eQ PLC’S FINANCIAL STATEMENTS RELEASE 2013 – RESULT OF CLIENT OPERATIONS GREW – DIVIDEND WILL RISE TO EUR 0.15

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eQ PLC                                                                            STOCK EXCHANGE RELEASE

14 February 2014 at 12:00 noon

 

 

eQ PLC’S FINANCIAL STATEMENTS RELEASE 2013 – RESULT OF CLIENT OPERATIONS GREW – DIVIDEND WILL RISE TO EUR 0.15

 

October to December 2013 in brief

 

  • In the last quarter, the Group’s net revenue totalled EUR 5.1 million (EUR 3.6 million from 1 Oct. to 31 Dec. 2012).
  • The Group’s net fee and commission income totalled EUR 4.6 million (EUR 3.6 million).
  • The Group’s net investment income from own investments operations was EUR 0.5 million (EUR 0.0 million).
  • The Group’s operating profit was EUR 1.1 million (EUR -0.9 million).
  • Earnings per share were EUR 0.02 (EUR -0.03).

 

 

January to December 2013 in brief

 

  • In the financial period, the Group’s net revenue totalled EUR 18.8 million (EUR 16.3 million from 1 Jan. to 31 Dec. 2012).
  • The Group’s net fee and commission income totalled EUR 15.4 million (EUR 11.3 million).
  • The Group’s net investment income from own investments operations was EUR 3.4 million (EUR 5.1 million).
  • The Group’s operating profit was EUR 4.9 million (EUR 4.7 million).
  • The operating profit of client operations (Asset Management and Corporate Finance) was EUR 3.5 million (EUR 1.6 million).
  • Earnings per share were EUR 0.10 (EUR 0.10).
  • Dividend proposal EUR 0.15 per share (EUR 0.12).
  • The assets under management totalled EUR 6.7 billion (EUR 6.3 billion on 31 Dec. 2012) at the end of the period.
  • The net cash flow from own investment operations was EUR 10.4 million (EUR 7.6 million).
  • The financial statements release contains Icecepital asset management companies acquired during the financial year 2012 from 20 November 2012. On 30 September 2013, eQ increased its holding in Finnreit Fund Management Company Ltd from 50 per cent to 100 per cent. Finnreit Fund Management Company has been consolidated with the Group’s result as a subsidiary from 1 October 2013. Due to the acquisitions, the comparison figures of the interim report are not comparable.

  

Key ratios 10-12/ 2013 10-12/ 2012 Change % 1-12/ 2013 1-12/ 2012 Change %
Earnings per share, EUR 0.02 -0.03 167% 0.10 0.10 0%
Dividend proposal, EUR       0.15 0.12 25%
Equity per share, EUR 1.97 2.03 -3% 1.97 2.03 -3%
             
Interest-bearing liabilities, EUR million 0.0 4.0 -100% 0.0 4.0 -100%
Liquid assets and interest-bearing receivables, EUR million 11.3 10.7 5% 11.3 10.7 5%
             
Assets under management, EUR billion 6.7 6.3 6% 6.7 6.3 6%

 

 


Key ratios
10-12/ 2013 10-12/ 2012 Change % 1-12/ 2013 1-12/ 2012 Change %
Net revenue, Group, EUR million 5.1 3.6 40% 18.8 16.3 15%
Net revenue, Asset Management, EUR
million
3.7 2.6 43% 13.6 9.0 51%
Net revenue, Corporate Finance, EUR million 0.9 1.1 -14% 2.2 2.6 -18%
Net revenue, Investments, EUR million 0.4 -0.1 600% 3.0 4.7 -35%
Net revenue, other segments and            
eliminations, EUR million 0.0 0.0 114% 0.0 0.0 -2%
             
Operating profit, Group, EUR million 1.1 -0.9 222% 4.9 4.7 6%
Operating profit, Asset Management, EUR
million
0.8 -0.5 250% 3.1 0.9 244%
Operating profit, Corporate Finance, EUR
million
0.3 0.4 -13% 0.4 0.7 -46%
Operating profit, Investments, EUR million 0.4 -0.1 600% 3.0 4.7 -35%
Operating profit, other segments, EUR million  -0.4 -0.7 41% -1.6 -1.6 -1%
             
