Kaldalón hf.: Financial Statements 2024

Kaldalón hf. Annual Financial Statements Approved by the Board on March 7, 2024.

 Kaldalón Reports Best Financial Performance to Date

• Profit before tax: ISK 4.311 million
• Return on equity: 14% on an annual basis
• Investment properties: Increased by 27% year-over-year
• Operating profit: Up by 43%, while rental income grew by 40% year-over-year
• Net Operating Income margin: 79%
• Cash flow from operations: More than doubled year-over-year

Investments and Financing

• Total investments: ISK 11,6 billion in 2024
• Bond issuance: ISK 9 billion in listed bonds issued during the year
• Green financing framework: Finalized in 2024
• Debt structure at year-end:
  • 81% of interest-bearing debt was part of the company’s general secured financing framework
  • Three-quarters of debt was inflation-linked
  • Over 60% of debt was prepayable without restrictions

^{All amounts are in million ISK unless otherwise stated..}

Jón Þór Gunnarsson, CEO of Kaldalón hf.

^"The company's operations and development align with the strategy and plans presented to investors in recent years. Revenue growth reached 40% year-over-year, or approximately 33% above inflation. Operating income increased proportionally more than operating expenses. Operating profit before fair value adjustments grew by 43% year-over-year, despite costs incurred due to transactions that did not materialize in the first half of the year.

Kaldalón maintains a strong, inflation-indexed revenue stream, with a weighted average lease term of approximately 10 years.

In 2024, Kaldalón invested ISK 11.6 billion in asset development, including new properties and portfolios, in line with its strategic focus. The company’s revenue growth in 2024 is primarily driven by prior year investments, which are now generating income throughout the year. Similarly, the majority of 2024 investments were made in the final quarter of the year and will become revenue-generating in 2025.

Kaldalón prioritizes profitability and efficiency in its operations. All investments made during the year reflect this commitment, ensuring the optimal use of capital entrusted to the company by shareholders and lenders. In the first half of the year, there was a clear pricing imbalance between commercial real estate in the general market and publicly listed real estate companies. This made it challenging to invest in properties in line with shareholder return expectations, making the achievement of growth targets in 2024 particularly satisfying. Kaldalón’s management now considers market conditions to have improved, presenting better opportunities for long-term profitable transactions.

As a young company, one of Kaldalón’s primary objectives is to become a recognized and regular issuer in the bond market. In 2024, the company issued two inflation-linked bond series in addition to commercial papers. Alongside increased financing with listed market bonds, the company continues to utilize bank financing for debt management and funding purposes. This approach will remain in place. On the liability side of the balance sheet, there are significant opportunities for refinancing. The company’s interest expenses would be nearly one-third lower if all prepayable debt were refinanced at the company's average listed market bond financing rates—equating to approximately ISK 800 million annually.

Demand for the company’s rental properties remains strong. At the end of 2024, Kaldalón had virtually no vacant rental space available. Consequently, the company undertook the development of three buildings during the year, designed to accommodate warehousing, industrial, or service-related operations. Construction progressed well, and the properties were delivered in the latter half of 2024. Leasing activity has been successful, prompting the company to acquire additional plots for further development to meet customer demand.

The company delivered strong performance and results for the year. The interest rate environment of recent years has undoubtedly influenced Kaldalón’s operating landscape. However, I believe the company's long-term outlook remains positive. We will continue to execute on our strategic vision, expanding our property portfolio to support the needs of the Icelandic business sector.^"

Sustainability

For the first time, the company has published an environmental report and environmental accounting, in addition to integrating non-financial information into its annual financial statements. The annual and sustainability report will be published ahead of the company’s annual general meeting. Data collection from recent years will be incorporated into the company’s environmental goals. The company completed a double materiality assessment during the year and is preparing its reporting framework based on this assessment for 2025.

The company issued a green financing framework during the year and obtained environmental certification for two properties. This effort will continue in 2025.

2024 Financial Statements

The board of directors' and CEO’s report can be found in the company’s financial statements. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

2025 Outlook

The company’s outlook for 2025 is positive. Kaldalón anticipates operating revenues to range between ISK 5,350 – 5,550 million, with operating profit expected to amount to ISK 4,200 – 4,350 million. This forecast assumes a 3.5% year-over-year increase in price levels and a comparable occupancy rate.

The above forecast does not account for revenues from new investments made in 2025; any such planned investments would be in addition to these projections.

Presentation of the Financial Statements

Alongside the financial results, an investor presentation will be held on Friday, March 7, at 16:00 at Grand Hotel, Sigtún 28, Reykjavik, Iceland. The meeting will cover the company’s operations during the period, the annual financial results, and future prospects.

The financial statements and investor presentation are available at kaldalon.is/fjarfestar in Icelandic.

The annual report will be published ahead of the company’s annual general meeting on April 3.

Further Information

Jón Þór Gunnarsson, CEO,

Attachments