Good morning everyone, a warm welcome to Bonava's half year report presentation 2019. Speaking is Louise Tjäder, Head of IR, with me I have Joachim Hallengren, CEO, and Ann-Sofi Danielsson, CFO. Joachim will begin the presentation and take you through some of the highlights in the report, followed by Ann-Sofi, who will take you through the financials in a little bit more detail. After the presentation, we will open up for a Q&A session where you will have the chance to ask your questions to both Joachim and Ann-Sofi. Please note that you can also write your questions via the web. With this short welcome and introduction, I will hand over the word to you Joachim, please.
Good morning, all. I would like to guide you through the second quarter of 2019 for us here at Bonava. Talking about the second quarter, it has the same features as the first and second quarter every year. It is a quite low volume quarter, has to do with our seasonality. With that said, we had a strong sales performance where we increased the number of sold units to consumers in all markets but St. Petersburg and Baltic. The reason that they were trailing behind is that we did not start as many projects this quarter as before. The number of sold units in total, 1,038 compared to 1,263. It is especially in the business-to-business, the investor deals that are trailing behind.
It is a huge interest out there for our rental projects, but as I have said many times before, the signing and closing of those agreements are not evenly distributed over the years. We are a bit on the soft side when it comes to started units, 499 compared to 1,440. I would like to stress that coming into 2019, we knew already early that the plan starts were skewed. We were more back heavy in starts in 2019, but we are also seeing some effect of our more cautious position in Sweden where we wanted to get a clearer vision regarding the market situation before we started more units. Also we see a huge interest in the German business. A large volume when it comes to building permit applications, zoning applications, flooding the authorities who are struggling to keep up with the speed. We are mitigating that.
We are actually sending in more applications that we plan to start. More projects are being planned in parallel. We will build up a buffer. It is really hard to forecast how long time it will take for the German authorities to catch up. Looking at the net sales for the quarter, more or less on par with last year. However, the EBIT is down. One reason, Ann-Sofi will be more into detail. One reason is that the units that were handed over were the geographical distribution, were more heavy versus the Nordic part last year than this year. Of course, those units are more costly. Another reason is that the contribution from land sales is less this quarter than it was in the last comparative quarter. EBIT margin down from 11% to 6.6%. We will be back to that.
Looking at the first half year, good demand on all our markets. Consumer sales are up 1,643 compared to 1,558. As you can see investor deals are at 126 compared to 407 last year. Again, those deals have no really clear distribution. I expect a lot more deals to be closed in the second half year. Housing starts slightly down when it comes to consumers, 1,096 compared to 1,252. Of course, the investor sales, there's a one-to-one relation between sold units and started units. Net sales, a bit up SEK 5.6 versus SEK 4.4, and the EBIT is more or less on par. Here I would like to stress that the contribution from land sales this year compared to last year is substantially lower, SEK 62 million compared to SEK 154 million, which is actually showing the strength of the underlying performance in the operations.
Walking you through the market, starting with consumers, we still see a very strong demand in Germany. When it comes to the Swedish market, we're definitely seeing signs of stabilization. I think there is more confidence among the Swedish consumers. We can see that also in the sales numbers in Sweden, which even if it was from low numbers, it was a substantially higher sales this quarter compared to 1 year ago. We have a stable situation in Norway. However, the markets in Denmark and Finland are more cautious, mostly dependent on pretty hefty development there in recent years and quite large volume coming out in the markets now. St. Petersburg and the Baltics have still a good demand. When it comes to investors, it's a really strong demand on all markets.
Overall, there is a lot of activity, both when it comes to investors and consumers, even if that is not totally reflected in the numbers in this quarter. You're well familiar with this graph. It's the geographical split into sales value and number of units. We're following the strategy. We're growing in Germany. You can see that Germany has picked up in sales value from 39%-46%, from 37%-42% when it comes to units. Of course, it's coming out of the Swedish proportion of the business due to a more slow market the last 2 years. Also, would like to point out that the St. Petersburg Baltic business is slowly but surely increasing their part. It will never be a huge part of our business, but I think it's a part that actually deserves a bit more attention than it gets.
