Fastighets Balder (BALD) Q3 2024 earnings summary

Executive summary

• Property portfolio value at SEK 215–215.3bn, with 96% occupancy and 80% of assets in capitals and large cities.

• Rental income and net operating income increased 7–8% year-over-year, despite currency headwinds.

• Profit from property management per share was 1.36 SEK, down slightly due to higher financing costs; earnings capacity per share up 4% to 5.16 SEK.

• Portfolio is 53–55% residential, with the remainder in office, retail, hotel, logistics, and other commercial segments.

• Long-term trend of increasing NAV and earnings per share since 2015, with NAV per share at SEK 85.60.

Financial highlights

• Rental income and NOI up 7–8% year-over-year; like-for-like rental growth at 3.6%.

• Net profit for the quarter was negative due to value changes, but improved significantly year-over-year.

• Net debt to total assets at 49.6%; interest coverage ratio at 2.7x.

• Available liquidity at SEK 20–20.1bn, covering over 1.3x of maturing liabilities.

• Surplus ratio stable at 75–76%.

Outlook and guidance

• Yields and interest rates are stabilizing, supporting a shift to balanced capital allocation and growth investments in 2025.

• Gradual deleveraging expected in 2025 as net financial position peaks.

• Cost of debt expected to decrease as older, higher-rate loans roll off.

• Conversion of convertible bonds could reduce net debt by SEK 5.4bn and net debt/total assets by 2%.

• Finnish residential market and overall cash flow showing signs of recovery.