Jm Group Interim Report January – March 2018 Cautious Market for New Production in Stockholm – Stabilization of House Prices in Sweden and Norway
Total Page:16
File Type:pdf, Size:1020Kb
1/2018 JM GROUP INTERIM REPORT JANUARY – MARCH 2018 CAUTIOUS MARKET FOR NEW PRODUCTION IN STOCKHOLM – STABILIZATION OF HOUSE PRICES IN SWEDEN AND NORWAY JANUARY – MARCH 2018 Revenue decreased to SEK 4,054m (4,245) and operating profit decreased to SEK 528m (570). The operating margin amounted to 13.0 percent (13.4) Profit before tax decreased to SEK 512m (829) 1). Profit after tax decreased to SEK 399m (706) 1) Return on equity for the past twelve months was 30.5 percent (36.1) 1). Earnings per share for the first quarter decreased to SEK 5.70 (9.90) 1) Consolidated cash flow including net investment in properties was SEK –18m (1,001) The number of residential units sold decreased to 480 (864) and housing starts decreased to 570 (813) 1) Including gains of SEK 275m from the sale of the participations in Småa AB in 2017 ACCORDING TO SEGMENT REPORTING JANUARY–MARCH APR.–MAR. FULL-YEAR SEK M 2018 2017 2017/2018 2017 Revenue 4,054 4,245 16,817 17,008 Operating profit 528 570 2,327 2,369 Operating margin, % 13.0 13.4 13.8 13.9 Profit before tax 512 829 2,262 2,579 Cash flow from operating activities –18 1,001 994 2,013 Return on equity, % 30.5 38.7 Equity/assets ratio, % 40 41 40 Earnings per share, SEK 5.70 9.90 26.80 31.00 Number of residential units sold 480 864 2,716 3,100 Number of housing starts 570 813 3,630 3,873 Number of residential units in current production 7,672 7,901 8,200 Revenue according to IFRS 3,825 4,157 16,943 17,275 Operating profit according to IFRS 507 582 2,381 2,456 Earnings per share according to IFRS, SEK 5.50 10.00 27.40 31.90 IFRS 15 Revenue from Contracts with Customers is applied to the consolidated income statement and balance sheet, which means that revenue and profit and loss for JM’s operations outside of Sweden, JM International, are reported according to the completed contract method. Segment reporting and project management are reported according to the percentage of completion method. The consolidated statements in accordance with IFRS are presented on pages 21-22. For definitions of key financial figures, see the document entitled “Definitions of key financial figures” at jm.se/investors. Unless otherwise specified, the analysis and comments in this interim report are based on JM’s segment reporting. Cover photo: Fyrtornet, Dalénum, Lidingö 2 JM GROUP INTERIM REPORT JANUARY – MARCH 2018 GROUP “The housing market in Stockholm One of the housing starts is the high-rise Fyrtornet, Lidingö’s new continued to be cautious during landmark in Dalénum, which will have a panorama view of Saltsjön the first quarter, but prices stabi- and Djurgården. With 22 floors and glassed-in corner balconies, lized. The cautious market applies the building will have a beautiful design. The project also includes in particular to new production a sister building with eight floors. We will start production on 129 of homes with a long time until residential units here in this beautiful location next to the water occupancy. Lower sales and a and close to the commuter ferry to Nybroplan in downtown lower number of housing starts Stockholm. in Stockholm decreased the cur- In an excellent location in Gustavsberg, Värmdö, we started the rent production volume during first phase with 56 senior housing units in the Strandviks Flyglar the quarter. We are planning to project. We will build four buildings here in a park environment increase the number of housing starts during the year, assuming next to the bay, Farstaviken, with a view of the harbor. that the housing market stabilizes and that planning processes are As of 2018, all JM residential units that enter into the stable. Housing starts in Stockholm during the first quarter were pre-construction phase will be certified in accordance with the supported by a normal level of reservations, where profitability Nordic Swan Ecolabel. The idea is that the efforts we have made continues to be good in the current production volume. over a period of many years to create a healthy environment and The housing operations in the rest of Sweden are showing a sustainable development should be more visible for housing cus- positive development with good profitability levels in a market tomers. We are thus the first Nordic construction company to that continues to be stable, and prices remained more or less the certify the entire Group’s production of its own residential units same during the first quarter. in accordance with