Fabege (FABG) Q1 2009 earnings summary

Executive summary

• Property management earnings rose 10% YoY to SEK 148m, while the after-tax result was an SEK 81m loss, mainly reflecting property valuation declines and tax charges.

• Net operating income increased to SEK 348m despite lower rental income from property sales; the surplus ratio improved 3 percentage points to 64%.

Financial highlights

• Rental income was SEK 548m vs SEK 561m; comparable-property rental income increased 2% and net operating income increased 4%.

• Net operating income was SEK 348m vs SEK 344m; profit from property management activities was SEK 148m vs SEK 135m.

• Profit after financial items fell to SEK 31m from SEK 348m; loss after tax was SEK 81m vs profit of SEK 388m.

• Diluted EPS was SEK -0.49 vs SEK 2.28; unrealised property value changes were SEK -119m vs SEK 88m.

Outlook and guidance

• Rental income was expected to remain stable through 2009; priorities included tenant retention, cost control, a higher surplus ratio and a strong balance sheet.

• Market conditions were expected to slow leasing decisions; management cited low vacancies, stable revenues and favourable interest rate trends as supports for the rest of 2009.

• Projects in progress were expected to raise annual rent from SEK 63m to SEK 176m when fully let; largest projects had 93% occupancy as of 31 March.