Street Calls of the Week
Introduction & Market Context
Swedish property developer Besqab AB (STO:BESQAB) presented its interim results for January-June 2025 on July 9, highlighting strong revenue growth despite challenging market conditions. The presentation, delivered by CEO Magnus Andersson and CFO Magnus Sundell, came just days after the company’s June 30 listing transfer from Nasdaq First North to the main Nasdaq Stockholm exchange.
The company, which focuses on developing sustainable housing in the Greater Stockholm and Uppsala regions, reported that while the Swedish housing market experienced a slowdown during Q2 with lower transaction volumes and stagnant prices, Besqab still managed to achieve significant sales and production milestones.
As shown in the following overview of key Q2 activities, Besqab maintained strong operational momentum across multiple metrics:
Quarterly Performance Highlights
Besqab reported substantial revenue growth for Q2 2025, with revenue reaching 928 million Swedish kronor, a 90.6% increase from 487 million kronor in the same period last year. Operating profit rose to 55 million kronor, up 66.7% from 33 million kronor in Q2 2024. However, both gross and operating margins declined year-over-year, with gross margin falling to 13% from 21% and operating margin dropping to 6% from 7%.
The company explained that the margin compression was largely due to a "dilution effect" from newly started projects, as approximately 25% of all homes in production were started in Q2 2025, with over 60% of the quarter’s revenue coming from these new projects. Management emphasized that these projects don’t have worse overall profitability than other ongoing developments but noted their cautious approach to profit recognition in early project stages.
The following slide illustrates the key financial metrics for the quarter:
Sales performance remained robust despite market headwinds, with 247 housing units sold or booked during the quarter. The company maintained a 64% sold or booked rate for units in ongoing production, with only 10 unsold homes in completed developments. This sales performance is visualized in the following chart:
Besqab’s production activities accelerated significantly during the quarter, with 416 production-started housing units across 7 projects and 490 completed units. By the end of Q2, the company had 1,602 housing units in ongoing production, with 83% of these in wholly owned projects. The company is progressing toward its goal of having 2,000 homes in ongoing production.
The following visualization shows the company’s production progress:
Strategic Initiatives
A key strategic move during the quarter was Besqab’s divestiture of management properties to free up capital for higher-return investments. The company sold a fully developed care home in Nacka for 200 million kronor and three management properties in Uppsala for approximately 263 million kronor, with both transactions aligning with book values. These sales will release approximately 250 million kronor in capital that the company plans to redirect toward investments with higher returns.
After the reporting period, Besqab also acquired building rights in Nacka Strand, which will be implemented under Wallin Bostad’s management. This adds to the company’s substantial building rights portfolio, which now encompasses 6,483 rights across 65 future housing projects in 21 municipalities.
The following slide provides a detailed breakdown of the company’s building rights portfolio:
The company also highlighted its production starts during the quarter, showcasing seven new projects in Uppsala and Greater Stockholm, including Skeppskajen, Berghällen, Fransyskan, Viggby Ängar, and Sjöstråket. These projects demonstrate Besqab’s focus on developing in sought-after locations.
Forward-Looking Statements
Looking ahead, Besqab expressed optimism about its positioning for the fall season, citing projects in high-demand locations and favorable market conditions with interest rate cuts and changed amortization requirements strengthening the business environment. The company completed its integration in connection with the Nasdaq Stockholm listing, with costs for the merger and integration recognized in Q2.
Management noted that while the Swedish housing market faces challenges, the underlying need for new housing in the Stockholm and Uppsala regions remains strong. The company’s strong cash position of 406 million kronor, despite being lower than the 494 million kronor reported in the same period last year, provides financial flexibility for future growth initiatives.
Besqab’s stock closed at 20.40 kronor on October 3, 2025, up 3.43% for the day. The shares have traded between 20 and 28 kronor over the past 52 weeks, suggesting investors are still evaluating the company’s long-term prospects amid the evolving Swedish housing market.
Full presentation:
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