Platzer Fastigheter (PLAZ) Q4 2023 earnings summary

Executive summary

• Record operating surplus reached SEK 1,132m, up 21% from SEK 939m; rental income rose 18% to SEK 1,453m, but higher financing costs and negative property revaluations drove a net loss.

• Positive net lettings totaled SEK 44m for 2023; economic occupancy was 92%, and 133,000 sq. m. of industrial/logistics space was completed and occupied.

• The Board proposed a dividend of SEK 2.00 per share, versus SEK 2.30 for the prior year.

Financial highlights

• Rental income increased to SEK 1,453m from SEK 1,229m, supported by index-linked increases of SEK 101m, Kineum occupancy and acquisitions; property costs rose to SEK 321m from SEK 290m.

• Income from property management was SEK 609m versus SEK 668m; net financial expense rose to SEK 494m from SEK 245m as interest rates and average borrowings increased.

• Net loss was SEK 943m versus net profit of SEK 3,026m; property value changes were negative SEK 1,277m versus positive SEK 2,562m, and EPS was SEK -7.87 versus SEK 25.26.

• Cash flow from operating activities was SEK 604m versus SEK 616m; cash and cash equivalents ended at SEK 167m, down SEK 50m during the year.

Outlook and guidance

• Sweden’s economy was expected to grow weakly in 2024; inflation and interest rates were turning down, with recovery prospects identified as a bright spot.

• Gothenburg office vacancies were expected to decline in 2024 as new construction slows; no new office space was expected in the CBD or city centre excluding CBD.

• Logistics demand remained strong for modern, green-certified premises in attractive locations; few new projects were starting, pointing to lower future supply of efficient logistics space.

• The development pipeline included 75,000 sq. m. of major projects underway and potential projects of 340,000 sq. m. GFA; Mimo in Mölndal was 60% pre-let, with preliminary long-term ownership expected in Q4 2024 subject to conditions.