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• Revenue Growth: Like-for-like revenue increased by 2.7%.

• Net Operating Income Growth: Like-for-like net operating income grew by 4.3%.

• Property Valuation: Property valuations remained flat during the quarter.

• Net Asset Value Target: New financial target to grow net asset value by a minimum of 12% per year.

• Return on Equity: Minimum return on equity set at 15% for the development segment.

• Interest Coverage Ratio: Interest coverage ratio for the quarter is 1.8.

• Average Interest Rate: Average interest rate is 2.5%.

• Loan-to-Value Ratio: Slight decrease in loan-to-value ratio to 60%.

• Secure Loan-to-Value Ratio: Secure loan-to-value ratio at 22%.

• Bottom Line: Net income for the quarter amounted to SEK1.6 billion.

• Unrealized Changes in Value: Unrealized changes in value amounted to SEK36 million.

• FX Gains: Other financial items driven by FX gains of SEK1.9 billion.

• Warning! GuruFocus has detected 8 Warning Signs with FRA:JSIA.

Release Date: May 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Samhallsbyggnadsbolaget i Norden AB (FRA:JSIA) reported a 2.7% increase in like-for-like revenue and a 4.3% increase in net operating income, indicating strong operational performance.

• The company set a new financial target to grow net asset value by a minimum of 12% per year, showcasing a clear growth strategy.

• Samhallsbyggnadsbolaget i Norden AB is making progress towards achieving investment-grade ratings for its core holdings, which could enhance funding opportunities.

• The company has a stable funding structure with long-term assets and a favorable average interest rate of 2.5%, providing financial stability.

• Efforts to reduce administrative costs and optimize property management are underway, which could improve profitability in the long term.

Negative Points

• The company is facing high administrative costs due to legal issues and restructuring efforts, which have impacted financial performance.

• There is a need to reduce the group's debt level, and the company has suspended dividends until an investment-grade rating is achieved.

• The property valuations remained flat during the quarter, indicating limited growth in asset value.

• Samhallsbyggnadsbolaget i Norden AB is reliant on selling non-core assets to manage debt, which could be challenging in a fluctuating market.

• The timeline for achieving an improved credit rating remains uncertain, which could affect future funding and investment opportunities.

Q & A Highlights

Q: Can you provide details on the progress of selling non-core assets and the potential cash from selling an equity stake in community service properties? A: We are in discussions to divest mainly residential buildings outside of our core holdings, aiming to reduce them to zero over the next few years. We are not in a hurry and aim to sell at the best possible price. Regarding the community sector, assets are valued at around SEK40 billion, with potential equity of SEK20 billion. If we decide to raise equity, it could be up to SEK10 billion, assuming no discount on equity value.