GlobeNewswire

Interim Report January – September 2020

Share

» Income amounted to SEK 2,457 million (2,738). The decline is due to divestment of properties during 2019, including the whole portfolio in Karlstad and all investment properties in Örebro. For a comparable portfolio, i.e. properties owned for the whole of 2019 and 2020, income amounted to SEK 2,350 million (2,357).

» The operating surplus amounted to SEK 1,664 million (1,894). For a comparable portfolio the operating surplus amounted to SEK 1,615 million (1,615).

» Profit from property management amounted to SEK 982 million (1,149).

» Profit before tax amounted to SEK 1,661 million (2,140) and net profit, attributable to the parent company’s shareholders, totalled SEK 1,299 million (1,688), corresponding to SEK 1.20 (1.68) per ordinary share.

» Changes in value of properties totalled SEK 818 million (1,097).

» Project development, including development of building rights, contributed to increases in value of properties of SEK 246 million (241).

» After taking possession of 6 properties for SEK 2,334 million, transfer of possession of 3 properties for SEK 379 million and investments of SEK 1,710 million, the value of the property portfolio amounted to SEK 56,619 million.

» The interest coverage ratio amounted to 2.6 (2.7), leverage to 53 per cent (50) and the adjusted equity ratio to 40.2 per cent (43.5).

» The net asset value (NRV) per ordinary share amounted to SEK 22.10 (21.17).


Statement by the CEO

Good earnings in a recovering market


The year 2020, due to covid-19, is a year like no other. We can, however, see that Klövern’s business is long-term, stable and is delivering good results completely according to plan in a market which is now recovering. We are favoured by our contracted rental income and also by the composition of our tenants, who have generally succeeded in dealing with the current market conditions without too great an impact.

GOOD EARNINGS
Klövern’s earnings for the first nine months of the year are in line with our expectations. Earnings were positively affected by efficient property management. For a comparable portfolio, both income and the operating surplus were on the same level as the corresponding period in 2019.

Profit from property management amounted to SEK 982 million and after positive changes in value of properties of SEK 818 million, profit before tax was SEK 1,661 million. The return on equity during the past 12 months amounted to 13 per cent.

MARKET RECOVERY
It is gratifying to see that a number of macroeconomic indicators now show that the economy is recovering. This is, of course, taking place from the second quarter’s depressed levels but everything indicates that the sharp drop in business activity during the spring is now behind us. We can also see that the market is recovering by higher demand in the rental and transaction markets and by improving financing prospects in the capital market. We can also note that our tenants are to an increasing extent back in their offices.

NET MOVING-IN REFLECTS THE SLOWDOWN IN THE FIRST HALF
In total, external net moving-in amounted to SEK –46 million during the third quarter, which is a direct effect of the slowdown of the letting market in the first half of the year. The single largest explanation for the negative net moving-in is a hotel vacation which has had an impact of SEK –16 million. However, from October onwards, the hotel is operating again. Despite a weaker business climate during the spring, we have also welcomed a number of new tenants during the third quarter such as the Municipality of Kalmar, Linköping University and the Swedish Transport Administration.

PROJECT DEVELOPMENT CREATES VALUE
Project development has a key role in our business model and also positions Klövern as a long-term urban developer. On 30 September, development properties accounted for 16 per cent of our total property value and during the first nine months of the year investments amounted to SEK 1,710 million. The ongoing projects are expected to have a big positive effect on net-moving in during the coming two years.

Our two largest ongoing commercial projects, both in New York, are continuing according to plan and are expected to be completed in the second quarter of 2021 and the first quarter of 2022, respectively. The residential market has continued to be stable in recent months, which is gratifying.

In October, construction was started of the first phase – consisting of 60 apartments – of the Nacka Strand 1 project.

In total, project development, including development of building rights, contributed to increases in value of properties of SEK 246 million during the first three quarters of 2020.

INCREASED FINANCIAL STRENGTH
During 2020, we placed particular emphasis on securing good long-term financing and on further reinforcing our financial strength. During the second quarter, Klövern refinanced SEK 5 billion in existing bank loans and secured bonds. We also obtained new loans and credit decisions for new loans of over SEK 4 billion. In June, Klövern subsequently obtained an investment grade rating (BBB- with stable outlook) from Scope Ratings which is positive for future financing.

With a view to making use of the opportunities that we see for continued value creation by refinement and development of the building rights portfolio, selective acquisitions and to maintain a balance between equity and debt, Klövern’s board resolved at the beginning of October, subject to approval at an Extraordinary General Meeting on 13 November 2020, to carry out a fully covered rights issue of approximately SEK 2 billion with preferential rights for existing holders of ordinary shares. In October, we also announced that SEK 2 billion of green bonds, with maturity in 2024, had been issued.

The financial key figures – for example equity ratio, leverage and interest coverage ratio – will be further strengthened by these measures.

