2019-08-23 07:00:00 CEST

2019-08-23 07:00:24 CEST


Kojamo Oyj - Half Year financial report

Kojamo plc: Kojamo plc’s Half-Year Financial Report 1 January – 30 June 2019

Kojamo Plc Stock Exchange Release, 23 August 2019 at 8:00 a.m. EEST
Kojamo plc’s Half-Year Financial Report 1 January – 30 June 2019

Profitable growth in line with strategy during the first half of the year

This is a summary of the Half-Year Financial Report January–June 2019, which is
in its entirety attached to this release and can be downloaded from the
company’s website at www.kojamo.fi/investors. Unless otherwise stated, the
comparison figures in brackets refer to the corresponding period of the previous
year. The figures in this Half-Year Financial Report have not been audited.

Summary of April–June 2019

–      Total revenue increased by 3.7 per cent to EUR 93.1 (89.8) million

–      Net rental income increased by 8.8 per cent, totalling EUR 66.8 (61.4)
million. Net rental income represented 71.8 (68.4) per cent of revenue

–      Profit before taxes amounted to EUR 85.9 (91.5) million. The profit
includes EUR 42.2 (53.4) million in net gain on the valuation of investment
properties at fair value and EUR 0.0 (0.4) million in profit from the sale of
investment properties. Earnings per share was EUR 0.27 (0.31)

–      Funds From Operations (FFO) increased by 127.5 per cent and amounted to
EUR 40.1 (17.6) million

–      Gross investments totalled EUR 58.6 (39.5) million, representing 62.9
(44.0) per cent of total revenue

Summary of January–June 2019

–      Total revenue increased by 3.7 per cent to EUR 184.6 (178.0) million

–      Net rental income increased by 7.4 per cent, totalling EUR 117.7 (109.5)
million. Net rental income represented 63.8 (61.5) per cent of revenue

–      Profit before taxes amounted to EUR 124.8 (140.5) million. The profit
includes EUR 52.6 (74.1) million in net gain on the valuation of investment
properties at fair value and EUR 0.0 (1.0) million in profit from the sale of
investment properties. Earnings per share was EUR 0.40 (0.48)

–      Funds From Operations (FFO) increased by 68.1 per cent and amounted to
EUR 66.4 (39.5) million

–      The fair value of investment properties was EUR 5.3 (4.9) billion at the
end of the review period, including EUR 23.7 (0.0) million in investment
properties held for sale

–      The financial occupancy rate improved, standing at 96.9 (96.5) per cent
during the review period

–      Gross investments totalled EUR 96.6 (243.2) million, representing 52.3
(136.6) per cent of total revenue

–      Equity per share was EUR 9.55 (9.11) and return on equity was 8.5 (10.4)
per cent. Return on investment was 6.2 (7.3) per cent

–      EPRA NAV per share (net asset value) was EUR 11.88 (11.17)

–      There were 1,329 (1,214) apartments under construction at the end of the
review period

–      Kojamo specifies its outlook for 2019

Kojamo owned 35,194 (34,172) rental apartments at the end of the review period.
Since June of the previous year, 167 (981) apartments have been acquired, 952
(1,360) have been completed, 100 (1,956) have been sold and 3 (90) have been
demolished or altered.

