,804,800 | 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 | 1,804,800 | 1,804,800 |
| Total dividend preference shares, SEK million | 9.0 | 9.0 | 27.1 | 27.1 | 36.1 | 36.1 |
| Dividend per preference share, SEK | 5.00 | 5.00 | 15.00 | 15.00 | 20.00 | 20.00 |
| Total number of ordinary shares outstanding | 85,865,300 85,865,300 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 85,590,602 85,865,300 85,659,841 | |||||
| Profit from property management per ordinary share, SEK | 0.00 | 0.01 | 1.07 | -0.12 | 2.43 | 1.24 |
| Earnings per ordinary share, SEK | -0.08 | 0.06 | 4.48 | 3.23 | 9.35 | 8.10 |
| Adjusted earnings per ordinary share, SEK | -0.08 | 0.07 | 4.48 | 3.24 | 9.35 | 8.11 |
| Equity, SEK million | 3,269.1 | 2,490.3 | 3,269.1 | 2,490.3 | 3,269.1 | 2,906.2 |
| Equity attributable to ordinary shareholders, SEK million | 2,299.8 | 1,519.3 | 2,300.3 | 1,519.3 | 2,299.8 | 1,936.7 |
| Equity per ordinary share, SEK | 26.78 | 17.69 | 26.79 | 17.69 | 26.78 | 22.55 |
| EPRA NRV, SEK million | 3,709.1 | 2,872.3 | 3,709.1 | 2,872.3 | 3,709.1 | 3,365.9 |
| EPRA NRV attributable to ordinary shareholders, SEK million | 2,739.7 | 1,901.4 | 2,740.2 | 1,901.4 | 2,739.7 | 2,396.4 |
| EPRA NRV per ordinary share, SEK | 31.91 | 22.14 | 31.91 | 22.14 | 31.91 | 27.91 |
| Growth in EPRA NRV per ordinary share (12 months), % | - | - | - | - | 44.1 | 54.6 |
PARENT COMPANY'S COMPREHENSIVE INCOME IN SUMMARY
| 2022 | 2021 | 2022 | 2021 | 2021 Oct- | 2021 | |
|---|---|---|---|---|---|---|
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2022 Sep | Jan-Dec |
| Operating income | 13.2 | 8.9 | 37.5 | 22.4 | 48.1 | 32.2 |
| Operating expenses | -23.2 | -19.4 | -81.7 | -56.5 | -105.8 | -81.8 |
| Operating profit/loss | -10.0 | -10.6 | -44.2 | -34.1 | -57.7 | -49.7 |
| Profit/loss from financial items | 69.4 | -3.9 | 50.7 | -5.0 | 325.3 | 224.0 |
| Profit/loss after financial items | 59.4 | -14.5 | 6.5 | -39.2 | 267.6 | 174.4 |
| Appropriations | - | - | - | - | 8.4 | 8.4 |
| Profit/loss before tax | 59.4 | -14.5 | 6.5 | -39.2 | 276.1 | 182.8 |
| Tax | -16.7 | -0.9 | -20.3 | -3.8 | -21.3 | 3.3 |
| Net profit/loss for the period/year | 42.7 | -15.4 | -13.8 | -42.9 | 254.7 | 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 | 2022-09-30 | 2021-09-30 | 2021-12-31 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets | 5.4 | 1.5 | 6.3 |
| Tangible assets | 2.8 | 1.5 | 2.2 |
| Financial assets | 3,003.2 | 473.5 | 2,138.9 |
| Non-current assets | 3,011.4 | 476.5 | 2,147.4 |
| Current assets | 1,421.1 | 2,358.3 | 1,876.5 |
| Total assets | 4,432.5 | 2,834.8 | 4,024.0 |
| EQUITY AND LIABILITIES | |||
| Restricted equity | 547.9 | 118.6 | 547.9 |
| Non-restricted equity | 951.5 | 1,242.8 | 1,035.8 |
| Total equity | 1,499.4 | 1,361.4 | 1,583.7 |
| Non-current liabilities | 1,511.7 | 798.8 | 1,190.3 |
| Current liabilities | 1,421.4 | 674.6 | 1,249.9 |
| Total liabilities | 2,933.1 | 1,473.4 | 2,440.3 |
| Total equity and liabilities | 4,432.5 | 2,834.8 | 4,024.0 |
JANUARY-SEPTEMBER 2022 Comparative figures for the income statement refer to 1 January-31 September 2021.
