Report Q4 2015
Nordlys AB (publ)
Management Commentary
Adjustments in relation to 2015 annual accounting affect Q4 2015, i.e. financial costs. Thus, the result of Q4 2015 is not comparable to the budget.
However, accounting adjustments do not affect the operating activities. Revenues deviate positively from budget due to the sale of the Finnish building rights. The new tenant in Finland who has a rent-free period throughout Q4 2015 has partly offset this. Operating costs are at a higher level than budget in both operating entities; Galliaden AB and Turku Ausade Hotelli Oy. It regards i.e. property tax and the contribution to the renovation in Finland.
Administrative costs are higher than budget due to extraordinary costs to realtors, attorneys, and postponed costs regarding the IFRS conversion.
At the end of a financial year, tax is regulated and reflects IFRS. IFRS likewise affects depreciations and valuation of the properties. DTZ Finland Oy and Jones Lang LaSalle, Sweden have conducted new valuations of the Finnish and Swedish portfolios In December 2015, respectively. The new valuations have caused positive value adjustments.
Financial costs in Q4 2015 comprise interest costs on the Bond and interest costs on the Shareholder's loan and reflect adjustments referring to 2015 annual accounting. Actual Q4 2015 interest costs on the Bond is SEK 10,8 m and SEK 759t regarding the shareholder's loan which are being rolled up.
Moreover, exchange adjustments are not realized. Due to the development of the EUR exchange rate throughout Q4 2015 exchange adjustments are a significant amount.
The cash position has dropped compared to previous quarter, due to amortization and no rental income from the new Finnish tenant. Throughout 2016 cash will accumulate as the Finnish hotel tenant starts to pay rent in February 2016 and next amortization is not until Q3 2016.
All covenant tests are met.
HUG#1989856
