Welcome to the presentation of ENTIA's Q2 report. My name is Charlotte Wallman-Hurlin and I'm the CEO of the company. And next to me is our CFO, Magnus Ekström.
To begin with, we can conclude that we are leaving a strong quarter behind us. ENTIA continues to develop according to plan. rental income increased by just over 27 compared with the previous year and growth in income from property management per class a and class b share amounted to just over 27 percent for the for the first half of the year during the second quarter we completed an acquisition of 440 million and invested approximately half a billion in our ongoing projects while continuing to develop our existing properties. The development of our existing properties is an important part of our business and during the quarter we were able to announce that the investment in the ongoing development of the Visken prison has more than doubled in size and that we will nearly double the capacity at the Ringsjö prison. the conversion of premises from educational use to police facilities at the garrison area in Linköping was completed during the quarter and in early april the swedish police authority moved into newly renovated and purpose-built premises we have also leased previously vacant premises to the swedish prison and probation service in skövde and to the national government service
center in östersund in värnamo we have signed a lease agreement with the swedish police authority for the construction of a new police station i will get back to both the acquisition and some of our development projects in more details shortly but first i will hand over to magnus who will walk you through the financials thank you a lot uh we got through the numbers and just summarized the first slide we now have a contracted rent of 1.8 billion we have a property value of just under 30 billion with a running yield of 5.8 percent the rental income for the first half year increased and with a good cash flow as you can see in in the surplus ratio of just under 83 percent our icr for q2 increased to 4.2 times and the ltv amounted to 47.6 percent the growth for nrv per class a and b share amounted to 16 for the quarter and and the growth for profit from property management amounted to almost 30 percent if we go to the q2 we had a good performance in q2 with an increase in rental income of 28 percent like for like 1.2 percent increase in ny of 25 like for like plus 0.3 percent and increase of in profit from property management of 34 percent and this increase is mainly driven by ny from completed projects and acquisitions we had a positive impact from changes in value from investment properties of 155 million and a negative impact from changes in value from our interest rate swaps of 184 million and this is mainly due to changes in long-term market interest rates tax the tax is mainly deferred tax and this gives us a profit after tax of 207 million for q2 the first picture on this slide shows the skärholmen police station in may we completed the acquisition of the property which comprises approximately 6,400 square meters of lettable area.
The underlying property value in the transaction amounted to just over 440 million and the annual rental value amounts to approximately 26 million. The second and third pictures show existing properties currently under development. The picture in the middle shows the Viscan prison, while the picture on the right shows the Ringsjö prison. As I mentioned at the outset, the development of existing properties is an important part of our business. During the quarter, it was confirmed that we will invest an additional 260 million in the expansion of the Visken prison. The facility, which currently has 144 places, became operational in January last year. Shortly thereafter, an agreement was reached with the Swedish Prison and Probation Service to expand the facility by 120 places at an estimated cost of 250 million. Since then, the design and planning process has continued and the project has grown in scope, resulting in the investment more than doubling to 515 million with an annual rental value of 56 million. We have signed an agreement with the Swedish Prison and Probation Service to nearly double the capacity of the Ringsjö prison, increasing the number of places from 105 to 185, and to invest approximately 80 million in the project. The annual rental value is estimated at 16 million. TIA acquired the facility in 2022 and has since expanded it in several stages. At our prison facility in Tygelsjö outside Malmö and in Asptuna south of Stockholm, the Swedish Prison and Probation Service has announced that it has initiated feasibility studies regarding further capacity expansion. as usual there is a high level of activity in our project development we currently have projects under development of nearly 13 billion of which 10.5 billion remains to be invested the project portfolio provides a stable and predictable growth of the business during the quarter we invested approximately 500 million in our ongoing projects this slide shows examples of three of our ongoing projects. The first is the new police station in Värnamo. In June, a lease agreement was signed for the project, meaning that it has moved up one step in our project table in the Q2 report and is now listed under projects with signed lease agreements. The new police station will comprise more than 8,600 square meters. entea was awarded a project in december 2023 since then planning and zoning work has been ongoing and the project is now entering its next phase with procurement of contractor after which construction can start the annual rental value which is based on the final project costs is estimated at 25.3 million while the total investment is expected to amount to approximately 400 million In the project table in the Q2 report, under the same category, projects with signed lease agreements, the new project to expand the Ringsjö prison, as well as a project within higher education, are now included. In the lowest section of the project table in the Q2 report, which presents projects for which lease agreements have not yet been signed, the police building project in Linköping has been removed. the swedish police authority has informed us that its requirements have changed since the procurement process was completed and that it therefore will not proceed with signing a lease agreement the second project shown on this slide is an expansion of the natural forensic center nfc at the garrison area in lynchaping the extension will add more than 5 000 square meters including laboratory facilities in september last year we entered into an agreement with the swedish police authority to expand its operational premises at the same time the existing lease agreement covering 15 000 square meters was extended by 15 years from the completion of the project which is scheduled for the fourth quarter of 2028 the final picture shows the custody unit project in Västerås during the quarter we have invested approximately 100 million in the project construction has been underway for just over a year and the structural framework has now been completed interior work including installation routes and partition walls is progressing at full pace we have a large project portfolio with a total current investment volume
of just under 13 billion of which 2.5 billion is already invested and as Lotta just mentioned 10.5 billion remains to be invested for the next five years. We estimate an additional rental income from our ongoing projects of approximately 51 percent.
