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K2A Knaust & Andersson Interim / Quarterly Report 2023
3067_10-q_2023-11-08_684a6b85-21b6-489f-be0a-9204fa499be3.pdf
Interim / Quarterly Report
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Interim report January - September 2023 K2A Knaust & Andersson Fastigheter AB (publ)
INTERIM REPORT JANUARY - SEPTEMBER 2023
JUL-SEP 2023
- § Rental income amounted to SEK 105.8 million (96.3)
- § Net operating income amounted to SEK 77.5 million (67.3)
- § Profit from property management amounted to SEK 7.7 million (16.7)
- § Value changes from investment properties amounted to SEK -166.4 million (-30.4)
- § Net profit for the period amounted to SEK -150.6 million (10.1) and earnings per ordinary share amounted to SEK -1.99 (-0.08)
JAN-SEP 2023
- § Rental income increased to SEK 327.5 million (269.7)
- § Net operating income amounted to SEK 227.7 million (178.4)
- § Profit from property management amounted to SEK 19.3 million (140.8)
- § Value changes from investment properties amounted to SEK -481.9 million (305.2)
- § Net profit for the period amounted to SEK -371.2 million (433.4) and earnings per ordinary share amounted to -5.00 SEK (4.48)
- § Total number of apartments under management at the end of the period amounted to 5,126 (4,885)
| Number of apartments in property and project portfolio |
Property value | EPRA NRV attributable to ordinary shareholders |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| 9,167 | 9,011 | MSEK | 1,804 MSEK |
||||||
| 2023 | 2022 | 2023 | 2022 | 2022 Oct- | 2022 | ||||
| KEY FIGURES, SEK MILLION | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2023 Sep | Jan-Dec | |||
| Rental income | 105.8 | 96.3 | 327.5 | 269.7 | 432.5 | 374.7 | |||
| Operating surplus | 77.5 | 67.3 | 227.7 | 178.4 | 292.3 | 243.0 | |||
| Profit from property management | 7.7 | 16.7 | 19.3 | 140.8 | 6.2 | 127.6 | |||
| Value change, investment properties | -166.4 | -30.4 | -481.9 | 305.2 | -785.5 | 1.5 | |||
| Profit after tax | -150.6 | 10.1 | -371.2 | 433.4 | -645.4 | 159.1 | |||
| Number of managed units | 5,126 | 4,885 | 5,126 | 4,885 | 5,126 | 5,012 | |||
| Number of units under production | 368 | 1,448 | 368 | 1,448 | 368 | 1,348 | |||
| Number of units in projects | 3,673 | 3,539 | 3,673 | 3,539 | 3,673 | 3,517 | |||
| Total number of units | 9,167 | 9,872 | 9,167 | 9,872 | 9,167 | 9,877 | |||
| Net loan-to-value ratio, % | 64.4 | 61.6 | 64.4 | 61.6 | 64.4 | 63.8 | |||
| Interest coverage ratio, 12 months, times | - | - | - | - | 1.6 | 1.8 |
Number of apartments under management added (last 12 months)
Rental value, properties under management
Long-term net reinstatement value (EPRA NRV) 2,772.5 3,709.1 2,772.5 3,709.1 2,772.5 3,383.5 EPRA NRV attributable to ordinary shareholders 1,803.6 2,739.7 1,803.6 2,739.7 1,803.6 2,414.3 EPRA NRV per ordinary share, SEK 21.01 31.91 21.01 31.91 21.01 28.12 Growth in EPRA NRV per ordinary share, % - - - - -34.2 0.7
Growth in operating surplus 12 months, since last year
241 449 MSEK 28 %
EVENTS 2023
K2A Knaust & Andersson Fastigheter launched an updated green finance framework and an updated green equity framework. The new frameworks include stricter sustainability requirements and a clearer link to the EU green taxonomy than before.
The Swedish Minister for Infrastructure and Housing, Andreas Carlson (Christian Democrats), visited K2A's student accommodation in Barkarbystaden, Järfälla, on the outskirts of Stockholm. The minister met students who have been able to move to the Stockholm region to study thanks to the construction of new student housing, and saw tangible examples of K2A's award-winning sustainability work.
K2A entered into an agreement with Akademiska Hus, resulting in K2A being responsible for letting and managing 199 student apartments in Luleå.
K2A repaid a bond loan of 400 million Swedish kronor, financed with its own available funds.
The first tenants moved into K2A's newly built energy-plus house, Generatorn, in Linköping. The building consists of 90 student apartments and 22 assisted living accommodations.
§ Land allocation was obtained for 40 rental apartments on Tellusborgsvägen in Midsommarkransen, Stockholm. § Land allocation was obtained for 80 student apartments on Tellusborgsvägen in Midsommarkransen, Stockholm.
Q1 K2A launched "The Green Real Estate Podcast", its own podcast focusing on current events in the company and in the real estate market in general.
- § K2A completed a sale of six properties with an underlying property value of SEK 1,095 million. Four properties will be transferred on 31 May 2023 and two properties under development with planned possession in December 2023. Overall, K2A's liquidity is strengthened by SEK 400 million.
- § K2A entered into an agreement to sell four properties in Växjö with an underlying property value of SEK 650 million. The properties will be transferred on 30 June 2023. Overall, K2A's liquidity is strengthened by SEK 235 million.
- § Region Gotland decided to amend an existing zoning plan, which means that K2A will have the opportunity to build more permanent student housing In Visby.
K2A arranged Almedalen's greenest stage for housing debate during Almedalen week in Visby.
At the start of the semester, 99.8 percent of K2A's student apartments were rented out.
GRESB, the world's largest sustainability ranking for real estate companies, awarded K2A five out of five possible stars. K2A ranked second among all publicly traded residential companies worldwide.
In our year-end report for 2022, I wrote that 2023 will be a year of consolidation for K2A. By then, we already had a year behind us in which we had made significant efforts to adapt to the change in conditions: we had increased access to capital, put new construction starts on hold, reduced fixed costs and hedged our liabilities.
The plan communicated at that time meant focusing on completing ongoing production projects, carrying out efficiency improvements in management to strengthen the surplus ratio, and securing additional liquidity by disposing of assets to strengthen the balance sheet and financial key ratios.
All projects in production nearing completion
During the third quarter, two major projects were completed in Växjö and Linköping. The latter is probably the largest wooden energy-plus building built in Sweden. If we add the apartments completed after the end of the third quarter, this means a total of 498 new apartments since mid-year and a total of 935 new apartments in 2023.
Efficient management: greater volume accommodated in the same organisation
During the year, we increased the number of properties managed by our own management organisation, but despite greater management volume, the size of the management organisation is basically the same as it was a year ago. This generated synergies while we continued to work on smarter management through centralisation and digitalisation. The surplus ratio for the period January to September has increased to 69,5 percent, compared to 66.2 percent in the corresponding period in 2022.
Our profit from property management in 2023 has been lower compared to 2022. However, a key detail in this context is this includes the total profit from joint ventures, including changes in the value of investment properties. K2A's profit from property management for the period January to September 2023 amounted to SEK 19.3 million, but includes a negative item of SEK 31.3 million due to valuechanges in the JV. It may seem counter-intuitive that profit from property management includes changes in value, but these are the accounting rules we have to deal with. Adjusted for changes in value, profit from property management is SEK 50.6 million, up from SEK 34.5 million in the same period in 2022.
Further sales expected in 2023
In the wake of rising interest rates, the share price of most housing companies has fallen sharply, and K2A is by no means an exception. As many observers have noted, swings – both up and down – are always sizeable during dramatic periods and price movements tend to be amplified, becoming self-fulfilling prophecies.
A clear sign that there is still confidence in the Swedish housing market are the major differences between the stock market's valuation of property companies and the transaction market's valuation of residential property.
My view is that the transaction market makes a major distinction between different properties based on location, quality and sustainability factors. The significant sales made by K2A in spring 2023 were made at book value. I am convinced that this would not have been possible without the type of assets characteristic of K2A: attractive locations, stringent environmental requirements and high standards.
Our aim is to complete further sales by the end of 2023, and we continue to see substantial interest in our assets.
Plan remains in place for the future
I feel confident that our plan is right for us going forward, even though the challenges in the industry persist.
The bond market is not closed, but we do not view the price at which we can refinance our bonds as being acceptable to us – nor do we expect this to change over the coming year. By repaying the bonds instead of looking to refinance, we strengthen our key ratios as well as our income statement and balance sheet going forward.
The first repayment was made in August, when we repaid green bond loans of SEK 400 million. The next instalment, for the same amount, is due in June. I envision that, in the near future, K2A will be a company with a significantly lower loan-to-value ratio than today, and we are preparing to repay all outstanding bonds unless market conditions change.
