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Akelius strives for a higher ratingAkelius has closed and signed binding agreements to sell properties amounting to EUR 1.74 billion during the year.Reported loan-to-value is 40 percent.The signed but not yet closed property disposals of EUR 1 billion will decrease loan-to-value further.Sales prices have been 15 percent above fair value,indicating significant strength in the balance sheet.
contemplating issue of equityTo further strengthen the company,a potential issue of equity is being prepared.An extraordinary general meeting will be held in the beginning of September.
net letting EUR 11.5 millionThe bottlenecks in construction have been addressed.The company has hired more staff and initiated cooperation with additional construction companies.This means that more apartments are being delivered to letting, as compared to last year.
Real vacancy remained stable at around 1 percent.Like-for-like income grew with roughly 4 percent.
Berlin politicians stop upgradingBerlin politicians aim to introduce a rental freeze for five years.Akelius has, consequently, stopped its upgrading activity in Berlin.
Housing shortage is a major issue in major cities, such as Berlin.The only way to ease the situation is to build more apartments. Freezing rents will not create any additional apartments.The proposed regulation will rather reduce the construction of new apartments.That is a slap in the face to the climate, construction workers and all those struggling to find an apartment in Berlin.
Net operating income 131 1.1Total property return 385 Per annum: 6.3
annual property return 6.3 percent
20181614121086420
2019Jan–Jun
2013Jan–Dec
2014Jan–Dec
2015Jan–Dec
income return value growth average annual property return
2016Jan–Dec
2017Jan–Dec
2018Jan–Dec
percent
change in value EUR 254 million
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interim report, January to June 2019
interest expensesliquidity
unsecured loanssecured loans
loan-to-value ratio 40 percent
interest expenses and liquidityEUR million
liquidity
profit before tax and revaluation
cash uses and sources12 months forward, EUR million
short-term loansinvestmentscontracted purchases
equity and hybrid capital ratio 49 percent
ordinary equitypreferred equity
cash uses cash sources
395
50
307
38
hybrid bond
sales
Dec 312018
44
19
25
Jun 302019
40
15
25
47
37
5
Dec 312018
Jun 302019
5
Jan–Jun 2018
Jun 30 2018
Jan–Jun 2019
Jun 30 2019
66
650
69
756
financing
1,167
756
146
265
49
40
54
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interim report, January to June 2019
liquidity fixed interest termdebt maturities
interest rate hedges, average interest rateEUR million, percent and year
debt maturitiesEUR million, year
average interest rate 2.58 percent
fixed interest term 4.6 years debt maturities 5.7 years
0–1
307
1–2
648
3–4
49
4–5
612
>52–3
799
0–1
6.94
1–2
597
2.71
2–3
1.48
822
3–4
53
4–5
800
>5
2.60
2,295
1.45
4.3
5.7
4.55.0
5.35.6
4.5
Dec 31 2015
Dec 31 2016
Dec 31 2017
Dec 31 2018
5.7
4.6
5.7
Jun 302019
2.58
3.44
2.62
Dec 31 2016
2.58
Dec 31 2017
2.64
Dec 31 2018
Dec 31 2015
384
2,536
Jun 302019
financing
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interim report, January to June 2019
EUR millionJul 2018– Jun 2019
Earnings capacity as at
June 30, 20191
Rental income 502 5322
Operating expenses -206 -199Maintenance -31 -30Net operating income 265 303Central administration and other items3 -28 -29EBITDA 237 274Other financial income and expenses -2 -1Adjusted EBITDA 235 273Net interest expenses -134 -127Interest coverage ratio excluding realized value growth 1.8 2.2
Realized value growth 322 -Interest coverage ratio 4.2 -
Net debt as per June 30, 2019 4,933 4,933Net debt/EBITDA 20.8 18.0Net debt/EBITDA including realized value growth 8.8 - 1) The earnings capacity is based on on the property portfolio as at June 30, 2019 and the property portfolio’s gross rent, real vacancy, estimated operating expenses and maintenance costs and central administration during a normal year. 2) Includes EUR 461 million in residential rental value as of July 1, 2019, EUR 37 million in rental income for commercial properties and parking, EUR -8 million in real vacancy for apartments and EUR 43 million in other income. 3) Excludes operational exchange differences and depreciation.
rental income EUR 253 million Rental income was EUR 253 million (233), an increase of 8.6 percent compared to the same period in 2018.