It's a small but successful part of Bonava's operations. Just a few pictures regarding projects that we started in the quarter. The first project is a part of the German operations, which we actually don't talk about very much. It's actually holiday homes that we develop in the Baltic region, on the seashore and the islands in the north part of Germany. The target group is private investors that acquire this or invest in this and that leases them. It's really popular. This project that we started in this quarter is the first phase out of 140 vacation apartments. Going back to more bread and butter projects, Latvia, Riga, Turaidas, 63 apartments to consumer started in the quarter. Going over to the Nordic segment, we started the first phase of Trikotageparken in Copenhagen. In total, it will be approximately 150 apartments.
Carrying on with our successful business in Bergen, Norway, Gartnerlien II, the second phase of 29 apartments started also in this quarter. With that, I will hand over the word to our CFO, Ann-Sofi Danielsson.
Thank you very much, Joachim. I will start with a reconciliation with what happened during quarter two in the last 12 months when it comes to our financial objectives and our dividend policy. Return on Capital Employed objective to be between 10% to 15% in the last 12 months, we are at 11.8. Equity to Assets Ratio to be above 30% is the objective, we are very close to that when we ended quarter two here, almost 30%, 29.9. The dividend policy, at least 40% to be distributed to our shareholders, Earnings Per Share, we are at 11.8 for the last 12 months. The big conclusion here is that we have continued to grow our business. The last 12 months, a net sales of SEK 15.2 billion with a very decent margin if you take it for the whole group, almost 11%.
We think that giving this market circumstances that we have and where we are, we think that's a very decent level. I think it's relevant to look here where we come from three years ago and where we are now. We have increased our business, we have kept our EBIT margin even though we are growing. Our income statement, some details here. We have for the quarter a net sales more or less at the same level as last year. EBIT down, I will come back to that. We have a lower EBIT this quarter than last year. I also take the opportunity here to point out that our financial net is substantially stronger or better than last year. We continue actually to reduce our debt in Russian ruble, that's the main reason why we have this low level.
We are actually in a position where we don't have so much Russian debt, so that's very good. We have had good cash flow in the Russian business, our business in Saint Petersburg, that is the main reason why we are so low here for this quarter. Looking a little bit deeper into our net sales, I think it's relevant to look at where does it come from. What you have here is the recognized units that we've had in the quarter. This is for consumers, we are up compared to last year. However, it's very important to point out that the main reason why we have more units recognized in 2019 than in 2018 in this quarter is that we have more units recognized in Saint Petersburg. That's the main reason why we are up here.
When we look at the numbers that we have recognized to investors, fewer but more this year. We also have some in Sweden, That is also something relevant to point out. EBIT down SEK 182 compared to SEK 306. Again, I want to point out that we have a very good development in Germany and also in Saint Petersburg, Baltics with a strong positive development. Sweden and the Nordics are down, both down compared to last year. I will come back to a little bit deeper how the trend looks like in these two units. We have had very few units recognized in the Nordics during this quarter, and that's the reason why we have a lower EBIT here. Sweden, as we have pointed out now, we have much lower sales prices for those units that we have recognized than we had last year.
That's the reason why we have this development in Sweden. Here some more comments regarding the development in our different business units, starting then with Germany. I think what you see here is a very strong development. We are growing the business in Germany, as we have said. We said that when we started Bonava three years ago, that the main objective for us is to increase our operations in Germany. Here you really can see that is what we have done. We have at the same time increased EBIT margin in this growing business. A strong development in Germany. Sweden. What we said, actually, I think it's relevant to point out that both in 2017 and 2018, we pointed out that the margin in Sweden was on a very high level, not sustainable in the long run.