However, the loan-to-value ratio does not provide the entire picture, and the key for K2A is to focus on the interest coverage ratio in the short term, ensure access to liquidity and focus on strengthening the current cash flow in the longer term. The interest coverage ratio has decreased from 1.8 at the end of 2022 to 1.6 at the end of the third quarter of 2023. The negative impact on the interest coverage ratio was expected, but K2A's higher surplus ratio combined with interest rate swap contracts has provided robust protection against the rapidly rising interest rates. K2A holds interest rate swap contracts with a total notional value of SEK 3,575 million. Excluding construction credit, the share of interestrate hedged loans was 98 percent at 30 September 2023. In a way, K2A has already deployed its parachute, which means that the interest coverage ratio has not fallen rapidly, but decreased at a slower pace to then level off. K2A still estimates that the interest coverage ratio in 2023 and 2024 will not fall below the company's risk limit of 1.5.
Equipped for the future
During this challenging year, our focus on sustainability has proved to be crucial to the attractiveness of our assets, and it will continue to form an integral part of K2A in the future.
When GRESB, the world's largest sustainability ranking for property companies, presented its comparison, K2A was ranked second among listed housing companies globally. In the third quarter, we renewed our Nasdaq Green Equity Designation and received an overall rating of Excellent – the highest rating.
We are sticking to our plan and will continue to do so going forward. This is a challenging period, but I am confident that the strategy we have adopted, focused on strengthening the balance sheet, is the right path for K2A based on current circumstances in our surroundings.
Johan Knaust, CEO
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 9,167 apartments, including 5,126 managed apartments, with a total property value of SEK 9,011 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. 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. In residential projects developed in-house K2A installs rooftop solar panels with the aim of making the properties self-sufficient in electricity. 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. 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.
Roadmap for a climate-positive K2A in 2027
At the beginning of the third quarter, the K2A Board of Directors approved the Roadmap for a climate-positive K2A in 2027. Climate targets have been divided up between different units at the company, and work is now proceeding on analysing data, continuing to anchor the work within the company and optimising operational performance. The company's sustainability policy has been updated with regard to the roadmap, a new procedure with a carbon budget for each new construction project has been introduced and collaboration has been initiated with Myrspoven to further optimise the company's energy use by means of AI.
Second best on the world's stock exchanges according to GRESB
K2A received the top rating of five out of five stars in GRESB, the world's biggest sustainability ranking for property companies. The ranking is updated annually and K2A, with 90 out of 100 points, was rated second among all listed housing companies compared.
GRESB (Global Real Estate Sustainability Benchmark) is a benchmarking tool that measures and evaluates the sustainability performance of property companies from an investor perspective. It is used by more than 170 institutional and financial investors and encompasses around 1,800 property companies and funds from over 70 countries. The evaluation looks at a large number of sustainability aspects linked to areas including the environment, social sustainability, governance and monitoring.
Portfolio 100 percent inventoried for climate risk
During the autumn, a supplementary climate risk inventory was carried out regarding the exposure of K2A's portfolio to the future climate. The inventory was carried out by Sweco and is consistent with Step 1 of the EU Taxonomy. It helps us prioritise sites for further climate adaptation efforts. The work this autumn means that 100 percent of K2A's portfolio has now been inventoried regarding climate risk.
Renewal of Nasdaq Green Equity Designation
K2A renewed its Nasdaq Green Equity Designation in 2023. Seventy percent of the company's turnover and eighty percent of its investments are classified as green. K2A's environmental management achieves a rating of Excellent – the highest rating – in the overall assessment.
GREEN FINANCING FRAMEWORK FOLLOW-UP
GREEN FINANCING FRAMEWORK FOR SHARES, JAN–JUN 2023
Breakdown according to CICERO Shades of Green
GREEN FINANCING FRAMEWORK
Dark green Medium green Light green Yellow
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 operation's other indirect emissions from sources such as business trips. Scope 3 does not include tenants and new production activities on a quarterly basis. For complete results in scope 3, see the latest annual report.
2) From Q1 2023, energy statistics are reported with normal year-corrected district heating. Historical energy statistics have been updated according to the same principle.
GREEN BUILDINGS
| Certified properties under management | |||||
|---|---|---|---|---|---|
| Certification and level, no.of buildings | Certified | Ongoing | Total | Ongoing | Total |
| Nordic Swan Eco-label | 20 | 45 | 65 | 36 | 101 |
| Miljöbyggnad nybyggnad | |||||
| - Silver | - | 2 | 2 | - | 2 |
| Miljöbyggnad iDrift | |||||
| - Silver | 15 | 34 | 49 | - | 49 |
| - Brons | 33 | 7 | 40 | - | 40 |
| Passivhouse/other | 3 | - | 3 | - | 3 |
| Total | 71 | 88 | 159 | 36 | 195 |
Example of green buildings – Växjö Diskusen
At Diskusen in Växjö, K2A has completed 185 rental apartments that were ready for occupancy September 2023.
The project is produced in Swedish certified wood and will receive the Nordic Swan Eco-label.
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 5,126 housing apartments and a lettable area of 185,415 sqm, of which 160,253 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 | 1,626 | 67,801 | 2,518 | 3,383 | 48,108 | 167 | 2,377 | 35 | 498 | 130 | 1,846 |
| Student housing | 3,332 | 76,590 | 5,210 | 3,752 | 45,864 | 217 | 2,655 | 50 | 612 | 162 | 1,975 |
| Community service properties | 168 | 15,862 | 17,434 | 977 | 29,352 | 65 | 1,939 | 10 | 290 | 55 | 1,649 |
| Total/average | 5,126 | 160,253 | 25,162 | 8,112 | 43,750 | 449 | 2,421 | 95 | 511 | 346 | 1,868 |
| 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 | 2,078 | 70,458 | 5,963 | 4,114 | 53,840 | 206 | 2,696 | 38 | 496 | 165 | 2,158 |
| Student cities | 2,890 | 79,356 | 11,049 | 3,526 | 39,001 | 209 | 2,307 | 50 | 558 | 154 | 1,699 |
| Other cities | 158 | 10,439 | 8,150 | 472 | 25,364 | 34 | 1,847 | 6 | 342 | 28 | 1,496 |
| Total/average | 5,126 | 160,253 | 25,162 | 8,112 | 43,750 | 449 | 2,421 | 95 | 511 | 346 | 1,868 |
INVESTMENT OBJECTS PER CATEGORY
Rental apartments Student housing Community service properties
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 9,011 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 141.8 million at the balance sheet date.
Information about management objects and ongoing projects in this report is based on assessments and assumptions regarding economic occupancy rate, size, focus and scope of ongoing projects and when in time projects are expected to be started and completed. Data on rental value and property costs are estimates and refer to a full year. Property costs do not include costs for property management. Assumptions about economic occupancy rate refer to long-term vacancy cleared of project vacancy and temporary initial vacancy during the move-in period in connection with completion. Information on property value refers to fair value as of the balance sheet date. The assessments and assumptions involve uncertainty factors and the data should not be seen as a forecast. The information on ongoing projects is reviewed regularly and assessments and assumptions are adjusted as a result of ongoing projects being completed or added and conditions changing. For projects where construction has not started, financing has not been procured, which means that financing ongoing projects is a factor of uncertainty.
PROPERTIES UNDER MANAGEMENT
| Rental | |||||||
|---|---|---|---|---|---|---|---|
| Total | No. of | value | |||||
| Property | Municipality | Category | Completed | area, sqm | apartments | MSEK | |
| On 1 January, 2023 | |||||||
| Rental apartments | R | 75,393 | 1,629 | 172.2 | |||
| Student housing | S | 77,873 | 3,216 | 206.4 | |||
| Community service properties | C | 31,501 | 162 | 61.4 | |||
| Future projects | F | 2,416 | 5 | 5.1 | |||
| Sum | 187,184 | 5,012 | 445.0 | ||||
| Added 2023 | |||||||
| Bredsand pre-school | Enköping | C | 2023 | 1,350 | – | 1.5 | |
| LSS Oxelösund 2 | Oxelösund | C | 2023 | 445 | 6 | 1.7 | |
| Sirenen | Lund | R | 2023 | 3,497 | 98 | 7.9 | |
| Skrinet | Luleå | R | 2023 | 4,600 | 95 | 8.7 | |
| Galaxen | Västerås | R | 2023 | 6,747 | 155 | 14.6 | |
| Äppellunden | Umeå | R | 2023 | 3,852 | 83 | 7.4 | |
| Diskusen | Växjö | R | 2023 | 6,863 | 185 | 18.7 | |
| Generatorn | Linköping | S, C | 2023 | 3,177 | 112 | 9.4 | |
| Sum | 30,531 | 734 | 69.9 | ||||
| Divested 2023 | |||||||
| Havsmannen | Västerås | R | 2019 | 5,076 | 114 | 14.2 | |
| Hinderbanan etapp 2 | Gävle | R | 2021 | 4,440 | 107 | 8.9 | |
| Brynäs 19:20 | Gävle | R | 2021 | 4,847 | 138 | 11.0 | |
| Ekologen | Växjö | R | 2018 | 5,332 | 75 | 9.1 | |
| Soluppgången | Växjö | R | 2022 | 4,816 | 60 | 9.0 | |
| Skärvet 11 | Växjö | R | 2022 | 3,664 | 56 | 6.4 | |
| Biologen | Växjö | R | 2022 | 4,124 | 70 | 7.4 | |
| Sum | 32,299 | 620 | 66.1 | ||||
| Total | 185,415 | 5,126 | 448.9 |
1) C=Community service properties, S=Student housing, R=Rental apartments, F=Future projects
ONGOING PROJECTS PER BALANCE SHEET DAY
TOTAL PROPERTY AND PROJECT PORTFOLIO PER BALANCE SHEET DAY
ONGOING PROJECT DEVELOPMENT IN PRIORITISED AREAS
As a result of increased production costs, K2A has identified prioritised areas where the profitability is still judged to be sufficient to justify the start of production. The table below shows ongoing projects in these areas, distributed per category. The projects listed in the table below correspond to the other ongoing projects in the prioritized areas in the table on the next page. The table below deviates with 74 temporarily erected housing units on the property Gotland Visby Korpralen 1.
