• Income from operations amounted to ISK 8,656 million.
  • Lease income of the year amounted to ISK 7,393 million compared to ISK 6,765 million in 2018.
  • EBITDA amounted to ISK 5,562 million.
  • Profit amounted to ISK 2,968 million.
  • Net cash from operations was ISK 3,104 million.
  • The book value of investment properties amounted to ISK 95,918 million.
  • The book value of assets for own use amounted to ISK 4,068 million.
  • Changes in value of investment properties totalled ISK 2,170 million.
  • Interest-bearing debt amounted to ISK 59,780 million.
  • Equity ratio was 31.7%.
  • Earnings per share were ISK 0.86.
  • Economic occupancy rate was 94.9% at the end of the year.
  • Weighted average interest percentage of non-current indexed liabilities were 3.65% at the end of the year.
  • The Board proposes that dividend payment for ISK 800 million will be payed to shareholders, ISK 0.23 per share.

The Consolidated Financial Statements of Eik fasteignafélag hf. (“Eik” or the “Company”) were approved by the Company's Board of Directors on 10 March 2020.

Garðar Hannes Friðjónsson, CEO:

“The Company performed well during the year 2019. EBITDA amounted to ISK 5,562 million and the Company’s profit amounted to ISK 2,968 million. The Company’s EBITDA is nearly 1% below the Company’s EBITDA forecast.

The Company refinanced all interest bearing long term liabilities of its subsidiary EF1 to banks in the year and, concurrently, issued two new bond classes. EIK 050749 was increased twice during the year following its initial public offering and total nominal value of the class was ISK 6,000 million at year end with an interest rate of 3.077%. EIK 050726 was increased once following its initial public offering and the total nominal value of the class was ISK 1,500 million at year end with an interest rate of 2.712%.”

Eik’s consolidated financial statements include the consolidated financial statements of the company and its subsidiaries, and are prepared in accordance with International Financial Reporting Standards (IFRS). The company’s auditors, KPMG ehf., have audited the financial statements and issued an unqualified audit opinion.

Dividend proposal

Eik’s dividend policy has been to pay to shareholders around 35% of net cash from operating activities either as dividend or by buying back its own shares. The Company’s Board of Directors proposes to the annual general meeting that will be held, 2 April 2020, that an amount of ISK 1,098 million will be distributed to shareholders for the operating year 2019. Own shares have already been purchased for an amount of ISK 298 million and thus the Board proposes a dividend payment of ISK 800 million to shareholders or an equivalent of ISK 0.23 per share.

Outlook

The Company has prepared a detailed financial budget for 2020 accessible on its website, www.eik.is.

According to the issued financial budget for the year 2020 the Company’s EBITDA will be ISK 5,689 million. based on 2.5% average inflation rate which is a 2.3% increase compare to the results of 2019. The group’s income will be ISK 8,939 million, expenses 3,250 million and maintenance and refurbishment ISK 406 million. The Company expects that investment in current real estate of the Company may be in the range of ISK 1,500 – 2,500 in the year 2020 and that all investments that the Company makes will provide adequate returns.

The year has started well, and the first two months of the year are in line with the Company’s budget, both in terms of rentals and with Hótel 1919. The Hótel 1919 booking status for March and April is good and in accordance with forecasts. That can, however, change with short notice.

Rapid outbreak of COVID-19 will have wide ranging effects on the economy. The Company is well placed to meet considerable fluctuations as a result thereof as it has more than 400 tenants and the Company’s portfolio is diverse. Around 45% of the portfolio is constituted of offices which is the market that is most flexible in the context of changes in the behaviour of tenants on account of risk of infection measures taken to counter it, such as a ban on mass gatherings or quarantines. Around 11% of the Company’s portfolio is hotels, but the travel industry is the commerce sector that will likely be impacted most by the virus initially. In addition, the Company has lease agreements with various parties in the travel industry that lease offices, commercial premises or warehouses from the Company. It is difficult to assess the potential impact on income as matters currently stand, but in the budget for 2020 the Company expects income from hotels to amount to ISK 690-710 million (based on the EBITDAR of Hótel 1919) and that income from parties in the travel industry to ISK 110-120 million. The Company’s largest real estate leased under hotel operations, is Mýrargata 2-16 which is subject to a long-term lease to Icelandair Hotels. Around 2/3 of rental income from other parties in the travel industry than hotels come from financially strong tenants.

Bond class increase and refinancing

In mid-February, the Company increased its bond classes EIK 050749 and EIK 050726 by ISK 1,180 million nominal value. EIK 050749 is now ISK 6,500 million, nominal value and EIK 050726 ISK 2,180 million, nominal value. In connection with the increase, the Company repaid bank loans with unfavourable terms.

The Company always strives to obtain the most favourable interest rates available and at the end of the year the Company’s indexed interest rates were 3.65%. In June 2019, an authorisation to refinance the bond series LF 14 1 opened, interest on those bonds is 3.9% and its total amount is just over ISK 12.4 billion, nominal value. In addition, the Company has flexible bank financing in the amount of just over ISK 9.2 billion which is payable without a prepayment fee.

Merger of subsidiaries

Two subsidiaries of Eik, EF12 ehf. and EF14 ehf. have been merged with the Company. Also, LF11 ehf., a subsidiary of Landfestar ehf., has merged with another subsidiary of Landfestar ehf., LF1 ehf. The mergers were effective as of 1 January 2019.

Company Portfolio

Properties owned by the Company number just over 100 and total over 310,000 square meters in 600 units leased to over 400 tenants. The Company’s principal properties are Borgartún 21, 21a and 26; Suðurlandsbraut 8 and 10; Mýrargata 2-16; Pósthússtræti 2; Álfheimar 74; Grjótháls 1-3 and Austurstræti 5, 6, 7 and 17 in Reykjavík; Smáratorg 1 and 3 in Kópavogur and Glerártorg in Akureyri.

The largest share of Eik’s real estate portfolio is office space, 45%, followed by commercial premises (24%), warehouses (13%), hotels (11%) and other spaces (8%).

The Company purchased two properties during the year and sold one and the portfolio increased by 1,300 square meters. The Company’s investments in properties are in line with its policy on return rather than growth. The properties that the Company bought were a warehouse at Vatnagarðar 14 and commercial premises at Skólavörðustígur 42. The Company sold the property at Barónsstígur 11.

Presentation of Results

An open presentation of the results will be held on Wednesday, 11 March 2020 at 8:30 am in the meeting hall Goðafoss in Hotel 1919, Pósthússtræti 2, Reykjavík. A light breakfast will be served, commencing at 8:00 am. Garðar Hannes Friðjónsson, CEO of Eik and Lýður H. Gunnarsson, CFO, will present the results and respond to questions following the presentation.

2020 Financial Calendar

Publishing of quarterly and annual results is planned on the following dates:

  • Annual General Meeting                                           2 April 2020
  • Quarterly results Q1 2020                                         29 April 2020
  • Quarterly results Q2 2020                                         27 August 2020
  • Quarterly results Q3 2020                                         28 October 2020
  • Management report for 2020 and budget for 2021   11 February 2021
  • 2020 Annual Results                                                 4 March 2021

Financial results will be disclosed and published after market closing of NASDAQ Iceland.

Attached is the Consolidated Financial Statement for 2019. The Company's ESG Report is accessible on its website (in Icelandic only).

For further information contact:

Garðar Hannes Friðjónsson, CEO, gardar@eik.is, s. 590-2200
Lýður H. Gunnarsson, CFO, lydur@eik.is, s. 590-2200 / 820-8980

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