Earnings Call: Q2 2021

Jul 15, 2021

Thank you very much and welcome all to this on this call presenting as to this first half of twenty twenty one earnings. Slide number 2, please. If you look at Our earnings, I think it's fair given the large amount of the transactions that we have done during the quarter and also given the repositioning company in terms of strengthening our focus on rent regulated residentials and elderly care home to start presentation by looking into our current earnings capacity for the 12 months rolling. You will see that We are having rental income of SEK 6,100,000,000. And as you all All of you know, we take through the P and L all of the cost of the maintenance and other property cost. And then we have NOI of EUR 4,400,000,000 and operating profit of €4,100,000,000 before our value add strategy. And if we add the income or guiding for income on value add strategies that is on yearly basis SEK 2.2 billion. We are being delivering much stronger than that. But if you add those SEK 2,200,000,000 and then if you subtract dividends to D shares and hybrids and profit attributable to minority interest, you will land in earnings capacity of EUR 5,400,000,000 for SEK 3.8 per Class A and B Shares, which is very strong profit generation that has been fueled by strong growth and our creativity to our value add strategies. For the first half of twenty twenty one, we are delivering profit after tax of EUR 9,300,000,000, which is strong increase compared to the corresponding period of the previous year. And this corresponds to SEK 5.94 pounds per A and B shares comparing to SEK 1.8 last year. If you adjust for some nonrecurring cost, you will land the adjusted profit for the first half of 2021 of 6.09. So a very strong profit for the first half of twenty twenty one. If you look at the profit from property management, Also here, we see strong delivery. Our profit from property management, adjusted for non recurring cost increased by 33% in comparison with the first half of 2020 to EUR1.7 billion. And as I said, for the Given our strong increase in on this capacity and our strong profit in Q2, We are adjusted our forecast for earnings for 2021 to SEK7.8 per share. Next slide. SPB is in a very unique real estate business in Europe, delivering strongest growth and also strongest NAV growth Last years, in 2019, we grew NAV with 79%. We continued last year with 41% and for the first half of this year. Next slide, please. Just to give you some more flavor on our position, mentioning a few highlights about our portfolio. You can see at the end of Q2, we have a portfolio of 117,000,000,000 Swedish clouds at the book with almost EUR 90,000,000,000 in Sweden, €17,000,000,000 in Norway, €9,400,000,000 in Finland and continuing to grow in Denmark with €1,100,000,000 at the end of first half of 2021. We, as I said, this transaction operates in the world's safest real estate asset classes, which we have proven throughout pandemics with unprecedented rent collection. And also, we have continued to decrease risk in our portfolio by focusing even more on residential space. Today, almost half of our book Book value is related to residential, either to rent regulated residential or residential for elderly people. Our 3 value add strategies are delivering strong growth. I will come back to that. We Continue to invest in sustainability, and we have a strong relationship with municipalities. And today, we have Europe's largest property development portfolio with 59 1,000 Apartments. And if we add to that, that you also Our controlling owner of JM with 30 7,000 apartments with mainly exposure to stock conversion. We have very strong position in a market with very strong demand for the residuals. Our passing grant, EUR 6,100,000,000 still after book and with our cost, probably the highest debt initial yield in comparable for comparable assets. We continue to have strong growth with 9 years, but effectively almost perpetual and strong Locations where by today almost 80% of our assets are located in major cities and university towns, which largest exposure in Stockholm and the universities It is around it. But of course, if you look at our building rights portfolio, you will see that We have 42% of our 59,000 apartments located in Stockholm region. And in total, 81% located in major Nordic cities and university towns and 19 in other growth cities in Sweden and Norway. Next slide, please. As I said before, our low risk safe income of €6,100,000,000 We have almost half of the value coming from residential. So you can see here that 41% of The income is coming from residential, either for regulated residential or residential for elderly. And on top of that, 26% coming from education centers and coming from hospital and health centers. That means that almost 80% of our income is coming from the core for the lower risk assets in terms of residentials and and schools. We are a trusted partner for municipalities and states throughout the Nordics and exposure to the Nordic countries is in a way unique that you have 3 or 4 Scandinavian