Eik fasteignafélag hf.: Interim results for the first three months
of 2024
The Interim Consolidated Financial Statements of
Eik fasteignafélag hf. for the period 1 January to 31 March 2024
were approved by the Company’s Board of Directors and CEO on 2 May
2024
The main results are as follows:
- Income from operations amounted to ISK 2,709 million
- Thereof, rental income amounted to ISK 2,365 million
- EBITDA amounted to ISK 1,700 million
- Total profit amounted to ISK 2,051 million.
- Net cash from operations amounted to ISK 1,011 million.
- The book value of investment properties amounted to ISK 135,656
million.
- The book value of assets for own use amounted to ISK 5,956
million
- Change in value of investment properties amounted to ISK 2,734
million.
- Cash and cash equivalents amounted to ISK 1,623 million.
- Interest-bearing debt amounted to ISK 77,191 million.
- Equity ratio was 35.0%.
- Profit per share was ISK 0.6.
- Economic occupancy rate was 93.8%
- Weighted indexed interest was 3.33%.
- Weighted unindexed interest was 6.26%.
Attached is an interim financial report which contains Interim
Consolidated Financial Statements for the first three months of the
year 2024 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.
Group‘s operations
The Company's operations went well in the first
three months of 2024, and the performance was in line with the
Company's management expectations. The Company's operating revenues
for the first three months of 2024 amounted to ISK 2.709 million,
of which rental income was ISK 2.365 million. Operating expenses
were ISK 982 million, and impairment of trade receivables was ISK
27 million.
The operating profit before valuation changes
and depreciation amounted to ISK 1.700 million, compared to ISK
1.760 million for the same period in the previous year. Profit
before income tax was ISK 2.564 million, and the total profit for
the first three months of 2024 was ISK 2.051 million.
The net operating income (NOI) ratio (i.e.
operating profit before valuation changes and depreciation as a
percentage of rental income) was 71.0% for the first three months
of 2024, compared to 73.6% for the same period in 2023.
The Company's investment properties are valued
at their fair value in accordance with international financial
accounting standards (IFRS), taking into account the present value
of future cash flows of individual assets. Changes in fair value
are reflected in the valuation changes of investment properties,
amounting to ISK 2.734 million in the first three months of the
year. The main factors contributing to the increase in the value of
investment assets are inflation, new contracts, and lower discount
rates on future cash flows. The main factor contributing to the
decrease in value is an increase in capitalization rates.
Financial Position
The Company's total assets amounted to ISK
145.984 million on March 31st, 2024. Of this, investment properties
were valued at ISK 135.656 million, which consist of real estate
leased to tenants amounting to ISK 124.861 million, investment
assets in development amounting to ISK 4.394 million, building
rights and land of ISK 3.716 million, pre-paid street construction
tax of ISK 13 million, and lease assets with a value of ISK 2.673
million. Assets for own use amounted to ISK 5.956 million, and
development assets was valued at ISK 1.084 million. The Company's
equity amounted to ISK 51.074 million at the end of the period,
with an equity ratio of 35.0%. At the Company's annual meeting on
April 11th, 2024, it was approved to distribute a dividend to
shareholders for the 2023 fiscal year in the amount of ISK 2.540
million, which was paid to shareholders on April 30th, 2024. The
equity position as of March 31st, 2024, does not reflect that
payment.
The Company's total liabilities amounted to ISK
94.910 million on March 31st, 2024. Of this, interest-bearing
liabilities were ISK 77.191 million, and income tax liabilities
were ISK 13.016 million. The loan-to-value ratio of the Company,
i.e. the net position of interest-bearing debts against the value
of real estate and building rights, was 54.1%. The Company
refinanced non-indexed loans with variable interest rates with
indexed loans with variable interest rates during the period. The
proportion of indexed loans was approximately 93% at the end of the
first quarter of 2024.
Asset Portfolio
The Company has purchased a preschool building
located at Rettarheiði 45 in Hveragerdi, and it is estimated that
it will be taken into use later this year. The building is an
extension to the existing preschool in Hveragerdi, and negotiations
have been conducted with Hveragerdi Municipality for a long-term
lease of the preschool.
Furthermore, the sales process for
Raudararstigur 27 in Reykjavík is about to commence, as plans to
convert office space into apartments on the 2nd to 4th floors of
the building are being finalized. It is expected that the sales
process will be completed this summer when the Ministry of Foreign
Affairs moves out of the building.
Economic occupancy rate
The Company's economic occupancy rate was 93.8%
at the end of the quarter, decreasing by 0.5% from the beginning of
the year.
In the Company's annual report 2023, it was
mentioned that the Company estimates that the economic occupancy
rate will be 95% by the end of 2025 including around 10,000 square
meters that were classified as development properties at year-end
2023. Upon publication of the financial statement of the first
quarter 2024 the Company has leased around third of those square
meters.
The Company’s journey towards a 95% economic
occupancy rate is therefore well underway and ahead of
schedule.
The Company’s journey will be covered in more
detail at the online meeting.
Withdrawal of voluntary takeover
offer
On July 6th, 2023, the shareholders of the
Company received a voluntary takeover offer from Reginn Ltd. with
plans to present such an offer a month in advance. The offer was
made in accordance with the provisions of the Takeover Act No.
108/2007, which, among other things, prohibited the Company's board
from making decisions that could affect the offer without obtaining
prior approval from a shareholders' meeting. On April 29th, the
board of Reginn Ltd. announced the withdrawal of its merger
notification to the Competition Authority regarding the voluntary
takeover offer to the shareholders of Eikar, which was presented on
July 6th, 2023. In parallel, Reginn intends to seek permission from
the Financial Supervisory Authority of the Central Bank of Iceland
to withdraw the offer. The Company's board welcomes the conclusion
of this long process, which has taken about 11 months and has had a
detrimental effect on its operations. With the withdrawal of the
offer, the Company has the freedom to take independent and
strategic decisions as a self-sufficient Company with a strong
asset portfolio and a promising future.
Online meeting
An online open meeting will be held on Friday the 3rd of May 2024,
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://vimeo.com/event/4268666/29bdd79fb0
Following registration, participants will receive an e-mail with
further information.
Market participants can send questions before or during the
meeting to the e-mail address fjarfestatengsl@eik.is.
Management encourages marketers to submit questions prior to the
meeting so that answers can be prepared, if needed. Questions will
be answered after the presentation.
Financial Calendar
Following is the planned dates for the publishing of quarterly
and annual results:
Quarterly result – 2
quarter 15. August
2024
Quarterly result – 3 quarter
31. October 2024
Annual results
2024
13 February 2024
Publishing of the financial will be done after the closing of
market.
For further information, please contact:
Garðar Hannes Friðjónsson, CFO, gardar@eik.is, s. 590-2200
Lýður H. Gunnarsson, CEO, lydur@eik.is, s. 820-8980
- Q1 2024 Condensed consolidated interim financial statement
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