What you see here is actually exactly what we said. The prices for those units that we have, we have adapted them to new market conditions, You see that in our margin. Good level, however, still. The market adaptation that we have had during the last months has affected the margins in the Swedish business. Nordic, stable margins for the last 12 months. Finally, Saint Petersburg and the Baltics, where we have more units recognized, a bigger activity and also a positive development when it comes to the margin, the EBIT margin. We still have a very good level of units in production when you look at our portfolio. I also think it's relevant to point out that exactly as Joachim started here to say, that the sales ratio in that portfolio is on a decent and good level, 70% all in all.
We have a very good portfolio to work with going forward. Again, to point out is that we, as in previous years, have many completions that are expected to be done in the quarter four of this year. However, if you compare how it looks like in 2018, we have fewer units to be completed in the fourth quarter 2019, both for consumers, that's ITOS you see here, and also to investors. That is relevant to point out here. When it comes to our total assets, if you look at what has happened during the last quarter, is that we have increased the units that we have in production. That is why we have SEK 1 billion more in total assets.
What is also relevant to point out is that when you look at the completed housing units that we have not sold but have in our balance sheet still, the value of those units has not increased during the last quarter. If you go back one year, of course, that is the other reason why we have more assets now than one year ago. Cash flow positive here in the fourth quarter. Not that much, SEK 21 million plus. That is not so much to say about. The thing is that normally we have a negative cash flow in quarter two and in quarter three. That is the seasonal development of our business. We tie up, we need more cash, more financing in quarter two and quarter three. If you look then a little bit deeper, where does it come from?
I think it is relevant to point out that a positive cash flow in the fourth quarter. What you see here is that the main reason for that, if you compare with how it looked like one year ago, is that the cash flow that we used for investments in housing projects is a little bit lower than last year. That is the main reason for this positive cash flow. All other things are more or less in line with last year. If you look at our Net Debt, SEK 7.3 billion, and that is a normal development of our Net Debt. We have paid out half of our dividend also in this quarter. The other half will be paid out in the fourth quarter.
SEK 7.3 billion, and here, Net Debt in tenant-owner associations and housing companies in Sweden and Finland is still the main part of our debt that we have in our balance sheet. Almost SEK 15 billion tied up in our business that we use for our activities. Still a decent return on that capital that we use. I also think it is relevant to point out that we have really increased our business during these last four and a half years, still kept our Return on Capital Employed at our objective level. By that, I hand over to Joachim to make a short summary, and then you are in for questions.
Thank you. To wrap up the second quarter, I would like to highlight the continued growth in Germany. We sold well to consumers. We increased the number of ongoing units with more than 10%. I think it was 13%, actually. We have a really good sales ratio in the portfolio. We knew from the beginning that starts would be skewed towards the second half of the year. We have increased our numbers of sold units to consumers. As Ann-Sofi pointed out, we have a good volume, more than 10,000 units in production with a really strong and solid sales ratio. Then we also commented on the number of started units, the back-heavy planning for 2019. Also our more cautious approach to the Swedish market. We have focused so much on sales in Sweden.
As I said before, we can thrive and be really pleased with the results of that hard work. Now we can shift part of that focus into starting more units in the Swedish operations. Then, again, a reminder that for the moment, the German authorities are flooded with building permit applications, zoning applications. We're trying to mitigate that by planning. It will affect us, and of course, I guess that some of you are sitting there wondering how long time will that take. It's really hard to say. I can give you one example. What we know is the situation is more or less the same on all our markets except the Baltic region, which I presented earlier.
If we go to two projects in what we, as Swedes, will refer to as Berlin, one project is now entering its nine month of handling, while another project in another municipality, still within the Berlin area, got its building permits in nine weeks. It is really tough to draw any conclusions. I think it's sort of the SEK 1 million question. How long time will it take before this is over? As I said, we're trying to work around this by sending in more applications, by having a broader base to work from. The demand for Bonava's apartments and products are really strong on all our markets, both from consumers and investors. There is a lot of activity ongoing, even if that is not reflected in this quarterly report. Besides the sales, I'm looking forward to the second half of the year.
