Interim Report January – March 2003

2003-05-15

Profits
For the period January – March, profit after taxes amounted to MSEK 13.2. This result includes gains on sales of properties in the amount of MSEK 3.4. Rental revenue amounted to MSEK 64.7 and the operating surplus was MSEK 35.9. Net financial items were MSEK -22.5.
 
Cash flow and financial position
The cash flow amounted to MSEK 24.3 and the equity ratio at the end of the period stood at 24.0 percent, equivalent to 26.2 percent after full conversion. Shareholders’ equity was MSEK 535.1 as of March 31, 2003, liquid funds were MSEK 87.2 and interest-bearing liabilities at the same point in time was MSEK 1,553. The average interest on borrowings was 5.8 percent at the end of the period, with an average interest-fixing period of 2.5 years.
 
Revenue and property costs
Rental revenue amounted to MSEK 64.7 for the period January – March 2003 and property costs amounted to MSEK 28.8, making the operating surplus MSEK 35.9. As of March 31 the occupancy rate for the property holdings was 89 percent of rental values, which is unchanged compared to the situation at year-end 2002.
 
Operations
Klövern is a real estate company focused on acquiring, developing and selling high-yielding properties in large and medium-sized towns outside major city regions. Klövern seeks to expand by acquiring properties with the intention of achieving sufficient size to lay the foundations for effective management and a leading position. Klövern will also achieve sufficient operational size and stock market capitalization to create the right prospects for its share to become an attractive investment alternative for players in the stock market.
 
Property holdings
Klövern’s property holdings as of March 31, 2003 are summarized below:
 
Type of property
Number of properties
Floor-space, sq.m.1)
Rental value, MSEK
Economic 
occupancy rate, %
Offices
29
147,459
130.2
89
Industry/warehouse
30
162,921
91.9
89
Retail
9
32,137
27.1
94
Education
3
18,264
14.9
77
Residential
2
11,312
9.2
89
Other 2)
5,704
10.3
92
Total
73
377,797
283.6
89
 
1)       Reclassification of space within the properties has resulted in a net change in rentable space of 900 square meters compared to the situation December 31, 2002.
2)       This category includes parking and garage space with an aggregate rental value of MSEK 3.7.
 
Financing
As of March 31, 2003, interest-bearing liabilities stood at MSEK 1,553 with an average annual borrowing rate of 5.8 percent and an average period of fixed interest of 2.5 years. Loans maturing during 2003 had an average period fixed interest of 63 days. The average period of fixed interest was 3.8 years as of March 31.
 
Loan structure as of March 31, 2003
 
 
Maturity
MSEK 
Average interest rate, %
Percentage
of total
2003
437
5.3
28
2004
64
6.1
4
2005
415
5.8
27
2006
129
6.0
8
2007
404
6.2
26
2008
55
5.8
4
Subordinated loan
50
6.3
3
Total
1,553
5.8
100
 
Capital expenditures
A total of MSEK 25 was invested during the period in renovations of properties, primarily in Norrköping, Nyköping and Uppsala. The amounts have been capitalized in their entirety.
 
Property sales
A total of seven properties were sold for a total price of MSEK 39, for a gain of MSEK 3.4. These sales mean that Klövern leaves seven localities where the holdings were only one smaller property per locality.
 
 
Subordinated convertible debenture loan
During 2002 Klövern issued a subordinated convertible debenture loan in the amount of MSEK 50. The loan – Klövern K2b – is listed, falls due for repayment June 30, 2004 and carries interest at a rate of 6.25 percent. Conversion to shares may take place during the period August 15, 2002 – June 18, 2004 at a conversion price of SEK 11 per share. A total of 4 545 455 class B shares may be added upon full conversion. The greater part of the subordinated convertible debenture loan – 64 percent – is held by Investment AB Öresund, who upon conversion to shares can increase its holding in Klövern by 2.9 million class B shares.
 
