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Sales Rate: Increased to 66% in ongoing production.
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EBIT Margin: Increased to 4% for Q1 2025.
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New Bond Issuance: SEK 960 million bond maturing in mid-2028.
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Units in Ongoing Production: Targeting 5,000 units by next year.
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Completed Unsold Units: Sold off 20% of old inventory, equal to 77 units.
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Gross Margin: Improved in the quarter.
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Net Debt: SEK 3.1 billion, stable from Q4 2024.
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Equity Asset Ratio: 41%, above the target of 30%.
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Net Project Asset Value/Net Debt: 1.4, above the target of 1.0.
Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Bonava AB (STU:66B) reported an increase in sold and started units, with a sales rate of 66%, the highest in many years.
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The company successfully renegotiated and launched a new bond of SEK960 million, extending the duration to mid-2028 and lowering financing costs.
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Bonava AB (STU:66B) is seeing strong interest in new projects, such as the Fredman project in Stockholm and the Renata project in Helsinki.
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The company reported an increase in EBIT margin to 4%, marking an important first step in their controlled growth path.
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Bonava AB (STU:66B) maintained a strong financial position with an equity asset ratio of 41%, well above the target of 30%.
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The EBIT margin of 4% is not satisfactory for long-term goals, indicating room for improvement.
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The company faced challenges with older projects in Germany, impacting IFRS EBIT due to lower margins and increased reserves.
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The market climate in Finland remains slow, with recovery lagging behind other regions.
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Completed unsold units increased due to the completion of three big projects in the Baltics, highlighting inventory management challenges.
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Net financial items were higher in the quarter, partly due to fees associated with the new green bond and FX effects from vendor loans.
Q: Can you explain how Bonava is managing today’s dynamic global environment with its decentralized organization? A: Peter Wallin, CEO, explained that being close to customers and the market is crucial for understanding and acting on changes. This approach allows Bonava to receive direct feedback from customers, subcontractors, and financiers, providing a better understanding of market conditions. The company is structured to scale up efficiently when the market improves.
Q: What is important to understand about Bonava’s use of the percentage of completion method for financial performance? A: Jon Johnsson, CFO, highlighted that the percentage of completion method allows for real-time recognition of revenues and profits, unlike the completed contracts method, which has a delay. This approach provides a more accurate reflection of current performance and supports controlled growth.
