interim report january 1–september 30, 2013 · akademiska hus – summary 2013 july–sept 2012...
TRANSCRIPT
AKADEMISKA HUS AB (Publ) Reg. no: 556459-9156
• Rental revenue amounted to SEK 4,005 million (3,937). The increase can be attributed mainly to the commis-sioning of newly constructed buildings in the Stockholm region and Uppsala region.
• Net operating income totalled SEK 2,721 million (2,765). Increased costs, mainly for maintenance, have resulted in a slight fall in net operating income.
• Net changes in property values amounted to SEK 491 million (256).
• Net financial income/expense for the period totalled SEK -274 million (-561). This figure includes changes in the value of financial instruments totalling SEK 44 million (-184).
• Profit before tax for the period amounted to SEK 2,891 million (2,410) and profit for the period was SEK 2,257 million (1,776).
• Investment in redevelopment and new construction for the year to date totalled SEK 2,070 million (2,024).
• The yield (excluding properties under construction) was 6.9 per cent (7.1).
report Interim Report January 1–September 30, 2013
Working in collaboration with our customers, we develop, build and manage knowledge environments that further Sweden’s success as a nation of knowledge. With our experience, expertise and size, we contribute to effective, sustainable environments for education, research and innovation.
AKADEMISKA HUS2INTERIM REPORT JANUARY 1–SEPTEMBER 30, 2013: STATEMENT BY THE PRESIDENT
Statement by President Kerstin Lindberg Göransson: In the Budget Bill for 2014, a clarified assignment is proposed for Akademiska Hus:
“Akademiska Hus Aktiebolag will own, develop and manage properties for universities and colleges where the pri-mary focus will be on education and research and it will carry on operations compatible therewith. Operations will be run on a commercial basis and will gen-erate a yield that is line with the market by setting rents that take into account inherent operating risks. Akademiska Hus Aktiebolag will work to promote the long-term, sustainable development of university and college campuses.”
The prerequisites presented in our reformulated assignment support our long-term strategy. The focus is on development to achieve greater customer- perceived value and working together with our centres of education to pro-mote their success. Highlighted areas include the importance of greater trans-parency, the focus on sustainability, reinforced interaction with customers and the key role played by Akademiska Hus in reinforcing Sweden as a nation of knowledge.
One of the factors for success is even closer interaction with our customers in project planning and management. Our ambition is to be at the forefront in sus-tainability issues, particularly in the use of energy, where we have considerable scope to make a difference. That is why we are raising the level for one of our energy goals. Our previous energy goal was to reduce purchased energy by 40 per cent to 2025. We are now raising the bar and the new target is a reduction of 50 per cent. At the end of last year we had reached the halfway point.
The new Student Building in Stock-holm, opened in September, has extre m-ely low energy use – just 20 kWh per square metre per year – which is an
Newly formulated ownership assignment and stricter energy goal
President Kerstin Lindberg Göransson
excellent example of how we have suc-ceeded in building sustainably.
The investments being made by the major centres of education and research and innovation mean that Akademiska Hus continues to maintain a large project portfolio, which is now worth SEK 25.5 billion. It is still in the Stock-holm and Uppsala regions that the most extensive new construction projects are taking place in research-intensive oper-ations. The largest decided project is Biomedicum in Solna for the Karolinska Institute. The groundbreaking cere-mony on September 24 attracted a great deal of attention in the media. During the period, Aula Medica was commis-sioned on behalf of the Karolinska Insti-tute, which is one of the reasons why the project portfolio has fallen slightly com-pared with the second quarter. No new major projects were added during the period.
A crucial factor in the implementa-tion of the entire project portfolio is the potential to secure financing. In this respect, the ownership situation, the good financial standing and the stable tenant structure put Akademiska Hus in a very good position.
Property management results remain stable. Rental revenue totalled SEK 4,005 million (3,937) and net oper-ating income was SEK 2,721 million (2,765). The net operating income has fallen slightly, due mainly to an increase in operating and maintenance costs. Profit after tax for the period was SEK 2,257 million (1,776). The improvement in profit can be attributed to a positive change in property values and improved net interest income and expense. There has been no change in the properties’ yield levels and this is expected to continue for the remainder of the year.
Kerstin Lindberg Göransson President
AKADEMISKA HUS3INTERIM REPORT JANUARY 1–SEPTEMBER 30, 2013: SUMMARY AND COMMENTS
Comments on items in the statement of Comprehensive inCome and the statement of finanCial positionThird quarter 2013Rental revenue during the third quarter of the year amounted to SEK 1,319 million (1,288), which can be attributed mainly to commissionings. Operating and maintenance costs increased slightly, amounting to SEK 357 million (320). Net operating income increased by SEK 40 million to SEK 957 million.
Changes in property values totalled SEK 48 million (-35) and net financial income/expense improved to SEK -136 mil-lion (-258), mainly due to changes in the value of financial instruments. Profit for the period was SEK 684 million (449).
Rental revenue Rental revenue amounted to SEK 4,005 million (3,937). The increase can be attributed mainly to the commissioning of newly constructed properties in the Stockholm region, such as the Public Health Building, the Wallenberg Laboratory, Red Cross, Engineering Sciences and the Swedish School of Sport and Health Sciences. The sale of the entire holdings in Kalmar during 2012 and 2013 will have a negative impact on rental revenue to the amount of SEK 42 million on an annual basis.