FOCUSED PROPERTY PORTFOLIO
Through persistent effort over many years, we have in accordance with our strategy focused the property portfolio on the growth locations and markets where we wish to be longterm owners. In October, we have taken possession of a couple of smaller, but strategically important acquisitions at Fiskhamnen in Gothenburg and at Uppsala Business Park. At the end of the third quarter, the total value of the property portfolio was SEK 57 billion, of which the foreign portfolio in Copenhagen and New York accounted for 16 per cent.

A CLOSE DIALOGUE WITH TENANTS
Klövern’s tenants have, in general, been affected to a relatively small extent by the pandemic. A limited part of the customer base, not least in the hotel, restaurant and fairs sectors, has for natural reasons faced greater challenges. We have a very close dialogue with the tenants who have requested some form of rent relief and an assessment has been made in each particular case whether there are prerequisites, for, for example, discounts and respite in combination with the rental assistance provided by the government. A number of tenants have at an early stage been offered the possibility of paying rents on a monthly basis instead of quarterly.

Adjusted for the tenants who pay on a monthly basis, the rental payments received by Klövern and those assessed as secure totalled as at 19 October 2020 98 per cent of the invoiced rents for the fourth quarter. At the corresponding time in 2019, 99 per cent of the rents had been received.

In summary, it can be noted that we deliver good earnings despite conditions in 2020 being special and challenging. The development of the pandemic in recent weeks in Europe may affect the pace of the economic recovery. But with a reservation for this uncertainty factor, I still look forward to a good conclusion to this peculiar year.

Rutger Arnhult, CEO Klövern


Klövern AB (publ)


For additional information, please contact:
Rutger Arnhult, CEO, +46 (0)70-458 24 70, rutger.arnhult@klovern.se
Lars Norrby, IR, +46 (0)76-777 38 00, lars.norrby@klovern.se

Klövern is a real estate company committed to working closely with customers to offer them attractive premises in growth regions. Klövern is listed on Nasdaq Stockholm. For further information, see www.klovern.se.

Klövern AB (publ), Bredgränd 4, 111 30 Stockholm. Phone: +46 (0)10-482 70 00. E-mail: info@klovern.se.

This information is information that Klövern AB is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication through the agency of the contact persons set out above at 07.30 CEST on 21 October 2020.

This interim report has been published in Swedish and in English. In the event of a discrepancy between the language versions, the Swedish version shall take priority.

Attachment

About GlobeNewswire

GlobeNewswire
GlobeNewswire
One Liberty Plaza - 165 Broadway
NY 10006 New York

https://globenewswire.com

GlobeNewswire is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.

Subscribe to releases from GlobeNewswire

Subscribe to all the latest releases from GlobeNewswire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from GlobeNewswire

Touax: Success of the partial buyback of the Undated Deeply Subordinated Bond27.11.2020 17:45:00 CETPress release

PRESS RELEASE Paris, November 27, 2020 – 5.45 p.m. YOUR OPERATIONAL LEASING SOLUTION FOR SUSTAINABLE TRANSPORTATION Success of the partial buyback of the Undated Deeply Subordinated Bond Touax SCA announces today that it has bought back and canceled part of the Undated Deeply Subordinated Bond issued in August 2013, November 2013 and May 2014, for a nominal amount of 24.2 million euros. The outstanding amount of the bonds stands at 26.6 million euros. This operation will enable to optimize the capital structure of the Group and to lower the related costs. Fabrice and Raphaël Walewski, managing partners of Touax Group commented: “The strategic refocusing initiated since 2018 around the long-term rental business of environmentally-friendly transport equipment has allowed a return to growth and profit over the first half of 2020. The capital increase of Touax Rail for 81.9 million euros achieved at the end of September 2020 significantly strengthened the capital of the Rail division and t

CONDITIONS FOR RIKSBANK REVERSED AUCTIONS SEK MUNICIPAL BONDS27.11.2020 16:20:00 CETPress release

Anbudsförfarande kommuner och regioner, 2020-12-01BondsFixed rate notes issued in SEK by Municipalities or Regions with maturity in: 2025 The following issuers are accepted for delivery: Göteborgs Stad Jönköpings Kommun Malmö Stad Nacka Kommun Region Skåne Stockholms Stad Region Stockholm Vellinge Kommun Västerås Stad Delivery may not be made in Bonds purchased by the Counterparty from the issuer less than one week prior to the date for announcing the Specific terms, i.e. the purchase may not have been made after: 2020-11-20BidsBids are made to tel 08-696 69 70 and confirmed in writing by a filled-in Bid form by e-mail to EOL@riksbank.se Bid date2020-12-01Bid times10.00-11.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)SEK 750 +/- 750 millionHighest permitted bid volume (corresponding nominal amount)The total bid volume from one Counterparty for the two Credit rating classes may not exceed SEK 1 000 million. No bid may contain Bonds exceeding SEK 750 millio