Like-for-like growth in rental income was EUR 7 million (6), or 3.7 percent (3.4). Service income was EUR 53 million (49).
During the period, 16,217 (13,030) rental contracts with an annual rent of EUR 206 million (122) were renewed or renegotiated. The new yearly rent is EUR 209 million (125), an increase of 1.7 percent (1.9).
The real vacancy rate decreased by 0.1 percentage points to 1.3 percent (1.1). The vacancy rate for residential units was 9.5 percent (8.5). 86 percent (87) was due to upgrades or planned sales of apartments.
net operating income EUR 131 millionNet operating income was EUR 131 million (124). Property expenses totaled EUR 122 million (109). EUR 15 million (14) was attributable to maintenance, corresponding to EUR 9 (8) per square meter and year.
Like-for-like growth in net operating income was 3.9 percent (6.2). Net operating income margin was 51.7 percent (53.2).
Adjusted net operating income margin was 65.5 percent (67.5). Adjusted net operating income excludes income from operating expenses included in the rent invoiced to the tenants, such as utility expenses and property taxes. It highlights the ongoing earning capacity from property management related to rental services only.
increase in property value 2 percent The increase in property value was EUR 254 million (379), 2 percent (3.6). The growth in value is mainly due to increasing cash flow. Higher net operating income and profitable acquisitions and sales contributed as well.See table on page 7. net financial items EUR -98 millionInterest expenses were EUR -69 million (-66). The increase is mainly due to the higher cost of borrowings and increased debt due to net acquisitions.Interest expenses for the hybrid bond were EUR -10 million (-5). Financial derivatives affected earnings by EUR -20 million (3). Other financial items amounted to EUR 1 million (-2).
profit before tax EUR 263 millionProfit before tax was EUR 263 million (423). The increase in the fair value of properties had a positive impact on the profit.
tax expenses EUR 30 millionTax expenses totaled EUR 30 million (95). EUR 18 million (94) was deferred tax, mainly due to unrealized gains on properties. Sales through share deal in Sweden contributed to positive tax in Q2.
Akelius has no ongoing tax disputes.
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interim report, January to June 2019
property portfolio
fair value EUR 12,199 millionThe fair value was EUR 12,199 million (11,225), which is equivalent to EUR 3,850 (3,463) per square meter. The average capitalization rate for the entire portfolio was 3.66 percent (3.61), which is 0.01 percentage points lower than at the beginning of the year. See table on page 7.
property purchases EUR 94 million Property purchases amounted to EUR 94 million (543) during the period. The average capitalization rate for purchased properties was 3.97 percent (3.76).
property investments EUR 216 millionInvestments in properties totaled EUR 216 million (138). On an annual basis, this corresponds to EUR 131 (86) per square meter. 36 percent (42) of the total investments were due to apartment upgrades.
property sales EUR 743 million In total, Akelius sold properties for EUR 743 million (299). Properties sold in 2019 were located in Germany and Sweden. Income from the sale of properties totaled EUR 42 million (4) excluding EUR 7 (7) million in transaction costs.
assets and liabilities held for saleAkelius has signed agreements for the sale of apartments in Germany. The closing date is planned to the second half of 2019. EUR 440 million was reported in investment properties and EUR 64 million was reported in deferred taxes. Well-kept residential properties are attractive investments for many types of investors and provide a liquidity reserve during the entire business cycle.
financing
equity and hybrid capital ratio 49 percent Equity increased by EUR 178 million to EUR 5,548 million (5,125) during the period. The equity and hybrid capital ratio amounted to 49 percent (50).
loan-to-value ratio 40 percent Loans excluding the hybrid bond decreased by EUR 568 million during the period, to EUR 4,951 million (4,605). The loan-to-value ratio decreased by 4 percentage points to 40 percent (40) since last year. Secured loans were EUR 1,899 million (1,890), compared to EUR 2,346 million at the end of 2018. Secured loan-to-value ratio was 15 percent (16), 4 percentage points lower than at the year-end 2018. The secured loans were borrowed from 31 banks (36) in seven countries. Unsecured loans include 9 (8) bonds and loans from large investors and related companies.
debt maturities 5.7 years Loans have an average maturity of 5.7 years (5.5), and has remained unchanged since the end of last year. EUR 307 million (245) matures within one year. The average loan-to-value ratio on short-term loans was 37 percent (37). Short-term loans consist of borrowings from 16 banks (13) and capital market financing.
interest rate hedge 4.6 years EUR 2,295 (2,519) million had a fixed interest rate term of more than five years and EUR 384 million (453) had a fixed interest rate term of less than one year. The average interest rate was 2.58 percent (2.64). On average, the underlying interest rate is secured for 4.6 years (5.2), compared to 4.5 years at the end of 2018.
liquidity EUR 756 million Available funds in the form of liquid assets and credit facilities totaled EUR 756 million (650). The fair value of the unencumbered properties was EUR 5,526 million (4,928).
