Near-term risks and uncertainties

According to Interim Report 1 January–30 September 2023

Kojamo estimates that the most significant near-term risks and uncertainties are caused by the uncertain situation in property and financial markets as well as by geopolitical tensions. The situation in the Middle East can have an effect on the price of oil and also more broadly on inflation or the global economy.

Russia’s war of aggression in Ukraine has caused economic uncertainty throughout the current year. The war has pushed consumer prices up broadly which has weakened consumer purchasing power and economic growth. As the war continues, the uncertainty can have impacts on the housing and property markets, including apartment prices, rents and yield requirements as well as on the operations of the construction companies. In addition, the economic sanctions and their extent may have an impact on the availability and prices of building materials. If inflation remains strong, increased costs could affect Kojamo’s result and cash flow as well as the fair value of apartments.

The development of the Finnish economy may affect the housing and financial markets in exceptional ways. These factors may have an impact on Kojamo’s profit and cash flow as well as the fair value of apartments. A general downturn may lead to unemployment and reduce household purchasing power, which may affect the ability of residents to pay rent and, subsequently, the company’s rental income.

The weakening of the property and financial markets as well as the rise in market interest rates may lower the credit rating, make it difficult to get financing and increase the price of financing significantly as well as weaken Kojamo’s financial key figures. These factors may affect Kojamo’s profit and cash flow, as well as the fair value of the apartments.

Urbanisation is expected to continue in the longer term. The supply of rental apartments may increase locally in the main areas in which Kojamo operates, and the changes in supply and demand could have an impact on Kojamo’s tenant turnover or the financial occupancy rate and, thereby, rental income.

Cyber attacks and various other data security threats have increased. These data security breaches could impact Kojamo’s business operations and the reliability of information systems.

A more detailed description of Kojamo’s strategic risks and uncertainties is provided in the Financial Statements 2022.

Read more about Kojamo’s risk management here.

Page updated 2 November 2023