D. Carnegie & Co: Significant Boost in Profit and Equity

STOCKHOLM--()--Regulatory News:

D. Carnegie & Co (STO:DCAR) reports a significant boost in profit before tax, which rose from SEK 307 million in 2014 to 1 402 million in 2015 – an increase by 360%. Income from property management also grew significantly, reaching SEK 186 million (42), up 342%.

Net Profit per share was SEK 16,10, up 235% compared to last year. Adjusted equity (EPRA/NAV) rose by 41 % in 2015 and amounted to SEK 73,50 per share at year end (51,99)

January 1 – December 31, 2015

  • Rental income increased to SEK 1,217 million (609) · Net operating income increased to SEK 554 million (258)
  • Income from property management increased to SEK 186 million (42)
  • Changes in the value of investment properties of SEK 1,307 million (278) · Changes in the value of derivatives of SEK -11 million (-14)
  • Profit before tax increased to SEK 1 422 million (307)
  • Profit after tax increased to SEK 1,139 million (233)
  • Earnings per share increased to SEK 16.10 (4.80) before dilution and increased to SEK 13.50 (4.30) after dilution*

FOURTH QUARTER 2015

  • Rental income increased to SEK 317 million (282) · Net operating income increased to SEK 133 million (98)
  • Income from property management increased to SEK 48 million (0)
  • Changes in the value of investment properties and derivatives of SEK 867 million (200)
  • Changes in the value of derivatives of SEK -39 million (-7)
  • Profit before tax increased to SEK 853 million (194)
  • Profit after tax increased to SEK 734 million (142)
  • Earnings per share increased to SEK 10.37 (2.01) before dilution and increased to SEK 8.52 (1.59) after dilution*

* Upon calculation of the profit per share after dilution, the annual interest savings regarding the convertible debenture in the amount of

SEK 51 million has been taken into consideration. The effect of the savings per share is SEK 0.72/year.

Significant events during the fourth quarter

  • Entered into an agreement regarding the sale of Hammarkullen in Gothenburg with 890 apartments and an agreed property value of SEK 493 million, strengthening cash on account by SEK 250 million
  • Announcement in December of the new valuation of the property portfolio amounting to SEK 13,600 million, just over SEK 1 billion above the previously reported value
  • Entered into an agreement regarding the acquisition of properties in Uppsala and Norrköping located adjacent to other D. Carnegie & Co´s properties.

Statement from the CEO

Over the course of the year, we have found our identity as one of Sweden's largest managers of residential properties following several years of strong growth and the mergers of several property companies. At the same time, we have streamlined and focused, acquiring additional apartments adjacent to our existing properties. D. Carnegie & Co is thus now a residential property company focusing on the Stockholm region. This has also involved intensive renovation work and 293 apartments were renovated during the fourth quarter.

I am also happy to note that we have reached our target of a total return of at least 10 per cent, which led to an increase in the adjusted shareholders’ equity by 41 per cent during the year. Earning capacity increased from the beginning of the year by 50 per cent to SEK 307 million on a rolling 12-month basis.

During the quarter, the company completed the acquisition of just over 100 apartments in Norrköping, further strengthening our earning capacity. During the period, we continued to improve the efficiency of the renovation of apartments and to industrialize this process. The forecast of renovating at least 500 apartments in 2015 was surpassed with 524 apartments renovated over the course of the year. Even the annual rate of 1,000 apartments per year was achieved during the fourth quarter. We have also continued investing at a rapid pace in façades, heating facilities, laundry rooms, etc. which increases our rental income and reduces the costs of repairs and maintenance.

Increased rent and lower costs is reflected in an improved net operating income, which for the quarter amounted to SEK 133 million as compared with SEK 98 million for the same quarter of last year. For the year, net operating income doubled to SEK 554 million as compared with SEK 257 million last year. Earning capacity increased to SEK 307 million at an annual rate as per January 1, 2016 as compared with SEK 205 million at the beginning of last year. Increases in value in the property portfolio during the quarter amounted to SEK 867 million, after deductions for investments, and SEK 1,307 million for the entire year.

Taken as a whole, the improvements entail a strong improvement in reported earnings. The profit for the quarter before taxes was SEK 952 million, and for the entire year all of SEK 1,421 million, as compared with SEK 194 million for the fourth quarter of 2014 and SEK 306 million for all of 2014. Earnings per share after taxes amounted to SEK 10.37 as compared with SEK 2.01 for the fourth quarter of 2014. This means a profit after taxes for the year of SEK 1,139 million, which corresponds to SEK 16.10 per share.

We will continue on our chosen path this year seeking out additional acquisitions in the Stockholm region and will continue our work in renovating our portfolio, which will further increase our profitability. We will also push the development of building rights, so that we can start new construction during next year

Stockholm, 25 February 2016

ULF NILSSON CEO, D. Carnegie & Co

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Contacts

D. Carnegie & Co
Ulf Nilsson, CEO
+46 (0)8 121 317 25

Contacts

D. Carnegie & Co
Ulf Nilsson, CEO
+46 (0)8 121 317 25