Then not least important in the situation that we are facing in some of our markets where there is more headwind, we do have a very strong financial position to fall back on. Not least Equity to Assets Ratio, but also cash flow-wise, which gives us a lot of opportunities to act. With that, I will hand over the word to Louise Tjäder to moderate the Q&A session.
Thank you, Joachim. Thank you, Ann-Sofi. We're ready for questions. Operator, do you have any question for us?
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press 01 on your telephone keypad and you'll enter a queue. After you're announced, please ask your question. Our first question comes from the line of Stefan Andersson from SEB. Please go ahead. Your line is now open.
Thank you. Three questions for me then. First of all, on Germany, do you feel that you also need to beef up the land bank in order to be able to meet these longer planning processes? When it comes to the Nordics, you're mentioning that it's mainly the loss there is all due to the lower rate of handovers. I'm just curious, is that all or is there something else in there? Connected to that as well, when you talk about the slowness in Denmark, is that temporary or do you see that as being something more longer? Third question, the land sales that you have in the quarter, would you say that that is old deals where you have earn-outs or have you actually been doing rather nice divestments in the quarter? Thank you.
Okay. Starting with the land bank question, I will hand over to Ann-Sofi. The land bank in Germany. Well, actually, I think that we have beefed up the land bank in Germany already, I don't see any further sort of sprint to boost it more than we, of course, need to expand the land bank as we still have planned to grow the German operations. Starting the strategy period, we more or less had two and a half to three years production in the land bank, and now I think we're up to four and a half. No immediate rush. We are acting when we find good deals. We're building a solid portfolio. We're still forecasting a growth over the strategy period, somewhere between 5%-10%.
I think that some of you remind me that I'm a bit cautious here, you need to remember that growth is rarely linearly distributed. It has its ups and downs. As we said before, 2019 will be a year where the speed will go down a bit. Moving over to the next question, that was regarding the margins in the Nordics.
In the Nordics. Well, the main reason also why it is negative is that if you remember, we talked a lot about this many quarters here, that we have had a rather challenging development in Finland. That is something that we have worked with a lot. However, in this quarter, we also had some issues also in Denmark. The quarter is actually affected also by the fact that we have very low volumes recognized, so that the issues that we have had in Finland and in Denmark are affecting the margins in this quarter.
If you look at it on a long-term development, though, I think it's relevant to look at the rolling 12-month development of the margin in the Nordics, that we pointed out also that that margin is on a stable level, however, quite low, a little bit more than 5%, but it's a more fair way to look at the Nordic margin development.
The last question was about land sales-
Yeah
divestments. No, they were not earn-outs in that sense. I think it was a mixed bag. Some of it is a pretty low volume. Some deals were made this year, some deals were made earlier, but it was not an earn-out model, but it was triggered by, for instance, a valid zoning.
Okay. Thank you.
Thank you.
The next question comes from the line of Fredric Cyon from Carnegie. Please go ahead.
Hi, Joachim and Ann-Sofi. A couple of questions from my side. I'll do them one by one, if you don't mind. Starting off with the CEO Comment. You're saying in the CEO Comment that you expect more startups in the second half in 2019. Is that a comparison solely to the first half or also a year-on-year comparison?
It's a comparison to the first half. I still believe that the challenges for the authorities in Germany will be unchanged for the second quarter. I predict that we will be on the low side or the soft side when it comes to starts in Germany, if nothing spectacular happens with the capacity within the municipalities. It's a comparison to the first half and not to last year's figures.
That's clear. You were mentioning as well that price adjustments have impacted profitability in Sweden. Would you say that's also an issue for the underlying margin also for the second half, since quite a number of projects there have made adjustments?