Rental income and occupancy rate
During the period, rental income increased to SEK 269.7 million (193.1). The increase corresponded to growth of 39.7 per cent in rental income. During the period, the economic occupancy rate was 97.5 per cent (91.9).
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 8.6 per cent in the comparable portfolio, of which lower vacancies contributed with 6.7 percentage points. On 30 September 2022, the lettable area in K2A's property portfolio was 182.8 tsqm, compared with 145.1 tsqm on 30 September 2021, up 26.0 per cent. On September 30 2022, the total rental value of investment objects was SEK 409.5 million (307.6) on an annual basis, up 33.1 per cent.
Rental income
| 2022 | 2021 | ||
|---|---|---|---|
| SEK million | Jan-Sep | Jan-Sep Change, % | |
| Student housing | 117.0 | 85.9 | 36.3 |
| Rental apartments | 109.6 | 78.8 | 39.0 |
| Public service properties | 43.1 | 28.4 | 51.7 |
| Total income | 269.7 | 193.1 | 39.7 |
Property costs
During the period, total property costs increased to SEK 91.3 million (58.8), up 55.3 per cent. The increase is explained below.
| Property costs, Jan-Sep 2022 |
|---|
| ------------------------------ |
| Public | ||||
|---|---|---|---|---|
| Student | Rental | service | ||
| SEK million | housing | apts. | properties | Total |
| Operating costs | -30.8 | -22.8 | -6.9 | -60.5 |
| Maintenance | -4.5 | -3.3 | -1.9 | -9.8 |
| Property tax | -1.9 | -0.5 | -0.0 | -2.4 |
| Depreciation/amortisation | - | -0.7 | - | -0.7 |
| Direct property costs | -37.2 | -27.4 | -8.8 | -73.4 |
| Property administration | -17.8 | |||
| Total property costs | -91.3 |
Property costs, Jan-Sep 2021
| Public | ||||
|---|---|---|---|---|
| Student | Rental | service | ||
| SEK million | housing | apts. | properties | Total |
| Operating costs | -20.8 | -17.7 | -4.1 | -42.6 |
| Maintenance | -2.0 | -1.6 | -0.7 | -4.3 |
| Property tax | -1.4 | -0.2 | 0.0 | -1.6 |
| Depreciation/amortisation | -0.1 | -0.1 | - | -0.2 |
| Direct property costs | -24.3 | -19.6 | -4.7 | -48.7 |
| Property administration | -10.1 | |||
| Total property costs | -58.8 |
During the period, operations and maintenance costs, including property tax, amounted to SEK -72.7 million (- 48.5), up 49.9 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 9.9 per cent in the comparable portfolio (excluding Kungsbäck).
Property administration costs amounted to SEK -17.8 million (-10.1). 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 178.4 million (134.3) up 32.9 per cent. The surplus ratio for the past 12 months was 65.3 per cent (68.6). The lower surplus rate is mainly explained by growth driven costs for operation and maintenance of SEK -10.2 million, higher costs for electricity of SEK -6.5 million, and costs for restoring the Gävle Kungsbäck property of SEK -2.3 million (including the fourth quarter 2021).
Central administration
Central administration costs amounted to SEK -52.5 million (-40.6), which corresponded to an increase in costs of 29.1 per cent. The increase was due to strengthening of the organisation. The number of employees at the head office rose by 8 people year-on-year. The central costs are allocated between K2A's two business areas – property management and project development – and costs during the period amounted to SEK -14.0 million (-14.1) and SEK -38.4 million (-26.6), respectively.
Profit from joint ventures
The share of profit during the period was SEK 106.2 million (4.8). The year-on-year increase was largely due to value changes attributable to joint projects, which amounted to SEK 106.3 million (3.6).
Net interest income/expense
Net interest expense amounted to SEK -91.4 million (-62.6). 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 2.9 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 307.1 million (370.5). The value changes are primarily contributable to properties in the Stockholm area.
