Good morning, everyone, and welcome to our presentation of Public Property Invest results for the first quarter of 2026. My name is André Gaden. I'm CEO of PPI, and together with me is our CFO, Ylva Göransson, and our CIO, Ilija Batljan. If we first look at today's agenda, we will begin our presentation with some highlights from the quarter before we move on to operations. Ylva will present financials, and Ilija will give some insight on our thoughts looking ahead. We will end the presentation with concluding remarks and a Q&A session. Let's start with highlights. The first quarter of 2026 has been an operationally strong quarter for PPI, and it was the first full quarter reflecting the transformative SocialCo acquisition that was completed in December 2025. The contribution from the SocialCo portfolio has been significant.
The quarter was adversely affected by substantial appreciation of the Norwegian krone against the Swedish krona. As mentioned, we deliver an operationally strong quarter in Q1. Rental Income came in at NOK 916 million, up from NOK 205 million in the same quarter last year. Net Operating Income increased to NOK 726 million from NOK 189 million. Net income from property management, adjusted for one-offs in the quarter, was NOK 389 million, corresponding to NOK 0.41 per share. We also deliver a strong cash flow from operations of NOK 628 million compared to NOK 178 million in Q1 last year. These numbers clearly demonstrate the step change in the scale of PPI following the SocialCo transaction. Underlying operational performance has been strong.
During the quarter, we signed new and renewed leases with an annual rent of NOK 45.8 million, and Net Letting was positive with NOK 11 million. Adjusted for significant currency fluctuations, our run rate Rental Income is up by 70 basis points above CPI during Q1, which confirms solid underlying performance. Turning to the balance sheet, we have established a robust long-term capital structure in PPI. In January, we issued EUR 900 million in new social bonds at attractive terms with fixed interest rate and used the proceeds to refinance a large part of the bridge facility that was put in place in connection with the SocialCo acquisition. At quarter end, 73% of our debt is at fixed interest rates, which has significantly reduced our sensitivity to interest rate movements.
Finally, importantly, we have during this quarter established a full scalable and integrated operational platform across all 4 Nordic countries, and we are in the final stages of re-domiciliation to Sweden. With the listing on Nasdaq Stockholm and secondary listing on Oslo Børs expected on the 20th and 21st of May, respectively. We have a robust long-term capital structure in place, the company is well positioned for continued value creation. Let's move on to portfolio highlights and have a look at the PPI portfolio at the end of March 2026. PPI's portfolio includes 850 properties with a total lettable area of 2.2 million sq m. Our gross asset value is now NOK 52 billion, adversely affected by currency fluctuations in the quarter. Annual run rate rental income is NOK 3.5 billion.
Our annualized run rate Net Operating Income is NOK 2.9 billion, and our run rate EBITDA is NOK 2.7 billion . We have a strong portfolio of government-backed tenants representing 84% of our Rental Income, providing a secure and stable and resilient cash flow. Occupancy in the portfolio is at 94%, and we have a portfolio WAULT of 7.1 years, including the project portfolio. The net yield in the management portfolio is 5.7%. The balance sheet remains strong with an LTV of 48.5% and an adjusted Net Debt to EBITDA of 9.9x. Let's have a look at operations. During the quarter, we signed new and renewed leases covering 23,400 sq m with an annual rent of NOK 45.8 million. Net Letting was positive at NOK 11 million.
As mentioned, occupancy remains high and stands at 94%. Our WAULT in the management portfolio is 6.8 years and 7.1 years when development projects are included. Among the key lease events in the quarter, I would like to highlight a new 12-year lease contract for 7,000 sq m with the City of Gothenburg for a newly built elderly care home. We also signed a new 10-year lease with the Norwegian Labour and Welfare Administration in Arendal. We completed a lease-up of 4,000 sq m to an existing tenant in Falkenberg in Sweden. These transactions, they demonstrate the continued demand for our properties and the strength of our tenant relationships. On the right side, you can see our maturity profile, and we have an even distribution of expiries also going forward.
