The property and hotel group’s result made a gloomy turnaround. But adjusted for changes in value, there was an increase.
Olav Thon photographed during the celebration of his 100th birthday at Hotel Bristol last year. He stepped down as chairman of the Olav Thon Group the same summer, but is still a board member. Photo: Martin Solhaug Standal, NTBPublished:
Yesterday 09:54
Updated yesterday 10:33
Despite the increase in income, there was a sharp drop in profit for the Olav Thon Group in 2023. This is revealed in the group’s annual report for last year, which was published on Tuesday.
The group owns and manages shopping centers in Norway and Sweden, is behind the hotel chain Thon Hotels and owns and leases a number of commercial properties.
The result before tax ended at minus NOK 4.3 billion. Thus, the result for 2022, a profit of NOK 4.3 billion, has been completely turned upside down.
The group explains the dramatic change from 2022 with a decrease in the value of the property portfolio and financial instruments of minus NOK 8.3 billion.
The decrease is explained by the fact that the return requirement for the valuation of the property portfolio in 2023 increased from 4.9 to 5.7 per cent.
Revenues in 2023 ended at NOK 13.6 billion, an increase of 12 per cent compared to the previous year.
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If you look at the result before tax, value change/depreciation and currency, it came to NOK 4.3 billion, an increase of 11 per cent from 2022.
– The operating profit development was good in most of Olav Thon Gruppen’s businesses, and despite persistent economic uncertainty and strong interest rate increases, Olav Thon Gruppen achieved a significant increase in the operating profit for the year, says Deputy CEO Arne B. Sperre in a press release.
Weak development for commercial property
The development in the commercial property market in 2023 is described as weak. It is pointed out that the sharp interest rate increases led to lower demand for commercial property as an investment object.
“This contributed to increased yield requirements and a general decline in the value of commercial properties in Norway”, writes Olav Thon Gruppen in the press release.
In 2023, the Thon group invested around NOK 3.7 billion in the business, half of which is linked to the purchase of new properties. It recently became known that the group has shelled out NOK 1.5 billion for the Diagonale property in Bjørvika and thus becomes the sole owner.
Increased store turnover at the shopping centres
The shopping centers that are part of the group had a combined store turnover of just under NOK 79.6 billion in 2023, which corresponds to an increase of approximately 7 per cent compared to the previous year.
– The turnover figures at the shopping centers have shown good development in 2023 despite the strong interest rate increases in both Norway and Sweden, says Sperre.
The Olav Thon Group currently owns and manages 88 shopping centers in Norway and Sweden.
In the press release, the group writes that Thon Hotels had a profit improvement in 2023 as well.
The hotel and restaurant area had operating income of just over NOK 5 billion in 2023, up from NOK 4.3 billion the previous year.
At the end of 2023, Thon Hotels had 14,057 rooms spread across 94 hotels in Norway and abroad.