Value change, investment properties
| 2022 | 2021 | |
|---|---|---|
| SEK million | Jan-Sep | Jan-Sep |
| Investment objects | 3.5 | 286.6 |
| Ongoing projects | 303.6 | 83.9 |
| Total value change | 307.1 | 370.5 |
| Total as a percentage of opening balance | 3.2 | 6.4 |
K2A has interest rate swaps for loans with a total nominal value of SEK 2,075.0 million (1,175.0). During the period, unrealised changes in the value of derivatives amounted to SEK 98.8 million (17.6), 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 (-0.3), which relates to estimated tax expense in newly acquired companies. Deferred tax amounted to SEK -103.3 MSEK (- 100.6) and was mainly impacted by unrealised changes in the value of properties and derivatives. The corporation tax rate is 20.6 per cent.
On 30 September 2022, the group's accumulation of tax loss carryforwards amounted to SEK 334.0 million (228.2). Deferred tax is recognised on a net basis on the consolidated balance sheet.
Deferred tax liabilities recognised on balance sheet
| MSEK | 2022-09-30 | 2021-09-30 |
|---|---|---|
| Properties | 627.6 | 439.8 |
| Tax loss carryforwards | -68.5 | -46.7 |
| Untaxed reserves | 2.0 | 1.8 |
| Derivatives | 25.6 | 4.0 |
| Other items | 2.0 | 1.8 |
| Total | 588.6 | 400.7 |
General information
This document is a translation of the Swedish interim report, in the event of discrepancies, the Swedish original will supersede the translation.
Organisation and employees
At period-end, K2A had a total of 130 employees (132). 48 people (40), of whom 20 (16) 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 82 people (92) 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 8.6 million (3.8). 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 2.1 million (3.4), of which SEK 1.6 million (1.9) was invoiced to the Parent Company. Sten Gejrot is chairman of K2A's Board and a partner of Advokatfirman Lindahl.
FINANCING
Amounts relating to the balance sheet in brackets on this page show results as of 31 December 2021, other figures show results corresponding to the quarter of the previous year.
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 30 September 2022, the value of K2A's assets were SEK 11,594.2 million (9,563.2), of which investment properties accounted for SEK 10,228.1 million (8,458.4). Cash and cash equivalents amounted to SEK 378.8 million (379.2). Equity amounted to SEK 3,269.1 million (2,906.2).
Interest bearing liabilities
On 30 September 2022, K2A had interest bearing liabilities (excluding lease liabilities) of SEK 7,284.8 million (5,802.2). The group's net loan-to-value ratio was 61.6 per cent (59.0).
At period end, the average interest rate was 2.9 per cent (2.0). Overall, the fair value of liabilities does not deviate materially from their carrying amounts.
On the balance sheet date, the average interest period was 25 months (28) and the average loan maturity was 25 months (27). K2A has derivative contracts totalling SEK 2,075.0 million (1,075.0). At period end, loan repayments over the next 12 months amounted to SEK 77.1 million (54.0). Accrued borrowing costs of SEK 17.9 million (20.5) reduced interest bearing liabilities on the balance sheet.
