Kojamo Plc: Kojamo plc’s Interim Report 1 January – 31 March 2019
Kojamo Plc Stock Exchange Release, 9 May 2019 at 8:00 a.m. EEST
Kojamo plc’s Interim Report 1 January – 31 March 2019
Total revenue, net rental income and FFO increased
This is a summary of the Interim Report January–March 2019, which is in its entirety attached to this release and can be downloaded from the company’s website at www.kojamo.fi/en. 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 January–March 2019
- Total revenue increased by 3.7 per cent to EUR 91.5 (88.2) million
- Net rental income increased by 5.7 per cent, totalling EUR 50.8 (48.1) million. Net rental income represented 55.6 (54.5) per cent of revenue
- Profit before taxes was EUR 38.9 (48.9) million. The profit includes EUR 10.4 (20.7) million in net gain on the valuation of investment properties at fair value and EUR 0.0 (0.6) million in profit on sale of investment properties. Earnings per share was EUR 0.13 (0.17)
- Funds From Operations (FFO) increased by 20.3 per cent and amounted to EUR 26.3 (21.9) million
- The fair value of investment properties was EUR 5.2 (4.9) billion at the end of the review period, including EUR 0.0 (96.4) million in investment properties held for sale
- The financial occupancy rate improved, standing at 96.9 (96.3) per cent during the review period
- Gross investments totalled EUR 38.0 (203.7) million, representing 41.5 (230.9) per cent of total revenue
- Equity per share was EUR 9.32 (8.87) and return on equity was 5.5 (7.6) per cent. Return on investment was 4.3 (5.4) per cent
- EPRA NAV per share (net asset value) was EUR 11.55 (11.08)
- There were 1,280 (1,251) apartments under construction at the end of the review period
- Kojamo specifies its outlook regarding Funds From Operations (FFO)
Kojamo owned 34,792 (35,697) rental apartments at the end of the review period. Since March of the previous year, 84 (981) apartments have been acquired, 836 (1,291) have been completed, 1,786 (345) have been sold and 39 (73) have been demolished or altered.
Key figures
| 1–3/2019 | 1–3/2018 | Change % | 2018 | |
| Total revenue, M€ | 91.5 | 88.2 | 3.7 | 358.8 |
| Net rental income, M€ *) | 50.8 | 48.1 | 5.7 | 234.0 |
| Net rental income margin % *) | 55.6 | 54.5 | 65.2 | |
| Profit before taxes, M€ *) | 38.9 | 48.9 | -20.4 | 277.3 |
| EBITDA, M€ *) | 52.3 | 60.6 | -13.7 | 325.1 |
| EBITDA margin, % *) | 57.2 | 68.7 | 90.6 | |
| Adjusted EBITDA, M€ *) | 42.0 | 39.3 | 6.8 | 196.5 |
| Adjusted EBITDA margin, % *) | 45.9 | 44.6 | 54.8 | |
| Funds From Operations (FFO), M€ *) | 26.3 | 21.9 | 20.3 | 116.4 |
| FFO margin, % *) | 28.8 | 24.8 | 32.4 | |
| FFO excluding one-off items, M€ *) | 26.3 | 21.9 | 20.3 | 117.3 |
| Investment properties, M€ 1) | 5,201.8 | 4,930.8 | 5.5 | 5,093.2 |
| Financial occupancy rate, % | 96.9 | 96.3 | 97.0 | |
| Interest-bearing liabilities, M€ 2) *) | 2,634.7 | 2,734.7 | -3.7 | 2,485.5 |
| Return on equity, % (ROE) *) | 5.5 | 7.6 | 10.1 | |
| Return on investment, % (ROI) *) | 4.3 | 5.4 | 7.2 | |
| Equity ratio, % *) | 40.7 | 37.4 | 43.0 | |
| Loan to Value (LTV), % 2) 3) *) | 46.7 | 49.2 | 45.9 | |
| EPRA NAV, M€ | 2,854.8 | 2,543.7 | 12.2 | 2,889.1 |
| Gross investments, M€ *) | 38.0 | 203.7 | -81.3 | 365.2 |
| Number of personnel, end of period | 299 | 319 | 298 | |
| Key figures per share, € 4) | 1–3/2019 | 1–3/2018 | Change % | 2018 |
| FFO per share *) | 0.11 | 0.10 | 10.0 | 0.49 |
| Earnings per share | 0.13 | 0.17 | -23.5 | 0.93 |
| EPRA NAV per share | 11.55 | 11.08 | 4.2 | 11.69 |
| Equity per share | 9.32 | 8.87 | 5.1 | 9.54 |
| *) 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 Figures section of the interim report. | |
| 1) Including items held for sale. 2) Excluding items held for sale. 3) The transition to IFRS 16 had an effect of 0.6 percentage points on this key figure during the review period. 4) Key figures per share 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 2019 (specified)
Kojamo estimates that in 2019, the Group’s total revenue will increase by 2–7 per cent year-on-year. In addition, the company estimates that the Group’s FFO for 2019 will amount to between EUR 130–143 million, excluding one-off items (previously EUR 126–141 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 completed housing divestments and acquisitions, 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
The year began in line with our expectations. Our success was reflected in our key performance indicators. Our total revenue and net rental income increased, and our Funds From Operations (FFO) figure improved by as much as 20 per cent year-on-year. The fair value of properties rose to EUR 5.2 billion. The financial occupancy rate increased to 96.9 per cent. The Lumo webstore reached the milestone of 10,000 tenancy agreements in late March, which is evidence of the webstore having established its position in the rental apartment market.
Our financial position was strong at the end of the review period and we are in a good position to invest when suitable opportunities are identified. We are making good progress towards our target of increasing the value of our investment properties to EUR 6 billion by the end of 2021. We started construction on 277 new apartments during the first quarter and we currently have nearly 1,300 apartments under construction.
We want to be a frontrunner in our industry, also by developing new and effective methods for identifying suitable investments. During the review period, we started a reverse tendering process in which we requested construction companies to prepare proposals on investment initiatives of approximately EUR 100 million. It is an approach that we have used previously with good results. Based on the investment initiatives obtained through the process, we can subsequently make actual investment decisions as necessary. In addition to competitive tendering, we are also actively surveying other investment opportunities.
We made a significant leap forward in our service development by making the My Lumo application, originally introduced last autumn, available to all of our tenants at the end of March. The service was well received and more than 7,000 of our tenants started using it immediately. The application currently allows users to, for example, pay rent, send fault reports and monitor the progress of resolving the issues in real time. We intend to further expand and develop the application’s features in the future. My Lumo is a great example of Kojamo’s service platform, which provides our tenants and partners with a platform for developing and piloting new services. We strongly believe that our ability to serve our customers conveniently on their terms is essential for our success.
We are celebrating our 50th anniversary at Kojamo this year. Kojamo’s success and our ability to execute our strategy are driven by our highly competent and enthusiastic personnel. In February, Kojamo was again recognised as one of “Finland’s most inspiring workplaces”, reflecting the dedi-cation of our personnel and success in personnel surveys. I want to take this opportunity to thank our personnel for their commitment to our shared goal of creating better urban housing.
Jani Nieminen
CEO
News conference and webcast
Kojamo will hold a news conference for institutional investors, analysts and media on 9 May 2019 at 10:00 a.m. at the company’s head office at Mannerheimintie 168a, Helsinki. The event will be held in English. Members of the media will also have the opportunity to ask questions in Finnish after the event.
The event can also be streamed as a live webcast. A recording of the webcast will be available later on the company website at https://kojamo.fi/en/investors/releases-and-publications/financial-reports/
The press conference can be streamed online at https://kojamo.videosync.fi/2019-q1-results
You can also participate in the news conference by calling:
FI: +358 9 8171 0310
SE: +46 8566 42651
UK: +44 3333 000 804
US: +1 6319 131 422
The participants joining the news conference will be asked to provide the following PIN code: 33427020#
For more information, please contact
Maija Hongas, Manager, Investor Relations, Kojamo Plc, tel. +358 20 508 3004
Erik Hjelt, CFO, Kojamo plc, +358 20 508 3225
Distribution
Nasdaq Helsinki, Irish Stock Exchange, key media
Kojamo is Finland’s largest private residential real estate company and a frontrunner in the 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 with 50 years of experience. 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 kojamo.fi/en/