Rental and vacancy levelsProperty holdings as at September 30, 2013 amounted to 3.2 million square metres of rentable space (3.2), of which 77,000 square metres (82,000) were vacant, resulting in a vacancy level of 2.4 per cent (2.6). The largest individual blocks of vacant space are Mathematical Sciences in Gothenburg total-ling 5,666 square metres, Stora Institutionen, Ultuna hamn in Uppsala totalling 5,351 square metres, and the F–J Buildings
AKADEMISKA HUS – SUMMARY 2013
July–Sept2012
July–Sept2013
Jan–Sept2012
Jan–Sept
Rolling 12-month
period Oct 2012–Sept 2013
2012Full year
2011Full year
Rental revenue, SEK m 1,319 1,288 4,005 3,937 5,333 5,265 5,116Net operating income, SEK m 957 917 2,721 2,765 3,544 3,588 3,389Changes in value, properties, SEK m 48 -35 491 256 -56 -291 361Profit before tax, SEK m 860 610 2,891 2,410 3,030 2,549 3,252Vacant space, rent, % 1.0 1.0 1.0 1.0 1.0 1.0 1.2Vacant space, area, % 2.4 2.6 2.4 2.6 2.4 2.6 2.6
Fair value, properties, SEK m 57,105 54,327 57,105 54,327 57,105 54,677 52,071of which properties under construction, SEK m 4,674 3,874 4,674 3,874 4,674 4,007 2,181
Yield, % (excluding properties under construction) — — — — 6.9 7.1 6.9Yield, % (including properties under construction) — — — — 6.4 6.7 6.7Net operating income, SEK/m2 — — — — 1,102 1,120 1,059
Return on equity after standard tax, % — — — — 8.4 6.8 9.2Return on capital employed, % — — — — 5.4 5.3 6.5Equity ratio, % 46.4 43.1 46.4 43.1 46.4 46.0 43.3Interest coverage ratio, % * 656 563 648 563 619 558 619Internal financing ratio, % 285 112 142 100 109 84 112Loan-to-value ratio, % 33.8 33.4 33.8 33.4 33.8 33.9 32.2
*Excluding changes in the value of properties and financial derivatives.
LEASE RENEWAL STRUCTURE %
0
10
20
30
40
50
2019 and later
201820172016201520142013
RENTAL REVENUE PER REGION
Northern Region, 10 %
Southern Region, 14%
Western Region, 14%
Uppsala Region,
17%
Stockholm Region,
35%Eastern Region, 10%
RENTAL REVENUESEK m SEK/m2
0
1,000
2,000
3,000
4,000
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6,000
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1,800
Rental revenue, SEK m Rental revenue, SEK/m2
on the Konradsberg Campus in Stockholm totalling 4,498 square metres. The vacant space has a distinctly lower rental value than the average for the holdings. In terms of value, vacant space accounted for only 1.0 per cent (1.0).
LeasesA characteristic feature of Akademiska Hus is long leases with universities and colleges. The average term of a newly signed lease is ten years. At the period-end, the average remaining lease term was 5.1 years (5.2 at the turn of the year). In the case of the large, complex specialist buildings for laboratory and research work, a lease is normally required where a large proportion of the investment is repaid during the term of the lease, which means a lease of ten years or longer.
The dominant customer group, universities and colleges, are stable, creditworthy customers that generate approxi-mately 90 per cent of revenue. All customers that are centres of education, apart from Chalmers University of Technology, have the Swedish government as principal and thus have the highest credit rating.
Operating and maintenance costsOperating costs for the period amounted to SEK 643 million (619), of which media provision amounted to SEK 450 million (429). New buildings were commissioned during the year, which meant an increase in energy use. Akademiska Hus has a large proportion of laboratories, accounting for 34 per cent of the property holdings, which means relatively high operating costs. Several new and redeveloped premises that have come into use in recent years are large laboratories that are more resource- intensive than normal teaching premises. This applies both from an energy point of view and in terms of inspection and mainte-
AKADEMISKA HUS4INTERIM REPORT JANUARY 1–JUNE 30, 2013: COMMENTS
PROPERTIES (SEK M)01-01-2013– 30-09-2013
01-01-2012– 31-12-2012
Opening fair value 54,677 52,071Investment in new construction and redevelopment 2,070 2,901Acquisitions 0 7Capitalised interest expense 94 107Sales -375 -146Change in fair value (unrealised) 639 -262
of which change in value due to a change in the cost of capital and yield requirement — -29of which change in value due to a change in the assumed rate of inflation — -232of which change in value as a result of the change in the value index (mainly average remaining lease term) 232 -262of which capitalised interest expense -94 -107of which start-up of projects, revaluation of cash flow etc. 501 367
CLOSING FAIR VALUE 57,105 54,677
For a more detailed account of the Akademiska Hus view of property valuation, reference can be made to the 2012 Annual Report.
nance. The very snowy winter has resulted in an increase in costs for snow clearance of approximately SEK 11 million.
Maintenance costs amounted to SEK 462 million (372). The rise can be attributed to increased investment in preventive maintenance, SEK 162 million (113) and project maintenance, SEK 143 million (102). We will continue to implement mainte-nance measures to gradually raise the standard of our prop-erty holdings.
Market developmentThe focus in the property market is on properties with stable cash flows and a low rental risk (long leases, tenants with a good credit rating), which is to our advantage. The geographi-cally diverse Akademiska Hus portfolio offers a good risk spread that can benefit from the growth in strong regional markets, such as university and college towns and cities. There is a strong demand for high-quality properties and these are regarded as a relatively safe form of investment, offering a sta-ble yield in both good times and bad. The majority of Akadem-iska Hus tenants are only affected to a limited extent by tem-porary fluctuations in the economy. The market assessment is that there will be no change in yield requirements during the remainder of the year even if the risk of a rise in yield require-ments cannot be dismissed entirely.
Sweden as a nation of knowledge is changing and larger centres of education are growing as a result of government investment in research and development. They are upgrading their use of premises to achieve greater efficiency and at the same time increase their attractiveness, which is reflected in the very extensive Akademiska Hus project portfolio. Along-side major investments in larger university and college towns and cities, the number of students will fall over the next few years. The number of applicants for places, however, continues to be high. Continuous investment in new production at Akad-emiska Hus, and in particular maintenance and modernisa-tion of existing properties, are taking place to ensure the attractiveness of the property portfolio to tenants. A focus on premises suitable for more general use reduces operating
NET OPERATING INCOMESEK m %
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Net operating income, SEK m Net operating income level, %
OPERATING COSTS SEK m SEK/m2
FAIR VALUE, PROPERTIES SEK m SEK/m2
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Net operating cost, SEK m of which media provision, SEK m Operating cost, SEK/m2 of which media provision, SEK/m2
Fair value, properties, SEK m Fair value, properties, SEK/m2
vulnerability and broadens the range of potential uses, making the campuses more attractive. The majority of Akademiska Hus campuses are in prime locations in attractive towns and cities and the risk to Akademiska Hus in these locations is limited by access to an active, highly efficient rental market.
