Wallenstam (WALL) Q4 2017 earnings summary

Executive summary

• Net asset value growth excluding dividends and buybacks was 13.3% in 2017, above the 10% annual target; property management income rose 10% to MSEK 806.

• Strong rental demand, efficient new construction and improved management supported growth; uncertainty in the condominium market prompted conversions to rental housing.

Financial highlights

• Rental income rose 6% to MSEK 1,701; excluding acquired and sold properties, growth was 9%. Q4 rental income rose 8% to MSEK 444.

• Net operating income increased 8% to MSEK 1,264; property management income rose 10% to MSEK 806. Q4 figures were MSEK 311 and MSEK 185, respectively.

• Profit before tax was MSEK 3,001 (4,198); net income was MSEK 2,421 (3,348), or SEK 7.4 (10.1) per share.

• Excluding unrealized value changes and impairments, profit was MSEK 765 (865); property value gains were MSEK 2,556 (3,470), and wind power impairment was MSEK 500.

Outlook and guidance

• 2018 business-plan target: average annual net asset value growth of at least 10%, excluding dividends and buybacks; 2018 was the final year of the plan.

• Business-plan ambition was to start construction of 7,500 homes; 1,953 apartments were under construction at year-end.

• Some project starts could be delayed pending municipal planning work; construction tenders were deferred on some projects in anticipation of lower contractor prices.

• Condominium projects could be converted to rentals, and all projects were required to be viable as rental properties.