countries that are AAA rated, Sweden, Denmark and Norway and Finland, AA plus So exposure against very strong sovereign credit. We have a beautiful, you can say, a beautiful illustration of our lease expiries, when you can see that 3rd of our leases are longer than 2,031. And In this Q3, I invite all of you to visit Celestia on 8th September, where we are opening the new cultural center, the most sustainable building ever built in Europe and where we have 50 years at 50 years municipalities. Next slide please. We have strong profits from property management with low risk assets as the foundation of our business model, providing passing rents of EUR 6,100,000,000 and with the highest rent collection in the European listed real estate universe. And on top of that, we have 3 different teams that are delivering value and profit from our 3 value add strategies, building rights development, the new production, we are guiding that This deal should deliver €1,000,000,000 to €1,400,000,000 on yearly basis. Sustainability and investment in existing Twilio should deliver €600,000,000 yearly basis. And we just we are making much more money from the transactions that we just make a placeholder profit of EUR 400,000,000 from that business. Next slide, please. This slide just to give you a illustration how our holistic model works, where we are both applying different teams, different parts of the markets, but also at the same time combine those different things in a strong delivery of profit, where we are both acquiring single assets and portfolios and being able to transform those to high quality assets to long term ownership of top quality social infrastructure assets, but also at the same time disposing mature or noncore assets and applying true value creation, building rights development, new production as well as a team that is doing refurbishments, innovations and investments in existing portfolio. Next slide, please. Few words about diesel dry development and new production, strong Profit for the first half of the year, EUR 1,500,000,000 in profit for the first half of the year. And as you can see, we are guiding and as you know, we have been guiding for €1,000,000,000 to €1,400,000,000 for the full year. We delivered SEK 1,500,000,000 for the 1st half year and almost SEK 1,000,000,000 in Q2. Here, we have The most experienced teams in Europe in Property Development this Islam through both SVB trademark and SUEFAFASTIETER TRADEMAK and those highly skilled and experienced team are creating very strong profit. We are today, I should say, without competition, number 1 European property develop a bit 59,000 apartments in our project portfolio and also if you add that 37,000 apartments in GM, which is almost 100,000 apartments, very strong position in a market with very strong population growth. Important here is to mention that the Nordic is probably one of the few regions in Europe that still have and is projected to continue to have strong population growth. This is often omitted in the European comparisons, but very Important to understand demographics and how the population is developing, how the income is developing for this low risk asset. Our building rights portfolio is a story for itself. We have today according to external estimation value potential in our Brazilianized portfolio of almost €30,000,000,000 that could be compared to book value of slightly below €4,000,000,000 So amazing potential left in digitalized portfolio. And if you look at the next slide, please, you will see the potential for the total delivery from building nice development the new production. And you can see, if you look at the breakdown, as you said, almost €30,000,000,000 value potential from the building rights. And then if you look at our developments for own management, you will see that We see that we will be able to deliver profits from property management or NOI of €900,000,000 almost €1,000,000,000 yearly basis. And if you just apply conservative market yields, given that I think we are Booked those at the books today at EUR 6,000,000,000, you will see that there is potential for more than doubling that value. And if you should use this, the same valuation method as some of of our competitors, then we should already have the large part of the Santelbroek. And then You see illustration for our expected profits from joint venture. So if you just the sum it up, euros 7,000,000,000 extra from developments Own management, euros 2,000,000,000 extra from joint ventures, that is €9,000,000,000 and then euros 25,000,000,000 extra from building rights that is almost €40,000,000,000 That is doubling our NIB value. So that means we have today under our own control to double our NAV value. And that is unique, both in terms of credit And I hope that the rating agencies will spend time and some time on this in comparative perspective and also follow this because we already today fulfill the criteria for 3rd class. And if you add on top of that this large value that will be delivered in the next year. Then you have an amazing low risk