In This Article:
Release Date: April 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Wallenstam AB (FRA:WAE) reported a 7% increase in net operating income, reflecting strong operational performance.
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The company achieved a high occupancy rate with residential properties fully let and commercial properties at 91% occupancy.
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Wallenstam AB completed 343 rental apartments in the first quarter, all of which are fully let, demonstrating strong demand.
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The company has a stable balance sheet with an equity ratio of 44% and a loan-to-value (LTV) ratio of 47%.
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Wallenstam AB's newly constructed residential property in Naa Grace won an award for Sweden's finest new construction in 2024, highlighting the quality of their developments.
Negative Points
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Operating expenses increased by almost 10%, driven by higher property management costs and tariff increases.
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The administration expenses rose by 10 million due to new IT systems and increased personnel expenses.
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The interest coverage ratio is relatively low at 2.8 times, which could indicate potential financial strain if interest rates rise.
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The average interest rate during the first quarter was 2.54%, which, while lower than last year, still represents a significant cost.
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The company has increased its interest-bearing liabilities by approximately 2 billion during the quarter, which could impact future financial flexibility.
Q & A Highlights
Q: Can you provide more details on the financial performance for the first quarter of 2025? A: Susan Linde, CFO, reported a 7% increase in net operating income, amounting to 570 million kronor. Rental income rose by 52 million kronor, with residentials growing by 4% and commercials by 1.6%. The financial net improved by 14%, and the profit after tax was 573 million kronor, up from 333 million kronor the previous year.
Q: What are the current occupancy rates for Wallenstam's properties? A: Susan Linde stated that the overall occupancy rate is 96%, with residential properties fully let at 100% and commercial properties at 91%.
Q: How is Wallenstam addressing energy efficiency in its properties? A: The company is focused on improving energy classes, with 60% of rental value having energy class 1A to C. They have initiated an energy-saving project in Rosta, Stockholm, involving approximately 900 apartments, to enhance sustainability and meet climate goals.
Q: Could you elaborate on the recent property acquisitions and developments? A: Wallenstam acquired land in Stockholm for future projects and completed several residential projects, including Naka Grace and Elttoritier 1. They also started new projects in Gothenburg, such as Kalebeck, contributing to a total of 1,177 apartments in production.