eQ Plc Stock Exchange Release
6 November 2014 at 1:00 p.m.
eQ PLC’S INTERIM REPORT 1 JANUARY TO 30 SEPTEMBER 2014 – eQ'S RESULT GROWS STRONGLY - PROFIT INCREASED BY MORE THAN 70%
July to September 2014 in brief
- In the third quarter, the Group’s net revenue totalled EUR 5.2 million (EUR 3.9 million from 1 July to 30 Sept. 2013).
- The Group’s net fee and commission income totalled EUR 5.3 million (EUR 3.4 million).
- The Group’s net investment income from own investment operations was EUR -0.1 million (EUR 0.5 million).
- The operating profit of client operations (Asset Management and Corporate Finance) was EUR 2.4 million (EUR 0.6 million).
- The Group’s operating profit was EUR 2.0 million (EUR 0.6 million).
- Earnings per share were EUR 0.04 (EUR 0.01).
January to September 2014 in brief
- During the period under review, the Group's net revenue totalled EUR 16.4 million (EUR 13.7 million from 1 Jan. to 30 Sept. 2013).
- The Group’s net fee and commission income totalled EUR 15.6 million (EUR 10.8 million).
- The Group’s net investment income from own investment operations was EUR 0.1 million (EUR 2.9 million).
- The Group’s non-recurring other income and expenses totalled EUR 0.6 million (EUR 0.0 million).
- The operating profit of client operations (Asset Management and Corporate Finance) was EUR 6.9 million (EUR 2.4 million).
- The Group’s operating profit was EUR 5.6 million (EUR 3.8 million).
- Earnings per share were EUR 0.12 (EUR 0.07).
- The assets under management totalled EUR 7.4 billion (EUR 6.7 billion on 31 Dec. 2013) at the end of the period.
- The net cash flow from own investment operations was EUR 4.8 million (EUR 8.2 million from 1 Jan. to 30 Sept. 2013) and the change in fair value was EUR 4.4 million (EUR -0.8 million).
| Key ratios | 7-9/ 2014 | 7-9/ 2013 | Change % | 1-9/ 2014 | 1-9/ 2013 | Change % | 1-12/ 2013 |
| Net revenue, Group, EUR million | 5.2 | 3.9 | 35 % | 16.4 | 13.7 | 20 % | 18.8 |
|
Net revenue, Asset Management, EUR million |
4.4 | 3.2 | 38 % | 12.9 | 9.9 | 31 % | 13.6 |
|
Net revenue, Corporate Finance, EUR million |
1.0 | 0.3 | 187 % | 3.6 | 1.2 | 192 % | 2.2 |
| Net revenue, Investments, EUR million | -0.1 | 0.4 | -135 % | -0.2 | 2.6 | -106 % | 3.0 |
| Net revenue, other segments and | |||||||
| eliminations, EUR million | 0.0 | 0.0 | 0 % | 0.0 | 0.0 | 0 % | 0.0 |
| Key ratios | 7-9/ 2014 | 7-9/ 2013 | Change % | 1-9/ 2014 | 1-9/ 2013 | Change % | 1-12/ 2013 |
| Operating profit, Group, EUR million | 2.0 | 0.6 | 251 % | 5.6 | 3.8 | 48 % | 4.9 |
|
Operating profit, Asset Management, EUR million |
2.0 | 0.6 | 209 % | 5.4 | 2.3 | 131 % | 3.1 |
|
Operating profit, Corporate Finance, EUR million |
0.4 | 0.0 | 1125 % | 1.5 | 0.1 | 1979 % | 0.4 |
|
Operating profit, Investments, EUR million |
-0.1 | 0.4 | -135 % | -0.2 | 2.6 | -106 % | 3.0 |
|
Operating profit, other segments, EUR million |
-0.3 | -0.4 | 33 % | -1.1 | -1.2 | 10 % | -1.6 |
| Profit for the period, EUR million | 1.6 | 0.4 | 319 % | 4.4 | 2.6 | 72 % | 3.4 |
| Earnings per share, EUR | 0.04 | 0.01 | 300 % | 0.12 | 0.07 | 71 % | 0.10 |
| Equity per share, EUR | 2.04 | 1.96 | 4 % | 2.04 | 1.96 | 4 % | 1.97 |
| Liquid assets and interest-bearing liabilities, EUR million | 16.4 | 7.8 | 110 % | 16.4 | 7.8 | 110 % | 11.3 |
| Private equity investments, EUR million | 30.3 | 32.7 | -7 % | 30.3 | 32.7 | -7 % | 30.6 |
| Interest-bearing liabilities, EUR million | 0.0 | 0.0 | 0 % | 0.0 | 0.0 | 0 % | 0.0 |
| Assets under management, EUR billion | 7.4 | 6.4 | 15 % | 7.4 | 6.4 | 15 % | 6.7 |
Janne Larma, CEO
