Selvaag Bolig ASA: Q3 2023: Good profitability and homes for NOK 5.3 billion under construction
Selvaag Bolig had operating revenues of NOK 2 008 million and an adjusted EBITDA (IFRS) of NOK 249 million for the first nine months of the year.
During the first nine months, the company sold 272 homes net, started construction of 145 units and delivered 379 homes to the buyer. At the end of the quarter, Selvaag Bolig had 908 homes under construction with a combined sales value of NOK 5.29 billion. Sixty-nine per cent of these homes had been sold at the end of the quarter.
“The profitability of the projects is still good, and even though the new housing market has been challenging, we have succeeded in selling homes for close to NOK two billion so far this year,” says CEO Sverre Molvik.
“We had several good sales starts in the quarter, we have a strong position with over 400 homes for sale, and we have an additional 650 homes that could be put up for sale during the first half of 2024 if the market allows.
“As previously communicated, we have postponed entering into construction agreements due to high construction costs. The cost has now dropped. We have therefore entered into several agreements, and will enter into more going forward.”
The live webcast of the presentation can be viewed from 0830 here. An English transcript of the presentation will be made available on the company’s website.
Highlights of the third quarter 2023 (third quarter 2022)
- Gross sales* amounted to 85 homes (102) with a sales value of NOK 543 million (NOK 554 million)
- Net sales were 77 homes (83) with a sales value of NOK 479 million (NOK 439 million)
- Net construction starts for 57 homes (68), net completions of 90 (142) and net deliveries of 74 to buyers (144)
- Net 985 homes under construction (1 268) with a combined sales value of NOK 5 292 million (NOK 6 225 million)
- 69 per cent (73 per cent) of homes under construction sold at 30 September
- 60 (19) completed homes unsold at 30 September
- IFRS**: Operating revenues of NOK 437 million (NOK 905 million), EBITDA adjusted for financial expenses NOK 44 million (NOK 137 million), corresponding to a margin of 10.1 per cent (15.1 per cent)
- Earnings per share: NOK 0.21 (NOK 0.85)
- NGAAP***: Operating revenues of NOK 451 million (NOK 788 million), EBITDA of NOK 37 million (NOK 96 million), corresponding to a margin of 8.3 per cent (12.2 per cent)
Highlights of the first nine months of 2023 (first nine months of 2022)
- IFRS**: Operating revenues of NOK 2 008 million (NOK 2 228 million), EBITDA adjusted for financial expenses NOK 249 million (NOK 430 million), corresponding to a margin of 12.4 per cent (19.3 per cent)
- Earnings per share: NOK 1.46 (NOK 3.15)
- NGAAP***: Operating revenues of NOK 1 588 million (NOK 2 330 million), EBITDA of NOK 163 million (NOK 306 million), corresponding to a margin of 10.3 per cent (13.1 per cent)
- Gross sales amounted to 336 homes (512) with a sales value of NOK 1 980 million (NOK 2 708 million)
- Net sales were 271 homes (404) with a sales value of NOK 1 577 million (NOK 2 108 million)
- Net construction starts for 145 homes (371), net completions of 413 (426) and net deliveries of 379 to buyers (438)
* Units sold are sales contracts entered into with customers pursuant to the Norwegian Housing Construction Act and the Tenancy Act in Sweden. In accordance with the IFRS, they are recognised as income on delivery. Net sales include Selvaag Bolig’s share of joint venture projects. Gross sales include all homes in joint venture projects.
** Pursuant to the IFRS, all profit is recognised when the homes are delivered to the buyer. Profit pursuant to the IFRS accordingly derives primarily from homes which began to be built roughly two years ago.
*** The accounts pursuant to Norwegian generally accepted accounting principles (NGAAP) utilise the percentage of completion method. This means that profits are recognised on the basis of construction progress and sales in the projects. That presents ongoing value creation in the company.