| Nominal | Fixed interes |
|---|---|
| amount, MSEK | (average), % |
| 400 | 0.08 |
| 1,200 | 1.27 |
| 475 | 0.21 |
| 2,075 | 0.80 |
INTEREST AND AVERAGE LOAN MATURITY
| Fixed rate | Loan maturity, MSEK | |||||
|---|---|---|---|---|---|---|
| Due year | Volume, MSEK | Interest, per cent | Commitment | Drawn | Undrawn | |
| Variable interest rate | 2,753.9 | 3.92 | - | - | - | |
| 2022 | - | - | 712.1 | 467.6 | 244.5 | |
| 2023 | 274.2 | 1.78 | 2,254.6 | 1,783.0 | 171.6 | |
| 2024 | 625.6 | 1.52 | 2,010.7 | 1,855.8 | 154.9 | |
| 2025 | 1,669.4 | 1.66 | 2,849.5 | 2,845.6 | 3.8 | |
| 2026 | 1,504.7 | 3.14 | 304.7 | 304.7 | - | |
| 2027 | - | - | 46.0 | 46.0 | - | |
| 2028 | 475.0 | 2.80 | - | - | 300.0 | |
| Total/average | 7,302.7 | 2.89 | 8,177.6 | 7,302.7 | 874.9 |
GREEN BONDS AND GREEN HYBRID BONDS
| Nom. | |||||||
|---|---|---|---|---|---|---|---|
| First issue | Maturity | Time to | amount | Base | Base rate | Current | |
| Senior unsecured FRN Green Bonds | date | date | maturity, yrs | MSEK | rate | margin, % | rate, % |
| 20/23 FRN C | 2020-08-01 | 2023-08-01 | 0.8 | 400 | Stibor 3M | 3.95 | 5.22 |
| MTN 101 | 2021-06-01 | 2024-06-01 | 1.7 | 400 | Stibor 3M | 3.25 | 4.52 |
| MTN 102 | 2021-10-01 | 2025-04-01 | 2.5 | 400 | Stibor 3M | 3.00 | 4.89 |
| MTN 103 | 2022-03-18 | 2024-12-24 | 2.2 | 300 | Stibor 3M | 4.40 | 6.03 |
| Total outstanding bonds | 1,500 | ||||||
| Hybrid bonds | 2021-01-21 | 2026-04-21 (First Call Date) | 450 | Stibor 3M | 5.95 | 7.23 | |
| Total outstanding hybrids | 450 |
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 interim 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 interim 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 applies 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 26. For further information on K2A's valuation method, see the annual report for 2021 (Note 15).
Sensitivity analysis - valuation
| Key figures, per cent | 2022-09-30 | 2021-09-30 |
|---|---|---|
| Discount rate, apartments | 5.9 | 5.7 |
| Discount rate, public service properties | 7.0 | 7.2 |
| Yield requirement | ||
| Apartments | 3.6 | 3.8 |
| Community service properties | 4.9 | 5.2 |
| Total | 3.7 | 3.9 |
In the above table, the direct yield requirement as of 2022- 09-30 for community service properties has been corrected to 4.9 percent (previously reported 4.4 percent).
The property portfolio value increased SEK 1,688.0 million (1,769.0) compared with the end of 2021. During the period, SEK 1,463.8 million (630.0) 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 157.9 million (73.2).
| Change in property portfolio for Jan-Sep 2022 | ||
|---|---|---|
| Investment | On-going | ||
|---|---|---|---|
| Fair value, SEK million | objects | projects | Total |
| Property portfolio at start of period |
6,732.3 | 1,726.1 | 8,458.4 |
| Acquisition of properties | - | 16.8 | 16.8 |
| Asset acquisitions via subsidiaries | 227.3 | 420.1 | 647.4 |
| Divestments | -85.9 | -1.0 | -86.9 |
| Investments | 37.9 | 767.6 | 805.5 |
| Unrealised value changes | 3.5 | 303.6 | 307.1 |
| Realised value changes | -0.2 | -1.7 | -1.9 |
| Right-of-use assets | 18.5 | 63.2 | 81.7 |
| Reclassified | 1,463.8 | -1,463.8 | - |
| Property portfolio at period-end | 8,397.2 | 1,831.0 | 10,228.2 |
Change in property portfolio for Jan-Sep 2021
| Fair value, SEK million | Investment objects |
On-going 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 | 695.2 | 50.9 | 746.1 |
| Divestments | - | - | - |
| Investments | 3.9 | 600.5 | 604.4 |
| Unrealised value changes | 286.6 | 83.9 | 370.5 |
| Right-of-use assets | 27.0 | - | 27.0 |
| Reclassified | 630.0 | -630.0 | - |
| Property portfolio at period-end | 6,119.3 | 1,459.4 | 7,578.7 |
Not 3 Correction
A right-of-use asset was previously reported as Depreciation among property costs, Is reported as of October 2021 under Change in value of investment properties. The summary below shows the effects in the income statement and cash flow analysis for the period January-September 2021. For further information in the Annual Report 2021, Note 35.
