Annual report
2022
KMC Properties ASA
Jackon Insulation (part of Bewi ASA):
Provider of building insulations systems
mainly towards the Norwegian market.
Contents
About KMC Properties .................................................... 3
Our business .................................................................. 4
Letter from the CEO ...................................................... 10
Executive management .................................................14
Board of directors ..........................................................16
ESG report .....................................................................18
Corporate governance .................................................. 30
Board of directors’ report ...............................................37
Financial statements ..................................................... 48
Consolidated financial statements ................................................ 50
Notes to the consolidated financial statements .............................54
Statement of comprehensive income – KMC Properties ASA .......82
Notes to the financial statements – KMC Properties ASA ............ 86
Property portfolio .......................................................... 98
Appendix ..................................................................... 100
Annual report 2022
|
KMC Properties2 About KMC Properties
e preferred real estate
partner for logistic and
industrial companies
■ Real estate company focusing on high-yield logistics and
industrial properties
■ Long lease agreements with solid counterparties, at strategic
locations for the tenants
■ Portfolio of 61 industrial properties in the Nordics and the
Netherlands with a gross value of NOK 5.4 billion, 35 per cent
increase in 2022
■ Two largest tenants, accounting for 63 per cent of net income,
are the listed packing and insulation company BEWI ASA,
majority-owned by the Bekken family, and Insula AS, a leading
Nordic seafood company owned by Kverva/ the Witzøe family
■ Portfolio of ~526 000 gross square meters rentable area
Net operating
income (NOK)
270
million
EPRA Net
Initial Yield
6.9
per cent
Porfolio value
(NOK)
5.4
billion
WAULT
~11.0
years
EPRA LTV
~56.2
per cent
KMC Properties
|
Annual report 2022 3About KMC Properties
PSW Technology (part of Scana ASA): Providing complete lifecycle
services towards specialised well equipment and offshore wind
installations. Subsea and yard facilities located at Mongstad Base.
Annual report 2022
|
KMC Properties4 Our business
KMC Properties ASA is a real estate company whose business strategy is to invest in
high-yield industrial and logistical properties, primarily in the light industry and warehouse
segment.
The company has a diversified portfolio of properties in the
Nordics and the Netherlands. The company’s vision is to be
a leading real estate partner known for quality, innovation and
supporting its tenants. Managing sustainable risks and oppor-
tunities is fundamental in achieving this vision, creating value
for the society, and generating returns for investors. KMC Prop-
erties mainly enters triple net bare-house lease agreements
whereby maintenance, insurance and property tax are covered
by the tenant.
Business model
KMC Properties’ business model aims at creating accretive and
durable values, with a clear focus on profitability. The com-
pany has an overall long-term objective to generate a maxi-
mum risk-adjusted sustainable return on invested capital. KMC
Properties is focusing on the following pillars of value creation:
■ High cash-flow from company operations
■ Long-term sustainable return
■ A clear focus on environmental, social and governance
(ESG) issues in all aspects of the company’s
operations Growth through investments in current
portfolio and proactive property management
■ Growth through strategical new acquisitions
■ Growth through building new facilities for new and existing
clients
Investment strategy
KMC Properties invests primarily in industrial and warehouse
properties due to the segment’s high returns, long lease agree-
ments and stable occupancy rates.
The company will invest in new properties with existing and new
tenants, as well as in upgrading of existing properties. KMC
Properties aims to collaborate closely with its tenants to be their
preferred real estate partner.
The investments increase the company’s cash flow and con-
tributes to diversifying the company’s property portfolio, hence
reducing the company’s operational and financial risks. All
investments are made with a focus on creating long-term value
for investors and tenants.
Financing strategy
Currently, KMC Properties finances its operations through com-
mon equity, a senior secured bond loan, bank loans, a revolving
credit facility and retained cash from operations. The company
wish to be a recurring issuer in the bond market.
Going forward, the company will focus on minimising the financ-
ing cost while still creating growth and basis for dividend.
Strategy for tenants
KMC Properties endeavours to attract a solid and creditwor-
thy base of market leading companies with satisfactory track
records and history, and with a significant focus on ESG.
The company mainly enters triple net bare house contracts
whereby maintenance, insurance and property tax are covered
by the tenant. The contracts have a long-term lease, and the
properties are considered strategically important for the ten-
ant’s business.
The company seeks to achieve a good and long-term relation-
ship with the tenants, with clear business benefits for both par-
ties.
Strategy for the rental market
KMC Properties invests primarily in properties which is business
critical for the tenants. The risk of a decline in the occupancy
rate and rent levels due to a weaker rental market is regarded
as relatively low due to the solidity of the tenants, the long-term
rental contracts, and the strategically importance of the loca-
tion of the properties.
Business concept
KMC Properties
|
Annual report 2022 5Our business
Contract extensions and investments in current
portfolio
KMC Properties is continuously working with its tenants on con-
tract renewals and/or extensions, as well as in discussions on
potential development investments in its current portfolio.
KMC Properties maintains a close relationship with its tenants
to identify and actively engage in business development activ-
ities. The company has several ongoing projects and expects
the high activity level to continue in the coming years.
Project- and real estate development makes it possible to meet
the changing needs of tenants as well as to further develop and
refine the property portfolio.
Greenfield development projects
Through its continuous dialogue with both existing and
potential new tenants, KMC Properties seeks to identify
opportunities to expand its portfolio through investments
in new facilities for new and existing clients.
The company seeks to utilise available land plots in the exist-
ing portfolio for development of new facilities in collaboration
with potential tenants, focusing on business-critical locations
for the tenants.
KMC Properties will also acquire and develop land plots based
on long-term contract commitments from new and existing ten-
ants.
In 2022 KMC Properties completed the construction of a meat
production facility at Oppdal, Norway, with Oppdal Spekemat
as tenant. At year-end 2022, the company had two additional
ongoing greenfield projects; the construction of a packaging
hub at Jøsnøya, Norway, with BEWI ASA as tenant, and the
construction of a salmon slaughterhouse at Florø, Norway with
Slakteriet AS as tenant.
Acquisitions
In 2022, KMC Properties acquired 16 properties. The company
expects to continue pursuing strategic growth opportunities.
KMC Properties targets high yield properties, preferably with
long-term triple net bare house contracts, with strategic loca-
tions for its tenants, with multiple use, and with substantial relo-
cation costs.
The group seeks to secure diversification across industries,
tenants, locations, and property types.
KMCP/tenant
inititative/
request
Supporting activities
Primary activities
Property
upgrade
ADMINISTRATION AND FINANCE
MARGIN
MARGIN
Greenfield
Property
acquisition
Predesign
process
Agreements Construction
Property
management
Initial investment
process and
tenant agreement
Purchace of
land plot
Predesign
process
Construction
agreements
Initial acquisition
process and conditional
agreement
Due
dilligence
Unconditional
agreement and
acquisition
Property
management
Construction
Property
management
Annual report 2022
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KMC Properties6 Our business
Contract extensions and
investments in current
portfolio
KMC Properties is continuously
working with its tenants on con-
tract renewals and/or exten-
sions, as well as in discussions
on potential development invest-
ments in its current portfolio.
KMC Properties maintains a close
relationship with its clients to iden-
tify and actively engage in business
development activities. The company
has several ongoing projects and
expects the high activity level to con-
tinue in the coming years.
Project- and real estate development
makes it possible to meet the chang-
ing needs of customers as well as to
further develop and refine the prop-
erty portfolio.
Greenfield development
projects
Through its continuous dialogue
with both existing and poten-
tial new tenants, KMC Properties
seeks to identify opportunities
to expand its portfolio through
investments in new facilities for
new and existing clients.
The company seeks to utilise availa-
ble land plots in the existing portfolio
for development of new facilities in
collaboration with potential tenants,
focusing on business-critical loca-
tions for the tenants.
KMC Properties will also acquire and
develop land plots based on long-
term contract commitments from new
and existing tenants.
In 2022 KMC Properties completed
the construction of a fish box facil-
ity at Senja, Norway, with BEWI ASA
as tenant. At year-end 2022, the
company had three additional on-
going greenfield projects, including
the construction of a new produc-
tion facility at Oppdal, Norway, with
Oppdal Spekemat AS as tenant, the
construction of a packaging hub at
Jøsnøya, Norway, with BEWI ASA
as tenant, and the construction of a
salmon slaughterhouse at Florø,
Norway with Slakteriet AS as tenant.
Acquisitions
During 2022, KMC Properties
has acquired five properties.
The company expects to continue
pursuing strategic growth
opportunities.
KMC Properties targets high yield
properties, preferably with long-term
bare house contracts, with strategic
locations for its tenants, and that
are ‘built to suit, with substantial
relocation costs.
The group seeks to secure
diversification across industries,
tenants, locations, and property
types.
KMC Properties
|
Annual report 2022 7Our business
Stockholm
Netherlands
Trondheim
Copenhagen
Oslo
Annual report 2022
|
KMC Properties8 Our business
KMC Properties primarily invest in properties in the light industry and logistics segment.
The company focuses on having long lease agreements with solid counterparties.
The properties are at locations of strategic importance to the ten-
ants or at logistic hubs. As of 31 December 2022, KMC Proper-
ties’ portfolio consisted of 61 industrial- and logistics properties
in the Nordics and the Netherlands. The company’s four largest
tenants are BEWI ASA, Insula AS, Grøntvedt Group, and Scana
ASA, accounting for 81 per cent of the group’s net income.
The listed packaging and insulation company BEWI ASA accounts
for 47 per cent of the company’s net operating income (NOI). The
share significantly increased upon completion of KMC Proper-
ties’ acquisition of 10 properties from BEWI in November 2022. In
addition, KMC Properties currently cooperates with BEWI at one
development project at Jøsnøya, Norway, where KMC Properties
is building a new packaging hub for BEWI. At the end of 2022,
BEWI had 67 production facilities across Europe, annual sales of
EUR 1.5 billion and approximately 3 300 employees.
The Nordic seafood group Insula AS is the second largest ten-
ant, leasing 10 properties and accounting for 16 per cent of NOI.
Insula is vertically integrated from fish stations through process-
ing to strong consumer brands. The company has approximately
1 100 employees in Norway, Sweden, Denmark, Finland, and
Iceland and is owned by Kverva Industrier.
Grøntvedt Group accounts for 9 per cent of the company’s NOI.
The company is a leading platform within industrial processing of
pelagic fish, and the world’s largest producer of marinated her-
ring. The company is headquartered at Ørlandet, approximately
50 minutes outside of Trondheim by boat. The location is stra-
tegic given the rich resources of pelagic fish in the North Sea.
The listed company Scana ASA accounts for 9 per cent of the
group’s NOI, through its subsidiary PSW Technology. Scana
is an industrial owner company in the ocean industries creat-
ing value through active ownership in market-leading portfolio
companies.
The numbers in the illustration below are based on existing con-
tracts as of 31 December 2022.
Our properties
Long lease agreements with solid tenants across strategic locations
47% 16%
9% 9%
19%
100%
BEWI Insula PSW Grøntvedt Other Total
Share of operating
income
Share of operating
income
Share of operating
income
Share of operating
income
Share of operating
income
Share of operating
income
Operating income
by country
Operating income
by country
Operating income
by country
Operating income
by country
Operating income
by country
Operating income
by country
41%
28%
12%
19%
52%
26%
12%
9%
100%
78%
22%
74%
26%
58%
19%
13%
9%
1%
KMC Properties
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Annual report 2022 9Our business
2022 was a turbulent year in many ways, yet a successful year for KMC Properties,
and we are very pleased with our accomplishments. We successfully completed a
series of value-accretive acquisitions, adding a total of 16 industrial properties to our
portfolio, and progressed our development projects, increasing our gross asset value
by 35 per cent to NOK 5.4 billion.
Along the way, we continued to build a robust organisation
and significantly stepped up our sustainability efforts, in line
with our promises last year. All in all, we have entered 2023
with a significantly strengthened platform for growth.
Solid financial performance
In 2022, KMC Properties posted a rental income of NOK 273
million, an increase of 33 per cent, explained by the addi-
tional income from new investments and CPI adjustments.
Since most of our rental agreements are triple net bare house
agreements, costs are low, enabling fuelled growth of our
net income from property management from NOK 56 million
last year to NOK 96 million for 2022, representing a growth
of 70 per cent.
Delivering on our growth ambitions
Our solid financial performance was driven by a well-exe-
cuted growth strategy, including investments in the exist-
ing portfolio, contract extensions, development projects, and
acquisitions.
We invested a total of NOK 1 447 million in attractive produc-
tion facilities in the Nordics in 2022 of which the transform-
ative agreement with BEWI amounted to NOK 895 million.
The transactions were financed by a combination of new
equity raised through private placements, drawings on exist-
ing loan facilities, new committed loans, and cash on the
balance sheet.
In parallel to this, we progressed on our development projects,
including completion of the new production facility for Oppdal
Spekemat in the fourth quarter of the year. Our investments
in greenfield projects amounted to approximately NOK 108
million in 2022, at a yield-on-cost of 7.5 per cent.
At year-end 2022, our investment portfolio was valued at NOK
5.4 billion, up from NOK 4.0 billion at the end of 2021, deliv-
ering a EPRA Net Initial Yield of 6.9 per cent. Our committed
and intended pipeline stood at approximately NOK 1.9 billion.
Accretive acquisitions
The most significant transaction announced in 2022 – and so
far in our history, was the transformative agreement with our
largest tenant, the listed packaging, and insulations company
BEWI ASA. On the last day of June, we signed an agreement
to acquire a sizeable and attractive portfolio of up to 24 indus-
trial properties, valued at up to NOK 2 billion, with a gross yield
of 6.31 per cent. We completed the first phase of the agree-
ment in November, including 11 properties in Sweden and
Norway, valued at approximately NOK 925 million. Upon com-
pletion, long term triple net rental agreements were entered,
averaging an initial lease of 16.5 years. Furthermore, we have
an exclusive right to acquire the remaining part of the portfo-
lio valued at up to NOK 1.0 billion, valid until 30 June 2023.
In addition to the BEWI portfolio, we acquired several other
properties, all at strategic locations and with long lease
agreements with solid counterparties, in line with our invest-
ment strategy.
In January, we announced our acquisition of a herring pro-
duction and cold storage facility in Rönnäng, Sweden, from
Klädesholmen Seafood. The property came with a triple-net
bare house agreement with an initial lease term of 15 years
and a gross yield of 7.5 per cent. Klädesholmen is owned by
the Grøntvedt Group, our third-largest tenant.
In February, we had the pleasure of welcoming Kuraas AS
as a new tenant, when we acquired a modern meat process-
ing facility located at Fagernes, near Narvik in Norway. The
property came with a 6.5-year lease agreement, at a gross
yield of 7.8 per cent. Even more pleasing, was that we were
given the opportunity to further extend our partnership with
Kuraas towards the end of the year, when we acquired an
Letter from the CEO
Annual report 2022
|
KMC Properties10 Letter from the CEO
– We will continue to
focus on optimising our
capital structure and
increasing our nancial
exibility to support both
our short-term and long-
term business plans.
additional logistic property, including a dry-, cold- and freeze
storage next to the meat processing facility. As part of the
extension, Kuraas replaced the initial bare house agreement
for the meat processing facility, entering 15-years initial lease
for both properties.
In addition, we further diversified our tenants base in 2022,
through our acquisitions of two industrial properties in Den-
mark and one outside Ålesund in Norway. The two proper-
ties in Denmark came with triple net bare house agreements
with KpK Døre og Vindue A/S and Outline Vinduer A/S, both
owned by the listed company Inwido, with an initial lease of
10 years. The property in Norway came with a triple net bare
house agreement with Cflow Fish Handling AS with an initial
lease of 14 years and a gross yield of 8.65 per cent.
KMC Properties
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Annual report 2022 11Letter from the CEO
Progressing development projects
In 2022, KMC Properties worked on three development pro-
jects, in addition to upgrades of existing properties in collabo-
ration with our tenants.
The development of the production facility for Oppdal Speke-
mat were delivered on time and on budget in the fourth quarter
of the year, enabling our tenant to commence operations at the
new facility in December.
On the other hand, our largest project, being the development
of a new slaughterhouse for Slakteriet Holding in Florø was
delayed following a revised development plan. However, the
project has still had good progress, including completion of legal
and technical due diligence, signing of a process agreement,
entering of a conditional share purchase agreement and a con-
ditional lease agreement with Slakteriet, as well as completion
of some preliminary work.
Finally, the development of a new packaging facility for BEWI
on Jøsnøya also progressed well throughout the year.
Divestment of office building in Moscow
Towards the end of 2022, we could finally complete the sales
of the office building in Moscow, Russia. Ever since we estab-
lished KMC Properties through the combination with Storm Real
Estate, we have had an intention to divest the property. Follow-
ing Russia’s invasion of Ukraine, the property was classified
as held for sale. Obviously, it has not been easy to secure the
sales, given the ongoing war and imposed sanctions. There-
fore, we were very pleased to be able to close the process and
receive the payment of EUR 9.6 million following a completed
sanction control and ownership research.
Significantly stepped up our efforts on ESG
While the origins of KMC Properties date back over 40 years,
the company first became a listed entity in December 2020,
and therefore, our first ESG report covered the year of 2021.
The report included our priorities on how to improve our work
on sustainability and the related reporting.
In 2022, all employees were involved in this work, and we entered
2023 much better prepared to work purposefully with reducing our
climate footprint, as well as with improved governance structures
in place. In November, our board approved our ESG strategy, set-
ting a clear purpose and vision for our work. To reduce the foot-
print, our key priorities are to improve the energy efficiency of the
buildings at our properties, and to increase the use of renewable
energy sources, priorities we share with our tenants.
We are proud of our progress, although we admit that we are
still at the starting line of this work. Our ESG initiatives are a
crucial part of our long-term approach to creating value for our
shareholders, tenants, employees, and society at large.
Well positioned for further profitable growth
opportunities
Going into 2023, we remain committed to our investment strat-
egy, focusing on properties in Northern Europe with solid ten-
ants, in addition to greenfield and capex. We will continue to
focus on the type of properties we know well, i.e., foodstuff facil-
ities and light industry, in collaboration with current and new
tenants, as well as third parties.
The macroeconomic environment has been, and continues to
be, characterised by high uncertainty. In particular, the signif-
icant increase in interest rates the last year impacts the real
estate industry. However, KMC Properties’ portfolio of high yield-
ing logistic and light industry properties with solid tenants and
long lease contracts, combined with its 100 per cent CPI adjust-
ments on almost all lease agreement, provide us with a com-
fortable headroom towards our covenants.
Going forward, our key priority is to complete the refinancing of
the company’s senior secured bond loan. Further, we will focus
on integration of recently acquired properties, further develop
our pipeline of M&A opportunities, and secure progress on ongo-
ing development projects.
Looking back at the full year of 2022, I am proud of what our
organisation has accomplished over the course of the year, and
I would like to express my gratitude to each of our employees
for their dedicated efforts. We have entered 2023 with a robust
organisation, a significantly strengthened platform for growth,
and an attractive pipeline of opportunities. All in all, we are well
positioned to reach our target of a NOK 8 billion real estate port-
folio by the end of 2024.
Liv Malvik
Chief executive officer, KMC Properties ASA
Annual report 2022
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KMC Properties12 Letter from the CEO
Outline Vinduer A/S (part of Inwido): Produces windows,
doors and sliding door solutions for new builds and
rehabilitation projects for the private market in Denmark.
KMC Properties
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Annual report 2022 13Letter from the CEO
Executive management
Liv Malvik
Chief executive officer
(CEO)
Liv Malvik has more than
10 years’ experience as
CEO for various real estate
companies, including
Heimdal Eiendomsmegling
AS and Grilstad Marina AS.
In addition, she was CEO for
Inter Revisjon Norge AS for
three years, and has close
to 20 years’ experience
from banking, including
management positions in
Sparebank1 SMN and Fokus
Bank AS. Malvik has a MSc
in Business Administration
from the Norwegian School
of Economics (NHH).
At 31 December 2022, Malvik
held 179 285 shares in KMC
Properties.
Kristoffer Holmen
Chief financial officer
(CFO)
Kristoffer Holmen previously
held the position as CFO of
Storm Capital Management,
and from 2018 to 2020 as
CEO/CFO of Storm Real
Estate ASA. Holmen is
previously a state certified
public accountant and
prior to joining Storm
Capital Management, he
worked for PwC. He holds
a BSc in Business and
Administration and MSc in
Auditing and Accounting
from the Norwegian School
of Economics (NHH). In
addition, he has three
years of law school at the
University of Oslo.
At 31 December 2022,
Holmen held 125 000 shares
in KMC Properties.
Audun Aasen
Chief operating officer
(COO)
Audun Aasen has more than
15 years’ experience from
the construction and real
estate sector, including as a
property manager and real
estate developer. He also has
construction work experience.
Aasen has a University
Degree as real estate
appraiser and technical
construction controller, in
addition to a Carpentry
Master’s Degree.
At 31 December 2022, Aasen
held 577 000 shares in KMC
Properties.
Ove Rød Henriksen
Chief accounting officer
(CAO)
Ove Rød Henriksen
previously held the position
as CFO of Siva - Selskapet
for industrivekst SF (The
Industrial Development
Corporation of Norway).
Henriksen is a state
authorized public accountant
and prior to joining Siva, he
worked as a Manager for
Deloitte. He holds a MSc
in Finance from Norwegian
University of Science and
Technology and a MSc in
Accounting and Auditing from
the Norwegian School of
Economics (NHH).
At 31 December 2022,
Henriksen held 9 630 shares
in KMC Properties.
Annual report 2022
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KMC Properties14 Executive management
Kristoffer Formo
Head of M&A
Kristoffer Formo has more
than 20 years’ experience
from several positions in
the finance and real estate
business, whereas the last
five years as an independent
real estate investor. Formo’s
previous experience includes
DNB Næringsmegling, Real
Forvaltning, Sparebank 1
Midt Norge, Orkla Finans
and M&A advisor at Nordic
Corporate Management.
Formo has a bachelor’s in
finance from the Norwegian
business school BI.
At 31 December 2022, Formo
held 3 740 000 shares in
KMC Properties.
Klädesholmen Seafood (part of Grøntvedt): Produces herring, caviar and
spread products mainly for the Scandinavian market. Established in the well-
known fishing village Klädesholmen, central positioned towards it markets.
