Magnolia Bostad (MAG) Q4 2023 earnings summary

Executive summary

• 2023 housing production slowed sharply; 9,300 homes were in production at the start of the year, with 1,932 completed and 57 production starts during the year.

• 7,496 homes remained in production at year-end; 78% of the 9,300 homes at the start of the year were sold to institutional investors.

Financial highlights

• FY net sales were SEK 305m vs SEK 569m; operating loss was SEK 595m vs SEK 747m, including SEK 104m of negative investment-property value changes.

• FY loss before tax was SEK 871m vs SEK 929m; net loss was SEK 868m vs SEK 863m, and EPS was SEK -21.34 vs SEK -20.89.

• Q4 net sales were SEK 71m vs SEK 349m; operating loss was SEK 180m vs SEK 235m, and net loss was SEK 252m vs SEK 281m.

• FY production and operating costs included SEK 206m for canceled projects and project-portfolio write-downs; loss from associates was SEK 268m, mainly from valuation and financing effects.

• Net financial items were SEK -276m for FY and SEK -74m in Q4; year-end average interest rate was 9.8% vs 8.2% at the start of the year.

Outlook and guidance

• Estimated completions: 3,783 homes over the next 12 months and ~7,200 over the next three years; most self-management projects in production are expected to complete in 2024–2025.

• Decreasing inflation and forecasts of falling interest rates were seen as conditions for gradual housing-market recovery in 2024; housing demand remains significant in growth regions and green-industry towns.

• Management said cost reductions and organizational adaptation are needed for lower future production volumes, positioning operations to pursue opportunities as markets recover.