Interim report
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Heimar hf. Condensed Consolidated Interim Financial Statements 1 January to 30 September 2026 This financial statement is a translation of the original Icelandic financial statement. In the event of any discrepancy between the Icelandic and English versions, the Icelandic version shall prevail. Heimar hf. Hagasmára 1 201 Kópavogur, Iceland Reg. no. 630109-1080
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 2 Contents Endorsement and Statement by the Board of Directors and the CEO .................................................................... 3 Consolidated Statement of Profit or Loss and Comprehensive Income for the period 1 January – 30 September 2026 ........................................................................................................................................................................ 5 Consolidated Statement of Financial Position as at 30 September 2026 ................................................................ 6 Consolidated Statement of Changes in Equity for the period 1 January – 30 September 2026 .............................. 7 Consolidated Statement of Cash Flows for the period 1 January – 30 September 2026 ........................................ 8 Notes ....................................................................................................................................................................... 9 Quarterly Statement .............................................................................................................................................. 14
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 3 Endorsement and Statement by the Board of Directors and the CEO The operations of Heimar hf. consist of the ownership, development, leasing and operation of real estate used for commercial activities, such as retail and services, industry, offices, and sports and leisure activities. The Company further sells services r elated to leasing and property operations, such as cleaning, caretaking, maintenance and general property management. The interim financial statements of Heimar hf. for the period 1 January to 30 September 2026 have been prepared in accordance with the international accounting standard IAS 34 Interim Financial Reporting, as adopted by the European Union, and additional di sclosure requirements in the Financial Statements Act no. 3/2006. The interim financial statements comprise the condensed consolidated financial statements of Heimar hf. and its subsidiaries. Operations and financial position Operating revenue of the Heimar hf. Group amounted to ISK 13,179 million in the period 1 January to 30 September 2026, compared to ISK 11,801 million for the same period in 2025. The Group's operating profit before value adjustment amounted to ISK 8,880 mi llion in the period, compared to ISK 8,051 million for the same period the previous year. Profit from the Group's operations in the period amounted to ISK 4,197 million according to the statement of profit or loss, compared to ISK 2,864 million for the same period in 2025. The value adjustment of investment properties amounted to ISK 7,468 million in the period, compared to ISK 3,149 million in the same period of 2025. The higher value adjustment in 2026 is explained by a greater rise in the price level than in the same period of 2025. The value adjustment in the third quarter of 2026 was, however, negative by ISK 201 million due to an increase in the weighted average cost of capital (WACC), which resulted in a loss for the quarter amounting to ISK 371 million. Total assets of the Group amounted to ISK 256,341 million at the end of the period according to the statement of financial position. The Company's equity amounted to ISK 81,721 million, including share capital of ISK 1,934 million. The Company's equity ratio was 32% at the end of September 2026. Outlook Rising interest rates, price levels and inflation expectations have a direct upward effect on the Company's operating revenue and expenses. It is the assessment of the Board of Directors and management that the composition of the Company's tenants significantly reduces the risk of increased arrears, despite increases in the rent charged to the Company's customers, and recent periods have borne this out. The Company's rental income is for the most part index-linked, at approximately 94%. Demand for leased pr emises has remained stable, and the Company seeks to ensure that its portfolio consists of sought -after quality assets for which there will be demand in the future. The Company's largest single expense item, apart from finance expenses, is property taxes, and the increase in the official property assessment value in 2026 amounts to approximately 4% from the previous year.