KMC Properties
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Annual report 2022 15Executive managementExecutive management
Board of directors
Pål M. Aglen
Chair
Pål Aglen is currently CEO
of the Norwegian operations
of the Scandinavian real
estate company Nordr. Aglen
has more than 25 years of
experience from various
management positions in the
real estate and construction
industries, more recently as
CEO of Nordr Norway and
CEO of Veidekke Eiendom.
He has comprehensive
experience from working with
transactions and strategic
considerations.
Aglen holds an executive
MBA in strategic
management from the
Norwegian School of
Economics (NHH) and a
Masters in real estate from
the Norwegian University
of Life Sciences (Norges
miljø- og biovitenskapelige
universitet). Aglen is a
Norwegian citizen.
On 31 December 2022,
Aglen Holding AS, related
party to Aglen, held 820 500
shares in KMC Properties.
Aglen is considered an
independent director of the
board.
Nini Høegh Nergaard
Director
Nini Høegh Nergaard
was a financial analyst at
Handelsbanken Capital
Market from 1998 to 2005.
She has held various board
positions in public and
private companies, including
Opak AS, Mamut ASA and
Norwegian Car Carriers ASA.
Nergaard has a law degree
from Oslo University. She is
a Norwegian citizen.
On 31 December 2022,
Banan II AS, related party
to Nergaard, held 2 768 704
shares in KMC Properties.
Nergaard is considered an
independent director of the
board.
John Thoresen
Director
Thoresen has almost 20
years of experience from
working as an auditor
and was the CFO of
Reitangruppen from 2002 to
2003. Thoresen established
an investment firm in 2003,
together with his brother, and
has since then been actively
involved in strategic- and
financial development of
the companies invested in.
Thoresen has held several
directorships, including the
board of SalMar.
Thoresen holds a Master
in accounting from the
Norwegian School of
Economics (NHH).
On 31 December 2022,
Kastor Invest AS, related
party to Thoresen, held
2 242 856 shares in KMC
Properties. Kastor Invest
also held approximately 30
per cent of BEWI Invest, the
largest shareholder of KMC
Properties, holding 139 019
470 shares at the end of
2022.
Thoresen is considered
independent of the
company’s executive
management and material
business contacts, but not
of the company’s major
shareholders.
Haakon Sæter
Director
Haakon Sæter has more
than 30 years of experience
from investments and
capital markets. He is the
owner of the two investment
companies Six-Seven AS and
Silvercoin Industries AS and
has been actively engaged
through investments in
several listed and non-listed
companies, as well as real
estate development projects.
Sæter is currently a board
member of Pronofa ASA,
in addition to several other
private companies, and
serves at the nomination
committee for the listed
companies Gentian
Diagnostics ASA and Next
Biometrics Group ASA.
Sæter is educated at the
Oslo Business School and is
a Norwegian citizen.
On 31 December 2022,
Sæter did not hold shares in
KMC Properties.
Sæter was proposed to the
board of KMC Properties
by the company’s second
largest shareholder, HAAS
AS, and was elected as
director of the board on
the extraordinary general
meeting held on 28 February
2023. Sæter is considered an
independent director of the
board.
Annual report 2022
|
KMC Properties16 Board of directors
Morten Eivindssøn Astrup
Director
Morten E. Astrup is the owner
of SurfSide Holding AS, one of
the largest shareholders in KMC
Properties, and founding partner
of Storm Capital Managment, a
leading Nordic asset manager
with focus on Nordic high yield
debt.
Astrup has 30 years of asset
management experience.
Astrup holds a master’s degree
in Business and Economics from
BI Norwegian Business School/
City University London. He is a
Norwegian citizen and resides in
Switzerland.
On 31 December 2022, Surfside
Holding AS held 10 000 000
shares in KMC Properties.
Astrup is considered an
independent director of the
board.
Hege A. Veiseth
Director
Hege A. Veiseth is currently CFO of
the Norwegian investment company
Frøy Kapital AS, the third largest
shareholder of KMC Properties
ASA. Veiseth has extensive
experience from finance and
accounting, including the position
as CFO for the listed media group
Polaris Media ASA and the listed oil
service company Electromagnetic
Geoservices (EMGS) ASA.
Veiseth currently serves at the
board of directors of the herring
company Grøntvedt Group AS,
the third largest tenant of KMC
Properties, where she is also chair
of the audit committee.
Veiseth holds a master’s degree
in economics and business
administration from the Norwegian
School of Economics (NHH) and
is a certified accountant from
BI Norwegian Business School.
Veiseth is a Norwegian citizen.
On 31 December 2022, Frøy
Kapital AS, a related party to
Veiseth, held 13 020 833 shares in
KMC Properties.
Veiseth was proposed to the
board of KMC Properties by the
company’s third largest shareholder,
Frøy Kapital AS, and was elected
as director of the board on the
extraordinary general meeting held
on 28 February 2023.
Veiseth is considered independent
of the company’s executive
management and major
shareholders, but not of the
company’s material business
contacts.
Marianne Bekken
Director
Marianne Bekken worked
for KMC Properties AS from
2013 to 2018, and has held
various positions in BEWI,
the company’s largest tenant.
Bekken is part of the Bekken
family, the majority owner of
BEWI Invest, which is the
majority owner of BEWI and
the largest shareholder of KMC
Properties.
Marianne Bekken holds a
bachelor’s degree in Business
and Marketing at BI University
and is a Norwegian citizen.
On 31 December 2022, Audun
Aasen, COO of KMC Properties
and related party to Bekken,
held 577 000 shares in KMC
Properties. In addition, Bekken
held a minority shareholding
in Bekken Investments, which
is the majority owner of BEWI
Invest, the largest shareholder
of KMC Properties, holding 139
019 470 shares at the end of
2022.
Bekken is considered
independent of the company’s
executive management and
material business contacts, but
not of the company’s major
shareholders.
KMC Properties
|
Annual report 2022 17Board of directorsBoard of directors
PSW Power & Automation (part of Scana ASA): Provider of energy
solutions for both on and off shore installations. Established at Ågotnes
port. Area wich Bergen's new freight terminal is to be established.
Annual report 2022
|
KMC Properties18 ESG report
Environmental, social and
governance report
As KMC Properties, in its existing form, first became a listed entity in December 2020, the
company’s first Environmental, Social and Governance (ESG) report covered the year
of 2021. That report included a list of priorities and targets for the company’s ESG work
for 2022. Looking back, most of those targets were achieved, providing the company
with a significantly strengthened platform for how to prioritise its ESG efforts and to work
purposefully with reducing its climate footprint.
2022 in review
KMC Properties considers its ESG initiatives to be crucial to
secure long-term value creation for its stakeholders, including
tenants, capital markets, employees, and the society at large,
and the company experiences increasing interest for ESG
related topics from its stakeholders.
In 2022, several regulatory developments impacted KMC Prop-
erties’ ESG reporting requirements, including the Norwegian
Transparency Act, focusing on human rights, and working condi-
tions in the value chain, and the update of the Norwegian techni-
cal building regulations (TEK17), resulting in increased attention
to the environmental footprint of buildings. Further, upon the
announcement from the Norwegian Government that the trans-
position of the EU Taxonomy regulation into national law was to
be delayed by one year, the company decided to postpone its
preparations for reporting in alignment with the EU Taxonomy.
Early 2022, KMC Properties carried out a materiality assess-
ment, which later was revisited and updated in October. The
assessment was carried out by an independent specialist, and
resulted in a total of 11 material topics, of which six topics relate
to climate change and environment (E), three to social issues
(S), and two to governance (G). The assessment laid the foun-
dation for the development of an ESG strategy, as well as sev-
eral governing documents, which was approved by the board in
November 2022, setting a clear purpose and vision for the com-
pany’s work. To reduce the climate footprint, KMC Properties’
key priorities are to implement measures to improve the energy
efficiency of the buildings at its properties, and to increase the
use of renewable energy sources, priorities shared with the
company’s tenants.
Target set in 2021 Status 2022
Develop ESG strategy ✔
Develop governing documents (Code of conduct, Suppliers code of conduct,
Environmental policy, Human rights policy, Supplier questionnaire) ✔
Digitalise ESG data collection ✔
Establish a whistle-blower channel ✔
Climate risk review according to the TCFD framework ✔
Set gender diversity targets ✔
Prepare for the Norwegian Transparency Act ✔
Establish contact with identified indigenous groups See the chapter Indigenous people
Prepare for reporting alignment with the EU taxonomy Postponed to 2023
Further develop acquisition procedures to include environmental issues Postponed to 2023
Develop an environmental risk assessment plan for existing properties Postponed to 2023
Develop a carbon emission reduction strategy Postponed until baseline is established
KMC Properties
|
Annual report 2022 19ESG report
About this report
This is the second ESG report published by KMC Properties.
It is prepared with reference to the Global Reporting Initiative
(GRI) Standards (2021) and covers the 2022 calendar year. The
GRI Standards are the world’s most widely used sustainability
reporting standards. The report covers material environmen-
tal and social impacts and the management approach of KMC
Properties. Previous reports can be found on www.kmcp.no/
en/investors/reports+and+presentations. The report has been
approved by KMC Properties’ board of directors. Feedback
on this report is appreciated and can be directed to andreas.
grimsbu@kmcp.no.
Scope and boundaries
Information and data given in the report concern all of KMC
Properties’ properties and activities unless otherwise stated.
The report sets out to disclose data on ongoing operations on
properties, completed greenfield projects and KMC Properties
own operations for 2022. Acquisitions and initiated greenfield
project in the reporting period will be accounted for in the 2023
financial year.
KMC Properties completed one greenfield project and initiated
two new projects that are scheduled to be completed in 2023.
16 acquisitions were carried out in 2022.
Capital expenditure projects in current portfolio worth more than
NOK 40 million are to be accounted for, but there were no pro-
jects that qualified for this in 2022.
KMC Properties had 12 full-time employees at the end of 2022.
The company had a turnover rate of 37 per cent in 2022. This
is explained by the divestment of the Russian property, where
five employees where let go. KMC Properties hired two new
employees in 2022. All employees are based in Trondheim and
Oslo, Norway.
BeForm: A manufactorer of injection
molded, thermo- and thermoset plastics.
Furthermore plastic recycling.
Annual report 2022
|
KMC Properties20 ESG report
Data collection and consolidation
Collecting accurate and relevant data is increasingly important.
Stakeholders are demanding information. For this reason, in
order for KMC Properties to work effectively with ESG issues
it needs to monitor developments in its own operations as well
as amongst its tenants.
To support this, KMC Properties has invested in an ESG report-
ing software that will allow effective gathering and management
of ESG data. Going forward, this will be useful in meeting future
assurance criteria included in the European Corporate Sustain-
ability Reporting Directive (CSRD), which KMC Properties will
need to comply with by 2026.
In 2022, 43 out of 50 tenants provided data for this ESG report,
and data from 43 out of 50 properties with operations was col-
lected. All of these provided data on health and safety-related
issues while environmental data related to spills was retrieved
from 12 properties with operations.
ESG in KMC Properties
KMC Properties is a real estate company creating value from
investing in industrial and logistical properties. The company’s
vision is to be a leading real estate partner known for quality,
innovation and supporting its tenants.
Managing sustainable risks and opportunities is fundamental in
achieving this vision, creating value for the society and gener-
ating returns for investors. KMC Properties mainly enters triple
net bare-house lease agreements whereby maintenance, insur-
ance and property tax are covered by the tenant. In greenfield
projects, the company holds the entire legal responsibility as a
landlord to ensure that the project develops according to KMC
Properties’ standards and goals, as well as all applicable laws
and regulations.
Responsibility
The board of directors holds overall responsibility for ensuring
KMC Properties’ responsible governance of ESG issues and
has approved this report. The CEO, together with key func-
tions, manages ESG issues on a day-to-day basis. The board
is continuously informed of ESG issues and decisions. The
reporting lines from properties to top management are made
by selected employees who obtain the necessary information
and thereafter send it on to management. Given the increased
focus on ESG issues, KMC Properties is looking to hire an ESG
manager in 2023.
Risk management
Transitioning into a low-carbon and just society poses risks and
opportunities to all businesses. Understanding how to manage
these will be essential for KMC Properties to succeed. In 2022,
KMC Properties established an overall risk management sys-
tem, including ESG related issues such as climate-related risks
and corruption. Operational risks such as health and safety will
be incorporated in 2023.
The company has established processes to mitigate risks in
mergers and acquisition processes, including technical, juridical,
environmental and financial due diligence procedures.
Governing documents
KMC Properties updated and developed its governing docu-
ments concerning ESG in 2022. All were approved by the board
and signed by the company’s CEO and are readily available on
the company website; www.kmcp.no alongside other govern-
ing documents.
■ Code of conduct
■ Environmental policy
■ Human Rights Policy
■ Supplier code of conduct
■ Whistleblowing mechanism
Strategic priorities
KMC Properties achieved a major milestone in 2022 with the
development of the company’s ESG strategy. The strategy sets
a clear purpose and vision for KMC Properties, and defines
four pillars (referenced in the accompanying table) for its ESG
work towards 2030.
The strategy was developed in October 2022, and involved the
entire management team. It was approved by the board on
17.11. 22.
Purpose
KMC Properties is a real estate company creating value from
investing in industrial and logistical properties.
Vision
KMC Properties will be a leading business partner to European
industries and is known for quality, innovations and properties
that supports its tenants in achieving their goals.
KMC Properties
|
Annual report 2022 21ESG report
Strategic pillar and ambitions for 2030 2026 targets Status 2022
Long-term thinking
KMC Properties’ decisions today determines
its ability to adapt to a low-carbon just
economy. Aspirations:
Being considered an ethical and sustainable
market player.
Zero reported corruption incidents Zero reported corruption incidents
100% of portfolio properties assessed for
physical climate risk
52%
Map climate-related risks and
opportunities for the main sectors that
KMC Properties serve and update
acquisition strategy
Not started
KMC Properties actively working to reduce
emissions across its value chain.
Develop absolute and/or intensity-based
GHG-reduction targets for KMC Properties
Not started
Internal competency
KMC Properties is a lean organisation, and
every employee counts towards its success.
Aspirations:
Being an employer where employees
experience a clear purpose in their work and
be given equal opportunities to grow.
85% satisfaction rate on survey Survey to be developed in 2023
Minimum 40/60 (%) gender balance Board of directors: 42/58 (women/men)
Management team:25/75 (women/men)
Employees: 58/42 (women/men)
Zero incidents of discrimination Zero reported incidents of discrimination
Partnerships with tenants
Ensuring good cooperation with tenants
creates value and reduce risks for both
parties. Aspirations:
Being considered an attentive landlord
supporting its tenants.
100% completion rate of planned visit
inspections per year
17/17 planned visit inspections carried
out
Strengthening tenant relationship by
encouraging sustainable practices and offer
green solutions.
100% of tenants communicate their climate
accounting (minimum scope 1 and 2)
33% of tenants report that they have
climate accounting
25% of portfolio produce renewable
energy
6.5% of properties have had renewable
energy technology installed
Zero spills from tenants' operation There were 3 minor spills reported from
tenants
Providing safe and healthy and fair working
conditions on for workers on its properties.
Zero HSE incident reported from KMC
Properties tenants
0 fatalities
10 high-consequence work-related
injuries (excluding fatalities
48 recordable work-related injuries
Future-fit properties
A building, with all its components, has
significant environmental and social impacts
throughout its lifetime. Aspirations:
Building robust, flexible and low carbon
buildings
Reduce waste generation on construction
sites
Data not available
Minimum sorting rate of 70% on
construction sites
72% rate for the one greenfield project
completed in 2022
Ensuring the health and safety, as well as
good working conditions, on greenfield and
brownfield projects
Zero serious accidents on construction
sites
1 serious accident
Engaging with contractors and suppliers
that actively work to reduce their negative
impacts on construction sites and in supply
chain.
All suppliers have due diligence proce-
dures in place in accordance with EU regu-
latory requirements
Data not available
Annual report 2022
|
KMC Properties22 ESG report
Stakeholder engagement and materiality
The ESG strategy is based on KMC Properties’ material top-
ics as identified in January 2022 and updated in October 2022
with input from a climate risk review and a human rights sali-
ency assessment.
A materiality assessment was carried out by an independent
specialist, using the GRI-3 Materiality Standard. Stakeholders,
including banks, investors, employees, and tenants were inter-
viewed. In these interviews, potential and actual impacts caused
by KMC Properties’ activities to the environment, society and
economy were assessed according to their significance. Addi-
tionally, the financial materiality of the topics was discussed and
incorporated into the list of material topics.
See full assessment in Appendix 1.
KMC Properties’ material topics
Climate change and environment:
■ Climate-related risks and opportunities
■ Greenhouse gas emissions
■ Energy efficiency in buildings
■ Circular economy
■ Pollution and spills from properties
■ Biodiversity on properties
Social issues:
■ Health and safety on properties, construction sites and in
transportation services
■ Diversity and equality in own operations
■ Rights of indigenous people
Governance issues:
■ Anti-corruption
■ Ethical supply chain management
Environment
KMC Properties’ impact on the environment occurs through its
tenants’ operations as well as capital expenditure projects in
current portfolio and greenfield projects for new constructions.
The company’s environmental policy states that KMC Proper-
ties is committed to operating in an environmentally sustaina-
ble manner and to ensure that its properties are future-fit for
the planet and society.
KMC Properties seeks to be a partner for green solutions. Close
cooperation with tenants and contractors is necessary for KMC
Properties to succeed in reaching its environmental targets and
ambitions.
Climate-related risks
In a world where climate change is the most pressing issue,
KMC Properties must ensure the resilience of its business. In
2022, the company therefore carried out a climate-risk review
in accordance with the recommendations of the Task force on
Climate-related Financial Disclosures (TCFD).
The review found several risks and opportunities related to cli-
mate change, which KMC Properties will work to manage bet-
ter going forward.
The review informed the company’s ESG strategy, targets and
KPIs, recognising in particular that KMC Properties’ decisions
today determines its ability to adapt to a low-carbon and just
economy. A key target for KMC Properties is for all portfolio
projects to be assessed for physical climate risk by 2026. This
work started in 2022 and will continue in 2023.
The TCFD review was an important first step in gaining insight
and recommendations for enhanced ESG risk management.
This will include obtaining a better understanding of nature-re-
lated risks, other environmental and social risks associated by
KMC Properties activities.
Key environment-related material topics:
■ Climate-related risks
■ Greenhouse gas emissions
■ Energy efficiency in buildings
■ Circular economy
■ Pollution and spills from properties
KMC Properties
|
Annual report 2022 23ESG report
Identified climate-related risks and opportunities
Type Risk Opportunities
Physical
■
Extreme weather, flood and drought
■
Ocean acidification and rising sea levels
■
Energy efficiency measures
■
Renewable energy production offering
■
Attract capital through green bonds
Regulatory
■
Energy efficiency requirements
■
Increased CO
2
taxes
Market
■
Reduced access to capital
■
Reduced access to properties
■
Change in tenants’ preferences
Technological
■
Lack of circular building competency in supply chain
Reputational
■
Recruitment and retention of employees
■
Attracting solid tenants
Reducing emissions
The real estate sector accounts for up to 30 per cent of GHG
emissions globally, and mitigating emissions is essential in order
to reduce the impact that the sector has on climate change.
Stricter requirements for existing and new buildings, particularly
linked to energy efficiency and carbon reduction, could impact
the profitability of acquisitions and increase maintenance costs
for KMC Properties’ existing portfolio. Moreover, KMC Proper-
ties is experiencing an increased interest regarding emission
data, and it is expected that the emissions profile of the com-
pany will impact its access to capital in the future.
Reducing emissions is central to KMC Properties’ long-term
thinking and building partnerships with its tenants. The com-
pany’s environmental strategy states that it will actively work to
reduce emissions across its value chain.
The vast majority of KMC Properties emissions lies in Scope
3. As a landlord and real estate developer, KMC Properties
will focus its efforts in reducing emissions through cooperation
with tenants and through stricter requirements to contractors
on greenfield projects.
KMC Properties climate accounting has been prepared accord-
ing to the GHG Protocol using operational control approach. The
Scope 3 emissions calculations for 2021 and 2022 are based
on actual reported data. In 2022, KMC Properties received
energy consumption data from 86.5 per cent of its portfolio.
The increase in total emissions is caused by a higher number
of properties in 2022 compared to 2021 as well as an increase
of use of fossil fuels in the Swedish properties.
In 2023, KMC Properties will communicate intensity KPIs for
emissions per m
2
.
GHG emissions
Metric tonnes CO
2
2022 2021
Scope 1 0.00 0.00
Scope 2 (location-based) 0.04 0.07
Scope 2 (market-based) 3.77 3.56
Scope 3:
Business travel 10.72 10.29
Downstream leased assets 47 009.96 46 362.00
Total emissions 47 020.72 46 372.36
■ Scope 2 – electricity calculations are made using AIB
emission factors
■ Scope 3 – includes two categories: Business travels and
downstream leased assets. The calculations are made
using DEFRA and AIB emission factors.
Energy consumption
MWh 2022 2021
Norge 71 862 80 290
Sweden 16 512 23 560
Denmark 56 676 57 336
Netherlands 97 681 98 521
Finland 4 660 N/A
Total 242 731 259 707
Restatement of information
Energy consumption data from tenants has been collected for
2021 and 2022 for this year’s report and are comparable. The
2021 data for Scope 3 Downstream leased assets, and the
energy consumption data communicated in this report are there-
fore different from those communicated in last year’s report.
Annual report 2022
|
KMC Properties24 ESG report
Adjustments have also been made for KMC Properties’ Scope 2
market-based emissions for 2021 from 31 tCO
2
-e to 3.56 tCO
2
-e.
The data communicated in the 2021 report was based on the
total energy consumption in KMC Properties’ shared offices and
has t been adjusted to only include KMC Properties’ own offices.
Enhancing energy efficiency
A building’s net energy demand has a large impact on the emis-
sions of the building throughout its lifetime, as well as the asso-
ciated costs of heating and cooling.
In 2022, KMC Properties started a systematic mapping of cur-
rent energy consumption in the portfolio by acquiring updated
energy reports with energy efficiency measures. This is also
included in the environmental due diligence procedure for acqui-
sitions.
KMC also established the company KMC Energy, which will
provide renewable energy systems to tenants where the focus
is energy transition in the property portfolio. In 2022, 7 proper-
ties had installed solar cells on ground, facades and/or roofs.
In 2022, the total reported energy consumption for KMC Prop-
erties’ portfolio was 242 731 MWh. This is a reduction from last
year's 259 707MWh. KMC Properties assumes this is a result
of the ongoing European energy crisis.
