Financial position and cash flow

IFRS 16 Leases

IFRS 16, Leases replaced IAS 17, Leases as of January 1, 2019. When changing over Peab chose the changeover method in which comparable periods are not recalculated. Additional leases primarily comprise office and premise rents, leaseholds, land rentals and vehicles. Total assets and net debt were affected at changeover on January 1, 2019 by SEK 850 million. IFRS 16, Leases is applied in segment reporting. For further information see note 1.

Financial position

The equity/assets ratio on June 30, 2019 was 27.6 percent compared to 30.4 percent at year-end. Excluding additional IFRS 16, Leases the equity/asset ratio on June 30, 2019 was 28.1 percent. Interest-bearing net debt amounted to SEK 7,241 million compared to SEK 3,551 million at the end of 2018. Excluding additional IFRS 16, Leases net debt on June 30, 2019 was SEK 6,414 million. The increase in net debt is explained by more construction on property on our own balance sheet, our own developed housing projects in Norway and Finland and payment of SEK 1,239 million in dividends in the second quarter. The average interest rate in the loan portfolio, including derivatives but excluding additional IFRS 16, Leases was 1.5 percent (1.6) on June 30, 2019.

Group liquid funds, including unutilized credit facilities, were SEK 4,078 million at the end of the period compared to SEK 5,846 million on December 31, 2018.

At the end of the period Group contingent liabilities, excluding joint and several liabilities in trading and limited partnerships, amounted to SEK 9,919 million compared to SEK 10,302 million on December 31, 2018. Of contingent liabilities surety given for credit lines for tenant-owned apartments under production was SEK 7,069 million compared to SEK 7,580 million on December 31, 2018.

Investments and divestments

During the quarter SEK 594 million (503) was net invested in tangible and intangible fixed assets and investment property. During the period January-June SEK 1,086 million (938) was net invested in tangible and intangible fixed assets and investment property and consisted primarily of office building construction and investments in machinery.

Net investments in project and development properties, which are recognized as inventory items, totaled SEK 402 million (905) during the quarter. Net investments in project and investment properties totaled SEK 1,052 million (1,002) during the period January-June 2019. Most of the investments refer to ongoing housing projects in Finland and Norway and our own developed rental projects in Project Development in Sweden.

Cash flow

April – June 2019

Cash flow from current operations was SEK -976 million (-191), of which cash flow from changes in working capital was SEK -1,763 million (-886). The change in working capital included increased accounts receivables and was negatively affected by in part construction of housing projects in Finland and Norway and our own developed rental projects in Project Development in Sweden.

Cash flow from investment activities was SEK -345 million (-513).

Cash flow before financing was SEK -1,321 million (-704).

January – June 2019

Cash flow from current operations was SEK -334 million (-437), of which cash flow from changes in working capital was SEK -1,582 million (-1,236). The change in working capital included, among other things, construction of housing projects in Finland and Norway and our own developed rental projects in Project Development in Sweden.

Cash flow from investment activities was SEK -428 million (-657).

Cash flow before financing amounted to SEK -762 million (-1,094).

Cash flow from financing operations amounted to SEK 502 million (999) of which SEK -1,239 million (-1,180) consisted of paid dividends.

Net debt

MSEK Jun 30
2019
Jun 30
2018
Dec 31
2018
Mkr 30 jun
2019
30 jun
2018
31 dec
2018
Bank loans Banklån 5,501 3,133 3,383
Commercial papers Företagscertifikat 749 1,350 730
Bonds Obligationer 2,248 1,049 2,248
Financial leasing liabilities Finansiella leasingskulder 598 577 593
Additional leasing liabilities according to IFRS 16 Tillkommande leasingskulder enligt IFRS 16 827
Other interest-bearing liabilities Övriga räntebärande skulder 0 60 58
Interest-bearing receivables Räntebärande fordringar -1,554 -2,042 -2,085
Liquid funds Likvida medel -1,128 -535 -1,376
Net debt Nettoskuld 7,241 3,592 3,551

Net debt and debt/equity ratio

Cash flow before financing