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 4 Statement by the Board of Directors and the CEO To the best of the knowledge of the Board of Directors and the CEO, the condensed consolidated interim financial statements are prepared in accordance with the international accounting standard IAS 34 Interim Financial Reporting, as adopted by the European Union, and additional disclosure requirements in the Financial Statements Act no. 3/2006. It is the opinion of the Board of Directors and the CEO that the interim financial statements give a true and fair view of the assets, liabilities and financial position of the Group as at 30 September 2026, of its operating results, and of the changes in cash and cash equivalents in the period 1 January to 30 September 2026. Furthermore, it is the opinion of the Board of Directors and the CEO that the interim financial statements and the endorsement of the Board of Directors and the CEO give a clear overview of the development and performance of the Group's operations and of i ts position, and describe the principal risk factors and uncertainties faced by the Group. The Board of Directors and the CEO of Heimar hf. have today discussed the consolidated interim financial statements for the period 1 January to 30 September 2026 and confirmed them by means of their signatures. Kópavogur, 5 November 2026. The Board of Directors: Tómas Kristjánsson, Chairman of the Board Birgir Már Ragnarsson Guðrún Tinna Ólafsdóttir Heiðrún Emilía Jónsdóttir Steingrímur Halldór Pétursson CEO: Halldór Benjamín Þorbergsson
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 5 Amounts are in ISK million Consolidated Statement of Profit or Loss and Comprehensive Income for the period 1 January – 30 September 2026 Note 2026 2025 1.1.-30.9. 1.1.-30.9. Rental income 12.548 11.186 Income from operations in real estates 631 616 Operating revenue 5 13.179 11.801 Operating expenses of investment properties ( 2.673) ( 2.264) Operations in real estates ( 961) ( 883) Administrative expenses ( 665) ( 603) Operating expenses 6 ( 4.299) ( 3.750) Operating profit before value adjustment 8.880 8.051 Value adjustment of investment properties 8 7.468 3.149 Depreciation of assets for own use ( 56) ( 48) Operating profit 16.292 11.152 Financial income and (finance expenses): Financial income 135 171 Finance expenses ( 11.233) ( 7.760) Net finance expenses 7 ( 11.098) ( 7.589) Share in profit of associates 10 52 16 Profit before income tax 5.246 3.580 Income tax ( 1.049) ( 716) Comprehensive income for the period 4.197 2.864 Earnings per share 2,15 1,58 Diluted earnings per share 2,15 1,58 The notes on pages 9 - 13 are an integral part of the interim financial statements.
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 6 Amounts are in ISK million Consolidated Statement of Financial Position as at 30 September 2026 Note 30.9.2026 31.12.2025 Assets Investment properties 8 244.226 228.528 Properties and equipment for own use 726 727 Lease deferrals 220 266 Bonds and long-term receivables 50 43 Investments in associates 10 6.114 6.093 Non-current assets 251.336 235.657 Trade receivables 678 832 Other short-term receivables 697 924 Lease deferrals 62 84 Cash and cash equivalents 3.568 2.908 Current assets 5.005 4.748 Total assets 256.341 240.405 Share capital 1.934 1.967 Share premium 20.273 21.439 Restricted equity 36.071 37.196 Retained earnings 23.444 18.882 Equity 81.721 79.483 Interest bearing liabilities 9 134.852 129.890 Lease liability 5.703 5.530 Deferred income tax liability 19.523 18.474 Non-current liabilities 160.077 153.893 Interest bearing liabilities 9 11.889 4.578 Current portion of lease liability 0 48 Trade and other short-term payables 2.652 2.403 Current liabilities 14.542 7.028 Total liabilities 174.619 160.922 Total equity and liabilities 256.341 240.405 The notes on pages 9 - 13 are an integral part of the interim financial statements.