As communicated earlier, we are in the process of moving our primary listing to Nasdaq Stockholm, with a secondary listing on Euronext Oslo Børs and re-domiciling PPI to Sweden. The dual listing was approved on the 30th of April, and we are now on track for the transition. The strategic rationale is clear. With a NOK 52 billion portfolio where 52% is located in Sweden, there is a natural alignment between our geographic presence and the capital markets platform in Stockholm. Stockholm is the Nordic region's leading financial hub for listed real estate companies, and this move gives us access to a broader and more liquid investor base, including investors with deep expertise within Nordic commercial real estate and social infrastructure.
Sweden is also the most active real estate transaction market, and the listing positions us to access a broader set of transaction opportunities as well as debt and equity capital markets at attractive terms to fuel continued growth. In terms of timeline, PPI ASA will merge into PPI, Public Property Invest AB, with shares exchanged one to one. The merger is expected to be completed on the 15th of May. The last day of trading for PPI ASA will be around the 13th of May, with the first day of trading on Nasdaq Stockholm on approximately the 20th of May, and on Euronext Oslo Børs on approximately the 21st of May 2026. To wrap up this section, I want to emphasize that PPI now has a scalable, fully operational platform in place.
Over the past year, PPI has gone from being a Norwegian-focused company to a fully operational pan-Nordic social infrastructure platform. We now have properties across Sweden, Norway, Finland, and Denmark with a well-diversified geographic footprint. On the organizational side, we have taken important steps to ensure we can operate effectively at this scale. We have strengthened the management team with the appointment of Annika Ekström as Chief Operating Officer, bringing in significant experience from Nordic real estate sector. The property management team from the SocialCo portfolio has been fully transferred to PPI, and we have recruited key functions to support the new integrated organization. This means we now have people on the ground in all our core markets. Looking ahead, the re-domiciliation to Sweden and the Nasdaq Stockholm listing is nearly complete, which will further strengthen our capital markets positioning and investor access.
With organizational, financial, and structural platform now firmly in place, PPI is ready to execute at scale. We have the team, the balance sheet, the market presence to pursue further value creation, and remain focused on operational excellence and realizing synergies from the SocialCo transaction. I will leave the word to Ylva, who will take you through financials.
Thank you, André. We start with the financial highlights for the quarter. The charts illustrate the step change in scale following the SocialCo acquisition. Rental income amounted to NOK 960 million in the first quarter, up 348% from the same quarter last year. This reflects the first full quarter of consolidating the SocialCo portfolio acquired in mid-December last year. This acquired portfolio contributed by NOK 628 million of the total rental income in the quarter. CPI adjustments provided additional uplift across the portfolio. Net income from property management was NOK 354 million in the quarter, negatively affected with approximately NOK 35 million of one-off items, which I will come back to on the next page. While this is not yet a fully normalized quarter, it clearly demonstrates the earnings capacity of the enlarged portfolio.
EPRA NAV per share ended at quarter end at NOK 26.3, slightly down from NOK 27.3 at year-end. This decline is entirely driven by the appreciation of the Norwegian krone during the quarter. Next page, our P&L. The results for the first quarter are not directly comparable year on year, reflecting the exceptional growth PPI has delivered over the past four quarters. With that context, I briefly walk through the key P&L drivers for the quarter. As mentioned, rental income increased to NOK 960 million. Total operating income was NOK 921 million. Property expenses were NOK 194 million in the quarter. This reflects the significantly larger portfolio following the acquisition, but also temporarily higher energy costs in Sweden and Finland due to an unusually cold winter.
