Earnings Call: Q1 2020

Apr 27, 2020

Ladies and gentlemen, welcome to the Sam Hells Pubnaspolel Q1 Report 2020. Today, I'm pleased to present CEO, Ilija Batrien. For the first part of this call, all participants will be in a listen only mode. And afterwards, there will be a question and answer session. Speaker, please begin. Thank you very much, and welcome to presentation of Q1 for SVB. And this is the Q1, how to say, the full effect from the new SPB, including Air Force could be seen. And if you look at the main messages, the first is actually our strong financial position. At the end of the quarter, we had 50 more than EUR 50,000,000,000 in unencumbered assets, stronger bank relationship and also access to European credit market that we could show by issuing 20 years bond at late March. So we are coming into the crisis with strong cash position, but also with very strong earnings capacity with very strong earnings capacity that will be delivering strong cash during the year. So we can go to the Slide 2, please. And at the Slide 2, we are presenting our earnings capacity for thermal drilling. And you can see that just purely mathematically, we are expecting to deliver profit of EUR 3,000,000,000 or per share, ordinary plus K and B shares from property management. And on top of that, income from our other income streams, which is expected to total to close to SEK 4,000,000,000 or SEK 3.12 per ordinary A and B shares. So that is very strong profit expectations from earnings capacity. €1,400,000,000 or €1,372,000,000 which adjusted for nonrecurring costs relating to transactions, refinancing and the repurchase of the bonds amount to €1,500,000,000 which is strong increase compared to the corresponding quarter of the previous year. I will comment later on this onetime costs related to the handfuls of transaction. Important thing there is that we have to take almost all transactions cost through P and L, which is, how to say, affecting profit from property management negatively and increasing unrealized value changes. And our strong net operating income is important message from this report. Net operating income increased year on year with 2 73 percent to 8 95,000,000. And also, where we deliver a strong margin of 67%, which is the increase with 11 percent during its in relation to the last year. And finally, this is, of course, affecting cash flow. So our cash flow adjusted for Nordic drilling cost amounted to EUR591 1,000,000. Also that very strong increase in relation to the last year. Next slide, please. Our income is £9 of £10 coming from the board's most creditworthy counterparts from Swedish, Norwegian governments and from Swedish and regulated Revolutions. And you can see that we have income on this capacity of EUR 5,200,000,000 and of which 88% is coming from government direct or indirect or from Swedish and regulatory residentials. And the other message here is the same as always. We are long term partner to municipalities. And we have, as I will show forward implementation, also in those time, I And in those times, we have probably one of the most secured income in the space. Of our income, like 1% or even below that is affected by the coronavirus crisis. And we have seen despite that we have a low exposure, humble and trying to help those that are exposed. And that is why we are counting to have deferred payments or change the timing for the payments of SEK 12,000,000 and are giving the support to those who need EUR 1,000,000 in discount. So that is less than 1% of our total income. Next slide, please. Financial performance, as you can see, very strong increase in rental income, drawn EUR 453,000,000 to €1,341,000,000 particularly strong increase in net operating income, and this is slightly affected also downwards by, I would say, catastrophic developments of the Norwegian crown. And this is really strong message from this report, increased margins and net operating income that is beating even my expectations. So I'm really happy that we can integrate property management in the way that we are doing and that we can deliver the strong NOI. If you look at Airplane IV that is in our report presented according to new EPRA definitions, we are landed at EUR 24 800,000,000, which is slightly less at the end of the year. And the main reason for that is changes in Norwegian Cloud. However, we feel comfortable to continue to believe also in increasing NAV as our message to the market that we will be the company that is performing the highest increase in NIB. 2019, 2021 is firm. And if you want guiding, that is foreign guiding. So we feel pretty comfortable with that. Increasing equity ratio and loan to value slightly affected by the rest of paying the rest of Hemphousa. However, when we look at when we look at our assessment where we are in 2020, we still feel comfortable on our way to triple B plus within the next 12 months, which is our goal. And finally, probably the most important for our shareholders that we deliver strong earnings per ordinary share of Plastics A and B of SEK 0.94 per share, which is like almost 5 times compared