KMC Energy established in 2022
KMC Properties strive to be a provider of green solutions to
its tenants. In 2022, a NOK 13 million investment was made in
KMC Energy, a KMC Properties subsidiary that will offer solu-
tions that secure tenants’ reliable access to renewable energy,
and contribute to a more stable capacity on the grid, which will
benefit the local communities.
A tested solution
In 2022, KMC Properties initiated a pilot project for use of solar
panels and battery containers at its facility in Kampenveien 5,
Fredrikstad. The project was done in cooperation with the ten-
ant BE Form, targeting a more sustainable production by using
locally produced renewable energy. In 2023, Kampenveien 5 is
set to produce 503 594 kWh renewable energy per year, cover-
ing 20-25 percent of its energy demand.
BeForm: A manufactorer of injection
molded, thermo- and thermoset plastics.
Furthermore plastic recycling.
KMC Properties
|
Annual report 2022 25ESG report
Energy storage
The demand for renewable energy increases due to techno-
logical developments and need for carbon reduction. However,
renewable energy is unpredictable and requires a high grid
capacity to ensure access.
KMC Energy’s storage solution optimises the production of solar
power on sites, and provides a feasible solution to manage peak
load periods. This creates stability and predictability for tenants,
as well as reduces costs for operators of the power grid.
Resource management
KMC Properties’ aspiration is to build robust and flexible build-
ings with a low carbon design. In building future-fit properties,
materials must be carefully considered and managed based on
their environmental footprint.
The company’s environmental policy states that it will consider
the environmental footprint of the materials sourced, as well
as actively seek to reduce waste and material consumption
while increasing opportunities for recycling. KMC Properties
has an overall target to reduce waste generation by 2026, and
for the sorting rate to be higher than 70 per cent in greenfield
projects. For the completed greenfield project in 2023, there
was a reported sorting rate of 72 per cent. KMC Properties has
communicated expected reporting datapoints for 2023 to new
greenfield contractors.
KMC Properties’ ambitions will influence its criteria and pro-
cedures for selecting contractors going forward. An important
measure to be completed in 2023 is the development of an envi-
ronmental criteria for greenfield projects.
Considering biodiversity
When constructing and operating industrial properties, local
ecosystems and biodiversity can be negatively impacted. Pol-
lution from the properties or construction activities, and habitat
disturbance and conversion, are identified risks associated with
the company’s business.
Several of the company’s properties are located along the Nor-
wegian coastline, in or close to vulnerable ecosystems. There
were three reported smaller spills from KMC Properties ten-
ants in 2022.
In 2022, KMC Properties formalised its management approach
to biodiversity in the ESG strategy, governing documents,
reporting and suppliers screening criteria, covering its entire
value chain.
The environmental policy states that the choice of location for
greenfield projects will be informed by potential impact on biodi-
versity on the site, and environmental due diligence processes
are conducted according to laws and regulations. There were
no instances of non-compliance with environmental laws and
regulations recorded in 2022.
Social
KMC Properties has a direct impact on its employees’ work-
ing conditions and well-being, as well as an indirect impact on
human rights and labour conditions in its supply chain. Moreo-
ver, the company influences its tenants as well as the commu-
nities where its properties are located.
The company’s Human Rights policy states that KMC Proper-
ties is committed to respecting human rights as defined in the
International Bill of Rights, the ILO Fundamental Conventions
on Labour Standards and the UN Guiding Principles on Busi-
ness and Human Rights.
KMC Properties aims to be a responsible employer, property
owner and real estate developer. KMC Properties' most impor-
tant priority is to take care of its own employees’ welfare and
safeguard decent working conditions for its tenants and suppliers.
Employee welfare
Creating a diverse, safe and interesting working environment
for its employees to thrive is central to attracting and retaining
the right competency in KMC Properties.
KMC Properties’ code of conduct states that the company shall
strive to create a good and healthy work environment based
on equality and diversity, where the integrity of employees is
safeguarded. No discrimination may take place on the grounds
of age, sex, religion, sexual orientation, ethnic background, or
other protected characteristic. All forms of harassment are pro-
Relevant material topics
■ Health and safety on construction sites
and with tenants
■ Working conditions in supply chain
■ Diversity
■ Indigenous peoples’ rights
Annual report 2022
|
KMC Properties26 ESG report
hibited, as well as abusive discrimination. KMC Properties had
zero reported incidents of discrimination in 2022.
Employee satisfaction
KMC Properties is a lean organisation, and each and every
employee counts towards its success. It is the company’s aspi-
ration that all its employees experience a clear purpose in their
work and are given equal opportunities to grow. In 2023, KMC
Properties will develop and conduct an employee satisfaction
survey.
Gender balance (women/men)
2022 2021
Board of directors 3/4 3/4
Management team 1/4 1/4
Employees (excl. management team) 4/3 6/4
Diversity
At the end of 2022, KMC Properties had 12 full-time employees
all in Norway. We value equality and strive to build a diverse
organisation in terms of gender, age and background. KMC
Properties has set a target of 40/60 gender balance for each of
the employee categories and the board of directors.
Age distribution
2022 2021
50 < 1 3
30-49 11 12
29 > 0 0
In 2023, KMC Properties will develop recruitment procedures
that ensures a diverse selection of candidates and a fair assess-
ment of these.
The Norwegian Transparency Act
The Norwegian Transparency Act entered into force in July 2022
to ensure that companies have appropriate procedures and
measures in place to respect human rights and decent working
conditions in its value chain.
KMC Properties has worked diligently with the Act throughout
the year, and an independent statement can be accessed at
www.kmcp.no. The work included providing training on human
rights to management team and key resources in the organisa-
tion. This was followed by a saliency assessment which involved
the management team and external stakeholders. The assess-
ment identified salient issues related to human rights and labour
rights in KMC Properties’ value chain.
As a real estate developer and owner, most of KMC Properties’
salient issues are in the first tier of its supply chain (construc-
tion and transportation services), while more work needs to be
done to further assess salient issues in the sourcing of materials.
The findings were included in the development of governing
documents and procedures for supply chain management and
informed the updated materiality assessment (Appendix 1).
KMC Properties views the due diligence work on human rights
as a process. The responsibility of implementing a process
aligned with the OECD Guidelines and ensure that KMC Prop-
erties meet the criteria of the Act lies with the Company CEO.
Salient issue
Relevancy in
value chain
Health and safety Transportation
Construction
Tenants
Working conditions Transportation
Construction
Social dumping/migrant workers Transportation
Construction
Forced labour Transportation
Construction
Discrimination Transportation
Land rights Local community
Potentially unidentified salient issues Sourcing of raw materials
Safe working conditions on properties
KMC Properties owns properties for development and proper-
ties with established industry actors. Occupational accidents
and diseases can lead to devastating impacts on workers,
enterprises and entire communities and economies. The global
affirmation of the importance of safety and health at work was
expressed in June 2022, when the International Labour Con-
ference (ILC) decideded to include a safe and healthy working
environment in the ILO’s framework of fundamental principles
and rights at work (FPRW). For KMC properties, the strategic
importance of these conventions is translated through its aspi-
ration for all people working on KMC Properties’ properties to
enjoy safe, healthy and fair working conditions. This includes
both construction workers and tenants.
Construction workers
KMC Properties’ aspiration is for all greenfield and brownfield
projects on to be safe and provide good working conditions.
Workers on construction sites are typically exposed to risks
related to falling objects, electricity, explosion and fire, crush
injuries, people vs machines and construction collapse. There
are also occupational health risks related to long-term expo-
sure of noise, dust, chemical health hazards and ergonomics.
KMC Properties
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Annual report 2022 27ESG report
Social dumping occurs when a company intentionally hires for-
eign workers who accept sub-standard pay/working conditions
compared to those common in the local labour market. It is a
well-known issue in the construction industry, which can lead
to poor working conditions and lower standards of working con-
dition.
Health and safety is important for KMC Properties to manage,
and contractors are carefully screened on their management
and transparency of these issues. As of 2023, they will also be
required to sign KMC Properties’ supplier code of conduct, out-
lining the company’s expectations for working conditions on its
construction sites which also reflects the human rights policy.
The overall responsibility of health, safety and working envi-
ronment (HSE) in construction and rehabilitation projects lies
with KMC Properties. The COO manages these issues on a
daily basis and reports directly to the CEO. Projects must at
all times follow applicable laws and regulations, including the
right to Norwegian minimum wage rates and injury insurance.
KMC Properties carries out inspections regularly to safeguard
good working conditions.
KMC Properties has an ambition of zero serious accidents on
its construction sites. In 2022, there were two active greenfield
construction sites, and one recorded serious injury.
Tenants
KMC Properties’ aspiration is for all people working for KMC
Properties’ tenants to enjoy safe, healthy and fair working condi-
tions. The company manages a portfolio of light industrial facili-
ties, which is associated with risks such as: flammable material,
hazardous waste, slippery floors, high altitudes, loose objects.
The tenants are ultimately responsible for their employees’ work-
ing conditions. KMC Properties seeks to be an attentive land-
lord that assist its tenants to minimise risks related to health and
safety. KMC Properties expects its tenants to apply the same
standards of working conditions as set out in the company’s
code of conduct, as well as comply with any applicable law. In
preparation for this report, KMC Properties has requested infor-
mation on work related injuries from its tenants for each property.
0 high-consequence work related injuries were recorded in 2022.
43 of 50 properties were accounted for in this year’s report.
Indigenous rights
KMC Properties owns properties in Northern Norway, including
in areas where indigenous Sámi rights must be given attention
and due diligence.
With prosperities in areas known to have prominent Sámi pop-
ulations and associated traditional practices, KMC Properties
has actively consulted with its current tenants to map any pre-
vious or ongoing potential conflicts and has not identified any
at the time of writing. KMC will continue such consultations.
All new properties will continue to follow a detailed regulatory
review process that explicitly includes consultation with rele-
vant local indigenous governing bodies. KMC Properties places
additional focus on remaining aware of traditional land uses of
potential developments, particularly when considering building
on or near reindeer grazing lands or cultural sites.
KMC Properties remains committed to fully respecting indig-
enous rights and continuing close dialogue with these stake-
holders.
Stockholm
Netherlands
Trondheim
Copenhagen
Oslo
KMC Properties' properties in Northern Norway.
Annual report 2022
|
KMC Properties28 ESG report
Governance
KMC Properties recognises that its business conduct has an
impact on the economy through transactions and negotiations,
as well as its management of supply chain. KMC Properties
aims to be a transparent market player, and as listed on the Oslo
Stock Exchange, it is obliged to disclose detailed information
on corporate governance (see separate chapter on Corporate
Governance in the annual report).
KMC Properties Code of conduct expresses clear expectations
regarding ethical behaviour, including anti-corruption, protec-
tion of the environment, safeguarding health and safety and
human rights.
The Code applies to the board of directors, management team,
employees, subsidiaries and hired consultants. It provides
instructions for how to manage any identified breach of the code.
Anti-corruption
Anti-corruption has been identified as a material topic, particu-
larly linked to property regulation, acquisitions and its supply
chain.
An important development in 2022, was the divestment of the
company’s Russian subsidiary. A complete sanction control
and ownership research of the buyer was carried out, and the
settle ment was completed outside Russia. This has reduced
the company’s exposure to corruption risk.
KMC Properties’ code of conduct state that the company has
a zero-tolerance approach to any forms of corruption, extor-
tion, money laundering or bribery. The company's operations
must be conducted in an open and honest manner, which in no
way impedes competition or benefits any individual party. This
applies both internally and externally in relation to partners, ten-
ants and other stakeholders.
There were no reported incidents of corruption in KMC Proper-
ties’ operations in 2022.
Supply chain management
Ensuring a responsible supply chain management that includes
material ESG issues is the first step towards building future-fit
properties.
In 2022, KMC Properties developed a supplier code of conduct
that will be applicable to all suppliers from 2023 onwards. It
details KMC Properties expectations to human rights, workers’
rights, the environment, corruption and sanctions.
Corresponding to this, a supplier questionnaire with detailed
screening criteria related to governance of ESG issues was
developed and tested on two contractors. This will be an impor-
tant tool for KMC Properties to select contractors moving for-
ward, both for new greenfield and brownfield projects.
Whistleblowing mechanism
KMC Properties strive to maintain transparency as well as high
business ethics. A whistleblowing mechanism was put in place
in January 2023. It is available online providing an opportunity to
communicate on suspected wrongdoings affecting people, our
organisation, society or the environment. Instruction on how to
make a report is provided, and the mechanism ensures anonym-
ity and is available for both external and internal stakeholders.
Key governance-related material topics
for KMC Properties include:
■ Anti-corruption
■ Ethical supply chain management
KMC Properties
|
Annual report 2022 29ESG report
KMC Properties aims to maintain a high standard of corporate governance. Good
corporate governance strengthens the confidence in the company and contributes to
long-term value creation by regulating the division of roles and responsibilities between
shareholders, the board of directors and executive management.
Corporate governance at KMC Properties shall be based on the
following main principles:
■ All shareholders shall be treated equally
■ KMC Properties shall maintain open, relevant, and
reliable communication with its stakeholders, including its
shareholders, governmental bodies, and the public about
the company’s activities
■ KMC Properties’ board of directors shall be autonomous
and independent of the company’s management
■ The majority of the members of the board shall be
independent of major shareholders
■ KMC Properties’ shall have a clear division of roles and
responsibilities between shareholders, the board and
management
1. Implementation and reporting on corporate
governance
Compliance and regulations
The board of directors (the board) of KMC Properties (the
company) has the overall responsibility for ensuring that the
company has a high standard of corporate governance. The
board has adopted a corporate governance policy document
addressing the framework of guidelines and principles regulat-
ing the interaction between the shareholders, the board, and
the Chief Executive Officer (the CEO). The policy is based
on the Norwegian Code of Practice (the Code) for Corporate
Governance issued by the Norwegian Corporate Governance
Board. The objective of the Code is that companies listed on
regulated markets in Norway will practice corporate govern-
ance that regulates the division of roles between shareholders,
the board and executive management more comprehensively
than is required by legislation. The board and executive man-
agement perform an annual assessment of its principles for
corporate governance.
KMC Properties ASA is a Norwegian public limited company
organised and existing under the laws of Norway pursuant to
the Norwegian Public Limited Companies Act and listed on the
Oslo Børs (Oslo Stock Exchange). The company is subject to
section 3-3b of the Norwegian Accounting Act, which requires
the company to disclose certain corporate governance related
information annually. In addition, the Issuers Rules of Oslo Børs,
covered by the Oslo Rulebook II chapter 4.5 requires listed
companies to publish an annual statement of its principles and
practices with respect to corporate governance, covering every
section of the latest version of the Code. The Continuing Obli-
gations also sets out an overview of information required to be
included in the statement. The Norwegian Accounting Act is
available at www.lovdata.no (in Norwegian), while the Issuers
Rules is available at www.oslobors.no.
KMC Properties seeks to comply with the current code of prac-
tice, issued on 14 October 2021. The Code is available at www.
nues.no/english.
Application of the Code is based on the ‘comply or explain’
principle, which means that the company must provide an
explanation if it has chosen an alternative approach to specific
recommendations.
KMC Properties provides an annual statement of its adherence
to corporate governance in its annual report, and this informa-
tion is also available at www.kmcp.no. This statement describes
how KMC Properties conducted itself with respect to the Code
in 2022.
Deviations from the Code: None
2. Business activity
KMC Properties is a real estate company focused on owning
industrial and logistics properties. The company’s business pur-
pose is set out in its Articles of Association as:
Corporate Governance
Annual report 2022
|
KMC Properties30 Corporate governance
"The company's business shall comprise of trading, investment
in real estate property and security instruments and other busi-
ness operations in this relation, including participation in other
companies with corresponding business through equity, loan
or issuance of guarantees."
The company’s main goals, strategies and risk profiles are pre-
sented in the annual report. It is the board’s opinion that these
objectives, strategies, and risk profiles are within the scope of
the business purpose clause. The objectives for the business
are set with the intention of creating value for shareholders.
The board has defined clear and long-term objectives for the
company, to ensure value creation for the shareholders in a
sustainable manner.
Long-term objectives, strategies and the risk profile are evalu-
ated once a year in connection with the work on strategy, or as
necessary in connection with major events or structural changes.
Deviations from the Code: None
3. Equity and dividends
Capital structure
The board is committed to maintaining a satisfactory capital
structure for the company according to the company's goals,
strategy, and risk profile, thereby ensuring that there is an appro-
priate balance between equity and other sources of financing.
The board continuously assesses the company’s capital require-
ments related to the strategy and risk profile.
On 31 December 2022, the company’s equity totalled NOK 2
377 million, corresponding to an equity ratio of 41 per cent. The
board considers KMC Properties’ capital structure to be appro-
priate to the company’s objectives, strategy, and risk profile.
Dividends
The company’s dividend policy is based on the principle of fair
distribution of profit among all its shareholders pro rata their
respective holdings of shares, considering a rational correlation
of the amount paid in dividends and the funds needed to carry
out the strategic plans of the company’s development. Dividend
rights arise on the date approved by the general meeting. There
are no restrictions involved for non-resident holders.
The company is focusing on pursuing growth through both
organic and in-organic initiatives and anticipates paying divi-
dends according to a dividend pay-out ratio in the 30–50 per
cent range of the company’s cash earnings, defined as net
result from property management less payable tax, in the com-
ing years.
KMC Properties did not distribute dividends for the financial
year of 2021. In the company’s report for the fourth quarter of
2022, the board stated its intention to propose to the general
meeting to pay dividends in line with the company’s dividend
policy when refinancing of the senior secured bond loan is com-
pleted, and provided that the company has sufficient liquidity
for committed investments.
Board authorisations
Authorisations to the board to increase the share capital or to
buy own shares will normally not be given for periods longer than
until the next annual general meeting (AGM) of the company.
The annual general meeting of KMC Properties, held on 1 June
2022, granted the board authorisations as follows:
1. Authorisation to increase the share capital by up to
NOK 11 385 746, representing up to 20 per cent of the
company’s outstanding share capital as of the date
granted, in connection with capital raisings for the
financing of the company’s business and in connection
with acquisitions and mergers.
2. Authorisation to increase the share capital by up to
NOK 800 000 in connection with issuance of shares in
connection with share incentive arrangements for key
employees and other employees.
3. Authorisation to acquire shares in the company and take
security in treasury shares on behalf of the company with
an aggregate nominal value of up to NOK 4800000.
The authorisations are valid until the annual general meeting in
2023, however no longer than until 30 June 2023.
Deviations from the Code: None
4. Equal treatment of shareholders and
transactions with close associates
In the event of capital increases based on authorisations issued
by the general meeting, where the existing shareholders’ rights
will be waived, the reason for this will be provided in a public
announcement in connection with the capital increase.
Any transactions, agreements or arrangements between the
company and its shareholders, members of the board, mem-
bers of the executive management team or close associates
of any such parties will be conducted in compliance with the
procedures set out in the Norwegian Public Limited Liability
Companies Act. The board shall arrange for a valuation to be
obtained from an independent third party unless the transaction,
agreement or arrangement in question is considered immate-
rial. Board members and members of the executive manage-
KMC Properties
|
Annual report 2022 31Corporate governance
ment team shall immediately notify the board if they have any
material direct or indirect interest in any transaction entered by
the company.
Trading in own shares
Any transactions the company carries out in its own shares
will be carried out either through the stock exchange or at pre-
vailing stock exchange prices. If there is limited liquidity in the
company’s shares, KMC Properties will consider other ways to
ensure equal treatment of its shareholders.
As per 31 December 2022, KMC Properties did not own any
own shares.
KMC Properties’ financial statements provide further informa-
tion about transactions with related parties.
Deviations from the Code: None
5. Shares and negotiability
KMC Properties has only one class of shares, and all shares
have equal rights, including the right to dividend and voting
rights. Each share has a face value of NOK 0.20 and carries
one vote.
The company emphasises equal treatment of its shareholders,
and the shares are freely transferable.
Deviations from the Code: None
6. General meetings
The general meeting is the highest authority of KMC Proper-
ties. All shareholders of the company are entitled to attend and
vote at general meetings of the company and to table draft
resolutions for items to be included on the agenda for a gen-
eral meeting.
Pursuant to article 7 of the company’s articles of associations,
the general meeting shall resolve:
1. The appointment of the chairman of the board
2. The approval of the annual accounts and annual report,
including the distribution of dividends
3. The appointment of the members and the chairman of
the nomination committee
4. Other matters that the general meeting is required by
law to resolve.
The general meeting shall also resolve the board of director's
declaration for remuneration of the executive management team
in accordance with the Norwegian Public Limited Liabilities Act
paragraph 6-16a.
The notice for the general meeting shall be sent to the share-
holders no later than 21 days prior to the date of the general
meeting. The general meeting may, with a majority vote as for
amendments to the articles of association, and with effect for the
next annual general meeting, decide that the notice for extraor-
dinary general meetings shall be sent to the shareholders no
later than two weeks prior to the extraordinary general meeting
is held. The annual general meeting (AGM) is held each year no
later than six months after expiry of the preceding financial year.
The AGM for 2023 is planned to be held on 11 May 2023. The
board shall be present at general meetings.
Deviations from the Code: None
7. Nomination committee
Article 7 of the company’s articles of association stipulates that
the nomination committee shall consist of three members. The
members shall be elected for a period of two years unless the
general meeting decides a shorter period.
The nomination committee shall prepare proposals to the gen-
eral meeting in relation to the following:
1. The appointment of the members of the board and the
chairman of the board
2. The appointment of the members of the nomination
committee and the chairman of the nomination
committee
3. The remuneration of the board and the nomination
committee.
4. Any changes in the mandate of the nomination
committee or in the articles of association
The Norwegian Public Limited Liabilities Act paragraphs 6-7
and 6-8 shall apply correspondingly for the members of the
nomination committee.
As per 31 December 2022, KMC Properties’ nomination com-
mittee included:
■ Finn Haugan, chairperson
■ Ingrid Kristin Viken
■ Gunnar Syvertsen
Deviations from the Code: None
8. Board of directors: Composition and
independence
According to article 5 of KMC Properties’ articles of associa-
tions, the board of the company shall consist of minimum three
members. The chairperson of the board alone, or two members
Annual report 2022
|
KMC Properties32 Corporate governance
of the board jointly, shall have authority to sign on behalf of the
company. The board may designate procurators.
As per 31 December 2022, KMC Properties’ board comprised
seven members. All members were elected at the company’s
AGM on 1 June 2022 and for a period of two years, whereas
five members were re-elected, and he chairperson, Pål Magnus
Aglen, and board member John Thoresen, were newly elected.
