*The number of apartments under property management increased by 1,168. Business segment Construction handed over 806 apartments to property management during the fourth quarter which is a record.
*Strengthening of the balance sheet trough a new issue during 2023 and ongoing processes to divest a housing property portfolio in
*About
Financial ratios for the full year 1 January-
(corresponding period in 2022)
- Rental income:
SEK 480.2 million (384.2) -
Profit from property management:
SEK 108.3 million (130.7) -
Profit for the period:
SEK -398.1 million (907.4) -
Net investments in investment properties:
SEK 2,226.8 million (2,707.0) -
Investment properties:
SEK 14,870.9 million (13,094.6) -
Long-term net asset value (NAV):
SEK 5,803.5 (5,768.3) - Number of apartments under management: 4,876 (3,708)
- Number of construction starts, apartments: 450 (1 125)
- Number of apartments under construction: 1,549 (2,171)
- Number of apartments under project development: 4,176 (4,346)
- Interest coverage ratio (year): 1.7 multiple (2.2)
- Equity/assets ratio: 30.3% (33.9)
- Debt-to-equity ratio: 60.2% (55.4)
-
Profit from property management per share:
SEK 0.49 per share* (0.61) -
Long-term net asset value (NAV) per share:
SEK 24.25 per share* (26.79) - Growth in profit from property management per share: -19.3%* (28.9)
- Growth in long-term net asset value (NAV) per share: -9.5%* (15.9)
-
Earnings per share*/**:
SEK -1.96 per share (4.13)
* Adjusted for new issue of 24,000,000 Class B shares as of 28 September and24 October 2023 .
** There are no potential shares (e.g. convertibles in the company, and accordingly no dilution effect).
A message from the CEO
The fourth quarter was an intense period for K-Fastigheter. The Construction business area completed 806 apartments in the final three months of the year. This was a record for the operations, and can be compared to 726 apartments completed by the business area for all of 2022. In addition, completion and moving in continued in
At the same time, we cannot shy away from the fact that some locations face challenging conditions. This has meant that some projects have excessively high vacancies on moving in, which impact our vacancies as we have expanded rapidly and completed many projects in a short period of time. We are working hard to adjust this imbalance. In this context, I would like to emphasize that succession letting is making positive progress, and that the higher vacancies are due to high levels and delays in different new production projects. New production projects also means that, in some cases, tenancies stipulate moving in at a later date than on completion. Reducing the number of vacancies is a priority, and this will take some time to resolve fully. The prospects for achieving this are good in the first half-year, as we anticipate a more steady rate of completions for new projects, i.e. less concentrated than during the final quarter of 2023. This improves the conditions for our letting operations.
During the year, our portfolio expanded by 1,168 apartments, and by the end of the year we had 4,876 apartments under management. This represents an increase of an incredible 31 percent on the previous year. At the end of the year, rental values totaled
Approximately 80 percent of our property holding is excluded from collective rent negotiations. In this part of the holding, rents increased by 5.45 percent on
Interest rates are now stabilizing. In addition, lower base rates can now be expected earlier than forecast, in line with the Riksbank's statement on interest rates from early February. This is a positive development that provides the property and construction sector a new normal to proceed from. K-Fastigheter remains aligned with around a dozen banks, entirely without bond financing. At the end of the quarter, 91 percent of our interest-bearing liabilities related to acquisition financing, with completed investment and business properties hedged at an average interest rate of 3.22 percent. The average interest period was 3.5 years.
There is still extensive underlying demand for new housing in
The market value of our existing properties was marginally negatively affected in the final quarter. Rent increases ahead of 2024 contributed to limiting the downturn. A high rate of completions, new construction starts and acquisitions of building rights ensure that property values are increasing despite the lower valuations. In total, we increased property values by just over 14 percent in 2023, to close to
We are continuing to gradually adapt operations in the Prefab business area in order to meet the volumes required over the coming months. Our order book for the coming year could be described as imbalanced. In the short term, we face a tough period with lower capacity utilization, followed by a rapid increase in activity during the second half of 2024. This follows successful sales efforts with several major key contracts signed, including agreements for residential properties at Orminge Torg in Nacka, and premises for Fortifikationsverket at LV6 i Halmstad. Production levels in the second half of the year can be described as similar to those prevailing before the market downturn started. By gradually adapting operations, we expect to satisfy increased volumes in the second half of the year through efficient operations, a sharper customer focus, as well as collaboration and optimization between our production plants. The sharp slowdown in housing construction in
At the end of the year, our financial and operational targets expired. I am able to conclude that we succeeded in achieving most of the targets over an economic cycle. Net asset value has increased by 378 percent since the reference year 2018, and annual growth per share was 25 percent. Profit from property management increased by 163 percent and annual growth per share was 10 percent, which was below our target. For all years, we exceeded the minimum level for equity/assets and debt-to-equity, while our interest coverage ratio of 1.7 at the end of 2023 was slightly below our target level of 1.75. Interest coverage ratio is set to improve gradually at a pace with stronger profit from property management and normalizing sales in the Prefab business area.
With regard to our operational goals, we clearly exceeded the target of 80 percent of rental revenue derived from residential properties. The target of 1,300 annual construction starts by the end of 2023 was revised downwards to the previous target of 1,000 in connection with the Q1 report for 2023. For 2023, we did not reach our target of 1,000 construction starts for reasons including lengthy planning approval processes and more challenging funding conditions. We started construction 0f a total of 450 apartments in 2023. We effectively reached our target of 5,000 apartments under management as of the date of this report, as we now have 4,999 apartments under management. This represents incredible progress, and I cannot thank all the Group's current and previous employees enough, who have all contributed to making this possible.
But we will not rest on our laurels. K-Fastigheter remains an aggressive and innovative market operator. In connection with the Interim Report 2024 for the first quarter, we will be presenting a new business plan and targets for the period 2024-2028. Our ambition is also to present these in more detail at a Capital Markets Day in
We strive to be an attractive employer where each individual can have an influence and opportunities for personal development within the Group. Accordingly, I am very proud that we were awarded the prize
-
A complete Year End report for 2023 is attached and published on: k-fastigheter.com/en/investors/financial-reports
A presentation of the earnings and operations will be published on: k-fastigheter.com/en/investors/presentations
For more information, please contact:
Johan Hammarqvist, Head of Investor Relations and Communications
e-mail: johan.hammarqvist@k-fastigheter.se, telephone: +46 (0)10-167 60 99
This disclosure contains information that
K-Fastigheter is much more than a property company. Through an integrated process, we build our business in the four business areas project development, prefab, construction and property management. To enhance cost efficiency and cut construction times, K-Fastigheter has chosen to work with three concept houses, developed in-house and constructed for own management. K-Fastigheter offers close to 4,900 homes from
https://news.cision.com/k-fast-holding-ab/r/k-fast-holding-ab--publ--year-end-report-january-december-2023,c3928756
https://mb.cision.com/Main/18395/3928756/2605892.pdf
https://mb.cision.com/Public/18395/3928756/b642ecd95214ad01.pdf
(c) 2024 Cision. All rights reserved., source