2017-03-03 10:30:22 CET
2017-03-03 10:30:22 CET
REGULATED INFORMATION
VVO-Yhtymä Oyj - Annual Financial Report
VVO Group plc: VVO Group plc's Financial Statements 1 January-31 December 2016
VVO GROUP PLC
STOCK EXCHANGE RELEASE
3.3.2017 AT 11.30
VVO Group plc's Financial Statements 1 January-31 December 2016
Summary of 1 January-31 December 2016
* The Group's gross investments during the period totalled EUR 696.0 (235.0)
million. Gross investments were 198.0 (63.3) per cent of turnover. Of these
gross investments, EUR 664.9 million consisted of acquisition costs related
to new properties and housing stock acquisitions.
* The fair value of investment properties was EUR 4.3 (4.0) billion. Return on
investment was 8.8 (7.6) per cent.
* The Group's turnover totalled EUR 351.5 (370.9) million. Turnover is
entirely generated by rental income. Turnover decreased mainly due to the
rental housing stock divestments carried out early in the year.
* Profit before taxes amounted to EUR 289.7 (224.7) million. The profit
includes EUR 163.3 (70.3) million in net valuation gain on the fair value
assessment of investment properties and EUR -10.4 (2.7) million in capital
gains and losses on investment properties. The Group's favourable profit
performance is based on changes in the fair value of investment properties,
low financial costs, a good financial occupancy rate and the successful
management of maintenance costs.
* Net rental income was EUR 222.0 (227.4) million, representing 63.2 (61.3)
per cent of turnover. Net rental income was decreased by rental housing
stock divestments.
* The financial occupancy rate remained high, standing at 97.4 (97.6) per cent
during the review period.
* There were 1,536 (1,189) rental apartments under construction at the end of
the review period.
* The Group owned 34,974 (41,153) rental apartments on 31 December 2016. The
Lumo segment accounted for 31,108 (28,716) and the VVO segment for 3,866
(12,437) of these apartments.
Summary of 1 October-31 December 2016
* The Group's turnover totalled EUR 84.6 (94.7) million. Turnover decreased
mainly due to the rental housing stock divestments.
* Profit before taxes amounted to EUR 135.4 (57.4) million. The profit
includes EUR 94.8 (17.9) million in net valuation gain on the fair value
assessment.
* Net rental income was EUR 49.6 (56.9) million, representing 58.6 (60.1) per
cent of turnover. Net rental income was decreased by rental housing stock
divestments.
* The financial occupancy rate remained high, standing at 97.8 (97.6) per cent
during the review period.
* The Group's gross investments during the period totalled EUR 87.0 (82.4)
million.
CEO Jani Nieminen
The company's significant transformation and the largest investments in its
history
The result for the 2016 review period was excellent, based on the increase in
the value of our apartment assets, the success of our operating activities and a
good financial occupancy rate. We underwent a major transformation, building
future competitiveness in an environment where Finland is becoming increasingly
urbanised, digitalisation is proceeding and people's housing preferences are
developing rapidly. The strategic decision to focus, as a housing investment
company, on market-based operations and rental housing service design was turned
into concrete action in the review period: the Group made the largest
investments in its history and divested non-profit properties subject to long-
term restrictions.
As stated in our mission, we create better urban housing. We have boldly
developed our operations and innovated housing solutions and services, with the
aim of generating even better customer experience. In five years, we have
invested nearly EUR 1.5 billion in boosting the Lumo business operations. In
addition to acquisitions, we have launched the construction of nearly 4,000
privately financed rental apartments. The Lumo brand has achieved a strong
market position, and it already constitutes 90 per cent of our Group's business.
The Lumo online store has revolutionised the customer's role in renting an
apartment, and more than a thousand tenancy agreements have already been signed
through the service. Lumo Kompakti will offer a new housing solution, and the
car-share scheme has expanded to several locations.
During the review period, we developed the Lumo business with record-breaking
EUR 700 million investments. We acquired ICECAPITAL Housing Fund II with its
2,274 market-based rental apartments. The apartments are mainly located in the
Helsinki Metropolitan Area and Tampere. Our Group's binding acquisition
agreements, amounting to more than EUR 300 million at the end of the year, are
key to the completion of 2,635 new Lumo homes.