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 7 Amounts are in ISK million Consolidated Statement of Changes in Equity for the period 1 January – 30 September 2026 Share Share Restricted Retained capital premium equity earnings Total 1 January to 30 September 2025 Equity as at 1.1.2025 1.764 14.206 36.952 11.600 64.521 Comprehensive income for the period 2.864 2.864 Transferred to restricted equity account 4.289 ( 4.289) 0 Transferred to statutory reserve ( 61) 61 0 Share capital increase 258 9.229 9.487 Purchase of treasury shares ( 29) ( 1.017) ( 1.046) Acquisition of non-controlling interest in Sóltún ( 156) ( 156) Dividend ( 750) ( 750) Dividend received from subsidiaries ( 10.000) 10.000 0 Share option agreements 22 22 Equity 30.9.2025 1.993 22.200 31.302 19.447 74.942 1 January to 30 September 2026 Equity as at 1.1.2026 1.967 21.439 37.196 18.882 79.483 Comprehensive income for the period 4.197 4.197 Transferred to restricted equity account 6.175 ( 6.175) 0 Purchase of treasury shares ( 34) ( 1.165) ( 1.199) Dividend ( 782) ( 782) Dividend received from subsidiaries ( 7.300) 7.300 0 Share option agreements 22 22 Equity 30.9.2026 1.934 20.273 36.071 23.444 81.721 The notes on pages 9 - 13 are an integral part of the interim financial statements.
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 8 Amounts are in ISK million Consolidated Statement of Cash Flows for the period 1 January – 30 September 2026 Note 2026 2025 Cash flows from operating activities 1.1.-30.9. 1.1.-30.9. Comprehensive income for the period 4.197 2.864 Adjusted for: Value adjustment of investment properties 8 ( 7.468) ( 3.149) Depreciation of assets for own use 56 48 Net finance expenses 7 11.098 7.589 Share of profit of associates 10 ( 52) ( 16) Income tax 1.049 716 8.880 8.051 Change in operating assets 442 ( 32) Change in operating liabilities 351 19 9.673 8.037 Interest income received 7 135 171 Interest expenses paid ( 4.291) ( 3.725) Paid interest expense from lease liabilities 7 ( 246) ( 172) Net cash provided by operating activities 5.271 4.311 Cash flows from investing activities Investment in investment properties 7, 8 ( 7.658) ( 7.099) Sales price of investment properties 8 0 26 Dividend received from associates 10 31 308 Investment in properties and equipment for own use (net change) ( 55) ( 31) Acquisition of non-controlling interest 0 ( 156) Cash and cash equivalents acquired on acquisition of subsidiaries 0 64 Net cash used in investing activities ( 7.682) ( 6.887) Cash flows from financing activities Purchase of treasury shares ( 1.199) ( 1.046) Dividend paid ( 782) ( 750) New long-term borrowings 9 17.139 12.357 Repayments and settlements of interest bearing long-term liabilities 9 ( 12.042) ( 9.845) Repayments of lease liabilities ( 46) ( 158) Net cash provided by financing activities 3.071 558 Changes in cash and cash equivalents 660 ( 2.018) Cash and cash equivalents at the beginning of the year 2.908 3.780 Cash and cash equivalents at the end of the period 3.568 1.763 Investing and financing activities not affecting cash flows Investment in investment properties 8 0 ( 17.918) New share capital sold 0 9.487 Liabilities acquired 0 8.431 The notes on pages 9 - 13 are an integral part of the interim financial statements.