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interim report, January to June 2019
other financial information
cash flowOperating cash flow before change in working capital was EUR 46 million (52).Cash flow from investing activities was EUR 572 million (-378). Cash required for the acquisition of properties is secured before the agreements are signed. Profitable but non-mandatory upgrades can be stopped within a three-month period.Cash flow from financing activities was EUR -603 million (342). Dividends of EUR 18 million (18) were paid to the holders of preference shares.
parent companyDividends of SEK 5 per preference share were or will be paid on the record dates pursuant to the Articles of Association: May 3, 2019, August 5, 2019, November 5, 2019 and February 5, 2020, totaling SEK 377 million, EUR 36 million.
The Parent Company’s profit before tax was EUR 19 million (83). Financial income mainly includes interest income, currency exchange gains on currency derivatives and external and internal receivables in foreign currency.
preference sharesThe total number of preference shares was 18,835,606 (18 835 606), equivalent to EUR 570 million (578) reported in equity. Preference shares represent 0.59 percent (0,59) of the total number of shares in Akelius Residential Property AB. On June 30, 2019, the price paid per preference share was SEK 349 (341).
ratingIn 2019, Standard and Poor’s confirmed the investment grade rating BBB with a stable outlook for Akelius Residential Property AB and its unsecured debt. The rating for Akelius Residential Property AB’s hybrid bond is BB+.
second quarterProfit before tax for the quarter amounted to EUR 65 million (203). Change in the fair value of properties impacted the profit with EUR 62 million (179). Rental income increased to EUR 124 million (115). Property costs amounted to EUR 58 million (53). Net operating income increased to EUR 66 million (62). Net financial items totaled EUR -49 million (-34) and included the change in the fair value of derivatives of EUR -12 million (2).
Cash flow amounted to EUR -3 million (-1). Cash flow generated from operations was EUR 44 million (32). Net cash flow from investing activities amounted to EUR 724 million (-54). Financing activities had a negative effect on cash flow of EUR -771 million (21).
staff1,403 people (1,100) were employed as at June 30 compared to 1,326 at the end of 2018.
related party transactionsNet debt from related parties decreased by EUR 24 million (43).
significant events after the end of the reporting periodAkelius sells 1,492 apartments in Germany. Half in Hamburg and half in Munich. Sales price EUR 420 million. Planned closing is end of 2019. Akelius sells 664 apartments in Toronto. Sales price EUR 123 million. Planned closing is September. Inclusive assets held for sale, total contracted sales are EUR 996 million.
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interim report, January to June 2019
consolidated statement of comprehensive income
EUR million
2019Jan–Jun
6 months
2018Jan–Jun
6 months
2019Apr–Jun
3 months
2018Apr–Jun
3 months
2018 Jan–Dec
12 monthsRental income 253 233 124 115 482Operating expenses -107 -95 -50 -46 -195Maintenance -15 -14 -8 -7 -28Net operating income 131 124 66 62 259Central administration -18 -13 -9 -7 -29Other income and expenses 3 3 2 3 3Net income from the revaluation and disposal of investment properties* 245 374 55 179 546Operating profit 361 488 114 237 779Interest expenses -68 -66 -30 -35 -128Interest expenses hybrid bond -10 - -5 - -14Other financial income and expenses - -2 -2 -1 -3Change in fair value of derivative financial instruments -20 3 -12 2 -Profit before tax 263 423 65 203 634Tax -30 -95 16 -35 -127Profit for the period/year 233 328 81 168 507Items that will be reclassified to profit or loss:- Translation differences 2 57 -89 95 35- Change in the hedging of currency risk -20 -161 39 -79 -113- Tax attributable to the hedging of currency risk -2 35 -2 18 23- Revaluation reserve 1 2 - - 2
Total other comprehensive income -19 -67 -52 34 -53Comprehensive income for the period/year 214 261 29 202 454
Profit attributable to: - owners of the Parent Company 231 326 81 167 501 - non-controlling interests 2 2 - 1 6Total comprehensive income attributable to: - owners of the Parent Company 212 259 29 201 448 - non-controlling interests 2 2 - 1 6Earnings per share before and after dilution, EUR 0.13 0.10 0.05 0.05 0.15
*) EUR 35 million is related to the realized gain/loss from the disposal of investment properties in Jan–Jun 2019 and EUR 0 million in Jan–Jun 2018. Transaction costs amounted to EUR 7 million in Jan–Jun 2019 and EUR 4 million in Jan–Jun 2018. Net income from the revaluation and disposal include change in fair value of properties EUR 254 million, minus transaction cost EUR 7 million, and minus revaluation reserve for owner-occupied properties of EUR 1 million.
