VVO-Yhtymä Oyj - Interim report (Q1 and Q3)

VVO Group plc: VVO Group plc's Interim Report 1.1- 30.9.2016

VVO Group plc's Interim Report 1.1- 30.9.2016


VVO GROUP PLC
STOCK EXCHANGE RELEASE
3 November, 2016 at 13.00 EET

VVO Group plc's Interim Report 1.1- 30.9.2016

SUMMARY JANUARY-SEPTEMBER 2016

  * The Group's gross investments during the period totalled EUR 609.4 (159.2)
    million. Gross investments were 228.4 (57.6) per cent of turnover.
  * The fair value of investment properties was EUR 4.1 (3.9) billion. Return on
    investment was 7.0 (7.7) per cent.
  * The Group's turnover totalled EUR 266.8 (276.3) million. Turnover is
    entirely generated by rental income.
  * Profit before taxes amounted to EUR 154.4 (167.3) million. The profit
    includes EUR 68.6 (52.5) million in net valuation gain on the fair value
    assessment of investment properties and EUR -20.3 (1.4) million in capital
    gains and losses on investment properties. The capital losses will be
    reduced as a result of a decision made by the Housing Finance and
    Development Centre of Finland ARA after the end of the review period. Net
    income and capital losses resulting from the delay of the divestment of
    8,571 apartments were approximately EUR 14.7 million higher than expected.
    Nevertheless, the delay of the transaction does not have a substantial
    effect on the Group's operating profit. The Group's favourable profit
    performance is based on changes in the fair value, low financial costs, a
    good financial occupancy rate and the successful management of maintenance
    costs.
  * Net rental income was EUR 172.4 (170.5) million, representing 64.6 (61.7)
    per cent of turnover. Net rental income was increased by completed new
    development, acquisitions, increased rental income and the successful
    management of maintenance and repair costs. Divestments decreased net rental
    income.
  * The financial occupancy rate remained high, standing at 97.2 (97.5) per cent
    during the review period.
  * There were 1,415 (1,199) rental apartments under construction at the end of
    the review period.
  * The Group owned 34,926 (40,899) rental apartments on 30 September 2016.
  * The company specifies its outlook with regard to investments.


SUMMARY JULY-SEPTEMBER 2016

  * Turnover totalled EUR 84.6 (93.1) million. Turnover decreased due to rental
    housing stock divestments.
  * Profit before taxes amounted to EUR 49.0 (42.9) million. The profit includes
    EUR 12.4 (5.3) million in net valuation gain on the fair value assessment.
  * Net rental income was EUR 55.9 (57.3) million, representing 66.1 (61.5) per
    cent of turnover. Net rental income was decreased by rental housing stock
    divestments.
  * The financial occupancy rate remained high, standing at 97.8 (97.8) per cent
    during the review period.
  * The Group's gross investments during the period totalled EUR 519.5 (44.2)
    million.


CEO JANI NIEMINEN

In approximately five years' time, the company has invested nearly EUR 1.5
billion in market-based rental housing. In 2016, our investments in Finnish
rental housing will be approximately EUR 650 million, and at the end of the
review period, there were 1,415 new rental apartments under construction, of
which 1,233 were in the Helsinki region. 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. We are actively
fighting the grey economy well beyond the legislative requirements. VVO Group's
share of the entire rental housing market is approximately 4.4 per cent.

VVO Group plc issued a new EUR 200 million secured bond after the review period
on 17 October 2016. The transaction attracted a wide audience from investors in
Fin-land, other Nordic countries and Europe and it was clearly oversubscribed,
with subscriptions from over 40 investors. The bond was listed on the Nasdaq
Helsinki Ltd stock exchange on 21 October 2016. The company's goal is to
diversify its funding sources in order to finance growth.

As a housing investment company, our annual investment target is 1,000 rental
apartments. This target can be reached, but it would be significantly easier to
increase the number of rental apartments if there was a sufficient supply of
plots suitable for immediate construction in growth centres. It is possible to
influence the housing situation in the Helsinki Metropolitan Area and the market
price of rents by increasing the amount of plots suitable for construction and
by enhancing the supply.