We have a high average lease period in the portfolio and an estimated additional NOI of just under 900 million when completion of all projects the rental value will be just under 2.8 billion our goal is that more than 90 percent of the rental income should be derived from public sector tenants at the end of the quarter this share amounted to 97 percent the remaining contract length for public sector tenants amounts to 7.8 years the lease expiry profile is set out in the middle graph at the end of the quarter annuity based additional rents amounted to 236 million for the 51 percent of the supplements um that that expire after 2031. The major part is attributable to three lease agreements which mature between the years 2037 and 2049.
The property value has increased with just over 1 billion during Q2 and the current value is just under 30 billion. The current yield is 5.8% and is based on our NOI in the earning capacity. We have a good cash flow from our operations on the last 12 months basis. We have a cash flow from operating activities of approximately 1 billion and the total investment volume of approximately 3.5 billion. We have a strong financial position with an LTV of 47.6. our icr is 3.9 times for the last 12 months and for the quarter the icr was 4.2 times if you look at the adjusted net depth ebitda where we exclude debt from projects it amounted to 7.7 in q2 so so we are in a good position for growth the geepra nrv per class a and b share increased to 56.14 sec per share the profit from property management per class a and b share increased to 1.12 sec per share in the quarter and amounted to 4.20 sec per share for the last 12 months and if we look at the growth in epra nre and the profit from property management since 2018 the average Our average growth was just over 16% for the NRE and 21% for the profit from property management. We have a debt portfolio of 14.4 billion. Our average interest rate amounted to 85% at the end of the period. and we have a high interest rate hedging ratio of just over 100 percent and our duration was 3.9 years at the end of the period our duration in debt maturity amounted to 3.3 years and at the end of the period during the quarter we have refinanced a loan facility of 825 million and increased the loan to almost one billion with a term of five years on good market conditions. We were also active in the bond market in late June with an issue of new green bonds totaling just over 1.6 billion with good terms. At the same time we carried out the buyback of 1.1 billion and as a result of that a large share of debt matured within one year has been refinanced and finally we have a good access to capital with unutilized credit facilities of just over 5 billion and if we look at the bond market the spread curve development has come down since the beginning of the year and as i said on the previous page we could we could issue two green bonds totaling 1.6 billion with maturities of two and five years respectively and spreads of 60 respect the respectively 109 bips so the capital market is very good at the moment and finally if we look at the earning capacity the profit from property management has increased with 20 percent per class a and b share quarter by quarter and currently up to 4.42 sec per share and with that i hand over to you lotta thank you magnus our project portfolio of nearly 13 billion of which
10.5 billion remains to be invested, provides a stable and predictable growth for many years to come. In addition, demand for new and modernized premises remains strong among several of our tenants, creating further opportunities for growth. We are also seeing increased activity in the transaction market. Our financial position is strong and we are well positioned to continue growing we look forward with confidence to the second half of the year with new transactions and projects as well as continued development of our existing portfolio finally we would like to wish everyone a wonderful summer. Thank you for listening.