| Property value | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. of | Lettable area, sqm | Rental value | at completion | Investment, | Profit | |||||||||||
| Per category | apartments | Residential | Premises | Total | MSEK | SEK/sqm | MSEK | SEK/sqm | MSEK | MSEK | % | |||||
| Student housing | 1,028 | 23,661 | 315 | 23,976 | 97 | 4,046 | 2,016 | 84,084 | 1,319 | 697 | 53 | |||||
| Rental apartments, Stockholm | 1,022 | 35,418 | 1,855 | 37,273 | 121 | 3,245 | 2,663 | 71,446 | 1,949 | 714 | 37 | |||||
| Community service properties | – | – | 26,480 | 26,480 | 80 | 3,036 | 1,656 | 62,537 | 1,320 | 336 | 25 | |||||
| Total/average | 2,050 | 59,079 | 28,650 | 87,729 | 298 | 3,401 | 6,335 | 72,211 | 4,588 | 1,747 | 38 |
Distribution per category, MSEK
ONGOING PROJECTS
| Total | Rental | |||||||
|---|---|---|---|---|---|---|---|---|
| Construction | area, | No. of | value | |||||
| Projects in production | Municipality | Category1 | Status2 | start | Completed | sqm | apartments | MSEK |
| Spiran | Luleå | R | 2, 2021 | 4, 2023 | 5,400 | 115 | 10.1 | |
| Planeten | Västerås | R | 2, 2021 | 1, 2024 | 2,463 | 62 | 5.2 | |
| Magasinet | Norrtälje | R | 1, 2022 | 1, 2024 | 10,785 | 191 | 19.4 | |
| Sum | 18,648 | 368 | 34.7 | |||||
| Other ongoing projects in prioritised areas | ||||||||
| Perrongen | Stockholm | S | 6 | 2024 | 2026 | 6,562 | 247 | |
| Slakthus preschool | Stockholm | C | 6 | 2024 | 2026 | 1,230 | – | |
| Slakthushallen (gym) | Stockholm | C | 6 | 2024 | 2026 | 2,130 | – | |
| Åkroken | Sundsvall | S | 6 | 2024 | 2026 | 1,892 | 86 | |
| Trätornet | Stockholm | R | 4 | 2025 | 2027 | 4,170 | 115 | |
| Stinsen | Nynäshamn | R | 3 | 2025 | 2027 | 6,414 | 180 | |
| Havet | Örebro | S | 6 | 2025 | 2027 | 1,024 | 36 | |
| Korpralen | Gotland | S | 1 | 2025 | 2027 | 1,672 | 76 | |
| Sandstugan | Stockholm | R | 3 | 2026 | 2028 | 4,149 | 120 | |
| Kärnhuset | Stockholm | S | 4 | 2026 | 2028 | 1,958 | 89 | |
| Timmerfallet | Stockholm | S | 2 | 2026 | 2028 | 4,400 | 200 | |
| Juliana | Västerås | S | 6 | 2026 | 2028 | 990 | 45 | |
| Visborg | Gotland | S | 1 | 2026 | 2028 | 3,850 | 175 | |
| Skogsliden | Stockholm | R | 4 | 2027 | 2029 | 3,425 | 92 | |
| Verkstan | Stockholm | R | 1 | 2027 | 2029 | 2,780 | 80 | |
| Båtvarvet | Stockholm | R | 1 | 2027 | 2029 | 3,400 | 95 | |
| Imperiet | Stockholm | R | – | 2027 | 2030 | 7,000 | 188 | |
| Ateljén | Stockholm | R | 2 | 2028 | 2030 | 5,935 | 152 | |
| Sum | 62,981 | 1,976 | ||||||
| Other ongoing projects | ||||||||
| Baronen | Sundsvall | R | 6 | 2026 | 2028 | 7,071 | 187 | |
| Förseglet | Västerås | R | 6 | 2026 | 2028 | 5,420 | 145 | |
| Brinken, stage 1 | Borås | R | 4 | 2026 | 2028 | 7,639 | 201 | |
| Ekersvägen | Örebro | R | 3 | 2026 | 2028 | 10,500 | 240 | |
| Harklövern, stage 2 | Karlstad | R | 6 | 2026 | 2028 | 3,128 | 81 | |
| Lugnet | Sundsvall | R | 6 | 2027 | 2029 | 2,558 | 70 | |
| Brinken, stage 2 | Borås | R | 2 | 2028 | 2030 | 9,894 | 213 | |
| Sum | 46,210 | 1,137 | ||||||
| Total per balance-sheet day | 127,839 | 3,481 | ||||||
| Co-owned projects, number of apartments and area attributable to K2A Flogsta |
Uppsala | S | 4 | 2025 | 2027 | 7,850 | 160 | |
| Ångpannan (prioritised project) | Västerås | C | 6 | 2024 | 2027 | 23,150 | – | |
| Viby | Upplands-Bro | R | 6 | 2024 | 2030 | 23,520 | 400 | |
| Sum | 54,520 | 560 | ||||||
| Total | 182,359 | 4,041 |
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 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 report.
EARNINGS CAPACITY PER BALANCE SHEET DAY
| Acquired, not | |||||
|---|---|---|---|---|---|
| accessed | Ongoing | ||||
| Investment | investment | projects in | |||
| SEK million | objects | properties | production | Group | Total |
| Rental value | 448.9 | – | 34.7 | 483.6 | |
| Vacancies | -7.9 | – | -0.5 | -8.4 | |
| Rental income | 441.0 | – | 34.2 | 475.2 | |
| Total property costs, including administration | -124.3 | – | -9.6 | -133.9 | |
| Operating surplus | 316.7 | – | 24.7 | 341.4 | |
| Central administration, property management | -18.5 | -18.5 | |||
| Net interest income/expense | -206.4 | ||||
| Profit from property management | 116.5 | ||||
| Remaining investments | 55.0 | – | 553.9 | 608.9 |
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 | +/- 24.2 |
| Occupancy rate | +/- 1 percentage point | +/- 4.8 |
| Property cost | +/-10 per cent | -/+ 13.4 |
| Interest expense | +/- 1 percentage point | -/+ 26.6 |
THE GROUP'S STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY
| 2023 | 2022 | 2023 | 2022 | 2022 Oct- | 2022 | |
|---|---|---|---|---|---|---|
| SEK million Note |
Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2023 Sep | Jan-Dec |
| Rental income | 105.8 | 96.3 | 327.5 | 269.7 | 432.5 | 374.7 |
| Property costs | ||||||
| Operating costs | -18.4 | -19.6 | -65.9 | -60.5 | -93.9 | -88.4 |
| Maintenance | -2.8 | -2.1 | -8.5 | -9.8 | -13.6 | -14.8 |
| Property tax | -0.8 | -1.1 | -2.5 | -2.4 | -4.0 | -3.9 |
| Depreciation | -0.4 | -0.3 | -1.1 | -0.7 | -1.5 | -1.1 |
| Property administration | -5.9 | -5.9 | -21.8 | -17.8 | -27.4 | -23.4 |
| Total property costs | -28.2 | -29.0 | -99.9 | -91.3 | -140.3 | -131.7 |
| Operating surplus | 77.5 | 67.3 | 227.7 | 178.4 | 292.3 | 243.0 |
| Central administration, property management | -3.6 | -4.4 | -12.1 | -14.0 | -14.4 | -16.3 |
| Central administration, project development | -6.8 | -10.6 | -26.5 | -38.4 | -30.8 | -42.7 |
| Gain/loss from joint ventures | -15.1 | -2.8 | -31.1 | 106.2 | -65.5 | 71.8 |
| - whereof operating surplus | -0.1 | -0.0 | 0.2 | -0.1 | -0.1 | -0.4 |
| - whereof value change, investment properties | -15.0 | -2.8 | -31.3 | 106.3 | -65.4 | 72.2 |
| Net interest income/expense | -44.3 | -32.9 | -138.6 | -91.4 | -175.4 | -128.1 |
| Profit/loss from property management | 7.7 | 16.7 | 19.3 | 140.8 | 6.2 | 127.6 |
| Value changes | ||||||
| Investment properties, unrealised | 2 -158.0 |
-28.7 | -463.5 | 307.1 | -767.1 | 3.5 |
| Investment properties, realised | -8.4 | -1.7 | -18.4 | -1.9 | -18.4 | -2.0 |
| Participations in other companies | - | -7.0 | - | -7.8 | - | -7.8 |
| Derivatives | -12.2 | 42.0 | -7.4 | 98.8 | -13.2 | 92.9 |
| Profit/loss before tax | -170.9 | 21.4 | -469.9 | 537.0 | -792.6 | 214.3 |
| Current tax | 0.2 | -0.1 | -0.1 | -0.3 | -0.1 | -0.3 |
| Deferred tax | 20.2 | -11.2 | 98.8 | -103.3 | 147.2 | -54.9 |
| Net profit/loss for the period/year | -150.6 | 10.1 | -371.2 | 433.4 | -645.4 | 159.1 |
| Net profit/loss for the period/year attributable to: | ||||||
| Parent Company shareholders | -150.6 | 10.3 | -370.8 | 433.6 | -645.0 | 159.5 |
| Non-controlling interests | - | -0.3 | -0.3 | -0.3 | -0.4 | -0.4 |
| Earnings per share | ||||||
| Earnings per ordinary share, before and after dilution, SEK |