Three of the members are women. The Public Limited Compa-
nies Act states that there should be at least three of each gender
when the board has between six and eight members.
When appointing members to the board, it is emphasised that
the board shall have the requisite competency to independently
evaluate the cases presented by the executive management
team as well as the company's operation. It is also consid-
ered important that the board can function well as a body of
colleagues.
Board members shall be elected for periods not exceeding two
years at a time, with the possibility of re-election. Board mem-
bers shall be encouraged to own shares in the company.
An overview of the board members’ competence and back-
ground is available in a separate section of this report and
from the company’s website https://www.kmcp.no/en/manage-
ment+and+board.
Independence of the board
All the board members of KMC Properties are considered inde-
pendent of senior executives, and six of seven are considered
independent of the company’s material business contacts. The
majority of the members are independent of the company’s
main shareholders.
Deviations from the Code: None.
9. The work of the board of directors
The overall management of the company is vested in the board
and the company’s management. In accordance with Norwegian
law, the board shall ensure that the company has proper man-
agement with clear internal distribution of responsibilities and
duties. A clear division of work has been established between
the board and the executive management team. The CEO is
responsible for the executive management of the company.
Instructions to the board and the CEO were last revised and
approved by the board on 27 April 2022 and 22 February 2023.
The board has the overall responsibility for the management of
the group and the supervision of its day-to-day management
and business activities. The board shall prepare an annual
plan for its work with special emphasis on goals, strategy, and
implementation. The board’s primary responsibility shall be (i)
participating in the development and approval of the compa-
ny’s strategy, (ii) performing necessary monitoring functions
and (iii) acting as an advisory body for the executive man-
agement team. The chairperson of the board is responsible
for ensuring that the board’s work is performed in an effective
and correct manner.
The members of the board receive information about the com-
pany’s operational and financial development on a quarterly
basis. The company’s strategies shall regularly, and at least
once a year, be subject to review and evaluation by the board.
The regulations governing the board’s working practices include
guidelines for how individual directors and the CEO should
conduct themselves with respect to matters in which they may
have a personal interest. Among them is the stipulation that
each director must make a conscious assessment of his/her
own impartiality and inform the board of any possible conflict
of interest.
Further, the regulations include guidelines for how the board
and executive management shall deal with approval of agree-
ments, which are considered material, between the company
and its shareholders and other close associates, including that
the board shall arrange for an independent third-party valuation.
This will, however, not apply for transactions that are subject to
the approval of the general meeting pursuant to the Norwegian
Companies Act. Agreements with related parties will be included
in the notes to the financial statements in the annual reports.
The board meets as often as necessary to perform its duties
and shall prepare an annual evaluation of its work.
Sub-committees of the board
Audit committee
Pursuant to the Norwegian Public Limited Liability Companies
Act and the listing rules of the Oslo Stock Exchange, the com-
pany shall have an audit committee. The audit committee is
appointed by the board.
The committee’s main tasks are to prepare the board’s follow-up
of the financial reporting process, monitor the group’s internal
control and risk management systems, and maintain an ongo-
ing dialogue with the auditor.
KMC Properties held an extraordinary general meeting on 28
February 2023, whereas Stig Wærnes and Anna Musiej Aan-
ensen resigned from the board, and Hege Aasen Veiseth and
Haakon Sæter was elected as new board members.
Therefore, at the date of this report, KMC Properties’ audit com-
mittee comprised the following members:
KMC Properties
|
Annual report 2022 33Corporate governance
■ Hege Aasen Veiseth, chairperson
■ John Thoresen, member
The board approved instructions to the audit committee at the
board meeting on 4 February 2021.
Remuneration committee
The board has appointed a remuneration committee. The com-
mittee evaluates and proposes the compensation of KMC Prop-
erties’ CEO and other members of the executive management
team and provide general compensation related advice to the
board.
The board adopted instructions to the remuneration committee
on 29 April 2021.
At the date of this report, KMC Properties’ remuneration com-
mittee comprised the following members:
■ Pål Aglen, chairperson
■ Haakon Sæter
■ Marianne Bekken
Deviations from the Code: None
10. Risk management and internal control
The board shall ensure that KMC Properties has sound internal
control and systems for risk management that are appropriate
in relation to the extent and nature of the company’s activities.
The internal control and the systems shall also encompass the
company’s corporate values and ethical guidelines.
The objective of the risk management and internal control is
to manage exposure to risks to ensure successful conduct of
the company’s business and to support the quality of its finan-
cial reporting.
The board shall carry out an annual review of the company’s
most important areas of exposure to risk and its internal con-
trol arrangements.
The board shall provide an account in the annual report of the
main features of the company’s internal control and risk manage-
ment systems as they relate to the company’s financial reporting.
Internal control of financial reporting is conducted through day-
to-day follow-up by management, and supervision by the com-
pany’s audit committee.
Deviations from the Code: None
11. Board remuneration
The general meeting shall determine the board’s remuneration
annually. Remuneration of board members shall be reasonable
and based on the board's responsibilities, work, time invested
and the complexity of the enterprise. The remuneration of the
board members shall not be performance-related nor include
share option elements.
The board shall be informed if individual board members per-
form tasks for the company other than exercising their role as
board members. Work in sub-committees may be compensated
in addition to the remuneration received for board membership.
The board’s remuneration was approved at the company’s
annual general meeting on 1 June 2022, following a proposal
from the nomination committee.
Deviations from the Code: None
12. Remuneration of executive management
Pursuant to Section 6-16a of the Norwegian Public Limited
Companies Act (NPLCA), the board prepares guidelines for
determination of salaries and other benefits payable to sen-
ior executives.
The guidelines will, in line with the said statutory provision, as
well as Section 5-6 (3) of the same Act be approved by the gen-
eral meeting. If the guidelines are materially altered, the new
guidelines will be laid before, and approved by the general meet-
ing. The guidelines will be approved by the general meeting at
least every four years.
In addition to the guidelines, the board prepares a remunera-
tion report pursuant to Section 6-16b of NPLCA. Such report will
be considered by the company's general meeting and shall be
subject to an advisory vote by the general meeting in accord-
ance with NPLCA Section 5-6 (4). The guidelines and report
are published in a separate report and made available from the
company’s website, www.kmcp.no.
The company’s senior executive remuneration policy is based
primarily on the principle that executive pay should be compet-
itive and motivating, to attract and retain key personnel with the
necessary competence.
The statement refers to the fact that the board shall determine
the salary and other benefits payable to the CEO. The salary
and benefits payable to other senior executives are determined
by the CEO in accordance with the guidelines laid down in the
statement. The CEO will normally propose the remuneration
to senior executives in consultation with members of the remu-
neration committee.
Deviations from the Code: None
Annual report 2022
|
KMC Properties34 Corporate governance
13. Information and communication
Investor relations
Communication with shareholders, investors and analysts is
a high priority for KMC Properties. The objective is to ensure
that the financial markets and shareholders receive correct and
timely information, thus providing a sound foundation for a val-
uation of the company. All market players shall have access to
the same information, and all information is published in English.
All notices sent to the stock exchange are made available on
the company’s website and at www.newsweb.no.
Financial information
The company normally holds investor presentations in associ-
ation with the publication of its quarterly results. These pres-
entations are open to all and provide an overview of the group’s
operational and financial performance in the previous quarter,
as well as an overview of the general market outlook and the
company’s own prospects. The presentations are also availa-
ble on the company’s website.
Restricted trading periods
Persons discharging managerial responsibilities (PDMR) are
not allowed to acquire or sell shares in the company or related
financial instruments during the period from 30 days prior to the
publication of the company’s report for the first half year and
for the fourth quarter, including preliminary full year results, fol-
lowing the regulations of the Market Abuse Regulations (MAR).
KMC Properties publishes a financial calendar on Oslo Børs’s
website, setting out the expected dates of publication for its
reports. The dates are also available at the company’s website.
Deviations from the Code: None
14. Take-over situations
In a take-over process, should it occur, the board and the exec-
utive management team each have an individual responsibility
to ensure that the company’s shareholders are treated equally
and that there are no unnecessary interruptions to the compa-
ny’s business activities. The board has a particular responsibil-
ity in ensuring that the shareholders have sufficient information
and time to assess the offer.
In the event of a take-over process, the board shall ensure that:
a) the board will not seek to hinder or obstruct any takeover
bid for the company’s operations or shares unless there
are particular reasons for doing so;
b) the board shall not undertake any actions intended to give
shareholders or others an unreasonable advantage at the
expense of other shareholders or the company;
c) the board shall not institute measures with the inten-
tion of protecting the personal interests of its members
at the expense of the interests of the shareholders; and
the board shall be aware of the particular duty it has for
ensuring that the values and interests of the shareholders
are protected.
In the event of a take-over bid, the board will, in addition to com-
plying with relevant legislation and regulations, seek to com-
ply with the recommendations in the Code. This could include
obtaining a valuation and fairness opinion from an independ-
ent expert. On this basis, the board shall draw up a statement
containing a well-grounded evaluation of the bid and make a
recommendation as to whether the shareholders should accept
the bid. The evaluation shall specify how, for example, a take-
over would affect long-term value creation of KMC Properties.
Deviations from the Code: None
15 . Au d i to r
The auditor is appointed by the annual general meeting and
is independent of KMC Properties. Each year the board shall
receive written confirmation from the auditor that the require-
ments with respect to independence and objectivity have been
met.
Each year, the auditor shall draw up a plan for the execution of
their auditing activities, and the plan shall be made known to
the board and the audit committee. The board should specif-
ically consider if the auditor to a satisfactory degree also car-
ries out a control function and the auditor shall meet with the
audit committee annually to review and evaluate the company’s
internal control activities.
The auditor shall be present at board meetings where the annual
accounts are on the agenda. Whenever necessary, the board
shall meet with the auditor to review the auditor’s view on the
company's accounting principles, risk areas, internal control
routines, etc.
The auditor may only be used as a financial advisor to the com-
pany provided that such use of the auditor does not have the
ability to affect or question the auditors’ independence and
objectiveness as auditor for the company. Only the company’s
CEO and/or CFO shall have the authority to enter into agree-
ments in respect of such counselling assignments.
At the annual general meeting the board shall present a review
of the auditor’s compensation as paid for auditory work required
by law and remuneration associated with other specific assign-
ments.
Deviations from the Code: None
KMC Properties
|
Annual report 2022 35Corporate governance
Synprodo (part of Bewi ASA): Combined facility
producing technical components and building
insulation systems for the Dutch market.
Annual report 2022
|
KMC Properties36 Board of directors’ report
Board of directors’ report 2022
KMC Properties delivered a successful 2022. The company acquired a total of 16
industrial properties and progressed its development projects, increasing its gross
asset value (GAV) by 35 per cent from NOK 4.0 billion to NOK 5.4 billion, significantly
strengthening its platform for further growth. Rental income came in at NOK 273 million
for 2022, an increase of 33 per cent from 2021.
The company continued to execute on its growth initiatives, with
a clear path towards its strategic target of a GAV of NOK 8 bil-
lion by the end of 2024, including investments in the existing
portfolio, contract extensions, development projects and acqui-
sitions. In parallel, KMC Properties has built a strong organisa-
tion, ready to take on further opportunities.
Strategy and objectives
KMC Properties shall be the preferred partner for logistic and
industrial companies. The group’s growth strategy consists of
the following main elements:
■ Contract extensions and development investments in
current portfolio
■ Investments in development projects (greenfield projects)
■ Acquisitions of new properties
KMC Properties invests primarily in logistics – and industrial
properties due to the segment’s high returns, long lease agree-
ments and stable occupancy rates.
The investments increase the group’s cash flow and contrib-
utes to diversifying the group’s property portfolio, hence reduc-
ing the group’s operational and financial risks. All investments
are made with a focus on creating long-term value for inves-
tors and tenants, while at the same time minimising the nega-
tive impacts on all three pillars of ESG: Environmental, Social
and Governance.
KMC Properties focuses on properties with strategic locations,
meaning properties in industrial and/or logistical hubs, or prop-
erties with proximity to key customers and/or natural resources
which are business critical for the tenants. The group targets
a solid customer base of market leading companies with long
heritage and good track records, as well as entering long-term
triple net contracts with very low contract extension risk.
At the end of 2022, KMC Properties had NOK 1.9 billion in its
pipeline of investments, including (1) the two development pro-
jects (packaging facility at Jøsnøya for BEWI, NOK 151 mil-
lion remaining investments, and slaughterhouse for Slakteriet
Holding, NOK 682 million not committed), and (2) the acquisi-
tion pipeline with the remaining part of the real estate portfolio
from BEWI (NOK 1 000 million) and a property in Narvik (NOK
90 million) acquired on 3 January 2023.
The group’s ambition is to further develop its position as the
preferred industrial real estate partner for logistic and indus-
trial companies.
Operations
As of 31 December 2022, KMC Properties owned a total of 61
properties in the Nordics and the Netherlands, up from 44 prop-
erties in the same region at the end of 2021. Entering 2022, the
group also owned an office building in Moscow, Russia, but the
building was classified as held for sale during the first quarter of
2022 and the sale was completed in November 2022.
KMC Properties’ operations include investments in properties,
including greenfield/development projects, upgrades and expan-
sion of existing properties and acquisitions of new properties,
as well as management of the properties owned by the group.
All properties are managed from Norway.
Most of the group’s lease contracts are bare house contracts,
whereby maintenance, insurance and property tax are cov-
ered by the tenant. Most of the contracts are 100 per cent CPI
adjusted.
KMC Properties
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Annual report 2022 37Board of directors’ report
Grøntvedt Palagic and Grøntvedt Nutri: Produces herring,
mackerel an roe -products. Furthermore fresh fish oil and
fishmeal products for customers world wide. Strategic located
towards the Northeast Atlantic.
Annual report 2022
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KMC Properties38 Board of directors’ report
Property portfolio
All properties owned at the end of 2022 are logistics- and indus-
trial properties in the Nordics and Netherlands, including 34 in
Norway, 10 in Denmark, 12 in Sweden, 4 in the Netherlands
and one in Finland.
The portfolios consist of approximately 526 000 gross square
meters rentable area.
Important events in 2022
Development projects
Development of packaging hub for BEWI at Jøsnøya, Hitra,
Norway
In March 2021, KMC Properties entered a letter of intent with
BEWI for development of a new packaging facility on Jøsnøya,
Hitra, on the west coast of Central Norway. The new facility will
be BEWI's most modern and efficient facility for production of
fish boxes.
The project had good progress in 2022, with completion of a pre-
phase project and with commencement of the development in
May 2022. The project is planned for completion in the second
half of 2023 and is fully let to BEWI ASA on a triple net lease
contract, with initial lease of 15 years and an option for BEWI
to extend the lease term two times by five years each. The total
construction cost is estimated to be approximately NOK 200
million, and the yield-on-cost is set on 7.5 per cent.
Completion of development of a production facility for
Oppdal Spekemat for NOK ~89 million
In July 2021, KMC Properties entered an agreement with Oppdal
Spekemat AS for the construction of a new production facility
at Oppdal, in Trøndelag county in central Norway. The devel-
opment project was completed in the fourth quarter and had a
construction cost of NOK 89 million with a yield-on-cost of 7.5
per cent. Oppdal Spekemat commenced operations in Decem-
ber 2022, from which a triple-net bare-house agreement, with
an initial lease term of 15 years started running.
Oppdal Spekemat is a Norwegian producer and seller of tra-
ditional cured meats and related products established in 2009.
The company has a solid market position in central Norway
and is majority owned by Fatland, a Norwegian slaughter- and
meat expert with an annual turnover of close to NOK 5 billion.
Development of a salmon slaughterhouse for Slakteriet
Holding AS for NOK 682 million
In August 2021, KMC Properties signed a Letter of Intent (LOI)
with Slakteriet Holding AS to build a salmon slaughterhouse
facility at Florø, on the Norwegian western coast. Further, in
June 2022, the group entered a conditional share purchase
agreement (SPA) and a conditional lease agreement with Slak-
teriet. The agreements included acquisition of a land plot and
preliminary works for approximately NOK 41.3 million. In addi-
tion, the parties entered a triple-net bare house lease agree-
ment with an initial term of 20 years, and an option to extend.
Following a revised development plan, including delayed
start-up of the construction, completion of the project is cur-
rently expected in the first half of 2025. The agreements are
subject to customary closing conditions and financing. The esti-
mated total investment is NOK 682 million, with a yield-on-cost
of 6.75 per cent.
Established in 1989, Slakteriet is one of Norway’s largest fish
slaughter companies, with major facilities in Florø and Brekke.
The company has demonstrated a steady growth in both reve-
nues and slaughter volumes and has a solid financial position.
Acquisitions and divestments
Acquisition of herring production facility in Sweden from
Klädesholmen Seafood for SEK 94 million
On 21 January 2022, KMC Properties announced the acquisi-
tion of a herring production and cold storage facility in Rönnäng,
in the Swedish country of Västra Götaland, from Klädesholmen
Seafood AB for approximately SEK 94 million (approximately
NOK 90 million). NOK 30 million of the consideration was set-
tled by issuance of new shares in KMC Properties to the seller
(see further details below in the section called “Shares and
shareholder matters”) and the remainder, approximately NOK
64 million was settled in cash.
The property came with a triple-net bare house agreement with
Klädesholmen Seafood with an initial lease term of 15 years and
a gross yield of 7.5 per cent.
Klädesholmen Seafood, owned by Grøntvedt Pelagic AS, KMC
Properties’ third-largest tenant, is a modern herring production
company.
Acquisition of meat processing facility near Narvik in
Northern Norway for NOK 100 million
In February 2022, KMC Properties completed the acquisition
of a modern meat processing facility, located at Fagernes near
Narvik in Norway, for approximately NOK 100 million, with a
gross yield of 7.8 per cent. The acquisition was financed through
a combination of bank loan and equity.
The property is strategically located south of Narvik city center,
near the E6 motorway, the railway and a port terminal, and came
with a bare house agreement with Kuraas AS. Kuraas is a Nor-
wegian producer and seller of meats, headquartered in Narvik.
Acquisition of two production properties in Denmark for
DKK 151 million
In August 2022, KMC Properties completed its acquisition of
two industrial properties in Denmark for approximately DKK
151 million with a gross yield of 7.85 per cent. The properties
KMC Properties
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Annual report 2022 39Board of directors’ report
came with triple-net bare house agreements with the tenants
KpK Døre og Vindue A/S and Outline Vinduer A/S, both part of
the listed company Inwido, with an initial lease of 10 years and
an option to extend.
Inwido is a leading European provider of customised solutions
for windows and doors, with net sales of SEK 7.7 billion in 2021.
Acquisition of industrial property outside Ålesund,
Norway for NOK 52 million
In October 2022, KMC Properties completed its acquisition of
an industrial property outside Ålesund on the west coast of Nor-
way for approximately NOK 52 million. The tenant, Cflow Fish
Handling AS is a provider of solutions and services for fish han-
dling to wellboats, fishing vessels, delousing and other related
services. The property, which also includes an 85-metres long
deep-water quay, came with a triple-net bare house agreement
with Cflow of 14 years and a gross yield of 8.65 per cent.
Transformative acquisition of NOK 2.0 billion real estate
portfolio from BEWI
On 30 June 2022, KMC Properties entered an agreement with
BEWI ASA for the acquisition of up to 24 properties and one
land plot with a gross asset value of up to approximately NOK
2.0 billion. The properties included in the transaction are com-
posed of a total 244 415 sqm gross area (BTA) of buildings and
999 714 sqm BTA of land, with a gross yield of 6.31 per cent.
When the agreement was entered, 19 of the properties were
owned by Jackon Holding, which BEWI at that time was in the
process of acquiring, hence, the transaction was subject to
BEWI’s acquisition of Jackon, which was completed on 19 Octo-
ber 2022.
On 9 November 2022, the first phase of the acquisition was
completed, including 10 properties and one land plot in Nor-
way and Sweden, valued to approximately NOK 900 million.
Further, one additional property located in Norway valued at
approximately NOK 25 million was acquired before the end of
2022. The acquired portfolio aligns with KMC Properties’ core
sector of light industrial properties and long-standing working
relationship with BEWI. The transactions were financed by a
combination of the new equity raised in November (see more
information below), drawings on existing loan facilities, new com-
mitted loans, and cash on balance sheet.
In connection with the transaction, long term triple net rental
agreements, averaging an initial lease of 16.5 years, was be
entered into for the properties.
KMC Properties has an exclusive right to acquire the remaining
part of the portfolio valued at up to NOK 1.0 billion, valid until 30
June 2023. This option is considered to have no material intrin-
sic value and is therefore not recognised as a financial asset in
the consolidated statement of financial position.
Divestment of office building in Moscow, Russia
On 29 November 2022, KMC Properties announced that it had
received payment of EUR 9.6 million for the sale of its office
building in Moscow, Russia. The payment was in line with the
booked value of the property as of 30 September 2022.
A complete sanction control and ownership research of the
buyer was carried out, and the settlement was completed out-
side Russia.
Financial review
The following financial review is based on the consolidated finan-
cial statements of KMC Properties ASA and its subsidiaries. The
statements have been prepared in accordance with International
Financial Reporting Standards (IFRS).
Profit and loss
KMC Properties had a total rental income of NOK 273 million
for 2022, up from NOK 205 million for 2021. Since most of the
group’s lease agreements are triple net bare house agreements,
direct property costs are relatively low. Hence net operating
income amounted to NOK 270 million for the full year of 2022,
up from NOK 202 million for 2021.
Administration expenses amounted to NOK 52 million for 2022,
compared to NOK 64 million for 2021. The figures for 2021 were
affected by high transaction costs. The operating expenses
mainly include legal and other advisory fees related to account-
ing, investment, financing activities and personnel expenses.
Net realised financials amounted to negative NOK 122 million
for 2022 compared to negative NOK 82 million last year. The
cost increase relates to higher interest-bearing debt and higher
interest rates.
KMC Properties recorded net income from property manage-
ment of NOK 96 million for 2022, up from NOK 56 million for
2021.
Net unrealised financials amounted to NOK 35 million for 2022
compared to negative NOK 53 million last year. The amount con-
sists primarily of foreign exchange gains and losses, including
such gains and losses on intercompany balances, and amorti-
sation of debt issue costs.
Change in value of financial instruments was NOK 111 million
for 2022 compared to NOK 59 million for the previous year.
Change in value of investment property amounted to NOK 41
million for 2022 compared to NOK 317 million for the previous
year.
