Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Neobo Fastigheter AB (OSTO:NEOBO, Financial) successfully entered the NASDAQ Stockholm main market, marking a significant milestone.
- Rental income increased by 6.3% in the like-for-like portfolio due to rent increases and reduced vacancies.
- Net operating income rose by 8.5% in the like-for-like portfolio, indicating strong operational performance.
- The company signed a six-year lease agreement with the Swedish Prison and Probation Service, which will significantly reduce commercial vacancy rates.
- Neobo Fastigheter AB (OSTO:NEOBO) has a strong financial position with bank financing and recently refinanced loans at lower margins, reflecting improved market sentiment.
Negative Points
- Unrealized value changes amounted to a negative 244 million, representing a 1.8% decrease during the year.
- The occupancy rate decreased by 0.2% in the third quarter due to some commercial tenants moving out.
- Total property costs increased by 26 million, driven by higher operational and administrative expenses.
- Net operating income fell by 3 million due to the divestment of seven properties during the year.
- Increased operating costs were attributed to higher tariff-based costs and snow removal expenses.
Q & A Highlights
Q: How long will it take to renegotiate all loans at better interest rates, and what impact will it have?
A: We have an average debt duration of 3.1 years, and 24% of our total loan volume will be directly affected when interest rates decrease. We have successfully refinanced loans at lower margins than our existing debt portfolio, but the overall impact depends on future interest rate trends.
Q: Will you switch to financing from bonds in the future?
A: Diversifying funding sources is beneficial, and while we have strong bank relationships, exploring bond market opportunities is an interesting prospect for the future.
Q: How do you view the reduced population projections from SCB?
A: Despite slower population growth, there remains strong demand for rental apartments in Sweden. We do not foresee immediate issues with leasing our 8,300 apartments.
Q: With a focus on optimization and growth, how do you plan to grow?
A: We aim to optimize our property portfolio and explore acquisitions to enhance shareholder value. We will continue value-creating investments to grow profit from property management.
Q: Can you elaborate on the increased operation costs during Q3, particularly tariff-based costs?
A: The increase is due to higher costs for heating, electricity, and a harsh winter. We are working on reducing energy consumption and negotiating with municipalities to manage tariff-based costs. Cost reduction is a major focus in our budgeting process.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