to the last year when we had SEK 0.2 per share. Next slide, please. Concerning our business, 94% of the portfolio value social infrastructure with 77% community service property and 17% Swedish and regulated residential, strong and the increased presence in the largest city in the Nordics, 66% of total property value is in the largest cities in the Nordics. Next slide, please. More in detail concerning portfolio, €61,500,000,000 elderly care homes, schools, LFS housing and municipal government buildings, 17% rent regulated in Malmo region by buying from the municipality of Schellinger, which is fast growing part of the Malne region and our property development, which is within this other segment of EUR 5,200,000,000 is continuing to deliver and also delivering cash flow properties in the property management, property management portfolio. Next slide, please. We still do think that it is important, which is to repeat every time what kind of underlying megatrends are shaping our growth and are shaping outlook for our company. Demographic change is an important one and also connected to organization. And we feel pretty comfortable that those trends will continue also in post corona board. And in corona or in pandemic world, I should say that sustainability is even more important than ever. And we are in a report showing that we are continuing to invest in energy efficiency. We delivered strong decrease in and now we can actually in this report present the first results from that show that we are delivering strong decrease in CO2 emissions, but we also invest in social sustainability that is very important in those days. We founded, together with Narsos Economo, Food For Heroes that, up to date, has delivered 7,000 meals to people in need, together with Stockholm Stas mission and the Salvation Army delivering food to the elderly. We are also delivering food to the 2 hospitals in Stockholm and at the same time also trying to support our municipalities through the crisis, We order we order the respirators masks to municipality of food. And they are also in through different initiatives supporting small businesses in our municipalities. But even more important, we continue to invest. During the quarter, we invested CHF 380,000,000 in that way, saving jobs and supporting growth in our municipalities. Next slide, please. Our property development is doing a great job, And you will see a report now when we have portfolio of 1,800,000,000 square meters, which is like 25,000 apartments that we also come through the quarter. In the quarter, we delivered from our building rights cash flow properties in our portfolio. And we will see more of that going forward. And that is why we, in the report, do some scenario analysis to give you a flavor concerning value creation potentially in our portfolio. And just to mention, few ongoing projects, we are working the rebuilding of City Hall of Municipality of Niqua with 25 years new lease. We are next year in Q2 next year expecting to have our delivering new delivering new buildings for social services in city of Estero with 15 years lease. Also in municipality, one of the topmost municipalities, municipality of having, we are expecting to deliver 73 years needs in school and 10 years needs of elderly care home. And at the same time, in the pipeline, 6 new group housing units for free play in disability, and all of those will be on 15 years leads. So we are going to see strong inflow of cash from our building rights, but also strong improve for long leases coming from our property development portfolio. Next slide, please. To summarize, as I said before, the important message that we are, despite the times, delivering strong profit after tax per ordinary share of perhaps A and D of GBP0.94 per share, which is almost 5 times last year's GBP0.2. Euros And our earnings capacity amounted for profit management amounted to €2,900,000,000 at the end of Q1. And if we look at the change in relation to the last year adjusted for our cash position, we can see increase of 2 74% year on year. And as we said before, also on this capacity is slightly affected by development in Norwegian town, which is which has affected more our net asset value and also in that way, affecting netra NIB per share that is landed at 19.52 per ordinary A and B plus A and B Shares as of the Q1. Profit before tax, euros 1,700,000,000 and after the tax, euros 1,400,000,000 and adjusted for nonrecurring costs for repayment of expensive loans and also deductions for profit paid to preferred shares, B shares and hybrid loans. We have net earnings, adjusted net earnings for the year of Important message from the report, as I said before, that we are continue to build strong cash flow machine with our cable platform, and that can be very clean from our NOI development where we are delivering margins of 67% and NOI of €895,000,000 And you can see that our cash flow is increasing with 300 cash flow from operation increasing with 3 58 percent before EUR 44,000,000 or adjusted for nonrecurring costs to EUR 5 91,000,000. And we see still continuing strong