Stable profit in line with expectations

Stable profit in line with expectations

Press Release 18 August 2010

Interim report

- Net sales fell by 21 per cent to SEK 1,142 (1,439) m, and gross profit
fell by 21 per cent to SEK 752 (954) m due to the previous year's
transaction with AP3 and increased costs relating to the severe winter.

- Profit before tax was SEK 168 (164) m. Profit after tax was SEK 137
(237) m, equivalent to SEK 1.00 (1.70) per share.

- As of 30 June 2010, the property portfolio comprised 559 (585)
properties with a book value of SEK 21,866 (21,861) m.

- 10 (2) properties were acquired for SEK 799 (158) m. 39 (257)
properties were also divested for SEK 906 (7,517) m, generating a profit
of SEK 14 (-128) m. These divestments affected profit for calculating
dividends by SEK 1 (891) m.

- Profit for calculating dividends for the interim period was SEK 219
(858) m, equivalent to SEK 1.60 (6.30) per share.

- The forecast for the full year 2010 profit for calculating dividends
is unchanged at SEK 600 m, or SEK 4.40 per share.

 

Second quarter (April-June)

  · Net sales fell by 15 per cent to SEK 571 (668) m as a result of the
transaction with AP3.
  · Profit before tax was SEK 132 (244) m. Net profit after tax was SEK
80 (304) m, or SEK 0.60 (2.20) per share.

 

“Kungsleden's profits for the period remained stable in year-on-year
terms, adjusted for a positive tax effect, and the transaction with the
Swedish Third Pension Insurance Fund (AP3), both of which affected the
previous year's comparative figures. Even if as a result of the AP3
deal, net sales were down by some SEK 300 m for the period, gross profit
fell by only SEK 200 m, despite the severe winter.

The recovery of the transaction market continued with surprisingly high
volumes in the second quarter. This is a positive sign demonstrating
that the market has probably bottomed out and is heading upwards.
Conditions on the credit market have also improved. Increased
willingness to invest is likely to pave the way for a price increase on
properties in time. Year to date, Kungs­leden has re-valued its
properties by some SEK 100 m, the majority in the second quarter.

In the first half-year, Kungsleden sold 39 properties for just over SEK
900 m while acquiring 10 properties for nearly SEK 800 m. There were
also investments in properties of SEK 145 m in the period. Hemsö was the
largest transaction when four public properties, divided between 38
buildings, were acquired from Swedish property development company
Vasallen for just over SEK 1.1 bn., of which Kungsleden's share is 50
per cent. The property yield was some 7.5 per cent, and completion is on
1 October.

The lettings market has stabilised, even if we still expect vacancies a
touch higher this year than last. But these vacancies are concentrated
on a few individual properties where projects are ongoing to find
solutions.

On 1 October Per Berggren takes over as the Chief Executive of Hemsö.
Mr. Berggren is the Chief Executive of property company Jernhusen. He
has extensive experience of the property sector and will be a
driving-force in the ongoing work of creating two independent
organisations before the mid-point of 2011.

After the severe winter, with increased operating costs, the forecast
for the full year is more challenging. But we are reiterating our
estimate of profit for calculating dividends of SEK 600 m, as we are
noting positive progress on the transaction market.”

Thomas Erséus
Chief Executive

 

Kungsleden AB (publ) discloses the information in this press release
according to the Swedish Securities Markets Act and/or the Swedish
Financial Trading Act. The information was provided for public release
on 18 August 2010 at 01.00 p.m.

For more information, please contact:
Thomas Erséus, CEO Kungsleden | phone 46 8 503 052 04 | mobile 46 70 378
20 24
Johan Risberg, Deputy CEO Kungsleden | phone 46 8 503 052 06 | mobile 46
70 690 65 65