We have actively divested properties that do not support our strategy due to
their characteristics or location. We sold 8,571 non-profit cost principle
apartments to Y-Foundation and, towards the end of the year, we signed an SPA
whereby a total of 1,344 non-restricted apartments, located around Finland, were
sold after the review period to a company managed by Avant Capital Partners.
Our extensive investments also require diverse financing solutions. We issued a
EUR 200 million senior secured bond on 17 October 2016 and had it listed on the
official list of Nasdaq Helsinki Ltd. The Group and the European Investment Bank
agreed on EUR 170 million of long-term financing, which will be used to fund new
net or nearly zero-energy buildings (nZEBs) in the Helsinki Metropolitan Area
and other major growth centres over the next few years. The financing from the
EIB is part of an investment programme in which we will implement a total of
1,800 apartments.
During the review period, we specified our strategy and updated our values so
that they are aligned with our restructured operations as well as with future
success factors identified on the basis of the operating environment and
megatrends. Our strategic focal points are Delivering the best customer
experience, Dynamic and professional place to work, Generating long-term
shareholder value and Leading on sustainable development. These focal points are
turned into concrete, practical actions together with our competent personnel.
Our new values are Happy to serve, Strive for success and Courage to change. Our
personnel showed utmost commitment and forward-looking thinking in their
contribution to defining the values, which provides a solid foundation for our
operations.
The volume of construction and the level of activity in the housing market have
been delightfully high. Nevertheless, even the current pace is not sufficient to
fully meet the needs of the fastest growing urban centres. During the review
period, our Group was the leading operator in property investments and the
largest real estate investor in Finland with its EUR 4.3 billion apartment
assets.
Our market share of the entire rental housing supply is 4.2 per cent and, in
line with our 2021 strategy, we will continue making significant investments
both through the development of new properties and through the acquisition of
existing properties in the largest growth centres. We want to respond to the
demand for rental housing, particularly in the Helsinki region, making it easier
for people to move around in pursuit of employment in urbanising Finland. By
investing in profitable growth, we are building the future and we believe that
the Lumo brand and service design will lead the way in the housing sector.
I would like to thank our customers for their active contribution to our
versatile cooperation.
Jani Nieminen
CEO
Key indicators
VVO Group 10-12/2016 10-12/2015 1-12/2016 1-12/2015
--------------------------------------------------------------------------------
Turnover, M € 84.6 94.7 351.5 370.9
Net rental income, EUR million 49.6 56.9 222.0 227.4
% of turnover 58.6 60.1 63.2 61.3
Profit before taxes, EUR million 135.4 57.4 289.7 224.7
Operative result, EUR million 21.8 29.4 116.9 121.4
Investment properties, EUR million(
1)) 4,298.9 3,999.2
Financial occupancy rate, % 97.8 97.9 97.4 97.6
Investment properties, EUR million(
2)) 2,122.8 1,494.6
Return on equity (ROE), % 12.9 10.8
Return on investment (ROI), % 8.8 7.6
Equity ratio, % 40.7 41.1
Loan to Value, % (2)) 46.7 39.4
Earnings per share, € 14.58 6.14 31.38 24.23
Shareholder equity per share, EUR 251.20 234.85
Gross investments, EUR million 87.0 82.4 696.0 235.0
Employees at end of period 286 356
1) Contains non-current assets held
for sale
2) Does not contain non-current assets
held for sale
Outlook for VVO Group
VVO Group estimates that in 2017, net rental income will be EUR 208-220 million.
Investments in new development and housing stock acquisitions are forecast to
exceed EUR 300 million. VVO Group estimates that in 2017, its operative result
will be EUR 96-107 million. The outlook takes into account the effects of both
the significant housing divestments carried out in 2016 and the housing
divestments and acquisitions planned for 2017, 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 VVO Group plc's distributable unrestricted shareholders'
equity at 31 December 2016 was EUR 152,587,002.95, of which the profit for the
financial year was EUR 67,499,178.76. 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
102,249,594.95 to be retained in unrestricted shareholders' equity.
Further information:
VVO Group plc
Jani Nieminen, CEO, tel. +358 20 508 3201
Erik Hjelt, CFO, tel. +358 20 508 3225
VVO Group plc offers rental apartments and housing services in Finnish growth
centres. The vision of the housing investment company is to be a pioneer in
housing and the customer's number-one choice.
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