Through the new Research Bill, the higher education sector will continue to receive a substantial increase in funding in the future, which could counterbalance a possible downturn in education activities. At the smaller centres of education, research grants will not compensate for a possible fall in the number of students and there is greater uncertainty in the long term regarding the need for premises.
Properties (property valuation)The fair value of properties was SEK 57,105 million (54,677). The fair value also includes properties under construction amounting to SEK 4,674 million (4,007). All property assets are reported at fair value. The fair value has been set by means of an internal property valuation of all properties. The unreal-ised change in value totalled SEK 639 million. The fair value per square metre is SEK 16,012, excluding properties under construction (15,495).
There has been no change in the yield requirement or cost of capital during the period. The average yield requirement was 6.4 per cent (6.4) and the average cost of capital was 8.5 per cent (8.6). An external valuation of yield requirements, cost of capi-tal and other valuation variables has been made by DTZ and NAI Svefa. Apart from financial parameters, the property value is affected by factors such as rent levels, net operating income, lease term, property category and type of customer.
The profit-impacting change in fair value for the period is positive, amounting to SEK 491 million (256). The change in fair value includes a realised change in value of SEK 33 mil-lion following the sale of the Rostad and Falken properties in Kalmar and a realised disposal totalling SEK -181 million in respect of demolition at the Department of Bacteriology in Stockholm to allow construction of Biomedicum.
AKADEMISKA HUS5INTERIM REPORT JANUARY 1–JUNE 30, 2013: COMMENTS
FINANCING COST, BREAKDOWN01-01-2013– 30-09-2013
01-01-2012– 30-09-2012
01-01-2012– 31-12-2012
Loan financing cost, including charges, % 2.24 2.88 2.75Interest swaps, net interest, % 0.42 0.37 0.40
Financing cost, % 2.66 3.25 3.15Changes in value, financial derivatives, % -0.30 1.33 1.06
TOTAL FINANCING COST, % 2.36 4.58 4.21
Dec 2
012
Dec 2
011
Dec 2
010
Dec 2
009
Dec 2
008
Dec 2
007
Dec 2
0060
1
2
3
4
5
6
Year
Sept 2
013
2.782.53
COMPARISONS BETWEEN DIFFERENT ANNUALISED FINANCING COST CALCULATIONS%
Financing cost, period allocation, %
Financing cost according to IFRS, %
projeCts, investments and salesThe project portfolio totals SEK 25,517 million, of which SEK 21,679 million refers to decided and planned projects and SEK 4,185 million refers to concept projects. ‘Concept pro-jects’ are projects that are considered likely but which remain uncertain in terms of time and scope. SEK 4,674 million of the project portfolio has already been invested. The project portfolio covers future investments over several years and the emphasis is on Stockholm and Uppsala, where there are sev-eral major new construction projects. For further information about major projects, reference can be made to the 2012 Annual Report.
Net investment in properties during the period amounted to SEK 1,695 (2,025) million. The Rostad and Falken properties in Kalmar were sold during the period for SEK 138 million.
PROJECT PORTFOLIO (SEK M) 30-09-2013 31-12-2012
Decided projects 13,022 13,594Planned projects 8,310 8,575
Decided and planned projects 21,332 22,169Concept projects 4,185 3,908
TOTAL PROJECT PORTFOLIO 25,517 26,077of which already invested -4,673 -4,006
REMAINING PROJECT PORTFOLIO 20,844 22,071of which decided and planned 16,659 18,163
finanCinGGlobal economic recovery is taking place at a modest rate. Despite this, the financial markets are weighed down by uncertainty regarding the approach that will adopted by the central banks. On the one hand they have attempted to guide the market in how to adapt to the recovery by adjusting short-term interest rates, on the other hand information regarding the winding down of US bond purchases has generated uncer-tainty. At the same time, the markets have been reminded very tangibly that finance policy and structural problems remain unresolved. This has resulted in rising risk premiums and the forcing up of long-term interest rates.
The Swedish economy has shown some bright spots although overall growth in GNP continues to be low and industrial production has yet to return to pre-finance crisis levels. The global rise in interest rates since the late spring, particularly long-term interest rates, has filtered into the Swedish interest market. Previously anticipated cuts in inter-est rates by the Swedish Riksbank have evaporated. The main
LOAN MATURITY STRUCTURE SEK m
0
5,000
10,000
15,000
20,000
25,000
2013 2018 2023 2028 2033 2038 2043
reason is an unequivocal statement by the Swedish Riksbank that household debt and the subsequent long-term effects are the pivotal underlying cause for concern.
Since 2011, there have been issues in Swedish kronor at a fixed rate of interest and with terms of between 15 and 30 years, totalling SEK 3,305 million. The reason for the issues is to ensure very long-term financing of the substantial invest-ment portfolio. Bonds with a maturity and fixed interest period in excess of 15 years are handled within a separate portfolio and with a separate mandate.
