Magnolia Bostad (MAG) Q4 2017 earnings summary

Executive summary

• FY 2017 net sales rose to SEK 1,772 million from SEK 1,010 million; operating profit was SEK 375 million and net profit SEK 267 million.

• The building-rights portfolio reached 16,429, up 47% YoY; 2,227 residential units were sold and recognized across 10 projects.

• The portfolio broadened with first hotel and residential-care transactions, supporting product and risk diversification.

Financial highlights

• Net sales were SEK 1,772 million (SEK 1,010 million); property-sale revenue was SEK 1,338 million (SEK 835 million).

• Operating profit was SEK 375 million (SEK 355 million); net profit was SEK 267 million (SEK 265 million).

• Gross profit was SEK 425 million (SEK 368 million); net financial items were negative SEK 109 million (negative SEK 90 million).

• Operating cash flow was negative SEK 617 million (negative SEK 22 million); cash and cash equivalents ended at SEK 208 million (SEK 507 million).

Outlook and guidance

• 2018 production capacity targets: 3,000 residential units, two to four care facilities and one to two hotels annually.

• Demand remained strong for rental apartments, hotels and care facilities; tenant-owned apartment interest weakened in late 2017, with a slight recovery noted since early 2018.

• Management expected to complete one or two hotel projects annually and anticipated potential for more than two to four care facilities per year over the longer term.