*Share transfer agreement signed with Brinova regarding divestment of our property portfolio in Region South. Payment will be made in the form of newly issued shares in Brinova which will make K-Fastigheter the largest owner of the company with an ownership of 58.4 percent.
*928 apartments construction started during the year and a combined 2,052 apartments under construction at the end of the year.
*Continued improved occupancy rate to 96.4% and improved profit from property management to SEK 135.1 million. Surplus ratio rose to 66.5 percent.
Financial ratios for the full year 1 January-31 December 2024
(corresponding period in 2023 in brackets)
- Rental income: SEK 603.4 million (480.2)
- Profit from property management: SEK 135.1 million (112.6)
- Profit from property management per share: SEK 0.55 per share* (0.51)
- Growth in profit from property management per share: 8.5%* (-16.1)
- Result in business segment Construction before taxes: SEK 284.6 million (297.8)
- Earnings per share in business segment Construction: SEK 1.16 per share* (1.35)
- Growth in earnings per share in business segment Construction: -13.6%*
(-54.9) - Profit for the period: SEK 74.8 million (-398.1)
- Earnings per share*/**: SEK 0.20 per share (-1.96)
- Long-term net asset value (NAV): SEK 6,206.5 million (5,803.5)
- Long-term net asset value (NAV) per share: SEK 25.23 per share* (24.25)
- Growth in long-term net asset value (NAV) per share: 4.0%* (-9.5)
- Interest coverage ratio (year): 1.6 multiple (1.7)
- Equity/assets ratio: 30.4% (30,3)
- Debt-to-equity ratio: 59.1% (60.2)
- Number of construction starts, apartments: 928 (450)
- Number of apartments under construction: 2,052 (1,549)
- Number of apartments under project development: 1,893 (4,176)
- Number of apartments under management: 4,985 (4,876)
- Net investments in investment properties: SEK 525.6 million (2,226.8)
- Investment properties: SEK 15,616.5 million (14,870.9)
* Adjusted for new issues during 2023 and 2024..
** There are no potential shares (e.g. convertibles in the company, and accordingly no dilution effect).
A message from the CEO
It was an eventful year in K-Fastigheter's history, marked by a continued challenging market climate. However, the market has stabilized and is even beginning to turn around, albeit at a slow pace. I would like to start by thanking everyone who shares responsibility within the Group for their hard work and dedication during a year of significant changes at K-Fastigheter.
There is much to say about 2024, but let me start with the major news from December. At that time, K-Fastigheter signed an agreement with Brinova Fastigheter AB to divest our property portfolio in region South, with a total property value of SEK 10,760 million. Payment will be made in the form of newly issued shares in Brinova, giving K-Fastigheter an ownership stake of up to 58.4 percent, making it the largest shareholder after the transaction. The exact number of shares K-Fastigheter will receive depends on the condition of the divested portfolio after the completed transaction as of the transfer date on 1 April 2025. Brinova will be consolidated into K-Fast Holding AB's financial statements and will therefore be classified as a subsidiary for the time being. The transaction establishes a significant property portfolio in the new Brinova focused on housing in the Öresund region. The transaction also enhances the new Brinova's prospects for increased earnings, partly due to the overlap between the holdings in region South and the existing Brinova portfolio. This generates economies of scale and we assess that K-Fastigheter will benefit from enhanced financial return potential through its stake in Brinova compared to solely holding its own portfolio in region South. A larger company with a higher market capitalization and, over time, a more diversified shareholder base is also expected to enhance share liquidity, attract greater interest from the capital markets, and potentially secure the inclusion of the Brinova share in Nasdaq Stockholm Large Cap as well as property-related stock indices such as EPRA in the long term. I can also conclude that this transaction increases K-Fastigheter's earnings ability in the management of completed properties by approximately 15 percent, based on the companies' profit figures as of 30 September 2024 and K-Fastigheter's shareholding in Brinova of 58.4 percent.
