eQ Oyj - Interim report (Q1 and Q3)

eQ PLC’S INTERIM REPORT Q3 2017 – eQ GROUP'S OPERATING PROFIT GREW BY 6%

eQ PLC INTERIM REPORT

27 October 2017 at 8:00 A.M.

 

  

January to September 2017 in brief

 

• During the period under review, the Group's net revenue totalled EUR 26.8 million (EUR 26.2 million from 1 Jan. to 30 Sept. 2016).

• The Group’s net fee and commission income was EUR 26.0 million (EUR 24.7 million).
• The Group’s net investment income from own investment operations was EUR 0.8 million (EUR 1.5 million).

• The Group’s operating profit grew by 6 per cent to EUR 12.8 million (EUR 12.1 million).
• The Group’s profit was EUR 10.1 million (EUR 9.5 million).
• The consolidated earnings per share were EUR 0.27 (EUR 0.26).
• The net cash flow from own investment operations was EUR 0.7 million (EUR 2.4) and the change in fair value was EUR 0.8 million (EUR -1.0 million).
• The net revenue of the Asset Management segment increased by 26 per cent to EUR 23.5 million (EUR 18.6 million) and the operating profit by 41 per cent to EUR 12.4 million (EUR 8.8 million).
• The net revenue of the Corporate Finance segment fell to EUR 2.7 million (EUR 6.3 million). It is typical of corporate finance business that success fees have a considerable impact on invoicing, due to which the result may vary considerably from quarter to quarter.

 

July to September 2017 in brief

 

• In the third quarter, the Group’s net revenue totalled EUR 8.0 million (EUR 7.8 million from 1 July to 30 Sept. 2016).

• The Group’s net fee and commission income was EUR 7.7 million (EUR 6.9 million).
• The Group’s net investment income from own investment operations was EUR 0.3 million (EUR 0.9 million).

• The Group’s operating profit grew by 4 per cent to EUR 4.1 million (EUR 4.0 million).
• The Group’s profit was EUR 3.3 million (EUR 3.2 million).
• The consolidated earnings per share were EUR 0.09 (EUR 0.09).

    

Key ratios	1-9/17	1-9/16	Change %	7-9/17	7-9/16	Change %	1-12/16
Net revenue, Group, M€	26.8	26.2	2%	8.0	7.8	3%	35.4
Net revenue, Asset Management, M€	23.5	18.6	26%	7.4	6.5	15%	25.6
Net revenue, Corporate Finance, M€	2.7	6.3	-58%	0.3	0.5	-40%	7.9
Net revenue, Investments, M€	0.6	1.3	-55%	0.3	0.8	-66%	1.9
Net revenue, Group administration
and eliminations, M€	0.1	0.0	1431%	0.0	0.0	1%	0.0
Operating profit, Group, M€	12.8	12.1	6%	4.1	4.0	4%	16.2
Operating profit, Asset Management, M€	12.4	8.8	41%	4.2	3.4	22%	12.0
Operating profit, Corporate Finance, M€	0.7	3.0	-76%	-0.1	0.0	-1877%	3.7
Operating profit, Investments, M€	0.6	1.3	-55%	0.3	0.8	-66%	1.9
Operating profit, Group administration, M€	-0.9	-1.0	-13%	-0.3	-0.3	-2%	-1.4
Profit for the period, M€	10.1	9.5	6%	3.3	3.2	3%	12.8
Key ratios	1-9/17	1-9/16	Change %	7-9/17	7-9/16	Change %	1-12/16
Earnings per share, €	0.27	0.26	5%	0.09	0.09	0%	0.35
Equity per share, €	1.53	1.65	-7%	1.53	1.65	-7%	1.75
Cost/income ratio, Group, %	52.1	52.6	-1%	48.4	47.1	3%	53.0
Liquid assets, M€	8.4	12.1	-31%	8.4	12.1	-31%	16.7
Private equity fund investments, M€	20.1	20.6	-3%	20.1	20.6	-3%	19.2
Interest-bearing liabilities, M€	0.0	0.00	0%	0.0	0.0	0%	0.0
Assets under management, € billion	8.3	8.4	-2%	8.3	8.4	-2%	8.8

   

Janne Larma, CEO

During the first nine months of the year, the net revenue of the Group grew by 2 per to EUR 26.8 million and the operating profit by 6 per cent to EUR 12.8 million. The Group’s profit increased to EUR 10.1 million (EUR 9.5 million from 1 Jan. to 30 Sept. 2016). eQ Group’s rolling 12-month operating profit has grown for 14 consecutive quarters.

