Neobo Fastigheter AB (publ) ($NEOBO)

Welcome to Neobo Q1 Report 2026. [Operator Instructions] Now I will hand the conference over to CEO, Ylva Sarby Westman.

Thank you very much. Good morning, and welcome to the presentation of Neobo's interim report January to March 2026. My name is Ylva Sarby Westman, and I'm joined here today by our CFO, Maria Strandberg. Despite the turbulent environment, our performance remained strong with higher rental income and record low vacancy. Like-for-like rental income increased by 5% due to higher rents and lower vacancy. Net operating income decreased to SEK 103 million due to divestments. On a like-for-like basis, NOI was broadly stable as higher rental income was offset by increased property management costs following a colder and snowier first quarter. Profit from property management decreased to SEK 26 million due to divestments and the colder and snowier Q1 year-on-year. As a result of share buybacks, profit from property management per share was unchanged year-on-year at SEK 0.19. Our property portfolio is now valued at SEK 13.6 billion and comprises 8,100 apartments. Residential properties represent 95% of the total value. Rental value continued to show positive growth. And of the 5% that I told you about earlier in the like-for-like growth in rental income, 2.9 percentage points come from annual rent adjustments, 3.4% for residential properties and 0.9% for commercial premises. And it's positive to see that the remainder is attributable to reduced vacancies and rent increases from apartment renovations and other value-creating investments. Thanks to focused and dedicated efforts by our engaged employees, we have successfully reduced residential vacancy from 6.6% to 4.6%. And this has resulted in the highest total occupancy rate to date at 94%. We continue to create value through strategic improvements. And during the quarter, we invested SEK 55 million in initiatives that increased our net operating income and upgraded our properties. This includes the renovation of 39 apartments and a number of sustainability investments. I would like to briefly highlight Helsingborg, where we continue to see strong operating fundamentals and where capital was deployed during Q1 into targeted value-creating investments. During the first quarter, we renovated 10 apartments, generating a yield on cost in excess of 5% and carried out energy efficiency investments with a yield on cost of approximately 12%. We have now achieved a very low vacancy levels in Helsingborg out of a total of 455 apartments, only 4 are vacant, of which 3 are currently under renovation. During the first quarter, we also carried out renovations of a number of apartments in Stockholm, generating rent increases of approximately 60%. Some additional comments on our Q1 results. We continue to focus on increasing rental income and reducing costs. And the first quarter of the year was significantly colder and snowier than the previous year, which led to an increase in total property costs. However, as a result of cost-saving measures, we have reduced both property-related and central administration costs. Due to share buybacks, profit from property management per share was unchanged year-on-year, despite the absence of NOI from divested properties. The value of the property portfolio remains stable at SEK 13.6 billion, and the average weighted yield requirement is unchanged at 5.1%. An overview of Neobo's earnings capacity. Net operating income increases by SEK 14 million as a net effect of higher rental income, reduced vacancy and divested properties. Net financial items increased by SEK 5 million due to the expiry of a favorable swap and a higher interest base. Profit from property management per share increases by 6.5% and the net initial yield now stands at 4.1%. With a solid capital structure based on equity and secured bank financing, Neobo retains a strong financial position with an average interest rate of 3.4% at quarter end. Loan-to-value decreased to 49.8%, and the ICR was 1.8x over the past 12 months. Interest rate derivatives are used to improve cash flow predictability and mitigate financial risk and the aggregated nominal value of active swaps amounted to SEK 5.9 billion at period end. Our mission is to create long-term shareholder value through disciplined capital allocation, customer-focused management and active portfolio optimization. As of the end of March, Neobo has approximately 77,000 shareholders, and our largest shareholders are shown here. In conclusion, we are confident in Neobo's strong long-term potential, supported by attractive return potential, driven by value-creating investments and active portfolio optimization. Strong balance sheet and stable cash flows, supporting long-term growth in net operating income. Well-located, affordable housing with visible demand and a responsible and long-term owner committed to sustainable value creation for society and the environment. And with that, we are happy to take any questions.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any written questions or closing comments.

Yes. We have some written questions. And the first one, could you say something about the plans to continue the property -- portfolio divestments versus investing in new properties?

Yes. We are really focusing on continued optimization of our property portfolio. We would really like to continue. We divested unstrategic properties of SEK 404 million last year. And we would -- we are trying hard to continue that work. Right now, it's a little bit hesitant in the transaction market with low liquidity in the residential segment. But we are working on it, and we would like to both continue to do divestments, but we are also evaluating possibilities for the next step to acquire properties.

Yes. Will the management propose a new buyback program?

Yes, that's a question for the Board, of course. But we have our AGM later today. And it is a question that will be decided upon if the AGM gives the company continued possibilities to do that. And of course, it's a very, very interesting investment opportunity for Neobo in this market situation with a low valuation in the stock market. So we are evaluating that.

Could you quantify the impact that the weather had on the NOI margin in Q1?

Yes. It was significantly colder and also a lot more snow than the first quarter last year. So I think it was approximately SEK 6 million to SEK 7 million or so increased costs for -- in this quarter.

Do you expect the surplus margin to recover during the rest of the year?

For sure, absolutely.

How large are the share of the 3.4% residential rent increases had on the impact on Q1 earnings?

Yes, that's a good question. I mean it's -- the annual uplift in the residential part of the portfolio is now decided upon at 3.4%. And most of the increases started during the first quarter, but not all of them from the 1st of January and not all of them from the 1st of February either. So it has been -- but I think the large majority starting to take effect in the beginning of the quarter.

Yes, thank you. That's the last one.

Thank you very much, everyone, for listening in, and have a nice day.