company with strong values that are not yet on the book. As I mentioned before, we have been guiding for this value add strategy Profit of €1,000,000,000 to €1,400,000,000 per annum, and we have over delivered here by delivering profit for the first half of twenty twenty one of EUR 1,500,000,000. Next slide, please. Just a few more years about and illustration about our position in the market. You can see that we are today outstanding leader in the Nordics. And if you put our numbers in European context, you will see that we are leader in Europe with very strong growth potential, both securing long term income from these developments and also on the way or already in short term having large value that will be transferred to our equity and our balance sheet. Next slide, please. Investments in the existing portfolio, which don't focus on sustainability. Here, we have Two targets where one is focusing on rent regulated residential where we are guiding to renovate 600 apartments. On yearly basis, for the first half of 2021, we delivered 3 75 apartments. And the second one is delivering EUR 600,000,000 in profit on yearly basis. Here also we have a highly experienced specialist team with strong relationship with the tenants to understand the needs and requirements, but also the long track record of delivering sustainable investments and strong profit. Next slide, please. On this slide, you can see that we are continue to deliver also profits from our Investment in Sustainability. And we have a vision of becoming the whole small sustainable property company by 2030. And this has been and also we especially in that we should be climate neutral by 2,030. However, given how importance of sustainability is increasing, we will probably look to update our vision with even more ambitious goals in connection to our Capital Markets Day in the autumn. Also here, as I said, we guide the earnings effect per year of EUR 600,000,000 For the first half year, we had EUR 2.33 1,000,000, that given that we have higher pace of refurbishments, we are also here in line with our goals. Next slide, please. A few words on sustainability. As I mentioned, This is core part of our business. We are having a strong vision 2,030. We will work to update it with even more ambitious calls to present in connection to our Capital Market Day. Today, we are one of the largest, if not the largest issuer of social bonds in Europe. And I'm very happy and I will always emphasize this that this summer, the summer of the pandemics that we could offer 300 young people summer jobs. That is how it should be and that is how Business community will should work together with communities to create best long term value for the shareholders and best value for this society. Next slide, please. Then concluding our 3 value add strategy with our Shell team delivering strong also this quarter. Also here, we have the We run real estate M and A team in Europe, and we have been able to both acquire at attractive levels and sell at attractive levels. Few sales that you did in Q2, we did some of those 20% over our latest valuation. And there is more to be done. And just to give you a flavor, if you look at our journey, you will see a journey with very strong presence say, in M and A market and for the first half of twenty twenty one, We did transactions for €36,300,000,000 and delivering strong growth. You see also in this market large undersupply of community service properties in the Nordics. And this is, of course, giving us additional opportunities to continue to support Nordic municipalities to deliver the best social infrastructure. As we used to say, we have like a placeholder here, estimated occurring earnings effect on yearly basis of SEK 400,000,000 on yearly basis. We have been delivered much much more than that every year since start of the business. Next slide, please. Just putting those together, as I said, SEK 6 point €5,000,000,000 in rental income from of which 98% are coming from AAA Economies and Rent regulated Redentials. On top of this, profit estimated Recurring profits from building rights development and new production of EUR 1,000,000,000 to EUR 1,400,000,000. We already all that achieved in the first half of twenty twenty one, plus profit from investments in existing portfolio 2, refurbishments and on top adding profit from value adding transaction. So this will give you understanding how we and why we are delivering the strong profit and also why we are increasing our forecast for this year. Next slide, please. Just 2 slides up and trying to summarize the main messages And starting with message highlights, We have the most stable cash flows in Europe backed by AAA countries. On top of that, we have strong growth fueled by 3 value add strategies, building rights development, new production, investments in existing portfolio and value add value add transactions. We are also a dividend company. We think that it is having, as is in our case, 100,000 shareholders is also strength of this company And that is also our dividends that are currently One count