0R70 Eik Fasteignafelag Hf

• Income from operations for the year amounted to ISK 8,668 million.
• Rental income for the year amounted to ISK 7,712 million compared to ISK 7,562 million in the year 2020.
• Operating profit before changes in value and depreciation amounted to ISK 5,645 million.
• Total profit for the year amounted to ISK 4,933 million.
• Changes in value of investment properties amounted to ISK 5,215 million.
• Net cash provided by operating activities amounted to ISK 3,492 million in the year.
• The book value of investment properties amounted to ISK 105,638 million.
• Assets for own use amounted to ISK 4,183 million.
• Interest-bearing debt amounted to ISK 64,814 million at year end.
• Total assets amounted to ISK 114,928 million.
• Equity ratio was 32.6%.
• Profit per share was ISK 1.44.
• Economic occupancy rate was 94.2% at year end.
• Weighted indexed interest rates were 3.03% at year end.
• Weighted unindexed interest rates were 4.4% at year end.
• The Board of Directors proposes a dividend payment of ISK 1,740 million, ISK 0.51 per share.

The financial statements of Eik fasteignafélag hf. were approved by the Company’s Board of Directors on 17 February 2022.

In case of any discrepancy in the English and the Icelandic versions of this announcement or the Financial Statements, the Icelandic version shall prevail.

Garðar Hannes Friðjónsson, CEO:

“The year 2021 was all at once eventful, challenging and interesting. The market perked up after last year’s rental recession and the Company’s economic occupancy rate increased from 92% at the beginning of the year to 94.2% at the end of the year 2021, even though the Company lost large tenants from its portfolio.

The operations of the Company went well during the year and exceeded original expectations for the year. Decreasing impact of the pandemic on society and the transition towards a more normal life, led to an increase in the Company’s earnings forecast twice during the year. EBITDA for the year 2021 was ISK 5,645 million but original forecasts estimated EBITDA to be between ISK 5,050 – 5,350 million.

The Company contributes to promoting a good and sustainable society for all and makes it easier for its tenants and customers to take eco-friendly steps. Electric charging stations are now at many of the Company’s buildings, accessibility has been improved with ramps and waste storage facilities improved to promote increased sorting. This progress will continue because we all bear social responsibility.

Weighted indexed interest rates continue to decrease and were 3.03% at year end. At the same time weighted unindexed interest rates were 4.4%. The Company issued three new bond classes during the year, indexed bond class EIK 100327 and unindexed bond classes EIK 23 1 and EIK 24 1, along with increasing EIK 141233 and refinancing EIK 15 1 with an unindexed bank loan.”

The Company has issued its Annual Report, which contains extensive information on the Company and its operations during the year 2021 along with financial statements. The Report accompanies this announcement and it can also be accessed on the Company’s website, www.eik.is.

The financial statements include the consolidated financial statements of Eik fasteignafélag hf. and subsidiaries and has been prepared in accordance with International Financial Reporting Standards (IFRS). The Company’s auditor, KPMG ehf., has audited the financial statements and provided an unqualified opinion.

Proposal on dividend payment

The Company’s Board of Directors changed its dividend policy during the year and the current policy of the Board is to pay the shareholders up to 50% of net cash from operating activities less the amount used for repurchasing of own shares up until the call for the Annual General Meeting. In accordance with the dividend policy, the Company’s Board of Directors proposes to the Annual General Meeting, which will be held on 5 April 2022, a dividend payment of ISK 1,740 million to shareholders for the operating year 2021.

Effects of COVID-19 on the Company’s operations

Effects of COVID-19 on the Company’s income statement can mainly be seen in impairment of receivables, earnings of Hótel 1919 and balance of receivables. The Company estimates that negative effect of the pandemic on the Company’s EBITDA has been around ISK 255-265 million during the year 2021. Impairment of receivables amounted to ISK 81 million in excess of average impairment of receivables for the years 2017-2019 and results of Hótel 1919 were ISK 135 million below the hotel’s average results for the years 2017-2019. Balance of receivables is ISK 249 million higher than at the beginning of the year. The Company expects that effects of the pandemic will continue to decrease during the year 2022.

Outlook

The Company has issued an extensive financial budget for the year 2022 which is accessible in the accompanying Annual Report for the Company.

According to the issued financial budget for the year 2022, EBITDA for the year will be approximately ISK 6,130–6,380 million based on 4% even inflation but ISK 5,980–6,230 million at fixed price levels

Change in organizational chart

The Company has changed its organizational chart. Business development is now responsible for increased value of the Company’s assets with development of real estate and plots. Real estate maintenance has been dissolved as an independent division but is now a unit within the finance division. The new organizational chart can be accessed on the Company’s website, https://www.eik.is/stjorn.

Company Portfolio

The Company acquired three properties during the year. Vatnagarðar 24 and Vatnagarðar 26 where Tesla Motors has a long-term lease, in addition to a part of Síðumúli 15, making the Company the owner of the whole property at Síðumúli 13-15.

The Company sold three properties during the year, Hafnarstræti 4 in Reykjavík, Fjölnisgata 3b in Akureyri and Kirkjubraut 28 in Akranes.

The Company signed a purchase agreement on 1 February 2022 regarding acquisition of a part of Sóltún 24, which shares a plot and garage with another property owned by the Company, Sóltún 26. The Company also received at the beginning of the year an announcement of the utilization of a call option on two of the Company’s properties in Akranes, Höfðasel 2 and Höfðasel 4. Delivery of the properties will be on 30 September 2022.

Properties owned by the Group number 111 with a total of just over 312,000 sqm. of rental space in 600 rental units, and the total number of tenants is over 400. The Company's principal properties are Borgartún 21 and 26; Suðurlandsbraut 8 and 10; Mýrargata 2-16; Pósthússtræti 2; Álfheimar 74 (Nýi Glæsibær); Grjótháls 1-3 and Austurstræti 5, 6, 7 and 17 in Reykjavík, Smáratorg 1 and 3 in Kópavogur and Glerártorg in Akureyri.

The largest share of the Company's real estate portfolio is office space, which is 45% of the portfolio’s worth. The second largest class is commercial premises or around 24% of the portfolio. The third largest class is warehouses or 14% of the portfolio. Hotels are 10% of the portfolio, health related operations 4% and bars and restaurants 3%.

Electronic presentation

An electronic presentation will be held on Friday 18 February 2022 at 8:30 am. Garðar Hannes Friðjónsson CEO and Lýður H. Gunnarsson CFO will present the results and respond to questions following the presentation

Registration to the meeting is here:

https://us02web.zoom.us/webinar/register/WN_RsrfxqoGT--nHOf1aevr6g

Following registration, participants will receive an e-mail with further information.

2022 Financial Calendar

Planned dates for interim and annual results are as follows:

Annual General Meeting                                                    5 April 2022 Quarterly results Q1 2022                                                  5 May 2022 Quarterly results Q2 2022                                                  25 August 2022 Quarterly results Q3 2022                                                  27 October 2022 2022 Annual results                                                           16 February 2023

Announcements of financial information will be published after closing of markets.

Accompanying is the 2021 Annual Report which contain the financial statements for the year 2021. The Company’s ESG Report is accessible on its website.

For further information contact: Garðar Hannes Friðjónsson, CEO, gardar@eik.is, tel. 590-2200 Lýður H. Gunnarsson, CFO, lydur@eik.is tel. 590-2200 / 820 8980

Attachment

• Eik fasteignafélag - Condensed Consolidated Financial Statement 2021

Eik Fasteignafelag Hf (LSE:0R70)
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