Housing developer JM had unexpectedly strong headwinds in the second quarter. And it looks like it will take time before the market turns, according to CEO Mikael Åslund.
There are glimmers of light, but it will take time to recover the lost purchasing power, he says to TT.
The report for the second quarter shows that revenues fell and profits plummeted by 47 percent compared to the same period last year.
It's still a cautious and tough market. Customers have significantly reduced purchasing power due to inflation. The cost picture for companies and financing costs have increased as interest rates have risen so sharply, says newly appointed Mikael Åslund.
From that perspective, it will take time before the market is back where it was a few years ago.
Positive signs
Åslund points out that the supply on the secondary market is "at high or very high levels". In combination with consumers' continued limited purchasing power, it poses a problem for housing entrepreneurs like JM.
But there are positive signs. Most encouraging, according to Åslund, is that the number of sold homes has increased.
The most positive part is that we are significantly increasing sales compared to the previous year. We also see that we can start producing more units due to increased sales, he says and continues:
There are glimmers of light in that we assess that we have reached an interest rate peak, we have seen the first interest rate cuts in Finland and Sweden, and have confidence that there will be more. We also see increased prices on most of our markets.
Slow turnaround
Mikael Åslund hopes that JM's building rights portfolio, efficient production, and good financial position will make the company emerge stronger from the weak construction market.
A slow turnaround is underway, but Åslund believes it will take time before interest rates, purchasing power, and construction costs normalize.
Within the next two years, I don't think you'll be back.
Housing company JM reports a profit before tax of 123 million kronor for the second quarter. This can be compared to a profit of 232 million kronor for the same period last year.
The profit fall was unexpectedly large. Analysts had expected around 150 million in profit before tax, according to Bloomberg.
Revenues for the quarter fell to 3,583 million from 3,636 million kronor.
JM sold 1,075 homes during the second quarter, up from 363 homes sold during the same quarter last year. Production starts also increased to 722 homes, from 454 a year earlier.
