15.02.2018
FINANCES
Stock exchange releases
Kojamo plc, Stock Exchange Release, 15 February 2018 at 3:30 pm
Kojamo plc’s Financial Statements Bulletin 1 January-31 December 2017
Investments in growth centres and development of housing services continue – property portfolio’s value developed well
This is a summary of the 2017 Financial Statement Bulletin, which is in its entirety attached to this release and can be downloaded from the company’s website at www.kojamo.fi
SUMMARY OF JANUARY-DECEMBER 2017
- Total revenue totalled EUR 337.0 (351.5) million. Total revenue is generated entirely by rental income. Total revenue decreased due to the divestments of 1,603 non-strategic rental apartments in 2017 and 9,011 apartments in 2016.
- Net rental income was EUR 216.0 (222.0) million, representing 64.1 (63.2) per cent of total revenue. Net rental income decreased due to the divestments of rental apartments in 2016 and early 2017. The decrease was reduced by lower maintenance and repair costs year-on-year.
- Profit before taxes amounted to EUR 266.7 (289.7) million. The profit includes EUR 126.2 (163.3) million in net valuation gain on the fair value assessment of investment properties and EUR 2.5 (-10.4) million in capital gains and losses on investment properties. The profit decrease resulted primarily from smaller changes in the fair value than in the comparison period.
- Equity per share was EUR 275.39 (251.20), return on equity was 10.9 (12.9) per cent and EPRA NAV per share (net asset value) was EUR 344.31 (319.56).
- The financial occupancy rate remained high, standing at 96.7 (97.4) per cent during the period.
- The fair value of investment properties was EUR 4.7 (4.3) billion. At year-end, the company owned 34,383 (34,974) rental apartments.
- Gross investments during the period totalled EUR 367.3 (696) million. Gross investments were 109 (198) per cent of total revenue. Gross investments exceeded total revenue, but the decrease was due to a significant purchase of rental apartments in the comparison period.
- There were 1,525 (1,536) Lumo apartments under construction at the end of the financial year.
SUMMARY OF OCTOBER-DECEMBER 2017
- Total revenue totalled EUR 85.7(84.6) million.
- Profit before taxes amounted to EUR 58.8 (135.4) million. The profit included EUR 25.5 (94.8) million in net valuation gains on fair value assessment.
- Net rental income was EUR 53.8 (49.6) million, representing 62.8 (58.6) per cent of total revenue.
- The financial occupancy rate remained high, standing at 96.7 (97.8) per cent during the period.
- The Group’s gross investments during the period totalled EUR 173.7 (87.0) million.
The information in the financial statements bulletin is based on the Kojamo Plc’s audited financial statements for the year 2017. The quarterly figures are unaudited. The figures in brackets refer to the corresponding period of 2016 and the comparison period refers to the corresponding period of the previous year, unless otherwise stated.
CEO JANI NIEMINEN:
New construction thrives and housing services develop rapidly
In 2017, we consolidated our position as Finland’s largest real estate investor and innovator in rental housing services. We developed our property portfolio actively, revamped the customer experience of our Lumo brand and improved our abilities to become a pioneer showing the way to better urban housing in Finland.
We implemented our growth strategy by building new Lumo homes, converting offices into apartments, renovating older housing stock and acquiring properties that are in keeping with the Lumo business. We applied sustainability principles in our properties by, for example, promoting the wise use of electricity, heat and water as well as by creating opportunities for sharing-economy applications in housing. We are contributing to the climate friendliness of the entire sector by participating actively in Climate Leadership Coalition as the only real estate company in Finland.
We are continuously improving our housing stock to meet people’s needs in the increasingly urban Finland. Over the last five years, we have invested EUR 1.7 billion in the Lumo business. At year-end, we owned 34,383 rental apartments and had 1,525 rental apartments under construction. In 2017, approximately 90 per cent of our apartmens and 91 per cent of our total revenue consisted of the Lumo business, whose total revenue grew from the previous year. New rental apartments have been built particularly in the Helsinki Metropolitan Area. The occupancy rate of our rental apartments remained high, although supply has momentarily increased. We believe that the continued urbanisation will create long-term demand for rental apartments in growth centres.
Urban living in a city centre, in a modern, high-quality home, will attract more and more people in the future. At the end of the year, we finalised a deal on the purchase of properties owned by the City of Helsinki, previously used by Metropolia University of Applied Sciences, in an excellent location. We aim to turn them into modern, sought-after urban apartments.
Finance that supports growth is the key to achieving our strategic objectives. To meet our growth targets, we continued to diversify and strengthen our financing base. Our public credit rating (Moody’s Baa2 with a stable outlook) and the EUR 500 million bond listed on the Irish Stock Exchange support our goal of investing in Lumo homes in the increasingly urban Finland.
