Rodamco Centerpool AB

Presentation of the Financial Statements for Rodamco Centerpool AB

Financial Analysis for the Year Ending 2022

Overview:

The financial statements include the income statement, balance sheet, changes in equity, and cash flow statement. The company operates in real estate, focusing on owning and managing both real and personal property, as well as relevant supplementary activities.

Income Statement Analysis:

1. Revenue: The company did not generate any revenue in 2022, similar to the previous year.
2. Operating Expenses: Operating expenses were minimal, with "Other operating costs" amounting to 34 Tkr, a minor decrease from 36 Tkr in the prior year.
3. Operating Result: The operating result was a loss of 35 Tkr, slightly worse than the previous year’s loss of 33 Tkr.
4. Financial Items: A significant loss of 24,233 Tkr from "Result from shares in group companies," as opposed to a gain of 37,787 Tkr in 2021.
5. Net Financial Items: The räntekostnader (interest expenses) rose to 5,412 Tkr from 1,800 Tkr.
6. Net Income Before Tax: Resulted in a profit of 43,786 Tkr after receiving a substantial group contribution of 73,466 Tkr.
7. Tax: The tax expense was 14,308 Tkr (including deferred tax of 6,157 Tkr).
8. Net Result: The company reported a net profit of 29,478 Tkr in 2022, compared to a net loss of 12,380 Tkr in the previous year.

Balance Sheet Analysis:

1. Assets:

   • Fixed Assets:
     • "Shares in group companies" were valued at 633,296 Tkr, a decrease from 711,334 Tkr due to sales and revaluations.
     • Receivables from associated companies increased to 245,462 Tkr.
   • Current Assets:
     • "Receivables from group companies" of 73,466 Tkr indicated a strong inter-company relationship.
     • Total current assets stood at 73,685 Tkr.

2. Equity and Liabilities:

   • Equity:
     • The total equity increased to 148,769 Tkr, from 119,290 Tkr last year, boosted by retained earnings and net profit.
   • Provisions:
     • Provisions for deferred tax liabilities were calculated at 241,895 Tkr.
   • Current Liabilities:
     • "Liabilities to group companies" were 524,506 Tkr, indicating significant intra-group financing.
     • Current tax liabilities increased to 37,272 Tkr.

Cash Flow Analysis:

1. Operational Cash Flow:
   • Operating activities resulted in a negative cash flow of 5,561 Tkr before working capital adjustments but a net inflow of 10,704 Tkr after adjustments.
2. Investment Activities: There were no investing activities, implying no asset purchases or sales.
3. Financing Activities:
   • Group contributions affected cash flows, with 10,704 Tkr net cash from financing activities.

Commentary and Strategic Insights:

Financial Health:

• The financial statements reflect minimal revenue generation from its primary operations but highlight significant financial interplay within the group, with notable contributions affecting overall profitability.
• The strengthening of equity is a positive sign as it provides a buffer against operational losses.

Key Financial Ratios:

• Liquidity: The lack of significant current assets beyond receivables indicates limited liquidity.
• Solidity: A solid solvency ratio of 15.6%, improved from last year’s 13.2%, indicating better capital structure management.

Strategic Positioning:

• The company focuses on the strategic alignment with group operations, potentially emphasizing significant dependence on intra-group synergies and financial flows.
• There's room for growth in operational efficiency to reduce reliance on group contributions for profitability. The planned delisting might indicate strategic restructuring or asset optimization.

Recommendations:

• Consider strategies to generate operational revenues to diversify and strengthen the income base.
• Keep a close watch on interest expenses, possibly refinancing high-interest obligations to improve net income.

Conclusion:

Rodamco Centerpool AB demonstrates a strong reliance on its group for financial stability while managing its assets prudently to improve equity and solvency. Enhancing operational revenues and managing financial expenses will be critical for future growth and sustainability.