Klövern AB (publ) : Interim Report January-June 2016

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| Source: Klövern AB
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»» Income increased by 6 per cent to SEK 1,430 million (1,346).

»» The operating surplus increased by 8 per cent to SEK 943 million (873).

»» Profit from property management increased by 20 per cent to SEK 597 million (498).

»» Changes in value of properties amounted to SEK 1,089 million (775).

»» Net profit increased by 4 per cent to SEK 1,149 million (1,102), corresponding to SEK 1.07 (1.02) per ordinary share.

»» After taking possession of 2 properties for SEK 376 million, sale of 3 properties for SEK 147 million and investments of SEK 785 million, the value of the property portfolio amounted to SEK 37,137 million.

»» The interest coverage ratio rose to 3.0 (2.5) och the adjusted equity ratio amounted to 35.9 per cent.

Statement by the CEO

Continued good earnings development
Klövern's development of earnings continued to be strong during the second quarter. During the first six months of 2016 profit from property management increased by 20 per cent. Positive changes in value of properties contributed also this quarter to profits further down in the income statement. Apace with rising property values, we have gradually become more selective about acquisitions and instead allocate more capital to projects. We often see considerably greater potential for long-term creation of value in project activities, not only for commercial properties but also in housing.

Net moving-in continued to be positive during the second quarter and amounted to SEK 17 million during the first six months. For Klövern as a whole, the economic occupancy rate at the end of the quarter was 91 per cent, which is in line with the goal for 2016. If contracted areas where the tenant
has not yet moved in are taken into account, the figure rises to 92 per cent. During the third quarter, Tele2 will move into its newly constructed head office encompassing of around 20,000 sq.m. in Kista and StayAt will obtain access to over 7,000 sq.m. of totally renovated premises in the same area to
open a new apartment hotel. These tenancies, both with really long leases, will to a great extent compensate for the long announced future vacations in the same part of Stockholm.

On the project side, there is a high level of activity with everything from residential projects in the early planning phase to major office projects that are ready for the tenant to move in. Our ongoing projects have a total investment volume of SEK 3.7 billion with a remaining investment of SEK 1.4 billion. During the first six months investments amounted to SEK 785 million. Besides the new premises for Tele2 and StayAt which are soon ready for occupation, the over 19,000 sq.m. that Klövern has developed for the Swedish Transport Agency in Örebro were completed before Midsummer. Among the projects in an early phase, it may be mentioned that first sod has been cut for a new hotel/office building in Västerås, with, among others, Nordic Choice Hotels as tenant. In addition, a start has been made on the creation of a new hotel in Kista for the same hotel operator.

In the residential segment, Klövern Living is continuing to work on a number of projects at several different stages. In a longer perspective, there may be scope for as many as between 8,000 and 12,000 apartments within our existing property holdings.

For Klövern, 2016 has so far been relatively calm on the transaction side. But during the second quarter we took possession of the exciting project property that has been acquired in a superb location close to Stockholm Central Station. We now continue to work step by step in developing the unit into a modern office- and retail property.

On the financing side it can be noted that there was great interest for the 4-year bond loan of SEK 750 million that was issued during the second quarter. The interest coverage ratio exceeded also in the years second quarter the target of 2.0 by a wide margin at the same time as the adjusted equity ratio at the end of June amounted to 35.9 per cent.

Overall, we are very satisfied with the development during the second quarter which meant Klöverns best results ever both in terms of operating surplus and profit from property management. Prospects look good for continued healthy development also during the rest of the year.

Rutger Arnhult, CEO Klövern

For additional information:
Rutger Arnhult, CEO, +46 70-458 24 70, rutger.arnhult@klovern.se
Lars Norrby, IR, +46 76-777 38 00, lars.norrby@klovern.se

Klövern is a real estate company committed to working closely with customers to offer them efficient premises in Swedish growth regions. Klövern is listed on Nasdaq Stockholm. For further information, see www.klovern.se.

Klövern AB (publ), Bredgränd 4, 111 30 Stockholm. Phone: +46 8-400 500 50. E-mail: info@klovern.se.

This information is information that Klövern AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 12:00 CET on 11 July 2016.

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