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Comments by the CEO
The past year
Profit from property management per share increased by 24 % during the year to SEK 14.74. The equivalent result for the fourth quarter was SEK 4.16, an increase of 23 % compared to the same period last year.
The net asset value rose by 15 % to SEK 229.25 per share. Current earnings improved by 24 % from SEK 13.52 to SEK 16.81 and the share price rose by 19 % to SEK 219.40.
This meant that the share became slightly cheaper relative to profit from property management and current earnings during the year, but became slightly more expensive relative to the net asset value. Seen over longer periods of time, earnings, net asset value and the share price are developing at about the same rate but for shorter periods of time as it is well known that the share price is decoupled from underlying values and earnings.
Apart from Balder’s own property holdings, we also invest through a number of associated companies. During the year, some new associated companies were added and the development of these companies and our existing investments was very strong. Besides good profits, this strategy is broadening our contacts and giving us more business opportunities. Looking ahead, I see a continued positive development of results and relationships over the coming years.
Net investments during the year (i.e. acquisitions, sales, constructions) compared to the size of our property portfolio were smaller than for many years but this was due to intense competition for good acquisition targets but also to the fact that we prioritized a lower debt/equity ratio. During the year, our work within property/urban development progressed very well and resulted in a number of completed and future zoning plans for housing. I expect to see a gradual increase in our residential construction provided that demand for tenant-owner’s and rental apartments remains at the current level. Since Balder is basically a company with a strong cash flow, this also gives us freedom and flexibility when it comes to determining the right time, construction starts and form of tenure.
Financial goals and financing
Balder issued a number of bonds during the year in Euro and SEK with a total volume in excess of SEK 20 billion.
These issues have broadened the financing base and also extended our capital and fixed interest terms.
The basis for good financing is a strong income statement and balance sheet. The Board has decided to adjust our goal for the loan-to-value ratio so that it should not exceed 50 % over time (previously 55 %).
The future looks bright and I continue to see good potential to develop our company and relationships.
Chief Executive Officer