CONDITIONS FOR PURCHASES OF CORPORATE BONDS27.11.2020 16:20:00 CETPress release

Bid procedure, 2020-12-02BondsBonds issued in SEK by Swedish non-financial undertakings. The following bonds are eligible for delivery: VASAKRONAN AB: XS1941844174, 2022-02-11 VASAKRONAN AB: XS2051470552, 2024-09-11 HEMSO FASTIGHETS AB: XS1876163103, 2022-03-07 HEMSO FASTIGHETS AB: XS1938445530, 2021-10-22 VOLVO TREASURY AB: XS2153414292, 2022-12-08 VOLVO TREASURY AB: XS2018763461, 2021-06-28 HUSQVARNA AB: SE0009664543, 2022-03-01 HUSQVARNA AB: SE0010869669, 2023-02-14 AB INDUSTRIVARDEN: SE0011869668, 2022-02-28 AB INDUSTRIVARDEN: SE0012676724, 2023-02-20 Delivery of a Bond may not occur if the Counterparty has purchased the Bond from the issuer more recently than one month prior to the date of announcement of the Special terms, that is, the purchase may not have taken place after: 2020-11-02Bid date2020-12-02Bid times10.00-11.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)XS1941844174: 30 mln SEK +/-30 mln SEK XS2051470552: 30 mln SEK +/-30 mln SEK XS18761

CONDITIONS FOR RIKSBANK REVERSED AUCTIONS SEK COVERED BONDS27.11.2020 16:20:00 CETPress release

Bid procedure, 2020-12-03BondsSTADSHYPOTEK AB: 1590, SE0012676690, 2025-09-03 SWEDBANK HYPOTEK AB: 194, SE0012142206, 2024-09-18 NORDEA HYPOTEK AB: 5535, SE0013358413, 2025-09-17 SKANDINAVISKA ENSKILDA: 580, SE0013101722, 2025-12-17 LANSFORSAKRINGAR HYPOTEK: 518, SE0011309244, 2025-09-17 DANSKE HYPOTEK AB: 2512, SE0013877214, 2025-12-17 SWEDISH COVERED BOND: 146, SE0013381571, 2025-06-11 Bid date2020-12-03Bid times09.00-10.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)1590: 1200 mln SEK +/-600 mln SEK 194: 1000 mln SEK +/-500 mln SEK 5535: 1000 mln SEK +/-500 mln SEK 580: 800 mln SEK +/-400 mln SEK 518: 600 mln SEK +/-300 mln SEK 2512: 300 mln SEK +/-150 mln SEK 146: 600 mln SEK +/-300 mln SEK Maximum 5500 mln in totalHighest permitted bid volume (corresponding nominal amount)1590: 1200 mln SEK per bid 194: 1000 mln SEK per bid 5535: 1000 mln SEK per bid 580: 800 mln SEK per bid 518: 600 mln SEK per bid 2512: 300 mln SEK per bid 146: 600 mln SEK per bid Lo

CONDITIONS FOR RIKSBANK REVERSED AUCTIONS SEK GOVERNMENT BONDS27.11.2020 16:20:00 CETPress release

Bid procedure, 2020-12-04BondsSWEDEN I/L BOND: 3108, SE0004211084, 2022-06-01 SWEDEN I/L BOND: 3109, SE0005703550, 2025-06-01 Bid date2020-12-04Bid times09.00-10.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)3108: 500 mln SEK +/-250 mln SEK 3109: 500 mln SEK +/-250 mln SEK Maximum 1000 mln in totalHighest permitted bid volume (corresponding nominal amount)3108: 500 mln SEK per bid 3109: 500 mln SEK per bid Lowest permitted bid volume (corresponding nominal amount)SEK 50 million per bidExpected allocation timeNo later than 10.10 (CET/CEST) on the Bid dateDelivery and payment date2020-12-08Delivery of bondsTo the Riksbank's account in Euroclear Sweden AB's securities settlement system 1 4948 6383 Stockholm, 2020-11-27 This is a translation of the special terms and conditions published on www.riksbank.se. In the case of any inconsistency between the English translation and the Swedish language version, the Swedish language version shall prevail. Complete term

Greenfield cement project in Ethiopia is effective27.11.2020 15:45:28 CETPress release

Company Announcement No. 21 -2020, 3 November 2020 The previously announced signed contract for engineering, procurement and supervision on a cement plant in Ethiopia (Company Announcement No. 1-2019 on 24 January 2019) with Abay Industrial Development Share Company, is now effective. Located near the city of Dejen in Ethiopia, the new greenfield plant will play an important role for the development of local infrastructure. Once fully operational the plant will have a capacity of 5,000 tonnes per day and creating more than 300 new jobs in the area. The contract is valued at around EUR 100 million. The order includes design and engineering, full equipment supply, automation systems, installation and commissioning as well as training and extended supervision. Key deliveries are expected to commence towards the end of 2021. The majority of revenue from this project is expected in the subsequent years. “We are happy to see the contract now in effect,” said Carsten Riisberg Lund, President,