Norwegian Property ASA - Record profit in 2nd quarter
Norwegian Property expects a profit before tax of mnok 1 142 in the second quarter (compared to mnok 345 in the first quarter). The positive result is due to a positive result from operations, a strong rental growth in the property market and the resulting revaluation of the group's portfolio of commercial properties. Positive value development for the group's financial hedging contracts also contributes positively.
The full earnings report for the 2rd Quarter will, as previously announced, be released on 10th August.
Gain for fair value adjustements in the second quarter for the group's portfolio of investments properties totals mnok 830. DTZ Realkapital has, as in previous quarters, carried out a valuation of the group's properties. Total value of the group's properties (prior to the acquisition of the DnB portfolio at Aker Brygge and assumed completion of Aker Hus) is mnok 19 088. The main contributors to the positive revaluation are the continued strong development in market rents and reduction in the market's required yield gap. The long term interest rates have increased during the second quarter, and increased discount rates have contributed negatively to the property values.
Net financial items includes a positive effect of mnok 246 relating to a positive development in the market value of financial hedging contracts not qualifying for hedge accounting (mnok 362) and expensing of previously accrued arrangement fees and refinancing expenses (mnok - 116). Total value of the financial hedging contracts were mnok 580 at the end of second quarter.
At the end of second quarter the group had cash and cash equivalents of mnok 1 100. 80% of the group's interest bearing debt has been hedged with an average remaining duration of 5.8 years. Average interest for the group's interest bearing debt was 5.0% including margins and fees.
"The rental growth is still strong, in particular in central areas of Oslo and Stavanger, where Norwegian Property has most of our properties. We recently signed a contract of nok 4 300 per square meter at Aker Brygge, but we believe it is just a matter of time before this record is beaten," says CEO Petter Jansen.
For further information, contact: CEO and President, Petter Jansen, mobile +47 900 98 728 CFO Svein Hov Skjelle, mobile +47 930 55 566