K-Fastigheter will continue to be a property company, while at the same time being so much more than just a property company. This is what makes K-Fastigheter and our business concept unique. We control the whole chain - from foundation to finished home. Our property holdings in regions West and East, as well as our ongoing construction projects, are continuing as planned. Our operations in Construction, with the business areas Project development, Prefab and Building remain unchanged. Since 2019, more than 80 percent of our profit has come from the Construction operating segment. To clarify this, we divided our operations into the Construction and Property Management segments in spring 2024, in conjunction with presenting a new business plan for the 2024 to 2028 period. The goal is to start construction on 1,000 apartments annually and gradually accelerate to 1,200 construction starts per year by 2028. Additionally, we have set a goal for 30 to 50 percent of construction starts to be divested in order to finance new project launches. The high profitability of the Construction segment may historically have been overshadowed by the balance sheet dominated by properties. However, seen in isolation, we have generated significant returns on our invested equity in Construction and Project Development, which we hope to better reveal the value of in the future. At the end of 2024, the Prefab business area's order book totaled SEK 1,056 million, compared to SEK 1,058 million year-on-year. 61 percent of volumes are derived from external customers and 39 percent from intra-Group frame deliveries. The turnaround in Prefab is important for the Group, but further effort will be needed to secure more contracts. The start of 2025 has been positive in terms of winning new volumes. The operations are well-prepared for the future, and the challenging period we have experienced has led to a positive diversification of generated volumes. While housing still makes up the majority, its share is now somewhat smaller than before.
In 2024, we began construction on a total of 928 apartments, including 74 in Vallentuna in collaboration with Titania AB and 161 in Örebro in partnership with Kilenkrysset. This compares to 450 construction starts of apartments in 2023. At year-end, a total of 2,052 apartments were under construction, including 348 in the projects Ballerup in Copenhagen, Victoria 22 in Helsingborg, and Skjutskontoret 3 in Malmö, which will be handed over to Brinova upon completion. In the Construction operating segment, Novum Samhällsfastigheter, in which K-Fastigheter holds a 50 percent stake, began construction of retirement homes in Svedala.
We ended 2024 with a financial occupancy rate of 96.4 percent in our property portfolio. This compares to 91.9 percent in the previous year. This improvement is the result of the dedicated and goal-oriented efforts of our management organization. As a result of the improved occupancy rate and rental increases, the surplus ratio rose from 64.0 percent to 66.5 percent during the year, while profit from property management totaled SEK 135.1 million. Net letting remains positive, and the work continues to improve the financial occupancy rate further.
Since our listing on Nasdaq Stockholm in November 2019, the long-term net asset value per share, adjusted for share splits and new issues, has more than doubled to SEK 25.23. Naturally, I would have preferred a different trajectory for the share price during this period. However, I can conclude that daily operations, which form the foundation of the Group, have delivered an annual net asset value per share growth of 20 percent since listing, despite challenging times and market conditions. From this position, we will continue to develop K-Fastigheter and enhance our market offering.
- Jacob Karlsson, February 2025
A complete Year End report for January-December 2024 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-Fast Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on February 14th, 2025, 8 AM CET.
K-Fastigheter is much more than a property company. Through an integrated process, we build our business in the two business segments Construction and Property Management. In business segment Construction the objective is to deliver completed housing units based on the Group's concept houses, developed in-house, as well as high-quality frame solutions. Our prefab operations is organized in the subsidiary K-Prefab. To enhance cost efficiency and cut construction times, K-Fastigheter has chosen to work with three concept houses for housing, developed in-house. Business segment Property Management manages the Groups property portfolio with focus on housing. K-Fastigheter offers close to 5,000 homes from Copenhagen in the south to Gävle in the north and is continuously assessing new markets. K-Fastigheter strive to create attractive homes with a high comfort factor. The Group's property portfolio has a book value SEK 15.6 billion. Annual rental value in invest properties under management amounts to close to SEK 680 million. Since November 2019, the company's Class B shares have been traded on Nasdaq Stockholm under the (ticker: KFAST B). Read more at k-fastigheter.com
