Selvaag Bolig ASA: Q4 2022: Good results, dividend and homes under construction for NOK 6.4 billion
Selvaag Bolig had operating revenues of NOK 2 896 million and EBITDA adjusted for financial expenses of NOK 517 million in 2022. Given these results and the company’s solidity, the board proposes a dividend of NOK 2 per share for the second half of 2022. That brings the total payout for the year to NOK 4 per share.
“Results for 2022 were good,” says CEO Sverre Molvik. ”The decline from 2021 reflects the fact that we delivered fewer homes to our customers in in 2022 than in 2021, but the profitability of the projects is good. That is also reflected in the proposed dividend of NOK 2 per share for the second half.”
During the fourth quarter Selvaag Bolig started construction of 146 homes and completed 160. At 31 December, the company had 1 253 homes with a total sales value of NOK 6.4 billion under construction, up by NOK 183 million from 30 September. Sixty-seven per cent of these units were sold at the end of 2022.
“Even though sales in the second half were negatively affected by higher mortgage interest rates and increased living costs, we succeeded in selling sufficiently to start construction of nearly as many homes as we completed,” says Molvik. “This means the level of activity in the company is high and the order backlog is solid.
“Over the past year, we have also acquired new land which can provide approximately 800 homes. That’s rather more than our construction starts. We now have a land bank for approximately 11 000 homes and are thereby well positioned for growth when the market recovers.”
Selvaag Bolig started construction of 517 homes in 2022. The company now has around 350 for sale and can start sales of an additional 650 homes during the first half of 2023 providing market conditions are satisfactory.
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 fourth quarter 2022 (fourth quarter 2021)
- Gross sales* amounted to 49 homes (306) with a sales value of NOK 255 million (NOK 1,401 million)
- Net sales* were 44 homes (276) with a sales value of NOK 220 million (NOK 1,265 million)
- Net construction starts for146 homes (456), net completions of 160 (334) and net deliveries of 147 to buyers (324)
- Net construction under way on 1,253 homes (1,323) with a combined sales value of NOK 6,408 million (NOK 6,736 million)
- 67 per cent (67 per cent) of homes under construction sold at 31 December
- 31 (25) completed homes unsold at 31 December
- IFRS**: Operating revenues of NOK 669 million (NOK 1,554 million), EBITDA adjusted for financial expenses NOK 87 million (NOK 317 million), corresponding to a margin of 13 per cent (20.4 per cent)
- Earnings per share: NOK 0.48 (NOK 2.34)
- NGAAP***: Operating revenues of NOK 526 million (NOK 795 million), EBITDA of NOK 71 million (NOK 113 million), corresponding to a margin of 13.5 per cent (14.2 per cent)
Highlights of 2022 (2021)
- IFRS**: Operating revenues of NOK 2,896 million (NOK 3,403 million), EBITDA adjusted for financial expenses NOK 517 million (NOK 756 million), corresponding to a margin of 17.9 per cent (22.2 per cent)
- Earnings per share: NOK 3.63 (NOK 5.40)
- The board proposes a dividend of NOK 2.00 per share (NOK 3.00) for the second half. Total ordinary dividend for the year will be NOK 4.00 per share (NOK 5.00)
- NGAAP***: Operating revenues of NOK 2,856 million (NOK 3,308 million), EBITDA of NOK 377 million (NOK 524 million), corresponding to a margin of 13.2 per cent (15.8 per cent)
- Gross sales* amounted to 561 homes (907) with a sales value of NOK 2,963 million (NOK 4,506 million)
- Net sales* were 448 homes (821) with a sales value of NOK 2,328 million (NOK 4,026 million)
- Net construction starts for 517 homes (880), net completions of 586 (867) and net deliveries of 585 to buyers (894)
* Units sold are sales contracts entered into with customers pursuant to the Norwegian Housing Construction Act. 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.