Tax expense for 2022 was NOK 38 million, of which NOK 9 mil-
lion is tax payable and the remaining NOK 29 million is change
in deferred tax. For 2021, the tax expense was NOK 77 million.
Annual report 2022
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KMC Properties40 Board of directors’ report
There was a loss from discontinued operations on NOK 81 mil-
lion for 2022 compared to aprofit of NOK 2 million for 2021.
Net profit was NOK 163 million for 2022 and NOK 305 million
for 2021, while total comprehensive income came in at NOK 217
million for 2022 and NOK 281 million for 2021.
Cash flow
Operating activities generated a cash inflow of NOK 279 million
for 2022 and NOK 78 million for 2021.
Investment activities, including investments in upgrade projects
and new facilities, as well as acquisitions of new properties, gen-
erated a cash outflow of NOK 1 356 million for 2022 and NOK
660 million for 2021.
Financing activities led to a cash inflow of NOK 1 053 million
for 2022 due to increase in interest bearing debt and equity
issues. For 2021, financing activities led to a cash inflow of
NOK 665 million.
Financial position
KMC Properties’ assets amounted to a total of NOK 5 781 mil-
lion on 31 December 2022, up from NOK 4 333 million on 31
December 2021.
KMC Properties’ investment properties were valued at NOK 5
366 million at year-end 2022, up from NOK 3 982 million at the
end of 2022. The portfolio is valued by Cushman & Wakefield
quarterly. Of the change in value for the year of NOK 1 384 mil-
lion, expansion projects, investments in new facilities, and acqui-
sitions amounted to a total of NOK 1 447 million. In addition, fair
value adjustments amounted to NOK 41 million, while translation
adjustments contributed with NOK 38 million.
On 31 December 2022, other assets consisted primarily of right-
of-use assets of NOK 19 million, interest rate and currency rate
swap agreements of NOK 180 million, other non-current assets
of NOK 16 million, trade receivables at NOK 7 million, other cur-
rent assets of NOK 7 million, as well as NOK 187 million in cash.
KpK Døre og Vindue A/S (part of Inwido): Produces windows
and door solutions for new builds and rehabilitation projects for
the private market in Denmark.
KMC Properties
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Annual report 2022 41Board of directors’ report
Total non-current liabilities amounted to NOK 1 420 million at
the end of the year, down from NOK 2 436 million at the end of
2021. The decrease is due to the bond loan being classified as
non-current at the end of 2022. The liabilities consist mainly of
interest-bearing liabilities of NOK 1 217 million, deferred tax lia-
bilities of NOK 163 million, land lease liabilities of NOK 19 million
and other non-current liabilities of NOK 20 million. Total current
liabilities amounted to NOK 1 984 million and consisted of inter-
est-bearing liabilities of NOK 1 905 million, trade payables of NOK
37 million and other current liabilities NOK 41 million.
Total equity was NOK 2 377 million on 31 December 2022, repre-
senting an equity ratio of 41.1 per cent, compared to NOK 1 836
million at the end of 2021, an equity ratio of 42.4 per cent.
Research and development
KMC Properties does not have any activities classified as
research and development.
Going concern
The annual financial statements for 2022 have been prepared
on the assumption that KMC Properties is a going concern pur-
suant to section 3-3a of the Norwegian Accounting Act. With
reference to the section under financial risk, the board is of the
opinion that the bond loan with maturity in 2023 does not create
significant uncertainty related to going concern. With reference
to the group’s results and financial position, as well as forecasts
for the years ahead, the conditions required for continuation as
a going concern are hereby confirmed to exist. In the opinion
of the board of directors, the group’s financial position is good.
Parent company results and allocation of net
profit
The parent company had a profit before taxes of NOK 108.0 mil-
lion for 2022, and a change in deferred tax assets of NOK (36.0)
million, recording a net profit of NOK 72.0 million. As a compar-
ison, the parent company had a profit before taxes of NOK 10.3
million for 2021, and a change in deferred tax assets of NOK 0.1
million, thus recording a net profit of NOK 10.2 million for 2021.
The board proposes the following allocation of the net profit of
NOK 72.0 million for the parent company:
Transferred to other equity NOK 72.0 million.
Risk factors and risk management
KMC Properties is subject to several risks, including market,
operational and financial risks. The management and the board
are working to expand the structure of the group’s risk manage-
ment process.
Market risk
The group is exposed to the economic cycle and macroeconomic
fluctuations, and changes in the general global economic situa-
tion, such as the level of inflation, interest rates and the rate of
economic growth, could materially affect the value of the group’s
assets, including the value of the property portfolio. An economic
downturn may decrease the market value of some or all the group’s
properties. In addition, any changes in the commercial property
industry in which the group operates could have a negative effect
on the property value, including, among other things:
■ Reduction in the demand for commercial properties;
■ Reduced availability and increased cost of financing for
commercial properties; and
■ Slowdown in the market for the sale of commercial
properties.
Any significant reduction in property value would have a nega-
tive impact on the group’s future earnings and financial position.
Operational risk
The group owns several properties. On 31 December 2022, the
weighted average unexpired lease term of the contracts for the
properties was 11.0 years. In the event the group is unable to
let its properties upon expiry of lease agreements or if lease
agreements are terminated, the group will suffer a rental short-
fall, and may also be obliged to cover the common costs for the
vacant areas until the property is re-let. Expenditures related to
a property, such as renovation and maintenance costs, are gen-
erally not reduced in proportion to any decline in rental income
from that property. Consequently, should the group be unable
to re-let its properties upon the expiry or termination of lease
agreements, this could have a material adverse effect on the
group’s financial condition, results of operations and cash flows.
Further, the failure by tenants of the group to meet their obliga-
tions could also result in significant loss of rental income for the
group and could lead to a decrease in the value of the group’s
properties which in turn would negatively affect the group’s
financial condition.
Financial risks
Failure to comply with covenants in financing arrangements
may have a material adverse effect on the company. If the com-
pany breaches covenants under the loan agreement for the
senior secured callable bonds of NOK 1 850 million issued by
the company, this loan may be subject to an immediate re-pay-
ment obligation. There can be no assurances that the group will
be able to meet its obligations under current or future financ-
ing arrangements. Any breach of existing or future debt cove-
nants and undertakings with a subsequent claim for repayment
in full or in a part of the outstanding debt will have a material
adverse effect on the group’s financial position, operations, and
prospects.
The senior secured bond loan has a maturity date on 11 Decem-
ber 2023. The company’s highest priority is secure refinanc-
Annual report 2022
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KMC Properties42 Board of directors’ report
Båtsfjordbruket. (part of Insula): Combined fish
reception and fillet production. reception of whitefish
and king crab, as well as alive storage of cod.
KMC Properties
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Annual report 2022 43Board of directors’ report
ing of the portfolio at improved financial terms within the first
six months of 2023. KMC Properties is currently in active dia-
logue with potential creditors, including banks, bondholders,
and providers of private debt, and expects the refinancing to
be composed of various financial sources. There will be a gen-
eral uncertainty related to the outcome of the refinancing until
it is secured, and this poses a risk to the company. However,
based on the current processes the board is confident the refi-
nancing will be successful.
Risks related to the valuation of the property portfolio
The group’s investment properties are measured at their fair
value by the independent external valuer Cushman & Wakefield.
The valuations are based on the individual property’s assumed
future cash flows, and property values are arrived at by dis-
counting cash flows with an individual risk-adjusted required rate
of return. Cushman & Wakefield has performed its valuations
based on the information it has received from the group, includ-
ing lease contracts, estimated development costs, and expected
lettable area, estimated future market rents, yields, inflation and
other relevant parameters, and has not undertaken any tech
-
nical inspection of the properties nor made any assessment of
legal concerns related to the properties. Because of the uncer-
tainty surrounding the input Cushman & Wakefield has received,
in particular with respect to expected market rents, discount
rates and inflation, estimates of sellable or lettable areas and
estimated development costs for projects still in development,
there can be no assurance that the fair values assigned to the
group’s properties accurately reflect the proceeds that the group
will be able to generate from any sale of such properties in the
future. Moreover, valuation methods that are currently generally
accepted and that have been used for the purpose of develop-
ing the fair value of the group’s properties could subsequently
be determined to have been unsuitable. Revised valuation tech-
niques, erroneous valuations in connection with acquisition of
property portfolios and other unforeseeable events could result
in the group being unable to achieve its projected yields and
could have significant adverse effects on the group’s business,
financial condition, results of operations and cash flows.
Foreign exchange
The group is exposed to foreign currency exchange rate fluc-
tuations. The group operates internationally, and a significant
part of its business is conducted in countries with other curren-
cies than NOK, which is the group’s functional currency, with
rental income from the group’s properties being received in DKK,
SEK and EUR (in addition to NOK). Consequently, fluctuations
in DKK, SEK, and EUR against NOK could adversely affect the
financial results of the group.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities and the availability of funding
to meet obligations when due and to close out market posi-
tions. The group's strategy for managing liquidity risk is to have
sufficient liquidity at all times to meet its financial liabilities at
maturity, both under normal and exceptional circumstances,
without risking unacceptable losses or at the expense of the
group's reputation.
For a full overview of the potential risks and uncertainties relat-
ing to the group’s business and the industry in which it operates,
please refer to the notes to the financial statements.
Environmental, social, and governance (ESG)
KMC Properties sets high ethical standards, and communica-
tion with the outside world is to be open, clear, and honest. The
group is responsible for ensuring safe and good workplaces
in the local communities where it is present. KMC Properties
seeks to create value for society, customers, employees, and
shareholders.
KMC Properties does not pollute the external environment to any
material extent and does not have operations that require spe-
cial discharge permits or cleaning measures. Waste is sorted
according to the requirements applicable at the various loca-
tions.
KMC Properties is subject to corporate responsibility reporting
requirements under section 3-3c of the Norwegian Accounting
Act. A separate ESG report is included in this annual report,
which has been prepared with reference to the Global Report-
ing Initiative (GRI) Standards (2021). The report covers material
environmental, social, and economic impacts and the manage-
ment approach of KMC Properties for the calendar year 2022.
The report aligns with the company’s financial reporting period.
KMC Properties is conscious of its role in society related to
combating corruption and operates with a high level of transpar-
ency. The board is not aware of any cases of corruption related
to the group’s operation and will continue to focus closely on
this in the future. KMC Properties reporting is pursuant to the
Transparency Act is referenced on page 27 in the ESG report.
Employees and organisation
The employees are KMC Properties’ greatest asset, and the
competence of the employees represents a competitive advan-
tage for KMC Properties.
KMC Properties had 12 full-time employees at the end of 2022,
a reduction of 3 employees since the end of 2021, explained
by the divestment of the Russian property. All employees are
based in Trondheim and Oslo, Norway.
There were no serious work-related accidents in 2022 or 2021.
Sick leave in KMC Properties was 1.1 per cent in 2022, com-
pared to 3.5 per cent in 2021.
Annual report 2022
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KMC Properties44 Board of directors’ report
Strengthened organisation
KMC Properties continued to strengthen key functions in the
organisation in 2022, including Ove Rød Henriksen as chief
accounting officer (CAO) and member of the group management
team, as well as further resources within accounting, property
management and M&A.
Equal opportunities
KMC Properties is committed to ensuring that people with differ-
ent backgrounds, irrespective of ethnicity, gender, religion, sex-
ual orientation, or age, should all have the same opportunities
for work and career development at KMC Properties. Informa-
tion on KMC Properties efforts to increase diversity is included
in the ESG report.
KMC Properties takes its social responsibility seriously. In addi-
tion to ensuring that the work is carried out safely this involves
respecting the freedom of association and not accepting any
form of forced labour, child labour or work-related discrimination.
The corporate management team has four male and one female
member, who is the chief executive officer (CEO). The board of
directors has four male and three female members.
KMC Properties has an insurance covering the responsibilities
of the board of directors, the CEO and other senior management.
Corporate governance
Good corporate governance provides the foundation for long-
term value creation, to the benefit of shareholders, employees,
and other stakeholders. The board of directors of KMC Prop-
erties has established a set of governance principles to ensure
a clear division of roles between the board of directors, the
executive management, and the shareholders. The principles
are based on the Norwegian Code of Practice for Corporate
Governance.
KMC Properties is subject to annual corporate governance
reporting requirements under section 3-3b of the Norwegian
Accounting Act and the Norwegian Code of Practice for Corpo-
rate Governance, cf. section 4.4 of the Oslo Rule Book II, rules
for issuers listed at the Oslo Børs. The Accounting Act may be
found (in Norwegian) at www.lovdata.no. The Norwegian Code
of Practice for Corporate Governance, which was last revised
on 14 October 2021, may be found at www.nues.no.
The annual statement on corporate governance for 2022 has
been approved by the board and can be found in a separate
section of this annual report.
Share and shareholders
KMC Properties ASA is listed on the Oslo Børs (Oslo Stock
Exchange) under the ticker KMCP.
As of 31 December 2022, the company had a total of 323893649
outstanding shares, each with a nominal value of NOK 0.20.
KMC Properties has one share class, and all shares have equal
rights. The shares are registered in the Norwegian Central Secu-
rities Depository (VPS). The company's registrar is DNB Markets.
The shares carry the securities number ISIN NO 001 0360175.
On 31 December 2022, the 20 largest shareholders of KMC
Properties ASA held 92.18 per cent, of which the largest share-
holders are BEWI Invest AS, owned approximately 70 per cent
by the Bekken family, holding a total of 42.92 per cent, and
HAAS AS, owned by the Akselsen family, holding 23.73 per cent.
Share issues
On 21 February 2022, the board of directors of KMC Properties
resolved to issue 2 772 105 new shares directed at Klädeshol-
men Seafood AB as part of the settlement of the acquisition of
Klädesholmen at a subscription price of NOK 10.82 per share,
corresponding to the volume weighted average trading price
of the company's shares on Oslo Børs the 30 last trading days
prior to the share issue. The board’s resolution was pursuant to
the resolution granted by the general meeting on 2 June 2021.
On 3 November 2022, KMC Properties completed at private
placement raising gross proceeds of NOK 300 million through
the placement of 37 500 000 new shares NOK 8.00 per share.
The net proceeds from the placement were partly used to
finance the first phase of the acquisition of the industrial real
estate portfolio from BEWI (see more information in section
about acquisitions above). In addition, the proceeds were ear-
marked to clearly defined CAPEX - and greenfield projects.
Certain existing and new shareholders had pre-committed to
subscribe for a total aggregate of amount of approximately
NOK 250 million in the private placement. The portion not
pre-committed was fully underwritten at NOK 8.00 per share.
The pre-committing investors and underwriters also pre-com-
mitted to subscribe and underwrite, respectively, an amount
equal to 1/6 of the amount of their respective pre-commitment
and underwriting in the private placement in connection with
a potential private placement of further 6 250 000 new shares.
The underwriters and the pre-committed shareholders received
a 4 per cent underwriting commission based on the sum of
their commitment (i.e., a total of NOK 350 million), through the
issuance of 1 750 000 new shares at NOK 8.00 per share on
2 December 2022.
General meeting
On 1 June 2022, KMC Properties held its annual general meet-
ing. All resolutions proposed by the board were approved, includ-
ing the recommendations made by the nomination committee.
KMC Properties
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Annual report 2022 45Board of directors’ report
Pål Magnus Aglen was elected new chair, replacing Anders
Dyrseth, and John Thoresen was elected new member of the
board, replacing Thorbjørn Pedersen.
KMC Properties’ annual general meeting for 2023 is planned
to be held on 11 May 2023.
Subsequent events
Acquisition of logistic property in Narvik for NOK 90
million
On 2 January 2023, KMC Properties completed its acquisition
of a logistic property, including a dry-, cold- and freeze storage
facility outside Narvik, Norway, for NOK 90 million. The acqui-
sition was announced on 7 December 2022.
The property is strategically located in a logistic hub south of
Narvik city center, close to the E6 motorway, the railway and
port terminal and has one lease agreement with the Norwegian
meat producer Kuraas AS and one with Servicegrossistene, the
largest specialist for delivery of groceries to large households in
Norway. In addition, almost half the property is currently vacant,
enabling a potential for significant additional income.
Extraordinary general meeting
On 28 February 2023, KMC Properties held an extraordinary
general meeting. All resolutions proposed by the board were
approved, including the recommendations made by the nomi-
nation committee.
Anna Musiej Aanensen and Stig Wærnes resigned as members
of the board of directors. Haakon Sæter and Hege A. Veiseth
were elected as new members of the board of directors.
Outlook
In 2022, KMC Properties acquired a total of 16 industrial prop-
erties, and grew the value of its investment portfolio (GAV) from
NOK 4.0 billion to NOK 5.4 billion. The group remains commit-
ted to its investment strategy, focusing on properties in North-
ern Europe with solid tenants in selected industries, in addition
to greenfield and capex projects in collaboration with current
and future tenants.
The macroeconomic environment is characterised by high
uncertainty. In particular, the significant increase in interest rates
the last year impacts the real estate industry. However, KMC
Properties’ portfolio of high yielding logistic and light industry
properties with solid tenants and long lease contracts, com-
bined with its 100 per cent CPI adjustments on almost all lease
agreement, provide the company with a comfortable headroom
towards its covenants. Further, the company’s investments have
increased the overall EBITDA yield due to increased utilisation
of the current organisation.
KMC Properties’ key priority is to complete the refinancing of
the company’s senior secured bond loan. Further, the com-
pany will focus on integration of recently acquired properties,
completing the transformative agreement with BEWI by acquir-
ing the remaining properties, further developing the pipeline of
M&A opportunities, and securing progress in ongoing devel-
opment projects.
The board considers KMC Properties to be well positioned to
tackle the challenging macro environment and reach the com-
pany’s target of having a NOK 8 billion real estate portfolio by
the end of 2024.
The board wishes to express its gratitude to KMC Properties’
employees, including the executive management, for their dedi
-
cated efforts, contributing to KMC Properties’ strong growth and
successful development.
Trondheim, Norway, 29 March 2023
The board of directors and CEO, KMC Properties ASA
Pål Aglen Morten Eivindssøn Astrup Nini Høegh Nergaard John Thoresen
Chair Director Director Director
Hege A. Veiseth Marianne Bekken Haakon Sæter Liv Malvik
Director Director Director CEO
Annual report 2022
|
KMC Properties46 Board of directors’ report
We confirm, to the best of our knowledge, that
■
The group financial statements for the period from
1January to 31 December 2022 have been prepared in
accordance with IFRS, as adopted by the EU
■ The financial statements of KMC Properties ASA for the
period from 1 January to 31 December 2022 have been
prepared in accordance with IFRS, as adopted by the
EU, and accounting standards and practices generally
accepted in Norway
■ The financial statements give a true and fair view of the
group and the company’s consolidated assets, liabilities,
financial position, and results of operations
■
The report of the board of directors provides a true and fair
view of the development and performance of the business
and the position of the group and the company, together
with a description of the key risks and uncertainty factors
that the group and the company is facing
Trondheim, Norway, 29 March 2023
The board of directors and CEO, KMC Properties ASA
Pål Aglen Morten Eivindssøn Astrup Nini Høegh Nergaard John Thoresen
Chair Director Director Director
Hege A. Veiseth Marianne Bekken Haakon Sæter Liv Malvik
Director Director Director CEO
Responsibility statement by the
board of directors and CEO
KMC Properties
|
Annual report 2022 47Board of directors’ report
Jackon Insulation (part of Bewi ASA): Provider of
building insulation towards the Swedish market.