Profit for the period, EUR million 0.8 -0.8 201% 3.4 3.4 1%

 

 

Janne Larma, CEO

 

eQ consolidated its position as leading asset manager

 

The assets managed by eQ increased to EUR 6.7 billion by the end of the year. Measured with the value of the assets under management, eQ is the largest asset manager in Finland that is independent of bank groups. In 2013, we have successfully sold particularly asset management services related to emerging markets, real estate and private equity investments. During the year, the size of the eQ Emerging Markets Dividend Fund grew from EUR 70 million to EUR 159 million and the eQ Care Fund from EUR 6 million to EUR 81 million. The investment capacity of the eQ Care Fund exceeded EUR 160 million at the year-end. In the private equity market, we made a EUR 64 million close in the eQ PE VI North investment programme.

 

During the year, we improved our services by investing in a new information system. The system was introduced in stages during the year and is not fully operational. By investing in this new system, we were able to close three old systems, which both improves our client reporting and brings about cost savings.

 

 

Advium’s market position remained good

 

For the fifth year in a row, the number of corporate and real estate acquisitions remained fairly modest. Towards the end of the year, activity started to grow, however, and the outlook is significantly better. In 2013, Advium acted as advisor in seven concluded transactions. Advium has a highly experienced team of 13, which creates good preconditions for result-yielding operations.

 

 

Asset Management increased its result

 

The Asset Management segment was able to increase its result significantly from the previous year, and its operating profit was EUR 3.1 million. In addition, one should note that all the synergy benefits related to the Icecapital acquisition were not yet visible at year level in 2013. Advium’s result was modest with an operating profit of EUR 0.4 million. Based on the first months of 2014, the outlook is better, however. The Investments segment also made a lower result than in 2012 with an operating profit of EUR 3.0 million. The net cash flow of investments, EUR 10.4 million, exceeded, however, the 2012 level.

 

 

The Group’s capital adequacy is high and balance sheet extremely strong

 

The balance sheet of the Group remained extremely strong during the entire year. The Group’s liquid assets and interest-bearing receivables totalled EUR 11.3 million at the close of the year, while the balance sheet value of the private equity investments was EUR 30.6 million.

 

 

Outlook

 

The asset management business introduced the year 2014 from good preconditions. The strong sales during the last months of the year combined with the favourable outlook for new sales give trust in the growth of yields. Based on the beginning of the year, Advium’s outlook is also encouraging. As a result, we believe that the result of the client operations, i.e. the Asset Management and Corporate Finance segments, will improve significantly from 2013. The result of the Investments segment depends, on the other hand, mainly on factors that the company cannot influence, due to which the result of the segment may vary considerably and is difficult to forecast.

 

 

***

 

eQ has decided to change the company’s disclosure policy regarding issuing an outlook. According to the new practice, profit guidance is presented in the outlook as a verbal assessment regarding client operations (Asset Management and Corporate Finance). Previously, the company did not issue performance guidance and published the outlook as general verbal estimates. The outlook is presented in the financial statements release and in the report by the Board of Directors, as required by the Finnish Accounting Act. eQ will update the company’s disclosure policy accordingly.

 

***

 

eQ’s financial statements release for the period 1 January to 31 December 2013 is enclosed to this release and it will also be available on the company website at www.eQ.fi.

 

 

Additional information: Janne Larma, CEO, tel. +358 40 500 4366

 

Distribution: NASDAQ OMX Helsinki, www.eQ.fi

 

 

eQ Group is a Finnish listed company specialising in asset management and corporate finance business. eQ Asset Management offers a wide range of asset management services (including private equity funds) for institutions and individuals. The assets managed by the Group total approximately EUR 6.7 billion. Advium Corporate Finance Ltd, 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 at www.eQ.fi.