Star zero on your telephone keypad, and you'll be connected to an operator. I will now hand you over to your host, CEO, Erik Selin, to begin today's conference. Thank you.
Hi. Thank you. Welcome everybody for presentation of Balder's year-end and Q4 report. In Q4, we jump right into it. We took possession of some acquisitions that we made during the autumn, that was a large CBD property in Gothenburg with office and hotel. We also took possession of two centrally located office properties in Stockholm. On top of that, some projects for residential construction in Gothenburg. We also completed a couple of hundred apartments in Denmark and in Finland. That is ongoing business, as you know, more than usual was completed in the Q4. If we turn to next slide. In Q4 isolated, we had an increase in property management profit of 20%, we reached SEK 5.85 per share in the fourth quarter. NAV stood at SEK 346, 23% better than last year this time.
We had a net debt of SEK 48.2, roughly the same as a year ago, and net debt to EBITDA of 12.8, and that is for Q4. Also like rent roll was 3.8%, a bit higher than it was previous quarter. If you turn to the next slide, you can see some graphs showing profit from property management on the left side and long-term net asset value, NAV, on the right side. Basically it's not so much more to say than that continuous trend upwards. Of course that is my job and Marcus's job to ensure that profit from property management over time increases. If that happens, of course, over time also NAV will increase. Next slide. We have current earning capacity as we update every quarter. This is a yearly comparison from a year ago.
You see rental income 14% higher, and operating profit 15% higher. Parent profit from property management 13% higher. This is not the forecast, this is just a glimpse at year-end. Obviously during the year there will be transactions and construction and a lot of things that always make these figures not turn out like the figures just this quarter. That is sort of an easy pace to, by one pace, get an opinion about how the company earns if basically nothing happens. Next slide. We have consolidated statements of comprehensive income. You can see in the quarter we had an increase of profits on property management from parent company, and that is after deduction from controlling interest of SEK 1,053,000,000. That was 20% better than last year this quarter.
Also in the quarter were value changes and realized properties, and a big part of that is change in how we value the properties in SATO. That is now more or less deal-based. It's market price, what we see when a transaction is made in the investment market. Previously there were bigger deviation between different methods. One of them was acquisition cost and also that you compared selling apartment by apartment and with a discount. They had that old principle evaluated for many years as did Kojamo. You can see when yields come down and there's lots of transaction in the market, we as Kojamo could see that this valuation that we have now is much more reflecting the real values than the old approach. That's part of the explanation of the big change in just Q4. Next slide, financial position.
There you can see higher property values. Obviously, we invested in some value changes and also more equity and other loans follow up. It's basically like 20%, 25% larger numbers than last year. Nothing other special on that. We turn to next, property portfolio. 80% of the portfolio is in capitals and larger cities. Gothenburg, that is a big part, is not a capital, but it's for us a large city, depending how we compare on this. Residential 59%, office 18%, other 15%, and retail 8%. This looks like, I think more or less exactly as a year ago. This doesn't move around much per quarter or per year. Going forward, we think it will be something like this. Next slide, financing slide. Now we have the average interest rate cost of 1.5%. That is slightly lower than before.
That is, of course, you all know, very low interest rates in the market and in the bond market. When older loans mature, we get new ones with slightly better levels. There is a downward trend on this. Fixed credit term 5.8 years, and fixed rate period 3.1 years. Net debt to assets 48.2% and equity assets ratio 38.6%. There we are slightly below our target. The target is more long-term target. We do not have to reach it every quarter. The trend is still that we would like a bit higher equity ratio than we have right now. Net maturities, you can see at the bottom quite well spread out until we get all the way down to 2028, 2029. The latest bond emissions have been on the long end at quite attractive prices.
If you turn the page again, there's another financing slide. You can see, of course, portfolio value, net debt to assets, but also at the bottom, secure debt out of total assets and secure debt out of total debt. Those metrics is important for the rating agencies or the rating grid. We are going in the right direction, and we have quite a headroom there compared to what we have to have for the present rating. Finally, next slide, the share price, and we have it compared to NAV and profit from property management. Not much more to say about that because they're going in the right direction. You all know stocks, I guess, who's listening to this. This was a brief summary of the Q4 and year-end. Now we welcome if there is any questions.
Me and Marcus is here.
If you would like to ask a question, please press star one on your telephone keypad. Please ensure your line remains unmuted locally. I will then speak to you individually, state your full name, and introduce you to the call. A question has been submitted. Please stand by while I retrieve the caller's details. Our first question is coming from the line of David Flemmich from Handelsbanken. Please go ahead.