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 9 Amounts are in ISK million Notes 1. General information Heimar hf. (“the Company”), reg. no. 630109-1080, is located at Hagasmári 1 in Kópavogur. The consolidated interim financial statements of the Company for the period 1 January – 30 September 2026 comprise the interim financial statements of the Company and its subsidiaries, together referred to as the “Group” and individually as “Group entities”. The Company is a public limited liability company, listed on the Icelandic Stock Exchange (Nasdaq Iceland hf.). 2. Basis of preparation The consolidated interim financial statements have been prepared in accordance with the international accounting standard on interim financial reporting, IAS 34, as adopted by the European Union, and additional disclosure requirements in the Financial Stat ements Act no. 3/2006. The condensed consolidated interim financial statements do not include all the information required in complete annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year 2025. The Board of Directors approved and signed the interim financial statements on 5 November 2026. 3. Significant accounting policies The same accounting policies have been applied in the preparation of these interim financial statements as were applied in the preparation of the consolidated financial statements of the Group for the year 2025. The annual financial statements are available from the Company or on its website www.heimar.is. The interim financial statements are presented in Icelandic krona (ISK), which is the Company's functional currency, and all amounts are presented in ISK million. They have been prepared on the historical cost basis, except that the Group's investment properties are measured at fair value. The difference between the fair value and the carrying amount of financial assets and financial liabilities is insignificant. 4. Use of estimates and judgements by management The preparation of interim financial statements in accordance with International Financial Reporting Standards requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Information about significant decisions where accounting policies have the most significant effect on the carrying amount of assets is included in note 8 - valuation of investment properties. 5. Operating revenue Operating revenue is specified as follows: 2026 2025 1.1.-30.9. 1.1.-30.9. Rental income from leases 12.615 11.252 Deferred rental income ( 68) ( 66) Total rental income 12.548 11.186 Income from operations in real estates 631 616 Total operating revenue 13.179 11.801
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Notes Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 10 Amounts are in ISK million 6. Operating expenses Operating expenses are specified as follows: 2026 2025 1.1.-30.9. 1.1.-30.9. Property tax, water and sewage fees 1.566 1.452 Insurance 224 196 Maintenance and refurbishment 362 300 Energy and waste disposal 145 135 Depreciation and amortization of receivables 136 67 Salaries and salary related expenses 1.298 1.147 Capitalised salaries ( 228) ( 194) Other operating expenses 796 646 Total operating expenses 4.299 3.750 7. Financial income and finance expenses Financial income and finance expenses are specified as follows: 2026 2025 1.1.-30.9. 1.1.-30.9. Interest income 135 171 Total financial income 135 171 Interest expense ( 4.151) ( 3.702) Capitalised interest expense 401 167 Borrowing cost ( 167) ( 49) Interest expense from leases ( 246) ( 172) Indexation ( 7.070) ( 4.004) Total finance expenses ( 11.233) ( 7.760) Net finance expenses ( 11.098) ( 7.589) Capitalised interest expenses relate to properties under construction or undergoing considerable renovation that are not leased out. Interest is calculated using average indexed interest rates and reflects the average terms of the Company's financing at any given time. 8. Investment properties The Group's investment properties are measured at fair value at the reporting date in accordance with the international accounting standards IAS 40 Investment Property and IFRS 13 Fair Value Measurement. Assets under development whose fair value cannot be reliably estimated are recognised at cost. All investment properties fall under level 3 of the fair value classification system, which means that the valuation is not based on available market information. When valuing investment properties, the discounted future cash flow of individual properties is used. The cash flow model is based on free cash flow to the Group, which is discounted using the weighted average cost of capital (WACC) required of the Company. The cash flow plan in the model is for 30 years. The valuation of investment properties is carried out by employees of the parent company and is based on the same valuation method as the previous year. The required return on equity is estimated based on the CAPM (Capital Asset Pricing Model), which is based on risk-free indexed interest rates. The benchmark for risk-free interest is based on the 3-month average yield of a long-term index-linked government-backed bond. In addition to risk -free interest, there is a premium to cover the risk associated with the Company's underlying operations at any given time. Interest on loan capital is assessed considering the general interest rates offered on the market. The leverage ratio is expected to be 65% for the future. Included in the valuation of investment properties are furnishings and other accessories necessary to ensure the properties' income flow. The determination of the fair value of investment properties is based on assumptions that depend on management's judge ment, and therefore the actual sale price may differ from the estimate.
