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Dear shareholders

Profit from property management per ordinary share increased by 22 % during the year and amounted to SEK 11.89. The equivalent result for Q4 was SEK 3.39 per ordinary share, an increase of 28 % compared to the same period last year. Net asset value per ordinary share increased by 25 % during the year and amounted to SEK 198.49.
 
Current earning capacity per ordinary share increased by 27 % from SEK 10.64 to SEK 13.52. In Collector, our largest associated company in terms of value, earnings per share increased by 34 % and equity per share increased by 41 %. We can thus state that 2016 was a year of great improvements in key ratios per share in both Balder and Collector.
 
For the long-term shareholder, it is most important to have a belief about how future earnings will develop over time (obvious don’t you think?) and after that an opinion about the present value of future earnings (so-called discounting factor). However, small changes in these two key ratios, have a large effect on the value and both Balder and Collector were examples of this during 2016.
 
Balder’s share price fell by 12 % during the year even though key ratios per share improved by about 25 %, in other words, the share price should have been about 40 % higher on 31 December 2016 if the estimates relating to earnings and present value were equivalent to 31 December 2015.
 
In Collector, the value of the share was 19 % lower despite an improvement of almost 40 % in key ratios per share. Using the same estimates as the previous year-end, the share price should thus have been about 70 % higher. The fact that stock market expectations can vary so much creates opportunities for both the short-term and long-term investor and I personally think it is fascinating, interesting and fun to follow the changes over the years.

Operationally

Apart from financial key ratios, 2016 was a year when we performed positively on many fronts. Balder invests in many countries, property categories and projects and also through complete- and part-ownership. I personally believe that all parts of the company improved and this is also generating more business opportunities. It is a privilege for me to work with all of you!

2017 and beyond

My guess is that 2017 will also be a year with strong demand for both commercial premises and residential properties in our markets. The financing opportunities also seem favourable and our financing base has been broadened further as we now have an official rating.
 
We have now supplemented our financial goals as follows – an equity/assets ratio (min. 35 %) and a net debt to assets ratio (max. 55 %). These key ratios are obviously much alike, but the net debt to assets key ratio is increasingly used, which means that it is good for us to clarify our goal in relation to this. The future is bright and despite intense competition among investors, I feel optimistic as usual regarding the potential to find reasonably good investments over time.

Erik Selin
Cheif Executive Officer

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