As a result, property expenses in the first quarter were somewhat above our guided run rate level. However, we do not expect property expenses to exceed the run rate level on a year, a full year basis. Net Operating Income increased to NOK 726 million, corresponding to a NOI margin of 79%. Net administration expenses were NOK 106 million in the quarter and include approximately NOK 35 million of one-off items related to the SocialCo acquisition and integration, and also costs associated with the unwinding the current long-term incentive program as a consequence of the re-domiciliation to Sweden. Net realized financial expenses were NOK 266 million. Net income from property management was NOK 354 million, or NOK 389 million adjusted for one-offs.
Profit before tax amounted to NOK 351 million in the quarter, despite FX effects and negative fair value adjustments. Income tax was NOK 55 million, whereof approximately NOK 13 million is payable tax in, for the quarter. Net profit of NOK 296 million for the first quarter. Next page shows our balance sheet at quarter end. Investment properties were valued at NOK 52.1 billion, which is down from NOK 54.2 billion last quarter. This decline is entirely driven by foreign exchange translation effects, since around 70% of our property values are denominated in Danish krone, Swedish krona, and euro. The negative FX impact was NOK 2.4 billion. 100% of the portfolio is externally evaluated on a quarterly basis, and underlying property values were broadly stable during the quarter.
On a like-for-like basis, the portfolio increased in value by 3.6% from Q1 last year to this quarter. The value uplift mainly reflects new and renegotiated leases and CPI adjustments. Net yield remained unchanged at 4.7%. Equity stood at NOK 20.7 billion at quarter end. The movement in equity versus year end is also explained by FX translation effects rather than changes in underlying asset quality or operation performance. Interest-bearing debt amounted to NOK 27.2 billion. Our key credit metrics remain solid. Net Debt to EBITDA stands at 9.9x , Interest Coverage Ratio at 2.2x , Loan-to-Value at 48.5%. Next page shows our debt maturity structure, which is now very well positioned heading into the next phase.
Weighted average debt of maturity is 5.0 years when we exclude the remaining bridge facility of NOK 3.6 billion, which is in the process of being refinanced. Average interest rate is 4.26%. During the quarter, we have increased the fixed rate share of debt from 43% to 73%, significantly reducing our exposure to interest rate movements. Liquidity remains strong at NOK 4.8 billion, consisting of NOK 5.1 billion in signed or committed revolving credit facilities and NOK 713 million in cash. Next page shows our run rate, which provides a snapshot of PPI's normalized earnings capacity based on the portfolio and debt structure in place at quarter end. The most important factor to understand this quarter is the impact of currency movements.
The Norwegian krone strengthened materially during the first quarter, with Euro-NOK moving from 11.84 to 11.21, and SEK-NOK from 109 to 102. Given that approximately 70% of our property values and income is denominated in SEK, euro, and Danish krone, this appreciation automatically reduces the reported run rate figures when translated into Norwegian krones. It is therefore essential to adjust for currency effects. Taking into account currency effects, the Q1 2026 run rate rental income is actually up 70 basis points above CPI during this one quarter. This clearly demonstrates that the underlying operational performance is moving in the right direction.
On a reported basis, net income from property management, on a run rate basis, amounts to NOK 1.54 billion, which is NOK 1.63 per share. To illustrate the impact of our ongoing projects, primarily in Finland, we can add additionally NOK 111 million in Net Operating Income, which is expected to be realized over the coming months as projects reach completions. On this basis, adjusted run rate EBITDA amounts to NOK 2.74 billion. Net income from property management of NOK 1.75 per share. Adjusted Net Debt to run rate EBITDA stands at 9.9x , which is also affected by currency appreciation. Overall, the run rate figures confirm stable and improving underlying earnings capacity following the SocialCo acquisition. Now I will hand over to Ilija.
Thanks, Ylva. We have built last two years a robust capital structure with proven access to both equity and debt capital markets. 2024, we have raised NOK 17.9 billion in new equity and EUR 1.85 billion in the Eurobond market, clearly demonstrating strong investor and lender confidence. The upcoming Nasdaq Stockholm listing is expected to further broaden and increase liquidity in our investor base. This quarter, the SocialCo Bridge facility was fully refinanced on increasingly attractive terms, with the remaining part of the bridge expected to be refinanced with two large Nordic banks in next few days. The first quarter, we issued EUR 900 million in senior unsecured bonds with maturities of 3.25 years and 7.25 years.
