Hembla AB (publ) reports for the first quarter of 2019 an increased profit after tax amounting to SEK 576 million compared to SEK 156 million for the first quarter of the previous year.
Earnings per share after tax amounted to SEK 6.26 (1.98). The adjusted equity (EPRA NAV) increased by 40 percent compared to the first quarter 2018 and amounted to SEK 175.29 per share (125.35) as of 31 March 2019.
January – March 2019
- Rental income increased to SEK 477 million (386)
- Net operating income increased to SEK 218 million (166)
- Income from property management amounted to SEK 69 million (1)
- Unrealized changes in the value of investment properties of SEK 659 million (222)
- Changes in the value of financial instruments of SEK -7 million (-49)
- Profit before tax increased to SEK 746 million (190)
- Profit after tax increased to SEK 576 million (156)
- Earnings per share amounted to SEK 6.26 (1.98) before dilution and amounted to 6.23 (1.96) after dilution
Statement from the CEO
Organizational change with the tenant in focus
The first quarter of 2019 has been marked by the organizational change currently taking place in the company. The regional structure of the Management business area is being converted into an organisational setup divided by function. In practice, this means service and management issues will be handled by centralized units serving the company as a whole. Our direction and destination are clear: we are building an organization that will be even better equipped to focus on our tenants. The new organisation will deliver greater accessibility and a higher level of service, while also enabling us to harness the competence of our employees and create new, professional development opportunities. We’re now well under way.
Fundamental to any organizational change is to approach the process itself with diligence. The support and commitment of employees are vital. This creates a sense of shared ownership and responsibility for the process which I’m convinced will lead to a better final result. So during the first quarter, every employee in the management organization has actively participated in the creation of new processes and working methods. We operate within a clear framework with a defined objective, and as an organization, we’re taking these steps together.
An organizational change of this scale represents a big investment. It requires time, and, not least, personnel and monetary resources. As a result, the return on investment must be clear. For us, improved tenant satisfaction is the most important factor that will ultimately tell us whether we have succeeded. During February, we completed our annual tenants survey, which was jointly distributed by all of the company’s employees at the end of the previous quarter. Despite not yet evaluating the results of the organizational change, the survey underlined that the changes we’ve already implemented have enabled us to take a big step closer to meeting the needs of our tenants.
Customer service unit delivers excellent results
One of the questions in the annual tenants’ survey asked respondents how they would prefer to get in touch with our service organization. An overwhelming majority of our tenants expressed a preference for an easily accessible, central customer service facility where people can get assistance in their own language. The centralised customer service unit we rolled out on a small scale in December 2018 was the first part of the organisational change. And the results were really pleasing. During the first quarter, the unit recorded over 1,000 tenant interactions on average per week, mainly by telephone and via social media. This takes place in more than eight languages. The customer service unit will be reinforced by additional resources in order to become the main channel for our service provision.
During the first quarter of 2019, continued growth has remained strong in rental income and net operating income. This has been driven by acquisitions in combination with Hembla’s proven business model to invest and develop both our apartments and their common areas as well as exteriors. For a comparable portfolio, the total property expenses have increased, mainly due to maintenance, which is reflected in Hemblas’ continually more proactive approach to maintenance spend. We are convinced that this approach allows us to keep focus on our tenants and that it will increase the value of our assets in the long run.
Collaboration is our strategy
Our vision is to create dynamic districts where the needs of our tenants are the focus. A dynamic district is one that is socially sustainable. This is why a key part of our business model involves contributing to socially sustainable development in our districts. Collaboration is a key word within our strategy, and has also underpinned our work during the first quarter. We support a range of initiatives aimed at giving children and young people the opportunity to enjoy meaningful recreation. For example, during the quarter we started a partnership with Djurgården IF Ice Hockey Club on their Ishockey för Alla (Ice Hockey for All) project in Alby/Hallunda/Tumba and Husby/Kista/Akalla, and surrounding areas. The project aims to provide meaningful activities for children, young people and families in the form of grass hockey, ice hockey and ice skating.
Associations of property owners are another form of collaboration which are important for our work. Working alongside the police force and municipality, the association of property owners in Gottsunda/Valsätra of which we are a member, and hold the position of chair, carried out a civil dialogue during an evening which generated almost 1,000 responses from residents. This culminated in a so-called pledge to citizens during the first quarter. Alongside fellow members of the association and other participants, we collaborate on a number of activities in order to enhance the district. These include security surveys and joint efforts in the outdoor environment to improve peace of mind and well-being.
And in Sollentuna Municipality, we’ve taken part in the launch of a BID (Business Improvement District) project along with a number of other real estate owners, the municipality, the police force and the Church of Sweden. Within the scope of the BID project, we’ll be helping to improve the financial and social conditions in the district. We have good previous experience of this type of collaboration, and can see that this model will continue to form an important part of our work.
Stockholm 26 April 2019
Svein Erik Lilleland
This constitutes information that Hembla AB is legally obliged to publish under the EU’s Market Abuse Regulation. The information was released for publication on 26 April 2019 at 07.00 a.m. CEST.