Klövern AB (publ) : Interim Report January – March 2014


Income increased by 9 per cent to SEK 587 million (541).

The operating surplus increased by 15 per cent to SEK 368 million (321).

Profit from property management increased by 15 per cent to SEK 163 million (142).

Changes in value of properties amounted to SEK 157 million (-56), of derivatives to SEK -156 million (157) and share in earnings of associated companies amounted to SEK -45 million (-).

Net profit amounted to SEK 87 million (200), corresponding to SEK 0.24 (0.92) per common share.

Taking possession of 2 properties for SEK 276 million and sale of 3 properties for SEK 33 million.

Globen City was acquired and taken possession of at the beginning of the second quarter.

Statement by the CEO

A good first quarter
Klövern reported a strong profit from property management for the first quarter of the year. This was partly due to a mild winter but also a result of successful letting work and good cost control. The quarter was otherwise characterized by continued transaction activity, not least in the form of intensive work with the acquisition of Globen City.

Income continued to develop well, partly due to the high level of moving in at the end of 2013. Moving-in continued to be high during the first quarter of 2014 with a contract value of almost SEK 50 million per year.

We are also happy that we, after the end of the first quarter, have signed a 12-year lease with Tele2 regarding 20,000 sq. m. of office space in Kista. The premises will be part of a newly constructed 27,000 sq. m. office building and clearly illustrate the attractiveness of Kista.

A general focus on cost management, in combination with the mild winter, has allowed Klövern to produce a strong operating surplus. The operating margin in the first quarter was 63 per cent, compared to 59 per cent for the same period in 2013.

The market for property transactions has stayed strong. This is partly because of a greater willingness to lend among banks but also because of an increasing amount of new investors in the property market. Properties today provide a, in many cases, far better return on investment than for example the bond market.

The largest transaction of the past quarter was Globen City, but since the acquisition occurred on 11 April, the transaction is not included in the accounts for the period. The transaction includes the properties Arenan 2, 3, 6 and 8 in Stockholm as well as Startboxen 3 in Solna. Total lettable area amounts to around 140,000 sq.m. and mainly consists of offices. We believe that the Globen dis­trict will have an even more central status in the expanding Söderstaden area and that it will form one of the truly attractive office locations south of Stockholm’s city.

During the quarter we completed the acquisition of the property Idéskaparen 2 in Linköping. It is a modern office property of 23,600 sq.m., wholly rented on a 10 year lease contract. Klövern also signed a contract for the acquisition of the property Köpmannen 5 in Västerås from IKEA Fastigheter. The property is being completely refurbished and will consist of almost 17,000 sq.m. of retail space with, among others, Systembolaget, Willys and Rusta as tenants.

With a view to securing financing for above all the Globen acqui­sition, Klövern issued an uncovered bond loan in February with a duration of four years. The bond loan has a variable interest rate of three-month Stibor + 2.25 per cent. In comparison with Klövern’s October 2012 uncovered bond issue with a duration of four years and three months at three-month Stibor + 4.00 per cent, it is clear that the bond market has matured. Although bank loans are normally the cheapest form of financing, the cost for bonds are now almost on par with bank loans.

In conclusion, the result of the first quarter of the year is positive as regards both operating activities and attractive acquisitions”, says Klöverns CEO Rutger Arnhult.

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

Klövern is a real estate company committed to working closely with customers to offer them efficient premises in Swedish growth regions. As of 31 March 2013, the value of the properties totalled approximately SEK 24.6 billion and the rental value on an annual basis was around SEK 2.6 billion. Klövern is listed on Nasdaq OMX Stockholm Mid Cap. For further information, see kelly.corem.se.

Klövern AB (publ), Box 1024, SE-611 29 Nyköping, Sweden. Phone: +46 155-44 33 00, fax: +46 155-44 33 22,
e-mail: info@klovern.se.

This information is such that Klövern AB (publ) is obliged to disclose under the Securities Market Act and/or the Financial Instruments Trading Act. The information was made available for publication on 23 April 2014.

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