Hufvudstaden (HUFV-A) Q2 2024 earnings summary

Executive summary

• Net revenue from property management reached SEK 1,049 million in Q2 2024, up from SEK 1,004 million year-over-year, driven by indexation and new leases.

• Gross profit from property management was SEK 701 million, compared to SEK 675 million in the same period last year.

• Net result for the period was SEK -354 million, a significant improvement from SEK -1,372 million last year, mainly due to lower negative unrealised property value changes.

• Fair value of properties stood at SEK 46.2 billion at the end of Q2 2024, down from SEK 46.7 billion at year-end.

• Rental vacancy rate was 7.9%, or 5.8% excluding development projects, with ongoing leasing activity in key projects.

Financial highlights

• Net revenue from property management increased by 4.5% year-over-year to SEK 1,049 million.

• Gross profit for Jan-Jun 2024 was SEK 701 million, up from SEK 675 million in Jan-Jun 2023.

• Net profit for Jan-Jun 2024 was SEK -354 million, compared to SEK -1,372 million in Jan-Jun 2023.

• Unrealised changes in property value were SEK -994 million, improved from SEK -2,295 million year-over-year.

• Cash flow from current operations was SEK 521 million, down from SEK 558 million year-over-year.

Outlook and guidance

• Focus remains on strong assets in prime locations, development of marketplaces, and sustainability.

• Higher profit and good dividend growth over time are targeted.

• Office rental market remains tentative, but demand for high-quality, centrally located properties is sustained.

• Lower inflation and interest rate cuts have improved confidence in the retail sector, with several brands expanding in key locations.

• Major projects, including Kvarteret Johanna in Gothenburg and Orgelpipan 7 in Stockholm, are progressing, with completions expected in 2026 and beyond.