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Notes Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 11 Amounts are in ISK million Segmentation of investment properties is specified as follows: The Group's investment properties Right-of- use assets Total Carrying amount Balance as at 1.1.2026 222.951 5.578 228.528 Investment properties purchased 2.075 2.075 Improvements during the period 5.984 5.984 Adjustments due to revaluation of lease liabilities 171 171 Value adjustment for the period 7.514 ( 46) 7.468 Balance as at 30.9.2026 238.523 5.703 244.226 Segmentation of investment properties 2025: Carrying amount Balance as at 1.1.2025 188.180 3.247 191.427 Investment properties purchased 21.064 2.471 23.535 Improvements during the year 6.005 6.005 Sold during the year ( 26) ( 26) Adjustments due to revaluation of lease liabilities 72 72 Value adjustment for the year 7.728 ( 212) 7.516 Balance as at 31.12.2025 222.951 5.578 228.528 Segmentation of the Group's investment properties 30.9.2026: Commercia l buildings Office buildings Industrial and storage buildings Hotels Sports, education and entertainmen t Assets under developmen t Total Carrying amount Balance as at 1.1. 67.383 83.647 16.408 26.643 25.717 3.152 222.951 Reclassification 240 81 ( 76) 0 0 ( 245) 0 Purchased during the period 46 2.029 0 0 0 0 2.075 Improvements during the period 1.272 1.137 145 21 1.318 2.091 5.984 Value adjustment for the period 2.503 2.595 728 948 756 ( 16) 7.514 Balance as at 30.9. 71.444 89.489 17.205 27.612 27.790 4.983 238.523 Pre-tax weighted average cost of capital (WACC) 6,56% 6,46% 6,92% 6,85% 6,40% 6,57%
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Notes Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 12 Amounts are in ISK million Segmentation of the Group's investment properties 31.12.2025: Commercia l buildings Office buildings Industrial and storage buildings Hotels Sports, education and entertainment Assets under development Total Carrying amount Balance as at 1.1. 60.797 65.459 14.211 19.496 24.779 3.437 188.180 Reclassification 1.513 0 0 0 0 ( 1.513) 0 Purchased during the year 27 14.661 0 6.316 0 60 21.064 Improvements during the year 3.083 1.435 140 120 296 931 6.005 Sold during the year ( 26) 0 0 0 0 0 ( 26) Value adjustment for the year 1.989 2.092 2.057 711 642 237 7.728 Balance as at 31.12. 67.383 83.647 16.408 26.643 25.717 3.152 222.951 Pre-tax weighted average cost of capital (WACC) 6,44% 6,40% 6,83% 6,80% 6,28% 6,48% 2026 2025 Increase Decrease Increase Decrease Sensitivity analysis of fair value: Increase (decrease) in rental income of 5% 14.264 ( 14.264) 12.633 ( 12.633) Decrease (increase) in yield of 0.5 percentage points 18.512 ( 15.874) 16.679 ( 14.272) 9. Interest bearing liabilities Interest bearing liabilities are specified as follows: 30.9.2026 31.12.2025 Green bond issues on the market 61.694 50.416 Green bank loans 3.988 3.979 Green interest-bearing liabilities 65.683 54.395 Other bond issues on the market 46.643 45.481 Other liabilities to credit institutions 35.627 35.733 Other interest bearing liabilities 82.270 81.215 Interest bearing liabilities excluding discounts, premium 147.953 135.609 and capitalised borrowing cost Discounts, premium and capitalised borrowing cost ( 1.211) ( 1.142) Total interest bearing liabilities 146.742 134.467 Current maturities of interest bearing liabilities ( 11.889) ( 4.578) Total interest bearing liabilities, non-current portion 134.852 129.890 The Group has arranged short -term credit facilities and undrawn credit lines amounted to ISK 4,600 million at the end of the period.