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interim report, January to June 2019
EUR million2019
Jun 302018
Jun 302018
Dec 31AssetsIntangible assets 14 7 11Investment properties 11,707 11,187 11,891Owner-occupied properties 52 38 39Lease agreement, right-of-use-assets1 15 - -Tangible fixed assets 6 4 6Derivative financial instruments - - 2Deferred tax assets 1 - 1Financial assets 5 4 4Total non-current assets 11,800 11,240 11,954Trade and other receivables 98 83 86Derivative financial instruments - - 14Cash and cash equivalents 15 22 13Assets held for sale2 440 - 449Total current assets 553 105 562Total assets 12,353 11,345 12,516Equity attributable to the Parent Company’s shareholders 5,468 5,103 5,292Non-controlling interests 80 22 78Total equity 5,548 5,125 5,370Loans 4,644 4,360 5,180Hybrid bond 499 499 499Leasing agreement 13 - -Derivative financial instruments 58 69 46Deferred tax liabilities 852 894 885Provisions 1 1 1Other liabilities 17 14 16Total non-current liabilities 6,084 5,837 6,627Loans 307 245 339Leasing agreement 2 - -Derivative financial instruments 5 13 -Provisions - 2 1Trade and other payables3 343 123 121Liabilities held for sale4 64 - 58Total current liabilities 721 383 519Total equity and liabilities 12,353 11,345 12,516Interest-bearing liabilities excluding leasing- unsecured loans 3,052 2,715 3,173- secured loans 1,899 1,890 2,346Subtotal 4,951 4,605 5,519- hybrid bond 499 499 499Total 5,450 5,104 6,0181) EUR 9 million for leased offices and EUR 6 million for site leasehold agreements. 2) EUR 440 million is attributable to investment properties in Germany,sale price EUR 453 million. 3) EUR 197 million is prepayment received for property sales in Germany. 4) EUR 64 million is attributable to deferred tax in Germany
consolidated statement of financial position
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interim report, January to June 2019
EUR millionShare capital
Sharepremium
Currency transla-
tion reserve
Retained earnings Total
Non con-
trolling interests
Total equity
Opening balance Jan 1, 2018 204 1,504 -154 3,327 4,881 20 4,901Profit for the period - - - 326 326 2 328Other comprehensive income - - -68 1 -67 - -67Total comprehensive income - - -68 327 259 2 261Share issue 7 802 - - 809 - 809Dividend - -846 - - -846 - -846Closing balance Jun 30 2018 211 1,460 -222 3,654 5,103 22 5,125Profit for the period - - - 175 175 4 179Other comprehensive income - - 13 1 14 - 14Total comprehensive income - - 13 176 189 4 193Acquired minority - - - - - 52 52Closing balanceDec 31 2018 211 1,460 -209 3,830 5,292 78 5,370EUR conversion1 -24 -145 24 145 - - -Adjusted opening balance, Jan 1 2019 187 1,315 -185 3,975 5,292 78 5,370Profit for the period - - - 231 231 2 233Other comprehensive income - - -20 1 -19 - -19Total comprehensive income - - -20 232 212 2 214Dividend - - - -36 -36 - -36Closing balance Jun 30, 2019* 187 1,315 -205 4,171 5,468 80 5,548
*) attributable to preference shareholders 1 652 -83 - 570 - 570 1) The Parent Company, Akelius Residential Property AB,changed functional currency from Swedish kronor to Euro as of 2019.
