Solon Eiendom : Q1 2017 - Quarterly report

Q1

Quarterly report

2017

Highlights

• Strong development in residential real estate market

• All-time high sales in Q1 2017

• Total revenue increased 143% in Q1 2017 compared to Q1 2016

• 236 units under construction (206) at the end of the quarter

• 58 units sold (41) in Q1

• 27 units completed and 24 delivered (11/11) in Q1

• Project margin increased to 22% (19%) in Q1

• Reverse split of 200:1 completed on March 27

• Share capital reduction approved on May 23

• Dividend for 2016 of NOK 50 million approved

• Subsequent to quarter end three non core real estate assets have been divested resulting in a gain of NOK 19 million and increase liquidity of NOK 76 million.

(Numbers in parentheses are for the equivalent period last year) Units - Units refers to the number of apartments or houses

Units sold

60

Units delivered

60

50 50

40 40

30 30

20 20

10 10

0

2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1

0

2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1

Amounts in NOK thousand unless otherwise stated Q1 2017 Q1 2016 2016

Revenue	225 239	92 535	691 497
EBITDA	33 129	(3 314)	74 093
Profit/(loss) before tax	27 577	(5 866)	37 118
Equity ratio	29 %	13 %	28 %
Segment reporting
Residential real estate development	169 828	168 053	787 167
Revenue
EBITDA	25 914	28 282	129 609
EBITDA margin	15,26 %	16,83 %	16,47 %
Project margin	22,16 %	19,34 %	19,87 %
Key figures
Number of units sold	58	41	146
Number of construction starts	4	77	232
Number of units delivered	24	11	113
Number of units completed	27	11	113

Operational and Market update

Significant growth in total revenue

Solon delivered total revenue of NOK 225 239 thousand representing an increase of 143% compared to the same quarter last year. The growth was driven by the Residential Real Estate Development segment due to an increase in the number of delivered units in Q1 2017.

During Q1 2017 58 units were sold and at the end of the quarter 236 units were in production of which 87% have been sold.

EBITDA was NOK 33 129 thousand in Q1 2017 compared to negative NOK 3 314 in the same quarter last year. The increase in EBITDA is mainly due to an increase in the number of delivered units in Q1 2017.

Strengthened position to capture further market growth

Investments in the Land Bank in Q1 2017 amounted to NOK 167 924 thousand, compared to NOK 0 thousand invested for the same period last year.

On January 30, 2017, the company completed the subsequent offering of 666 666 666 new shares at a subscription price of NOK 0.15 per share.

In summary, Solon continued to deliver strong performance in Q1 2017. The company has also during the year secured additional funding and is consequently in a solid position to capture further market growth/share going forward.

Outlook

Housing sales continue to remain strong and the Company has not experienced that sales are slowing down. Sales in 2017 are so far encouraging.

The deal flow of new properties is maintaining momentum and the Company continues to see attractive opportunities to acquire new properties. Solon has invested strategically and will continue to maintain strict capital discipline going forward.