| 2021-01-01 - 2021-09-30 | ||||
|---|---|---|---|---|
| Previously | After | |||
| The group, MSEK | reported Correction | correction | ||
| Income statement | ||||
| Property costs | ||||
| Depreciation/amortization | -5.6 | 5.4 | -0.2 | |
| Total property costs | -64.2 | 5.4 | -58.8 | |
| Net operating income | 128.9 | 5.4 | 134.3 | |
| Profit from property management | 30.4 | 5.4 | 35.7 | |
| Value changes | ||||
| Value change, investment properties, unrealized |
375.8 | -5.4 | 370.5 | |
| Profit before tax | 423.8 | - | 423.8 | |
| Consolidated cash flow statement | ||||
| Operating activities | ||||
| Profit from property management | 30.4 | 5.4 | 35.7 | |
| Adjustment for non-cash items | 10.6 | -5.4 | 5.2 | |
| Cash flow from operating activities | -17.5 | - | -17.5 |
Note 4 Significant events after the end of the period
No significant events occurred after the end of the period.
OPPORTUNITIES AND RISKS
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 | +/- 27 |
| Occupancy rate | +/- 2 percentage points | +/- 11 |
| Property cost | +/-10 per cent | -/+ 14 |
| Interes expense | +/- 1 percentage point | -/+ 24 |
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-obeservable input to real-value valuation
| Public | |||
|---|---|---|---|
| service | |||
| properties | Apartments | ||
| Expected normalised rent year 16, SEK/sqm |
2,840 | 3,228 | |
| Current rent, SEK/sqm | 1,949 | 2,367 | |
| Remaining duration rental contracts, years |
8.9 | n/a | |
| Expected long-term vacancy year 16, per cent |
3.2 | 1.4 | |
| Current vacancy, per cent | 4.7 | 1.9 | |
| Expected normalised operating profit year 16, SEK/sqm |
2,295 | 2,345 | |
| Discount rate, per cent | 7.0 | 5.9 | |
| Yield requirement for assessment of residual value year 16, per cent |
4.6 | 3.4 |
| Effect on | ||||
|---|---|---|---|---|
| Sensitivity analysis value changes, SEK million1 | real value | |||
| Public | Apartments | |||
| service | ||||
| properties | ||||
| Expected normalised rent | +/- 5% | +/- 34 | +/- 274 | |
| Expected long-term vacancies | +/- 5% | -/+ 34 | -/+ 274 | |
| Expected property costs | +/- 5% | -/+ 6 | -/+ 65 | |
| Discount rate, per cent | +/- 1% | -/+ 118 | -/+ 821 | |
| Yield requirement for assessment of residual value |
+/- 1% | -/+ 166 | -/+ 1,810 |
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.
Ukraine
The ongoing war in Ukraine and the sanctions imposed as a consequence could significantly affect, for example, interest rates, inflation and exchange rates and lead to lower growth and disruption in the global economy, financial markets and global trade. In addition, the invasion can lead to an increase in energy prices and the materials needed for the company's operations, as well as to disruptions and delays in deliveries.
Price increases and uncertainties regarding the availability of materials have contributed to K2A deciding to postpone the majority of construction starts in 2022 and 2023 and notified personnel operating in K2A Trähus' production facilities.