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Notes Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 13 Amounts are in ISK million Changes in interest bearing liabilities during the period, excluding discounts, premium and capitalised borrowing cost, are specified as follows: 2026 2025 1.1.-30.9. 1.1.-31.12. Interest bearing liabilities 1 January 135.609 118.019 New borrowings 17.315 18.877 Interest bearing liabilities acquired through acquisition of companies 0 7.487 Repayments and settlements of long-term liabilities ( 12.042) ( 12.916) Indexation 7.070 4.142 Interest bearing liabilities at the end of the period 147.953 135.609 10. Investments in associates Klasi ehf. holdings 33.3% Klasi ehf., Silfursmári 12, 201 Kópavogur, is a real estate development company owned in equal shares by Heimar hf., Hagar hf. and KLS eignarhaldsfélag ehf. Tómas Kristjánsson, Chairman of the Board of Heimar hf., is also one of the main owners of KLS eignarhaldsfélag ehf. and sits on the board of Klasi ehf. Total assets of Klasi ehf. as at 30.9.2026 were ISK 26,089 million and the equity ratio was 70%. Smárabyggð ehf. holdings 20.6% Smárabyggð ehf., Silfursmári 12, 201 Kópavogur, held real estate and land in Smárabyggð in Kópavogur but that development has been completed. Total assets of Smárabyggð according to the financial statements as at 31.12.2025 were ISK 299 million and the equity ratio was 53%. Investments in associates are specified as follows: 30.9.2026 31.12.2025 Carrying amount as at 1.1. 6.093 5.558 Share in profit of associates 52 844 Dividend received from associate ( 31) ( 308) Carrying amount as at 30.9. / 31.12. 6.114 6.093 11. Other matters Legal proceedings On 14 October 2026, the Supreme Court of Iceland delivered its judgment in case no. 62/2025 between Heimar atvinnuhúsnæði ehf. and FF11 ehf. The case has been fully concluded, and its outcome has an insignificant financial impact on Heimar. Another legal action is still pending between Heimar atvinnuhúsnæði ehf. and FF11 ehf., co -owner of the property at Miðhraun 4 in Garðabær, which was damaged by fire on 5 April 2018. The case concerns the alleged right of FF11 ehf. to damages following the fire, inter alia in respect of loss of rental income. The monetary claims of FF11 ehf. amount in total to approximately ISK 240 million. Heimar atvinnuhúsnæði ehf. has rejected the claims and disputed the grounds on which they are based. Expert assessment s have been obtained in the case, and it is still pending before the District Court. There is uncertainty as to the outcome of the case and its possible financial impact on the Company.
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Consolidated Financial Statements of Heimar hf. 1 Jan. - 30 Sept. 2026 14 Amounts are in ISK million Quarterly Statement Q3 2026 Q2 2026 Q1 2026 Q4 2025 Total Rental income 4.223 4.207 4.118 4.219 16.767 Income from operations in real estates 211 213 208 209 840 Operating revenue 4.434 4.419 4.325 4.428 17.607 Operating expenses of investment properties ( 893) ( 902) ( 878) ( 841) ( 3.514) Operations in real estates ( 306) ( 316) ( 339) ( 371) ( 1.332) Administrative expenses ( 185) ( 224) ( 255) ( 283) ( 948) Operating expenses ( 1.384) ( 1.443) ( 1.472) ( 1.495) ( 5.794) Operating profit before value adjustment 3.050 2.977 2.853 2.934 11.814 Value adjustment of investment properties ( 201) 3.400 4.268 4.367 11.835 Depreciation of assets for own use ( 21) ( 18) ( 17) ( 20) ( 76) Operating profit 2.829 6.359 7.105 7.280 23.572 Financial income and (finance expenses): Financial income 57 70 8 70 205 Finance expenses ( 3.371) ( 3.534) ( 4.328) ( 1.536) ( 12.769) Net finance expenses ( 3.314) ( 3.465) ( 4.320) ( 1.465) ( 12.563) Share in profit of associates 21 ( 17) 48 828 880 Profit before income tax ( 464) 2.877 2.832 6.642 11.887 Income tax 93 ( 575) ( 567) ( 1.154) ( 2.203) Comprehensive income for the period ( 371) 2.301 2.266 5.487 9.683 Earnings per share Earnings (loss) per share ( 0,19) 1,18 1,15 2,77 Diluted earnings (loss) per share ( 0,19) 1,18 1,15 2,77