Swedish property company Sagax AB reported a 34% drop in first-half profit, as negative revaluations on its property portfolio and financial instruments overshadowed growth in rental income.
The real estate firm, which focuses on warehouses and light industrial properties, said Monday that net profit for the six months ending June 30 fell to 1.35 billion Swedish kronor from 2.06 billion kronor a year earlier.
According to its report, the result was hit by a negative property revaluation of 388 million kronor, a sharp reversal from a positive revaluation of 202 million kronor in the same period last year.
A negative revaluation of financial instruments amounting to 148 million kronor also weighed on the bottom line.
Despite the valuation headwinds, underlying performance remained strong, with rental revenue increasing 10% to 2.62 billion kronor and profit from property management rising 5% to 2.16 billion kronor.
The results come as Sagax continues its European expansion, recently announcing investments of 910 million kronor and 480 million kronor in separate deals.
Sagax said it is maintaining its full-year forecast for profit from property management, which it expects to be 4.4 billion kronor.
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