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
| Preferens- | Totalt antal | % av totalt | % av totalt | ||||
|---|---|---|---|---|---|---|---|
| A-aktier | B-aktier | D-aktier | aktier | aktier | antal aktier | antal röster | |
| Johan Knaust med bolag | 2,841,840 | 17,452,015 | 6,806,160 | 94,025 | 27,194,040 | 31.0 | 28.8 |
| Johan Thorell med bolag | 2,412,000 | 6,166,496 | - | 19,499 | 8,597,995 | 9.8 | 16.6 |
| Johan Ljungberg med bolag | 2,412,000 | 5,995,000 | - | 13,864 | 8,420,864 | 9.6 | 16.5 |
| Claes-Henrik Julander med bolag | 2,176,800 | 5,194,622 | - | 17,659 | 7,389,081 | 8.4 | 14.7 |
| Länsförsäkringar Fastighetsfond | - | 6,586,825 | - | - | 6,586,825 | 7.5 | 3.6 |
| SEB Fonder | - | 5,351,532 | - | 425 | 5,351,957 | 6.1 | 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 | 1,316,730 | - | 2,032 | 2,080,762 | 2.4 | 4.9 |
| Humle fonder | - | 1,535,755 | - | - | 1,535,755 | 1.8 | 0.8 |
| Avanza Pension | - | 1,191,141 | - | 162,961 | 1,354,102 | 1.5 | 0.7 |
| Swedbank Försäkring | - | 1,302,535 | - | 18,782 | 1,321,317 | 1.5 | 0.7 |
| Swedbank Fonder | - | 1,260,000 | - | - | 1,260,000 | 1.4 | 0.7 |
| Cliens Kapitalförvaltning | - | 1,033,261 | - | - | 1,033,261 | 1.2 | 0.6 |
| Adrigo Fonder | - | 734,637 | - | - | 734,637 | 0.8 | 0.4 |
| Handelsbanken Liv | - | 660,378 | - | 6,290 | 666,668 | 0.8 | 0.4 |
| LK Finans | - | 636,999 | - | - | 636,999 | 0.7 | 0.3 |
| Carnegie Fonder | - | 459,929 | - | 1,660 | 461,589 | 0.5 | 0.3 |
| Nordea Liv | - | 392,058 | - | 14,292 | 406,350 | 0.5 | 0.2 |
| Christian Lindberg | - | 375,000 | - | - | 375,000 | 0.4 | 0.2 |
| Övriga | - | 5,046,223 | - | 1,453,311 | 6,499,534 | 7.4 | 3.5 |
| Summa | 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 interim 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, October 26, 2022
K2A Knaust & Andersson Fastigheter AB (publ)
| Sten Gejrot | Ludwig Holmgren | Claes-Henrik Julander |
|---|---|---|
| Chairman | Member | Member |
| Johan Knaust | Ingrid Lindquist | Johan Ljungberg |
| CEO and Member | Member | Member |
| Johan Thorell |
Member
This interim report has been audited.
REVIEW REPORT
To the Board of Directors of K2A Knaust & Andersson Fastigheter AB (publ), corp. id. 556943-7600
Introduction
We have reviewed the condensed interim financial information (interim report) of K2A Knaust & Andersson Fastigheter AB (publ) as of 30 September 2022 and the nine-month period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Stockholm 26 October 2022
KPMG AB
Peter Dahllöf Authorised Public Accountant
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.
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
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.
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 | 2021 Oct- | 2021 | |
|---|---|---|---|---|---|---|
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2022 Sep | Jan-Dec |
| Profit from property management per ordinary share | ||||||
| Profit from property management | 16.7 | 16.4 | 140.8 | 35.7 | 272.7 | 167.6 |
| Dividend, preference shares | -9.0 | -9.0 | -27.1 | -27.1 | -36.1 | -36.1 |
| Hybrid bond expenses | -8.0 | -6.8 | -21.5 | -18.6 | -28.2 | -25.4 |
| Adjusted profit from property management | -0.3 | 0.6 | 92.2 | -10.0 | 208.3 | 106.1 |