consolidated statement of changes in equity
Attributable to the owners of the Parent Company
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interim report, January to June 2019
consolidated statement of cash flows
EUR million
2019Jan–Jun
6 months
2018Jan–Jun
6 months
2019Apr–Jun
3 months
2018Apr–Jun
3 months
2018Jan–Dec
12 monthsNet operating income 131 124 66 62 259Central administration -18 -13 -9 -7 -29Other income and expenses - 2 - 2 3Reversal of depreciation and impairment losses 2 1 1 - 3Interest paid -67 -61 -18 -21 -136Income tax paid -2 -1 -2 -1 -3Cash flow before changes in working capital 46 52 38 35 97Change in current assets -15 -6 8 -3 1Change in current liabilities -3 -4 -2 - 11Cash flow from operating activities 28 42 44 32 109Investments in intangible assets -4 -2 -2 -2 -7Investment in properties -216 -138 -126 -84 -349Acquisition of investment properties -94 -543 -20 -260 -1,186Acquisition of net assets - 30 - 18 40Proceeds from the sale of investment properties 743 299 742 293 300Proceeds from the sale of net assets1 -49 -28 -49 -28 -31Purchase and sale of other assets2 192 4 179 9 -8Cash flow from investing activities 572 -378 724 -54 -1,241New share issue - 809 - 809 809Acquisition of minority shares - 1 - 1 5Loans raised 889 1,327 236 790 3,650Repayment of loans -1,467 -960 -999 -713 -2,438Purchase and sale of derivative instruments -6 -8 2 -48 -51Amortization IFRS leasing 16 -1 - -1 - -Dividend ordinary shares - -809 - -809 -809Dividend preference shares -18 -18 -9 -9 -37Cash flow from financing activities -603 342 -771 21 1,129Cash flow for the period/year -3 6 -3 -1 -3Cash and cash equivalents at the beginning of the period/year 13 16 17 22 16Translation differences in cash and cash equivalents 5 - 1 1 -Cash and cash equivalents at the end of the period/year-end 15 22 15 22 13
For Jan–Jun 2019 1) Mainly related to a discount provided for deferred tax.2) Including EUR 197 million in prepayment received for property sales in Germany and EUR -7 million in transaction costs for sold properties.
Fair value of properties opening balance, EUR million 380 245 193 109 17Change in fair value, EUR million 1 -8 8 2 -1Investments, EUR million 8 19 13 6 2Purchases, EUR million - 124 31 76 91Sales, EUR million - - - - -Exchange difference, EUR million - - - - -Fair value of propertiesclosing balance, EUR million 389 380 245 193 109
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interim report, January to June 2019
key figures
1) Like-for-like capitalization rate. 2) Like-for-like growth on a rolling 12-month period. 3) Like-for-like growth for the period compared to the same period in the previous year. 4) Adjustment for revenue from operating expenses invoiced to the tenants in Germany, France, Canada, United States and Sweden amounted to EUR 53 million for Jan–Jun 2019 and EUR 49 million for Jan–Jun 2018.
Unsecured loans 3,052less debt from Akelius Apartment and Akelius Spar, up-front fees and repurchased SEK bond -12less cash and cash equivalents -15
Net unsecured senior debt 3,025
Unencumbered asset ratio 1.87
EUR million2019
Jan–Jun2018
Jan–JunPercent growth
Rental income 253 233 8.6Exchange differences - -Service revenue -21 -17Purchases and sales -33 -24Like-for-like rental income 199 192 3.7
Net operating income 131 124 5.4Exchange differences - -Purchases and sales -15 -12Like-for-like net operating income 116 112 3.9
EUR million2019
Jan–Jun2018
Jan–Jun
Proceeds from the sale of properties 743 299Costs of sale -7 -4Acquisition costs -288 -108Accumulated investments -116 -48Realized value growth 332 139
34
interim report, January to June 2019
other information
basis of presentationThe Akelius Residential Property Group’s Interim report has been prepared in accordance with IAS 34, Interim Financial Reporting and the Swedish Annual Accounts Act. The financial statements of the Parent Company, Akelius Residential Property AB, corporate identity number 556156-0383, have been prepared in accordance with the Swedish Annual Accounts Act and the accounting standard RFR 2, Accounting for Legal Entities. Disclosures in accordance with IAS 34 Interim Financial Reporting are submitted both in the notes and in other sections of the interim report. The figures in this interim report have been rounded, while the calculations have been made without rounding. As a result, the figures in certain tables and key figures may appear not to add up correctly.
accounting principles Parent CompanyAs of January 1, 2019, the Parent Company s functional currency is Euro.
