Kungsleden lifts 2011 dividend on better-than-expected results

Swedish listed property group Kungsleden is to raise its full-year 2011 dividend by 30% year-on-year after posting better-than-expected results of SEK 703 mln (EUR 80 mln) in 2011.

In a statement on Thursday, the company said it is proposing to pay out SEK 2.6 per share in 2011, compared to SEK 2 a share in 2010. For 2012, the company expects a lower profit of SEK 600 mln. 'I am viewing the transaction market for the coming year with some confidence, even if volumes do prove to be somewhat lower than 2011,' said CEO Thomas Erséus.

Profit before tax halved to SEK 373 mln in the fourth quarter of 2011 from SEK 781 in the same 2010 period, as a result of a drop in the value of financial instruments of SEK 127 mln.

In the 12 months ended December 31, Kungsleden reported a 25% increase in net sales to SEK 2.8 bn, from SEK 2.3 bn a year before. Cash flow from operating activities stood at SEK 666 mln, versus SEK 510 mln in 2010.

Kungsleden, which owns a portfolio valued at SEK 26 bn, was able to increase the average yield on its assets to 7.2% in 2011 from 6.4% a year before. The result was mostly driven by active portfolio management with acquisitions of higher-yielding assets worth SEK 4.8 bn in 2011.

Kungsleden has already refinanced half of its maturities for 2012 by signing a new syndicated loan of SEK 4.5 bn in January. 'Higher borrowing costs as a result of more stringent regulation are another reason for us to work more on extending our funding sources,' commented Erséus.