Fabege (FABG) Q3 2024 earnings summary

Executive summary

• Portfolio focused on Stockholm with 100 properties totaling 1.3 million sqm and a value of SEK 78.2 billion; Q3 saw a positive property valuation after seven quarters of declines.

• Rental income for Q3 2024 was SEK 847m, slightly down year-over-year, but for Jan–Sep 2024 reached SEK 2,577m, up from SEK 2,539m, with like-for-like growth of 5%.

• Net letting remained negative at SEK -11m in Q3 and SEK -85m for Jan–Sep, with occupancy declining to 89%.

• Profit after tax for Q3 2024 was SEK 14m, a turnaround from a SEK -992m loss in Q3 2023; net loss for Jan–Sep narrowed to SEK -668m from SEK -3,527m.

• Sustainability performance remains strong, with top GRESB scores and sector-leading energy efficiency.

Financial highlights

• Rental income for Jan–Sep 2024 was SEK 2,577m, with net operating income at SEK 1,924m and gross profit at SEK 1,923m.

• Surplus ratio was 77% in Q3 and 75% for the nine-month period.

• Profit from property management was just over SEK 1 billion, down year-over-year.

• Unrealized changes in property value for Jan–Sep were SEK -1,236m, a significant improvement from SEK -5,415m last year.

• Average interest rate at quarter-end was 3.16%, with net interest expense stable year-over-year.

Outlook and guidance

• Short-term occupancy is expected to decline further due to tenant move-outs, but project completions in late 2025/early 2026 should improve occupancy and rental income.

• Net letting is not expected to turn positive in 2024; focus remains on increasing occupancy to 95% over time and maintaining cost control.

• Interest costs are expected to remain just above 3% as older swaps mature and new loans are refinanced at better margins.

• The company expects continued uncertainty and volatility for the remainder of 2024, with a cautious rental market and longer decision lead times.

• Main goals for 2024 include increasing occupancy, enabling future projects, refinancing bond maturities, and maintaining ESG leadership.