Toivo Group Plc’s business review 1 January–31 March 2023: Towards future growth driven by a successful reaction

Business Review, 12. May 2023 at 8:30 a.m.

FINANCIAL PERIOD 1 JANUARY–31 MARCH 2023 KEY EVENTS

• Operating profit EUR 2.8 (7.0) million.
• Contracts for building a total of 50 (137) apartments were signed during the period under review.
• 0 (262) apartment start-ups during the period under review.
• 91 (179) apartments were completed during the period under review.

PROSPECTS FOR 2023

The company expects the operating profit for the financial year of 1 January–31 December 2023 to be EUR 10–17 million.

CONSOLIDATED KEY FINANCIALS*

CEO MARKUS MYLLYMÄKI

The company’s operating profit in the first quarter of 2023 amounted to EUR 2.8 million, and revenue totalled EUR 13.6 million. I am satisfied with our profit performance, revenue and the way we have reacted to the change in our operating environment. The reaction, our revenue and our profit performance provide us with a good starting point for 2023, which is expected to be a challenging year in the market.

Toivo is a housing developer that focuses on the full value chain of residential real estate development, construction and ownership. Toivo develops, builds and owns its housing properties but can also implement one or more components of the value chain.

Toivo executes its business model primarily in the Helsinki metropolitan area in energy-efficient concrete apartment buildings and area development projects.

In autumn 2022, the company began reacting to the change in the market environment. The business model and our agile organisation enabled us to react to the war in Ukraine, the general development of costs and the rise in interest expenses. The results of the changes in operations were also reflected in the figures for the first quarter of 2023. Revenue has grown significantly and our occupancy rate has remained high in spite of substantial rent increases.

In addition to reacting to the operating environment, the company has its eyes firmly on the future. The company is prepared for the future with a project development portfolio of 1,707 apartments, of which approximately 91% are located in the Helsinki metropolitan area. The company will implement these projects primarily as Energy Class A buildings with geothermal heating. The company will start these projects when the market conditions are more favourable.

DEVELOPMENT: The challenging market conditions open up opportunities in development in particular. While there are many good opportunities available to the company, it is important to be cautious with regard to these opportunities. In 2023, the company will select projects with particular care and analysis. During the first quarter, the company signed one agreement that enables the construction of approximately 50 apartments in Helsinki’s Oulunkylä district.

CONSTRUCTION: The company did not start any new projects in the first quarter.

OWNERSHIP: With regard to lease activities and management, Asuntomestarit® have succeeded well. The economic occupancy rate for the first quarter was 98.4% in spite of the company implementing rent increases of approximately 4.5% at the turn of the year 2022–2023. The company aims to increase rents by an average of approximately 5% during 2023. Toivo’s competitive, high-quality apartment product combined with the services of Asuntomestarit has proved its price-quality ratio in the challenging market.

Toivo’s business is very capital-intensive, and an optimal financial structure is vital for the company. The company’s equity ratio was 39.4% and the financial loan to value (LTV) rate of its properties was 55.7%.

I want to take this opportunity to thank everyone at Toivo for their excellent and disciplined work and for the growing number of customers who choose a Toivo home.

ANALYST AND MEDIA EVENT

Toivo Group Plc is organising an analyst and media event in Finnish on Friday, 12 May 2023 at 1o:00 a.m. Guests can join the event at the website https://toivo.videosync.fi/q1-2023-tulosjulkistus.

The results will be presented by Toivo Group’s CEO Markus Myllymäki and CFO Samuli Niemelä. Presented material will be available at company website sijoittajille.toivo.fi/en after the event.

Toivo Group Plc

Board of Directors

Further information
Markus Myllymäki
CEO
Toivo Group Plc
Tel. +358 (0)40 847 6206
markus.myllymaki@toivo.fi

Certified Adviser: Danske Bank A/S, Finland branch.

About Toivo
Toivo is a Finnish real estate company that was founded in 2015. Its business consists of developing apartment lots, constructing housing and ownership of apartments. The Company’s business model is unique as Toivo’s business combines the value chain of real estate business from development and construction to ownership, management and rental of a completed property. Toivo manages the entire life cycle of residential real estate with its own team, from raw land development to renting apartments. This way Toivo is able to generate additional value to its customers, shareholders and stakeholders.

Toivo’s strategy is to develop apartments in accordance with the Toivo concept. The apartments aim for a strong development margin and a stable and attractive return, and this way enable long-term ownership and the generation of higher additional value to Toivo’s customers. Toivo has a knowledgeable and experienced team of experts with strong merits in the real estate business. The members of Toivo’s team have been involved in the development and construction of over 17,000 apartments, and they have an average of ten years of experience.

Toivo’s revenue in 2022 was EUR 20.3 million and its operating profit was EUR 15.6 million.