Of course. If we make adjustments on the sales price, it will immediately affect the margin. I think we need to remind ourselves that what we're seeing now is projects that were started in another market. They're being completed now. The projects completed in 2019 were started in 2017. The benchmark, they were more or less an anomaly when it came to market. I think the benchmark Q2 Sweden last year was 24%. That's way over what you could expect over margin. Yes, of course, price adjustments will not disappear by Q2. They will still be there. However, we hope to start new projects, but they will not be finalized during this year. We will have to wait until 2020 and 2021 before we see those.
I think it's important to stress what I said when I talked about Sweden, that is the margins that we saw in 2017 and the first half of last year, they were exceptional.
Yes.
That is not where we will be in the future. That is also something that we've said since we started Bonava, that in the long run, the margins in Sweden will come down.
Probably you would have some kind of guidance where will those margins be then, but not to be specific on any geography. I think that we have said all the time that a margin of 12%, we perceive that as world-class over a business cycle. I think it's also fair to point out that what we're trying to do here at Bonava is actually to change the game. We're insourcing design capabilities, production capabilities, trying to change our business model. I argue that it will take some time before we master that new model. Over time, I don't see any reason for any country to be significantly below or over those margin because we're moving into the affordable segment as well.
Two more questions. One on the building right portfolio in Sweden. You have more than 7,000, and if you look at startups, it's been subdued for quite a while. Do you think the relationship or the ratio between building rights and startups is adequate at the moment? Are you looking at reducing the building right portfolio further?
We're always working with a portfolio, but what you see in recent time is more that we sell pieces of land that does not fit with our strategy in terms of segment. If you're asking me if we want to significantly lower the investment in land in Sweden, the answer is a straight no. You will see land sales from time to time to be more spot on to the offerings that we're working with, affordable instead of high-end or exclusive. It might also be so that if we hold a bigger chunk of land, we might sell to another developer just to speed up the development process. We are not looking to divest. We're actually looking to invest in Sweden. Unfortunately, the prices are not down to a decent level yet.
My final question. There's been new rent restrictions in Berlin. Have you seen any impact from the investor market on that yet? If not, do you anticipate there will be an impact? If so, what?
No impact, of course, it's a lot of buzz in the systems. I think it's very important to point out that this has nothing to do with Bonava's business. The discussion about the potential rent freeze, it's only limited to Berlin. Of course, when we talk about Berlin, it's Greater Berlin. If we're in Brandenburg, for instance, that is not applicable there. It's only to do with the current stock. Everything newly produced is not affected with this. On the contrary, it might actually drive investors our way. No impact, we don't foresee any impact. Let's see what happens. It's a proposal. It will be handled again in late October, beginning of November. Then it has to be made a formal decision.
Of course, we're monitoring the situation, it does not at all affect Bonava's business as we only develop new projects and not work with refurbishment or anything like that.
Thank you.
Okay. Thank you. We will also take some questions from the web. Simen Mortensen from DNB. Ann-Sofi, can you answer the question? Can you give a bit guidance on tax rate for Q2 25%?
Yes, 25% in Q2. I think I've said this before, that that is a more sustainable, relevant tax rate for the Bonava business since we have so much business in Germany where the tax rate is higher than it is, for example, in Sweden. You can expect the tax rate to be around 25% for Bonava.
Okay. Thank you. The other question is, at what level will margin in Sweden be sustainable? You have already talked about that a little bit.
I talked about that a bit.
Yes.
If we talk about the markets in general, I think that we could look at a margin somewhere between 10%-15%, depending on where we are in the business cycle. If we're in a very top of the business cycle, then we should earn more money. Overall, again, going back to the 12-ish percent world-class, I think it should be around that over time.
Operator, do I have more questions?
Yes. The next question comes from the line of Jan Ihrfelt from Kepler Cheuvreux. Please go ahead.
Thanks for taking my questions. You were talking about margins before and the 10%-50% that this include both the consumer business and the investor business?