increase in cash flows going forward. Our portfolio with the building rights of 1,820,000 square meters, as I mentioned before, is going to continue to deliver both in terms of cash flow, in terms of the building rights that have been sold before, but also in terms of delivering new cash flow properties with long leases to our property, to our property management. And you can see from the report, from the scenario analysis, they show that we have strong value potential that is much, much higher than the valuation of the books in our property development portfolio. Sustainability, we focus to be 100% climate neutral by 2,030. And in the report, we show that investments within our Green Box framework already have proven significant reductions in energy consumption and carbon dioxide emissions. In those times, social sustainability, probably very important. And as I mentioned before, we initiated collaboration with so called Stadz Vision during the Q1 to help mitigate the consequences of the spread of COVID-nineteen. We also found Food for Heroes together with National Seconema. And Food for Heroes has been now delivered almost or probably by today more than 7,000 meals together with Stockholm, South Asian and Malaysia, Ireland. And we are also supporting our municipalities both by making sure that our social infrastructure properties are working well. We have a contingency plan in place and are good support for the municipalities, but we also are helping in other ways, among others, by ordering respiratory masks for health care workers in order to make them safe. And probably even more important in long term term is that we are continuing with all investments, and we are holding our promises, including also our promise to our shareholders, to pay the dividend. And through different initiatives, we are helping to mitigate the negative consequences for the groups that are most affected of COVID-nineteen, which are elderly, small businesses and health workers. And the point number 5, as I mentioned in the introduction, we have strong financial position, more than EUR 50,000,000,000 in unencumbered assets, strong bank relationship, and we see strong access to European credit markets. And our focus is not changed. We are continuing to work to achieve CKB plus rating within 12 months. And that we see as a prerequisite for strong growth. And in the long term, the goal is to achieve an A rating. And this is important if you compare us with our peers, HEMSA and Wixen, but both are the rating in public in public rating category. We have much, much, much stronger key ratios without I mean, without comparison. Please just put those in the table so you will see. And we think that we have even today stronger property portfolio, higher quality and still there is an unjust difference in rating. And we will work hard to show this for investors. We will work hard with rating agency. Ask to get independent study of this because this is not fair. And we have to do work here to inform the market. We have one of the strongest balance sheets if you look at the unencumbered assets, if you look at our credit quality, at our sales income in the Nordics and in Northern Europe. I'm just looking at, for example, the Deutsche Woham and the companies that have problems in Germany with future rents and so on. So we have to do the work to inform the market to get the right peers and to get the right comparison and to not be compared with the commercial real estate, which we are not part of. And finally, we have had a very clear message that for the period 2019, 2021, our assessment is that we will be able to deliver the highest annual increase in net asset value among all Swedish listed property companies. And we feel pretty firm on that. This will be underpinned by strong potential from organic growth and high NOI markets. And as I mentioned in introductions to Q1, NOI margin was 67%, which is 11% in units higher than the NOI margin for Q1 2019. And this is also higher than our earnings capacity. And I'm writing finally in because in those times, many companies are afraid to give the guidance. But we have a strong financial position. We are humble, but we are not afraid. We continue to work. And as I'm writing in the output session, given the profits for the Q1 and given our earnings capacity, just mathematically, we see that we will be able to have total earnings capacity for the 20 like 3.28 krones per ordinary A and B shares. I will stop there. And please come with questions. Thank you. Next slide, final Our first question comes from the line of Simon Mortensen from DNB Markets. Please go ahead. Hi, Liam. This is Simon from DNB. I have a few questions actually. First of all, congratulations to the solid report. Just in terms of the rental income, I see in the quarter, it's roughly €50,000,000 higher than what you can read off your earnings capacity. The reported rent in the quarter is actually higher than the rental capacity figures. Is there anything behind that, roughly 50,000,000? Yes. And the main reason there is, I mean, as I said, is that we we see that we