Key figures

              4–6/201  4–6/201  Change  1–6/2019   1–6/2018   Change  2018
              9        8        %                             %
Total         93.1     89.8     3.7     184.6      178.0      3.7     358.8
revenue, M€
Net rental    66.8     61.4     8.8     117.7      109.5      7.4     234.0
M€ *)
Net rental    71.8     68.4             63.8       61.5               65.2
margin, %
Profit        85.9     91.5     -6.1    124.8      140.5      -11.1   277.3
taxes, M€
EBITDA,       99.2     104.4    -5.0    151.5      165.0      -8.2    325.1
M€ *)
EBITDA        106.5    116.3            82.1       92.7               90.6
margin, %
Adjusted      56.9     50.7     12.2    98.8       90.0       9.9     196.5
M€ *)
Adjusted      61.1     56.4             53.6       50.6               54.8
% *)
Funds From    40.1     17.6     127.5   66.4       39.5       68.1    116.4
M€ *)
FFO margin,   43.1     19.6             36.0       22.2               32.4
% *)
FFO           40.1     18.5     116.7   66.4       40.4       64.5    117.3
-off items,
M€ *)
Investment                              5,303.2    4,923.3    7.7     5,093.2
M€ 1)
Financial                               96.9       96.5               97.0
rate, %
Interest                                2,616.1    2,540.3    3.0     2,485.5
M€ 2)
Return on                               8.5        10.4               10.1
equity, %
(ROE) *)
Return on                               6.2        7.3                7.2
% (ROI)
Equity                                  41.9       41.6               43.0
ratio, % *)
Loan to                                 46.9       46.7               45.9
(LTV), % 2)
3) *)
EPRA NAV,                               2,936.0    2,760.3    6.4     2,889.1
Gross         58.6     39.5     48.4    96.6       243.2      -60.3   365.2
M€ *)
Number of                               329        347                298
end of

Key figures   4–6/201  4–6/201  Change  1–6/2019   1–6/2018   Change  2018
per           9        8        %                             %
share, € 4)
FFO per       0.16     0.08     100.0   0.27       0.17       58.8    0.49
share *)
Earnings per  0.27     0.31     -12.9   0.40       0.48       -16.7   0.93
EPRA NAV per                            11.88      11.17      6.4     11.69
Equity per                              9.55       9.11       4.8     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 Half-Year Financial 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 3–5
per cent year-on-year (previously 2–7 per cent). In addition, the company
estimates that the Group’s FFO for 2019 will amount to between EUR 134–144
million, excluding one-off items (previously EUR 130–143 million). Investments
in new development and housing stock acquisitions are forecast to amount to
approximately, or exceed, EUR 300 million (previously to exceed EUR 300
million). Achieving the level of EUR 300 million would require acquisitions of
residential properties during the second half of the year.

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 implementation of our strategy progressed in line with expectations during
the first half of the year. Total revenue, net rental income and Funds From
Operations (FFO) increased year-on-year. The fair value of properties rose to
EUR 5.3 billion. Supported by the development of the renting process and our
webstore, the financial occupancy rate increased to 96.9 per cent in spite of
increased supply in the market. The growth of like-for-like revenue was also
strong at 2.8 per cent.

In June, we announced that, from 31 December 2019 onwards, we will shift from a
transaction-based valuation technique to a yield-based valuation technique in
the valuation of our investment properties. The purpose of the change is to make
the company more comparable with its peer group. The potential impacts of the
change are currently being evaluated and they will be announced separately if

We made good progress during the review period towards our target of increasing
the value of our investment properties to EUR 6 billion by the end of 2021. We
started construction on 648 new apartments during the review period. Currently
there are 1,329 apartments under construction, with 85 per cent of these located
in the Helsinki region.

In addition to portfolio acquisitions and residential start-ups, we are also
well positioned to identify individual acquisition targets in the market in
order to grow our investment portfolio. During the first half of the year, we
acquired individual properties in central Helsinki.

After the end of the review period, we also announced an agreement on the sale
of 478 apartments. The transaction will be completed in August and it is part of
our strategy of focusing our operations on Finland’s seven largest growth
centres. The target assets for the transaction are located mainly outside these
growth centres.

Electronic services have become increasingly well-established as part of our
offering for Lumo ten-ants. The number of apartments rented via our webstore has
already exceeded 12,000, and the My Lumo online application launched in the
spring for use by our tenants has been well received by its user base. Service
development in collaboration with our partners and customers will continue as
part of our normal business operations.

Jani Nieminen

News conference and webcast

Kojamo will hold a news conference for institutional investors, analysts and
media on 23 August 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

The event can also be streamed as a live webcast. A recording of the webcast
will be available later on the company website at

The press conference can be streamed online at https://kojamo.videosync.fi/2019

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: 14812625#

For more information, please contact

Maija Hongas, Manager, Investor Relations, Kojamo Plc, tel. +358 20 508 3004

Erik Hjelt, CFO, Kojamo Plc, tel. +358 20 508 3225


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/