This year, we have divested our ARA properties that are subject to long-term
restrictions and focused on market-based operations, where we can develop our
operations extensively and carry out service design. Our goal is to create more
offering and new service solutions in rental housing in order to make it easier
to acquire rental apartments and to live in them. In rental operations, we apply
overall rent without any separate additional charges - a convenient approach for
our customers! Nearly all of our rents include water and broadband Internet, for
example. The Lumo homenow.fi online service channel, now up and running for
approximately a year, revolutionised the rental housing sector and has convinced
customers of its merits: more than 760 tenancy agreements have been signed
through the apartment rental service.


KEY INDICATORS


+--------------------------------+--------+--------+--------+--------+---------+
|VVO group                       |7-9/2016|7-9/2015|1-9/2016|1-9/2015|1-12/2015|
+--------------------------------+--------+--------+--------+--------+---------+
|Revenue, M€                     |84.6    |93.1    |266.8   |276.3   |370.9    |
+--------------------------------+--------+--------+--------+--------+---------+
|Net rental income, M€           |55.9    |57.3    |172.4   |170.5   |227.4    |
+--------------------------------+--------+--------+--------+--------+---------+
|% revenue                       |66.1    |61.5    |64.6    |61.7    |61.3     |
+--------------------------------+--------+--------+--------+--------+---------+
|Profit before taxes, M€         |49.0    |42.9    |154.4   |167.3   |224.7    |
+--------------------------------+--------+--------+--------+--------+---------+
|Earnings per share, €           |5.27    |4.86    |16.80   |18.09   |24.23    |
+--------------------------------+--------+--------+--------+--------+---------+
|Equity per share, €             |        |        |233.93  |228.57  |234.85   |
+--------------------------------+--------+--------+--------+--------+---------+
|Return on equity, % (ROE)       |        |        |9.6     |10.9    |10.8     |
+--------------------------------+--------+--------+--------+--------+---------+
|Return on investments, % (ROI)  |        |        |7.0     |7.7     |7.6      |
+--------------------------------+--------+--------+--------+--------+---------+
|Loan to Value, %                |        |        |47.7    |47.9    |42.8     |
+--------------------------------+--------+--------+--------+--------+---------+
|Equity ratio, %                 |        |        |39.5    |41.2    |41.1     |
+--------------------------------+--------+--------+--------+--------+---------+
|Financial Occupancy rate, %     |97.8    |97.8    |97.2    |97.5    |97.6     |
+--------------------------------+--------+--------+--------+--------+---------+
|Gross investments, M€           |519.5   |44.2    |609.4   |159.2   |235.0    |
+--------------------------------+--------+--------+--------+--------+---------+
|Investment properties, M€       |        |        |4,127.5 |3,907.9 |3,999.2  |
+--------------------------------+--------+--------+--------+--------+---------+
|Interest bearing liabilities, M€|        |        |1,984.8 |1,888.4 |1,494.6  |
+--------------------------------+--------+--------+--------+--------+---------+
|Number of personnel, end of     |        |        |290     |363     |356      |
|period                          |        |        |        |        |         |
+--------------------------------+--------+--------+--------+--------+---------+


OUTLOOK FOR VVO GROUP

VVO Group specifies its outlook for 2016 with regard to investments.

VVO Group estimates that net rental income will remain at the 2015 level.
Investments are forecast to be approximately EUR 650 million (previous estimate:
over EUR 600 million). The outlook takes into account the effects of the
divestment of 8,571 apartments and the acquisition of 2,274 apartments, the
estimated occupancy rate for the remainder of the year and the number of
apartments under construction. VVO Group's financial occupancy rate is expected
to remain at the current level throughout 2016, due to continuing stable demand
for rental housing. The estimate is based on currently valid tenancy agreements
and the stable demand in growth centres.


Further information:
VVO Group plc
Jani Nieminen, CEO, tel. 020 508 3201
Erik Hjelt, CFO, tel. 020 508 3255

VVO Group plc
Under the Lumo and VVO brands, VVO Group plc offers versatile and effortless
rental solutions coupled with an extensive range of housing services for
different life situations. VVO Group aims to invest heavily in increasing its
housing supply by 2021 through the development of new properties and acquisition
of existing properties. www.vvokonserni.fi 

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Bifogade filer:

VVO Group plc Interim Report Jan-Sept 2016.pdf