Services also developed rapidly in this record year of construction. The needs and hopes of urban tenants can be seen in our customers’ actions: the Lumo web store has increased steadily, and more than 4,000 tenancy agreements have already been completed there. Some 300 apartments are rented via the web store every month. On a monthly level, 30 per cent of all new Lumo tenancy agreements are signed via the web store. For newly constructed properties, the figure is up to 80 per cent.
In autumn 2017, we made an open invitation to companies to join us in developing new housing services, and offered the Lumo brand, the most valued brand in the sector, as an innovation platform for service development. The idea is to develop both common services for all customers and services tailored to meet individual requirements.
I am proud of our employees, who have contributed enthusiastically to renewing our corporate culture. We have achieved a lot: in line with our values, we have reviewed our old habits and streamlined our ways of working. At today’s Kojamo, we are truly living our jointly created values – Happy to serve, Strive for success and Courage to change – in a new and energetic way. We will continue to have courage to change in 2018 as well.
The Board of Directors of Kojamo have decided to explore the possibility of a stock exchange listing to broaden our ownership base and to support Kojamo’s continued growth.
My sincere thanks for the year 2017!
Jani Nieminen
CEO
*Taloustutkimus: Brändien arvostus (Brand Appreciation) 2018
KEY INDICATORS
| Kojamo Group | 10-12/2017 | 10-12/2016 | 1-12/2017 | 1-12/2016 |
| Total revenue, M€ | 85.7 | 84.6 | 337.0 | 351.5 |
| Net rental income, M€ | 53.8 | 49.6 | 216.0 | 222.0 |
| % of total revenue | 62.8 | 58.6 | 64.1 | 63.2 |
| Profit before taxes, M€ | 58.8 | 135.4 | 266.7 | 289.7 |
| Operative result, M€ *) | 27.7 | 21.8 | 107.6 | 116.9 |
| Investment properties, M€ 1) | 4,710.2 | 4,298.9 | ||
| Rental occupancy rate, % | 96.7 | 97.8 | 96.7 | 97.4 |
| Interest-bearing liabilities, M€ 2) | 2,283.0 | 2,122.8 | ||
| Return on equity (ROE), % *) | 10.9 | 12.9 | ||
| Return on investment (ROI), % *) | 7.5 | 8.8 | ||
| Equity ratio, % *) | 41.3 | 40.7 | ||
| Loan to Value, % 2) 3) 4) *) | 46.0 | 47.1 | ||
| Earnings per share, EUR | 6.62 | 14.58 | 28.77 | 31.38 |
| Equity per share, EUR | 275.39 | 251.20 | ||
| EPRA NAV (Net Asset Value) per share, EUR *) | 344.31 | 319.56 | ||
| Gross investments, M€ | 173.7 | 87.0 | 367.3 | 696.0 |
| Number of personnel at end of period | 316 | 286 |
*) In accordance with the guidelines issued by the European Securities and Markets Authority (ESMA), Kojamo provides an account of the Alternative Performance Measures used by the Group in the key indicators section of its financial statements
1) Contains items held for sale
2) Does not contain items held for sale
3) The formula used in the calculation was changed in 2017 , and comparative data have been changed to correspond to the current formula
4) As of 1st of Jan 2017 20 M€ of investment funds have been reclassified from financial assets to cash and cash equivalents. Comparative period has not been restated
OUTLOOK FOR 2018
Kojamo estimates that in 2018, net rental income will amount to EUR 219-232 million. Investments in new development and housing stock acquisitions are forecast to exceed EUR 300 million. Kojamo estimates that in 2018, its operative result will be EUR 101-113 million. The outlook takes into account the effects of the housing divestments and acquisitions planned for 2018, the estimated occupancy rate and the number of apartments under construction.
PROPOSAL BY THE BOARD OF DIRECTORS FOR THE DISTRIBUTION OF PROFITS
The parent company Kojamo plc’s distributable unrestricted shareholders’ equity at 31 December 2017 was EUR 182,441,313.59, of which the profit for the financial year was EUR 80,191,718.64. No significant changes have taken place in the company’s financial position since the end of the financial year. The Board of Directors proposes to the Annual General Meeting that the distributable funds be used as follows: a dividend of EUR 6.80 per share to be paid for every Series A share, totalling EUR 50,337,408.00, and EUR 132,103,905.59 to be retained in unrestricted shareholders’ equity.
Kojamo plc
Jani Nieminen
CEO
FOR MORE INFORMATION, PLEASE CONTACT:
Jani Nieminen, CEO, tel. +358 20 508 3201
Erik Hjelt, CFO, tel. +358 20 508 3225
DISTRIBUTION:
Nasdaq Helsinki
Irish Stock Exchange
Major media
www.kojamo.fi
Creating better urban housing Kojamo is the frontrunner in rental housing and real estate investments. It has undergone major renewals in recent years. The renewed Kojamo is able to provide better urban housing in a rapidly changing world. Kojamo is transforming Finnish society together with its customers, other companies and operators, and cities.