IFRS 9 Financial instrumentDerivative instruments are reported in the balance sheet as of the settlement date and are valued continuously at fair value through profit or loss. The fair value of derivatives not listed in an active market is determined according to valuation techniques, based on a series of methods and assumptions relating to market conditions as of the reporting date. Financial instruments that are not measured at fair value through profit and loss are measured at amortized cost using the effective interest rate method. The fair values of hybrid bond are based on level 1 and the fair values of derivatives and other loans are based on level 2 in the fair value hierarchy. Compared to 2018, no transfers have been made between different levels in the fair value hierarchy for derivatives and borrowings and no significant changes have been made to valuation techniques.
financial instruments recorded at fair value
EUR million2019
30 Jun2018
31 DecAssets - 16Liabilities 63 46
carrying value and fair value of interest-bearing liabilities excluding leasing
IFRS 16 LeasingIFRS 16 “Leases” has been implemented from January 1, 2019. Akelius applied the cumulative catch-up approach in the transition. Akelius’ rental agreements for offices and site leaseholds are reported in the balance sheet from 2019. The cost for site leasehold fees are reported as a financial expense, unlike the previous policy, according to which the fees were reported as operating costs. The rent cost is allocated between impairments and financial expenses. At the balance sheet date December 31, 2018 the value of Akelius’s leases was EUR 12 million, divided into site leasehold agreements of EUR 6 million and rental agreements of EUR 6 million.
risks and uncertaintiesOperational risks are limited by concentrating the property portfolio to residential properties in metropolitan areas. Strong residential rental markets in Sweden, Germany, Canada, England, France, the United States and Denmark reduce the risk of long-term vacancies. To reduce risk or variations in cash flow further, interest rates are secured on a long-term basis. Access to capital from a large number of banks and through the capital market mitigates the refinancing risk. Overseas investments are hedged to reduce the impact of currency movements related to the Group s equity-to-assets ratio. There have been no material changes in the company’s assessment of risks since the publication of the 2018 annual report.
Pål Ahlsén,CEO, Managing Director
Stockholm, Sweden, August 23, 2019, Akelius Residential Property AB (publ)
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interim report, January to June 2019
review report
introductionWe have reviewed the condensed interim report Akelius Residential Property AB as at June 30, 2019 and for the six months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
scope of reviewWe conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
conclusionBased on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.
Stockholm, 23 August 2019 Ernst & Young AB
Ingemar Rindstig Authorized Public Accountant
Jonas Svensson Authorized Public Accountant
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interim report, January to June 2019
definitions
adjusted EBITDAEBITDA plus other financial income and expenses. It highlights current cash flow capacity from property management excluding financial income and expenses.
adjusted net operating income marginNet operating income in relation to rentalincome excluding income from operatingexpenses included in the rent invoiced to thetenants, such as utility and property taxes.It highlights the ongoing earning capacityfrom property management related to rentalservices only.
annual property returnGain from the revaluation of investment properties and net operating income on an annual basis in relation to the fair value of the properties at the beginning of the year. It illustrates the total return on the property portfolio.
capitalization rateRate of return used in assessing the terminal value of property in the fair value assessment. Defined as the expected return when net operating income and property prices remain constant.
debt maturities, yearsVolume-weighted remaining term of interest-bearing liabilities and derivatives on the balance sheet date. It illustrates the company’s refinancing risk.
debt coverage capacityProfit before tax and revaluation, including realized value growth. Net operating income and realized value growth are reinvested into existing and new properties. This leads to a growing operating surplus. The earnings capacity is based on the property portfolio at balance sheet date and the portfolio’s gross rent, real vacancy, estimated operating expenses and maintenance costs during a normal year, as well as central administrative expenses.
Interest expenses are based on net debt on the balance sheet date calculated at the currency rate on the balance sheet date. No tax has been calculated as it relates mainly to deferred tax. The earnings capacity is not a forecast for the coming twelve months. It contains no estimates of rent, vacancy, currency exchange, future property purchases and sales or interest rate changes.
discount rateRate of return used in assessing the present value of future cash flow and terminal value in the fair value assessment of properties. Defined as the expected return on the property.
