Financial position and cash flow

Reclassication of property

After a revision of Peab’s property portfolio it was decided that some property previously reported as project and development property, i.e. inventory properties, will instead be classified as operations property or investment property, in the case where there is no plan to divest the property and it is expected to remain in the Group for the foreseeable future. For this reason, as of 1 January 2017 properties for a total recorded value of SEK 619 million have been reclassified as operations property and properties for a total value of SEK 629 million have been reclassified as investment property. The reclassification of these properties is forward-looking and therefore no comparable figures have been recalculated.

Financial position

The equity/assets ratio on 30 September 2017 was 30.3 percent compared to 29.7 percent at year-end. Interest-bearing net debt amounted to SEK 2,347 million compared to SEK 1,862 million at the end of 2016. Net debt has been affected by paid dividends in the second quarter, as well as increased investments in project and developement property and machines. The average interest rate in the loan portfolio, including derivatives, was 2.3 percent (2.3) on 30 September 2017.

Group liquid funds, including unutilized credit facilities, were SEK 3,870 million at the end of the period compared to SEK 6,062 million on 31 December 2016.

At the end of the period Group contingent liabilities, excluding joint and several liabilities in trading and limited partnerships, amounted to SEK 9,125 million (5,689). SEK 6,764 million (3,261) of contingent liabilities was surety given for credit lines for tenant-owned apartments under production.

In September 2017 Peab decided to divest all 2,458,447 shares in Lemminkäinen Oyj. Therefore per 30 September 2017 the shareholding of SEK 585 million is recognized on the balance sheet as an asset available-for-sale.

Investments and divestments

During the third quarter SEK 397 million (510) was net invested in tangible and intangible fixed assets. During the period January-September 2017 SEK 1,221 million (1,161) was net invested in tangible and intangible fixed assets. Like last year most investments refer to investments in machines and acquisitions in business areas Industry and Civil Engineering.

Net investments in project and development properties, which are recognized as inventory items, totaled SEK 417 million (425) during the third quarter. Net investments in project and development properties totaled SEK 790 million (415) during the period January-September 2017. During the first quarter property in Ulriksdal, Solna was divested. The partial sales of property in Hyllie was carried out in the second quarter 2016.

Cash flow

July – September 2017

Cash flow from current operations during the third quarter improved and amounted to SEK 654 million (-21). The increased cash flow is explained by a reduced capital tied up in working capital.

Cash flow from investment activities was SEK -550 million (-268) and referred primarily to investments in machines, acquisitions and loans to partially owned companies.

Cash flow before financing during the third quarter amounted to SEK 104 million (-289).

Cash flow from financing operations during the third quarter amounted to SEK -95 million (373).

January – September 2017

Cash flow from current operations improved and amounted to SEK 1,637 million (1,321), of which paid tax was SEK -566 million (-52). The increase in cash flow is primarily due to less capital tied up in working capital.

Cash flow from investment activities was SEK -850 million (-694), o which most was investments in machines. Sales of fixed assets for the amount of SEK 630 million (496), which primarily consisted of amortization of loans from partially owned companies as well as the divestiture of joint ventures, was included in cash flow from investment activities.

Cash flow before financing amounted to SEK 787 million compared to SEK 627 million for the same period last year. During the first quarter the transactions carried out regarding Arenastaden, Solna had a positive effect of around SEK 835 million. The comparable period included partial sales in Hyllie of SEK 508 million.

Cash flow from financing operations amounted to SEK -1,573 million (-1,297) of which SEK 1,062 million (767) consisted of paid dividends.