Definitions of key ratios

Hembla uses a number of Alternative Performance Measures (APMs) in interim reports and annual reports that are not defined in International Financial Reporting Standards (IFRS) or the guidelines of the European Securities and Markets Authority (ESMA).

These measures are used to provide valuable, complementary information to investors as well as company management in order to analyse and evaluate the company’s business. The APMs are not always comparable with measures that are used by other companies and shall be viewed as a complement to measures defined in IFRS. The key ratios described below are not defined in accordance with IFRS unless otherwise stated.

Finance
Key ratios Definition Reason for use of the measure
Return on equity, percent Profit for the year in relation to average shareholders’ equity. A profitability ratio showing Hembla’s return generated during the year on the owners’ capital that is invested in the company.
Loan-to-value ratio (LTV), percent Interest-bearing liabilities including net reported vendor notes after deductions for market value on listed shareholdings and cash and cash equivalents in relation to the fair value of the properties at the close of the period. Ratio showing Hembla’s level of indebtedness if the company were to realize marketable assets.
Loan-to-value ratio properties (LTV), percent Interest-bearing liabilities with security in properties in relation to the fair value of the properties at the close of the period. This industry-specific ratio shows the proportion of the fair value of the properties that are mortgaged.
Interest coverage ratio, times Income from property management plus financial costs in relation to financial costs. Ratio showing Hembla’s ability to cover its interest expenses.
Equity ratio, percent Reported shareholders’ equity in relation to reported total assets at the close of the period. Ratio showing Hembla’s interest rate sensitivity and financial stability.
Equity ratio, adjusted, percent Reported shareholders’ equity adjusted for the value of derivatives, goodwill and deferred tax liabilities. Ratio showing Hembla’s long-term adjusted equity ratio.
Property
Key ratios Definition Reason for use of the measure
Direct return, percent* Net operating income recalculated on an annual basis in relation to the average market value of the management properties during the period. Measure showing Hembla’s return from investment properties.
Net operating income, SEK ‘000* Total income minus bad debt losses, operating and maintenance costs, property administration, rents on leasehold interest in government owned land, and property taxes. An industry-specific measure that shows Hembla’s performance for property management.
Income from property management, SEK ‘000* Profit before changes in value and taxes. Measure showing Hembla’s result from its operational activities.
Non-recurring expenses, SEK ‘000* Non-recurring costs. Costs are specified as they have significant impact on the results but will not be charged to ongoing operations.
Realised changes in value in management properties, SEK ‘000* Property sales carried out after deductions for the most recent reported fair value of the properties and costs in conjunction with sale. Measure showing the value of property sales after deduction of the properties fair value and costs of sale.
Total return, percent* Profit before tax in relation to market value of the property portfolio. Measure showing Hembla’s return on its portfolio of investment properties.
Changes in value in investment properties, SEK ‘000* Change in the fair value after deductions for investments made. This measure shows the real change of reported fair value of the properties after deductions for investments made in existing properties.
Gross margin, percent* Net operating income as a percentage of total income. An industry-specific measure that shows Hembla’s earnings as a percentage of property management.
Shares
Key ratios Definition Reason for use of the measure
Shareholders’ equity per share, SEK Shareholders’ equity in relation to the number of outstanding ordinary shares on the balance sheet date. Measure showing shareholders’ share of Hembla’s total net assets per share.
Adjusted shareholders’ equity per share, (EPRA NAV), SEK Reported shareholders’ equity adjusted for the value of derivatives, goodwill and deferred tax liabilities, in relation to the number of outstanding ordinary shares on the balance sheet date. Measurements that show long-term Net Asset Value (EPRA NAV).
Profit per share, SEK ** Profit for the period after taxes in relation to the average number of outstanding ordinary shares prior to dilution.
Profit per share after dilution, SEK** Profit for the period after taxes in relation to the average number of outstanding ordinary shares, including the dilutive effect of outstanding option programmes, whose subscription price exceeds market price.
* Operational key ratios not considered alternative key ratios according to ESMA guidelines.
** Key ratios defined according to IFRS.