Wallenstam (WALL) Q1 2017 earnings summary

Executive summary

• Income from property management rose 14% YoY to SEK 191m; profit before tax reached SEK 650m versus SEK 352m.

• Net asset value increased SEK 0.6bn in Q1 to SEK 23.55bn at March 31, 2017; EPRA NAV was SEK 23.5bn.

• Rolling 12-month net asset value growth, excluding dividends and buybacks, was 23.5%; unrealized gains included SEK 132m from new rental construction.

Financial highlights

• Rental income rose 5% to SEK 414m; like-for-like growth, adjusted for acquired and sold properties, was nearly 8%.

• Net operating income increased to SEK 301m from SEK 279m, up SEK 22m; rental income added SEK 21m and lower operating expenses SEK 1m.

• Profit after tax was SEK 540m versus SEK 282m; earnings per share were SEK 1.6 versus SEK 0.9.

• Unrealized property value gains were SEK 369m versus SEK 400m, including SEK 132m from new rental construction.

• Property and development sales revenue was SEK 237m, with related expenses of SEK 188m; property and apartment sales totaled SEK 532m.

Outlook and guidance

• Business Plan 2018 targets annual net asset value growth of at least 10%, excluding dividends and buybacks; average growth for completed plan years was 3.0%.

• Construction in progress totaled 1,898 apartments; expected occupations spanned Q2 2017 through 2018.

• The plan called for starting construction of 7,500 homes by 2018; starts were expected in Tyresö, Sundbyberg, Gothenburg, Mölndal and Uppsala.

• Rosendal’s Tre Vänner project was planned to add 143 rental apartments.