Heimar hf. – Valuation as of 1 Jan 2026

Valuation Summary

• The value per share as of 1 January 2026 is estimated at ISK 48.2.
• The valuation is based on a ten-year forecast using the residual income method, with a 10% nominal required return on equity and a 3% terminal growth (zero real growth).
• The increase in value from the prior valuation reflects 2025 performance.

Key Assumptions

• Rental income increases by 8.8% in 2026 in line with management’s projections and thereafter in line with inflation (CPI).
• Operating expenses amount to 32% of operating revenues over the forecast period.
• Changes in the fair value of investment properties amount to 3–4% per year, in line with CPI.
• The average cost of debt is 7%, primarily consisting of ISK-denominated financing at an average indexed rate of 3.75%.
• Associates deliver a 15% return on the book value of their equity stake and pay out about 40% of earnings as dividends.
• Income tax is 20%, calculated on profit excluding the share of results from associates. It is recognized as a deferred tax liability, however not cash tax payments are expected due to tax losses carried forward and tax depreciation.
• No additional investments in investment properties are assumed during the forecast period.
• Dividend payments amount to 9.5% of prior-year total comprehensive income in 2026, increasing to 80% thereafter, assuming an equity ratio of approximately 34%.