-1.99 | -0.08 | -5.00 | 4.48 | -8.40 | 1.08 |
| Average number of outstanding ordinary shares, before and after dilution |
85,865,300 85,865,300 85,865,300 85,865,300 85,865,300 | 85,865,300 |
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 | 2023-09-30 | 2022-09-30 | 2022-12-31 |
|---|---|---|---|---|
| ASSETS | ||||
| Intangible and tangible assets | ||||
| Investment properties | 2 | 9,011.1 | 10,228.1 | 10,149.7 |
| Owner-occupied properties | 22.5 | 25.9 | 25.8 | |
| Equipment | 15.7 | 17.7 | 17.5 | |
| Licences | 4.3 | 5.4 | 5.2 | |
| Total intangible and tangible assets | 9,053.6 | 10,277.1 | 10,198.3 | |
| Financial assets | ||||
| Participations in joint ventures | 320.8 | 386.4 | 352.0 | |
| Participations in other companies | 153.4 | 153.4 | 153.4 | |
| Other non-current receivables | 26.8 | 114.2 | 39.6 | |
| Derivatives | 203.5 | 148.7 | 142.9 | |
| Total financial assets | 704.6 | 802.7 | 687.8 | |
| Total non-current assets | 9,758.2 | 11,079.8 | 10,886.1 | |
| Current assets | ||||
| Inventories | 1.6 | 8.1 | 2.3 | |
| Accounts receivable | 2.0 | 1.4 | 1.2 | |
| Tax assets | 3.6 | 3.9 | 3.0 | |
| Receivables from joint ventures | 51.3 | 4.9 | 10.7 | |
| Other receivables | 119.1 | 95.3 | 120.1 | |
| Prepaid expenses and accrued income | 41.4 | 21.9 | 20.4 | |
| Cash and cash equivalents | 223.5 | 378.8 | 298.0 | |
| Total current assets | 442.5 | 514.4 | 455.6 | |
| Total assets | 10,200.7 | 11,594.2 | 11,341.7 | |
| EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Share capital | 547.9 | 547.9 | 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 | 594.6 | 1,328.7 | 1,045.9 | |
| Equity attributable to Parent Company shareholders | 2,534.6 | 3,268.7 | 2,985.8 | |
| Equity attributable to non-controlling interests | - | 0.4 | 0.3 | |
| Total equity | 2,534.6 | 3,269.1 | 2,986.1 | |
| Non-current liabilities | ||||
| Deferred tax liabilities | 441.4 | 588.6 | 540.2 | |
| Non-current lease liabilities | 194.4 | 163.7 | 189.1 | |
| Non-current interest-bearing liabilities | 4,161.6 | 6,088.6 | 5,109.6 | |
| Total non-current liabilities | 4,797.4 | 6,840.9 | 5,838.9 | |
| Current liabilities | ||||
| Current interest-bearing liabilities | 2,489.6 | 1,196.2 | 2,233.7 | |
| Current lease liabilities | 33.3 | 16.9 | 20.5 | |
| Accounts payable | 46.9 | 65.7 | 76.3 | |
| Tax liabilities | 5.3 | 6.1 | 7.3 | |
| Other liabilities | 152.5 | 58.0 | 39.9 | |
| Accrued expenses and deferred income | 141.1 | 141.1 | 138.9 | |
| Total current liabilities | 2,868.7 | 1,484.1 | 2,516.6 | |
| Total liabilities | 7,666.1 | 8,325.0 | 8,355.6 | |
| Total equity and liabilities | 10,200.7 | 11,594.2 | 11,341.7 |
THE GROUP'S STATEMENT OF CHANGES IN EQUITY
| Attributable to Parent Company shareholders | ||||||
|---|---|---|---|---|---|---|
| Non | ||||||
| contributed | Hybrid | Retained | controlling | |||
| SEK million | Share capital | capital | bond | earnings | interests | Total equity |
| Opening equity, 1 Jan 2022 | 547.9 | 942.0 | 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 | 942.0 | 450.0 | 1,328.7 | 0.4 | 3,269.1 |
| Opening equity, 1 Jan 2023 | 547.9 | 942.0 | 450.0 | 1,045.9 | 0.3 | 2,986.1 |
| Profit/loss for the period | -370.8 | -0.3 | -371.2 | |||
| Payment, hybrid bond | - | - | - | -31.4 | - | -31.4 |
| Resolved dividend, ordinary shares | - | - | - | -12.9 | - | -12.9 |
| Resolved dividend, preference shares | - | - | - | -36.1 | - | -36.1 |
| Total transactions with shareholders | - | - | - | -80.4 | - | -80.4 |
| Closing equity, 30 Sep 2023 | 547.9 | 942.0 | 450.0 | 594.6 | 0.0 | 2,534.6 |
THE GROUP'S CASH FLOW STATEMENT
| 2023 | 2022 | 2023 | 2022 | 2022 Oct- | 2022 | |
|---|---|---|---|---|---|---|
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2023 Sep | Jan-Dec |
| Operating activities | ||||||
| Profit/loss from property management | 7.7 | 16.7 | 19.3 | 140.8 | 6.1 | 127.6 |
| Adjustments for non-cash items | 26.2 | 7.4 | 76.6 | -91.1 | 124.8 | -42.8 |
| Tax paid | - | - | -0.5 | - | -1.1 | -0.6 |
| Change in inventories | 0.1 | 7.9 | 0.7 | 7.7 | 6.5 | 13.5 |
| Change in operating receivables | 72.3 | 31.9 | -43.5 | 16.1 | 2.1 | 61.7 |
| Change in operating liabilities | 71.7 | -41.7 | 44.9 | -58.7 | 6.2 | -97.4 |
| Cash flow from operating activities | 178.0 | 22.2 | 97.3 | 14.7 | 144.6 | 62.0 |
| Investing activities | ||||||
| Investments in investment properties | -81.6 | -196.3 | -234.0 | -776.5 | -347.0 | -889.5 |
| Acquisition of investment properties | 0.3 | -126.3 | -304.5 | -642.0 | -350.5 | -687.9 |
| Deposits, investment properties | - | -0.1 | - | -0.1 | 0.1 | - |
| Divested investment properties | -13.3 | 1.0 | 1,262.1 | 86.9 | 1,262.1 | 86.8 |
| Investments in licences | - | -0.0 | -0.1 | -0.2 | -0.3 | -0.4 |
| Investments in equipment | -0.1 | -0.4 | -0.5 | -2.8 | -0.5 | -2.8 |
| Divestments of equipment | - | - | 0.1 | 0.3 | 0.2 | 0.4 |
| Lending to joint ventures | -19.2 | - | -37.0 | - | -39.6 | -2.6 |
| Participations in other companies | - | -6.0 | - | -60.2 | -0.0 | -60.2 |
| Cash flow from investing activities | -113.9 | -328.0 | 686.2 | -1,394.4 | 524.5 | -1,556.1 |
| Financing activities | ||||||
| Loans raised | 40.2 | 103.9 | 631.4 | 1,612.5 | 706.4 | 1,687.6 |
| Repayment of loans | -417.6 | 1.0 | -1,333.7 | -139.0 | -1,353.6 | -159.0 |
| Repayment of lease liability | -7.7 | -4.0 | -18.3 | -9.6 | -22.5 | -13.8 |
| Transaction derivatives | -0.0 | - | -68.0 | -24.3 | -68.0 | -24.3 |
| Payment, hybrid bond | -10.7 | -6.9 | -29.5 | -20.3 | -37.8 | -28.6 |
| Dividend, ordinary shares | - | - | -12.9 | -12.9 | -12.9 | -12.9 |
| Dividend, preference shares | -9.0 | -9.0 | -27.1 | -27.1 | -36.1 | -36.1 |
| Cash flow from financing activities | -404.9 | 84.9 | -858.0 | 1,379.4 | -824.4 | 1,412.9 |
| Cash flow for the period | -340.8 | -220.9 | -74.5 | -0.3 | -155.4 | -81.2 |
| Cash and cash equivalents at the beginning of the period/year |
564.3 | 599.7 | 298.0 | 379.2 | 378.8 | 379.2 |
| Cash and cash equivalents at the end of the period/year | 223.5 | 378.8 | 223.5 | 378.8 | 223.5 | 298.0 |
SEGMENT REPORTING
| ONGOING INVESTMENT |
UNDISTRIBUTED | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| PROPERTIES | PROJECTS | ITEMS | GROUP | ||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||
| SEK million | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | |
| INCOME STATEMENT | |||||||||
| Rental income | 325.9 | 268.1 | 1.6 | 1.6 | 0.0 | -0.0 | 327.5 | 269.7 | |
| Property costs | -98.1 | -88.5 | -1.7 | -2.1 | -0.0 | -0.7 | -99.9 | -91.3 | |
| Operating surplus | 227.8 | 179.7 | -0.2 | -0.5 | 0.0 | -0.8 | 227.7 | 178.4 | |
| Central administration | -12.1 | -14.0 | -26.5 | -38.4 | - | - | -38.6 | -52.5 | |
