Eik fasteignafélag hf.: Interim results for the first nine months of 2024

The Interim Consolidated Financial Statements of Eik fasteignafélag hf. for the period 1 January to 30 September 2024 were approved by the Company’s Board of Directors and CEO on 31 October 2024.

• Income from operations amounted to ISK 8,514 million
  • Thereof, rental income amounted to ISK 7,328 million
• EBITDA amounted to 5,537 million
• Total comprehensive profit amounted to ISK 3,326 million.
• Net cash from operations amounted to ISK 3,551 million.
• The book value of investment properties amounted to ISK 139,957 million. 
• The book value of assets for own use amounted to ISK 5,893 million
• Change in value of investment properties amounted to ISK 4,345 million.
• Cash and cash equivalents amounted to ISK 1,683 million.
• Interest-bearing debt amounted to ISK 82,567 million
• Equity ratio was 33.2%.
• Earnings per share was ISK 0.97.
• Economic occupancy rate was 93.6%
• Weighted indexed interest was 3.55%.
• Weighted unindexed interest was 7.67%.

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 the Interim Consolidated Financial Statements for the first nine months of the year 2024.

Operations of the period

The Company's operations were in line with the Company's updated plans. The Company's operating income for the first nine months of 2024 amounted to  ISK 8,514 million. Of this, rental income was ISK 7,328 million. Operating expenses amounted to  ISK 2,935 million and impairment of trade receivables was ISK 42 million.

Operating profit before changes in fair value change and depreciation amounted to ISK 5,537 million compared to ISK 5,776 for the same period last year. Profit before income tax amounted to ISK 4,157 million and Other comprehensive income for the first nine months of the year amounted to ISK 3,326 million.

The NOI Ratio (i.e. operating profit before changes in value and depreciation as a ratio of lease income) was 73.4% for the first nine months of the year 2024, compared to 74.6% for the same period in 2023, adjusted for reversal of impairment of trade receivables in 2023. 

The Group's investment properties are valued at fair value in accordance with International Financial Reporting Standards (IFRS), which is based on, among other, discounted future cash flows of individual assets. Changes in fair value are recognized and classified within changes in value of investment properties and amounted to ISK 4,345 million in the first nine months of the year 2024. The main assumptions driving the change are inflation, new agreements and lower return on equity. The main factors contributing to a decrease are an increase in financial cost and an increase in property valuation.

Financial Position

The Group's total assets amounted to ISK 150,146 million at the end of the period, whereof investment properties amounted to ISK 139,957 million which consist of real estate leased to tenants amounting to ISK 129,040 million, investment properties under development ISK 4,687 million, building rights and land ISK 3,666 million, pre-paid street construction tax ISK 13 million and leased assets amounted to ISK 2,550. Assets for own use amounted to ISK 5,893 million and assets under development ISK 1,092 million. The Group's equity amounted to ISK 49,809 million at the end of the period and its equity ratio was 33.2%. At the Group’s Annual General Meeting on 11 April 2024 a dividend payment to shareholders due to the year 2023 amounting to ISK 2,540 million was approved, which was subsequently paid on 30 April 2024.

The total liabilities of the Company amounted to ISK 100,337 million on 30 September 2024. Of this, interest-bearing liabilities were ISK 82,567 million, and deferred tax liabilities were ISK 13,335 million. The Company's loan-to-value ratio, i.e. the net position of interest-bearing debts against the value of real estate, building permits, and plots, was 56.1%.

In the third quarter, the Company issued a new bond, EIK 050734, in the amount of ISK 5,000 million at an indexed interest rate of 3.95%. The Company also paid off a bond, EIK 24 1, which was non-indexed in the amount of ISK 3,000 million.

During the first half of the year, the Company refinanced ISK 8,800 million of unindexed loans at variable rates with ISK 10,800 million indexed loans at variable rates. Additionally, the Company issued bonds in the amount of ISK 1,300 million at a fixed interest rate. The ratio of the Company's indexed loans at the end of the period was just over 97%.

Economic occupancy rate

The Company's occupancy rate was 93.6% at the end of the period and was unchanged between quarters.

At the beginning of the year, the Company expected the occupancy rate to be 92.8% at the end of the third quarter, so the rental has performed better than expected. Additionally, the Company has leased out approximately one-third of the development square meters that the Company expects to become income-generating by the end of 2025. As these square meters were classified as development square meters, they have little impact on the occupancy rate as development square meters are not considered rentable units while development takes place. When development square meters move below the occupancy rate parallel to the rent, the number of leasable square meters increases by as many square meters as the rented square meters, and therefore has little effect on the occupancy rate.

Outlook

The Company expects the EBITDA for the year to be in the range of ISK 7,295 – 7,515 million at a fixed price, based on the consumer price index for Inflation adjustment in November 2024.

Takeover bid

Eik's shareholders received a takeover offer from Langisjór ehf. on 20 September 2024, where a mandatory bid obligation had arisen because the offeror and parties considered to be in collaboration with it, on the basis of the Act No. 108/2007 on Securities Transactions, had acquired more than 30% of the voting rights in Eik. The results of the takeover bid were published on 18 October and Langisjór and its partners hold 1,106,529,154 shares in Eik, or the equivalent of 32.32% of the Company's share capital.

Online meeting

An online open meeting will be held on Friday the 1st of November 2024, at 8:30 GMT. Garðar Hannes Friðjónsson, CEO and Lýður H. Gunnarsson, CFO, will present the results and respond to questions following the presentation.

Registration of the meeting is through the following link:

https://vimeo.com/event/4669498

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

Market participants can submit questions for or at the meeting to the email address fjarfestatengsl@eik.is. The directors encourage market participants to submit questions for the meeting so that answers can be prepared, if necessary. Questions will be answered after the presentation.

Financial calendar

Following is the planned date for the publishing of the annual results:

Annual results 2024                                                                      13. February 2025

Publishing of finance information will be done after the closing of the markets.

For further information please contact:

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

Attachment

• 3F 2024 Condensed consolidated interim financial statement