Three bond issues have taken place on the Swedish market to date this year:
AMOUNT Interest construction Term
SEK 500 m Fixed interest 4.6 yearsSEK 500 m Variable interest 4.0 yearsSEK 200 m Fixed interest 7.0 years
Net loan debtThe fixed interest period and maturity structure for net loan debt is shown in the following table:
SEK m
Fixed interest,
years, Sept 2013
Fixed interest,
years, June 2013
Maturity, years,
Sept 2013
Maturity, years,
June 2013
Long-term portfolio 3,155 26.8 27.1 26.8 27.1Basic portfolio 16,100 3.4 3.4 3.7 3.8Total portfolio 7.8 7.5 7.4 7.8
Net interest income and expense Net interest income and expense was SEK -274 million (-561), which can be attributed mainly to changes in the value of financial derivatives. This is equivalent to an interest cost of 2.4 per cent (4.6) during the period. Changes in value, which were largely unrealised, correspond to a decrease in the cost of capital of 0.3 per cent (-1.3). The interest coverage ratio, calcu-lated on the cash flow impact of net interest income and expense, amounted to 1,162 per cent (670).
Effect of financial derivatives on profitInterest swaps are entered into with the aim of securing the desired fixed interest period in the liability portfolio. The interest and currency risks that arise in conjunction with financing in foreign currency are hedged throughout the whole of the term through currency swaps. There is thus no real exchange rate risk.
AKADEMISKA HUS6
AKADEMISKA HUSINTERIM REPORT JANUARY 1–JUNE 30, 2013: COMMENTS
0
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Rolling 12 months
2012201120102009
Average return on equity over five years Average return target over five years
RETURN ON EQUITY%
YIELD REQUIREMENT AND COST OF CAPITAL %
Interest coverage ratio, % Internal financing ratio, %
INTEREST COVERAGE RATIO AND INTERNAL FINANCING RATIO % %
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The instruments should be reported at fair value (market value) with changes charged to profit or loss. These represent a current value of future cash flow-impacting positions at the interest and exchange rates prevailing at the time of the report. Variations in market values could entail substantial changes in reported net financial income/expense. However, the changes in value for each instrument will decrease gradu-ally as time passes and will be eliminated completely by the maturity date.
Comparison of the present financing cost with the previous calculation base The graph on the previous page shows a comparison between the financing cost that is reported according to the Statement of Comprehensive Income (IFRS) and a calculation where the effect of financial derivatives on profit is allocated to a specific period over the term of the underlying instrument. The com-parison is calculated at annualised percentage rates of inter-est. This rate of interest concurs better with the cash flow impact of financial transactions.
risK manaGementThe Akademiska Hus property portfolio has a strategic risk: campuses have a specific purpose and are not general in the broad sense. Purchases and sales of properties take place to handle the strategic risk in the property portfolio.
Each year, the Akademiska Hus Board decides on long-term development, the strategic plan, the competitive situation and total risk exposure. The Board has routines and processes in place to check how the organisation handles the risks that can arise in business operations. This means that risks can be identified, analysed, assessed and handled effectively. Major disputes are reported on an ongoing basis to the Board of Directors.
An Audit Committee assists the Board of Directors in, among other things, matters concerning financial risk, reporting and control as well as property valuation. In addi-tion, a Finance Committee follows and prepares in more detail the handling of the financial risks.
As regards changes in value, reporting according to IFRS means that the properties are recorded at fair value in the Statement of Financial Position and that changes in value affect the Statement of Comprehensive Income. The value of the properties is determined by general market factors such as risk premiums as well as availability and demand on the prop-erty market and specific changes in the properties.
Rental revenue is assured through leases that are long in comparison to the industry in general. The average term for a newly signed lease with Akademiska Hus is ten years and the average remaining lease term is 5.1 years. Rents from state customers account for approximately 90 per cent of the rental revenue and these do not represent a credit risk. Compared to other property companies, the level of vacant space is very low. Specialist buildings for research and development frequently have leases of 10 years or longer that repay the whole of the investment and there is very good potential for extending the lease. In other respects, the aim is to have general premises that can be easily readjusted for alternative uses.
Around half of the cost of media provision is passed on to tenants. The use of power is price hedged and purchase takes place directly through Nord Pool. The property holdings are well maintained and maintenance planning takes place for each individual building.
Akademiska Hus carries on financing operations with well-adapted strategies, striking a balance between financial risks and a low financing cost. The Finance Policy lays down the long-term strategic orientation, allocation of responsibility, the Group’s approach to financial risks and the mandates that are in place to handle these risks. The Financial Risk Manage-ment Plan includes authorisations and mandates as well as concrete financing plans. The handling of the interest risk in the liability portfolio takes place within a separate fixed inter-est mandate.
For a more detailed description of Akademiska Hus’s risk management, reference can be made to the Annual Report for 2012.
oBjeCtives and profitaBilitYThe owner’s financial objectives have been set as follows:• The return on average equity should be equivalent to the
average five-year government bond interest rate plus four percentage points viewed over a business cycle.
• The dividend target is 50 per cent of the profit after financial items, excluding unrealised changes in value with a deduc-tion for current tax.
• The equity ratio should be between 30 and 40 per cent.
Over the past five years, the average return on equity has been 5.9 per cent whilst the target was 6.4 per cent.
Events after the reporting periodNo events of a material nature occurred after the end of the reporting period.