Annual report 2022
|
KMC Properties48 Financial statements
Consolidated statement of comprehensive income ....... 50
Consolidated statement of financial position .................. 51
Consolidated statement of cash flows .............................. 52
Consolidated statement of changes in equity ................. 53
Notes to the consolidated financial statements .............. 54
Note 01 Company information ...............................................54
Note 02 Basis of preparation and accounting principles ........54
Note 03 Summary of significant accounting policies .............. 55
Note 04 Discontinued operations ............................................58
Note 05 Financial risk management .......................................58
Note 06 Critical accounting estimates and judgements .........61
Note 07 Tenancy agreements .................................................62
Note 08 Property and administration expenses .....................63
Note 09 Financials ..................................................................65
Note 10 Investment property ..................................................65
Note 11 Other receivables and financial derivatives ..............66
Note 12 Cash and Bank depositis...........................................67
Note 13 Shareholder capital and shareholders ......................67
Note 14 Tax .............................................................................68
Note 15 Interest bearing liabilities ..........................................70
Note 16 Leasehold rights ........................................................72
Note 17 Other current and non-current liabilities ...................72
Note 18 Subsidiaries ...............................................................73
Note 19 Related party transactions ........................................ 74
Note 20 Earnings per share .................................................... 74
Note 21 Subsequent events ...................................................74
Alternative Performance Measures ...................................... 75
EPRA Reporting ......................................................................76
Definitions ...............................................................................80
Statement of comprehensive income
– KMC Properties ASA......................................................... 82
Statement of financial position
– KMC Properties ASA......................................................... 83
Statement of cash flows
– KMC Properties ASA......................................................... 84
Statement of changes in equity
– KMC Properties ASA......................................................... 85
Notes to the financial statements
– KMC Properties ASA......................................................... 86
Note 01 Accounting principles ................................................86
Note 02 Investment in subsidiaries .........................................86
Note 03 Borrowings ................................................................. 86
Note 04 Financial instruments ................................................88
Note 05 Finance income and costs ........................................89
Note 06 Other operating expenses .........................................90
Note 07 Personnel costs .........................................................90
Note 08 Income tax ................................................................. 91
Note 09 Deferred tax ............................................................... 92
Note 10 Share capital and shareholdes .................................92
Independent Auditor’s report ............................................. 93
Financialstatements 2022
KMC Properties
|
Annual report 2022 49Financial statements
Consolidated statement of comprehensive income
Amounts in NOK million Note 2022 2021
Rental income 7 273 205
Property expenses 8 (3 ) (3 )
Net operating income 270 202
Administration expenses 8 (52 ) (64 )
Net realised financials 9 (122 ) (82 )
Net income from property management 96 56
Net unrealised financials 9 35 (53 )
Changes in value of financial instruments 11 111 59
Changes in value of investment properties 6, 10 41 317
Profit before tax 282 380
Current tax 14 (9 ) (3 )
Deferred tax 14 (29 ) (74 )
Profit from continued operations 244 303
Profit from discontinued operations 4 (81 ) 2
Profit 163 305
Translation differences for foreign operations 54 (24 )
Comprehensive income 217 281
Profit attributable to:
Equity holders of the company 163 305
Non-controlling interest - -
Comprehensive income attributable to:
Equity holders of the company 217 281
Non-controlling interest - -
Earnings per share 20
Continuing operations 0.6 1.2
Basic=Diluted (NOK)
Annual report 2022
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KMC Properties50 Financial statments
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KMC Propertiesgroup
Consolidated statement of nancial position
Amounts in NOK million Note 31.12.2022 31.12.2021
ASSETS
Non-current assets
Investment properties 6.10 5 366 3 982
Site leaseholds, right-of-use assets 16 19 19
Financial derivatives 5.11 180 68
Other non-current assets 16 5
Total non-current assets 5 580 4 074
Current assets
Trade receivables 11 7 24
Other current assets 11 7 27
Cash and cash equivalents 12 187 208
Assets held for sale 4 - -
Total current assets 200 259
TOTAL ASSETS 5 781 4 333
EQUITY AND LIABILITIES
Equity
Share capital 13 65 56
Share premium 1 512 1 196
Translation reserve 20 (34 )
Retained earnings 781 617
Total equity 2 377 1 836
Liabilities
Non-current liabilities
Deferred tax liabilities 14 163 132
Non-current interest-bearing liabilities 15 1 217 2 275
Lease liabilities 16 19 19
Other non-current liabilities 17 20 10
Total non-current liabilities 1 420 2 436
Current liabilities
Current interest-bearing liabilities 15 1 905 -
Trade payables 17 37 24
Current tax liabilities 14, 17 0 3
Other current liabilities 17 41 34
Liabilities held for sale 4 0 -
Total current liabilities 1 984 61
Total liabilities 3 404 2 497
TOTAL EQUITY AND LIABILITIES 5 781 4 333
Trondheim, Norway, 29 March 2023, the board of directors and CEO, KMC Properties ASA
Pål Aglen Morten Eivindssøn Astrup Nini Høegh Nergaard John Thoresen
Chair Director Director Director
Hege A. Veiseth Marianne Bekken Haakon Sæter Liv Malvik
Director Director Director CEO
KMC Properties
|
Annual report 2022 51Financial statments
|
KMC Propertiesgroup
Consolidated statement of cash ows
Amounts in NOK million Note 2022 2021
Profit before tax 282 380
Changes in value of investment properties 10 (41 ) (317 )
Financial items (23 ) 76
Change in working capital:
- change in current assets 41 20
- change in current liabilities 24 (79 )
Other items not included in the cash flow 4 0
Taxes paid (7 ) (2 )
Net cash flow from operating activities 279 78
Purchase of investment properties 10 (1 308 ) (520 )
Upgrades of investment properties 10 (139 ) (140 )
Proceeds from property transactions 99 -
Interest received 3 -
Change in other non-current assets (12 ) -
Net cash flow from investment activities (1 356 ) (660 )
Capital increase from issue of shares 13 324 326
Proceeds interest-bearing liabilities 15 866 439
Repayment interest-bearing liabilities 15 (19 ) (3 )
Interest paid (126 ) (87 )
Other financial costs (3 ) (15 )
Change in other non-current liabilities 10 3
Net cash flow from financing activities 1 053 665
Effects of exchange-rate changes on cash and cash equivalents 12 3 0
Net change in cash and cash equivalents (21 ) 82
Opening balance of Cash and Cash equivalents 208 125
Cash and cash equivalents at period end 187 208
Annual report 2022
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KMC Properties52 Financial statments
|
KMC Propertiesgroup
Consolidated statement of changes in equity
Subscribed
share
capital
Share
premium
Translation
reserves
Retained
earnings
Total
equity
Total equity at 31 December 2020 48 892 (10 ) 313 1 243
Issue of shares 8 318 326
Transaction cost issue of shares (15 ) (15 )
Profit /(loss) for the period 305 305
Other comprehensive income (translation reserves) (24 ) (24 )
Total equity at 31 December 2021 56 1 196 (34 ) 617 1 836
Issue of shares 8 322 330
Transaction cost issue of shares (6 ) (6 )
Profit /(loss) for the period 163 163
Other comprehensive income (translation reserves) 54 54
Total equity at 31 December 2022 65 1 512 20 781 2 377
KMC Properties
|
Annual report 2022 53Financial statments
|
KMC Propertiesgroup
Notes to the consolidated nancial statements
Note 01 Company information
Exchange with the ticker KMCP. The company and its subsidiaries
folio of properties in the Nordics and the Netherlands. The prop-
erties are strategically located and have long lease agreements
with solid tenants.
The holding company, KMC Properties ASA public limited lia-
The consolidated financial statements were approved by the com-
pany’s board on 29 March 2023.
Note 02 Basis of preparation and accounting principles
Annual report 2022
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KMC Properties54 Financial statments
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KMC Propertiesgroup
Note 03 Summary of significant accounting policies
KMC Properties
|
Annual report 2022 55Financial statments
|
KMC Propertiesgroup
Annual report 2022
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KMC Properties56 Financial statments
|
KMC Propertiesgroup
KMC Properties
|
Annual report 2022 57Financial statments
|
KMC Propertiesgroup
Note 04 Discontinued operations
Note 05 Financial risk management
Annual report 2022
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KMC Properties58 Financial statments
|
KMC Propertiesgroup
KMC Properties
|
Annual report 2022 59Financial statments
|
KMC Propertiesgroup
Annual report 2022
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KMC Properties60 Financial statments
|
KMC Propertiesgroup
Note 06 Critical accounting estimates and judgements
KMC Properties
|
Annual report 2022 61Financial statments
|
KMC Propertiesgroup
Note 07 Tenancy agreements
Annual report 2022
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KMC Properties62 Financial statments
|
KMC Propertiesgroup
Note 08 Property and administration expenses
KMC Properties
|
Annual report 2022 63Financial statments
|
KMC Propertiesgroup
Annual report 2022
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KMC Properties64 Financial statments
|
KMC Propertiesgroup
Note 09 Financials
Note 10 Investment property
KMC Properties
|
Annual report 2022 65Financial statments
|
KMC Propertiesgroup
Note 11 Other receivables and financial derivatives
Annual report 2022
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KMC Properties66 Financial statments
|
KMC Propertiesgroup
Note 12 Cash and Bank depositis
Note 13 Shareholder capital and shareholders
KMC Properties
|
Annual report 2022 67Financial statments
|
KMC Propertiesgroup
Note 14 Tax
Annual report 2022
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KMC Properties68 Financial statments
|
KMC Propertiesgroup
KMC Properties
|
Annual report 2022 69Financial statments
|
KMC Propertiesgroup
Note 15 Interest bearing liabilities
Annual report 2022
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KMC Properties70 Financial statments
|
KMC Propertiesgroup
KMC Properties
|
Annual report 2022 71Financial statments
|
KMC Propertiesgroup
Note 16 Leasehold rights
Note 17 Other current and non-current liabilities
Annual report 2022
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KMC Properties72 Financial statments
|
KMC Propertiesgroup
Note 18 Subsidiaries
KMC Properties
|
Annual report 2022 73Financial statments
|
KMC Propertiesgroup
Note 19 Related party transactions
Note 20 Earnings per share
Note 21 Subsequent events
Annual report 2022
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KMC Properties74 Financial statments
|
KMC Propertiesgroup
Alternative Performance Measures
KMC Properties ASA’s financial information is prepared in accord-
ance with the international financial reporting standards (IFRS). In
addition, the company reports alternative performance measures
(APMs) that are regularly reviewed by management to enhance the
understanding of the company’s performance as a supplement, but
not as a substitute, to the financial statements prepared in accord-
ance with IFRS. Financial APMs are intended to enhance compa-
rability of the results and cash flows from period to period.
The financial APMs reported by KMC Properties ASA are the APMs
that, in management’s view, provide relevant supplemental informa-
tion of the company’s financial position and performance. Opera-
tional measures such as, but not limited to, occupancy and WAULT
are not defined as financial APMs according to ESMA’s guidelines.
EBITDA
Amounts in NOK million 2022 2021
Net income from property management 96 56
Net realised financials 122 82
EBITDA 218 138
Interest Cover Ratio (ICR)
Amounts in NOK million 2022 2021
LTM EBITDA 226 147
Net realised financials (122) (82)
ICR 1.8x 1.8x
KMC Properties
|
Annual report 2022 75Financial statments
|
KMC Propertiesgroup
EPRA Reporting
The following performance indicators have been prepared in accord-
ance with best practices as defined by EPRA (European Public
Real Estate Association) in its latest edition of the Best Practices
Recommendations Guidelines. The EPRA Best Practices Recom-
mendations Guidelines focus on making the financial statements of
public real estate companies clearer and more comparable across
Europe. For further information about EPRA, see www.epra.com.
Summary table EPRA performance measures
Unit 2022 / 31.12.2022 2021 / 31.12.2021
A EPRA Earnings per share NOK 0.09 0.22
B EPRA NRV per share NOK 7.6 7.0
EPRA NTA per share NOK 7.5 6.9
EPRA NDV per share NOK 7.3 6.5
C EPRA Net Initial Yield (NIY) % 6.9 7.1
EPRA, "topped-up“ NIY % 6.9 7.1
D EPRA Vacancy Rate % 0.0 0.0
E EPRA Cost Ratio (including direct vacancy costs) % 20.0 32.5
EPRA Cost Ratio (excluding direct vacancy costs) % 20.0 32.5
F EPRA LTV % 56.2 52.6
The details for the calculation of the performance measures are
shown on the following pages.
A. EPRA EARNINGS
EPRA Earnings is a measure of the operational performance of
the property portfolio. EPRA Earnings is calculated based on the
income statement, adjusted for non-controlling interests, value
changes on investment properties, changes in the market value of
financial instruments and the associated tax effects.
Amounts in NOK millions 2022 2021
Earnings per IFRS income statement 163 305
Adjustments to calculate EPRA Earnings:
Changes in value of investment properties (41) (317)
Changes in value of financial instruments (111) (59)
Deferred tax investment properties 27 63
Deferred tax financial derivatives 24 13
EPRA Earnings 63 4
Basic number of shares 291 253
EPRA Earnings per Share (EPS) 0.22 0.02
Company specific adjustments:
Profit from discontinued operations 81 (2)
Company specific Adjusted Earnings 144 2
Company specific Adjusted EPS 0.49 0.01
Annual report 2022
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KMC Properties76 Financial statments
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KMC Propertiesgroup
B. EPRA NET ASSET VALUE (NAV) METRICS
EPRA Net Reinstatement Value (NRV)
The objective of the EPRA NRV measure is to highlight the value
of net assets on a long-term basis and assumes that no selling of
assets takes place. Assets and liabilities that are not expected to
crystallise in normal circumstances such as the fair value move-
ments on financial derivatives and deferred taxes on property val-
uation surpluses are therefore excluded. Real estate transfer taxes
are levied on property transactions in Netherland, but not on prop-
erty transactions in the Nordics. Such taxes are accordingly only
included for Netherlands in KMC Properties valuation certificates.
Amounts in NOK millions 31.12.2022 31.12.2021
IFRS Equity attributable to shareholders 2 377 1 836
Approved, not paid dividend - -
Net Asset Value (NAV) at fair value 2 377 1 836
Deferred tax investment properties 189 171
Deferred tax financial derivatives 40 15
Real estate transfer tax 33 31
Fair value of financial derivatives (180) (68)
Net reinstatement value (EPRA NRV) 2 459 1 985
Outstanding shares at period end (million) 324 282
EPRA NRV per share 7.59 7.0
EPRA Net Tangible Assets (NTA)
The EPRA NTA is focused on reflecting a company’s tangible assets
and assumes that entities buy and sell assets, thereby crystallising
certain levels of unavoidable deferred tax liability. KMC Properties
has adopted the first option in the EPRA BPR guidelines excluding
all deferred tax related to investment properties, since KMC Prop-
erties has no intention to sell any of its properties.
Amounts in NOK millions 31.12.2022 31.12.2021
IFRS Equity attributable to shareholders 2 377 1 836
Approved, not paid dividend - -
Net Asset Value (NAV) at fair value 2 377 1 836
Deferred tax investment properties 189 171
Deferred tax financial derivatives 40 15
Fair value of financial derivatives (180) (68)
Net tangible assets (EPRA NTA) 2 425 1 954
Outstanding shares at period end (million) 324 282
EPRA NTA per share 7.5 6.9
KMC Properties
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Annual report 2022 77Financial statments
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KMC Propertiesgroup
EPRA Net Disposal Value (NDV)
The EPRA NDV measure illustrates a scenario where deferred tax,
financial instruments, and certain other adjustments are calculated
as to the full extent of their liability. This enables readers of finan-
cial reports to understand the full extent of liabilities and result-
ing shareholder value under an orderly sale of business and/or if
liabilities are not held until maturity. The measure should not be
viewed as a “liquidation NAV” for KMC Properties, as fair values
may not represent liquidation values, and as an immediate realisa-
tion of KMC Properties assets may be structured as sale of prop-
erty-owning companies, resulting in the deferred tax liabilities only
partially crystallising.
Amounts in NOK millions 31.12.2022 31.12.2021
IFRS Equity attributable to shareholders 2 377 1 836
Approved, not paid dividend - -
Net Asset Value (NAV) at fair value 2 377 1 836
Fair value adjustment of interest bearing liabilities, net of tax - -
Net disposal value (EPRA NDV) 2 377 1 836
Outstanding shares at period end (million) 324 282
EPRA NDV per share 7.3 6.5
C. EPRA Net Initial Yield (NIY)
EPRA Net Initial Yield (NIY) measures the annualised rental income
based on the cash rents passing at the balance sheet date, less
non-recoverable property operating expenses, divided by the mar-
ket value of the property, increased with (estimated) purchasers’
costs.
EPRA “topped-up” NIY incorporates an adjustment to the EPRA NIY
in respect of the expiration of rent-free periods (or other unexpired
lease incentives such as discounted rent periods and step rents).
Amounts in NOK millions 31.12.2022 31.12.2021
Investment properties 5 366 3 982
Investment properties held for sale - -
Market value of the property portfolio 5 366 3 982
Less projects, land and developments (67) (72)
Allowance for estimated purchasers’ cost 11 8
Gross up completed management portfolio valuation 5 310 3 918
12 months rolling rent 371 291
Estimated ownership cost (7) (11)
Annualised net rents 365 279
Add: Notional rent expiration of rent-free periods or other lease incentives - -
Topped up net annualised net rents 365 279
EPRA NIY 6.9% 7.1%
EPRA "topped-up" NIY 6.9% 7.1%
Annual report 2022
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KMC Properties78 Financial statments
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KMC Propertiesgroup
D. EPRA Vacancy Rate
Estimated Market Rental Value (ERV) of vacant space divided by
the ERV of the whole portfolio.
Amounts in NOK millions 31.12.2022 31.12.2021
Market rent vacant areas - -
Total market rent 375 286
EPRA Vacancy Rate 0.0% 0.0%
E. EPRA Cost Ratios
Administrative & operating costs (including & excluding costs of
direct vacancy) divided by gross rental income.
Amounts in NOK millions 2022 2021
Property expenses (3) (3)
Administration expenses (52) (64)
Less: Ground rent costs 0 0
EPRA Costs (including direct vacancy costs) (55) (67)
Direct vacancy costs - -
EPRA Costs (excluding direct vacancy costs) (55) (67)
Gross Rental Income less ground rents 273 205
Gross Rental Income 273 205
EPRA Cost Ratio (including direct vacancy costs) 20.0% 32.5%
EPRA Cost Ratio (excluding direct vacancy costs) 20.0% 32.5%
F. EPRA LT V
EPRA LTV is a metric to determine the percentage of debt
comparing to the appraised value of the properties.
31.12.2022
Group as
reported
Proportionate Consolidation
31.12.2022
Combined
EPRA LTV
31.12.2021
Combined
EPRA LTV
Amounts in NOK million
Share of joint
ventures
Non-controlling
interest
Bond loan 1 850 - - 1 850 1 850
Bank loan 1 266 - - 1 266 437
Construction loan 18 - - 18 -
Revolving credit facility - - - - -
Net Payables
1)
69 - - 69 15
Cash and cash equivalents (187) - - (187) (208)
Net debt 3 016 - - 3 016 2 094
Investment properties 5 366 - - 5 366 3 982
Investment properties held for sale - - - - -
Market value of the property portfolio 5 366 - - 5 366 3 982
EPRA LTV 56.2% 56.2% 52.6%
1) Net payables include trade payables, other current and non-current liabilities, trade receivables, and other receivables and other assets.
KMC Properties
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Annual report 2022 79Financial statments
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KMC Propertiesgroup
Definitions
GLA Gross leasable area, corresponds to the sum of the areas available for lease.
GRI Gross rental income, equals total rental income.
Independent valuer Cushman & Wakefield.
ICR Interest Cover Ratio, the ratio of EBITDA to Net Interest Cost.
LTM Last twelve months.
Market value of portfolio The market value of all properties owned by the parent company and subsidiaries.
NAV Net Asset Value, the total equity that the company manages for its owners. KMC Properties
presents NAV calculations in line with EPRA recommendation, where the difference mainly is
explained by the expected turnover of the property portfolio.
Occupancy rate (%) Estimated market rent of occupied space of the management properties, divided by the mar-
ket rent of the total space of the management portfolio.
Swap A swap is an agreement between two parties to exchange sequences of cash flows for a set
period of time.
Triple net lease
A type of lease whereby the tenant pays, in addition to the rent, all costs incurred on the
property that would normally have been paid by the property owner. These include operating
expenses, maintenance, property tax, site leasehold fees, insurance, property caretaking, etc.
WAULT
Weighted Average Unexpired Lease Term measured as the remaining contractual rent amounts
of the current lease contracts of the investment properties of the group, including areas that
have been re-let and signed new contracts, adjusted for termination rights and excluding any
renewal options, divided by Contractual rent, including renewed and signed new contracts.
SG&A Selling, General & Administrative Expenses, calculated as Salary expenses
Property related expenses
Property-related expenses include administrative costs related to the management of the prop-
erties as well as operating and maintenance costs.
SWAP A swap is an agreement between two parties to exchange sequences of cash flows for a set
period of time
WAULT
Weighted Average Unexpired Lease Term measured as the remaining contractual rent amounts
of the current lease contracts of the investment properties of the group, including areas that
have been re-let and signed new contracts, adjusted for termination rights and excluding any
renewal options, divided by Contractual rent, including renewed and signed new contracts.
The Gasfield property is excluded in the calculation.
Annual report 2022
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KMC Properties80 Financial statments
|
KMC Propertiesgroup
Escamar Seafood OY (part of Insula):
Processing facility of fish and shellfish for the
Finnish market.
KMC Properties
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Annual report 2022 81Financial statments
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KMC Propertiesgroup
Statement of comprehensive income – KMC Properties ASA
For the period 1 January - 31 December
Amounts in NOK million Note 2022 2021
Other income 17 14
Total income 17 14
Personnel expenses 7 (29) (19)
Other operating expenses 6 (19) (37)
Total operating expenses (48) (56)
Operating profit (loss) (31) (42)
Income from subsidiares 34 0
Finance revenues 5 248 170
Finance expenses 5 (170) (99)
Currency exchange gains (losses) 5 27 (19)
Net financials 139 52
Profit before tax 108 10
Income tax expense 8, 9 (36) 0
Profit 72 10
Translation differences from foreign operations 0 0
Comprehensive income 72 10
Annual report 2022
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KMC Properties82 Financial statments
|
KMC PropertiesASA
Statement of nancial position – KMC Properties ASA
Per 31 December
Amounts in NOK million Note 31.12.2022 31.12.2021
ASSETS
Non-current assets
Investment in subsidiaries 2 1 267 1 372
Financial derivatives 4 177 67
Loans to subsidiaries 2 636 2 162
Deferred tax asset 9 10 46
Total non-current assets 4 090 3 647
Current assets
Receivables from group companies 271 117
Other receivables 4 3 5
Other financial derivatives 2 0
Cash and cash equivalents 4 11 68
Total current assets 287 190
TOTAL ASSETS 4 377 3 837
EQUITY AND LIABILITIES
Equity
Ordinary shares 10 65 56
Share premium 2 375 2 054
Other paid-in equity 307 313
Other equity (422) (494)
TOTAL EQUITY 2 326 1 929
Liabilities
Non-current liabilities
Non-current interest-bearing liabilities 3 1 844 1 838
Loans from group companies 173 50
Total non-current liabilities 2 017 1 888
Current liabilities
Trade liabilities 5 5
Corporate tax payable 8, 9 0 0
Current interest-bearing liabilities 3 8 5
Payables to group companies 8 1
Other current liabilities 7 14 8
Total current liabilities 34 19
TOTAL LIABILTIES 2 051 1 907
TOTAL EQUITY AND LIABILITIES 4 377 3 837
Trondheim, Norway, 29 March 2023, the board of directors and CEO, KMC Properties ASA
Pål Aglen Morten Eivindssøn Astrup Nini Høegh Nergaard John Thoresen
Chair Director Director Director
Hege A. Veiseth Marianne Bekken Haakon Sæter Liv Malvik
Director Director Director CEO
KMC Properties
|
Annual report 2022 83Financial statments
|
KMC PropertiesASA
Statement of cash ows – KMC Properties ASA
Amounts in NOK million Note 2022 2021
Cash flow from operational activites
Profit before tax 108 10
Adjusted for:
Depreciations 5 0 0
Financial income 5 (143) (64)
Interest on loans to subsidiaries 5 139 (106)
Interest on loans from subsidisaries 5 (7) (1)
Financial expenses 5 163 99
Net currency gains (27) 19
Cash flow before changes in working capital (30) (41)
Changes in working capital:
Trade receivables and other receivables 4 (153) (118)
Trade payables and other payables 4 135 18
Paid taxes 8, 9 0 0
Net cash flow from operating activities (18) (100)
Cash flow from investment activities
Outflows from investments in subsidiaries 2 105 (134)
Outflows from lending to subsidiaries (474) 0
Inflows from repayment of loan 133 76
Interest received 0 3
Net cash flow from investment activities (236) (55)
Cash flow from financing activities
Share issue 10 330 315
Net borrowings 3 0 0
Repayments of loans 3 3 0
Transactions fees paid and other financial costs (6) (14)
Interest paid 3 (100) (91)
Net cash flow from financing activities 227 209
Net change in cash and cash equivalents (57) 14
Carried forward cash and cash equivalents 4 68 54
Fx movements on bank deposits 0 0
Cash and cash equivalents on closing date 11 68
Restricted cash and cash equivalents not included above - -
Annual report 2022
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KMC Properties84 Financial statments
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KMC PropertiesASA
Statement of changes in equity – KMC Properties ASA
Amounts in NOK million Note
Share
capital
Share
premium
Other
paid-in
capital
Retained
earnings/
losses
Total
equity
1 January 2021 48 1 736 327 (504) 1 607
Issue of shares - conversion of the
"Swedbank loan" 10 0 6 - - 7
Issue of shares - conversion of sellers credit
(KMC Properties AS) 10 8 293 - - 300
Issue of shares - private placement
(NOK 300 million) 10 0 5 - - 5
Issue of shares - conversion of sellers credit
(Dutch properties) 10 0 15 - - 15
Transaction cost issue of shares 10 - - (15) (15)
Effect of loan conversion to equity 3 - - - 10 10
Profit /(loss) for the year total - - - 0 0
Total 8 318 (15) 11 323
31 December 2021 56 2 054 313 (494) 1 929
Amounts in NOK million Note
Share
capital
Share
premium
Other
paid-in
capital
Retained
earnings/
losses
Total
equity
1 January 2022 56 2 054 313 (494) 1 929
Issue of shares privat placement 22.02.2022 10 1 29 - - 30
Issue of shares privat placement 04.11.2022 10 8 292 - - 300
Transaction cost issue of shares 10 - - (6) - (6)
Profit /(loss) for the year total - - - 72 72
Total 8 322 (6) 72 396
31 December 2022 65 2 375 307 (422) 2 326
Change in share capital and related transaction cost:
■
The shares subsequent of NOK 554 421, at NOK 0.20 per share, gave 2 772 105 new shares
■
The private placement of NOK 7 850 000, at NOK 0.20 per share, gave 39 250 000 new shares
(transaction cost: NOK 5 852 577).
