Klövern AB (publ): Interim Report January – March 2015


» Income increased by 14 per cent to SEK 669 million (587).

» The operating surplus increased by 14 per cent to SEK 419 million (368).

» Profit from property management increased by 39 per cent to SEK 227 million (163).

» Changes in value of properties amounted to SEK 376 million (157), of derivatives to SEK -73 million (-156) and share in profit of associated companies amounted to SEK -1 million (-45).

» Net profit amounted to SEK 400 million (87), corresponding to SEK 0.35 (0.04) per ordinary share.

» Taking possession of 5 properties for SEK 357 million and sale of 6 properties for SEK 185 million.

Statement by the CEO

A strong first quarter
Klövern has shown a strong result for the first quarter of the year. A continued buoyant rental market, combined with somewhat lower costs than expected, because of a mild winter, has made a positive contribution. Interest in properties continues to increase, as shown by rising share prices and ever higher price expectations among vendors of real estate. At the same time, the financial situation is favourable and the trend towards decreasing financing costs persists.

The rental market is strong and income is developing well. It is gratifying that Klövern can report a positive net moving-in for this quarter as well.

The operating surplus for a comparable portfolio is slightly higher than last year, which indicates that there are favourable prospects for 2015 being another good year for Klövern. Costs have been positively affected by a mild winter, which has led to lower costs than expected, for heating,
in particular.

Interest rates have continued to fall, which has decreased Klövern’s financing cost. Klövern’s loans are mainly based on three-month Stibor as a ground for computation of interest, with a supplement for the margin required by lenders. Stibor 3m amounted on 31 March to -0.06 per cent, which is a unique situation. Another reference rate that Klövern monitors carefully is the 10-year swap rate, which, simplified, shows the price for interest rate hedging with a ten-year term. On 31 March, it was 1.00 per cent, which is exceptionally low. The financing possibilities are accordingly very good at present and Klövern’s interest expense is falling apace with loans being renegotiated.

In February, Klövern issued a new bond with a four-year maturity. This was mainly intended to re-finance bonds issued in 2012 that matured in March this year. As of this refinancing, Klövern has a balanced maturity structure of its bonds. Klövern has a very strong balance sheet with an adjusted equity ratio of 36.7 per cent at 31 March. The real estate market is currently very strong, not least in the light of the favourable terms for financing and a growing share of foreign investors as well as rising interest among Swedish institutional investors. The market’s signals are that low interest rates will persist for a long period and the real estate segment will then be of great interest because of the opportunities for an attractive yield.

We have carried out many exciting transactions but I regard the purchase of two properties in Gothenburg’s fishing port as especially attractive. Gothenburg is a strong market and the city will gradually continue its expansion in the area around the fishing port, not least after the planned
move of the Stena terminal. Klövern is a long-term owner in Gothenburg and will continue to make a contribution to the development of the city.

We are happy with the strong start of the year. Interest in real estate has seldom been as great as it is now and there are a lot of indications that 2015 will be yet another successful year for Klövern.

Rutger Arnhult
CEO, Klövern

For additional information:
Rutger Arnhult, CEO, +46 (0)70-458 24 70, rutger.arnhult@staging-wwwklovernse.wp4.triggerfish.cloud
Lars Norrby, IR, +46 (0)76-777 38 00, lars.norrby@staging-wwwklovernse.wp4.triggerfish.cloud

Klövern is a real estate company committed to working closely with customers to offer them efficient premises in Swedish growth regions. As of March 31, 2015, the value of the properties totaled SEK 31.0 billion and the rental value on an annual basis was SEK 3.0 billion. Klövern is listed on Nasdaq Stockholm. For further information, see www.staging-wwwklovernse.wp4.triggerfish.cloud.

Klövern AB (publ), Box 1024, 611 29 Nyköping. Phone: +46 155-44 33 00. E-mail: info@staging-wwwklovernse.wp4.triggerfish.cloud.

This information is such that Klövern AB (publ) is obliged to disclose under the Securities Market Act and/or the Financial Instruments Trading Act. The information was made available for publication on 23 April 2015.