| Gain/loss from joint ventures | - | - | - | - | -31.1 | 106.2 | -31.1 | 106.2 | |
| - whereof operating surplus | - | - | - | - | 0.2 | -0.1 | 0.2 | -0.1 | |
| - whereof value change, investment properties |
- | - | - | - | -31.3 | 106.3 | -31.3 | 106.3 | |
| Net interest income/expense | -97.2 | -57.4 | -0.4 | 1.5 | -41.1 | -35.5 | -138.6 | -91.4 | |
| Profit/loss from property management | 118.5 | 108.2 | -27.0 | -37.4 | -72.2 | 70.0 | 19.3 | 140.8 | |
| Value changes | |||||||||
| Investment properties, unrealised | -221.7 | 3.5 | -241.8 | 303.6 | 0.0 | - | -463.5 | 307.1 | |
| Investment properties, realised | -18.8 | -0.2 | 0.4 | -1.7 | 0.0 | - | -18.4 | -1.9 | |
| Participations in other companies | - | - | - | - | - | -7.8 | - | -7.8 | |
| Derivatives | - | - | - | - | -7.4 | 98.8 | -7.4 | 98.8 | |
| Profit/loss before tax | -121.9 | 111.5 | -268.4 | 264.5 | -79.5 | 161.0 | -469.9 | 537.0 | |
| Current tax | - | - | - | - | - | - | -0.1 | -0.3 | |
| Deferred tax | - | - | - | - | - | - | 98.8 | -103.3 | |
| Profit/loss for the period | - | - | - | - | - | - | -371.2 | 433.4 | |
| BALANCE SHEET | |||||||||
| Non-current assets | 8,253.6 | 8,397.1 | 1,139.3 | 2,371.4 | 365.2 | 311.3 | 9,758.2 | 11,079.8 | |
| Current assets | 157.9 | 79.7 | 93.4 | 52.8 | 191.2 | 381.9 | 442.5 | 514.4 | |
| Total assets | 8,411.5 | 8,476.8 | 1,232.7 | 2,424.2 | 556.4 | 693.2 | 10,200.7 | 11,594.2 | |
| Non-current liabilities | 3,704.2 | 4,479.2 | 506.0 | 1,351.6 | 587.2 | 1,010.2 | 4,797.4 | 6,840.9 | |
| Current liabilities | 2,091.0 | 1,154.9 | 226.2 | 160.2 | 551.5 | 169.0 | 2,868.7 | 1,484.1 | |
| Total liabilities | 5,795.1 | 5,634.0 | 732.2 | 1,511.7 | 1,138.8 | 1,179.3 | 7,666.1 | 8,325.0 | |
| Total equity | - | - | - | - | - | - | 2,534.6 | 3,269.1 | |
| Total equity and liabilities | - | - | - | - | - | - | 10,200.7 | 11,594.2 |
THE GROUP'S KEY FIGURES
| 2023 | 2022 | 2023 | 2022 | 2022 Oct- | 2022 | |
|---|---|---|---|---|---|---|
| Property-related key figures | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2023 Sep | Jan-Dec |
| Number of managed apartments | 5,126 | 4,885 | 5,126 | 4,885 | 5,126 | 5,012 |
| Number of apartments under production | 368 | 1,448 | 368 | 1,448 | 368 | 1,348 |
| Number of apartments in projects | 3,673 | 3,539 | 3,673 | 3,539 | 3,673 | 3,517 |
| Total number of apartments | 9,167 | 9,872 | 9,167 | 9,872 | 9,167 | 9,877 |
| Lettable area housing properties, tsqm | 152.1 | 144.2 | 152.1 | 144.2 | 152.1 | 155.7 |
| Lettable area community service properties, tsqm | 33.3 | 38.6 | 33.3 | 38.6 | 33.3 | 31.5 |
| Total lettable area, tsqm | 185.4 | 182.8 | 185.4 | 182.8 | 185.4 | 187.2 |
| Economic occupancy rate, per cent | 97.2 | 98.4 | 97.4 | 97.5 | 97.7 | 97.9 |
| Surplus ratio, per cent | 73.3 | 69.9 | 69.5 | 66.2 | 67.6 | 64.8 |
| Cash flows from investment activities, SEK million | ||||||
| Investments in new construction, extension and refurbishment | -81.6 | -196.3 | -234.0 | -776.5 | -347.0 | -889.5 |
| Acquisitions | 0.3 | -126.3 | -304.5 | -642.0 | -350.4 | -687.9 |
| Divestments | -13.3 | 1.0 | 1,262.1 | 86.9 | 1,262.1 | 86.8 |
| Financial key figures | ||||||
| Return on equity, per cent | - | - | - | - | -25.5 | 5.3 |
| Equity/assets ratio, per cent | 24.8 | 28.2 | 24.8 | 28.2 | 24.8 | 26.3 |
| Loan-to-value ratio, per cent | 65.2 | 62.8 | 65.2 | 62.8 | 65.2 | 64.7 |
| Net loan-to-value ratio, per cent | 64.4 | 61.6 | 64.4 | 61.6 | 64.4 | 63.8 |
| Average interest rate, per cent | 3.2 | 2.9 | 3.2 | 2.9 | 3.2 | 3.1 |
| Interest-coverage ratio, 12 months, times | - | - | - | - | 1.6 | 1.8 |
| Fixed-rate period, number of months | 21 | 25 | 21 | 25 | 21 | 23 |
| Average loan maturity, number of months | 20 | 25 | 20 | 25 | 20 | 23 |
| 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 85,865,300 85,865,300 85,865,300 | |||||
| Profit from property management per ordinary share, SEK | -0.15 | 0.00 | -0.46 | 1.07 | -0.82 | 0.71 |
| Earnings per ordinary share, SEK | -1.99 | -0.08 | -5.00 | 4.48 | -8.40 | 1.08 |
| Adjusted earnings per ordinary share, SEK | -1.99 | -0.08 | -5.00 | 4.48 | -8.40 | 1.08 |
| Equity, SEK million | 2,534.6 | 3,269.1 | 2,534.6 | 3,269.1 | 2,534.6 | 2,986.1 |
| Equity attributable to ordinary shareholders, SEK million | 1,565.7 | 2,299.8 | 1,565.7 | 2,299.8 | 1,565.7 | 2,016.9 |
| Equity per ordinary share, SEK | 18.23 | 26.78 | 18.23 | 26.78 | 18.23 | 23.49 |
| EPRA NRV, SEK million | 2,772.5 | 3,709.1 | 2,772.5 | 3,709.1 | 2,772.5 | 3,383.5 |
| EPRA NRV attributable to ordinary shareholders, SEK million | 1,803.6 | 2,739.7 | 1,803.6 | 2,739.7 | 1,803.6 | 2,414.3 |
| EPRA NRV per ordinary share, SEK | 21.01 | 31.91 | 21.01 | 31.91 | 21.01 | 28.12 |
| Growth in EPRA NRV per ordinary share (12 months), % | - | - | - | - | -34.2 | 0.7 |
PARENT COMPANY'S COMPREHENSIVE INCOME IN SUMMARY
| 2023 | 2022 | 2023 | 2022 | 2022 Oct- | 2022 | |
|---|---|---|---|---|---|---|
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2023 Sep | Jan-Dec |
| Operating income | 14.8 | 12.4 | 48.8 | 37.5 | 69.1 | 57.8 |
| Operating expenses | -24.1 | -24.5 | -79.7 | -81.7 | -103.8 | -105.8 |
| Operating profit/loss | -9.2 | -12.0 | -30.9 | -44.2 | -34.7 | -48.0 |
| Profit/loss from financial items | -12.5 | 23.9 | -24.8 | 50.7 | -49.1 | 26.5 |
| Profit/loss after financial items | -21.7 | 11.8 | -55.7 | 6.5 | -83.7 | -21.5 |
| Appropriations | - | - | - | - | 26.1 | 26.1 |
| Profit/loss before tax | -21.7 | 11.8 | -55.7 | 6.5 | -57.6 | 4.6 |
| Tax | 0.9 | -8.7 | -3.3 | -20.3 | 1.4 | -15.6 |
| Net profit/loss for the period/year | -20.8 | 3.2 | -59.0 | -13.8 | -56.3 | -11.1 |
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 | 2023-09-30 | 2022-09-30 | 2022-12-31 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets | 4.3 | 5.4 | 5.2 |
| Tangible assets | 2.6 | 2.8 | 2.6 |
| Financial assets | 2,380.4 | 3,003.2 | 2,319.8 |
| Non-current assets | 2,387.3 | 3,011.4 | 2,327.7 |
| Current assets | 1,883.7 | 1,421.1 | 1,929.8 |
| Total assets | 4,271.0 | 4,432.5 | 4,257.5 |
| EQUITY AND LIABILITIES | |||
| Restricted equity | 547.9 | 547.9 | 547.9 |
| Non-restricted equity | 806.1 | 951.5 | 945.5 |
| Total equity | 1,354.1 | 1,499.4 | 1,493.5 |
| Non-current liabilities | 722.5 | 1,511.7 | 1,113.3 |
| Current liabilities | 2,194.4 | 1,421.4 | 1,650.8 |
| Total liabilities | 2,916.9 | 2,933.1 | 2,764.0 |
| Total equity and liabilities | 4,271.0 | 4,432.5 | 4,257.5 |
PERFORMANCE ANALYSIS
The profit and cash flow items below refer to the period January to September 2023. The comparative items refer to the corresponding period of the previous year. The amounts of the balance sheet items and comparison figures refer to the position at the end of the period this year and the previous year.
Rental income and occupancy rate
During the period, rental income increased to SEK 327.5 million (269.7). The increase represented growth of 21.4 per cent in rental income. During the period, the economic occupancy rate was 97.4 per cent (97.5).
The increase in rental income is primarily attributable to rent hikes and larger property portfolio compared to the same period in 2022. For like-for-like portfolios, rental income increased by 7.2 per cent, of which income from re-invoiced costs contributed with 0.4 percentage points. During the second quarter the property portfolio was reduced due to the sale of eight properties.
At 30 September 2023, the lettable area in K2A's property portfolio was 185.4 thousand sqm, compared with 182.8 thousand sqm at 30 September 2022, representing an increase of 1.5 per cent. At 30 September 2023, the total rental value of investment properties was SEK 448.9 million (409.5) on an annual basis, representing growth of 9.6 per cent.
Rental income
| 2023 | 2022 | ||
|---|---|---|---|
| SEK million | Jan-Sep | Jan-Sep Change, % | |
| Student housing | 155.6 | 117.0 | 33.0 |
| Rental apartments | 123.3 | 109.6 | 12.6 |
| Community service properties | 48.6 | 43.1 | 12.8 |
| Total income | 327.5 | 269.7 | 21.4 |
Property costs
During the period, total property costs increased to SEK 99.9 million (91.3), up 9.4 per cent. The increase is attributable to a larger property portfolio and is explained below.
Property costs, Jan-Sep 2023
| Community | ||||
|---|---|---|---|---|
| Student | Rental | service | ||
| SEK million | housing | apts. | properties | Total |
| Operating costs | -34.3 | -24.8 | -6.9 | -65.9 |
| Maintenance | -3.8 | -2.9 | -1.8 | -8.5 |
| Property tax | -1.6 | -0.9 | -0.0 | -2.5 |
| Depreciation/amortisation | - | -1.1 | - | -1.1 |
| Direct property costs | -39.6 | -29.7 | -8.7 | -78.1 |
| Property administration | -21.8 | |||
| Total property costs | -99.9 |
Property costs, Jan-Sep 2022
| Community | ||||
|---|---|---|---|---|
| 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 |
Operating and maintenance costs, including property tax, amounted to SEK -76.9 million (-72.7), representing an increase of 5.8 per cent. The increase can mainly be explained by K2A managing a larger property portfolio compared to the corresponding period in 2022. In the comparative period, operating costs were charged with SEK -1.9 million for restoration of the Gävle Kungsbäck 2:21 property. Electricity subsidies had a positive impact of SEK 3.4 million on net operating income in the second quarter. Operating costs in like-for-like portfolios increased by 0.4 per cent.
Property administration costs amounted to SEK -21.8 million (-17.8). The increase was due to the fact that K2A strengthened the organisation.
Net operating income and surplus ratio
During the period, the net operating income was SEK 227.7 million (178.4) up 27.6 per cent. The surplus ratio for the past 12 months was 67.6 per cent (65.3).
Central administration
Central administration costs amounted to SEK -38.6 million (-52.5), which corresponded to a reduction in costs of -26.4 per cent. During the period, joint ventures were invoiced a total of SEK 6.0 million for project management services, which has been reported as a cost reduction by central administration. K2A assesses that the corresponding invoicing will take place quarterly during 2023. The central costs are allocated between K2A's two business areas – property management and project development – and costs during the period amounted to SEK -12.1 million (-14.0) and SEK -26.5 million (-38.4), respectively.
Profit from joint ventures
The share of profit during the period was SEK -31.1 million (106.2). The year-on-year change was largely due to value changes attributable to joint projects, which amounted to SEK -31.3 million (106.3).
Net interest income/expense
Net interest expense amounted to SEK -138.6 million (-91.4). The year-on-year higher interest rates led to higher interest expense.
The average interest rate on the balance sheet date was 3.2 per cent (2.9). The interest-coverage ratio for the past 12 months was 1.6 (1.8).
Value changes
During the period, unrealised changes in the value of investment properties amounted to SEK -463.5 million (307.1).
Value change, investment properties
| 2023 | 2022 | |
|---|---|---|
| SEK million | Jan-Sep | Jan-Sep |
| Investment objects | -221.7 | 3.5 |
| Ongoing projects | -241.8 | 303.6 |
| Total value change | -463.5 | 307.1 |
| Total as a percentage of opening balance | -4.6 | 3.2 |
K2A has interest rate swaps for loans with a total nominal value of SEK 3,575.0 million (2,075.0). During the period, unrealised changes in the value of derivatives amounted to SEK -7.4 million (98.8).
Taxes
Current tax for the period amounted to SEK -0.1 million (-0.3), which relates to estimated tax expense in newly acquired companies. Deferred tax amounted to SEK 98.8 million (-103.3) and was mainly impacted by unrealised changes in the value of properties and derivatives. The corporation tax rate is 20.6 per cent.
On 30 September 2023, the group's accumulation of tax loss carryforwards amounted to SEK 387.3 million (334.0). Deferred tax is recognised on a net basis on the consolidated balance sheet.
Deferred tax liabilities recognised on balance sheet
| SEK million | 2023-09-30 | 2022-09-30 |
|---|---|---|
| Properties | 492.2 | 627.6 |
| Tax loss carryforwards | -80.4 | -68.5 |
| Untaxed reserves | 0.7 | 2.0 |
| Derivatives | 28.5 | 25.6 |
| Other items | 0.4 | 2.0 |
| Total | 441.4 | 588.6 |
General information
This document is a translation of the Swedish report. In the event of discrepancies, the Swedish original will supersede the translation.
Organisation and employees
At period-end, K2A had a total of 54 employees (130). 48 people (48), of whom 19 (20) 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 6 people (82) refer to employees in the K2A Trähus subsidiary.
Significant related party transactions during the period
During the period, the Group (Parent Company) purchased project management services from Samhed Fastighets AB, Ljungskär AB, Ludwig Holmgren Capital AB and C Interior Design AB for a total amount of SEK 4.3 million (8.6). 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 3.3 million (2.1), of which SEK 1.1 million (1.6) was invoiced to the Parent Company. Sten Gejrot is chairman of K2A's Board and a partner of Advokatfirman Lindahl.
Roundings
Due to rounding, the figures presented in this report may not always add up to exact totals and percentages may differ from the exact percentages.
K2A Knaust & Andersson Fastigheter AB (publ) 22
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 30 September 2023, the value of K2A's assets were SEK 10,200.7 million (11,594.2), of which investment properties accounted for SEK 9,011.1 million (10,228.1). Cash and cash equivalents amounted to SEK 223.5 million (378.8). Equity amounted to SEK 2,534.6 million (3,269.1).
Interest bearing liabilities
On 30 September 2023, K2A had interest bearing liabilities (excluding lease liabilities) of SEK 6,651.2 million (7,284.8). The group's net loan-to-value ratio was 64.4 per cent (61.6).
At period end, the average interest rate was 3.2 per cent (2.9). The realisable fair value of liabilities does not deviate materially from their carrying amounts.
On the balance sheet date, the average interest period was 21 months (25) and the average loan maturity was 20 months (25). K2A has derivative contracts totalling SEK 3,575.0 million (2,075.0).
