Eik fasteignafélag hf.: Interim results for the first six months of
2023
- Income from operations amounted to ISK 5,497 million
- Thereof, rental income amounted to ISK 4,691 million
- Operating profit before changes in value and depreciation
amounted to ISK 3,827 million.
- Total profit amounted to ISK 8,769million.
- Net cash from operations amounted to ISK 2,136 million.
- The book value of investment assets amounted to ISK 132,572
million.
- The book value of assets for own use amounted to ISK 6,025
million at the end of the period.
- Change in value of investment assets amounted to ISK 9,788
million.
- Cash and cash equivalents amounted to ISK 1,043 million.
- Interest-bearing debt amounted to ISK 74,004 million at the end
of the period.
- Equity ratio was 35.6%.
- Profit per share was ISK 2.15.
- Economic occupancy rate was 93.8% at the end of the period
- Weighted indexed interest was 3.03%.
- Weighted unindexed interest was 8.93%.
The Interim Consolidated Financial Statements of
Eik fasteignafélag hf. for the period 1 January to 30 June 2023
were approved by the Company’s Board of Directors and CEO on 7
September 2023.
In case of any discrepancy in the English and
the Icelandic versions of this announcement or the Financial
Statements, the Icelandic version shall prevail.
Group´s operations
The Group performed well in the first six months
of the year 2023 and the results exceeded management’s forecasts,
which can largely be explained by decrease in doubtful accounts
provision during the period. Operating income for the first six
months of the year 2023 amounted to ISK 5,497 million. Thereof,
rental income amounted to ISK 4,691 million. Operating costs
amounted to 1,851 million and write down of trade receivables was
positive during the period, amounting to ISK 181 million. This is
mainly driven by decrease in doubtful accounts provision due to
settlement of outstanding rental obligations which can be explained
by the impact of Covid-19 on the lessee. Operating profit before
changes in fair value change and depreciation amounted to ISK 3,827
million, increasing by just over 24% between years. Profit before
income tax amounted to ISK 9,178 million and total profit of the
Group for the first six months of the year 2023 amounted to ISK
7,342 million. Other comprehensive income amounted to ISK 1,427
million. Total comprehensive income for the first six months
amounted to ISK 8,769 million
The NOI Ratio (i.e. operating profit before
changes in value and depreciation as a ratio of lease income) was
78.4% for the first six months of the year 2023, compared to 73.9%
for the same period in 2022.
The Group's investment assets are valued at fair
value in accordance with International Financial Reporting
Standards (IFRS), which is based on, among other, discounted future
cash flows of individual assets. Changes in fair value are
recognised and classified within changes in value of investment
assets in the consolidated statement of comprehensive income, which
amounted to ISK 9,788 million in the first six months of the year
2023. The main assumptions driving the change are inflation,
increase in rental rates, increase in value of building permits and
lower return on equity. On the other hand, the main driver lowering
the estimate is the fact that future growth has now been
removed.
Financial Position
The Group's total assets amounted to ISK 141,979
million at the end of the period, whereof investment assets
amounted to ISK 132,572 million which consist of real estate leased
to tenants amounting to ISK 124,448 million, lease assets ISK 2,766
million, investment assets under development ISK 1,636 million,
building rights and land ISK 3,669 million and pre-paid street
construction tax ISK 13 million. Assets for own use amounted to ISK
6,025 million and assets under development ISK 675 million. The
Group's equity amounted to ISK 50,513 million at the end of the
period and its equity ratio was 35.6%. At the Group’s Annual
General Meeting on 30 March 2023 a dividend payment to shareholders
due to the year 2022 amounting to ISK 2,000 million was approved,
which was subsequently paid on 12 April 2023.
The Group’s total liabilities amounted to ISK
91,465 million at the end of the period, of which interest-bearing
debt amounted to ISK 74,004 million and deferred tax liability ISK
12,872 million. The Group´s loan to value is 54,4% at the end of
the period.
Economic occupancy rate
The Company's economic occupancy rate was 93.8%
at the end of the period but was 95.7% at the beginning of the
year. In the second quarter, Landsbankinn moved into their new
headquarters and at the same time returned the offices that they
had been renting on a long-term lease from the Company. This
resulted in a 1.7% decrease of the economic occupancy rate.
Company’s Portfolio
The company's purchase offer for Hafnarstræti 7
has been accepted with conditions, but it is an 820 sqm. office and
retail building. After the purchase, the company owns the entire
field bounded by Pósthússtræti 2, Tryggvagata 24-28 and
Hafnarstræti 5-9.
The Company’s owns around 110 properties, which
counts for over 318.000 thousand square meters on rental place in
over 600 units. Total number of tenants is around 500. The
Company's principal properties in the capital region are Borgartún
21 and 21a; Borgartún 26; Suðurlandsbraut 8 and 10; Mýrargata 2-16;
Pósthússtræti 2 (Hótel 1919); Smáratorg 3 (Turninn); Smáratorg 1;
Álfheimar 74 (Nýi Glæsibær); Grjótháls 1-3 and Austurstræti 5, 6, 7
and 17. The Company’s principal property outside the capital region
is Glerártorg, Akureyri. The Company’s largest tenants are
Húsasmiðjan, Berjaya Hotels Iceland, Sýn, Össur ,Bónus, Deloitte,
Rúmfatalagerinn, Samkaup og Ríkiseignir.
The largest part of the Company’s real estate
portfolio is office space, or 40%, followed by commercial premises
(23%), warehouses (13%), hotel (10%), health related operations
(6%), bars and restaurants (3%) and building permits (3%). Around
93% of the Company's real estate are in the capital region, of
which 38% is in financial and business districts of Reykjavík
(mainly within postal codes 105 and 108), 18% in the Reykjavik city
centre and 18% in Smárinn-Mjódd. 7% of the portfolio is located
outside the capital region, whereof over 6% is in Akureyri.
Outlook
The Company’s operation has been outperforming
expectation in the year and the outlook is increase for the second
time this year. The Company expects that the EBITDA for the year
will be in the range of ISK 7.500-7.800 million at a fixed price,
based on consumer price index for financial indexation in September
2023. The first estimate of the outlook for the year, was an EBITDA
in the range of ISK 6.690 – 6.970 million at a fixed price, based
on consumer price index for financial indexation in January. The
increase is mainly cause by higher prices, reversal of impairment
of trade receivables, changes to agreements and new properties.
Ajusted for price increase and the purchase of new properties, the
increase is around ISK 450-500 million compared to the first
estimate of the outlook.
Online meeting
An online open meeting will be held on Friday
the 8th of September 2023, at 8:30. Garðar Hannes Friðjónsson, CEO
and Lýður H. Gunnarsson, CFO, will present the results and respond
to questions following the presentation.
Registration of the meeting is through the
following link:
https://us02web.zoom.us/webinar/register/WN_hQnFRcl7T2uAKrPVij-2uA
Following registration, participants will
receive an e-mail with further information’s.
Changed Financial Calendar
Following is the planned dates for the
publishing of interim and annual results:
Quarterly results Q3 2023
15.
November 2023
Annual results
2023
15. February 2024
Attention is drawn to changes in planned
publication of Q3 2023 quarterly results.
For further information please contract
Garðar Hannes Friðjónsson, CFO, gardar@eik.is,
s. 590-2200
Lýður H. Gunnarsson, CEO, lydur@eik.is, s.
820-8980
- Q2 2023 Condensed consolidated interim financial statement
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