Sagax (SAGA-A) Q4 2023 earnings summary

Executive summary

• FY rental revenue rose 16% to SEK 4,293 M and profit from property management rose 16% to SEK 3,881 M; net loss was SEK 13 M versus profit of SEK 2,718 M.

• Cash flow from operating activities before working-capital changes increased 16% to SEK 3,485 M; diluted profit from property management per Class A and B share rose 15% to SEK 11.16.

Financial highlights

• Property revaluations reduced FY profit by SEK 2,517 M, while financial-instrument revaluations reduced it by SEK 1,235 M.

• Q4 rental revenue increased 17% to SEK 1,133 M and profit from property management rose 12% to SEK 909 M; quarterly net loss was SEK 433 M.

• FY financial expenses, excluding IFRS 16 lease interest, increased to SEK 734 M from SEK 492 M amid higher market rates; average borrowing rate was 1.9%.

Outlook and guidance

• FY 2024 profit from property management is forecast at SEK 4,200 M, before revaluations and tax, based on the current portfolio, announced acquisitions and divestments, and current exchange rates.

• Current earnings capacity at 1 Jan 2024 showed SEK 4,114 M profit from property management, 6.6% run-rate yield and net debt/run-rate EBITDA of 4.9x; this is not a forecast.