I'm not talking about on project level, I'm talking about business unit level now. It's a combination. I think that it's very good, Jan, that you point that out because when you compare margins with some of our competitors, we have a blend, specifically said that one third approximately would go into investors, while others is 100% into consumers. Of course, consumers more risk, more reward.
As you stated that the demand for investor deals are very high. Are you on the target for your investor business with 10%-15% in all your three different regions?
No. We still have challenges with the cost level in some of our countries, especially here in the Nordics. More on the firm side in Germany, more on the soft side when it comes to the Nordic business, when it comes to investor business due to high production cost or construction cost.
Okay. It's below 10% in Sweden with investor deals that you recording in the second quarter?
Yes, definitely.
Okay. Somewhere between 0 and 10 then more?
Yeah, on a project level, I think I guided that a 10% over time would be a good sustainable level. We're not there. We're not efficient enough. The competition is not strong enough when it comes to tenders from contractors. We are currently a bit below. In a good market like the German market, we should be above that and maybe up to 15% when we get really efficient with the support of a good market. We are not there yet.
Okay. Just to make some math there. If I put in 5% for your investor business, then your consumer business in Sweden is running like 4% operating margin. Is that a fair assumption?
That sounds really low, to be honest.
Yes.
I don't have that specific numbers in front of me. Maybe we could touch base later on that.
Okay. One more question, if I may. I'm just wondering your strategy in Sweden, what projects could you start in a very short period of time? What key parameters are you looking at to make the start happen? What regions are you looking for, et cetera. It would be very interesting to have a little bit more flavor on your strategy in Sweden.
We have five sort of local markets that we operate in Sweden, we're looking into all of these markets to start. I think we're seeing positive signs that the market is more stable everywhere. We are being held back by, as I said, high construction costs still, but also about regarding building permits and zonings. We have multiple projects that are stuck in appeal process for more than one year now. If we feel that the market is stable enough so we can understand where the market price is, if we have an efficient or a decent construction cost, we can start anywhere. We're not excluding or we're not sort of targeting any specific region.
Okay. Thanks very much.
The next question comes from the line of Niclas Höglund from Nordea. Please go ahead.
Yes, good morning. Most of my questions have been asked, but I'll try to ask a little bit more on the outlook for the Swedish margins operations. You're down to 4%, 4.5% excluding the land gains in the quarter. Is it fair to assume that you have had losses in some of the projects, profit counted in the quarter? When you talk about the rolling 12 months, it's on touch below 12% now for you excluding land gains. Is that a fair assumption that it should be able to keep that level when you look at the backlog?
Hello? It seems that someone doesn't have on mute, so could you mute because now we had a hard time hearing the question, Niclas, it was a very long question, so I'm sorry I need to ask you to ask it again.
Can you hear me?
Someone that is listening in is not having on mute. Could you be so kind and mute because there is problem to hear the question.
Can you hear me now, or?
No, I can. We try again, Niclas, if you can ask your question.
I'll keep it brief.
Okay.
Sweden margins. Have you had any losses in projects recorded in this quarter? Can you sort of also, since you comment on Kristineberg, can you elaborate on the impact on profitability given the recent price adjustments?
Well, we have no losses in Sweden for any project in this quarter. Kristineberg, well, maybe you could elaborate on that. The price adjustments in Kristineberg, they have not impacted this quarter at all since we have not recognized any unit there. Maybe you could elaborate on that.
Yeah. The first profit recognition or handed over is planned to be in Q4 this year. The price adjustments in Kristineberg is somewhere between 7%-11%. It's sort of apartment by apartment. I think that reflects in general how the market is. This project was planned for in late 2016, started in 2017. I think it's fair to say that the adjustment is in line with the development in the market. Of course, that will affect our margins in one-to-one ratio in that specific project. Not yet. It will be more visible in 2020.
Okay. One more question, if I may. Financing costs were very low in the quarter, only SEK 22 million. You mentioned the ruble as a comparison. Are there any gains included in those numbers, or is it fair to assume that those levels are sustainable going forward?
