Financial targets

Catena’s overriding objective is to show strong cash flow, enabling stable development and dividends for shareholders. To realise this, the operations apply a number of measurable financial targets that are communicated externally. These focus primarily on profitability and financial stability.

Catena includes a number of different functions with different conditions. They are followed up by means of a number of customized internal operational targets, relevant to the operations concerned, linked to the company’s strategies for clients and markets, property development, sustainability and financing.

Objectives

Comment

Outcome

Average capital tied-up
The average period during which capital is tied up should be at least two years. In this way, the Company has secured financing over a period of time that reduces financing risk, while the Company can, at any time, secure optimum credit terms for the continued financing of operations.


The average period during which capital is tied up just reached the set target as at the balance sheet date, amounting to 1.9 years. The improvement over 2016 is attributable to the renegotiations of several major credits completed in early 2017.

(Year)

(Year)

Interest-coverage ratio
The interest-coverage ratio shall not be less than a multiple of 1.75. This level provides an adequate safety margin, for example, in the event of rising market interest rate.

 
The interest coverage ratio remained above target. During the year, the 3.5-fold increase over 2016 was primary due to the Company’s increased property portfolio, more efficient management and the development of the slightly higher level of vacancy in acquired properties and financing costs, as well as realised changes in value.

(Multiple)

(Multiple)


Equity ratio
The equity ratio shall not be lower than 30 percent, which is considered well-balanced taking the Company’s cash flow into account. This provides good opportunities for returns with a balanced level of risk in the operations.


Compared with 2016, the equity ratio as at the balance sheet date was on a par with the target even after acquisitions were carried out and the dividend paid during the year in accordance with the Company’s dividend policy. This is an effect of a strong cash flow from operating activities and the targeted share issues that were successfully conducted in connection with the completed acquisitions.

(Percent)

(Percent)