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Annual report 2022 85Financial statments
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KMC PropertiesASA
Notes to the nancial statements – KMC Properties ASA
Note 01 Accounting principles
KMC Properties ASA (KMCP) is a public limited liability company
registered in Norway. Its head office is at Dyre Halses gate 1 A,
7042 Trondheim.
KMC Properties ASA uses a simplified version of IFRS as account-
ing principle. There are no material effects in comparison with ordi-
nary IFRS principles used in the group. Also see note 3 to the
consolidated accounts for further information on accounting prin-
ciples. Subsidiaries and investments in related companies are rec-
ognised at cost unless the value is considered to be impaired. A
write-down to fair value will be done if the impairment is not con-
sidered temporary and impairment is considered required by IFRS.
Write-downs will be reversed if the requirement for impairment is
no longer present.
Note 02 Investment in subsidiaries
KMCP investment in subsidiaries
Location
Formed/
acquired Ownership
Equity
31.12.2022
Bo ok val ue
KMCP 2022
Bo ok val ue
KMCP 2021
KMC Properties Holdco AS Norway 2022 100% 1 285 1 267 0
Tiberton Yard Holding 2 Ltd Cyprus 2015 100% (0) 0 0
Total 1 285 1 267 0
KMC P ASA sold in 2022 the shares in subsidiares to the new sub-
sidiary KMC Properties Holdco AS.
In 2021 KMC P ASA (99 per cent) and Tiberton Yard Holding 2 Ltd
(1 per cent) owns the shares in Gasor Consulting Ltd. Gasor Con-
sulting owns 100 per cent of the shares in LLC Martex. LLC Martex
owns and opereate the Gasfield building (the investment property).
In 2022 KMC P ASA and Tiberton Yard Holding sold the shares in
Gasor Consulting Ltd.
All the transaction at market terms.
Note 03 Borrowings
Bond loan:
Amounts in NOK million 2022 2021
Interest-bearing debt as at 1 January 1 838 1 832
New debt - -
Repayment/refinancing of debt - 0
Interest-bearing debt as at 31 December 1 838 1 832
Capitalised borrowing cost 6 6
Carrying amount interest-bearing debt* 1 844 1 838
Fair value of interest-bearing debt, excess value/(reduced value) for the group in relation to book value 0 0
* The fair value presented above is the excess value as at 31 December 2022, given by Nordic Bond Pricing AS.
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Bond loan:
As part of the transaction agreement between KMCP and the
owners of KMC Properties ASA, KMCP issued a bond loan on 12
December 2020, see terms below.
Bond loan NOK million *
Weighted average
current interest Interest terms Final maturity
In compliance
with covenants?
2020-2023 1 850 7.54% 3 months NIBOR + 4.25% 11 December 2023 Yes
Key terms:
■
NOK 1 850 000 000 senior secured bond. Guarantees and
security is shared with certain hedging providers and one
or more revolving credit facilities and, under the terms of an
intercreditor agreement, the bond issue ranks behind the
relevant hedging providers and the revolving credit facilities in
the payment waterfall.
■
Call option: Voluntary redemption of bond (i) prior to 11
June 2023 in done with a "make whole" compensation
to bondholders and (ii) after 11 June 2023 until (but not
including) Final Maturity is done at 101 per cent of the nominal
amount of redeemed bond.
■
Put option: Upon a change of control, failure to list the
bond or a de-listing of the Issuer's share from Oslo Børs,
exercisable at 101 per cent of the nominal amount of the
redeemed bond.
■
Guarantors and Security: KMC Properties AS and
substantially all of its direct and indirect subsidiaries (i) are
guarantors for the bond issue and (ii) substantially all of their
assets (and the shares in KMC Properties AS) are granted as
security for the bond issue.
■
General undertakings (covenants): Customary general
undertakings applicable to the Issuer and all its direct and
indirect subsidiaries, including maintaining authorisations,
compliance with laws, continuation of business, pari
passu ranking, limitations on investments, limitations on
distributions, certain financial support restrictions, restrictions
on limiting subsidiaries' right to make distributions.
■
Additional undertakings (covenants) for KMC Properties
AS: In additional to the general undertakings set out
above, there are certain covenants that only apply to KMC
Properties AS and its direct and indirect subsidiaries and
which, to a certain extent, "ring-fences" this part of the
group. These covenants include restrictions on mergers and
de-mergers, additional limitations on investments, limitations
on disposals of assets and requirements for re-investing
disposal proceeds, additional restrictions on incurring
financial indebtedness, negative pledge, requirements as to
insurances, requirements for maintenance and managements
of properties and limitations on alteration of property lease
agreements.
■
Financial covenants: The Issuer must ensure compliance
with the following financial covenants (maintenance
covenants), measure on the group as a whole:
– Interest cover ratio (ICR) of not less than 1.5x
– Net-loan-to-value ratio below (NLTV) 75 per cent
– Liquidity not less than an amount equal to net interest
costs for the next 6 months
■
In addition (incurrence covenants):
– any distribution from the Issuer is subject to an NLTV of
not less than 65 per cent and a liquidity that is 1.5x higher
than the liquidity requirement above; and
– the incurrence of certain otherwise permissible new
financial indebtedness is subject to a loan-to-value ratio of
60 per cent.
– The group was in compliance with all covenants related to
its liabilities at 31 December 2021.
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Note 04 Financial instruments
Financial assets represent contractual rights for the group to receive
cash or other financial assets in the future. Financial liabilities cor-
respondingly represent contractual obligations for the group to
make future payments. Financial instruments are included in sev-
eral accounting lines in the group’s balance sheet and income state-
ment and are classified in different categories in accordance with
their accounting treatment.
The carrying amount of financial instruments in the group’s balance
sheet is considered to provide a reasonable expression of their fair
value, with the exception of interest-bearing debt. The fair value of
interest-bearing debt is described in note 3. A specification of the
group’s financial instruments is presented below.
Financial assets
Amounts in NOK million
Amortised cost
31.12.2022
Fair value through profit
or loss 31.12.2022 Total
Cash and cash equivalents 11 0 11
Interest-bearing loans and borrowings to subsidiaries 2 636 0 2 636
Currency and interest swaps (long-term) 0 177 177
Currency and interest swaps (short-term) 0 2 2
Current receivables to subsidiaries 34 - 34
Other current receivables 240 0 240
Total financial assets at 31 December 2022 2 921 179 3 100
Financial liabilities
Amounts in NOK million
Amortised cost
31.12.2022
Fair value through profit
or loss 31.12.2022 Total
Interest-bearing loans and borrowings (bond) 1 844 0 1 844
Interest-bearing loans and borrowings from subsidiaries 173
Interests on loans and borrowings 8 0 8
Trade payables (non interest bearing) 5 0 5
Current liabilities to subsidiaries 8 0 8
Other current liabilities (non interest bearing) 14 0 14
Total financial liabilities at 31 December 2022 2 051 0 2 051
Net financial assets and liabilities at 31 December 2022 870 179 1 049
Financial assets
Amounts in NOK million
Amortised cost
31.12.2021
Fair value through profit
or loss 31.12.2021 Total
Cash and cash equivalents 68 0 68
Interest-bearing loans and borrowings to subsidiaries 2 162 0 2 162
Currency and interest swaps (long-term) 0 67 67
Currency and interest swaps (short-term) 0 0 0
Other current receivables 121 0 121
Total financial assets at 31 December 2021 2 351 68 2 419
Financial liabilities
Amounts in NOK million
Amortised cost
31.12.2021
Fair value through profit
or loss 31.12.2021 Total
Interest-bearing loans and borrowings (bond) 1 838 0 1 838
Interests on loans and borrowings 5 0 5
Trade payables (non interest bearing) 5 0 5
Current liabilities to subsidiaries 1 0 1
Other current liabilities (non interest bearing) 8 0 8
Total financial liabilities as at 31 December 2021 1 857 0 1 857
Net financial assets and liabilities as at 31 December 2021 494 68 562
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The below table shows an analysis of fair values of assets and
liabilities in the parent company, grouped by level in the fair value
hierarchy, which either are measured at fair value or where infor-
mation about the fair value is provided.
Level 1 - Quoted prices in active markets that the entity can access
at the measurement date.
Level 2 – Use of a model with inputs other than level 1 that are
directly or indirectly observable market data.
Level 3 - Use of a model with inputs that are not based on observ-
able market data.
Financial liabilities measured at fair value / where fair value must be presented
Amounts in NOK million Level 1 Level 2 Level 3 Total
Currency and interest swaps (long-term) 0 177 0 177
Currency and interest swaps (short-term) 0 2 0 2
Total 0 179 0 179
Swap agreements
Swap
agreement
Currency
amount (million)
Start
date
Maturity
date
Fixed
currency rate
Fixed
interest
Interest & currency NOK 335 23.12.2020 11.12.2023 EUR/NOK = 10.630 EURIBOR = -0.51%
Interest & currency NOK 240 23.12.2020 11.12.2023 SEK/NOK = 1.050 STIBOR = 0.017%
Interest & currency NOK 165 23.12.2020 11.12.2023 DKK/NOK = 1.428 DANISH IBOR = -0.505%
Interest NOK 500 13.07.2021 31.12.2030 Not applicable NIBOR = 1.5175%
Interest EUR 32 11.12.2023 13.12.2027 Not applicable EURIBOR = -0.03%
Interest SEK 120 11.12.2023 13.12.2027 Not applicable STIBOR = 0.686%
Interest DKK 120 11.12.2023 13.12.2027 Not applicable DANISH IBOR = 0.215%
Note 05 Finance income and costs
Finance income
Amounts in NOK million 2022 2021
Interest income 0 0
Fair value adjustment bank loan 0 0
Interest gains from group companies 139 106
Dividends from subsidiaries 34 0
Gains from the disposal of shares in subsidiaries 0 0
Changes in fair value, financial derivatives over profit and loss 109 64
Reversal of provision for loss on group companies 0 0
Other finance revenues 0 0
Sum finance income 282 170
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Finance costs
Amounts in NOK million 2022 2021
Interest costs from loans measured at amortised cost 100 95
Changes in fair value, financial derivatives over profit and loss 0 0
Loss from the disposal of shares in subsidiaries 61 0
Interest costs to group companies 7 1
Impairment of investment in group companies 0 0
Other finance costs 2 3
Total finance costs 170 99
Net foreign exchange gains and losses 27 (19)
Net finance gains (losses) 139 52
Note 06 Other operating expenses
Other operating expenses
Amounts in NOK million 2022 2021
Management fees 0 3
Legal, agency and consultancy fees 12 23
Accounting 1 0
Auditors 2 3
Other operating expenses 5 8
Total other operating expenses 19 37
Auditor fees (excl. vat)
Amounts in NOK million 2022 2021
Audit fees 2 4
Tax advice 0 0
Other services not related to auditing 0 0
Other services 0 0
Total auditor expenses 2 4
Note 07 Personnel costs
Personnel costs
Amounts in NOK million 2022 2021
Salaries, performance-related pay and other taxable benefits 21 12
Employers’ natural Insurance contributions 3 2
Pension expenses 1 0
Other personnel costs 2 3
Board fees 2 2
Total personnel costs 29 19
Annual report 2022
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KMC Properties90 Financial statments
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KMC PropertiesASA
Renumeration to senior executives
The total remuneration of the CEO and other Senior Executives
consists of a fixed package of salary and benefits supplemented
by cashbased short-term incentive(STI) and long-term incentive
(LTI) variable remuneration plans, share purchase scheme (on
the same terms as all other employees), pension and insurance
arrangements.
Overview of total renumeration to the board of directors (incl fees for board committees)
Amounts in NOK million 2022 2021
Anders Dyrseth, chair of the board (until June 2022) 0.2 0.4
Pål Aglen, (chair of the board from June 2022) 0.3 0.0
Morten E. Astrup 0.3 0.3
Stig Wærnes 0.3 0.3
Nini H. Nergaard 0.3 0.2
Anna Musiej Aanensen 0.3 0.3
Marianne Bekken 0.3 0.2
Thorbjørn Fjærtoft Pedersen (until June 2022) 0.1 0.1
John Thoresen (from June 2022) 0.2 0.0
Børge Klungerbo (until June 2021) 0.0 0.1
Total board fees 2.2 1.9
Note 08 Income tax
Tax recognised over income statement
Amounts in NOK million 2022 2021
Current income tax 0 0
Movement in deferred tax (36) (0)
Total income tax (36) (0)
Basis for taxation, parent company
Amounts in NOK million 2022 2021
Earnings before tax 108 10
Income and expenses not subject to taxation 55 (10)
Movement in temporary differences (105) (62)
Adjustment interest not deductible current year 0 0
Tax losses for current year not recognised 0 0
Basis for taxation 59 (62)
Change of losses carried forward (59) 62
Tax payable 0 0
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Note 09 Deferred tax
Temporary differences, parent company
Amounts in NOK million 31.12.2022 31.12.2021 Change
Financial liabilities (0) 0 (0)
Receivables
1
0 1 (1)
Capitalised borrowing cost (6) (12) 0
Currency and interest swaps (177) (67) 0
Tax losses carried forward 193 252 (59)
Adjustment interest deductible in the future 33 33 0
Sum temporary differences 44 207 (60)
Tax rate 22% 22% 0%
Deferred tax asset (liability) 10 46 (36)
Deferred tax asset (liability) not recognised 0 0 0
Recognised deferred tax asset (liability) 10 46 (36)
1) Deferred tax assets have been recognised in the balance sheet, since there is a sufficient likelihood that the tax assets will be utilised in the future.
Note 10 Share capital and shareholdes
Share capital and nominal value
Amounts in NOK million 31.12.2022 31.12.2021
Shares issued 324 282
Nominal amount 0.2 0.2
Share capital 65 56
All shares are fully paid. There is only one share class. All shares have equal rights.
Change in share capital and related transaction cost:
■
The shares subsequent of NOK 554 421, at NOK 0.20 per share, gave 2 772 105 new shares
■
The private placement of NOK 7 850 000, at NOK 0.20 per share, gave 39 250 000 new shares
(transaction cost: NOK 5 852 577).
Annual report 2022
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KMC Properties92 Financial statments
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KMC PropertiesASA
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of KMC Properties ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of KMC Properties ASA, which comprise:
• the financial statements of the parent company KMC Properties ASA (the Company), which
comprise the statement of financial position as at 31 December 2022, the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and
• the consolidated financial statements of KMC Properties ASA and its subsidiaries (the Group),
which comprise the consolidated statement of financial position at 31 December 2022, and the
consolidated statement of comprehensive income, statement of changes in equity and
statement of cash flow for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with simplified application of international accounting standards according to
section 3-9 of the Norwegian Accounting Act, and
• the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
Independent Auditor’s report
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2 / 5
We have been the auditor of the Company for 3 years from the election by the general meeting of the
shareholders on 24 June 2020 for the accounting year 2020.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
The Group’s business activities are largely unchanged compared to last year. We have not identified
regulatory changes, transactions or other event that qualified as new Key Audit Matters for our audit of
the 2022 financial statements. Furthermore, Valuation of investment properties has the same
characteristics and risks as in the prior year, and therefore continues to be an area of focus this year.
Key Audit Matters
How our audit addressed the Key Audit Matter
Valuation of investment propert
ies
The
majority of the Group’s assets consists of
Investment propert
ies. Primarily these are
logistics properties. The book value
on 31
December 2022
is NOK 5 366 million.
Investment propert
ies are measured at fair
value. Fair value adjustments of investment
properties may affect the
Group's results
significantly for the year and consequently the
equity.
The fair value is
an estimate based on
assumptions
as well as property specific
information
, such as lease terms, future
expected cash flows and yield
. The making of
estimates and determination of underlying
assumptions require application of
management judgement.
The basis for
management's estimate is valuations
performed by an
external valuation firm.
We considered valuation of investment
properties to be a key area of focus due to the
material amounts involved and the extent of
management judgment needed.
For details of valuation methodology and
further information on
investment properties,
refer to the Directors' report and note 3
(summary of accounting policies), note 6
(critical accounting estimates and
judgements) and note 10 (investment
properties) to the
consolidated financial
statements.
We obtained, read and understood the valuat
ion
reports
prepared by the external valuation firm and
met with the
m independently of management. We
assessed whether the
valuation reports were
prepared in accordance with a relevant framework
and
whether the reports were appropriate to
determine
the fair value of the Group's investment
propert
ies.
We assessed qualifications, competence and
objectivity of the valuation firm. Further, we reviewed
their terms of engagement
to determine whether
there were unusual terms
that might have affected
their objectivity or impose scope limitations upon
their work. Based on this work, we were satisfied
that the valuation firm remained objective and
competent, and that the scope of their work was
appropriate.
In our meetings with t
he valuation firm, we
discussed and challenged assumptions used.
Assumptions regarding cash flows and yield were
evaluated. We compared the assumptions used by
the valuation firm
to
observable market data and our
knowledge about the industry. We further ev
aluated
whether assumptions that were not readily
observable in a marketplace were reasonable.
For a sample of investment properties, we evaluated
whether the property
-specific information provided
by management to the valuation firm, such as lease
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KMC Properties94 Financial statments
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3 / 5
terms, duration and vacant area were consistent
with underlying property information. Furthermore,
we agreed this underlying information to the
received valuation reports. We obtained the
valuation reports directly from the valuation firm and
compared them to th
e reports we received from
management. We found no indication that the
information was used inconsistently.