At period end, loan repayments over the next 12 months amounted to SEK 70.3 million (77.1). Accrued transaction costs of SEK 8.7 million (17.9) reduced interest bearing liabilities on the balance sheet.
| Interest rate structure | MSEK | % |
|---|---|---|
| Fixed interest rate | 2,103 | 31.6 |
| Interest-secured loans | 3,575 | 53.7 |
| Variable interest rate | 982 | 14.7 |
| Total | 6,660 | 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 |
INTEREST AND AVERAGE LOAN MATURITY
| Fixed rate | Loan maturity, MSEK | |||||
|---|---|---|---|---|---|---|
| Due year | Volume, MSEK | Interest, per cent | Commitment | Drawn | Undrawn | |
| Variable interest rate | 982 | 6.37 | – | – | – | |
| 2023 | 223 | 1.84 | 722 | 651 | 72 | |
| 2024 | 475 | 1.55 | 2,154 | 2,113 | 41 | |
| 2025 | 3,009 | 2.59 | 2,907 | 2,907 | – | |
| 2026 | 1,496 | 3.12 | 741 | 741 | – | |
| 2028 | 475 | 2.50 | 348 | 248 | 100 | |
| Total/average | 6,660 | 3.16 | 6,873 | 6,660 | 213 |
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, % |
| MTN 101 | 2021-06-01 | 2024-06-01 | 0.7 | 400 | Stibor 3M | 3.25 | 7.28 |
| MTN 102 | 2021-10-01 | 2025-04-01 | 1.5 | 400 | Stibor 3M | 3.00 | 6.89 |
| MTN 103 | 2022-03-18 | 2024-12-18 | 1.2 | 300 | Stibor 3M | 4.40 | 8.46 |
| Total outstanding bonds | 1,100 | ||||||
| Hybrid bonds | 2021-01-21 | 2026-04-21 (First Call Date) | 450 | Stibor 3M | 5.95 | 9.86 | |
| 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 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 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 by 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 2022 (Note 15).
Sensitivity analysis - valuation
| Key figures, per cent | 2023-09-30 | 2022-09-30 |
|---|---|---|
| Discount rate, apartments | 6.2 | 5.9 |
| Discount rate, community service properties | 7.7 | 7.0 |
| Yield requirement | ||
| Apartments | 4.0 | 3.6 |
| Community service properties | 5.5 | 4.9 |
| Weighted average | 4.2 | 3.7 |
The value of the property portfolio has decreased by SEK -1,159.8 million compared to 31 December 2022. The decrease is mainly explained by the sale of eight investment properties in the second quarter totalling SEK 1,265 million.(before transaction costs and deviations in the resignation balance).
During the period, SEK 1,341.5 million (1,463.8) 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 141.8 million (91.6).
Change in property portfolio for Jan-Sep 2023
| Fair value, SEK million | Investment objects |
On-going projects |
Total |
|---|---|---|---|
| Property portfolio at start of period |
8,369.0 | 1,780.7 | 10,149.7 |
| Acquisition of properties | - | - | - |
| Asset acquisitions via subsidiaries | - | 313.1 | 313.1 |
| Divestments | -1,260.2 | -11.3 | -1,271.6 |
| Investments | 8.9 | 257.9 | 266.8 |
| Acquisition/extension right-of-use assets |
34.9 | - | 34.9 |
| Value changes | |||
| Unrealised | -207.9 | -241.8 | -449.7 |
| Realised | -18.8 | 0.4 | -18.4 |
| Right-of-use assets | -13.8 | - | -13.8 |
| Reclassified | 1,341.5 | -1,341.5 | - |
| Property portfolio at period-end | 8,253.7 | 757.4 | 9,011.1 |
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 |
| Acquisition/extension right-of-use assets |
18.6 | 63.2 | 81.7 |
| Value changes | |||
| Unrealised | 9.9 | 303.6 | 313.5 |
| Realised | -0.2 | -1.7 | -1.9 |
| Right-of-use assets | -6.4 | - | -6.4 |
| Reclassified | 1,463.8 | -1,463.8 | - |
| Property portfolio at period-end | 8,397.2 | 1,831.0 | 10,228.2 |
Note 3 Significant events after the end of the period
Land allocation was obtained for 40 rental apartments on Tellusborgsvägen in Midsommarkransen, Stockholm.
Land allocation was obtained for 80 student apartments on Tellusborgsvägen in Midsommarkransen, Stockholm.
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 | +/- 24 |
| Occupancy rate | +/- 1 percentage points | +/- 5 |
| Property cost | +/-10 per cent | -/+ 13 |
| Interest expense | +/- 1 percentage point | -/+ 13 |
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
Rental income and vacancies, increased property costs, project management and risks related to pandemics are the operational risks K2A has identified and describes together with the management of the risks in the company's latest Annual Report.
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
| Community service |
||
|---|---|---|
| properties | Apartments | |
| Expected normalised rent year 16, SEK/sqm |
2,778 | 3,439 |
| Current rent, SEK/sqm | 1,938 | 2,504 |
| Remaining duration rental contracts, years |
7.0 | n/a |
| Expected long-term vacancy year 16, per cent |
3.2 | 1.6 |
| Current vacancy, per cent | 4.5 | 2.2 |
| Expected normalised operating profit year 16, SEK/sqm |
2,283 | 2,481 |
| Discount rate, per cent | 7.7 | 6.2 |
| Yield requirement for assessment of residual value year 16, per cent |
5.6 | 3.9 |
Sensitivity analysis value changes,
SEK million, effect on real value1
| Community | ||||
|---|---|---|---|---|
| service | ||||
| Change | properties | Apartments | ||
| Expected normalised rent | +/- 5% | +/- 25 | +/- 256 | |
| Expected long-term vacancies | +/- 3% | -/+ 15 | -/+ 153 | |
| Expected property costs | +/- 5% | -/+ 4 | -/+ 62 | |
| Discount rate | +/- 0.25% -/+ 23/23 -/+ 181/187 | |||
| Yield requirement for assessment of | ||||
| residual value | +/- 0.25% -/+ 18/20 -/+ 233/266 |
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.
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 | 15,453,015 | 6,806,160 | 93,085 | 25,194,100 | 28.7 | 27.7 |
| Johan Ljungberg and companies | 2,412,000 | 9,289,661 | - | 13,864 | 11,715,525 | 13.4 | 18.3 |
| Johan Thorell and companies | 2,412,000 | 6,666,496 | - | 19,499 | 9,097,995 | 10.4 | 16.8 |
| Claes-Henrik Julander and companies | 2,176,800 | 5,194,622 | - | 17,659 | 7,389,081 | 8.4 | 14.7 |
| SEB Fonder | - | 5,048,480 | - | - | 5,048,480 | 5.8 | 2.8 |
| Länsförsäkringar Fastighetsfond | - | 3,995,918 | - | - | 3,995,918 | 4.6 | 2.2 |
| Verdipapirfondet Odin Eiendom | - | 3,738,190 | - | - | 3,738,190 | 4.3 | 2.0 |
| Enter Sverige | - | 3,240,913 | - | - | 3,240,913 | 3.7 | 1.8 |
| Ludwig Holmgren | 762,000 | 1,195,419 | - | 2,032 | 1,959,451 | 2.2 | 4.8 |
| Humle fonder | - | 1,525,671 | - | - | 1,525,671 | 1.7 | 0.8 |
| Swedbank Försäkring | - | 1,362,262 | - | 15,071 | 1,377,333 | 1.6 | 0.8 |
| Swedbank Fonder | - | 1,260,000 | - | - | 1,260,000 | 1.4 | 0.7 |
| Avanza Pension | - | 944,330 | - | 173,294 | 1,117,624 | 1.3 | 0.6 |
| Cliens Kapitalförvaltning | - | 1,033,261 | - | - | 1,033,261 | 1.2 | 0.6 |
| Diskretionär fond | - | 921,593 | - | - | 921,593 | 1.1 | 0.5 |
| Handelsbanken Liv | - | 663,071 | - | 2,390 | 665,461 | 0.8 | 0.4 |
| LK Finans | - | 636,999 | - | - | 636,999 | 0.7 | 0.3 |
| Handelsbanken Fonder | - | 391,110 | - | - | 391,110 | 0.4 | 0.2 |
| Christian Lindberg | - | 375,000 | - | - | 375,000 | 0.4 | 0.2 |
| Nordea Liv | - | 343,817 | - | 12,314 | 356,131 | 0.4 | 0.2 |
| Other | - | 5,174,672 | - | 1,455,592 | 6,630,264 | 7.6 | 3.6 |
| 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 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, 8 November 2023
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 subject to a review by the company's auditors.
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 2023 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 8 November 2023
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.
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 bearing liability less leases
Interest bearing liabilities less current and non-current lease liabilities.
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.
