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Eik fasteignafélag hf.: Interim results for the first three months of 2021

Eik fasteignafélag hf.
·6-min read
  • Income from operations amounted to ISK 2,033 million.

  • Impairment of trade receivables amounted to ISK 89 million.

  • Operating profit before changes in value and depreciation amounted to ISK 1,260 million.

  • Total profit amounted to ISK 884 million.

  • Net cash provided by operating activities was ISK 745 million.

  • The book value of investment properties amounted to ISK 99,711 million.

  • The book value of assets for own use amounted to ISK 3,835 million at the end of the period.

  • Change in value of investment properties was ISK 881 million.

  • Cash and cash equivalents amounted to ISK 2,904 million.

  • Interest-bearing debt amounted to ISK 63,103 million at the end of the period.

  • Equity ratio was 31.4%.

  • Profit per share was ISK 0.26.

  • Economic occupancy rate was 92% at the end of the period.

  • Weighted indexed interest rate was 3.09% at the end of the period.

  • Weighted unindexed interest rate was 3.15% at the end of the period.

The Interim Financial Statements of Eik fasteignafélag hf. for the period 1 January to 31 March 2021 were approved by the Company’s Board of Directors and CEO on 29 April 2021.

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

Attached is an interim financial report which contains Interim Financial Statements for the first three months of the year together with further information on the Company’s operations than are included in the announcement.

Company operations

The Company performed well in the first three months of 2021 and the results were in line with management’s forecasts. Operating income for the first three months of the year 2021 amounted to ISK 2,033 million. Of this amount, rental income was ISK 1,873 million. Operating profit before changes in value and depreciation amounted to ISK 1,260 million. Profit before income tax amounted to ISK 1,107 million and total profit of the Group for the first three months of 2021 amounted to ISK 884 million.

The Net Operating Income (NOI) ratio (i.e. operating profit before changes in value and depreciation as a ratio of lease income) was 67.8% for the first three months of 2021, compared to 71.4% for the same period in 2020.

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 around ISK 881 million in the first three months of the year.

Balance Sheet

The Company's total assets amounted to ISK 108,441 million as at 31 March 2021. Of this, investment properties valued at ISK 99,711 million consist of real estate leased to tenants amounting to ISK 96,873 million, leased assets (property utilisation rights) of ISK 2,293 million, investment properties under development of ISK 76 million, building rights and lots of ISK 457 million and pre-paid street construction fees in the amount of ISK 13 million. Assets for own use amounted to ISK 3,835 million and assets under development amounted to ISK 659 million. The Company's equity amounted to ISK 34,084 million at the end of March 2021 and its equity ratio was 31.4%. The Company’s total liabilities amounted to ISK 74,358 million as at 31 March 2021, of which interest-bearing debt was ISK 63,103 million and deferred tax liability ISK 7,668 million.

Economic occupancy rate

The Company's economic occupancy rate was the same as at the beginning of the year and was 92% at the end of the first quarter.

Outlook and effects due to COVID-19

Outlook for the year is unchanged from the forecast published in February 2021.

The effects of COVID-19 on the Company’s operations are still noticeable and the Company estimates that direct effect of COVID-19 was between ISK 130–140 million in the first three months of the year. The Company expects that the pandemic will continue to influence the operations for the rest of the year.

Financing

The Company issued two new bond classes in the quarter. Bonds amounting to nominal value of ISK 2,200 million were sold in the bond class EIK 100327 which bears 1.45% indexed interest rate. Furthermore, bonds amounting to nominal value of ISK 1,200 million were sold in the bond class EIK 23 1 which bears 2.9% unindexed interest rate. The funds were utilised for repayment of less favourable bank loans.

The bond class EIK 15 1, bearing 3.3% interest rate, was repaid in March 2021. The repayment was fully financed with an unindexed bank loan.

Weighted indexed interest terms were 3.09% at the end of the quarter and weighted unindexed interest terms were 3.15%, and the Company continues to strive for the most economical financing terms.

Company Portfolio

The Group owns just over 100 properties which total almost 310,000 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. The Company’s largest tenants are Húsasmiðjan, Icelandair Hotels, Ríkiseignir, Rúmfatalagerinn, Sýn, Landsbankinn, Össur, Míla, Síminn and Deloitte.

The largest part of Eik's real estate portfolio is office space, or 45%, followed by commercial premises (24%), warehouses (13%), hotel (9%), health related operations (5%) and bars and restaurants (3%). Around 92% of the Company's real estate are in the capital region, of which 38% is in financial and business districts of Reykjavík (mainly in postal codes 105 and 108), 17% in the Reykjavik city centre and 19% in Smárinn-Mjódd. 8% of the portfolio is located outside the capital region, whereof almost 7% is in Akureyri.

Electronic presentation

An electronic presentation will be held on Friday 30 April 2021 at 8:30 am. Garðar Hannes Friðjónsson CEO and Lýður H. Gunnarsson CFO will present the results and respond to questions following the presentation.

Registration to the meeting is here:

https://us02web.zoom.us/webinar/register/WN_6Ug4VeuVS_G5bHZB-_1rcg

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

2021 Financial Calendar

Following are planned dates for publishing of interim and annual results:

Quarterly results Q2 2021 25 August 2021
Quarterly results Q3 2021 28 October 2021
Management accounts 2021 and 2022 budget 11 February 2022
2021 Annual Results 3 March 2022

For further information contact:

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

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