Eik fasteignafélag hf.: Financial Statements 2022

    Eik fasteignafélag hf.: Financial Statements 2022 

• Income from operations for the year amounted to ISK 10,078 million.
• Operating profit before changes in value and depreciation amounted to ISK 6,608 million.
• Total profit amounted to ISK 8,001 million.
• Net cash provided by operating activities amounted to ISK 4,066 million.
• The book value of investment properties amounted to ISK 119,639 million at the end of the period.  
• The book value of assets for own use amounted to ISK 4,162 million at the end of the period.
• Changes in value of investment properties amounted to ISK 10,431 million.
• Interest-bearing debt amounted to ISK 70,272 million at the end of the period.
• Equity ratio was 34.0%.
• Profit per share was ISK 2.34.
• Economic occupancy rate was 95.7% at the end of the period.
• Weighted indexed interest rates were 3.03% at the end of the period.
• Weighted unindexed interest rates were 7.31% at the end of the period.
• The Board of Directors proposes a dividend payment of ISK 2,000 million.

The financial statements of Eik fasteignafélag were approved by the Company’s Board of Directors on 28 February 2023.

In case of any discrepancy in the English and the Icelandic versions of this announcement or the Financial Statements, the Icelandic version shall prevail.

Garðar Hannes Friðjónsson, CEO: “The year 2022 was a good year despite high inflation and a significant rise in the Central Bank’s key interest rate, the Company operations went well, and results were beyond original expectations for the year. Operating profit before changes in value and depreciation amounted to ISK 6,608 million and increased by just over 17% between years. Profit before income tax amounted to ISK 10,004 million and total profit of the Group amounted to ISK 8,001 million. Economic occupancy rate was 95.7% at the end of the period and there is increased demand for business premises. There were several new contracts made during the year as well as renewals with current tenants.

Furthermore, the Company is well financed for the year 2023. Cash and cash equivalents amounted to ISK 2,986 million. In addition, the Company has access to just over ISK 2,600 million in credit facilities. At the end of the year the Company issued the only bond class during the year, when a new unindexed bond class EIK 25 1, was issued. The issue was successful, and the Company sold for a total ISK 2,340 million with 7.67% required rate of return. The Company’s weighted indexed interest rates at the end of the year were 3.03% and unindexed interest rates were 7.31%. The ratio of the Company’s unindexed debt was around 22% at the end of the year.”

The Company has issued its Annual Report, which contains extensive information on the Company and its operations during the year 2022 along with financial statements. The Report accompanies this announcement, and it can also be accessed on the Company’s website, www.eik.is. The Company’s ESG report is also accessible on its website. 

The Net Operating Income (NOI) ratio (i.e. operating profit before changes in value and depreciation as a ratio of lease income) was 74.3% for the year 2022, compared to 72.0% for the year 2021.

The Company’s economic occupancy rate was 95.7% at the end of the period but was 94.2% at the end of 2021.

The Company's investment properties are valued at fair value in accordance with International Financial Reporting Standards (IFRS), based in part on the discounted future cash flows of individual assets. Changes in fair value are recognised in changes in value of investment properties, which were ISK 10,431 million in the year 2022.

Balance Sheet

Total assets of the Group amounted to ISK 128,651 million as at 31 December 2022, whereof investment properties amounted to ISK 119,639 million, assets for own use ISK 4,162 million and development properties ISK 671 million. The Company’s equity at year end 2022 amounted to ISK 43,744 million and equity ratio was 34.0%. The Company’s Annual General Meeting on 5 April 2022 approved an ISK 1,740 million payment of dividend to shareholders for the operating year 2021 and it was paid on 28 April 2022.

The Company’s total liabilities amounted to ISK 84,907 million as at 30 December 2022, of which interest-bearing debt was ISK 70,272 million and deferred tax liability ISK 10,683 million.

Effects due to COVID-19

The Company estimates that effects of COVID-19 were negative by ISK 40–45 million on EBITDA for the year 2022 but this effect was only visible in the first half of the year. Furthermore, all cautionary entries due to the pandemic relating to the value of investment properties have been reversed.

