Eik fasteignafélag hf.: Interim results for the first nine months
of 2021
- Operating Income amounted to ISK 6,421 million.
- Impairment of trade receivables amounted to ISK 104
million.
- EBITDA amounted to ISK 4,229 million.
- Total comprehensive income amounted to ISK 3,638 million.
- Net cash from operations was ISK 2,579 million.
- The book value of investment properties amounted to ISK 103,537
million at the end of the period.
- The book value of assets for own use amounted to ISK 4,160
million at the end of the period.
- Change in value of investment properties was ISK 3,591
million.
- Cash and cash equivalents amounted to ISK 3,028 million.
- Interest-bearing debt amounted to ISK 64,463 million at the end
of the period.
- Equity ratio was 32.1%.
- Earnings per share were ISK 1.07.
- Economic occupancy rate was 93.2% at the end of the
period.
- Weighted indexed interest was 3.03% at the end of the
period.
- Weighted unindexed interest was 3.62% at the end of the
period.
The Interim Financial Statements of Eik fasteignafélag hf. for
the period 1 January to 30 September 2021 were approved by the
Company’s Board of Directors and CEO on 28 October 2021.
In case of any discrepancy in the English and the Icelandic
versions of this announcement or the Financial Statements, the
Icelandic version shall prevail.
Attached are Interim Financial Statements for the first nine
months of the year.
The Company performed well in the first nine months of 2021 and
the results were in line with the Company’s updated management
forecast. Operating income for the first nine months of the year
2021 amounted to ISK 6,421 million. Of this amount, rental income
was ISK 5,714 million. EBITDA amounted to ISK 4,229 million and
increased by 12.1% between years. Profit before income tax amounted
to ISK 4,545 million and comprehensive income of the Group for the
first nine months of the year 2021 amounted to ISK 3,638
million.
The Net Operating Income (NOI) ratio (i.e. operating profit
before changes in value and depreciation as a ratio of lease
income) was 72.7% for the first nine months of the year 2021,
compared to 67.5% for the same period in 2020.
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 ISK 3,591 million in the first
nine months of the year.
Balance Sheet
The Company's total assets amounted to ISK 112,900 million as at
30 September 2021. Of this, investment properties were valued at
ISK 103,537 million, which consist of real estate leased to tenants
amounting to ISK 100,043 million, leased assets ISK 2,357 million,
investment properties under development ISK 698 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 4,160 million and assets under development amounted to ISK
659 million. The Company's equity amounted to ISK 36,188 million at
the end of June 2021 and its equity ratio was 32.1%. The Company’s
total liabilities amounted to ISK 76,711 million as at 30 September
2021, of which interest-bearing debt was ISK 64,463 million and
deferred tax liability ISK 8,352 million.
Economic occupancy rate
The Company's economic occupancy rate increased by 1.2% from the
beginning of the year and was 93.2% at the end of the third
quarter.
Updated forecast and effects due to
COVID-19
When the Company published updated forecast on 10 August 2021,
the EBITDA forecast for the year 2021 was between ISK 5,400 – 5,700
million at price levels in July 2021. The Company currently
estimates that the EBITDA for the year will be between ISK 5,500 –
5,800 million at October 2021 price levels. As previously stated,
the Company’s forecast is subject to risk and uncertainty factors,
mostly effects of the pandemic, which can lead to different results
than are specified in the forecast.
The effects of COVID-19 on the Company’s operations are still
considerable but are decreasing. The Company estimates that direct
effects of COVID-19 on the operations were ISK 185–195 million in
the first nine months of the year and they can mostly be traced to
tourism companies. The effects are quite visible in impairment of
trade receivables and the operations of Hótel 1919. It is unclear
how long and to what extent the pandemic will continue to have
effect on the Company’s operations in the coming periods.
Financing
The Company sold for the nominal value of ISK 1,500 million in
the bond class EIK 141233 in September with the required return
1.73%. Earlier in the year the Company issued two new bond classes,
EIK 23 1 and EIK 100327, and sold in total in both classes for the
nominal value of ISK 4,200 million. These three bond classes have
been listed on Nasdaq Iceland, EIK 23 1 in May and EIK 100327 and
EIK 141233 in September. The bond class EIK 15 1, bearing 3.3%
interest rate, was settled in March 2021 and the repayment was
fully financed with an unindexed bank loan.
Weighted indexed interest terms were 3.03% at the end of the
quarter and weighted unindexed interest terms were 3.62%, as the
Company always strives for the most economical financing terms.
Company Portfolio
The Company has acquired just under 1,000 sqm. of space in
Síðumúli 15 during the year and now owns the whole property at
Síðumúli 13 and 15. In addition the Company acquired Vatnagarðar 24
and 26 which are just over 2,300 sqm. of commercial and industrial
space housing the headquarters of Tesla in Iceland. These
properties have all been delivered to the Company.
The Company has sold Hafnarstræti 4 in the city centre of
Reykjavík, Fjölnisgata 3b in Akureyri and Kirkjubraut 28 in
Akranes. These properties have all been delivered to the new
owners.
The Group owns over 110 properties which total almost 312,000
sqm. of rental space in over 650 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 (Hotel 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, Icelandair Hotels, Ríkiseignir,
Landsbankinn, Sýn, Rúmfatalagerinn, Össur, Míla, Deloitte and
Síminn.
The largest part of Eik's real estate portfolio is office space,
or 45%, followed by commercial premises (24%), warehouses (14%),
hotel (10%), health related operations (4%) and bars and
restaurants (3%). Approximately 92% 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), 19% in Smárinn-Mjódd and 17% in the Reykjavik city centre 8%
of the portfolio is located outside the capital region, whereof
almost 7% is in Akureyri.
Changes to department roles
Development of real estate and lots, previously handled by the
construction department, is now handled by business
development.
Amended Financial Calendar for
2021
Following are planned dates for publishing of annual results and
AGM:
2021 Annual
Results
17 February 2022
2022 Annual general meeting
31 March 2022
Previously planned dates for publishing of management accounts
2021 and 2022 budget were 11 February 2022 and annual results
on 3 March 2022.
Electronic presentation
An electronic presentation will be held on Friday 29 October
2021 at 8:30 a.m. Garðar Hannes Friðjónsson, CEO, and Lýður H.
Gunnarsson, CFO, will present the results and respond to questions
following the presentation
Registration to the meeting is here:
https://origo.zoom.us/webinar/register/WN_CZUoDSvURLyFhz8AcuvsXA
Following registration, participants will receive an e-mail with
further information.
For further information contact:
Garðar Hannes Friðjónsson, CEO, gardar@eik.is, tel. 590-2200
Lýður H. Gunnarsson, CFO, lydur@eik.is, tel. 820-8980
- Q3 2021 Condensed consolidated interim financial statement
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