|Real-time Estimate - 08/13 04:56:14 am|
Selvaag Bolig ASA: Q1 2020: good start to the year
|05/20/2020 | 01:01am|
"Results for the quarter were in line with our expectations," says
"Value creation in the projects is good, we delivered homes with good margins and the sales ratio for homes under construction has increased.
"Sales have also been good, given the challenging times. A target campaign has yielded positive results, and we've sold homes close to completion as well as in projects where construction has yet to start."
This performance has continued after the end of the quarter, he reports, and adds that the company is making virtually normal progress at its construction sites.
"Demand for housing is high in our core areas, and doesn't disappear because of Covid-19. The government has also relaxed the residential mortgage rules, the base rate has been set at zero and we're heading for a reopening of workplaces.
"It's important to remember that residences are homes, not just pure investment objects. People don't sell their homes at a loss unless they're forced to, and there is little sign that many will be.
"We have more than 700 homes on sale, and expect to see a normalisation of the housing market in the time to come."
The profit margin in the first quarter is not directly comparable with the same period of 2019, since the company has largely delivered homes from joint ventures this year.
In addition, the sale of large parts of
Highlights of the first quarter 2020 (first quarter 2019)
· Construction under way on 1 431 homes net (1 534) with a combined sales value of
· 76 per cent (70 per cent) of homes under construction sold at 31 March.
· 82 per cent of homes for completion in 2020 are sold.
· Implemented transaction with Urban Property covering the sale of large parts of the land bank, giving an accounting gain of
· Pre-tax profit of
· IFRS**: Operating revenues of
· Earnings per share:
· NGAAP***: Operating revenues of
· Construction starts for 15 homes net (97), completions of 89 net (12) and deliveries of 114 net (29) to buyers.
· Gross sales* amounted to 196 homes (270) with a sales value of
· Net sales were 164 homes (243) with a sales value of
* Net sales include
** 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.
**** The Urban Property transaction has a one-off effect on the company's pre-tax profit of
The live webcast can be viewed from 08.30 here (https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20200520_2). An English transcript of the presentation will be made available on the company's website by 21 May.
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