Wihlborgs Fastigheter (WHIL) Q2 2024 earnings summary

Executive summary

• Achieved a record operating surplus of SEK 764 million in Q2 2024, with strong cash flow, positive net letting, and high demand for quality properties in prime locations.

• Rental income increased by 7% year-over-year to SEK 2,072 million for the first half, with operating surplus also up 7% to SEK 1,482 million.

• Project pipeline and ongoing investments provide a solid foundation for future growth despite higher financing costs.

• Income from property management declined to SEK 884 million due to higher interest expenses.

• EPRA NRV per share increased 2% year-over-year to SEK 88.74, adjusted for dividend.

Financial highlights

• Operating surplus for H1 2024 rose 7% to SEK 1,482 million; income from property management was SEK 804–884 million, impacted by higher financing costs.

• Result for the period was SEK 698 million, or SEK 2.27 per share; EPRA NRV increased 2% to SEK 88.74 per share.

• Rental value as of July 1 was SEK 4,490 million per year, with rental income at SEK 4,102 million, up 5%.

• Portfolio market value increased to SEK 57,159 million, driven by acquisitions, investments, and minor positive valuation changes.

• Operating surplus margin held at 72% for the period.

Outlook and guidance

• Project volume and stable cash flow position the company for continued growth, supported by positive net letting.

• Management expects further central bank rate cuts in H2, which could improve financing conditions.

• CPI indexation in Sweden is expected to slow, shifting growth focus to project development and selective acquisitions.

• Market sentiment has improved, but economic conditions remain weak; rents are rising in line with indexation.

• Swedish GDP growth expected to accelerate in 2025 as lower interest rates take effect, while Danish growth is forecast to slow.