Hi. Good morning. Thank you for taking my questions. I only have one question today, regarding the net financials that continues to surprise, coming below at least my expectations. Can you please elaborate a bit on the net financials? When I compare them to the earnings capacity, for example, I find the annualized net financials in Q4 being about 20% below the earnings capacity. That has gone through all of 2019, basically. Are there any one-offs or other things impacting on net financials in Q4?
It's small one-offs in the Q4 report in the net financials. You have some value changes from financial positions. It's also difficult always to project how the currency is going to differ from quarter- to- quarter or year- to- year. That's mainly a part of the effect.
All else equal, should the net financials going forward be in accordance with the earnings capacity? It has surprised basically every quarter in 2019, and it's quite a large deviation when comparing with paid net financials in the cash flow statement.
No, we try to indicate the financial costs that are in the year basis, but they're probably a little bit on the conservative side.
Okay, perfect. Thank you.
The next question is coming from the line of Tobias Kaj from ABG. Please go ahead.
Yes, thank you. Good morning, and thank you for taking my question. I would like to start just regarding your holding in [Kojamo]. Given that it has maybe been obvious for other minority owners that the valuation of the company has been rather cautious in the past, and now you make this revaluation, do you think that you will be able to increase your owner share in [Kojamo] in the next few quarters?
It's very hard for us to predict. We are, of course, interested in buying if the price is reasonable. Right now, we have no such discussions. Let's see what happens.
The change was not triggered by a requirement of some of the other owners to sell if you changed your valuation methods?
No, it wasn't. It was just that, of course, when we looked at it in the year passes by, you can see the difference between, for example, acquisition cost and market value widens all the time. They had this valuation method forever, and sooner or later, everything comes to an end. That's why the Kojamo changed it first. They are listed, so for them, of course, maybe even more focus on it. When Kojamo changed it also made us think that, okay, this will be strange. It could be companies have totally different approaches in valuating the same assets. That's why we changed it. Of course, in a single quarter, it looks maybe a bit dramatic. I know you and other ones following it, commented that the value seems to be a bit low.
Again, we also wrote that the principle was a combination of different methods. Mm-hmm.
Yeah. Regarding your balance sheet, you have had quite small changes in your gearing during 2019 as you've been reactive with acquisitions and investments. If opportunities occurred, would you like to be as active 2020 as well? Would you like to reduce your gearing and, for example, aim for a higher rating?
We would like to reduce gearing slightly. On the other hand, if we find good investments, we are not in a hurry or in a rush to change the gearing. We always think about the long-term shareholder and what would make sense in the long run. If we find good investments, we can, of course, wait some quarters with lower gearing. We will have slightly lower gearing and hopefully find good investments as well.
If you look at the competitive situation today and compared to a year ago, do you think that the outlook for growth is similar as a year ago, or has it changed in any direction?
For investments or for in general? Or what are you thinking of?
Both. Acquisitions or development investments.
It's so early, hard to predict, actually. I think development investments should be quite good. We have a good pipeline there. Acquisition is very hard to tell, I would say. Right now it's highly competitive, but on the other hand, we look at a lot of stuff. I think it's a bit early to guess actually.
Okay. Thank you for taking my questions.
Thank you.
As a reminder, if you would like to ask a question, please press star one. The next question is coming from Niclas Höglund from Nordea. Please go ahead.
Good morning, Niclas Höglund here. One question from me. It's actually related to the Kojamo revaluation method. You have none of the sub-revaluation method, as you have it. You have the new yield-based approach, maybe more mixed than the Kojamo, but you also have a lot of development projects in. Could you help me to point out the yield at costs that you're running in these projects? Would you agree with the statement that the new yield-based or combined method would enable a faster revaluation of the projects that you have ongoing?
The projects, there are different yields when they are completed, depending on a bit where they are located. You can say roughly between 4.7%-5% yield, something in that area. The market may be like 100 points lower. You have a point that should be a slightly positive effect on that also going forward. The existing land bank and portfolio at this value is still at cost in SATO. We don't change the value until it's completed. There are different approaches on building rights also, but they are at cost. You have a point there, Niclas, that it could be future upside as we go along when we finish projects.
It's more reflective to the underlying trend than while previous, maybe it was more of a delayed effect.
Exactly.
Thank you. That was my question. Thank you.
Yeah.
The next question is coming from the line of Simen Mortensen from DNB Markets. Please go ahead.
Hi, gents. Congratulations with good results. I just have a question regarding, sorry, I called, about the accounting change, which is coming in Sweden, it seems, on residential developments. Where you have to include the net debt from Bostadsrättsförening or when you do residential developments. I'm just wondering, will that impact your balance sheet and accounting at all given that you have some residential developments?
No. We already have it in the balance sheet.
Okay. Thank you.
Yes, under extra earnings up there.
We have no further questions in the queue.
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