Yield requirement, % Cost of capital, %
AKADEMISKA HUS7INTERIM REPORT JANUARY 1–SEPTEMBER 30 2013: STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, SUMMARY (SEK M)
2013 July–Sept
2012 July–Sept
2013 Jan–Sept
2012 Jan–Sept
Rolling 12-month
period, Oct 2012–Sept 2013
2012 Full year
Rental revenue 1,319 1,288 4,005 3,937 5,333 5,265
Other property management revenue 51 53 159 170 235 246
Total property management revenue 1,370 1,341 4,164 4,107 5,568 5,511
Operating costs -173 -182 -643 -619 -894 -870
Maintenance costs -184 -138 -462 -372 -654 -564
Property administration -57 -60 -204 -201 -281 -278
Other property management expenses 1 -44 -134 -150 -195 -211
Total property management expenses -413 -424 -1,443 -1,342 -2,024 -1,923
NET OPERATING INCOME 957 917 2,721 2,765 3,544 3,588
Changes in property values, positive 434 186 1,879 1,127 1,956 1,204
Changes in property values, negative -386 -221 -1,388 -871 -2,012 -1,495
Total changes in property values 48 -35 491 256 -56 -291
Central administration expenses -9 -14 -47 -50 -63 -66
PROFIT BEFORE FINANCIAL ITEMS 996 868 3,165 2,971 3,425 3,231
Financial income/expense -136 -258 -274 -561 -395 -682
PROFIT BEFORE TAX 860 610 2,891 2,410 3,030 2,549
Tax -176 -161 -634 -634 600 600
NET PROFIT FOR THE PERIOD 684 449 2,257 1,776 3,630 3,149
Attributable to the Parent Company's shareholder 684 449 2,257 1,776 3,630 3,149
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME, SUMMARY (SEK M)
2013 July–Sept
2012 July–Sept
2013 Jan–Sept
2012 Jan–Sept
Rolling 12-month
period, Oct 2012–Sept 2013
2012 Full year
Profit for the period 684 449 2,257 1,776 3,630 3,149
Items that can be reclassified
Result from cash flow hedges 60 -12 48 22 64 38
Tax attributable to cash flow hedges -10 5 -6 1 -8 -1
Cash flow hedges, dissolved against profit or loss -15 -6 -21 -25 -29 -33
Items that cannot be reclassified
Revaluation of defined benefit pensions — — — — -5 -5
Tax on pensions — — — — 1 1
TOTAL PROFIT OR LOSS OR OTHER COMPREHENSIVE INCOME FOR THE PERIOD 35 -13 21 -2 23 0
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 719 436 2,278 1,774 3,653 3,149
Of which attributable to the Parent Company’s shareholder 719 436 2,278 1,774 3,653 3,149
AKADEMISKA HUS8INTERIM REPORT JANUARY 1–SEPTEMBER 30 2013: CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION, SUMMARY (SEK M) 30-09-2013 30-09-2012 31-12-2012
ASSETS
Non-current assets
Tangible non-current assets
Properties 57,105 54,327 54,677
Equipment and fittings 18 25 23
Total tangible non-current assets 57,123 54,352 54,700
Financial non-current assets
Derivatives 1,162 1,784 1,867
Other non-current receivables 421 461 433
Total financial non-current assets 1,583 2,245 2,300
Total non-current assets 58,706 56,597 57,000
Current assets
Current receivables
Derivatives 280 472 382
Other current receivables 850 754 1,003
Total current receivables 1,130 1,226 1,385
Cash and cash equivalents
Cash and cash equivalents 3,172 4,786 3,247
Total cash and cash equivalents 3,172 4,786 3,247
Total current assets 4,302 6,012 4,632
TOTAL ASSETS 63,008 62,609 61,632
EQUITY AND LIABILITIES
Equity 29,259 26,961 28,336
LIABILITIES
Non-current liabilities
Loans 17,217 17,632 18,293
Derivatives 223 360 416
Deferred tax 6,888 7,822 6,568
Other non-current liabilities 435 470 464
Total non-current liabilities 24,763 26,284 25,741
Current liabilities
Loans 5,637 6,022 4,176
Derivatives 76 258 132
Other current liabilities 3,273 3,084 3,247
Total current liabilities 8,986 9,364 7,555
Total liabilities 33,749 35,648 33,296
TOTAL EQUITY AND LIABILITIES 63,008 62,609 61,632
MEMORANDUM ITEMS
Pledged assets 102 189 270
Contingent liabilities 3 3 3
AKADEMISKA HUS9INTERIM REPORT JANUARY 1–SEPTEMBER 30 2013: STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS, SUMMARY (SEK M)2013
Jan–Sept2012
Jan–Sept2012
Full year
CURRENT OPERATIONS
Profit before tax 2,891 2,410 2,546
Adjustment for items not included in the cash flow -596 62 475
Tax paid -184 -440 -433
CASH FLOW FROM CURRENT OPERATIONS BEFORE CHANGES IN WORKING CAPITAL 2,111 2,032 2,588
CASH FLOW FROM CHANGES IN WORKING CAPITAL
Increase (-)/decrease (+) in current receivables 20 156 -102
Increase (+)/decrease (-) in current liabilities 277 -37 -360
CASH FLOW FROM CURRENT OPERATIONS 2,408 2,151 2,126
INVESTMENT
Investment in properties -2,070 -2,024 -2,503
Sale of properties 228 101 118
Investment in other non-current assets -2 -8 -9
Sale of other non-current assets — — 1
Decrease (+) in non-current receivables 49 16 5
CASH FLOW FROM INVESTMENT -1,795 -1,915 -2,388
FINANCING
Raising of interest-bearing loans, excluding refinancing 667 1,205 164
Dividend paid -1,355 -1,245 -1,245
CASH FLOW FROM FINANCING -688 -40 -1,081
CASH FLOW FOR THE PERIOD -75 196 -1,343
Cash and cash equivalents at the beginning of the period 3,247 4,590 4,590
Cash and cash equivalents at the period-end 3,172 4,786 3,247
Attributable to the Parent Company’s shareholder
CHANGES IN GROUP EQUITY, SUMMARY (SEK M) Share capital
Other contributed capital Hedge reserve
Retained earnings Total equity
Equity 31-12-2011 2,135 2,135 -38 22,289 26,521
Equity 01-01-2012 2,135 2,135 -38 22,289 26,521
Effect of amended accounting principle — — — -89 -89
Adjusted equity 01-01-2012 2,135 2,135 -38 22,200 26,432
Dividend — — — -1,245 -1,245
Total comprehensive income, Jan-Sept 2012 — — -2 1,776 1,774
Equity 30-09-2012 2,135 2,135 -40 22,731 26,961
Total comprehensive income, Oct-Dec 2012 — — 6 1,369 1,375
Equity 31-12-2012 2,135 2,135 -34 24,100 28,336
Dividend — — — -1,355 -1,355
Total comprehensive income, Jan-Sept 2013 — — 21 2,257 2,278
EQUITY 30-09-2013 2,135 2,135 -13 25,002 29,259
AKADEMISKA HUS10INTERIM REPORT JANUARY 1–SEPTEMBER 30, 2013: SEGMENT INFORMATION
