Neobo Fastigheter AB (publ)

Thank you, and welcome everyone to the presentation of Niobo's year-end report 2024. My name is Ylva Sarby-Vestman and I'm joined here today by our CFO Maria Strandberg. Sweden needs more affordable housing and by developing our properties to meet people's needs, we aim to contribute to a more sustainable residential property market in Sweden. We have worked intensively during the last year to prepare Niobo for compliance with Nasdaq Stockholm's listing requirements. The listing was followed by the positive news that Niobo at the end of the year had been included in the EFTA index. Operations have continued to perform well throughout the year. Rental income in the like-for-like portfolio increased by 6%, driven by rent adjustments and lower vacancies. Net operating income increased by 12% in the Like for Like portfolio and profit from property management increased by 3%, despite the divestment of seven properties and higher financing costs during the year. Unrealized value changes amounted to minus 301 million, reflecting a 2.2% decrease over the year. We have a residential focused property portfolio with a value of 13.7 billion and 8,300 apartments. Residential properties account for 95% of the value and the remaining value mainly consists of community service properties. Our rental value is slightly above 1 billion with 77% derived from residential apartments and 20% from commercial premises. Increasing the occupancy rate has been a top priority since we started Niobo. The occupancy rate in the residential portfolio has improved by 1.5 percentage points since the start of Niobo and by 0.3 percentage points during last year. During the summer, a six-year lease agreement was signed with the Swedish Prison and Probation Service with a rental value of 10 million. And in conjunction with occupancy during summer this year, the commercial vacancy rate will fall by 2.9 percentage points and the total rental value will at the same time increase by 5 million. We create attractive and sustainable living environments where people can thrive and feel secure. And during the year, we have invested 164 million in value creating investments that have increased our net operating income and made our residential areas more attractive and secure. This includes renovation of about 100 apartments and a number of sustainability investments. We have taken further steps on our sustainability journey and successfully met all internal sustainability targets for 2024. We have continued the important work with energy optimization in our properties and conducted a survey of climate-related hazards. We have also implemented a code of conduct for employees and a corresponding one for suppliers, enhancing our ability to steer sustainability initiatives in the desired direction. During the fourth quarter, we completed an energy and the climate roadmap detailing the necessary steps and providing a comprehensive assessment of the required actions to achieve our long-term goals. Work on our climate report for 2024 is in progress and will be presented as part of our sustainability report 2024. It is positive to note that the liquidity in the transaction market is recovering and that transaction volumes in Sweden increased by 40% compared to previous year. We are optimistic that liquidity will continue to rise, which is positive as we plan to accelerate our transaction activities in order to further optimize and grow our property portfolio. some comments on our year-end result. Rental income increased to $908 million, which is a net effect of higher income in the Life4Life portfolio and the absence of income from seven divested properties. The Life4Life portfolio showed an increase in rental income of 6%, explained by rent increases, reduced vacancy, and additional rent increases as a result of renovated apartments. Total property costs increased by 6 million to 435 million. And the increase is a net effect of higher costs for operations, as well as reduced costs for maintenance and sold properties. The increase in operating costs is mainly attributable to increased costs for tariff and snow removal at the beginning of the year. Excluding non-recurring costs, property administration decreased by 2 million. Net operating income increased by 13 million to 473 million and in the like-for-like portfolio by 12%. Central administration costs declined to 75 million. And during the year, we had non-recurring costs of 16 million attributed to preparations for the transition to Nasdaq's main list, reorganization, and to a provision in the fourth quarter relating to an ongoing insurance case. Excluding one-offs, during both the current and preceding year, central administration costs decreased by 11 million as a result of the structuring of operations now being complete. Profit from property management during the fourth quarter increased by 50% compared to corresponding period previous year. Neobu's earnings capacity is not a forecast and does not include any assessment of future trends. Since the previous quarter, profit from property management has increased by 17 million, mainly attributed to increased rental income of 23 million as a result of indexation of commercial rents and increase in negotiated residential rents. So far, 48% of our rental income in the residential portfolio has been negotiated with an average increase of 4.9%. That took full effect as of January 1st of this year. The remaining rent negotiations are expected to be completed during the spring Increased property costs are attributed to higher tariff expenses and increased central administration costs due to the addition of two new employees, a head of transactions and a financial controller. The improvement in the net financial items is primarily due to a lower policy rate. Over the past three years, the value of the Like4Like portfolio has decreased by 2.2 billion, with a decline of 301 million during 2024 due to increased yield requirements and also higher tariff-based costs. The average yield requirement used in the valuations have increased from 3.8% in the beginning of 2022 to 5.0% by the end of 2024. And we now clearly observe that yields have leveled off and stabilized. We continue to conduct external valuations of all our properties quarterly to ensure accurate and reliable book values. We have a strong financial position based exclusively on bank financing from banks in the Nordic region. Over the past year, we successfully refinanced loan agreements totaling 2.7 billion at margins lower than our average interest margin. Additionally, we reached an agreement with our banks to reduce the annual amortization rate by 50%, which will enable us to prioritize value generating investments and accelerate the refinement of our property portfolio. The average debt duration amounted to 2.8 years in the end of December, and our average interest rate amounted to 3.2%. Since we have a higher hedge ratio of 76%, that effectively has offset the upswing in interest rates that took place over the past years. The average fixed rate period was prolonged from 2.2 to 2.8 years during the year, and the ICR amounted 1.6 times on a rolling 12-month basis. The Swedish central bank reduced the policy rate on multiple occasions throughout the year to support the economy and stabilize inflation at its target level. For Neobo, this will result in an improved financial position and enhanced opportunities to make value-accretive investments in the property portfolio. In order to secure future cash flow and further mitigate financial risk, we utilize interest rate derivatives. At the close of the period, the total nominal value of these swaps amounted to 5.4 billion, with maturities ranging from one to seven years. Additionally, there are interest rate derivatives with future commencement dates totaling a nominal amount of 1.4 billion. And here you can see our largest shareholders as of the end of December. And we are very pleased with our large number of shareholders totaling 102,000. Some key takeaways. We see continued increase in both NOI and profit from property management with a positive outlook going forward. Strong prospects for rental growth in the coming years. Refinancing of bank loans of 2.7 billion and half amortization in a significantly improved financing climate. Listing on Nasdaq Stockholm and inclusion in the EFRA index. We have successfully achieved all interim targets for sustainability in 2024, and we see improved liquidity in the transaction market as we now increase our focus on optimization and growth. So we are now entering our third year with a solid foundation in place and strong opportunities to generate shareholder value moving forward. And with this, I would like to open the floor for questions.

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The next question comes from Kayvan Shirvanpur from SEB. Please go ahead.