are negotiating new leases, and we are also being able to move some of the properties from building rights to some of the properties from building rights to property portfolio. So that is mainly in this organic growth. Yes. But why is the SEK 50,000,000 higher in Q1 than the earnings capacity guidance we just Our earnings capacity, Simon, is just pure mathematics. We do not have any rent increases, and we do not have any properties that we know that we have new leases for. And we are very conservative in our earnings capacity. So that is on leases. Okay. Can you also comment on the quarterly increase in the vacancy? You can see roughly about 90 basis points Q on Q. Can you tell us a bit what's behind that? That is the reason for that is that we have been going to continue to invest. And so that is the main reason. And 0.1 percent is Norwegian krone because in Norway, we have, I would say, much higher markets. Okay. Higher occupancy in Norway and one of the worst things I would say in the world? In Sweden, we have the Swedish regulated residential services that we use for refurbishments. Selling. You see that we have also the property development portfolio that when we get when we see a facility to do the subject and then we see, of course, we see, of course, we use that by letting tenants leave in order to have income from increased income when the property is refurbished. Okay. To follow-up on the sense of wait and season stuff, I've read several times in media, I look here in Norway that Oslo met, which clearly did not, despite of our negotiation, extend the lease with you. And it seems to be there'd be a legal dispute between you and the tenant. Can you please give us an update on the status there? We feel that we have right and our property management in Norway feel that also that has to fulfill their obligations. So we feel pretty confident about it. Yes, but what's behind? Because it seems to not be a tenant and you claiming What's the legal case is about? That is we just want to discuss our tenants outside of the direct discussion, but we feel that, that will be done in that is long story from helpful time, but we feel that we will find great solution, and we feel confident with our case. But it seems NOK 6 40,000,000 is in dispute. So quite significant amount, so you don't care to give us any more detail? That is not significant amount for us. That is dealt by the local team in Norway. And we still own the property, and we will not comment our tenants outside of the direct discussion. Okay. In terms of the table tax in the quarter, I also note that in the report, it's €48,000,000 Based on earnings profit from rental operations, it amounts to up to a 15% cable tax ratio. Could you give us a give us a give the detail on the cable tax and what to expect in terms of payable tax ratios? In long term, we are expecting to have people tax around 10%. And that is still our expectation. However, after the acquisition transaction, we will, during the year, do even more analysis on that. But we have not changed our view where we should be. Okay. Just also to follow-up a bit more. I'm sorry to take so much time. But in terms of your earnings guidance, you guide in terms of financing €736,000,000 However, when you look into the Q1, we see despite those extra charges, you're at €292,000,000 which is quite significantly different in terms of financing costs. Could you give us a clarification of what's behind? And what's the difference between the figures we saw in Q1 as a financing cost and those costs you guide in the earnings capacity. Our guidance is pretty, how to say, pretty mathematic, and it's our to say it is 1.52 percent at the end of the quarter, and then the rest is not. However, we came in Q1 with a relatively high interest rate from the Hernfuser transaction and also some additional costs from that transaction. So and then we did large bond issuances in order to repay bank debt. And then we have some overlapping there. So we have also probably some nonrecurring costs also in that number. But we think that we had strong reports, so we didn't invest any more time to explain that. So the message there is that we feel pretty confident with our earnings capacity. And to just to try to sum up for now. Just to note, there's a very solid value uplift in the quarter. Could you tell us where and what kind of assets we found this one? And also how that value uplift can be seen in relation to new FUSA not wanting to step up in the LOI? And just to help us understand where has the value increased then and how we can see this in the association with Nifusa not stepping into the better of intent. Impact? There is no association at all concerning valuing. It's very easy. That you could conclude that our income is like EUR 50,000,000 higher than earnings capacity. And that is, of course, explaining the value changes. And then we also have some I mean, some of the costs that we had in the quarter, P and L should be in value changes because the way how the Refusa transaction was classified. So but the main reason is that we have much higher income