  

Strong growth of eQ Asset Management’s fee and commission income and operating profit continued

eQ Asset Management’s strong profit growth continued. The net revenue of the Asset Management segment increased by 26 per to EUR 23.5 million and the operating profit by 41 per cent to EUR 12.4 million. The growth of the fee and commission income continued in all areas: the management fees from traditional asset management grew by 16 per cent and the management fees from real estate and private equity asset management by 32 per cent. The net subscriptions in the eQ Care and eQ Finnish Real Estate funds were EUR 188 million in the nine-month period. At the same time as we have received clearly the most new capital of the open-ended real estate funds registered in Finland, we have also been able to offer extremely competitive returns. During the nine-month period, the return of the eQ Finnish Real Estate Fund has been 6.9% and that of the eQ Care Fund 6.7%. The interest in private equity asset management has also continued to be strong. In May, eQ established its first secondary market fund, and by the end of September, 18 private equity funds had been bought to its portfolio. The capital of the eQ PE SF L.P. fund amounts to EUR 137.5 million. Within traditional asset management, the demand for eQ’s funds has remained good and the returns have been excellent. In May, we established the eQ Emerging Markets Small Cap Fund, and at the end of September its capital totalled EUR 43 million. The returns of the funds managed by eQ are excellent. Since the beginning of the year, 79% of our funds have surpassed their benchmark indices, and during an investment period of three years, 93% of the funds that eQ manages have surpassed their benchmark indices.

   

Advium’s fee income at a lower level than last year

In the Corporate Finance segment Advium acted as advisor in seven finalised transactions during the nine-month period. In the third quarter, Advium acted as advisor to Rettig as it sold an industrial property in Belgium. After the period under review, Avdium has acted as advisor in two transactions, one of which was finalised at the beginning of October. According to estimates, the other transaction will be finalised during the last quarter of the year. Advium’s fee income was at a lower level than last year. The company’s net revenue fell to EUR 2.7 million (EUR 6.3 million from 1 Jan. to 30 Sept. 2016) and its operating profit fell to EUR 0.7 million (EUR 3.0 million). Great variations in fees per quarter are typical of corporate finance operations. The market situation for corporate and real estate transactions continues to be good, and we believe that it will remain good during the last months of the year.

  

The result of the Investments segment below previous year’s level

The operating profit of the Investments segment was EUR 0.6 million (EUR 1.3 million). The result of the Investments segment may also vary greatly per quarter depending on the exits that take place in private equity funds. At the end of September, the balance sheet value of the private equity fund investments was EUR 20.1 million (EUR 19.2 million on 31 Dec. 2016).The values of the investments developed favourably, and the value change in the fair value reserve before taxes was EUR 0.8 million during the nine-month period.

   

***

 

eQ’s interim report 1 January to 30 September 2017 is enclosed to this release and it is also available on the company website at www.eQ.fi.

  

Additional information: Janne Larma, CEO, tel. +358 9 6817 8920

Distribution: Nasdaq Helsinki, www.eQ.fi, media

   

eQ Group is a group of companies that concentrates on asset management and corporate finance business. eQ Asset Management offers a wide range of asset management services (including private equity funds and real estate asset management) for institutions and private individuals. The assets managed by the Group total approximately EUR 8.3 billion. Advium Corporate Finance, which is part of the Group, offers services related to mergers and acquisitions, real estate transactions and equity capital markets.

  

More information about the Group is available on our website www.eQ.fi.

Attachments:

eQ Plc Interim Report Q3 2017.pdf