Reporting and accounting principles
Owing to Klövern’s change of direction, from consulting operations to real estate during the second half of 2002, changes and complementary adjustments were made in the financial reporting. The same accounting principles and calculation methods were used as in Klövern’s Annual Report 2002. All historical comparative data in this interim report for the first six months of 2002 are in their entirety attributable to the then Adcore’s consulting business. Additional explanatory comments will be found in conjunction with the income statements, balance sheets, cash flow statements and key financial indicator reporting
 

Events after the end of the reporting period
 
Annual General Meeting held April 23, 2003
At Klövern’s regularly scheduled Annual General Meeting held April 23, 2003 Stefan Dahlbo and Erik Paulsson were re-elected. The Meeting decided to elect the following as new members of the Board of Directors: Gustaf Hermelin, President & CEO of Klövern AB, Anna-Greta Lundh, President of Länsförsäkringar Södermanland, Bo Pettersson, President of Catella Capital AB, Johan Piehl, President of Förvaltnings AB Charrow and Anders Swensson, President of Nect Management AB. Directors Lars Evander and Ole Oftedal had requested not to be considered for re-election. At the subsequent statutory Board of Directors meeting Stefan Dahlbo was re-elected as Chairman. It was also decided to select the registered auditing firm of Ernst & Young as auditors for a term of four years and that Klövern’s registered office will be located in Nyköping. The Meeting resolved that a provision be added to the Articles of Incorporation to the effect that all outstanding class A shares outstanding as of January 2, 2004 shall be automatically converted to class B shares on that day. This means that the Company after the conversion scheduled for January 2, 2004 will have only one class of share. The Annual General Meeting resolved to authorize the Board of Directors to issue – on one or more occasions, and with or without departure from preferential rights for shareholders – up to 20.000.000 class B shares, each share in a nominal amount of SEK 5. Payment for the new shares may be made in kind, through offset or in cash.
 
Klövern’s shares again on the regular O-list 
When Klövern (the former Adcore AB) on May 16, 2002 announced that the Company was to change its business orientation from IT consulting services to real estate operations, the Stockholm Stock Exchange decided that the Company’s shares would be traded on the observation section of the O-list and that the Company would have to re-apply for listing. After completing the required process of examination during the spring of 2003, the Stockholm Stock Exchange ruled that the Company satisfies the requirements for listing of its shares on the O-list of the Exchange. The Stockholm Stock Exchange therefore decided that the Company’s shares again should be traded on the O-list from April 30, 2003. Klövern’s prospectus for re-listing on the regular O-list is available on Klövern’s home page www.staging-wwwklovernse.wp4.triggerfish.cloud.
 
Hagströmer & Qviberg appointed to act as market maker
Klövern has entered into an agreement with Hagströmer & Qviberg Fondkommission to act as market maker in Klövern’ class B share starting May 2, 2003. The purpose of market making is to increase the liquidity in the Company’ shares. In brief, the agreement means that the market maker quotes a bid and offered price for Klövern’s class B share and undertakes to buy and sell shares at these prices.
 
Schedule of financial reporting
Semi-annual report January – June 2003   August, 21 2003
Interim report January – September 2003   November 5, 2003
 
This interim report has not been subject to examination by the Company’s auditors.
 
 
Nyköping, May 15, 2003
Klövern AB (publ)
 
Gustaf Hermelin
President & CEO
 
 
 
For further information:
An analyst meeting will be held at 8:00 a.m., Friday, May 16 at Operaterrassen in Stockholm. Application to attend may be made via Financial Hearing’s home page www.financialhearings.com
Gustaf Hermelin, CEO, telephone +46-155-44 33 10, +46-70-560 00 00 gustaf.hermelin@staging-wwwklovernse.wp4.triggerfish.cloud
Anders Lundquist, CFO, telephone +46-155-44 33 20, +46-70-528 43 33, anders.lundquist@staging-wwwklovernse.wp4.triggerfish.cloud
 
 
The full report including tables can be downloaded from the following link: