Kojamo plc: Kojamo plc`s Interim Report 1 January-30 September 2018

05.11.2018
FINANCES

Stock exchange release 5 November 2018 at 12.00 p.m.

Kojamo plc’s Interim Report 1 January-30 September 2018

The implementation of the strategy advanced, driven by accelerated investments and service development

This is a summary of Kojamo’s January-September 2018 Interim Report, which is in its entirety attached to this release and can be downloaded from the company’s website at www.kojamo.fi/en/investors.

Unless otherwise stated, the comparison figures in brackets refer to the corresponding period of the previous year. The figures in this Interim Report have not been audited.

Summary of July-September 2018

  • Total revenue increased by 6.7 per cent to EUR 89.7 (84.0) million.
  • Net rental income increased by 10.2 per cent, totalling EUR 64.5 (58.5) million. Net rental income represented 71.9 (69.6) per cent of revenue. 
  • Profit before taxes was EUR 59.1 (73.4) million. The profit includes EUR 13.4 (33.2) million in net gain on valuation of investment properties at fair value.
  • The fair value of investment properties was EUR 5.0 (4.5) billion at the end of the review period.
  • Gross investments totalled EUR 62.6 (64.3) million.

Summary  of January-September 2018

  • Total revenue increased by 6.5 per cent, totalling EUR 267.7 (251.3) million.
  • Net rental income increased by 9.0 per cent, totalling EUR 174.0 (159.7) million. Net rental income represented 65.0 (63.6) per cent of revenue. 
  • Profit before taxes totalled EUR 199.5 (205.4) million. The profit includes EUR 87.5 (100.8) million in net gain on valuation of investment properties at fair value and EUR 0.9 (1.5) million profit on sale of investment properties.
  • The fair value of investment properties was EUR 5.0 (4.5) billion at the end of the review period, including EUR 0.0 (3.9) million in investment properties held for sale.
  • The financial occupancy rate remained high, standing at 96.8 (96.7) per cent during the review period.
  • Gross investments totalled EUR 305.8 (193.7) million, representing 114.2 (77.1) per cent of total revenue. 
  • Equity per share was EUR 9.32 (8.65) and return on equity was 9.8 (11.2) per cent. Return on investments was 6.9 (7.7) per cent.
  • EPRA NAV per share (net asset value) was EUR 11.39 (10.88). Compared to the comparison period, the change was 4.7 per cent.
  • There were 1,008 (1,760) Lumo apartments under construction at the end of the review period. 
  • Kojamo specifies its outlook with regards to total revenue and FFO.

Kojamo owned 34,416 (34,046) rental apartments at the end of the review period. Since September of last year, 1,049 apartments have been acquired, 1,319 have been completed, 1,929 have been sold and 69 have been demolished or altered.

Key Figures

  7-9/2018 7-9/2017 Change% 1-9/2018 1-9/2017 Change% 2017
Total revenue, M€ 89.7 84.0 6.7 267.7 251.3 6.5 337.0
Net rental income, M€ *) 64.5 58.5 10.2 174.0 159.7 9.0 216.0
Net rental income margin, % *) 71.9 69.6   65.0 63.6   64.1
Profit before taxes, M€ *) 59.1 73.4 -19.5 199.5 205.4 -2.8 266.7
EBITDA, M€ *) 70.1 83.7 -16.2 235.1 235.5 -0.1 308.2
EBITDA margin, % *) 78.2 99.5   87.9 93.7   91.5
Adjusted EBITDA, M€ *) 56.8 50.2 13.1 146.8 133.2 10.2 179.5
Adjusted EBITDA margin, %*) 63.3 59.7   54.8 53.0   53.3
Funds From Operations (FFO), M€ *) 42.3 33.8 25.1 81.8 78.7 3.9 107.8
FFO margin, % *) 47.1 40.2   30.5 31.3   32.0
FFO per share, € *) 3) 0.17 0.15 13.3 0.35 0.34 2.9 0.47
FFO excluding one-off items, M€ *) 42.2 33.8 24.9 82.6 78.7 4.9 107.8
Investment properties, M€ 2)       4,997.9 4,516.3 10.7 4,710.2
Financial occupancy rate, %       96.8 96.7   96.7
Interest-bearing liabilities, M€ 1) *)       2,537.7 2,352.7 7.9 2,283.0
Return on equity, % (ROE)*)       9.8 11.2   10.9
Return on investments, % (ROI)*)       6.9 7.7   7.5
Equity ratio, %*)       42.2 40.2   41.3
Loan to Value, % 1) *)       46.2 45.9   46.0
EPRA NAV, M€       2,814.6 2,495.7 12.8 2,548.8
EPRA NAV per share, € 3)       11.39 10.88 4.7 11.11
Gross investments, M€ *) 62.6 64.3 -2.6 305.8 193.7 57.9 367.3
Number of personnel, end of period       304 302   316
*) Disclosure of Alternative Performance Measurements based on ESMA guidelines is located on key figures section of this Interim Report
1) Excluding items held for sale              
2) Including items held for sale              
3) Key figures have been adjusted to reflect the impact of the decision by the Extraordinary General Meeting of Shareholders on 25 May, 2018 regarding the share split. In the share split the shareholders received 30 new shares per each existing share.

Outlook for Kojamo in 2018 (specified)

Kojamo estimates that in 2018, the Group’s total revenue will increase by 5-8 per cent year-on-year (previously 3-9 per cent). In addition, the company estimates that the Group’s FFO for 2018 will amount to between EUR 106 and 115 million, excluding one-off items (previously EUR 103-116 million). Investments in new development and housing stock acquisitions are forecast to exceed EUR 300 million.

The outlook takes into account the effects of the housing divestments and acquisitions completed in 2018, the estimated occupancy rate and rises in rents, as well as the number of apartments to be completed. The outlook is based on the management’s assessment of total revenue, net rental income, administrative expenses, financial expenses, taxes to be paid and new development to be completed, as well as the management’s view on future developments in the operating environment.

Additionally, the outlook is based on strong demand sustained by migration, which will increase like-for-like rental income. The management can influence total revenue and FFO through the company’s business operations. In contrast, the management has no influence over market trends, the regulatory environment or the competitive landscape.

CEO’s review

We proceeded with implementing our strategy and succeeded in our operational activities also during the third quarter. The fair value of investment properties amounted to EUR 5.0 billion at the end of the review period. The financial occupancy rate remained at a good level during the review period, despite the increased number of new properties completed in the market. The financial occupancy rate was 96.8 per cent during the review period and improved further during the third quarter. 

In accordance with our strategy, we respond to the trends of urbanisation, digitalisation and communality. We want to provide our customers with services that make daily life easier, increase the attractiveness of housing and improve the sense of community. Our aim is to develop a networked service platform that will enable agile innovation implementation in cooperation with other operators. Kojamo’s apartments form the platform to which the new services can easily be connected.

During the review period, the number of tenancy agreements signed via the Lumo webstore continued to increase sharply. Over 7,500 tenancy agreements have already been signed via the webstore.

Kojamo and Leanheat Oy, a provider of artificial intelligence solutions for controlling district heating, signed an agreement to use Leanheat’s AI-based IoT solution to control the indoor temperature of approximately 26,000 Kojamo-owned apartments. The agreement covers 80 per cent of the housing stock owned by Kojamo.

During the review period, we grew our Lumo business in Finnish growth centres with both newly constructed properties and purchases of existing apartments. We acquired 981 apartments from OP Financial Group’s funds during the first half-year and 68 apartments from Henna and Pertti Niemistö Art Foundation ARS FENNICA sr in September. 895 new Lumo apartments were completed during the review period. At the end of the review period, we owned a total of 34,416 apartments. Acquiring and selling apartments is part of our strategy, according to which we will focus on the seven largest growth centres.

Kojamo turns 50 next year. During the jubilee year, we will accelerate service development even further as we aim to provide the best housing customer experience.

Jani Nieminen
CEO

Audiocast on 5 November 2018 at 2.00 p.m. Finnish time

Kojamo will hold a press conference for analysts, investors and media via a live audiocast on Monday, 5 November 2018 at 2:00 p.m. Finnish time.

A recording of the audiocast will be available later at the company’s website at https://kojamo.fi/en/investors/releases-and-publications/financial-reports/

The live audiocast of the press conference will be accessible at https://kojamo.videosync.fi/2018-q3-results

You can also participate in the press conference by calling:

FI: 09 8171 0310
SE: +46 8566 42651   
UK: +44 3333 000 804   
US: +1 6319 131 422

For more information, please contact
Jani Nieminen, CEO of Kojamo, tel. +358 20 508 3201   
Erik Hjelt, CFO of Kojamo, tel. +358 20 508 3225   

Distribution
Nasdaq Helsinki
Key media

Kojamo is Finland’s largest private residential real estate company and a frontrunner in rental housing business. Our mission is to create better urban housing. We operate in Finland’s most significant growth centres and our Lumo brand provides rental housing and new services for urban housing. We actively develop the value and number of our investment properties by developing new properties and our existing property portfolio. We want to be the property market frontrunner and the number one choice for our customers. Kojamo’s shares are listed on the official list of Nasdaq Helsinki. For more information, please visit www.kojamo.fi/en/

Kojamo plc’s Interim Report January-September 2018

Kojamo plc’s Interim Report January-September 2018 presentation