EBITDANet operating income plus central administrative expenses, other income and expenses with add-back of depreciation and impairment charges and operating exchange rate differences. It highlights current cash flow capacity from property management.
equity ratioEquity in relation to total assets. It highlights the company’s financial stability.
income returnNet operating income on an annual basis in relation to the fair value of the properties at the beginning of the year. It measures the yield on the property portfolio.
interest rate hedge total loans, yearVolume-weighted remaining term of interest rates on interest-bearing liabilities and derivatives on the balance sheet date. It illustrates the company’s financial risk.
interest coverage ratio Adjusted EBITDA plus realized value growth for the latest rolling 12-month period in relation to net interest expenses for the latest rolling 12-month period. It illustrates the company’s sensitivity to interest rate changes.
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interim report, January to June 2019
definitions
liquid financial assets Debt securities and equity securities traded on a regulated market and with an investment grade rating. liquidity The liquidity reserve consists of free cash, unused credit lines and assets that can be liquidized within three working days.
like-for-like properties Properties owned during the compared periods. This means that properties that were acquired or sold during any of the compared periods are excluded.
loan-to-value ratioNet debt divided by net assets.
loan-to-value ratio, secured loans Net debt reduced by unsecured interest-bearing debt divided by net assets.
net asset Total assets minus pledge cash, cash and liquid assets.
net asset value Equity, deferred tax and derivatives.
net debt Interest-bearing liabilities exclusive leasing less subordinated debt, cash and liquid assets.
net financial items The net of interest income, interest expenses, other financial income and expenses and changes in the fair value of derivatives. It measures the net of financial operations.
net lettingThe sum of agreed contracted annual rents for new lets for the period less terminated annual rents.
net interest expenses Total interest expenses less interest on subordinated debt, one-off financing charges and interest on cash, cash equivalents and liquid financial assets.
net operating income Rental income less property costs. It highlights the ongoing earning capacity from property management.
net operating income marginNet operating income in relation to rental income. It highlights the ongoing earning capacity from property management.
other income and expensesItems from secondary activities such as gains on disposals of fixed assets other than investment properties, income and expenses from temporary services rendered after the sale of properties.
property costsThis item includes direct property costs such as operating expenses, utility expenses, maintenance costs, leasehold fees and property taxes.
property portfolioInvestment property, owner-occupied properties, and investment property classified as assets held for sale.
realized value growthProceeds from the sale of investment properties minus acquisition costs, accumulated investments and costs of sale. It illustrates realized value growth of properties sold.
real vacancy rateThe total number of vacant apartments less the number of apartments vacant due to renovation work or planned sales, in relation to the total number of apartments. Real vacancy is measured on the first day after the month-end.
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interim report, January to June 2019
definitions
renewed and renegotiated rental contracts All changes in rental levels for remaining tenants.
rental incomeRental value less vacancies and rent discounts.
rental value12 months rent for apartments including a market rent for vacant apartments. Development of the rental value over the last 12 months, broken down into disposals, acquisitions and comparable portfolio.
return on equityComprehensive income divided by opening equity. Shows the return offered on the owners’ invested capital.
unencumbered asset ratioUnencumberanced assets less cash equivalents to senior unsecured debt less cash equivalents.
vacancy rateThe number of vacant apartments in relation to the total number of apartments. Vacancy is measured on the first day after the month-end.
value growthChanges in value of investment properties excluding investment and change of currency.
walk scoreRating of how easy it is to complete daily errands without a car. Locations are rated on a scale from 0 to 100, where 100 is the best. Walk score is provided by Walkscore.com
apartments for metropolitansAll apartments are in metropolitan cities, such as Berlin, Hamburg, Munich, Paris, London, Toronto, Montreal, New York, Boston, Washington D.C., Stockholm and Copenhagen.
better livingAkelius’ mission is to provide tenants with better living by continuously upgrading our buildings and our service.
acquire via cherry-pickingAkelius prefers to make many smaller acquisitions of properties that are exactly right, by cherry-picking, rather than making a few large acquisitions of properties that are not quite right.
strong capital structure, low refinancing risk Akelius has agreements with 36 banks, listed preference shares and listed senior unsecured bonds. Akelius is Sweden’s largest listed property company and has eighteen thousand shareholders.
first-class personnelMore than two hundred employees have graduated from the Residential Real Estate Management program at Akelius Business School.