NCC AB (publ) (NCC-B.ST) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the NCC Information Meeting. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, it's my pleasure to hand over to Tomas Carlsson, President and CEO. You will now be joined into the conference room.

Good morning, everybody, and welcome to this call regarding the information in the press statement that we sent out earlier this morning. And the subject is the impairment charges of approximately SEK 1.4 billion that NCC will do for the fourth quarter of 2025. And it's in connection with the year that we were working with, the year-end result of the last year that we've come to the conclusion that we need to reevaluate mainly property values in the business area Property Development, but also remaining portion of tax -- the value of tax assets in Norway following changed principles for how to evaluate that. In brief, the background is that the commercial property market has been weak during a long time, and we've not seen a recovery on the back of the lowering interest rates there over the last couple of years. We see few signs of improvement and lots of uncertainty when it comes to both transaction and the letting market. And we have made this review in the connection to the year-end closing process. We think this is important because it will create better conditions for sales of the projects in the relative near term. I think there's a couple of things that's important to highlight. One is that it has no cash flow impact whatsoever, which means that in terms of cash flow debt, that type of balance sheet items, it's no change. It does not impact NCC's ability to pay dividends, which I think is important to highlight as well. And then finally, it has no relation to any part of the operations within contracting or the Industry business area, i.e., we have not revised the project forecast or projects in connection to this, which means that there will be no future dilution of project earnings as a result of this impairment. Also, with -- excluding the extraordinary cost in connection with the impairment, we had a strong -- well, strong underlying earnings in the fourth quarter. We have a net income of SEK 15.929 billion and earnings in terms of EBIT of SEK 692 million. All contracting business areas reported stable and improving results. And Industry business area has continued the trend that we've seen during the year and has once again record earnings in the quarter. We have good orders received in the quarter, and we continue to see lots of early phase collaboration contracts on a very high level. And with that, operator, I hand over to open up for questions.

[Operator Instructions] Our first question comes from Keivan Shirvanpour from SEB.

I have a couple of questions. And the first is, could you maybe clarify which properties that you have written down the values of on -- and maybe to what extent on a property basis?

I understand that, that's interesting. But for commercial reasons, we do not specify property values on individual properties as well as we will not specify which -- where we've done impairments.

Okay. And then my second question is, would you say that the write-downs have been partly carried out to reflect the levels at which you have had potential discussions with buyers since you mentioned that this affects the condition for your near-term prospects. Maybe divesting...

There are several -- no, I understand the question, Keivan. It's -- there are several elements related to the impairment. And that's 1 part, but there are other elements. So we've done -- we've had multiple angles on how to approach this to find a fair value.

Okay. And then I have 1 final question, and that is the Q4 earnings. Could you maybe give some more details on the earnings themselves? And do they include any type of significant one-off?

Well, the earnings for the -- they are not totally finalized. This is preliminary numbers, but we have improvements in all business areas. And they have one-offs and project adjustments on a pretty normal level. It's very much business as usual for those.

[Operator Instructions] So far, there are no further questions from the phone.