the Nordic Swan Ecolabel. The Nordic Swan In Norway, the level of activity on the housing market was Ecolabel verifies that the buildings are energy-efficient, have good good with a slight increase in prices, and the housing market in ventilation and are built with moisture-resistant materials that are Finland was stable during the first quarter. free from substances harmful to the environment and people's We have noted an increase in the supply of residential develop- health. This is a natural step in our efforts to be a market leader in ment properties in Stockholm, and JM has a very good position to sustainable housing. take advantage of the possibilities for acquisitions that may arise. We are well-positioned with a good project portfolio that we In the rest of Sweden, competition for land is tough. JM’s strong continue to improve for the housing of the future, at the same financial position also supports our decision to prioritize the start time as our strong balance sheet offers us freedom of action.” of new housing projects. Johan Skoglund, President and CEO Strandviks Flyglar, Gustavsberg, Värmdö JM GROUP INTERIM REPORT JANUARY – MARCH 2018 3 MARKET, SALES AND HOUSING STARTS JANUARY – MARCH 2018 The housing market in Stockholm continued to be cautious during The number of residential units sold in the form of signed con- the first quarter, but prices stabilized. Lower sales and a lower tracts was 480 (864) 1). The percentage of sold or reserved number of housing starts decreased the current production vol- homes in relation to current production amounts to 61 percent ume during the quarter. Housing starts in Stockholm during the (78), with an interval of 60-65 percent considered normal. quarter were supported by a normal level of reservations, and JM Residential Stockholm sold 117 residential units (354), profitability continues to be good in the current production vol- JM Residential Sweden sold 244 (321), JM International sold 119 ume. (189) and JM Property Development sold 0 (0). The housing operations in the rest of Sweden are showing a The number of housing starts amounted to 570 (813) 2). positive development with good profitability levels in a market JM Residential Stockholm started production on 215 residential that continues to be stable, and prices remained more or less the units (300), JM Residential Sweden on 286 (343), JM International same during the first quarter. on 69 (170) and JM Property Development on 0 (0). In Norway, the level of activity on the housing market was In addition to demand, planning processes continue to be an good with a slight increase in prices, and the housing market in important criterion for the rate of housing starts. Finland was stable during the first quarter. The number of residential units in current production Population growth in our main markets, coupled with contin- amounted to 7,672 (7,901), of which 553 are rental units and res- ued low interest rates, supports demand for housing. idential care units (416). 1) Of which 0 rental units and residential care units (0). 2) Of which 0 rental units and residential care units (0). JANUARY–MARCH APRIL–MARCH FULL-YEAR OPERATING PROFIT BY BUSINESS SEGMENT, SEK M 2018 2017 2017/2018 2017 JM Residential Stockholm 274 347 1,365 1,438 JM Residential Sweden 213 164 718 669 JM International 53 58 266 271 JM Property Development 2 7 22 27 JM Construction 0 10 1 11 Group-wide expenses –14 –16 –45 –47 Total 528 570 2,327 2,369 Of which property sales 11 - 25 14 JANUARY–MARCH APRIL–MARCH FULL-YEAR OPERATING MARGIN BY BUSINESS SEGMENT, % 2018 2017 2017/2018 2017 JM Residential Stockholm 18.6 18.9 20.1 20.1 JM Residential Sweden 16.8 14.3 16.2 15.5 JM International 7.5 7.2 8.4 8.3 JM Construction 0.0 1.8 0.0 0.4 1) REVENUE OPERATING PROFIT AND OPERATING MARGIN 1) SEK m GROUP SEK m SEK m GROUP % 6 000 18 000 2 500 20 5 000 15 000 2 000 16 4 245 4 054 4 000 3 757 12 000 3 417 1 500 12 2 875 3 037 3 000 9 000 1 000 8 2 000 6 000 570 528 500 379 445 4 1 000 3 000 335 372 0 0 0 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Revenue per quarter 12-month period Operating profit per quarter (SEK m) 12-month period margin (%) 1) According to segment reporting 12-month period operating profit (SEK m) 1) According to segment reporting 4 JM GROUP INTERIM REPORT JANUARY – MARCH 2018 REVENUE, OPERATING PROFIT AND OPERATING MARGIN RESIDENTIAL BUILDING RIGHTS JANUARY – MARCH 2018 JANUARY – MARCH 2018 Consolidated revenue according to segment reporting for the The number of available building rights at the end of the first first quarter decreased to SEK 4,054m (4,245).