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.
| 2023 | 2022 | 2023 | 2022 | 2022 Oct- | 2022 | |
|---|---|---|---|---|---|---|
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2023 Sep | Jan-Dec |
| Profit from property management per ordinary share | ||||||
| Profit from property management | 7.7 | 16.7 | 19.3 | 140.8 | 6.2 | 127.6 |
| Dividend, preference shares | -9.0 | -9.0 | -27.1 | -27.1 | -36.1 | -36.1 |
| Hybrid bond expenses | -11.2 | -8.0 | -31.4 | -21.5 | -40.1 | -30.2 |
| Adjusted profit from property management | -12.6 | -0.3 | -39.2 | 92.2 | -70.1 | 61.3 |
| Weighted average number of ordinary shares | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 |
| Profit from property management per ordinary share, SEK |
-0.15 | -0.00 | -0.46 | 1.07 | -0.82 | 0.71 |
| Earnings per ordinary share (IFRS-measurement) | ||||||
| Profit after tax | -150.6 | 10.1 | -371.2 | 433.4 | -645.4 | 159.1 |
| Dividend, preference shares | -9.0 | -9.0 | -27.1 | -27.1 | -36.1 | -36.1 |
| Hybrid bond expenses | -11.2 | -8.0 | -31.4 | -21.5 | -40.1 | -30.2 |
| Profit after preferred dividend and hybrid bond expenses | -170.8 | -6.9 | -429.6 | 384.8 | -721.7 | 92.8 |
| Weighted average number of ordinary shares | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 | 85,865,300 |
| Adjusted earnings per ordinary share, SEK | -1.99 | -0.08 | -5.00 | 4.48 | -8.40 | 1.08 |
| Less non-controlling interest, SEK | 0.00 | 0.00 | 0.00 | 0.00 | 0.01 | 0.00 |
| Earnings per ordinary share, SEK | -1.99 | -0.08 | -5.00 | 4.48 | -8.40 | 1.08 |
| Equity per ordinary share | ||||||
| Equity | 2,534.6 | 3,269.1 | 2,534.6 | 3,269.1 | 2,534.6 | 2,986.1 |
| Less non-controlling interests | - | -0.4 | - | -0.4 | - | -0.3 |
| 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 | 1,565.7 | 2,299.8 | 1,565.7 | 2,299.8 | 1,565.7 | 2,016.9 |
| 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 | 18.23 | 26.78 | 18.23 | 26.78 | 18.23 | 23.49 |
| EPRA NRV per ordinary share | ||||||
| EPRA NRV | 1,803.6 | 2,739.7 | 1,803.6 | 2,739.7 | 1,803.6 | 2,414.3 |
| 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 | 21.01 | 31.91 | 21.01 | 31.91 | 21.01 | 28.12 |
| Surplus ratio | ||||||
| Rental income | 105.8 | 96.3 | 327.5 | 269.7 | 432.5 | 374.7 |
| Operating surplus | 77.5 | 67.3 | 227.7 | 178.4 | 292.3 | 243.0 |
| Surplus ratio, per cent | 73.3 | 69.9 | 69.5 | 66.2 | 67.6 | 64.8 |
| Return on equity | ||||||
| Profit after tax, rolling 12-month period | -645.4 | 867.0 | -645.4 | 867.0 | -645.4 | 159.1 |
| Closing equity | 2,534.6 | 3,269.1 | 2,534.6 | 3,269.1 | 2,534.6 | 2,986.1 |
| Return on equity, per cent | -25.5 | 26.5 | -25.5 | 26.5 | -25.5 | 5.3 |
| Equity/assets ratio | ||||||
| Equity | 2,534.6 | 3,269.1 | 2,534.6 | 3,269.1 | 2,534.6 | 2,986.1 |
| Total assets | 10,200.7 | 11,594.2 | 10,200.7 | 11,594.2 | 10,200.7 | 11,341.7 |
| Equity/assets ratio, per cent | 24.8 | 28.2 | 24.8 | 28.2 | 24.8 | 26.3 |
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASUREMENTS, CONT'D
| 2023 | 2022 | 2023 | 2022 | 2022 Oct- | 2022 | |
|---|---|---|---|---|---|---|
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | 2023 Sep | Jan-Dec |
| Interest-bearing liabilities excluding leases | ||||||
| Non-current interest-bearing liabilities | 4,161.6 | 6,088.6 | 4,161.6 | 6,088.6 | 4,161.6 | 5,109.6 |
| Non-current lease liabilities | 194.4 | 163.7 | 194.4 | 163.7 | 194.4 | 189.1 |
| Current interest-bearing liabilities | 2,489.6 | 1,196.2 | 2,489.6 | 1,196.2 | 2,489.6 | 2,233.7 |
| Current lease liabilities | 33.3 | 16.9 | 33.3 | 16.9 | 33.3 | 20.5 |
| Interest-bearing liabilities | 6,878.9 | 7,465.4 | 6,878.9 | 7,465.4 | 6,878.9 | 7,552.9 |
| Lease liabilities | -227.7 | -180.6 | -227.7 | -180.6 | -227.7 | -209.6 |
| Interest-bearing liabilities excluding leases | 6,651.2 | 7,284.8 | 6,651.2 | 7,284.8 | 6,651.2 | 7,343.3 |
| Net debt | ||||||
| Interest-bearing liabilities excluding leases | 6,651.2 | 7,284.8 | 6,651.2 | 7,284.8 | 6,651.2 | 7,343.3 |
| Cash and cash equivalents | -223.5 | -378.8 | -223.5 | -378.8 | -223.5 | -298.0 |
| Net debt | 6,427.7 | 6,906.0 | 6,427.7 | 6,906.0 | 6,427.7 | 7,045.3 |
| Loan-to-value ratio | ||||||
| Interest-bearing liabilities excluding leases | 6,651.2 | 7,284.8 | 6,651.2 | 7,284.8 | 6,651.2 | 7,343.3 |
| Total assets | 10,200.7 | 11,594.2 | 10,200.7 | 11,594.2 | 10,200.7 | 11,341.7 |
| Loan-to-value ratio, per cent | 65.2 | 62.8 | 65.2 | 62.8 | 65.2 | 64.7 |
| Net loan-to-value ratio | ||||||
| Net debt | 6,427.7 | 6,906.0 | 6,427.7 | 6,906.0 | 6,427.7 | 7,045.3 |
| Total assets less cash and cash equivalents | 9,977.2 | 11,215.3 | 9,977.2 | 11,215.3 | 9,977.2 | 11,043.7 |
| Net loan-to-value ratio, per cent | 64.4 | 61.6 | 64.4 | 61.6 | 64.4 | 63.8 |
| Interest-coverage ratio, 12 months | ||||||
| Operating surplus | - | - | - | - | 292.3 | 243.0 |
| Administrative expenses, property management | - | - | - | - | -14.4 | -16.3 |
| Net interest income/expense | - | - | - | - | -175.4 | -128.1 |
| Interest-coverage ratio (12 months), times | - | - | - | - | 1.6 | 1.8 |
| EPRA NRV | ||||||
| Equity | 2,534.6 | 3,269.1 | 2,534.6 | 3,269.1 | 2,534.6 | 2,986.1 |
| Derivatives | -203.5 | -148.7 | -203.5 | -148.7 | -203.5 | -142.9 |
| Deferred tax | 441.4 | 588.6 | 441.4 | 588.6 | 441.4 | 540.2 |
| EPRA NRV | 2,772.5 | 3,709.1 | 2,772.5 | 3,709.1 | 2,772.5 | 3,383.5 |
| Less non-controlling interests | - | -0.4 | - | -0.4 | - | -0.3 |
| 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 | 1,803.6 | 2,739.7 | 1,803.6 | 2,739.7 | 1,803.6 | 2,414.3 |
| Growth in EPRA NRV per ordinary share, 12 months | ||||||
| OB EPRA NRV attributable to ordinary shareholders, SEK | - | - | - | - | 31.91 | 27.91 |
| CB EPRA NRV attributable to ordinary shareholders, SEK | - | - | - | - | 21.01 | 28.12 |
| Growth in EPRA NRV per ordinary share, % | - | - | - | - | -34.2 | 0.7 |
FINANCIAL CALENDAR
FINANCIAL REPORTS AND COMPANY EVENTS
| Year-end Report, 2023 | 14 February 2024 | |||
|---|---|---|---|---|
| Annual report | 3 April 2024 | |||
| Q1 Interim Report, January-March 2024 | 25 April 2024 | |||
| Annual general meeting | 25 April 2024 | |||
| Q2 Interim Report, January-June 2024 | 17 July 2024 | |||
| Q3 Interim Report, January-September 2024 | 13 November 2024 | |||
| Year-end Report, 2024 | 13 February 2025 |
SUGGESTED DIVIDEND, PREFERRED SHARES
| Last trading day, including right to dividend payment | 6 December 2023 |
|---|---|
| Record date for dividend payment | 8 December 2023 |
| Expected date of payment from Euroclear | 13 December 2023 |
| Last trading day, including right to dividend payment | 6 March 2024 |
| Record date for dividend payment | 8 March 2024 |
| Expected date of payment from Euroclear | 13 March 2024 |
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 8 November 2023.
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