| Weighted average number of ordinary shares | 85,865,300 | 85,865,300 | 85,865,300 | 85,590,602 | 85,865,300 | 85,659,841 |
| Profit from property management per ordinary share, SEK |
-0.00 | 0.01 | 1.07 | -0.12 | 2.43 | 1.24 |
| Earnings per ordinary share | ||||||
| Profit after tax | 10.1 | 21.6 | 433.4 | 322.9 | 867.0 | 756.5 |
| Dividend, preference shares | -9.0 | -9.0 | -27.1 | -27.1 | -36.1 | -36.1 |
| Hybrid bond expenses | -8.0 | -6.8 | -21.5 | -18.6 | -28.2 | -25.4 |
| Profit after preferred dividend and hybrid bond expenses | -6.9 | 5.8 | 384.8 | 277.2 | 802.6 | 695.0 |
| Weighted average number of ordinary shares | 85,865,300 | 85,865,300 | 85,865,300 | 85,590,602 | 85,865,300 | 85,659,841 |
| Adjusted earnings per ordinary share, SEK | -0.08 | 0.07 | 4.48 | 3.24 | 9.35 | 8.11 |
| Less non-controlling interest, SEK | 0.00 | -0.01 | 0.00 | -0.01 | 0.00 | -0.01 |
| Earnings per ordinary share, SEK | -0.08 | 0.06 | 4.48 | 3.23 | 9.35 | 8.10 |
| Equity per ordinary share | ||||||
| Equity | 3,269.1 | 2,490.3 | 3,269.1 | 2,490.3 | 3,269.1 | 2,906.2 |
| Less non-controlling interests | -0.434 | -2.1 | - | -2.1 | -0.4 | -0.7 |
| Less value of preference shares | -518.9 | -518.9 | -518.9 | -518.9 | -518.9 | -518.9 |
| Less hybrid bond | -450.0 | -450.0 | -450.0 | -450.0 | -450.0 | -450.0 |
| Equity attributable to ordinary shareholders | 2,299.8 | 1,519.3 | 2,300.3 | 1,519.3 | 2,299.8 | 1,936.7 |
| Number of ordinary shares at period-end | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 |
| Equity per ordinary share, SEK | 26.78 | 17.69 | 26.79 | 17.69 | 26.78 | 22.55 |
| EPRA NRV per ordinary share | ||||||
| EPRA NRV | 2,739.7 | 1,901.4 | 2,740.2 | 1,901.4 | 2,739.7 | 2,396.4 |
| Number of ordinary shares at period-end | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 |
| EPRA NRV per ordinary share, SEK | 31.91 | 22.14 | 31.91 | 22.14 | 31.91 | 27.91 |
| Surplus ratio | ||||||
| Rental income | 96.3 | 70.7 | 269.7 | 193.1 | 349.3 | 272.7 |
| Operating surplus | 67.3 | 51.7 | 178.4 | 134.3 | 228.0 | 183.9 |
| Surplus ratio, per cent | 69.9 | 73.0 | 66.2 | 69.5 | 65.3 | 67.4 |
| Return on equity | ||||||
| Profit after tax, rolling 12-month period | 867.0 | 448.3 | 867.0 | 448.3 | 867.0 | 756.5 |
| Closing equity | 3,269.1 | 2,490.3 | 3,269.1 | 2,490.3 | 3,269.1 | 2,906.2 |
| Return on equity, per cent | 26.5 | 18.0 | 26.5 | 18.0 | 26.5 | 26.0 |
| Equity/assets ratio | ||||||
| Equity | 3,269.1 | 2,490.3 | 3,269.1 | 2,490.3 | 3,269.1 | 2,906.2 |
| Total assets | 11,594.2 | 8,375.0 | 11,594.2 | 8,375.0 | 11,594.2 | 9,563.2 |
| Equity/assets ratio, per cent | 28.2 | 29.7 | 28.2 | 29.7 | 28.2 | 30.4 |
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASUREMENTS, CONT'D
| 2022 | 2021 | 2022 | 2021 | 2021 Oct- | 2021 | |
|---|---|---|---|---|---|---|
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2022 Sep | Jan-Dec |
| Interest-bearing liabilities | ||||||
| Non-current interest-bearing liabilities | 6,088.6 | 3,903.4 | 6,088.6 | 3,903.4 | 6,088.6 | 4,345.4 |
| Non-current lease liabilities | 163.7 | 73.2 | 163.7 | 73.2 | 163.7 | 81.7 |
| Current interest-bearing liabilities | 1,196.2 | 1,265.0 | 1,196.2 | 1,265.0 | 1,196.2 | 1,456.8 |
| Current lease liabilities | 16.9 | 12.3 | 16.9 | 12.3 | 16.9 | 12.6 |