that we had in Q4 bonus capacity, and that is, of course, expressed in Baruche. Concerning me for the transaction, we stopped Nifuza transaction on 21st January when Nifusa didn't succeed to fund the equity for those actions. And there is we have been very clear that we will continue to sell some properties, but we are not going to sell in big pieces because we see that we will make more money by selling assets by us. Just to clarify, you said MiFUSA didn't exceed and have enough equity to step inside you stop the deal, just to clarify. That was what you said. That is very clear, Stephen. Okay. Just one question on the China. In terms of currency exposure and financing, first of all, the net debt increase of SEK 5,600,000,000. It includes the hybrids and everything, you're almost at SEK 9.7 percent. We noticed a lot of your debt is in euros. Perhaps, how is your euro debt exposure in total? And how has that been accounted in terms of writing the net debt versus the asset values? What is your debt exposure in euros and your asset value exposure in Europe? First, we do not include the hybrids because the hybrids within the hybrid as our equity. And the second here is that we feel pretty confident to have exposure in liquid market, which Euro East to compare with Swedish crowns or Norwegian crowns. So that is our strategic choice. And right now, our exposure to euro that is not matched with assets is around €700,000,000 And we are following that closely and using hedging in order to safeguard parts of that. And that is why we are reporting some unrealized losses through P and L. So I assume but how is that hedging being done? Just to clarify, so you will have realized financial cost when there's currency movements and financial gains exactly in the other way in terms of 0 exposure? And just help us understand the financing costs versus the of the hedging in the analogy. Can you give us some detail? Concerning the Norwegian town, And we see the Swedish ground as our exposure to our shareholders. And we hedge euros by FX form as because that is from our perspective because we are growing company. We are going to grow our property portfolio in both Finland and Denmark, and that is why we use the instruments that we use. Okay. But how long is your fixing energy? Just to clarify. We are rolling FX forward on 3 months basis or so that is how we are doing our hedging. And we are we feel pretty confident in that. Okay. So what is the unrealized loss in FX like in Q1? It is reported affecting the profit of €130,000,000 in 1,000,000 in Cuba. Okay. I'll let the line go now. Thank you for taking my questions. And the next question comes from the line of Philippe Albers from Danske Bank. Please go ahead. Yes. Hi. I only have two questions here. So maybe I missed this during your presentation, but in your earnings capacity, the financial income is up 75% quarter on quarter. Could you just elaborate a bit on what is included in the financial income and what is behind the large increase quarter on quarter? We are the income because we have strong cash position. And we are, among others, lending money to our joint ventures working through them in Norway. So that is the main reason. Okay. Thank you. And could you just give any figures like how much have you lended out to your joint venture in this quarter? And is it long term loans or No, it is I mean, we prefer to in the we have been building strong cash position during the long time, and that is one of the reasons why we are placing the cash because at the end of the quarter, we have EUR 3,800,000,000 in the cash position. And as I said in I see that the cash is king not only under the pandemic. So and particularly when the times are shaky, it is for us efficient way to place the cash in different in this case, in our joint ventures that have strong cash flow both in Finland and Norway. So we had like EUR 1,300,000,000 in total shareholder loans, I think. Okay. But so it's only like interest expenses from the JVs that come in as financial income for you guys? You don't include like your shares in, for instance, SSM or anything like that? No. There is no cash coming. It's just real cash that we include. Okay. And another question regarding your earnings capacity. If we look quarter to quarter, you have managed to realize roughly EUR 170,000,000 out of the communicated EUR 300,000,000 in synergies from the Hempos acquisition. Could you just give some flavor regarding the remaining €130,000,000? Is it still on the financing side you expect those synergies to realize? Or is it mixed between several lines in the P and L? Just to know what we should calculate with here. Yes. That is from financing, we do have we have done SEK 170,000,000, and we still have 70,000,000 from financing and or SEK 90,000,000 from financing and SEK 40,000,000 from operations. So that is what it is EUR 130,000,000 because we announced that we beat SEK 170,000,000 already in February. Yes, exactly. Those were the pay down debt, right? Okay. Thank you. Those were my questions. Thank you. Thank you. And the next question comes from the