SEGMENT INFORMATION 01-01-2013–30-09-2013 (SEK M) South West East Uppsala Stockholm North
Total, operating segments
Other opera-
tionsElimi-
nation Group
Revenue, including other operating revenue 565 615 403 700 1,483 399 4,165 -1 — 4,164
Inter-segment sales — — — — — — 0 — — 0
Total revenue 565 615 403 700 1,483 399 4,165 -1 0 4,164
Property management costs, including other operating costs -235 -217 -110 -220 -431 -145 -1,358 -85 — -1,443
Net operating income 331 398 293 480 1,052 254 2,807 -86 0 2,721
Total assets include:
Properties 6,936 6,944 4,591 10,902 23,644 4,089 57,105 — — 57,105
of which investments 296 76 59 825 792 23 2,070 2 — 2,072
SEGMENT INFORMATION 01-01-2012–30-09-2012 (SEK M) South West East Uppsala Stockholm North
Total, operating segments
Other opera-
tionsElimi-
nation Group
Revenue, including other operating revenue 603 603 406 701 1,397 397 4,107 — — 4,107
Inter-segment sales — — — — — — 0 87 -87 0
Total revenue 603 603 406 701 1,397 397 4,107 87 -87 4,107
Property management costs, including other operating costs -245 -199 -121 -235 -412 -130 -1,342 -54 54 -1,342
Net operating income 358 404 285 466 985 267 2,765 33 -33 2,765
Total assets include:
Properties 6,537 6,942 4,577 9,972 22,180 4,119 54,327 — — 54,327
of which investments 164 90 51 657 1,015 54 2,031 2 — 2,033
SEGMENT INFORMATION 01-01-2012–31-12-2012 (SEK M) South West East Uppsala Stockholm North
Total, operating segments
Other opera-
tionsElimi-
nation Group
Revenue, including other operating revenue 802 809 544 945 1,885 526 5,511 — — 5,511
Inter-segment sales — — — — — — — 117 -117 0
Total revenue 802 809 544 945 1,885 526 5,511 117 -117 5,511
Property management costs, including other operating costs -339 -282 -163 -344 -599 -184 -1,911 -90 75 -1,926
Net operating income 463 527 381 601 1,286 342 3,600 27 -42 3,585
Total assets include:
Properties 6,620 6,975 4,557 10,094 22,335 4,096 54,677 — — 54,677
of which investments 254 111 96 988 1,403 63 2,915 2 — 2,917
AKADEMISKA HUS11INTERIM REPORT JANUARY 1–SEPTEMBER 30 2013: PARENT COMPANY INCOME STATEMENTS
PARENT COMPANY INCOME STATEMENT, SUMMARY (SEK M) 2013
July–Sept2012
July–Sept2013
Jan–Sept2012
Jan–Sept2012
Full year
Rental revenue 1,346 — 4,032 — 5,265
Other property management revenue 12 29 54 87 75
Total revenue from property management 1,358 29 4,086 87 5,340
Operating expenses -190 — -658 — -867
Maintenance costs -184 — -462 — -564
Property administration -58 — -197 — -268
Other property management costs -21 -30 -61 -104 -90
Total costs from property management -453 -30 -1,378 -104 -1,789
NET OPERATING INCOME 905 -1 2,708 -17 3,551
Depreciation and write-downs as well as reversed write-downs in property management -279 — -914 — -1,288
Net operating income after depreciation and write-downs as well as reversed write-downs in property management 626 -1 1,794 -17 2,263
Central administration costs -9 — -47 — -67
Other operating revenue 195 — 329 — 287
Other operating costs -299 — -378 — -227
Total, other operating items -113 0 -96 0 -7
PROFIT/LOSS BEFORE FINANCIAL ITEMS 513 -1 1,698 -17 2,256
Net financial income/expense -186 -93 -368 1,004 -790
Profit/loss after financial items 327 -94 1,330 987 1,466
Appropriations — — — — -188
PROFIT BEFORE TAX 327 -94 1,330 987 1,278
Tax -81 25 -311 19 -271
PROFIT FOR THE PERIOD 246 -69 1,019 1,006 1,007
PARENT COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME, SUMMARY (SEK M)
2013 July–Sept
2012 July–Sept
2013 Jan–Sept
2012 Jan–Sept
2012 Full year
Profit for the period 246 -69 1,019 1,006 1,007
Items that can be reclassified
Profit/loss from cash flow hedges 60 -12 48 22 38
Tax attributable to items reported in other comprehensive income -9 5 -6 1 -1
Cash flow hedges, dissolved against profit or loss -16 -6 -21 -25 -33
TOTAL PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD 35 -13 21 -2 4
COMPREHENSIVE INCOME FOR THE PERIOD 281 -82 1,040 1,004 1,011
AKADEMISKA HUS12INTERIM REPORT JANUARY 1–SEPTEMBER 30 2013: PARENT COMPANY BALANCE SHEET
PARENT COMPANY BALANCE SHEET, SUMMARY (SEK M) 30-09-2013 30-09-2012 31-12-2012
ASSETS
Non-current assets
Tangible non-current assets
Properties 30,347 — 29,453
Equipment and fittings 18 7 23
Total tangible non-current assets 30,365 7 29,476
Financial non-current assets
Shares in Group companies 1 1,564 —
Derivatives 1,726 1,784 1,867
Other non-current receivables 447 26 434
Total financial non-current assets 2,174 3,374 2,301
Total non-current assets 32,539 3,381 31,777
Current assets
Current receivables
Derivatives — 472 382
Other current receivables 951 22,359 1,004
Total current receivables 951 22,831 1,386
Cash and cash equivalents
Cash and cash equivalents 3,172 4,786 3,247
Total cash and cash equivalents 3,172 4,786 3,247
Total current assets 4,123 27,617 4,633
TOTAL ASSETS 36,661 30,998 36,410
EQUITY AND LIABILITIES
Equity 5,929 5,376 6,243
Untaxed reserves 3,246 393 3,246
Non-current liabilities
Loans 19,031 17,210 18,293
Derivatives 618 — 416
Deferred tax 376 — 343
Other non-current liabilities 271 439 310
Total non-current liabilities 20,296 17,649 19,362
Current liabilities
Loans 4,600 6,014 4,176
Derivatives — — 132
Other current liabilities 2,590 1,566 3,251
Total current liabilities 7,190 7,580 7,559
Total liabilities 27,486 25,229 26,921
TOTAL EQUITY AND LIABILITIES 36,661 30,998 36,410
MEMORANDUM ITEMS
Pledged assets 102 189 270
Contingent liabilities 3 175 3
AKADEMISKA HUS13INTERIM REPORT JANUARY 1–SEPTEMBER 30 2013: ACCOUNTING PRINCIPLES
PARENT COMPANYAkademiska Hus AB is the Parent Company in the Akademiska Hus Group. Operations comprise mainly owning and managing university and college properties. In December 2012, a merger took place with the subsidiaries that owned and managed the properties within the Group.