as A and B class shares, and we will also do investigation for starting to pay dividends on monthly basis after next at Sears Annual General Meeting. On the ratings, we think that we have delivered all key ratios and have a stronger both financial position and income position and are in the basic stronger growth, but the majority of triple A plus companies in Europe, and we look forward to be upgraded to triple A plus and then to continue to perform to, in the long term, achieve A-eighteen. And as I said, Sustainability is not for us something separate. It is strategic for our business model. Next slide, please. Let me summarize with few lines. And as I said before, for the full year of 2021, we are guiding for earnings per ordinary share A and B charge to be SEK 7.8. We have strong and stable cash flow backed by AAA Countries, where SBB continues to deliver strong profits, secure cash flows and high growth Profit after tax for the first half of twenty twenty one was EUR 9,300,000,000 which is an increase of 258% compared with the same period last year, 258%. And also that following strong growth from the previous year. Adjusted for nonrecurring costs for repayments of expensive loans and including deductions or payments of earnings between preferred shares, Series D shares, hybrid loans and minority interest profit for the period amounted to SEK 6 9 clouds Series A and B Shares. It is important to mention that we have paid back all of our professionals. Number 2, SPB Board has decided to investigate the possibility of multi dividend of the ordinary A and B shares from the next Annual General Meeting. They inquire its Conclusion, together with the Board's assessments of the scope for the dividend in the next year, will be presented in connection with Capital Markets Day, which is planned take place during autumn 2021. At this occasion, we will also present our update on our sustainability vision, PENNET 30, with increasing the bars own sustainability as a main issue for long term value creation. Slide number 3, All our value add strategies are performing better than guided The profits from basic rights development and new production for the half first half of twenty twenty one amounted to CHF 1,500,000,000 compared with the target of CHF 1,000,000,000 to CHF 1,400,000,000 on an annual basis. And at the end of the Q2 of 2021, SBB's portfolio of building rights amounts to 42,000 Apartments, which together with project portfolio, which means ongoing project and production And part of it in joint ventures is totaling 59,000 to other departments and makes SPB the leading residential property developer in Europe with amazing potential for value creation and long term income. To summarize, the main message, S2B's 12 months rolling on its capacity rose by 30% during last year compared with the Q2 of 2020 and amounting to SEK 3.79 per Series A and B Shares. As I mentioned before, we do see that we have a great potential for value creation. Our valuation yield is 4.34 percent in the market as the yield requirements for Our low risk assets are more often below 3%, and I should say they are more often at 2.5%, 2.75 And also that should be put in a context where our average interest rate is 1.13 percent. Our value adding strategies continue to outperform at all levels By itself, the profit from our 2 value added strategies, development of building rights, new production And investments in existing portfolio ended up at €1,700,000,000 in profit for the first half of twenty twenty one. And here, our scenario analysis shows that we have potentials for tens of 1,000,000,000 of Swedish crowns in added value from our building rights portfolio. And I mean, if you look In our report, you'll see that we have refinanced like EUR 50,000,000,000 of debt. We are running portfolio of almost 100,059,000 partners by ourselves and our associated company GM of 37,000 apartments. And we are a running company with on income on a yearly basis of SEK 6,500,000,000. So our 300 employees are doing great job, and we are ready to continue to outperform the market. I will stay there and thank you very much for listening and we can take questions. Thank you. We have the first question from Frederic Saenz from Carnegie. Please go ahead. Good morning. Yes, a few questions from my side. Starting off with property write ups in the quarter, they were rather significant at plus SEK 5,000,000,000. What proportion of that is driven by yields? And what part is cash flows? I think if you look at our strong profit coming from our Valeyard strategies and strong development in And this capacity, you can see that it is very small portion that is driven by yield. It is probably around 3%. And as I said, our valuation yield was 4.3% 4.34%, which is still very high comparative market. My second question relates to admin costs. They were high in the quarter. What was the expectation? I expected that some of that is one of cost. It is Or soon is one of cost. It is relatively Part of that is runoff cost. One cost is say that we have had strong 2 years behind us, and