line of Jan Neufeld from Kepler Cheuvreux. Please go ahead. Okay. Jan Neufeld. Yes, I have actually three questions. The first one is actually going back to the first question. And I didn't get the answer there to why the financial costs were approximately €50,000,000 higher than what was indicated in the earning capacity for Q4. Was it some nonrecurring items in this EUR 50,000,000? Or could you just explain a little more into detail? Yes. There is still nonrecurring items left in those SEK 250,000,000. Some fees from within Hemfusen portfolio, and that is part of that. And then this overlapping by we first issued the debt and then we repaid the debt. And that is also part of explanation because as you remember, we announced that we want to decrease because Herfusser was us fully banked, financed and had a relatively low level of funding capital assets, and we do not like that. So we have been working hard to repay a large part of bank debt. And in order to do that, we first had to I'll say, we first issued the debt in order to be on the safe side of the island and then we repaid the debt. And then there is also a small effect from Europe because Europe topped at the end of the quarter. So that is also affecting slightly. But it's the main reason is overlapping of debt because we did large repayment. If you look at you will see that we have repaid like EUR 13,000,000,000, EUR 14,000,000,000 of debt in Q1, which is a very large amount. Okay. So a very large portion of this €50,000,000 has more or less treated as nonrecurring. That is my view that the largest portion of that is Nordic Europe. Okay, thanks. And second question also regards to your financial net and you stated in the report that your average interest rate was 1.52%. And looking forward and looking at your maturities, what you can get on the market, etcetera, etcetera. How do you think your average interest rate will develop going forward? We are going to decrease to continue to decrease our other interest rate the crisis. So you think you will see a lower average interest rate at the end of December than you have now? Absolutely. Okay. And my third question really relates to your property revaluations. And could you give us a split of how much was cash flow driven and how was yield driven is the portion split. I should say that it is more than 70% cash flow driven. And then you have 8% or 5%, which is coming from the building rights. And the building rights are actually also affecting the cash flow because some building rights are leaving building rights and coming in property portfolios. So it's a relatively small part of this EUR 1,600,000,000 that is coming from the yields. It's mainly cash flow driven. And that is also why we are presenting strong rental income, much stronger than earnings capacity. And also, final question, if I may, and also regarding your property value assets. How if you split that reevaluation into your old portfolio, the SVB portfolio and the new handfuls of portfolio, where the main property evaluations made in the old KEMPUs? Main part is coming from KEMPUs and portfolio and coming from higher income than having in the valuation by Q4. Okay. That's my question. Thanks. Thank you. And the next question comes from the line of Batya Ninsen from Call Square. Please go ahead. Hi. My question has parking been taken already, but I can give a take a follow-up on the market property market and valuation scenario. I interpret your answer that you see that portfolios property portfolios will be discounted for the while when you sell small assets at the same And if you look at Right, not discounting. We are selling properties at higher levels than the book, and we are selling properties at higher levels when we sell property by property. That's the level that has been agreed with Nifusa. Okay. Okay. Sure. Do you see any effect on or do you see it like several other parties in the market being affected by this new situation on the financing side. But there will be opportunities to buy more. It's very important. As I said in my introduction, we need to do the work to inform the market and concerning differences, market and concerning differences and the category where we should be both rated and seen and the commercial real estate. And there is still very strong demand for our assets. And also are still the most looked after us yet. So we do not see any, how to say, it is very difficult to buy this kind of assets, and we see that the transactions that are presenting are often targeting this kind of low risk assets. And the building rights portfolio will not be much affected by this? No, because we value our building rights relatively low before. And we actually still we sold we have been the only company that has been selling building rights also when the condo crisis started, and we still sell the building rights. However, the crisis creates opportunities for us to get good prices and to get entrepreneurs that can guarantee the construction cost. So we will probably get properties from our building rights in our portfolios with value upside. So there is