Heimstaden (HEIM) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw rental income rise 3.8% year-over-year to SEK 3,943 million, with like-for-like rental growth of 5.1% and real economic occupancy at 98.3%.

• Net operating income increased to SEK 2,814 million, with NOI margin improving to 71.4% from 69.0% a year earlier.

• Privatisation plan delivered SEK 2,818 million in H1 sales, with Q2 divestments at a 29% premium to book value.

• Net gains from fair value adjustments on investment properties were SEK 1,258 million, reversing last year's loss.

• Net loan-to-value stood at 58.1% and interest coverage ratio at 1.8x.

Financial highlights

• Rental income: SEK 3,943 million in Q2 2024 (up from SEK 3,800 million in Q2 2023).

• Net operating income: SEK 2,814 million (Q2 2023: SEK 2,623 million); NOI margin 71.4%.

• Net gains from property divestments: SEK 643 million in Q2.

• Net gains from fair value adjustments: SEK 1,258 million (Q2 2023: -SEK 7,349 million).

• Cash flow from operating activities: SEK 2,772 million (Q2 2023: SEK 317 million).

Outlook and guidance

• Occupancy expected to remain strong for the rest of 2024, with structural vacancy below 2%.

• Capital expenditure budget reduced for 2024, focusing on projects with immediate accretive impact on credit metrics.

• Privatisation proceeds to reduce reliance on bank financing.