At, as I said before, attractive but also fixed interest rates, which is very important in those shaky times where we have seen that, interest rates have increased since our issuance. We also repurchased NOK 280 million of outstanding bonds with floating interest rates. Our balance sheet remains solid with a BBB+ rating, an LTV of 48.5%, and 73% of debt at fixed interest rates, significantly reducing interest rate risk. We also have a diversified and long-term debt maturity profile, as Ylva mentioned before, currently five years. Overall, we believe we have now a robust capital structure firmly in place and ready to continue growth.
At the next slide 17, you can see that our organic growth strategy, where we reinvest strong operational cash flow into projects at attractive yields by earning yield already during the construction period. Net cash flow from operation has increased steadily over time, reaching NOK 628 million in the first quarter of 2026. This reflects the strength of our underlying earnings and the scalability of our platform. Our ongoing development projects, including you see few of them at the slide, but also including an additional project in Finland, are expected to add approximately NOK 111 million in Net Operating Income upon completion in late 2026 and early 2027. These projects are fully aligned with our strategy, focusing on social infrastructure assets with public tenants and long lease durations. We never take construction risk.
The table shown includes projects with total investment cost above NOK 100 million. On top of that, we have few smaller projects that will continue to add more income to our portfolio. At the next slide 18, we are trying to illustrate the next phase of our growth. We currently see a very compelling entry window for disciplined buyers with capital and execution capacity. Distressed sellers, for example, in Norwegian market, upcoming loan maturities and equity pressures across the sector are creating forced sale dynamics. In this type of market environment, access to deal flow and capital markets is critical, and we believe PPI has proven strength in both. At the same time, we remain fully committed to maintain a solid balance sheet and our BBB+ credit rating. Growth will always be pursued with discipline.
It is also why, on this slide, we show selected examples of deal flow in asset classes we know well. Primarily elderly care and supported living in Sweden, Finland, and Norway, as well as a police station in Finland. Lease durations range from 7 to 35 years, highlighting the long-term cash flow we target. Overall, we believe we are well positioned and ready for the next phase of growth, supported by strong capital access, proven execution capability, and financial discipline. Now I will give the word to my colleague, André, to wrap up.
Thank you, Ilija. To summarize our presentation, the first quarter of 2026 was the first full quarter integrating the SocialCo portfolio, and the results clearly demonstrate the transformative impact of this transaction. Rental Income reached NOK 916 million, up from NOK 389 million in Q4, while Net Operating Income came in at NOK 726 million compared to NOK 332 million last quarter. Cash flow from operations was NOK 628 million, more than double the level of Q4 2025. Operationally, we have delivered a solid quarter. Gross letting was NOK 46 million with Net Letting of NOK 11 million, and our development projects are progressing according to plan. We have also reached several important strategic milestones in this quarter. The integration of the SocialCo portfolio is complete, and we now have a fully integrated, scalable social infrastructure platform in place across the Nordics.
The re-domiciliation to Sweden and primary listing on Nasdaq Stockholm is nearly completed, positioning us for broader investor access and improved liquidity. Looking ahead, PPI is ready for the next phase. We have stable, long-term cash flows and growing dividend capacity. We are positioned to act when others can not, growing both organically and through acquisitions with proven and unique access to capital markets and deal flow. At the same time, we remain determined to maintain a solid balance sheet going forward and maintain our BBB+ rating. That was all. We will move on to our Q&A session, so Ylva and Ilija, please join me on stage.
Let's begin the Q&A session with a question for you, Ylva. Upon changing primary listing to Sweden, will you change accounting or functional currency from NOK to SEK?
Yes. In next quarter, we will report in SEK.