We assessed the disclosures in note
s 3, 6 and 10
to
the consolidated financial statements
regarding
valuation of investment properties
, and found them
to be adequate and appropriate.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with simplified application of international accounting standards according to the
Norwegian Accounting Act section 3-9, and for the preparation and true and fair view of the
consolidated financial statements of the Group in accordance with International Financial Reporting
Standards as adopted by the EU, and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
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Annual report 2022 95Independent auditor’s report
4 / 5
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's and the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
• conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
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We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of KMC Properties ASA, we have performed an
assurance engagement to obtain reasonable assurance about whether the financial statements
included in the annual report, with the file name kmcpasa-2022-12-31-en, have been prepared, in all
material respects, in compliance with the requirements of the Commission Delegated Regulation (EU)
2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to
Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the
preparation of the annual report in XHTML format, and iXBRL tagging of the consolidated financial
statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, 30 March 2023
PricewaterhouseCoopers AS
Øystein Sandvik
State Authorised Public Accountant
(This document is signed electronically)
KMC Properties
|
Annual report 2022 97Independent auditor’s report
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Method
Date
2023-03-30 13:56
BANKID
Sandvik, Øystein Blåka
Revisjonsberetning
PROPERTY PORTFOLIO
Country Adress Municipality Plot area
Warehouse/
industrial Offices Other Total Vacany
Acquisition
date
Share of
ownership
Year of construction completion/
major refurbishment Leasehold
Norway Storemyra 200, Mongstad Alver 62 091 9 964 770 - 10 734 0% 12.07.20 21 100% 2019
Norway Industrivegen 15 Balsfjord 11 620 6 580 120 - 6 700 0% 27.05.2020 100% 1999, 2009
Norway Strandvegen 4 Båtsfjord 16 590 4 187 348 3 226 7 761 0% 27.05.2020 100% 1971, 2004, 2020 Leasehold
Norway Fagervikveien 2a og 2b Båtsfjord 11 525 2 680 130 - 2 810 0% 30.11.2022 100% 1968, 2003
Norway Kampenveien 5 Fredrikstad 21 694 3 834 560 - 4 394 0% 20.12.2021 100% 1968, 2008 Leasehold
Norway Sørkilen 3 og Østkilen 14 Fredrikstad 34 468 14 152 648 - 14 800 0% 08.11.2022 100% 1980, 1997, 2016, 2020 Leasehold
Norway Krosnesveien 6 Fredrikstad 14 198 7 100 300 - 7 400 0% 08.11.2022 100% 1975, 1980, 1987, 2019 Leasehold
Norway Østkilen 1 Fredrikstad 3 710 1 340 - 230 1 570 0% 08.11.2022 100% 1988 Leasehold
Norway Vikerveien, plot Rally Fredrikstad 4 925 - - - 0% 08.11.2022 100%
Norway Liaveien 22 Fredrikstad 3 710 1 850 350 - 2 200 0% 08.11.2022 100% 1958, 1964, 1975, 1978
Norway Hammarvikringen 64 Frøya 24 366 7 318 694 - 8 012 0% 27.05.2020 100% 1980, 2012, 2021
Norway Kvernamoveien 12 Gjesdal 2 507 1 520 80 - 1 600 0% 08.11.2022 100% 1905, 1985, 1998
Norway Industriparken Jøsnøya Hitra 13 000 5 175 300 - 5 475 0% 27.05.2020 100% Under development
Norway Holamyra 24 Hustadvika 10 250 2 519 400 - 2 919 0% 30.06.2021 100% 2011, 2020
Norway Stømnervegen 1 & 3 Konsvinger 13 705 3 624 372 - 3 996 0% 23.12.2020 100% 1990, 2010, 2017, 2022
Norway Linneflaten 2, 4, 6 Kristiansand 20 133 8 520 289 - 8 809 0% 08.11.2022 100% 1970, 2010
Norway Hofstadvegen 15 Melhus 17 500 3 849 328 - 4 177 0% 27.05.2020 100% 2008
Norway Lyngenvegen 5 Melhus 4 949 2 000 200 - 2 200 0% 27.05.2020 100% 1980
Norway Strandgata 105, Havøysund Måsøy 9 843 6 421 230 418 7 069 0% 23.12.2020 100% 1940, 1983, 2006 Leasehold
Norway Fagernessletta 10 Narvik 10 303 5 193 900 - 6 093 0% 10.02.2022 100% 1998, 2003
Norway Søndre Industrivegen 50 Oppdal 18 155 5 027 391 - 5 418 0% 02.07.2021 100% 2022
Norway Gjerdsvikvegen 208 Sande 5 770 4 182 618 - 4 800 0% 23.12.2020 100% 1982, 1990, 2000 Leasehold
Norway Klubben Næringspark Senja 7 927 3 224 576 - 3 800 0% 10.06.2020 100% 2021 Leasehold
Norway Havnegata 24 Stjørdal 30 559 14 272 2 428 - 16 700 0% 27.05.2020 100% 1971
Norway Havnegata 16 Stjørdal 17 692 5 610 740 - 6 350 0% 31.05.2020 100% 1989
Norway Holsneset 23-25 Sula 13 743 3 236 443 - 3 679 0% 29.09.2022 100% 1950, 1977, 1986, 2006
Norway Skattørvegen 78 Tromsø 5 715 1 568 309 - 1 877 0% 27.05.2020 100% 1998, 2020
Norway Østre Rosten 102 b Trondheim 7 868 4 200 1 500 - 5 700 0% 27.05.2020 100% 2007
Norway Østre Rosten 102 Trondheim 7 036 1 685 790 - 2 475 0% 27.05.2020 100% 2004, 2021
Norway Torgardsveien 11 Trondheim 12 900 2 999 330 - 3 329 0% 27.05.2020 100% 2012
Norway Havet 45, Leknes Vestvågøy 45 011 12 889 1 500 - 14 389 0% 23.12.2020 100% 2010, 2020 Leasehold
Norway Havneveien 1, Uthaug Ørland 27 251 13 341 669 - 14 010 0% 17.12.2020 100% 1988, 1990, 2021
Norway Valsnesveien 259 Ørland 8 798 2 400 400 - 2 800 0% 27.05.2020 100% 2017
Norway Bleivassvegen 7 og 11, Ågotnes Øygarden 13 700 4 453 1 328 - 5 781 0% 01.12.2021 100% 1974, 1997, 2008, 2015, 2020
Total 533 212 176 912 19 041 3 874 199 827
Sweden Hamnviksvägen 9 Kramfors 53 600 10 324 260 - 10 584 0% 08.11.2022 100% 1890, 1960, 2016
Sweden Guleskär 56 Kungshamn 15 238 6 616 550 - 7 166 0% 23.12.2020 100% 1995, 2004
Sweden Halmstadsvägen 32 Laholm 24 933 13 600 200 - 13 800 0% 27.05.2020 100% 1929
Sweden Ramshallsvegen 2 Norrkøping 47 282 6 350 350 - 6 700 0% 27.05.2020 100% 1973, 1974, 1976
Sweden Bjørkelundsgatan 14 Skara 21 000 6 100 400 - 6 500 0% 27.05.2020 100% 1988
Sweden Järnvägsgatan 39 Skurup 44 076 12 150 450 - 12 600 0% 08.11.2022 100% 1989, 2008, 2011
Sweden Diabasvägen 9, Våmb Skövde 124 201 20 174 950 - 21 124 0% 08.11.2022 100% 1966, 1989, 2019
Sweden Ängholmsvägen 14 Tjörn 19 873 11 010 660 - 11 670 0% 10.02.2022 100% 2005, 2015
Sweden Ritarslingan 8 & 10 Täby 17 468 6 192 433 - 6 625 0% 08.11.2022 100% 1920, 1980, 1988
Sweden Kanalvägen 6 Urshult 20 740 8 593 450 - 9 043 0% 27.05.2020 100% 2007
Sweden Traktorvägen 1 Varberg 28 104 14 650 1 200 - 15 850 0% 23.12.2020 100% 1955, 2007, 2016
Sweden Åleden 13 Vårgårda 15 378 6 505 300 - 6 805 0% 27.05.2020 100% 1976
Total 431 893 122 264 6 203 - 128 467
Denmark Skelvej 1, Thorsø Favrskov 53 235 5 558 300 - 5 858 0% 06.04.2021 100% 1962, 2005, 2015, 2020
Denmark Constantiavej 31 and Århusgade 24 Fredrikshavn 42 573 11 606 500 - 12 106 0% 23.12.2020 100% 1946, 1978, 1990, 2014, 2020
Denmark Torvegade 41, Tørring Hedensted 9 572 4 975 382 - 5 739 0% 27.05.2020 100% 1976
Denmark Østerled 30 Holbæk 41 503 8 819 650 - 9 469 0% 27.05.2020 100% 1938, 2009
Denmark Kidnakken 13, Maribo Lolland 56 000 8 196 200 - 8 396 0% 28.08.2020 100% 1970, 2007
Denmark Havrevænget 1, Hobro Mariagerfjord 15 378 4 820 250 - 5 070 0% 27.05.2020 100% 1983
Denmark Rogalandsvej 3, Nykøbing Mors Morsø 39 509 20 593 800 - 21 393 0% 15.08.2022 100% 1985, 2005
Denmark Tungevej 2-4, Hvide Sande Ringkøbing-Skjern 6 224 2 657 150 - 2 807 0% 23.12.2020 100% 1984, 2001, 2014, 2020 Leasehold
Denmark Tvilhovej 8, Tvilhov Vejen 84 825 16 481 450 - 16 931 0% 28.08.2020 100% 1970, 2007
Denmark Fabriksvej 3 og 4, Farsø Vesthimmerland 46 357 21 041 850 - 21 891 0% 15.08.2022 100% 1995, 2010
Total 395 176 104 746 4 532 - 109 660
Finland Mastotie 7 Kuopio 23 093 4 651 400 - 5 051 0% 23.12.2020 100% 1991, 2000, 2010 Leasehold
Total 23 093 4 651 400 - 5 051
Netherlands Textielstraat 30 Oldenzaal 50 874 13 199 - - 13 199 0% 23.12.2020 100% 1970, 2007
Netherlands Kanalstraat 107 Someren 43 643 23 392 2 558 - 25 950 0% 23.12.2020 100% 1970, 2017
Netherlands Nieuweweg 235 Wichjen 72 421 30 999 950 - 31 949 0% 23.12.2020 100% 1970, 2007
Netherlands De Kalkovens 10 Zwartsluis 12 201 8 162 500 - 8 662 0% 23.12.2020 100% 1980, 2001
Total 179 139 75 752 4 008 - 79 760
Annual report 2022
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KMC Properties98 Property portfolioProperty portfolio
PROPERTY PORTFOLIO
Country Adress Municipality Plot area
Warehouse/
industrial Offices Other Total Vacany
Acquisition
date
Share of
ownership
Year of construction completion/
major refurbishment Leasehold
Norway Storemyra 200, Mongstad Alver 62 091 9 964 770 - 10 734 0% 12.07.20 21 100% 2019
Norway Industrivegen 15 Balsfjord 11 620 6 580 120 - 6 700 0% 27.05.2020 100% 1999, 2009
Norway Strandvegen 4 Båtsfjord 16 590 4 187 348 3 226 7 761 0% 27.05.2020 100% 1971, 2004, 2020 Leasehold
Norway Fagervikveien 2a og 2b Båtsfjord 11 525 2 680 130 - 2 810 0% 30.11.2022 100% 1968, 2003
Norway Kampenveien 5 Fredrikstad 21 694 3 834 560 - 4 394 0% 20.12.2021 100% 1968, 2008 Leasehold
Norway Sørkilen 3 og Østkilen 14 Fredrikstad 34 468 14 152 648 - 14 800 0% 08.11.2022 100% 1980, 1997, 2016, 2020 Leasehold
Norway Krosnesveien 6 Fredrikstad 14 198 7 100 300 - 7 400 0% 08.11.2022 100% 1975, 1980, 1987, 2019 Leasehold
Norway Østkilen 1 Fredrikstad 3 710 1 340 - 230 1 570 0% 08.11.2022 100% 1988 Leasehold
Norway Vikerveien, plot Rally Fredrikstad 4 925 - - - 0% 08.11.2022 100%
Norway Liaveien 22 Fredrikstad 3 710 1 850 350 - 2 200 0% 08.11.2022 100% 1958, 1964, 1975, 1978
Norway Hammarvikringen 64 Frøya 24 366 7 318 694 - 8 012 0% 27.05.2020 100% 1980, 2012, 2021
Norway Kvernamoveien 12 Gjesdal 2 507 1 520 80 - 1 600 0% 08.11.2022 100% 1905, 1985, 1998
Norway Industriparken Jøsnøya Hitra 13 000 5 175 300 - 5 475 0% 27.05.2020 100% Under development
Norway Holamyra 24 Hustadvika 10 250 2 519 400 - 2 919 0% 30.06.2021 100% 2011, 2020
Norway Stømnervegen 1 & 3 Konsvinger 13 705 3 624 372 - 3 996 0% 23.12.2020 100% 1990, 2010, 2017, 2022
Norway Linneflaten 2, 4, 6 Kristiansand 20 133 8 520 289 - 8 809 0% 08.11.2022 100% 1970, 2010
Norway Hofstadvegen 15 Melhus 17 500 3 849 328 - 4 177 0% 27.05.2020 100% 2008
Norway Lyngenvegen 5 Melhus 4 949 2 000 200 - 2 200 0% 27.05.2020 100% 1980
Norway Strandgata 105, Havøysund Måsøy 9 843 6 421 230 418 7 069 0% 23.12.2020 100% 1940, 1983, 2006 Leasehold
Norway Fagernessletta 10 Narvik 10 303 5 193 900 - 6 093 0% 10.02.2022 100% 1998, 2003
Norway Søndre Industrivegen 50 Oppdal 18 155 5 027 391 - 5 418 0% 02.07.2021 100% 2022
Norway Gjerdsvikvegen 208 Sande 5 770 4 182 618 - 4 800 0% 23.12.2020 100% 1982, 1990, 2000 Leasehold
Norway Klubben Næringspark Senja 7 927 3 224 576 - 3 800 0% 10.06.2020 100% 2021 Leasehold
Norway Havnegata 24 Stjørdal 30 559 14 272 2 428 - 16 700 0% 27.05.2020 100% 1971
Norway Havnegata 16 Stjørdal 17 692 5 610 740 - 6 350 0% 31.05.2020 100% 1989
Norway Holsneset 23-25 Sula 13 743 3 236 443 - 3 679 0% 29.09.2022 100% 1950, 1977, 1986, 2006
Norway Skattørvegen 78 Tromsø 5 715 1 568 309 - 1 877 0% 27.05.2020 100% 1998, 2020
Norway Østre Rosten 102 b Trondheim 7 868 4 200 1 500 - 5 700 0% 27.05.2020 100% 2007
Norway Østre Rosten 102 Trondheim 7 036 1 685 790 - 2 475 0% 27.05.2020 100% 2004, 2021
Norway Torgardsveien 11 Trondheim 12 900 2 999 330 - 3 329 0% 27.05.2020 100% 2012
Norway Havet 45, Leknes Vestvågøy 45 011 12 889 1 500 - 14 389 0% 23.12.2020 100% 2010, 2020 Leasehold
Norway Havneveien 1, Uthaug Ørland 27 251 13 341 669 - 14 010 0% 17.12.2020 100% 1988, 1990, 2021
Norway Valsnesveien 259 Ørland 8 798 2 400 400 - 2 800 0% 27.05.2020 100% 2017
Norway Bleivassvegen 7 og 11, Ågotnes Øygarden 13 700 4 453 1 328 - 5 781 0% 01.12.2021 100% 1974, 1997, 2008, 2015, 2020
Total 533 212 176 912 19 041 3 874 199 827
Sweden Hamnviksvägen 9 Kramfors 53 600 10 324 260 - 10 584 0% 08.11.2022 100% 1890, 1960, 2016
Sweden Guleskär 56 Kungshamn 15 238 6 616 550 - 7 166 0% 23.12.2020 100% 1995, 2004
Sweden Halmstadsvägen 32 Laholm 24 933 13 600 200 - 13 800 0% 27.05.2020 100% 1929
Sweden Ramshallsvegen 2 Norrkøping 47 282 6 350 350 - 6 700 0% 27.05.2020 100% 1973, 1974, 1976
Sweden Bjørkelundsgatan 14 Skara 21 000 6 100 400 - 6 500 0% 27.05.2020 100% 1988
Sweden Järnvägsgatan 39 Skurup 44 076 12 150 450 - 12 600 0% 08.11.2022 100% 1989, 2008, 2011
Sweden Diabasvägen 9, Våmb Skövde 124 201 20 174 950 - 21 124 0% 08.11.2022 100% 1966, 1989, 2019
Sweden Ängholmsvägen 14 Tjörn 19 873 11 010 660 - 11 670 0% 10.02.2022 100% 2005, 2015
Sweden Ritarslingan 8 & 10 Täby 17 468 6 192 433 - 6 625 0% 08.11.2022 100% 1920, 1980, 1988
Sweden Kanalvägen 6 Urshult 20 740 8 593 450 - 9 043 0% 27.05.2020 100% 2007
Sweden Traktorvägen 1 Varberg 28 104 14 650 1 200 - 15 850 0% 23.12.2020 100% 1955, 2007, 2016
Sweden Åleden 13 Vårgårda 15 378 6 505 300 - 6 805 0% 27.05.2020 100% 1976
Total 431 893 122 264 6 203 - 128 467
Denmark Skelvej 1, Thorsø Favrskov 53 235 5 558 300 - 5 858 0% 06.04.2021 100% 1962, 2005, 2015, 2020
Denmark Constantiavej 31 and Århusgade 24 Fredrikshavn 42 573 11 606 500 - 12 106 0% 23.12.2020 100% 1946, 1978, 1990, 2014, 2020
Denmark Torvegade 41, Tørring Hedensted 9 572 4 975 382 - 5 739 0% 27.05.2020 100% 1976
Denmark Østerled 30 Holbæk 41 503 8 819 650 - 9 469 0% 27.05.2020 100% 1938, 2009
Denmark Kidnakken 13, Maribo Lolland 56 000 8 196 200 - 8 396 0% 28.08.2020 100% 1970, 2007
Denmark Havrevænget 1, Hobro Mariagerfjord 15 378 4 820 250 - 5 070 0% 27.05.2020 100% 1983
Denmark Rogalandsvej 3, Nykøbing Mors Morsø 39 509 20 593 800 - 21 393 0% 15.08.2022 100% 1985, 2005
Denmark Tungevej 2-4, Hvide Sande Ringkøbing-Skjern 6 224 2 657 150 - 2 807 0% 23.12.2020 100% 1984, 2001, 2014, 2020 Leasehold
Denmark Tvilhovej 8, Tvilhov Vejen 84 825 16 481 450 - 16 931 0% 28.08.2020 100% 1970, 2007
Denmark Fabriksvej 3 og 4, Farsø Vesthimmerland 46 357 21 041 850 - 21 891 0% 15.08.2022 100% 1995, 2010
Total 395 176 104 746 4 532 - 109 660
Finland Mastotie 7 Kuopio 23 093 4 651 400 - 5 051 0% 23.12.2020 100% 1991, 2000, 2010 Leasehold
Total 23 093 4 651 400 - 5 051
Netherlands Textielstraat 30 Oldenzaal 50 874 13 199 - - 13 199 0% 23.12.2020 100% 1970, 2007
Netherlands Kanalstraat 107 Someren 43 643 23 392 2 558 - 25 950 0% 23.12.2020 100% 1970, 2017
Netherlands Nieuweweg 235 Wichjen 72 421 30 999 950 - 31 949 0% 23.12.2020 100% 1970, 2007
Netherlands De Kalkovens 10 Zwartsluis 12 201 8 162 500 - 8 662 0% 23.12.2020 100% 1980, 2001
Total 179 139 75 752 4 008 - 79 760
KMC Properties
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Annual report 2022 99Property portfolioProperty portfolio
Appendix
Appendix 1: Materiality assessment
Impact Explanation External impact Financial impact
Climate change Emissions from extraction, production and transportation
of materials and components used in the construction and
rehabilitation of KMCPs buildings (e.g. concrete, steel).
High X
Emissions from tenants' use of property. High X
Biodiversity & ecosystem impacts
on land and water
Impacts from the sourcing of steel, concrete and other
components used in buildings and rehabilitation.
Low
Impact on surrounding ecosystem due to location of
properties and waste/pollution from tenants (e.g., close to
the shoreline). This can cause e.g., habitat disturbance or
fragmentation.
High
Waste/pollution impacts Waste generation and local pollution throughout construction
and rehabilitation of properties.
Medium X
Material and resource use in the
supply chain
Use of raw materials, scarce materials, or non-recyclable
materials/components for rehabilitation and construction of
properties.
High
Circular economy Contribution to the circular economy through material
selection, reducing use of raw and finite material,
considerations for recyclability and longevity
Medium X
Health, safety and injuries in
value chain
Fatalities, injuries or work-related ill health among own
contractors, suppliers and tenants.
High X
Negative impact on local
communities
Reduction in local community well-being and property values
through e.g. noise, vibrations, dust, smell, emissions, land use
from construction and use of properties
Medium
Positive impact on local
communities
Additional employment opportunities, business development
and economic influx to local communities in which properties
are located
Low
Discrimination in hiring practices
or pay levels
Impacts on equality, inclusion and diversity for our work force
in terms of age, gender, sexual orientation, disability, race,
nationality, political opinions, religion or ethnic background.
Low X
Labour and human rights
violation
Forced labour, poor working conditions and child labour. This
could be related to e.g., sourcing of raw materials, contracted
personnel during construction phase or rehabilitation of
properties.
High X
Violation of indigenous rights in the property acquisition
process and development of property
Medium X
Tax contributions Transparent ownership structure and taxation practices Low X
Illegal or unethical practices in
the supply chain
Corruption, bribery and money laundering
Medium X
Illegal or unethical practices in
own operation
Corruption, bribery, and money laundering in regulations and
acquisition of properties.
Medium X
Annual report 2022
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KMC Properties100 Appendix
Appendix 2: GRI content index
Statement of use KMC Properties ASA has reported the information cited in this GRI content index for the period 01.01.2022 to
31.12.2022 with reference to the GRI Standards.
GRI 1 used GRI 1: Foundation 2021
GRI STANDARD Disclosure Location in report
GRI 2:
General
Disclosures 2021
2-1 Organisational details p. 8-9, 30, 54
2-2 Entities included in the organisation’s sustainability reporting p.20
2-3 Reporting period, frequency and contact point p.20
2-4 Restatements of information p. 24-5
2-5 External assurance p.20
2-6 Activities, value chain and other business relationships p. 5-9
2-7 Employees p. 20, 27
2-8 Workers who are not employees
2-9 Governance structure and composition p. 32-34
2-10 Nomination and selection of the highest governance body p. 32
2-11 Chair of the highest governance body p. 16
2-12 Role of the highest governance body in overseeing the management of impacts p. 21
2-13 Delegation of responsibility for managing impacts p. 21
2-14 Role of the highest governance body in sustainability reporting p. 20
2-15 Conflicts of interest p. 33
2-16 Communication of critical concerns p. 21
2-17 Collective knowledge of the highest governance body p. 16-17
2-18 Evaluation of the performance of the highest governance body p. 33
2-19 Remuneration policies p. 34
2-20 Process to determine remuneration p. 34
2-21 Annual total compensation ratio p. 64
2-22 Statement on sustainable development strategy p. 10-12
2-23 Policy commitments p. 27
2-24 Embedding policy commitments p. 20-29
2-25 Processes to remediate negative impacts p. 20-29
2-26 Mechanisms for seeking advice and raising concerns p. 29
2-27 Compliance with laws and regulations There were no incidents
of non-compliance in
the reporting period
2-28 Membership associations Until date, KMC Prop-
erties do not participate
in any associations or
advocacy organisations
2-29 Approach to stakeholder engagement p. 23
2-30 Collective bargaining agreements
KMC Properties
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Annual report 2022 101Appendix
GRI STANDARD Disclosure
Location in
report
GRI 3:
Material Topics 2021
3-1 Process to determine material topics p. 23, 100
3-2 List of material topics p. 23, 100
GRI 205:
Anti-corruption 2016
3-3 Management of material topics p. 29
205-1 Operations assessed for risks related to corruption p. 29
205-3 Confirmed incidents of corruption and actions taken p. 29
GRI 302:
Energy 2016
3-3 Management of material topics p. 25-26
302-1 Energy consumption within the organisation p. 24
302-3 Energy intensity
GRI 304:
Biodiversity
3-3 Management of material topics p. 26
304-2 Significant impacts of activities, products and services on biodiversity p. 26
GRI 305:
Emissions 2016
3-3 Management of material topics p. 24
305-2 Energy indirect (Scope 2) GHG emissions p. 24
305-3 Other indirect (Scope 3) GHG emissions p. 24
GRI 306:
Waste 2020
3-3 Management of material topics p. 26
306-3 Waste generated p. 26
Additional - Sorting rate: Percentage of waste that is diverted from disposal for recycling or reuse p. 26
GRI 308:
Supplier
Environmental
Assessment 2016
3-3 Management of material topics p. 26, 29
308-1 New suppliers that were screened using environmental criteria p. 26, 29
GRI 403:
Occupational Health
and Safety 2018
3-3 Management of material topics p. 27
403-9 Work-related injuries p. 28
GRI 405:
Diversity and Equal
Opportunity 2016
3-3 Management of material topics p. 26-27
405-1 Diversity of governance bodies and employees p. 27
GRI 406:
Non-discrimination
2016
3-3 Management of material topics p. 26-27
406-1 Incidents of discrimination and corrective actions taken p. 26-27
GRI 411:
Rights of Indigenous
Peoples 2016
3-3 Management of material topics p. 28
411-1 Incidents of violations involving rights of indigenous peoples p. 28
Annual report 2022
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KMC Properties102 Appendix
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