Eik fasteignafélag hf.: Interim results for the first six months of 2022- Income from operations amounted to ISK 4,691 million.
- Operating profit before changes in value, sales profit and depreciation amounted to ISK 3,075 million.
- Total profit amounted to ISK 5,754 million.
- Net cash from operations was ISK 1,927 million.
- The book value of investment properties amounted to ISK 115,611 million.
- The book value of assets for own use amounted to ISK 4,156 million at the end of the period.
- Change in value of investment properties was ISK 7,981 million.
- Cash and cash equivalents amounted to ISK 1,143 million.
- Interest-bearing debt amounted to ISK 67,147 million at the end of the period.
- Equity ratio was 33.8%.
- Profit per share was ISK 1.68.
- Economic occupancy rate was 94.5% at the end of the period
- Weighted indexed interest was 3.03% at the end of the period.
- Weighted unindexed interest was 5.74% at the end of the period.
The Interim Financial Statements of Eik fasteignafélag hf. for the period 1 January to 30 June 2022 were approved by the Company’s Board of Directors and CEO on 25 August 2022. Attached is an interim financial report which contains Interim Financial Statements for the first six months of the year together with further information on the Company’s operations than are included in the announcement. In case of any discrepancy in the English and the Icelandic versions of this announcement or the Financial Statements, the Icelandic version shall prevail. Company operations The Company performed well in the first six months of the year 2022 and the results were in line with management’s forecasts. Operating income for the first six months of the year 2022 amounted to ISK 4,691 million. Of this amount, rental income was ISK 4,070 million. Operating profit before changes in value, sales profit and depreciation amounted to ISK 3,075 million and increased by a little less than 14% between years. Profit before income tax amounted to ISK 7,196 million and total profit of the Group for the first six months of the year 2022 amounted to ISK 5,754 million. The Net Operating Income (NOI) ratio (i.e. operating profit before changes in value and depreciation as a ratio of lease income) was 73.9% for the first six months of the year 2022, compared to 71.4% for the same period in 2021. The Company's investment properties are valued at fair value in accordance with International Financial Reporting Standards (IFRS), based in part on the discounted future cash flows of individual assets. Changes in fair value are recognised in changes in value of investment properties, which were around ISK 7,981 million in the first six months of the year. Balance Sheet The Company's total assets amounted to ISK 122,946 million as at 30 June 2022. Of this, investment properties valued at ISK 115,611 million consist of real estate leased to tenants amounting to ISK 111,970 million, lease assets ISK 2,493 million, investment properties under development ISK 709 million, building rights and lots ISK 448 million and pre-paid street construction fees in the amount of ISK 13 million. Assets for own use amounted to ISK 4,156 million and assets under development amounted to ISK 668 million. The Company's equity amounted to ISK 41,497 million at the end of June 2022 and its equity ratio was 33.8%. At the Company’s Annual General Meeting on 5 April 2022 a dividend payment to shareholders was approved for to the operating year 2021 amounting to ISK 1,740 million which was paid on 28 April 2022. The Company’s total liabilities amounted to ISK 81,449 million as at 30 June 2022, of which interest-bearing debt was ISK 67,147 million and deferred tax liability ISK 10,122 million Economic occupancy rate The Company's economic occupancy rate was 94.5% at the end of the period but was 94.2% at the beginning of the year. Outlook Inflation has been high in the first six months of the year and continuing high inflation is projected throughout the year. Based on consumer price index for financial indexation in September the Company expects that EBITDA for the year will be between ISK 6,320–6,580 million at a fixed price throughout the year. Effects due to COVID-19 The effects of COVID-19 on the Company’s operations have decreased rapidly and were limited at the end of the second quarter. The Company expects that the effects will be even smaller in the second half of this year than the first based on unchanged situation of the pandemic and believes that the effects were negative by ISK 40–45 million on EBITDA in the first half of the year. Furthermore, effects of COVID-19 on value of the Company’s investment properties have mostly dissipated. Company Portfolio The Company received a part of the property at Sóltún 24 in February, but the property shares a plot and parking garage with the Company’s property at Sóltún 26. The Company also received a 503 sqm. industrial space in Skeifan 5 in June and currently owns half of the property. Furthermore, the Company acquired and received in June a 145 sqm. restaurant space at Pósthússtræti 2 and owns all of the property following this transaction. The Company signed an agreement on the sale of a 500 sqm. industrial property at Hjalteyrargata 4 in Akureyri and the property will be delivered on 1 October 2022. Booked gain on sales will be around ISK 74 million in the third quarter. The Company’s offer to acquire a 1,300 sqm. warehouse space at Smiðshöfði 9 has been accepted and work is currently under way on fulfilling conditions in the offer. As reported in the Company’s financial statements for the year 2021, the Company’s tenant at Höfðasel 2 and 4 in Akranes has announced the utilization of a purchase option on the properties and they will be delivered on 30 September 2022. Sales price is linked to consumer price index for financial indexation and gain on sale will be booked in the third quarter amounting to the difference of booked value and the sales price. Based on consumer price index for financial indexation in September 2022 the difference amounts to around ISK 285 million. The Company is working on purchase agreements relating to the Company’s planned purchase of the real estate companies Lambhagavegur 23 ehf. and Laufskálar fasteignafélag ehf. and will publish information on Nasdaq when it has been concluded. The Group owns just over 110 properties which total almost 314,000 sqm. of rental space in just over 600 units. Total number of tenants is over 400. 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. The Company’s largest tenants are Húsasmiðjan, Flugleiðahótel, Ríkiseignir, Landsbankinn, Sýn, Össur, Míla, Deloitte, Síminn and VÍS. The largest part of the Company’s real estate portfolio is office space, or 43%, followed by commercial premises (25%), warehouses (14%), hotel (7%), health related operations (7%) and bars and restaurants (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), 17% in the Reykjavik city centre and 19% in Smárinn-Mjódd. 7% of the portfolio is located outside the capital region, whereof around 6% is in Akureyri. Open meeting An open meeting will be held on Friday 26 August 2022 at 8:30 am in the meeting room Hlíðaberg in Hotel Kea, Akureyri. A light breakfast will be offered as of 8:00 am. Garðar Hannes Friðjónsson CEO and Lýður H. Gunnarsson CFO will present the results and respond to questions following the presentation. The meeting will also be in electronic form. Registration to the meeting is here: https://us02web.zoom.us/webinar/register/WN_4apW4ANGSs2TTqKSP8CkCw Following registration, participants will receive an e-mail with further information. Changed 2022 Financial Calendar Following are planned dates for publishing of interim and annual results: Quarterly results Q3 2022 27 October 2022
Management accounts 2022 and 2023 budget 6 February 2023
2022 Annual Results 28 February 2023 Financial information will be published after closing of markets. Attention is drawn to changes in planned publication of 2022 annual results. For further information contact: Garðar Hannes Friðjónsson, CEO, gardar@eik.is, tel. 590-2200
Lýður H. Gunnarsson, CFO, lydur@eik.is, tel. 820-8980
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