Kaldalón hf. – Valuation as of 1 Jan 2025

Key assumptions

• Rental income increases by 21% in 2025 and thereafter in line with the increase in the Consumer Price Index (CPI), or 3% per year throughout the forecast period. Management’s projections are used for the growth assumption in 2025.
• Operating expenses are assumed to average 23% of operating revenue per year during the forecast period.
• The revaluation of investment properties corresponds to the increase in the CPI, 4% in 2025 and 3% per year thereafter throughout the forecast period.
• Average cost of debt financing is based on 4.0–4.9% indexed interest rates, equivalent to 7.0–8.9% nominal interest rates from 2025 onward throughout the forecast period. Financing is assumed to be in ISK.
• Income tax is assumed to be 20% per year during the forecast period and is calculated on profit. It is recognized as a tax liability, but no income tax payments are expected due to tax losses carried forward and tax depreciation.
• No investments are made in investment properties during the forecast period.
• Dividends amount to 85% of total comprehensive income from the previous year from 2026 onward throughout the forecast period, while the equity ratio is 33% at the end of the forecast period.
• The terminal growth rate at the end of the forecast period is 3.0%, equivalent to zero real growth.
• See other general assumptions under “Valuation.”
• A nominal required return on equity of 10% is assumed when discounting the forecasted results for 2025–2034.

Results

• Based on the above assumptions, the estimated share value is ISK 26.9 as of 1 January 2025.