Norvestia - Interim report (Q1 and Q3)

INTERIM REPORT OF NORVESTIA FOR JANUARY–MARCH 2015

Helsinki, Finland, 2015-04-24 08:15 CEST (GLOBE NEWSWIRE) -- Norvestia Oyj     
       Stock exchange release      24 April 2015 at 9:15 

INTERIM REPORT OF NORVESTIA FOR JANUARY-MARCH 2015

In January-March 2015, the result of the Group amounted to EUR 12.5 million
(EUR 1.6 million in the same period previous year). 
Earnings per share were EUR 0.81 (0.10).
Trading gains were EUR 15.6 million (2.2).
Net Asset Value (dividend-adjusted) increased during the period by 8.4% (1.0%).
Amended Net Asset Value (dividend-adjusted) increased during the period by 8.3%
(1.0%). 
The AGM decided that EUR 0.30 per share be distributed as dividend (0.35).

CAPITAL MARKETS

Stock markets, particularly in Europe, rose markedly during the first quarter
of 2015. The yield of the Helsinki CAP Yield Index was 18.4% during the
quarter. This is fairly exceptional. The last time the index yielded as much in
one quarter was in the fall of 2009. 

Behind this strong rally are the same factors that have buoyed share prices for
some years now; exceptionally low interest rates and the support activities of
the European Central Bank (ECB). Low interest rates have continually funneled
assets into stock markets, and boosted share prices and valuation levels. 

In January 2015, the ECB launched its most powerful weapon so far. It decided
to initiate a bond-purchase program of up to EUR 60 billion a month. European
government bonds may also be bought within the limits of this program. The
purpose of the operation is to stave off the threat of deflation and to support
the struggling European economy. The sum of money spent by the ECB is huge. The
market value of the entire Helsinki stock exchange, which is approximately EUR
190 billion, offers some kind of perspective to it; the sum of money consumed
by the ECB could buy all the companies on the Helsinki stock exchange every
third month. 

Other economic news has been somewhat overshadowed by the ECB's support
activities. The euro exchange rate against the dollar has weakened by nearly
25% from last summer. This is mostly good news for Finnish listed companies.
The price of crude oil has also fallen from its June 2014 high by approximately
50%, which significantly reduces energy costs for Finnish companies and hence
improves their profitability. 

In recent weeks, economic forecasts for the Eurozone have been revised slightly
upward. Currently, the economy of the area is forecast to grow by 1.4% during
2015, while the previous forecast was 1.1%. Finland's economic growth is
forecast to stagnate further, with growth near 0%. 

Index yields on various exchanges for the first three months of 2015 were as
follows: 

Finland/OMX Helsinki Index                               16.2%
Finland/OMX Helsinki CAP Yield Index                     18.4%
Sweden/OMX Stockholm Index                               14.6%
Norway/OBX Index                                          7.1%
Denmark/OMX Copenhagen Index                             23.8%
USA/Nasdaq Composite Index                                3.5%
USA/S&P 500 Index                                     0.4%
Bloomberg European 500 Index                             15.5%
MSCI World Index                                          1.8%
Japan/Nikkei 225 Index                                   10.1%
Norvestia's share price (dividend-adjusted)               5.8%
Norvestia's Net Asset Value (dividend-adjusted)           8.4%
Norvestia's Amended Net Asset Value (dividend-adjusted)   8.3%

NORVESTIA'S INVESTMENTS

Norvestia's investments excluding cash and other liquid assets were 92% (89%)
of total assets at the end of March. The market value breakdown of the
investments was as follows: 

                                       31/3/2015         31/3/2014
                                 MEUR          %   MEUR          %
Listed shares and share funds*   97.1       59.2   71.8       49.6
Industrial investments           14.2        8.6   12.8        8.8
Hedge funds                      18.5       11.3   23.5       16.2
Bonds and bond funds             21.0       12.8   20.6       14.2
Cash and other liquid assets     13.3        8.1   16.3       11.2
In total                        164.1      100.0  145.0  100.0    

* of which share funds EUR 15.0 million (13.9).

79% of the Group's assets were in euros, 14% in Swedish krona, 6% in US dollars
and 1% in other currencies. 

During the first quarter of the year Norvestia traded shares actively. These
share trades were intended to take advantage of rising share prices. The timing
of the trades was successful. During the period under review, shares with
strong dividend yields in particular were added to the portfolio. 

Norvestia's Net Asset Value fluctuated less month on month than the stock
market in general. The company hedged its investments from time to time by
selling Euro Stoxx Index futures and by buying put options. Approximately half
of the Swedish krona currency risk was hedged with a currency future. 

FUTURE PROSPECTS

Exceptionally low interest rates and the ECB's support activities are likely to
continue throughout the year, which will continue to support the capital market
going forward. At the moment, investors have hardly any investment alternatives
with positive return expectations other than shares. 

If the ECB's support measures work as planned, the economies of the euro
countries should take a clear turn upward later this year. This would improve
the difficult employment situation and gradually balance the euro countries'
budget deficits. At some point, this would also result in a decrease in
European government debts. All this would be positive for the whole of Europe. 

There are, however, risks involved in the ECB's measures. In a bad scenario,
the ECB's support euros will just pour into the capital markets and increase
the prices of various asset classes without initiating economic growth. At some
point, this kind of development would, in all probability, lead to bubbles on
the capital markets. In the long term, company valuations have to follow the
basic fundaments of the economy. According to some estimates, shares are
already overvalued. 

In this sensitive investment environment, Norvestia aims to take into account
various possible scenarios in the economy and on the stock market, based on the
latest economic figures. Investment ratios of shares, funds and
interest-yielding investments will be assessed according to the prevailing
situation. 

KEY FIGURES

                                         1/1-31/3/   1/1-31/3/  1/1-31./12/
                                              2015        2014         2014
Earnings per share, EUR                       0.81        0.10         0.35
                                         31/3/2015   31/3/2014   31/12/2014
Equity ratio, %                               94.7        94.3         99.0
Shareholders' equity per share, EUR          10.40        9.32         9.59
Net Asset Value per share, EUR               10.40        9.32         9.59
Amended Net Asset Value per share, EUR       10.54        9.42         9.73
Net Asset Value, EUR million                 159.3       142.8        146.9
Amended Net Asset Value, EUR million         161.4       144.3        149.0
Share price, B share, EUR                     7.83        6.68         7.40
Number of shares                        15,316,560  15,316,560   15,316,560

DISCLOSURE PROCEDURE

This stock exchange release is a summary of Norvestia's January-March 2015
interim report. The full interim report including tables is available as an
attachment to this release and on Norvestia's web pages at
www.norvestia.fi/en/investors. 

The interim financial information has been reviewed by Norvestia's auditor.

Helsinki 24 April 2015

NORVESTIA OYJ

Board of Directors

On behalf Juha Kasanen
Managing Director
Tel. +358-9-6226 380

DISTRIBUTION
Nasdaq Helsinki

Main media
www.norvestia.fi

Attachments:

Norvestia Oyj Interim report 1.1.-31.3.2015.pdf