The growth of eQ’s client operations (Asset Management and Corporate Finance) has been excellent. During the first nine months, the income from client operations grew by 48 per cent on the previous year, and the operating profit grew by 188 per cent. We have been able to consolidate our position in all areas of asset management as well as in corporate finance. As a result, the operating profit of the Group grew by 48 per cent and profit per share by more than 70 per cent on the previous year.
The positive trend of the first six months continued in the third quarter in many equity markets. The world stock exchange index (MSCI World) rose by 13.3 per cent during the first nine months, and emerging markets (MSCI) gave an 11.7 per cent return. In the third quarter, the Helsinki Stock Exchange stood still, but the increase since the beginning of the year (OMXH cap) was 8.6 per cent. Long-term interest rates continued to fall in the third quarter both in developed and emerging markets, and they have given investors exceptionally good returns this year.
eQ Asset Management’s net sales in funds registered in Finland were EUR 170 million in the first nine months of the year. Due to excellent sales and value changes, the assets managed by eQ totalled EUR 7.4 billion at the end of September. Measured based on assets, our largest fund is still the eQ Emerging Dividend Fund, which had assets of EUR 302 million at the end of September. In the third quarter, the Finnish Cultural Foundation decided to outsource the management of its equity and other alternative investments to eQ, which is proof of our strong expertise in private equity investments. The eQ Care Fund had assets of EUR 137 million at the end of the period, and in September we agreed on real estate transactions totalling EUR 65 million. All these new construction projects will be finalised next year, and they complement the fund’s portfolio in an excellent manner.
The positive trend also continued in the corporate finance business. In the third quarter, Advium acted as advisor in three transactions, e.g. when the State of Finland and the German shipbuilding company Meyer Werft acquired the entire share capital of STX Finland Ltd. Advium also acted as advisor to KSF Media Holding Ab, as it sold its printing property in Vantaa to Swedish AB Sagax. Advium was once more elected the best company in Finland in the category Best Real Estate M&A Advisory in an enquiry made by the distinguished Euromoney magazine. This was the eighth time Advium was awarded this title. This is another proof of Advium’s leading market position in large real estate transactions.
The income of the Asset Management segment increased by more than 30 percent, and the operating profit more than doubled to EUR 5.4 million from EUR 2.3 million in 2013. The income of the Corporate Finance segment almost tripled, and its result improved clearly, operating profit being EUR 1.5 million as compared with EUR 0.1 million in 2013. In the Investments segment, the cash flow was EUR 4.8 million positive and the value change of the investments EUR 4.4 million positive since the beginning of the year. The operating profit of the Investments segment was EUR -0.2 million, including a write-down of EUR 1.1 million.
The Group’s cash flow has been strong in 2014. At the end of September, the Group’s liquid assets and interest-bearing receivables totalled EUR 16.4 million, and the balance sheet value of the private equity investments was EUR 30.3 million.
***
eQ’s interim report 1 January to 30 September 2014 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 Helsinki, www. eQ.fi.
eQ Group is a Finnish group of companies specialising in 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 individuals. The assets managed by the Group total approximately EUR 7.4 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 at www.eQ.fi.
