The period in brief
- Rental income increased by 39.8 percent to SEK 231.9 million (165.9), SEK 51.8 million of which came from acquired properties in 2021.
- Profit from property management increased to SEK 135.4 million (51.2), an increase of 164.7 percent.
- Changes in the value of properties amounted to SEK 96.0 million (277.6). For more information see page 11.
- After-tax profit for the quarter amounted to SEK 400.3 million (295.7). Profit per Class A and Class B share amounted to SEK 2.72 (note 1) and per Class D share SEK 0.50 (note 1).
- Total acquisitions and investments in the quarter amounted to SEK 366.7 million (5,352.5).
- The fair value of the property portfolio at the end of the quarter was SEK 18,260.1 million (17,797.4).
1) No diluting instruments exist.
The CEO’s comments
The high level of activity in transactions, project development and management continued in the first quarter of 2022. The value of property holdings at the end of the period was SEK 18,260 million, mainly driven by an increase in the value of the project portfolio. Rental income increased by 39.8 percent to SEK 231.9 million and profit from property management increased by 164.7 percent to SEK 135.4 million.
Intea has a strategy of continuous stable growth, which we will achieve through carefully selected acquisitions combined with project development of existing and new properties. It is gratifying that during the period we were able to reach an agreement with the Swedish Prison and Probation Service on a 20-year lease for the Viskan prison in Ånge on a property that we acquired earlier in the year. Viskan is the second prison that we are reopening in a short time together with the Prison and Probation Service. We are pleased to see that the government recently approved the lease agreement, which was a prerequisite.
In January 2022, the local development plan for Sahlgrenska Life became legally binding. This project is one of our largest and has now entered a more intensive phase. Construction is scheduled to start in 2023, and the first buildings are expected to be ready for occupancy in 2027. The specially adapted premises for life science, highly specialised care, advanced research, education and business development are expected to total 50,000 sqm.
Since the beginning, we have aimed to ensure that sustainability permeates every aspect of the company's work. Membership of the UN Global Compact, which Intea joined in the fourth quarter of 2021, gives visibility to our active, systematic sustainability work. We work in line with the goals of Agenda 2030, with a clear position based on increasing the repurposing of buildings, creating good working conditions and critically questioning new construction. There are a number of ways to create smart and sustainable buildings that do not involve demolition and new construction.
In addition to the human suffering, the war in Ukraine will also affect the economy in a variety of ways, including price increases, shortages and reduced world trade. For Intea, rising inflation means higher costs for management and projects, but also higher rent increases than expected for 2022. Price increases for materials, labour and energy lead to higher costs for the construction industry and may result in cost increases for the company's ongoing projects. To some extent, cost overruns can be managed through yield-based rent. Should material shortages and delivery problems arise, there is also a risk of delays in several projects.
However, we are rapidly adapting our activities to events in the world. An important example is the management of energy consumption and production in the face of soaring and volatile electricity prices and increasing demand for fossil-free electricity. For the environment, it is necessary and for us it is perfectly feasible to produce at least one third of all the energy we consume ourselves in the near future. Another example is how changes in the world around us have increased the demands for safety and security for our tenants. We work hard to ensure that our buildings and associated sites, particularly in the justice sector, are safe places for both staff and visitors. With long leases and purpose-built buildings, we have become an attractive partner for publicly funded operations, which is a strength in these uncertain times.
Work is progressing to prepare the company for a listing on Nasdaq Stockholm's main list. We believe that investors will appreciate Intea's dedicated focus on public-sector tenants and customised properties, in combination with good development opportunities.