Proposal for payment of dividend

The policy of the Board of Directors is to pay the shareholders up to 50% of net cash provided by operating activities less the amount used for repurchasing of own shares up until the call for the Annual General Meeting. In accordance with the dividend policy, the Board of Directors proposes to the Annual General Meeting on 30 March 2023 a dividend payment of ISK 2,000 million to shareholders for the operating year 2022.

Outlook

The Company has issued a comprehensive budget for the year 2023 which can be found on the Company’s website, www.eik.is. According to the published budget for the year 2023, the Company expects that the Company’s operating income will be between ISK 10,350 million and 10,570 million at a fixed price level based on consumer price index in January 2023. Furthermore, the Company expects that EBITDA for the year will be between ISK 6,690 million and 6,970 million.

Change in organisational chart

The Company has changed its organisational chart. The legal division has been dissolved as an independent division and is now a unit within the CEO’s office.

Company Portfolio

During the year, the Company has acquired and received three properties. In the first half of the year the Company acquired 500 sqm. in Skeifan 5, but the Company already owned a third of the building. The Company acquired 150 sqm. restaurant at Pósthússtræti 2 where the Company already owned the building housing Hotel 1919. In the second half of the year the Company acquired just over 1,300 sqm. industrial building and warehouse at Smiðshöfði 9.

Furthermore, the Company has sold and delivered three properties during the year, Hjalteyrargata 4 in Akureyri and Höfðasel 2 and 4 in Akranes, which total 3,911 sqm. and booked sales profit during the year amounts to ISK 362 million.  The Group owns just over 110 properties which total almost 312,000 sqm. of rental space in just over 600 units. Total number of tenants is over 400. The Company's principal properties in the capital region are Borgartún 21 and 21a; Borgartún 26; Suðurlandsbraut 8 and 10; Mýrargata 2-16; Pósthússtræti 2 (Hótel 1919); Smáratorg 3 (Turninn); Smáratorg 1; Álfheimar 74 (Nýi Glæsibær); Grjótháls 1-3 and Austurstræti 5, 6, 7 and 17. The Company’s principal property outside the capital region is Glerártorg in Akureyri. The Company’s largest tenants are Húsasmiðjan, Ríkiseignir, Berjaya Hotels Iceland, Landsbankinn, Sýn, Össur, Míla, Deloitte, Síminn and VÍS.

The largest share of the Company's real estate portfolio is office space, which is 42% of the portfolio’s worth. Commercial premises are 25% of the portfolio, warehouses 14%, hotels and restaurants 10%, health related operations 7% and other 2%.

Briefing sessionAn open briefing session will be held on Friday 1 March 2023 at 8:30 AM on the 19th floor at Smáratorg 3. A light breakfast will be served from 8:00 AM. Garðar Hannes Friðjónsson CEO and Lýður H. Gunnarsson CFO will present the results and respond to questions following the presentation.

A live stream from the session and registration for the electronic presentation is here:

https://us02web.zoom.us/webinar/register/WN_6fLmZxz_Ssa-UWrAFm5YKg

Following registration, participants will receive an e-mail with further information.

After the meeting the Company intends to offer to those present a short information talk on deferred tax liabilities of real estate companies and their relationship to future tax payments. The Company encourages those interested to attend on the 19th floor at Smáratorg 3.

Financial Calendar

Following are planned dates for publishing of interim and annual results: Annual General Meeting                                                         30 March 2023 Quarterly results Q1 2023                                                      27 April 2023 Quarterly results Q2 2023                                                      17 August 2023 Quarterly results Q3 2023                                                      26 October 2023 2023 Annual Results                                                              8 February 2024

Announcements of financial information will be published after closing of markets.

Further information will be provided by:

Garðar Hannes Friðjónsson CEO, [e-mail], tel. [phone] Lýður H. Gunnarsson CFO, [e-mail], tel. [phone]

Attachment

• Eik fasteignafélag - Condensed Consolidated Financial Statement 2021