• Interim Report H1 2017/18

    Source: Nasdaq GlobeNewswire / 15 Sep 2017 05:07:35   America/New_York

    Aalborg, Denmark, 2017-09-15 11:07 CEST (GLOBE NEWSWIRE) --  

    SUMMARY

    Financial performance in H1 2017/18

    The profit before tax for H1 2017/18 was DKK 14.0 million against a loss of DKK 9.3 million in H1 2016/17. The profit after tax was DKK 7.1 million compared with a loss of DKK 9.8 million for H1 2016/17.

    Total assets amounted to DKK 2,902.0 million at 31 July 2017 against DKK 2,852.9 million at 31 January 2017. Consolidated equity stood at DKK 1,304.1 million, up from DKK 1,293.7 million at 31 January 2017, for a solvency ratio of 44.9%.

    Breakdown by segment:

    DKKm Property development Asset management Unallocated
    Profit/loss      
    Profit/loss before tax               25.8 -6.0 -5.8
    Balance sheet      
    Development projects 934.8 -                           - 
    Completed properties - 1,175.0                           - 
    Other projects - 111.7                           - 
    Other assets 362.5 247.5 70.5
    Total assets                1,297.3 1,534.2 70.5
            
    Tied-up equity 728.3 523.4 52.4

    Outlook for 2017/18

    Due to extraordinary events in connection with the bankruptcy of a contractor involved in the Strædet project in Køge, including substantial additional costs, combined with the postponed handover of another project, Management at the end of August 2017 lowered the Group’s profit guidance for financial year 2017/18 from DKK 100-120 million before tax to DKK 50-60 million before tax.

    The revised profit guidance assumes a return on equity of 7-8% from the Group’s development activities, against the previous forecast of about 15%.

    The profit guidance is based on Management's expectations, including timing estimates, for a number of specific projects. The guidance reflects, among other things, that the second phase of Strædet, Køge, is expected to be handed over to Citycon this autumn. 

    Property development

    In the first half of 2017/18, TK Development handed over a 3,200 sqm retail park in Oskarshamn, Sweden, to the investor, handed over most of the apartments sold in the Amerika Have project in Copenhagen to the buyers and handed over the first phase of the Strædet retail project in Køge to the investor.

    Major development projects:

    • Construction of BROEN Shopping, the new shopping centre in Esbjerg, Denmark, has been completed, and the centre opened in April 2017. The current occupancy rate is 93% (Q1 2017/18: 91%).
    • Construction of Strædet, Køge, Denmark, is currently affected by the bankruptcy of a contractor in August 2017. Despite this bankruptcy and resulting delays, the principal second phase of the project is still expected to be handed over this autumn, while a small part of the project is expected to be completed and handed over in 2018 in line with previous plans. The shop openings are now scheduled for 28 September 2017. The retail project, of which 91% has been let (Q1 2017/18: 88%), and the parking facilities have been sold under a conditional sale agreement to Finnish-based Citycon. The sale to Citycon is still expected to have a positive earnings effect in the 2017/18 financial year upon handover of the second phase to the investor.
    • Construction of the Amerika Have residential project in Copenhagen, Denmark, has been completed, and most of the apartments sold were handed over to the buyers in Q2 2017/18. 119 of the 121 apartments have been sold (Q1 2017/18: 114).
    • Construction of the third phase of the Bielany residential project in Warsaw, Poland, is progressing according to plan, as is the pre-completion sale. 68% (Q1 2017/18: 54%) of the residential units have been sold.

    Asset management

    The portfolio of completed properties in this business area, including joint venture projects, makes up 156,700 sqm and represented a value of DKK 1,594.5 million at 31 July 2017. Based on the current occupancy rate, annual net rent corresponds to a return on the carrying amount of 4.4% (Q1 2017/18: 4.4%).  Based on full occupancy, the return on the carrying amount is estimated at 6.2% (Q1 2017/18: 6.2%). 

    Detailed development and operating plans have been drafted for each property, and overall the plans are progressing as planned.

    Any questions regarding this interim report may be directed to Frede Clausen, President and CEO, tel. +45 8896 1010.

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