André, the vacancy increased from 5% to 6% since Q4. What's behind the higher vacancy?
Well, the small change in vacancies is mainly related to some Norwegian assets, where we announced the terminations in 2025. We also have some effect, some currency effect, coming from the Swedish properties.
Does the run rate model for administration costs reflect the new hiring from SBB? The normalized run rate administration cost is up by NOK 36 million since the acquisition of SocialCo. What drives this change?
Yes, the run rate figures reflects the new organization in place from first of April. We have increased our estimated run rate figures for administration expenses with NOK 15 million in the quarter, and we expect these expenses to normalize over the course of over the year based on the organization and the structure we have today.
Net unrealized financials of NOK 77 million in amortized borrowing costs in your bridge loan facility. Will this be the same effect until the bridge loan facility is paid out in full, yeah, NOK 77 million per quarter?
No, this is not a recurring quarterly effect. The NOK 77 million reflects total amortization of previously borrowing costs. Most of this cost in Q1 is triggered by the repayment, the partial repayment of the bridge loan during the quarter. For the remaining borrowing costs from the bridge loan, we expect approximately NOK 60 million in effect when the rest of the bridge loan is repaid.
In the cash flow statement, there is NOK 153 million in margin call on derivatives. What triggers this payment?
Okay. The margin call reflects temporarily collateral requirements driven by market movements in foreign exchange and interest rates. But this is important to understand that it is not a realized loss or a change in underlying earnings cash earnings. As market conditions change, collateral can also be returned.
Your initial ambition was to remain below 9x Net Debt to EBITDA, while you're currently running closer to 10x on the run rate basis. How committed are you to returning below 9x ? Should we expect deleveraging to be driven primarily by EBITDA growth, asset rotations, or active balance sheet measures over the next 12 to 24 months?
Our Net Debt to EBITDA is also affected this quarter by currency fluctuation, particularly by appreciation in Norwegian crowns. We still have one of the strongest Net Debt to EBITDA key ratios if you compare to our peers. Heimstaden is having Net Debt to EBITDA 13x-14x when we are at slightly above 9x . We are targeting 9x-9.5x Net Debt to EBITDA, and that will be good enough for us to have an A- rating.
You delivered a clear improvement in net interest this quarter following the refinancing and higher fixed rate share of 73%. How should we think about the sustainability of the current 4.3% in all-in cost of debt? What is the sensitivity to short-term interest rates?
The 73% fixed interest rate and we have actually five years debt duration is very strong in this market. As we said earlier in the presentation, we did EUR 900 million in new bonds, among others, EUR 500 million 7.25 years, at fixed interest rate. The 27% that is not fixed is 9% that is NIBOR related and 18% STIBOR. We are very good position on the financing of our business.
With the move, to a primary listing in Sweden and re-domiciliation to Sweden, can you clarify what changes investors should expect, in terms of currency reporting, structural changes, or tax implications?
There will, we are not expecting, at least to our knowledge, any changes in terms of business. We will change functional currency from NOK to SEK. We are also expecting to be able to report stronger growth when we report the first quarter, which will be second quarter of this year, in Swedish currency. However, there may be tax implications for our shareholders, for example, concerning withholding tax. That is just normal, all shareholders will take own tax advice.
André, what are your expectations to CapEx on maintenance on development and development cost going forward?
Well, we already have our running maintenance included in our P&L and also in our run rate numbers. When it comes to our development costs, it is mainly driven by the Finnish portfolio, and you will find those in the report.
The final question to Ylva. What are your expectations to admin costs for 2026 versus the run rate figures? Also the same, considering property expenses.
Yes. The property expenses were, in the quarter, affected by the very cold winter. On a full year basis, we expect the property expenses as on the same level as in our run rate figures. Administration expenses in our run rate is our best estimate for the structural and organization we have in place now from first of April.
Thank you very much. That concludes today's Q&A.
Thank you.