Revenue and profit/lossThe Company’s revenue totalled SEK 4,086 million (87). Of this figure, income from regional companies amounted to SEK 0 million (87). The profit/loss before financial items was SEK 1,698 million (-17) and net financial income/expense was SEK -369 million (1,004). The profit after financial items was SEK 1,330 million (987).
InvestmentsInvestment in machinery and equipment amounted to SEK 2 million (2) and in properties SEK 2,070 million (0).
EquityEquity totalled SEK 5,929 million compared with SEK 6,243 million at the turn of the year.
ACCOUNTING PRINCIPLESAkademiska Hus complies with the EU-endorsed International Financial Reporting Standards (IFRS) and the interpretations made by the International Financial Reporting Interpretations Committee (IFRIC). This Interim Report for the Group has been prepared according to IAS 34 Interim Financial Reporting, and for the Parent Company in accordance with the Annual Accounts Act and the recommendation of the Financial Report-ing Board, RFR 2 Accounting for Legal Entities.
Unless stated otherwise below, the accounting principles and computation methods are the same as the accounting prin-ciples used in the most recent Annual Report.
Revised IAS 19: Employee Contributions – Defined Benefit PensionsThe revised IAS 19 (IAS 19R) is applicable from 2013. IAS 19R contains guidelines on how taxes payable on pension benefits must be reported and consequently the statement from the Swedish Financial Accounting Standards Council, UFR 4 Accounting for Special Employer’s Contribution and Tax on Returns, is no longer applied. A new statement from the Swedish Financial Accounting Standards Council for account-ing for tax on returns is applied – UFR 9 Accounting for Tax on Returns.
The revised IAS 19 means that actuarial gains and losses must be reported directly in Other Comprehensive Income. In accordance with the transitional rules, Akademiska Hus has recalculated the comparison figures and adjusted opening equity. The effect as at January 1, 2012 was SEK -89 million after account was taken of deferred tax and the special employ-er’s contribution. As at December 31, 2012, the effect was SEK -85 million and previously reported amortisation of an actuar-ial loss of SEK -4 million has instead been reported in Other Comprehensive Income as the corresponding positive effect of reported net profit for the 2012 financial year (after tax and the effect of the special employer’s contribution). It is also stated in
IAS 19R that when calculating the defined benefit pension cost in the Statement of Comprehensive Income, expected yield on plan assets is no longer an assumption that must be reported in the Statement of Comprehensive Income. In the light of the fact that Akademiska Hus only has unfunded defined benefit pen-sion schemes, this change will not have any material impact on the financial result for Akademiska Hus.
The revised IAS 19 has also resulted in amended principles for reporting of termination benefits. However, this change has not had any effect on the Akademiska Hus financial state-ments.
IAS 1 Presentation of Financial Statements – Presentation of Other Comprehensive Income Amendments to IAS 1 Presentation of Financial Statements requires further information in Other Comprehensive Income with the result that items in Other Comprehensive Income are grouped into two categories: a) items that will not be reclassified to profit or loss and b) items that will be reclassified to profit or loss if certain criteria are satisfied. The application by Akademi-ska Hus of the amendments introduced in IAS 1 can be seen in the Consolidated Statement of Profit of Loss and Other Compre-hensive Income. These changes have only affected the presenta-tion of items reported in the Profit or Loss and Other Compre-hensive Income but have not had any effect on reported profit or loss or financial position for 2012 and nor are they assessed to have any effect on future reporting of profit or loss.
Revised IFRS 7 Financial Instruments: DisclosuresIn accordance with IFRS 7, financial assessments valued at fair value must be placed into different value hierarchies. They are classified in a hierarchy comprising three different levels based on the information used to measure their fair value. The categorisation is the same as stated in the Akademiska Hus Annual Report for the 2012 financial year, Note 35.
IFRS 13 Fair Value MeasurementThe new IFRS 13 standard replaces previous guidelines on fair value measurement included in each standard. The standard applies in conjunction with fair value measurement of both financial and non-financial items, i.e. mainly properties and financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (“exit price”). IFRS 13 has been applied on a future-oriented basis with effect from January 1, 2013. The impact of the introduction of IFRS 13 has not had any material effect on the valuation of assets and liabilities reported at fair value.
Other IFRS amendmentsWith the exception of the above, no new or amended IFRS or interpretations from IFRIC have been applied or had any material effect on the financial position, financial results or disclosures at the Group or Parent Company. Akademiska Hus has opted not to apply IFRS 10–12 or the amended standards IAS 27 and IAS 28 in advance and will instead apply these with effect from January 1, 2014.
