Sweden’s SBB posts $343.79 million loss in Q2 2024, Real Estate News, ET RealEstate
STOCKHOLM: Debt-laden Swedish property group SBB forecast an improving market on Wednesday, despite reporting a loss for the ninth quarter in a row amid an ongoing restructuring.
SBB was one of several European real estate groups forced to cut debt and restructure amid high interest rates and weak economies in recent years, with Sweden among the hardest hit.
The landlord, which racked up debt buying properties such as schools and hospitals, reported an April-June loss before tax of 3.5 billion Swedish crowns ($343.79 million), smaller than a revised 10 billion crown loss a year earlier.
It also wrote down the value of its properties by 1.6 billion crowns in the quarter.
However, SBB Chief Executive Leiv Synnes said that sentiment in the sector had changed and forecast interest rate falls and recovering capital markets which would aid property companies.
“Property prices have a good chance to bounce back in the quarter ahead”, Synnes told investors.
Synnes also told Reuters he expected SBB to make a net profit in the second half of the year.
Sweden recently lowered its key interest rate, and its central bank has forecast more cuts this year.
Companies like SBB have struggled to refinance huge debts, with bond markets closed to the company after its credit rating was cut to junk last year and investor confidence faltered.
SBB’s net debt amounted to 49 billion crowns at the end of June, compared to 56 billion at the end of March.
In another sign of change to the market, SBB said in a separate statement that its joint venture Nordiqus, which owns school properties, had managed to refinance some of its bank debt through private placement bonds.
Struggling property rival Heimstaden Bostad also issued bonds for the first time since 2022, in the Swedish market.
SBB’s second quarter loss was bigger than some had hoped.
Carlsquare analyst Bertil Nilsson said the results were worse than he had expected, with property values falling further in the quarter and costs of transforming the business high.
Synnes said he expected those high costs to come down, forecasting a halving by the end of next year. SBB’s shares were flat at 0909 GMT.
