Profits impacted by revaluations, cash flow not affected

Summary of July – September 2019

  • Net sales for projects run entirely by SSM increased to 140.5 MSEK (47.3).
  • A review of SSM’s operations and current market situation was carried out during the quarter. Based on the review, SSM intends to focus on rental projects and selected cooperative apartment projects in the near future.
  • The review confirms SSM’s strong core, but also led to the revaluation of several projects and participations in and receivables from joint ventures corresponding to -312.7 MSEK.
  • Excluding revaluations and other non-recurring items, the operating loss was -17.7 MSEK (-0.4). Including these items, the operating loss was -377.7 MSEK (-0.4).
  • Cash flow from operating activities totaled -31.1 MSEK (132.1).
  • Production started in the Täby Turf project, which includes 178 rental units, and property company Willhem took over the project.
  • Tenants began moving into the West Side Solna cooperative apartment project.
  • SSM divested its contracting operations and began a strategic partnership with design-build company Mecon Bygg.

Summary of January – September 2019

  • Net sales for projects run entirely by SSM totaled 176.2 MSEK (594.2).
  • Change of CEO. Mattias Lundgren appointed Interim CEO in June 2019. Mattias has many years’ experience from the real estate market and has been CFO at NCC AB and Manager of NCC Housing Sweden (Bonava).
  • A review of SSM’s operations and current market situation was carried out to increase short and long-term profitability.
  • Excluding revaluations and other non-recurring items, the operating loss was -41.2 MSEK (85.4). Including these items, the operating loss was -416.5 MSEK (85.4)
  • Cash flow from operating activities totaled -97.4 MSEK (175.2).
  • Repurchase of SSM’s own outstanding bonds at a nominal value of 31.0 MSEK.

Significant events after the balance sheet date

  • Mattias Lundgren appointed permanent President & CEO of SSM.

Mattias Lundgren, Interim President & CEO, comments on the third quarter 2019:

“SSM will focus on rental projects and selected cooperative apartment projects in the coming years. Positive cash flow will be prioritized to create stability and reduce the company’s net debt. In practice, this means prioritizing rental projects with forward funding. The changes are the result of a comprehensive review that was carried out in Q3 2019.

The review confirms the company’s strong core in the form of its target group, housing concept, home market and micro-locations of building rights, but it also resulted in the revaluation of certain balance sheet items for a number of project properties and joint venture assets, leading to write-downs during the quarter. The revaluations, however, do not affect the company’s cash flow. The West Side Solna and Metronomen cooperative apartment projects and the Täby Turf rental project are the projects that will contribute positive cash flow in the short term since they will be completed between Q3 2019 and Q4 2021.

The company is currently evaluating several alternatives to achieve long-term stable financing including increasing SSM’s equity and refinancing the company’s loans. The company is of the view that that it should be possible to have a refinancing solution in place in time to repay the loans that are due in 2020.

Given the stabilized housing market, the solid market for rental projects and the company’s optimized business model with more balanced financial risk-taking, I see a positive future for SSM. And from the start of 2020, I also look forward to leading the company in the position of permanent President & CEO.”

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 and Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 07:30 CET on November 19, 2019

For more information, please contact:
Mattias Lundgren, Interim President & CEO Ann-Charlotte Johansson, EVP Communications & IR
Email: mattias.lundgren@ssmliving.se Email: ann-charlotte.johansson@ssmliving.se
Phone: +46 761 65 17 71

About SSM Holding AB (publ) 

SSM produces functionally smart and affordable homes with attractive common areas, close to public transport and the city center for the company’s target group – the urbanites of tomorrow. The company envisions a housing market that is accessible to as many people as possible. SSM is the leading property developer in its niche within the Greater Stockholm area and at end of September 2019, the company has approximately 4,500 building permits in its portfolio. SSM has been listed on Nasdaq Stockholm’s mainlist since April 6, 2017. www.ssmlivinggroup.com