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Sveafastigheter AB (FN:SVEAF) reported strong financial growth in its Q4 and full-year 2024 results presentation, with significant increases in rental income and net operating income despite temporary impacts from restructuring costs. The company completed over 1,100 apartments during the year while maintaining a solid financial structure focused on traditional bank financing.
Quarterly Performance Highlights
Sveafastigheter delivered robust financial results for Q4 2024, with rental income reaching SEK 352 million, representing a 22.6% increase compared to the same period in 2023. Net operating income (NOI) showed even stronger growth, rising 36.9% to SEK 215 million. The company reported a quarterly profit of SEK 256 million, which included unrealized changes in property values of SEK 195 million.
As shown in the following financial highlights from Q4 2024:
CEO Erik Hävermark emphasized the company’s strategic progress, stating, "We are now demonstrating that we are delivering on our strategy with focus on increased profitability and organic growth."
Detailed Financial Analysis
For the full year 2024, Sveafastigheter achieved rental income of SEK 1,361 million, representing a 20.9% increase compared to 2023, with like-for-like growth of 5.6%. Net operating income rose by 25.5% to SEK 860 million, with like-for-like growth of 8.4%. The NOI margin improved to 63.2%, up from 60.9% in 2023.
The company’s financial performance demonstrates consistent improvement in key metrics over time, as illustrated in this chart:
Despite the strong operational performance, profitability was temporarily impacted by administrative costs, which included non-recurring items of SEK 61 million related to restructuring. The company noted that interest costs include interest on parent company loans and therefore are not fully representative of Sveafastigheter as a stand-alone company.
The income statement provides a comprehensive view of the company’s financial performance:
Sveafastigheter maintains a solid financial structure with a loan-to-value ratio of 42%, well below its target of 50%. The company’s interest coverage ratio stands at 2.2x (rolling 12 months), with an average interest rate of 3.27%. During the quarter, the company refinanced a bank loan of SEK 1,077 million with a new maturity in 2027 and entered into a credit facility agreement of SEK 1,000 million.
The following chart illustrates the company’s funding sources:
Strategic Initiatives
Sveafastigheter’s business model focuses on operational efficiency and profitable organic growth, divided into two main segments: New Development and Property Management. The company has set clear targets for both segments, including upgrading at least 2,000 apartments in the next five years and starting construction of 600-800 apartments per year.
The comprehensive business model is outlined here:
In 2024, the company completed 1,138 apartments and started construction on 540 apartments in Stockholm, Nacka, and Skellefteå. As of December 31, 2024, Sveafastigheter had 1,030 apartments under construction with an estimated property value at completion of SEK 2.4 billion and an estimated rental value of SEK 134 million.
The company’s property portfolio consists of 14,669 apartments with a property value of SEK 24.8 billion and a rental value of SEK 1.6 billion. Approximately 94% of the properties are located in metropolitan regions and university cities, with a strong focus on the Stockholm-Mälardalen area.
The properties under management are detailed in this overview:
Sveafastigheter is also making progress on sustainability initiatives, having invested SEK 55 million in profitable projects that improve energy performance. The company has identified material sustainability topics across environmental, social, and governance categories, and aims to use 100% renewable energy by 2030.
Forward-Looking Statements
Looking ahead, Sveafastigheter expects strong rental development in 2025 and 2026. The company has already negotiated 80% of its residential rents for 2025, with an average increase of 4.8%. This is expected to contribute positively to the company’s earnings capacity.
The company’s earnings capacity provides insight into its future financial potential:
Sveafastigheter plans to continue its focus on profitable growth through new developments and renovations. The company aims to renovate at least 2,000 apartments within the next five years and to increase its NOI margin to exceed 70% within the same timeframe.
For project development, Sveafastigheter has 6,844 apartments in its pipeline with an estimated property value at completion of SEK 16.2 billion and an estimated rental value of SEK 855 million. The company targets obtaining land allocation agreements for at least 800 new apartments annually over the next five years.
The stock closed at SEK 34.06 on May 12, 2025, up 0.83% for the day, and has traded between SEK 29.12 and SEK 40.60 over the past 52 weeks.
Full presentation:
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