Release Date: August 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Samhallsbyggnadsbolaget i Norden AB (FRA:JSIA, Financial) reported a strong 7% growth in like-for-like revenues and a 9% increase in net operating income for Q2 2024.
- The company successfully reduced its debt by close to SEK8 billion during the quarter and SEK43 billion over the last two years.
- Samhallsbyggnadsbolaget i Norden AB secured a strong investment-grade rating for its education segment, allowing it to borrow SEK9 billion in the capital markets.
- The company has a strategic plan to divest up to 49% of Sveafastigheter, which is expected to cover capital needs for 2024 and 2025.
- The company anticipates a positive trend in property yields due to stronger capital market sentiment and expects rental income to increase by 10% more than inflation in the coming years.
Negative Points
- There was a 1.4% decrease in property values during the quarter, with a total decrease of nearly SEK3.6 billion due to both realized and unrealized changes.
- Administrative and restructuring expenses increased compared to last year, mainly due to advisory costs and legal fees.
- The company experienced a slight decrease in occupancy rates, particularly in Finland, although it expects to recover to normal levels.
- Samhallsbyggnadsbolaget i Norden AB faces challenges in securing funding for its community properties segment, which still requires work to attract equity and debt at attractive levels.
- The company has no plans for additional dividends in the foreseeable future and will maintain a cautious stance on new investments and acquisitions.
Q & A Highlights
Q: Can you provide an update on the liquidity needed to meet Q1 2025 bond maturities?
A: We are considering including a liquidity graph again in our reports. A key piece of the puzzle is the successful IPO or strategic partnership for Sveafastigheter. If that doesn't materialize as expected, we have other plans, including asset sales.
Q: Is the plan to sell up to 49% of Sveafastigheter shares related to covering SBB's capital needs for 2024 and 2025?
A: Yes, we plan to sell up to 49% of the shares in Sveafastigheter to cover our capital needs.
Q: Regarding the SEK3.4 billion receivables from SBB social facilities, is repayment expected in the near term?
A: We have a long-term agreement with Castlelake, and we expect the relationship to last for many years.
Q: How does the cost of Nordiqus market debt compare to the Castlelake financing?
A: We do not disclose the terms and conditions, including the pricing, of our transactions.
Q: What are the net cash proceeds from the Castlelake financing after deducting costs and bank debt?
A: We haven't disclosed specific figures as it's complex due to debt restructuring and security changes. The net proceeds are lower than SEK5.7 billion due to bank debt repayments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
