In accordance with Nasdaq’s recommendations, from Q4 2018, and retroactively, SSM applies the completed contract method for reporting cooperative apartment projects.
Summary of October – December 2018
- Net sales for projects run entirely by SSM totaled 58.2 MSEK (241.0).
- Operating profit was -33.6 MSEK (12.4). The profit includes project write-downs of -13.5 MSEK in the Clustret project, -7.8 MSEK in Turbinhallen and -7.0 MSEK in Metronomen. The operating margin was -57.7% (5.1).
- Cash flow from operating activities amounted to -2.8 MSEK (46.0).
- 38 (18) pre-purchase agreements signed during the quarter.
- Täby Turf, a project with 178 rental units, sold to property company Willhem for 473.0 MSEK.
- Due to a lack of commercial preconditions, SSM terminated process to acquire 1,200 building rights in Greater Stockholm.
- The Swedish Land and Environment Court revoked the city plan for Bromma Boardwalk, SSM not liable to pay purchase price of 500,0 MSEK.
- Change of strategic direction and targets – 50.0% of units in production in coming years to be rental units, 90.0% of cooperative apartments to be priced under 2.0 MSEK.
Summary of January – December 2018
- Net sales for projects run entirely by SSM totaled 652.5 MSEK (753.8).
- Operating profit was 51.8 MSEK (226.7) and the operating margin was 7.9% (30.1).
- Cash flow from operating activities amounted to 172.4 MSEK (26.2).
- 101 (247) pre-purchase agreements signed during the year.
- Production started for Täby Turf and Sollentuna Quarters rental projects with a total of 270 units.
- Bromma Tracks, Turbinhallen and The Tube completed with a total of 504 cooperative apartments. All units now occupied.
- SSM’s bond terms changed to start production of projects with lower sales rate.
- Board of Directors proposes dividend of 0.0 (0.0) SEK for the financial year 2018.
Significant events after the balance sheet date
- Termination of Clustret project in Jakobsberg with about 200 building rights due to change in municipality’s plan and following negotiations with the seller. SSM not liable to pay purchase price of 182.0 MSEK.
- On January 31, 2019, Stockholm City Planning Committee announcement to continue planning for Tellus Towers.
- Cost-efficiency program introduced to reduce overhead costs in 2019 by 50.0% or 25.0 MSEK.
Mattias Roos, President & CEO, comments on the year:
“In 2018, SSM adapted its strategy and housing product to meet the changed financial situation of its target group. The strategic product mix was adjusted to 50 percent rental apartments and 50 percent cooperative apartments. SSM has a solid portfolio of rental apartments and we expect strong growth in the rental market as a result of the conversions of rental units into cooperative apartments that has taken place in the past ten years together with planned conversions of municipal property companies’ holdings in the region.
By “redrawing” a number of units as smaller and even more space-efficient homes in projects where sales are ongoing, we were relatively quick and successful in adapting price levels while maintaining project margins. The goal going forward is for 90 percent of our cooperative apartments to be priced under 2.0 MSEK. In February 2019, we relaunched around 70 redesigned cooperative apartments in combination with an offer to pay 50 percent of the down payment for new buyers. The initial response from customers has been very positive.
The operating profit and operating margin developed negatively during the year, mainly due to lower gross profits and increased project costs. In addition to adapting our commercial offering, SSM’s organization has been adjusted to lower salary costs by-15.0 percent, or 14.0 MSEK, during 2019. During 2019 we also introduced a cost-efficiency program that aims to reduce overhead costs in 2019 by 50 percent, which corresponds to about 25.0 MSEK. SSM’s liquidity is good thanks to positive cash flow during the year and as a consequence of changes within the Bromma Boardwalk and Clustret projects detailed plans led to commitment of SEK 682.0 million in purchase consideration has expired, which is favorable for the company’s liquidity in the near future.
It is my opinion that with our offering of affordable, space-efficient homes close to public transportation, SSM is well positioned for continued growth. During 2018, we finished 515 cooperative apartments, all of which are now occupied. Our goal for 2019 is to start production of 300 homes and then gradually increase production to 1,500 homes by 2023.”
The information in this press release is such, which SSM Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 07:30 CET on February 21, 2019.
For more information, please contact:
President & CEO Chief
Communications & IR Officer
Phone: +46 761-65 17 71
Om SSM Holding AB (publ)
SSM producerar funktionssmarta och prisvärda bostäder med attraktiva gemensamhetsytor, nära allmänna kommunikationer i citynära lägen till bolagets målgrupp – morgondagens urbaniter. Bolagets vision är en bostadsmarknad med plats för så många människor som möjligt och bolaget har som målsättning att producera 50 procent bostadsrätter samt 50 procent hyresrätter. SSM är en ledande bostadsutvecklare i sin nisch inom Storstockholmsområdet och vid årskiftet 2018/2019 finns cirka 6 500 byggrätter i bolagets projektportfölj. SSM är börsnoterat på Nasdaq Stockholm sedan 6 april 2017. www.ssmlivinggroup.com