| Interest-bearing liabilities | 7,465.4 | 5,253.9 | 7,465.4 | 5,253.9 | 7,465.4 | 5,896.5 |
| Lease liabilities | -180.6 | -85.5 | -180.6 | -85.5 | -180.6 | -94.3 |
| Interest-bearing liabilities excluding leases | 7,284.8 | 5,168.3 | 7,284.8 | 5,168.3 | 7,284.8 | 5,802.2 |
| Net debt | ||||||
| Interest-bearing liabilities excluding leases | 7,284.8 | 5,168.3 | 7,284.8 | 5,168.3 | 7,284.8 | 5,802.2 |
| Cash and cash equivalents | -378.8 | -239.8 | -378.8 | -239.8 | -378.8 | -379.2 |
| Net debt | 6,906.0 | 4,928.5 | 6,906.0 | 4,928.5 | 6,906.0 | 5,423.0 |
| Loan-to-value ratio | ||||||
| Interest-bearing liabilities excluding leases | 7,284.8 | 5,168.3 | 7,284.8 | 5,168.3 | 7,284.8 | 5,802.2 |
| Total assets | 11,594.2 | 8,375.0 | 11,594.2 | 8,375.0 | 11,594.2 | 9,563.2 |
| Loan-to-value ratio, per cent | 62.8 | 61.7 | 62.8 | 61.7 | 62.8 | 60.7 |
| Net loan-to-value ratio | ||||||
| Net debt | 6,906.0 | 4,928.5 | 6,906.0 | 4,928.5 | 6,906.0 | 5,423.0 |
| Total assets less cash and cash equivalents | 11,215.3 | 8,135.2 | 11,215.3 | 8,135.2 | 11,215.3 | 9,184.0 |
| Net loan-to-value ratio, per cent | 61.6 | 60.6 | 61.6 | 60.6 | 61.6 | 59.0 |
| Interest-coverage ratio, 12 months | ||||||
| Operating surplus | - | - | - | - | 228.0 | 183.9 |
| Administrative expenses, property management | - | - | - | - | -19.8 | -19.8 |
| Net interest income/expense | - | - | - | - | -114.5 | -85.8 |
| Interest-coverage ratio (12 months), times | - | - | - | - | 1.8 | 1.9 |
| EPRA NRV | ||||||
| Equity | 3,269.1 | 2,490.3 | 3,269.1 | 2,490.3 | 3,269.1 | 2,906.2 |
| Derivatives | -148.7 | -18.6 | -148.7 | -18.6 | -148.7 | -25.6 |
| Deferred tax | 588.6 | 400.7 | 588.6 | 400.7 | 588.6 | 485.3 |
| EPRA NRV | 3,709.1 | 2,872.3 | 3,709.1 | 2,872.3 | 3,709.1 | 3,365.9 |
| Less non-controlling interests | -0.4 | -2.1 | - | -2.1 | -0.4 | -0.7 |
| Less value of preference shares | -518.9 | -518.9 | -518.9 | -518.9 | -518.9 | -518.9 |
| Less hybrid bond | -450.0 | -450.0 | -450.0 | -450.0 | -450.0 | -450.0 |
| EPRA NRV attributable to ordinary shareholders | 2,739.7 | 1,901.4 | 2,740.2 | 1,901.4 | 2,739.7 | 2,396.4 |
| Growth in EPRA NRV per ordinary share | ||||||
| OB EPRA NRV attributable to ordinary shareholders, SEK | 32.24 | 21.93 | 22.14 | 16.05 | 22.14 | 18.06 |
| CB EPRA NRV attributable to ordinary shareholders, SEK | 31.91 | 22.14 | 31.91 | 22.14 | 31.91 | 27.91 |
| Growth in EPRA NRV per ordinary share (12 months), per cent |
44.09 | 37.95 | 44.09 | 37.95 | 44.09 | 54.55 |
FINANCIAL CALENDAR
FINANCIAL REPORTS AND COMPANY EVENTS
| Q4 Interim Report, January-December 2022 | 14 February 2023 |
|---|---|
| Annual report 2022 | 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 |
| Q4 Interim Report, January-December 2023 | 14 February 2024 |
DIVIDEND, PREFERRED SHARES
| Last trading day, including right to dividend payment | 7 December 2022 |
|---|---|
| Record date for dividend payment | 9 December 2022 |
| Expected date of payment from Euroclear | 14 December 2022 |
| 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 |
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 October 26, 2022.
K2A Knaust & Andersson Fastigheter AB (publ) 31
K2A Knaust & Andersson Fastigheter AB (publ) Nybrogatan 59, 114 40 Stockholm, [email protected], www.k2a.se, org.nr 5569437600