Platzer Fastigheter Holding AB (publ) (STO: PLAZ B) Q2 2025 Earnings | 07/04/2025

Platzer Fastigheter Holding AB (publ) presented its Q2 2025 report, highlighting a stable financial performance despite ongoing low-income conditions and high vacancies, with a strong focus on existing customer relations, sustainability, and strategic project development in the Gothenburg market.

Market Dynamics & Strategy:

• Gothenburg Market: Characterized by more stable and modest rent development compared to Stockholm, with lower average rents making floor area reductions less motivating for tenants due to relatively small moving costs.

• Vacancy: Platzer anticipates a few more quarters of high vacancy before the market significantly improves. Activity is highest in central locations (upper inner city and CBD).

• Focus Areas: The company's strategy revolves around:

  • Filling Vacancies: A high priority, with an estimated vacancy value of SEK 210 million, offering significant potential for increased cash flow.

  • Refurbishment Projects (ROT-projekt): Continuing these projects to address vacancies.

  • Industrial Logistics Projects: Fast-paced projects in industrial logistics are performing well in the current market.

  • Transaction Activity: Remaining active to optimize the portfolio.

• Customer Relations: High focus on existing customers, with an 87% remaining rate and 92% exit rate.

• Nordea Departure: Nordea will vacate a property (Gullbergsfass 526) by Q1 2027, creating an opportunity for a comprehensive redevelopment, partly linked to a new Skanska project.

Financial Highlights (Q2 2025):

• Property Management Result: Increased by 16% to SEK 204 million, maintaining the same growth rate as Q1. This was driven by stable comparable performance and contributions from acquisitions (especially the MIMO acquisition), combined with strong cost control.

• One-off Costs: SEK 2 million in central administration related to bonuses and a new LTI program.

• Net Financial Items: Lower due to a higher debt volume and longer interest fixation, but offset by approximately 50 basis points lower average interest rates due to falling market rates and renegotiated credit agreements.

• Property Values: Remained stable, ticking slightly upwards overall.

  • Negative value change of SEK 74 million linked to cash flow, primarily due to future impacts of the Nordea exit.

  • Negative value change of SEK 113 million related to logistics assets, influenced by a recent transaction in their JV-owned company.

  • Net negative value change of SEK 39 million from these two factors.

• Divestments: Sold nearly SEK 1 billion in six months, resulting in a realized value change of minus SEK 72 million. However, after accounting for a SEK 67 million tax income reversal from these sales, the net result effect is minus SEK 5 million.

• Lower Investment Pace: Slower investment in the existing portfolio due to fewer large office projects and reduced tenant adaptation volumes, a natural consequence of the economic downturn.

• Impact of Interest Rates: Falling market interest rates led to an unrealized negative value change on derivatives.

• Strong Financial Position:

  • Net Interest-Bearing Debt to EBITDA: Improved to 10.8 (from 12 at year-end 2024).

  • Interest Coverage Ratio: 2.4 (or 2.5), approaching rating requirement levels.

  • Loan-to-Value (LTV): 47.9%.

  • Increased Share Value in Interest Companies: SEK 216 million increase in Q2 due to a thorough re-evaluation aligning training and evaluation principles (does not affect management results).

• Refinancing Activity: Renegotiated SEK 3 billion in loan volumes and moved SEK 4 billion from matured credits, enhancing financial flexibility. Issued SEK 1.45 billion in outstanding debt maturing March 2029.

Sustainability Efforts:

• Renewed Nasdaq's green equity designation for the fourth consecutive year.

• Achieved a 6% improvement in energy performance this quarter and expects to meet its target of 70 kWh/sqm in 2025.

• Opened Sweden's first fossil-fuel-free clean charging station (Circle K's first investment of this type).

Leadership Transition:

• Interim CFO Ulrika will be leaving her role, with Jakob Nilsson taking over. Ulrika will join Platzer's board.