No gains in that number. The interest rates are very low. What we've had in the past, why we had the higher financial costs, has been all the time that we've had well, we started with more than SEK 1 billion in debt in rubles, and now we are down to more or less zero. That's the main reason why it is so reduced and also so low in this second quarter. No gains. We have nothing to have any gains from.
Okay. Those are my questions. Thank you.
The next question comes from the line of Tobias Kaj from ABG. Please go ahead.
Yes. Thank you. A couple of questions from my side as well. I would like to start up to follow up regarding Sweden as well. Do you feel that the price adjustment that you have done is enough given that the ratio of sold unit is still at a quite low level, and especially in the perspective that very few starts has been made in the last six quarters, so most of the ongoing projects has to be completed in relatively near term?
Well, I think that if we focus instead on the number of sold units, I think that's the answer to your question. I think that these price adjustments is really working well. I think we found, and the market itself has found a sort of a new balance. I don't see that we need to make further price adjustments, putting the prices down even more in the ongoing projects. I can't exclude that there might be one or two projects more where we need to make adjustments, but then it would be the first price adjustment, so to speak. Not going down below the 8% to 10%, 12%. No.
Okay. Thank you. Regarding your units expected to be recognized in incoming quarters. You mentioned that you have fewer units completed in Q4 this year compared to next year. Should we, in that perspective, also expect clearly lower gains? Most of the decline seems to be related to the Baltics and St. Petersburg, where you normally highlight that you have quite low profit per unit as well.
Well, I think it's a very fair conclusion that you made that we have more units in areas where we have higher prices and also then higher EBIT level or profit from those projects. I also think it's relevant to look on the sales ratio, because in the portfolio, in those units that we have for completion in the fourth quarter, we actually have a lower sales ratio also in that portfolio to be completed in the fourth quarter. That is also something to see. You're absolutely right, and I can't give you any forecast, of course, but this is something that we need to have focus on to increase the sales and to really be sure that we complete these units in the fourth quarter.
Okay. Thank you.
Just as a reminder, if you do wish to ask question, please press 01 on your telephone keypad now. Our next question comes from the line of Stefan Andersson from SEB. Please go ahead.
Thank you. Just two short questions. First, just the policy on price adjustments. Just remind me, like in Kristineberg there, have you reduced all the apartments the same? I understand there's difference between type of apartments, but if you look at the ones that's already sold versus unsold, are you adjusting both those, or is there a difference between how you approach clients already signed up versus where you haven't had anyone signed up? The second question is regarding Saint Petersburg. The profits you have there, you kept there in order to pay down the debt you have, I understand. Is there any issues to actually get the cash back to Sweden? Do you have any issues with that at all? Or have you just decided to pay down debt locally?
Starting with the first question regarding Kristineberg. When we launched the project, or very soon after we launched the project, the market in Sweden went into a pretty significant headwind. We had a sort of a price guarantee stating that those who had bought the apartments from us would also gain from any possible price adjustment. However, that was 28 units that were already sold, so it's a really small part of the business. Yes, they were also adjusted. Again, specifically depending on location and size and all of that, it was different reductions. Yes, due to the fact that we offer those customers a price guarantee. The second question, I think I will pass to Ann-Sofi, that has to do with the financing in Saint Petersburg.
Yes. That is also something that we follow very closely. It's important for us. We keep very close attention to how the capital structure looks like in our Saint Petersburg business. So far, we have not seen any issues to take back the invested money that we have in Saint Petersburg. I think it's a very good strategy also to work both with local debt and also equity. To work with that in a strategic way so that you are sure that you can handle and have the money back, the invested capital back from the Saint Petersburg business. We have had no issues with that so far.
Thank you.
As there are no further questions, I'll hand back to the speakers.
Okay. Thank you all for listening in and for asking good questions. Before we close this call, I want to remind you of the next interim report, which is October 23. Again, thank you, and we all wish you a very nice summer. Thank you and goodbye.