Heimar hf: Interim Financial Statement for the first nine months of
2024
Heimar reports a profit of ISK 5.6 billion in the first nine
months of the year - EBITDA rises by 7.5%
Key Highlights of the
Nine-Month Results
- Operating revenue was ISK 10.9 billion in the first nine
months, with rental income increasing by 7.8% year-over-year,
slightly exceeding inflation by approximately 1.1%.
- EBITDA reached ISK 7.4 billion, marking a 7.5% increase
compared to the same period in 2023.
- Profit totaled ISK 5.6 billion, up from ISK 5.1 billion in the
previous year.
- Investment properties were valued at ISK 192.9
billion.
- Changes in investment property valuations amounted to ISK 7.6
billion for the first nine months.
- Cash from operations was ISK 4.4 billion, with cash on hand at
ISK 4.1 billion at the period’s end.
- Interest-bearing debt stood at ISK 120.4 billion at the end of
the period.
- The debt ratio was 63.5%, and the equity ratio was 31% at the
period’s end.
- Earnings per share for the period were ISK 3.07, up from ISK
2.81 in the previous year.
Halldór
Benjamín Þorbergsson, CEO of Heimar
“Our operations are
performing well and in line with plans. We are experiencing strong
demand for commercial real estate, especially in Heimar’s core
areas. Rental revenue growth is at 7.8% for the first nine months
of the year, equating to approximately 1.1% real revenue
growth.
Heimar has made
substantial investments in updating its property portfolio
alongside acquiring new assets over recent years, and this is now
reflected in the company’s results. These investments have laid the
foundation for the 7.8% rental income growth in the first nine
months of the year.
The company has also
explored opportunities to divest certain assets, with its total
property square footage reduced by nearly 2% since the end of 2022
through strategic sales. So far this year, the company has sold
properties for ISK 3.3 billion at an average price 10% above book
value. Additionally, the company’s share buyback program has been
activated to return the real value of these assets directly to
shareholders.
Management will
continue to explore divestment opportunities that align with
shareholder interests. Heimar’s share value remains below its book
equity, and management is working actively to enhance the company’s
profitability. Improved profitability underpins investment
decisions, and the focus on strengthening competitiveness through
development in core areas and new revenue streams is expected to
positively influence the company’s market valuation.
Heimar has considered
purchasing tens of thousands of square meters in recent months, but
due to market conditions, the emphasis has been on operational
discipline and purchasing only properties that align with the
company’s clear investment strategy.”
Operations and
Performance
Operating revenue
reached ISK 10.922 billion in the first nine months of the year, of
which rental revenue amounted to ISK 10.335 billion. Rental revenue
increased by 7.8% compared to the same period in 2023, equating to
approximately 1.1% real growth. Several changes to the property
portfolio affected rental revenue year-over-year. Operating profit
before sales, valuation adjustments, and depreciation (EBITDA) was
ISK 7.439 billion, a 7.5% increase compared to the same period in
2023. Costs of ISK 100 million associated with a voluntary takeover
offer for Eik fasteignafélag hf. were fully expensed in the second
quarter.
Portfolio and
Financial Position
The estimated value of
the company’s investment properties, excluding leased properties,
was ISK 189.674 billion. The portfolio consisted of 99 properties
totaling approximately 374 thousand square meters at the end of
September. The occupancy rate is approximately 97%, based on full
occupancy potential. Total valuation changes for the first nine
months amounted to ISK 7.630 billion.
At the end of October,
the company announced the completion of the sale of five properties
following an accepted purchase offer from Módelhús ehf. earlier in
the month. The properties include Eyrartröð 2a, Norðurhella 10,
Reykjavíkurvegur 74, and Vatnagarðar 6 and 8, totaling 8,962 square
meters. The sale price of these properties is ISK 3.275 billion,
with an estimated profit margin exceeding 10%. Current annual
rental income from these properties amounts to approximately ISK
250 million. The sales proceeds will be reinvested in line with the
company’s investment strategy. Property handover is scheduled for
November.
Activity and
Outlook
In the first nine
months, leases for over 29,000 square meters were signed,
representing an increase of about 10,000 square meters compared to
the same period last year.
- Management notes strong demand for commercial space within the
company’s core areas, meeting targets for occupancy and rental
rates.
- Following the signing of a lease agreement for a new health
clinic in Akureyri with the North Iceland Health Institution in the
summer of 2022, renovation and expansion work began on Sunnuhlíð 12
in Akureyri, with around 4,070 square meters of new and refurbished
rental space. About two-thirds of these spaces are already leased.
The new health clinic was handed over to the tenant in February
2024, and work on the second phase at Sunnuhlíð 12 continued, with
new spaces being prepared for staged delivery. Akureyri Physical
Therapy started operations in Sunnuhlíð in June 2024.
- Progress continues on the third-floor refurbishment of
Smáralind. Heimar has relocated its offices to part of the space.
An additional 2,000 square meters will be added to the existing
1,000 square meters, creating modern, high-quality office
space.
Management is seeing
significant interest in the new dining and entertainment area at
Smáralind, set to open in fall 2025. Negotiations are ongoing with
various restaurateurs.
Sustainability
Recently, Áslandsskóli
in Hafnarfjörður received BREEAM In-Use certification with a rating
of "Very Good," joining other properties like Smáralind and
Egilshöll with the same certification. Additionally, Borgartún 8-16
received a recertification with the rating "Very Good."
Financing
The company's financial position is
strong, with financial conditions within loan covenants. The equity
ratio stands at 31% (requirement of 25%). At the end of the period,
cash was ISK 4.144 billion, with an additional ISK 4.7 billion in
available credit lines.
The company's
refinancing needs are limited in the coming years, with no loans or
bonds maturing in 2024. The total refinancing requirement for 2025
is around ISK 1.2 billion.
Presentation
of the Interim Report
In conjunction with
the results release, Heimar invites stakeholders to an open
presentation at 4:15 pm on the same day. The event will be held at
the company's new headquarters in Smáralind, Hagasmári 1, 201
Kópavogur. Light refreshments will be served, and attendees can
experience Smáralind's new virtual reality leisure area. Halldór
Benjamín Þorbergsson, CEO of Heimar, will present the results and
answer questions after the presentation.
Registration for the
presentation can be made via email at fjarfestatengsl@heimar.is.
The presentation will also be streamed online at the following
link:
https://www.heimar.is/kynningarfundir/uppgjor-9m-2024/
The interim report for
the first nine months and presentation materials are available
at:
https://www.heimar.is/fjarfestar/fjarhagsupplysingar/
For
further information, please
contact Halldór Benjamín Þorbergsson, CEO of Heimar hf.,
at +354 821 0001
- Heimar hf. - Announcement of Interim Report 3Q 2024
- Heimar hf. - Interim Report Q3 in icelandic 2024
- Heimar hf. - investor presentation Q3 - 24
Heimar Hf (LSE:0Q8S)
Historical Stock Chart
From Oct 2024 to Nov 2024
Heimar Hf (LSE:0Q8S)
Historical Stock Chart
From Nov 2023 to Nov 2024