AKADEMISKA HUS14INTERIM REPORT JANUARY 1–SEPTEMBER 30 2013: AUDIT REPORT
To the Board of Directors of Akademiska Hus AB (publ)Registration number 556459-9156
IntroductionWe have reviewed the summary of the financial interim infor-mation (interim report) for Akademiska Hus AB (publ) for the period January 1, 2013 to September 30, 2013. The Board of Directors and the CEO are responsible for the preparation and presentation of this Interim Report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express an opinion on this Interim Report based on our review.
Scope and orientation of the reviewWe conducted our review in accordance with the Swedish Standard on Review Engagements (SÖG) 2410 Review of Interim Report Performed by the Independent Auditor of the Company. A review consists of making inquiries, primarily involving persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different orientation and is substantially more
Gothenburg, October 24, 2013
DELOITTE ABHans Warén
Authorised Public Accountant
limited in scope than an audit conducted in accordance with ISA and generally accepted auditing standards. The proce-dures performed in a review do not enable us to obtain assur-ance that we would become aware of all significant matters that might be identified in an audit. An opinion based on a review therefore does not have the certainty of an opinion based on an audit.
ConclusionBased on our review, nothing has come to our attention that causes us to believe that the Interim Report for the Group has not been prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act and for the Parent Company in accordance with the Swedish Annual Accounts Act.
aUditor’s revieW report on the sUmmarY of the interim finanCial statements (interim report) prepared in aCCordanCe With ias 34 and seCtion 9 of the sWedish annUal aCCoUnts aCt (1995:1554)
The Board of Directors and the President hereby certify that this Interim Report provides a true and fair overview of the Company’s and the Group’s operations, financial position and results and describes material risks and uncertainties that face the Company and the companies that form part of the Group.
Gothenburg, October 24, 2013
Eva-Britt GustafssonChair
Olof EhrlénBoard member
Leif LjungqvistBoard member
Per GranathBoard member
Gunnar Svedberg Board member
Maj-Charlotte WallinBoard member
Pia SandvikBoard member
Ingemar ZieglerBoard member
Anders LarssonEmployee representative
Thomas JennlingerEmployee representative
Kerstin Lindberg GöranssonPresident
AKADEMISKA HUS15
ADDRESS: GROUP OFFICE
Akademiska Hus Box 483 Stampgatan 14 SE-401 27 Göteborg
Phone: +46 31 63 24 00 akademiskahus.se [email protected] Reg. no. 556459-9156
CONTACT PERSONS
Kerstin Lindberg Göransson, President Telephone: +46 31 63 24 60 E-mail: [email protected]
Gunnar Oders, Director of Accounting and Finance Telephone: +46 31 63 24 26 E-mail: [email protected]
REPORT CALENDAR
Year-End Report 2013 11 February 2014
Annual Report 2013 13 March 2014
Annual General Meeting 2014 28 April 2014
Interim Report January–March 2014 28 April 2014
INTERIM REPORT JANUARY 1–SEPTEMBER 30 2013: DEFINITIONS
DEFINITIONS
EQUITY RATIO Reported equity in relation to total assets carried forward.
FINANCING COST ACCORDING TO IFRSNet financial income/expense in the form of the financing cost for loans, net interest for financial derivatives and the change in fair value of financial derivatives, in relation to average interest-bearing capital.
FLOOR SPACE, M2, GROSS The gross f loor space of the building. Comprises rentable f loor space as well as common areas and the area surrounding the building.
FLOOR SPACE, M2 Rentable f loor space in square metres.
INTEREST-BEARING LIABILITIES Interest-bearing loans, including pension provisions and similar items.
INTEREST-BEARING NET LOAN LIABILITY Interest-bearing loans, financial derivatives and current interest-bearing investments. Pension provisions and similar items are not included.
INTEREST COVERAGE RATIO Profit before financial items, excluding changes in the value of proper-ties in relation to net financial income/expense, excluding changes in value, financial derivatives, including period allocation of realised prof-its from derivatives and including capitalised interest in projects.
INTERNAL FINANCING RATIO The part of the tangible, non-current assets procured during the year that could be financed using funds earned internally during the year.
LETTING AND VACANT SPACE LEVELS Let or vacant f loor space in relation to the total f loor space. Financial letting or vacant space levels are rental revenue for space let and estimated rental revenue for vacant space in relation to the total rental revenue.
LOAN-TO-VALUE RATIO Interest-bearing net loan debt in relation to the closing value of properties.
MAINTENANCE COSTS Maintenance costs are all technical, administrative and managerial measures taken during the lifetime of the unit to maintain it or to reinstate it to a condition in which it can perform the required func-tion. Maintenance costs are divided into remedial maintenance and preventive maintenance.
NET INVESTMENTS Closing balance minus the opening balance for non-current assets plus depreciation and impairments minus revaluations.
NET OPERATING INCOME RATIO Net operating income in relation to management income.
OPERATING EXPENSES Operating expenses for measures aimed at maintaining the function of a property, installation etc. Operating expenses are divided into media provision and monitoring and service.
PERIOD-ALLOCATED FINANCING COSTNet interest income and expense in the form of the financing cost for loans, net interest for financial derivatives and period allocation of realised profits on financial derivatives over the remaining term of the underlying instrument, in relation to average, interest-bearing capital.
PROPERTY ADMINISTRATION Cost of management, day-to-day accounting administration, letting, contact with tenants, handling of registers, contracts and drawings, technical planning and follow-up and human resource administration.
RENTAL REVENUE The basic rent, index-linked, and estimated rent for vacant rentable f loor space and supplements, with a deduction for vacancies and rent reductions.
RETURN ON CAPITAL EMPLOYED The operating profit plus financial income in relation to the average total assets.
RETURN ON EQUITY AFTER STANDARD TAX Earnings after financial items with a deduction for full tax in relation to average equity.
TOTAL YIELD Direct yield from properties and their change in value, expressed in per cent.
YIELD Operating surplus in relation to the average assessed fair value.