"Our ability at ALFA Development to adapt to the market and optimize operations has been key to our robust results in 2023. With solid equity and a strengthened equity ratio, we are ready to seize new opportunities that we expect to arise in the real estate market in the coming years," says Andreea Kaiser, co-founder and co-owner of ALFA Development.
The company, which operates in urban and real estate development, has maintained a conservative approach to the real estate market in recent years, thereby strengthening its solvency and liquidity position. With equity of DKK 1.129m (DKK 1.198m) and an increased equity ratio of 50% (44%), ALFA Development is well-positioned to continue its growth strategy.
"The real estate industry is cyclical, and we cannot predict with 100% certainty when the next upturn will occur. However, with a solid balance sheet and strong liquidity, we are ready to act and purchase attractive land options and investment properties in the coming years, where we see potential for higher returns and earnings than in recent years," says Kristian Hare, CFO of ALFA Development.
Completion of urban development project IrmaByen
2023 also marked the completion of the company's ambitious urban development project in IrmaByen in the Greater Copenhagen area, where ALFA Development has developed a new city district with over 1,000 new homes over the past decade.
As guided in the 2022 financial report, the completion of IrmaByen and several other major projects in 2023 resulted in an expected reduction in net revenue from DKK 310m in 2022 to DKK 257m in 2023. Despite this decrease in total revenue, rental income increased from DKK 64m to DKK 100m, and free cash flow contributed positively with DKK 475m, bringing the cash balance at the end of 2023 to DKK 625m.
The company's investment properties were revalued down by DKK 32 million in 2023 due to a challenging real estate market, where rising interest rates led to higher yield requirements for investment properties.
Positive Outlook for 2024
ALFA Development has a positive outlook for 2024, focusing on acquiring new land plots, development of local plans on existing plots, and initiating specific construction projects, in the greater Copenhagen area. By 2027, ALFA Development expects to have developed several major district projects for sale and rent in Denmark, with current projects under development covering approximately 280,000 square meters.
In addition, the innovative living concept "Living by ALFA," a serviced Build-to-Rent concept offering exceptional services to residents and exclusive common areas, continues to develop. The first “Living by
ALFA” building opened in 2023 in IrmaByen and has since received great recognition from residents, professionals, and the public. The plan is to expand the concept with more "Living by ALFA" buildings in both Denmark and internationally in the coming years.
Key Figures from the 2023 Annual Report:
Net revenue: DKK 257m (DKK 310m in 2022)
Pre-tax profit: DKK 80m (DKK 152m in 2022)
Net profit: DKK 71m (DKK 133m in 2022)
Equity: DKK 1.129m (DKK 1.198m in 2022)
Liquidity ratio: 264% (80% in 2022)
Equity ratio: 50% (44% in 2022)
Number of employees: 44 (40 in 2022)
About ALFA Development
ALFA Development is a Nordic urban and real estate developer. Founded in 2006 as a family-owned business, ALFA Development's mission is to improve customers' quality of life by developing attractive and innovative urban environments and homes for a mid-income segment. ALFA Development is inspired by local building traditions combined with international development and construction trends.
ALFA Development is part of a corporate group rethinking the industry and its solutions. The sister company ALFA Ventures invests in start-up companies with a particular focus on sustainability, biodiversity, quality of life, and property technology.
In 2022, ALFA Development's owners, Andreea Kaiser and Ludvig Find, established the Planetary Responsibility Foundation (PRF), whose primary goal is to protect and restore nature and biodiversity through international project investments and knowledge sharing. Each year, a portion of ALFA Development's profits is donated to the foundation.
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