Magnolia Bostad (MAG) Q4 2022 earnings summary

Executive summary

• 2022 results deteriorated sharply as lower project sales, higher costs and financing rates, and property valuation losses drove a net loss of SEK 863m versus profit of SEK 50m in 2021.

• 9,345 homes were in production at year-end; 949 starts and around 900 completions were recorded during the year.

• SEK 700m of owner capital contributions and stronger liquidity supported operations amid a difficult funding and housing market.

Financial highlights

• Net sales SEK 569m, down from SEK 1,268m; net property sales were SEK 206m versus SEK 938m, reflecting revenue recognition for 60 homes versus 800 in 2021.

• Gross loss SEK 226m versus gross profit SEK 151m; operating loss SEK 747m versus profit SEK 260m, including SEK 230m of investment-property value losses versus SEK 128m of gains.

• Loss before tax SEK 929m versus profit SEK 75m; net loss SEK 863m versus net profit SEK 50m; EPS SEK -20.89 versus SEK 1.59.

• Net financial items were SEK -182m versus SEK -185m; central administration costs fell to SEK 98m from SEK 107m after cost savings.

Outlook and guidance

• Portfolio-based best estimate indicated just over 2,000 production starts in 2023 and over 3,000 in 2024; estimates may shift with market conditions, planning processes and project changes.

• Management postponed starts where high turnkey costs made projects unviable; existing projects were expected to continue to their schedules.

• Management expected easing inflation to support more stable rates, improved financing access and renewed starts, while continuing to pursue existing opportunities in the meantime.