an opportunity for us that we are that we saw already before the COVID-nineteen crisis and hired a guy that has been carrying Weidicus 1 of Weidicus Construction teams but has evolved together with us before at 3x. So we are strengthening team there in order to continue to deliver strong organic growth. Okay. Thank you. Thank you. And the next question comes from the line of Tobias Kai from ABG. Please go ahead. Yes. Thank you. My first question is regarding your income for Q2. You're right that you have discounts of EUR 1,000,000 and changed or postponed payments for EUR 12,000,000. Does that mean that you have already received 99% of income contracted for Q2? Or do you have other late payments where you don't see any risk in? We don't have any other exposure. And this exposure is actually we are making space. I think up to date, we have SEK 400,000 in discounts, so CHF446,000 in discounts. But we reserved to have €1,000,000 and of those deferrals are right now 6.6% active. And the others are those that we are expecting that we may help. So that is how to say, that is our maximum exposure as we see it. Okay. And regarding your gearing, you're right to have 50% net debt to total assets. But if we include the hybrid, you are at 55.5% or if we include 50% of the hybrid. What level do you need to keep your current rating? And what level would you need to reach to get to the BBB plus rating? And also, how do rating companies view the goodwill position? Do they deduct for that or not? We have, in our rating focus, focusing on S and P's view. And according to S and P, we need to be below debt to debt respectively below 55% in order to achieve it to be flat and below 50% in order to achieve BBB plus given our high quality assets. And we feel confident on our way and we focus to achieve BBB plus So there's not been any changes. And do we have standard and post, do they not deduct for the goodwill in the cancellation? They calculate on the calculation is based on so they calculate on equity adjust equity for the hybrid and then adjust debt for the hybrid and then the quote is debt to equity and in that way indirectly good release account. Okay. Thank you for taking my questions. And the last question is a follow-up question from the line of Svein Mortensen from GMV. Please go ahead. Yes. Hi, Helene. Just my question again. I read in the report that you have some realized negative property changes of SEK 60,000,000, which means that you have sold property below book values, if I'm correct. Can you just tell us what's behind That is value of the fair tax. Thank you. And as there are no further questions, I'll hand it back to the speaker. We have received 2 questions by email as well. So the first one comes from Michael Kardashian. He's got 2 questions. Can you talk about your liquidity situation? Cash on hand is small. Cash on hand is SEK 3,800,000,000. Also, how do you plan to stabilize your BBB-1 rating? Are disposals impacted by the environment? Could you please repeat? Sure. Also, how do you plan to stabilize your BBB- rating? Are disposals impacted by the environment? We are not trying to stabilize our BBB-eighteen. We are going to get BBB plus eighteen, and we are continuing to dispose as we announced before. 3rd question, why is adjusted LTV so high at 6% to 7%? Adjusted LTV defined as net debt plus 50% hybrid over the investment portfolio. And that is because that is you can always count in the way you want to count. Our net LTV is 50% that we present in the report. And on top of the ownership of direct ownership of the properties, we have also indirect ownership that is not a guarantee in that measure. Thank you. The next question comes from Sakur Lapseed from Merian Global Investors. Just to better understand how you're planning on paying back your commercial paper program, could you give a bit more color on the backup facilities themselves? And if you would consider issuing further unsecured debt in order to buff your liquidity position? We have strong liquidity position of EUR 3,800,000,000 and on top of that, EUR 7,000,000,000 dollars in back up facilities, and which is almost 2 times our commercial papers. We actually issued commercial papers last week. So we feel pretty confident with our liquidity position. Thank you. Great. So I'll hand over to Ilya for some closing words. Great. Thank you very much. And I can just close with actually the latest question that in those times are very important, just emphasizing that we have strongly finished position of EUR 3,800,000,000 in cash. We have EUR 7,000,000,000 in credit lines. We have more than SEK 50,000,000,000 in unencumbered assets and very strong bank relationship in the Nordics and strong inflow of cash during the year, both from earnings capacity, if you look like EUR 2,500,000,000 but also from the building rights that have been sold before. So we feel both humble given the situation for our society, but also pretty confident to continue to deliver shareholder value and value to our bond investors. Thank you very much. This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.