we have paid bonus to all our employees. We actually have bonus for all employees in SBB. And the second one is, We are still taking some transaction costs through the central administration. So that is We see that given our large pace of transaction. We increased also our cost guiding for in on its capacity for Central Administration to EUR 300,000,000. But I'm still arguing that our normalized cost in normalized environment is closer to EUR 160,000,000. So it's large part no accruing costs. Okay. And my third question relates to results from JV. They were close to SEK 400,000,000 in the first half. I acknowledge and appreciate the improved disclosure at the back of the report. But can you tell us how much in the first half is actually cash earnings that you generated and how much is related to value change? It is I mean, we are improving disclosure here and we have now published some numbers in the report. And in the Q1, we have Actually, almost everything in cash, but we will continue to increase this closure Okay. Two more questions. Regarding you've been extremely active as you have been for a number of years on How would you describe the current acquisition pipeline? Are you looking into new geographies? You think you will be as active in the second half of twenty twenty one as you were in the first half? We are focusing on healthy growth and we have been able in this quarter to improve our numbers and to strengthen than our rating key ratios, among other stuff also by selling some non core assets with 20% premium to the latest valuation. So for us, we are continuing to grow. We are working at the same time hard to increase our rating, and we feel that we will be able to combine those 2. And also given that we have a large equity outside of the balance sheet in our property portfolio. Okay. My final question relates to the investment in Nijen. What is the primary potential that you see in JF as a shareholder, but not having a budget. What is key reason for SVB and MSP? We think I mean, if you compare both GM and SPB, We both of us have a very conservative valuation of our building rights portfolio. And particularly if you compare with some of our competitors, but also if you compare to European competitors In that perspective, those building lights, both at our balance sheet and at the balance sheet are very cheap. So we see that DiEM has a strong position in the market that we know well and the market that we feel pretty confident from how to say, pretty confidently given the large potential from building rights in the central locations. Okay. Thank you, Ilya. Those were my questions. Thank you. Next Question from Simon Mortensen from DNB Markets. Please go ahead. Hi, Ine. This is Simon. I just had a few questions on my side. The earnings capacity, just wondering what is the cutoff of the transactions announced in the end of Q2? Which one is included and which one is not included. For instance, is the Riksen transaction included, which stated it's going to be settled in Q3. And is the July 6 transaction included, which stated the related three historical transaction. Just wondering where is the cutoff in the earnings capacity and which of the latest transactions are included in that guiding? Rixen is not included because it was signed All it is signed after the course that So that is I think that is probably the only transaction that is after 30th August. So the Stockholm Investors and Helsinki Transactions It's included in that guidance, if I'm correct, the July 6. Top of me is included, but Vestiros and the Helsinki Boy are part of Lixen transaction, so that is not important. Okay. And just also a question here on the JM. I just spotted there in the profit from property management, you €1,764,000,000 in the top tier. I'm just wondering what's your rationale of using that in the profitability guidance here. It seems a bit above consensus expectations actually, quite significantly. It is coming from me and we looked at last 12 months. So we are not doing any forward looking statements. It's just based on last the 4 months regime or last 12 months. Okay. My last question is the earnings guidance here 7.8%. We just look at the EPRA earnings and EPRA EPS. EPRA EPS in the quarter was down 52% year on year EPRA. EPS year to date is down 7%. I just if you could me understand how much of that earnings capacity you now or earnings guidance of €7,100,000 might actually relate to EPRA EPS and if you can put that in connection or you're going to comment on the EBITDA figures for the quarter as well, which was down 50%. Simon, as you know, you can take whatever measures, not in the business of measures. I'm in the business of delivering profit to my shareholders. So profit to my shareholders is going to be 7.8 That is our forecast for the year. And we had, for the first half of the year, SEK 5.94 per share and for the whole of the year, we are counting really SEK 8.8 per share. So I look forward to compare the numbers at the end of the year. Okay. I was just wondering if your own EPROC figures, if you had any