Interim Report January - March 2022

Significant events after the end of the period

• A land allocation was awarded by the city of Malmö in the Öster om mässan block in Hyllie. The land allocation was awarded to KlaraBo and its partner OBOS Nya Hem and includes a completed detailed development plan comprising 21,500 square metres GFA, corresponding to just over 300 housing units. The volume of the development is distributed equally between KlaraBo and OBOS, and the start of construction is planned for spring 2024.
• Existing debt was refinanced with three of the Group's banks. The debt amounted to approximately SEK 1.5 billion out of a total interest-bearing liability of just over SEK 4 billion. As a result of this refinancing, the lock-in period has increased to 3.2 years, and the average loan margin has declined to 1.8 per cent, corresponding to annual savings of approximately SEK 3.4 million in financial expenses (excluding new borrowing costs). Nearly SEK 780 million in additional future borrowing against existing properties has also been secured to be used for investments and acquisitions. All other things remaining equal, the loan-to-value ratio will amount to 52.2 after utilisation. The SEK 780 million credit facility has an average margin of 1.6 per cent with a term of three years and can be utilised as needed. An additional SEK 400 million can be utilised in connection with future acquisitions. Finally, the company signed an unsecured revolving credit facility amounting to SEK 400 million to be used for future investments and acquisitions.

Comments from CEO Andreas Morfiadakis

KlaraBo's revenue rose 111 per cent year-on-year to nearly SEK 119 million (56.2) in the first quarter. This increase was mainly driven by value-enhancing measures, completed new construction and acquisitions. Profit from property management increased 260 per cent to SEK 30.2 million (8.4), which impacted cash flow.

I am particularly pleased with our organic growth, meaning the earnings capacity of our management portfolio, of just over 4 per cent to nearly SEK 172 million (165) for properties on a like-for-like basis during the quarter.

We see promising opportunities to continue our journey of organic growth through measures including value-enhancing renovations of the existing portfolio, conversions of parts of the portfolio to new apartments and densification. The number of value-enhancing renovations has increased as we have grown, and we are renovating an average of about 100 apartments per year, which is increasing our cash flow and net operating income and thereby our property values.

Continued expansion and secured financing

KlaraBo's overall goal is to create value for the company's shareholders on a long-term basis by owning, developing and actively managing sought-after residential properties in growth regions with robust demand. During the quarter, we continued to expand geographically. Following the acquisition of a portfolio consisting of 126 rental apartments in Umeå as well as two land allocations for new construction of a total of 250 apartments in Skellefteå and Växjö, KlaraBo is now operating in three new cities.

After the end of the quarter, we were also awarded a land allocation in the Hyllie district of Malmö that had attracted considerable interest. In cooperation with OBOS Kärnhem, KlaraBo was entrusted to lead the Mallbo pilot project, which aims to offer financially accessible and environmentally sustainable homes for a broad range of target groups. Together with OBOS Kärnhem, the project comprises approximately 300 apartments, giving us a project portfolio of nearly 2,000 apartments.

We also completed a refinancing after the end of the quarter, which means that our average loan margin declined 0.1 percentage point to 1.8 per cent, compared with the end of the fourth quarter. At the same time our cash flow increased approximately SEK 3.4 million, all other things being equal. I see it as a sign of our strength that we were able to secure long-term financing on attractive terms, despite uncertainty in the credit market.

Outlook

The quarter was characterised by uncertainty in the aftermath of the pandemic and the outbreak of war in Ukraine. Interest and inflation have increased, and energy prices have remained volatile. Together, this has affected construction costs and costs for raw materials. This trend has persisted in the second quarter, and the prevailing uncertainty will likely continue to impact our operating environment in the near future.

Nevertheless, we can see that KlaraBo's offering is continuing to attract interest around the country, and the need for attractive apartments with reasonable rents remains high. We are continuing to monitor the market to identify attractive growth opportunities. With a nationwide management portfolio of approximately 5,500 apartments, two-thirds of which have improvement potential, we have a solid foundation for continued growth. Overall, I am therefore optimistic about our long-term growth potential.

Andreas Morfiadakis, CEO of KlaraBo

Teleconference
KlaraBo's CEO Andreas Morfiadakis and CFO Jenny Appenrodt will present the Interim Report through a webcast presentation and teleconference at 9:00 a.m. (CEST) on Tuesday, 3 May. The presentation will be held in English.

To participate in the teleconference, call: +46 8 505 583 58
For a webcast of the conference go to: https://tv.streamfabriken.com/klarabo-q1-2022