JM AB Q2 2025 slides: revenue drops 29% as housing market recovery stalls

Introduction & Market Context

JM AB (STO:JM) presented its interim report for Q2 2025 on July 11, 2025, revealing significant revenue and profit declines amid a challenging housing market. The Swedish residential developer’s stock fell 8.38% following the presentation, as investors reacted to the company’s performance and outlook.

The company cited increased geopolitical uncertainty and a delayed housing market recovery as key factors affecting its performance. Despite these challenges, JM noted marginally increasing housing prices in its key markets and improved underlying market conditions that could provide opportunities for favorable acquisitions.

As shown in the following geographic distribution of JM’s business, Sweden remains the company’s primary market, accounting for 70% of group revenue, with Norway and Finland representing 16% and 14% respectively:

Quarterly Performance Highlights

JM reported a substantial decline in key operational metrics for Q2 2025. Revenue fell 29% to SEK 2,540 million from SEK 3,583 million in the same period last year. Operating profit decreased to SEK 116 million from SEK 169 million, with operating margin slightly declining to 4.6% from 4.7%. Earnings per share dropped significantly to SEK 0.58 from SEK 1.18.

The following chart illustrates the company’s operating profit and margin trends:

The number of homes sold in Q2 2025 decreased dramatically to 433 from 1,075 in Q2 2024, representing a 60% decline. Production starts also fell to 647 from 722. The company’s land portfolio slightly decreased to 36,800 building rights from 37,200 a year earlier.

The following table shows the company’s attractive land portfolio distribution across key markets:

Detailed Financial Analysis

Cash flow from operations turned negative at SEK -204 million compared to positive SEK 663 million in Q2 2024, which the company attributed to fewer production starts. Despite these challenges, JM maintained a stable equity ratio of 55% and reported available liquidity of SEK 2,721 million, though this was down from SEK 3,267 million in the previous year.

The company’s homes in production and percentage sold are illustrated in the following chart, showing a decrease to 4,557 homes from 4,914, with 51% sold or booked:

A positive development was the increased revaluation effect, which rose to SEK 202 million from SEK 85 million in Q2 2024. This contributed significantly to the period’s results, as shown in the following breakdown:

Performance varied significantly across business units. JM Bostad Stockholm struggled with near-zero operating margins (0.1%), while JM Fastighetsutveckling showed strong profitability with a 40.6% operating margin. JM’s operations in Norway and Finland demonstrated relative resilience with operating margins of 7.2% and 7.8% respectively.

Strategic Initiatives & Sustainability

JM highlighted its sustainability initiatives, noting that it has been recognized as one of "Europe’s Climate Leaders" by the Financial Times for the fifth consecutive year. The company has reduced climate emissions by 33% between 2018-2023 (Scope 1 and 2), primarily through phasing out fossil fuels in vehicles and machinery.

A notable sustainability project includes a pilot study with climate-improved concrete that achieves 40% reduced CO2 emissions compared to Swedish reference concrete.

Forward-Looking Statements

Despite current challenges, JM emphasized its long-term prospects based on its strong brand, attractive land portfolio, competitive production costs, and well-balanced risk profile. The company noted that while the continued hesitant housing market affects profitability, it sees improved underlying market conditions.

The following slide summarizes JM’s long-term outlook:

For the first half of 2025, JM reported an increase in production starts to 1,224 compared to 867 in the same period of 2024, suggesting some optimism for future revenue streams despite the current market slowdown.

The company also highlighted a reduced number of unsold homes in completed production, which represents a positive development for its inventory management and potential future cash flow improvement.

As JM celebrates its 80th anniversary (1945-2025), it continues to position itself as a leading residential developer in the Nordic region, though it faces significant near-term challenges as it waits for the housing market recovery that has been slower to materialize than anticipated.

Full presentation:

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