comments on that because it was reported. But thank you. Always FX figures are having large deficiency, as you know, related where you issued the choice where you issued the hybrids, also that the income is coming. So I look I do not spend a lot of time with that stuff. I'm focusing to run the business that deliver profit And that is actually the only thing that counts at the end of the day. Okay. And do you have any date a guidance for us when we should expect the Capital Markets Day. The arm is quite long. Just excited to hear the new targets. Haven't the rates been set or when have you set it? Now we have not set the date yet. We will announce as soon as we are done. Okay. Thank you for taking my questions. Thank you. Next question from Stefaan from Nordea. Please go ahead. Yes. Hello. Thank you. First of all, nice to see that you specified the locations of your building rights. And regarding the buildings rights, the book value Stands at roughly SEK 1200 per square meter. Could you give an indication if you were to sell these building rights today, What would the market value per square meter be? I mean, as you then the value will be many times more than that. And that is one issue that we need to look going forward because we have a large equity outside of the balance sheet, which is in the building rights, but also in our production portfolio. I mean, It's not normal to build apartments in Stockholm region and having them at the book at yields of 4.5 chart or sometimes even 5%. So there is a job that we need to illustrate the large undervaluation that we have on our book assets. Thank you. And you mentioned the SPB valuation yield It's 4.34%. But you state that your assets has a model of rather below 3% if you look at Transactions. How long will it take to close the gap between your portfolio yield and market yield? I mean, I have been hoping that this The gap should be closed rather soon. And I hope that at least it will be closed in the next 6 to 8 quarters because it is a large gap And it is very easy for everyone to see the assets and also to see where the market is. And so we need to do more work on this to show our values because it is, how to say, I mean, in today's environment, if you have, as I said before, like EUR 30,000,000,000, EUR 40,000,000,000 outside of the balance sheet, those are the large numbers. So it's almost double NIV. So we need to look more at those issues. Okay. Thank you. Two more questions. You recently acquired some shares in Jan Mattson. Should we view this as Cash management or a long term investment? Yes, that is cash management. Probably some of those shares are already sold, if not all. I actually don't know that is more our team is making sure, so we make good money from our cash. And they are very I actually like that pressure because our team that is Managing this is very good. I think we have the like value of financial instruments of of in Q2 delivering profit of more than EUR 1,000,000,000. A large part of this has been cash, and they delivered some extra cash also after the end of the quarter. So that is so we always we are always very, how to say, very clear in our when the assets are long term assets and those assets we can comment like PJM. That is our long term investment. Okay. And finally, You have delivered on BBB plus So have you heard any indications from rating agencies? No, I mean, our job is to do our job to continue to deliver, to continue to strengthen our balance sheet, which we show once again. I mean, we showed through pandemics that we are having the safest real estate business in Europe, the older business in Europe having almost 100%. Land collection, we showed now that we are delivering very strong equity rise with strong profit, and at the same time, increasing value of residential part of our portfolio to be almost 50% of total portfolio. And on top of that, we also see that credit markets is reacting very positive. I mean, our bonds are traded at same level and better than BBB Flat Bonds and we are close to some BBB Plus both despite the big gap in the rating. So we hope that rating agency will do their job and we will continue to do our job. Great. Thank you, Liat. That was my questions. Thank you. Thank you. Next question from Martin Nielsen from Carlsberg. Please go ahead. Thank you. Doctor. Ljensovic. When you look at your very, I'd say cautious goal for property development profits. And I looked at Your operator, Jones, you have at least 5,000 apartments Per year on a portfolio of 20,000 that is 25%. Maybe you said that you're in percentage of presentation, but Do you think you will increase your pace in production since it comes similar signals from other property developers lately? I mean, definitely, we have already good production. The big difference is that we are not taking all of the equity the day 1, which according some newspapers, some other players are doing. So that is so I think both Our income development, we will see strong income development coming from new production. We will We also see strong value. However, we need to look at the issue that we have. As I mentioned before, very low values at our balance sheet. So that is something that we need to look at and by market with information and also to see how we can visualize and get the value to the balance sheet. Okay. Thank you. Thank you. We have one last question, which is for a moment from Oliver Pericius from Goldman Sachs International. Please go ahead. Hi, Ilija and team, and thank you very much for the presentation. Just a couple of questions on the Building Rights portfolio. And the development there, just to check that I've understood everything correctly, and I appreciate the new disclosure in the presentation. But I'm just trying to marry up Slides 910 with Page 24 of your release. And I just want to check I've interpreted things correctly. So you have your building rights portfolio is 59,000 apartments. Of those in your project portfolio, that's $7,600,000 And if you develop that $7,600 and the community services element of what is also in your project portfolio, that will correspond to an additional SEK969 1,000,000 of NOI. Is that a correct interpretation? Or have I gone wrong? Yes. Exactly. That is correct station and all you can see that is I mean, you can see where You can see where you can see estimated investment and you can see that in for this portfolio that is currently in production, there is probably an extra value of like EUR 7,000,000,000 according to my view of the market by today. So it's additional debt to EBITDA of equity, it's not that is not at the balance sheet. And that asset to investment number that you've got, I guess, the SEK 6,000,000,000 on the stuff currently under construction, Is that does that include some cost? Does that include the project you've already acquired within that? Or is that cost to come? Now this is In when I said that on this current portfolio. There is after all costs And after today's book value, there is additional €7,000,000,000 in profit than in some other companies should already have in at the balance sheet as equity. So this is very good. I mean, you are asking One of the central questions that I've been thinking about when we're together with my colleagues on the report. And then you can on top of that, you can add I mean, this cash and this equity is very visible because those projects are ongoing. And on top of that, You can have the extra value from the bidding rights portfolio where the projects are not ongoing. Okay. So that €969,000,000 what's the, I guess, time horizon to delivery of that incremental NOI to you? And what is the required CapEx at your share. This is going to be delivered in next 2 years. This is The full 969, okay. Yes, those are ongoing projects where the how to say where everything is at place and production is at place. Okay, brilliant. Thanks, Ilya. I can take anything else offline. Great. Thank you. Thank you. We don't have any more questions by phone for the moment. Ladies and gentlemen, if you wish to ask a new question by phone, you have to press We don't have any more questions by phone. We have one question that's come in writing and it's as follows. I was wondering if you could give us a bit more color on SBB aims to achieve an investment grade rating of BBB plus In the short term and of A- in the longer term, what do you see as the short term and what are the main constraints? Thank you. And we do think that we already now given the high quality of our portfolio, High exposure to residentials in AAA countries and our strong numbers and financial position and also given that we have very high rate of unencumbered assets And also according to our numbers and according to S and P's definition of net debt related to total capitalization. We do see that We have on 12 months looking forward looking net debt to total capitalization of 48%. And all those numbers are in line with having BBB plus rating. So from our view, We have delivered the key ratios that we think are important and we think that Credit market is giving us right and we will follow-up and we have to wait for rating agencies. I mean, that is a day discussion. But our discussion is to make sure that we grow healthy and that we have a strong balance sheet. And A-eighteen, I mean, given the quality of our and the uniqueness of our portfolio that has been proven through pandemics That is natural that we will strive for A minus rating. And but that is on the long term. And as you say, that is our view of this. Thank you. As there are no further questions, I would ask you, Ilija, to sum up the Q2 2021 earnings call. Thanks. Thank you, Marika. And I just want to emphasize that we are in this report increasing our forecast for the profit for year 2021 from SEK 5.15 share last quarter is 7.80 grams per share for A and B share for 2021. And we delivered strong on its capacity, strong profit and with large potential that is today outside of the balance sheet that there is large value creation there. So looking forward to follow-up on this. Thank you very much and wish you a great summer and stay safe. Thank you all.