TECHNOPOLIS PLC INTERIM REPORT May 10, 2016 at 9:00 a.m.
Technopolis Group Interim Report January 1 – March 31, 2016
Steady Start to Year, Guidance Unchanged
- Net sales EUR 41.1 (41.2) million, down 0.3%. On a constant currency basis, net sales were up 1.4%.
- EBITDA EUR 21.9 (22.2) million, down 1.5%. On a constant currency basis, EBITDA was up 0.5%.
- Financial occupancy rate 92.5% (93.8%). In Oulu, financial occupancy rate dropped 7.3%.
- Earnings per share EUR 0.10 (0.06)
- Direct result (EPRA) EUR 12.3 (12.7) million, down 3.1%
- Direct result per share, diluted (EPRA) EUR 0.12 (0.12)
- Net asset value per share (EPRA) EUR 4.65 (4.47)
| 1-3/ | 1-3/ | 1-12/ | |||||
| Key Indicators | 2016 | 2015 | 2015 | ||||
| Net sales, EUR million | 41.1 | 41.2 | 170.6 | ||||
| EBITDA, EUR million | 21.9 | 22.2 | 93.0 | ||||
| Operating profit, EUR million | 21.4 | 15.3 | 88.9 | ||||
| Net result for the period, EUR million | 13.8 | 9.2 | 50.0 | ||||
| Earnings/share, EUR | 0.10 | 0.06 | 0.38 | ||||
| Cash flow from operations/share, EUR | 0.19 | 0.13 | 0.60 | ||||
| Equity ratio, % | 38.0 | 37.7 | 39.3 | ||||
| Equity/share, EUR | 4.22 | 4.15 | 4.36 | ||||
| 1-3/ | 1-3/ | 1-12/ | |||||
| EPRA-based Key Indicators | 2016 | 2015 | 2015 | ||||
| Direct result, EUR million | 12.3 | 12.7 | 55.0 | ||||
| Direct result/share, diluted, EUR | 0.12 | 0.12 | 0.52 | ||||
| Net asset value/share, EUR | 4.65 | 4.47 | 4.70 | ||||
| Net rental yield, % | 7.7 | 7.8 | 7.7 | ||||
| Financial occupancy rate, % | 92.5* | 93.8 | 94.6* | ||||
* 3/2016: 15,250 m² under renovation. 12/2015: 16,700 m² under renovation.
The EPRA-based (European Public Real Estate Association) direct result does not include unrealized exchange rate gains and losses, fair value changes or any non-recurring items, such as gains and losses on disposals.
Future Outlook
Technopolis expects its net sales and EBITDA in 2016 to remain on the same level (+/- 5%) as in 2015.
The Group’s financial performance depends on the development of the overall business environment, customers’ operations, financial markets, market yields, and exchange rates. Furthermore, any changes in the property portfolio may have an impact on the guidance.
Keith Silverang, CEO:
“We had a solid first quarter despite the expected drop in occupancy in Oulu. Without currency impact, net sales grew 1.4% while EBITDA was up 0.5%. EBITDA included a EUR +0.8 million one-off, and the EBITDA margin came in at 53.3% (53.9%). Our financial occupancy declined to 92.5% (93.8%) from 94.6% in Q4 2015. The reason for this is a 7.3 % drop in Oulu occupancy year-on-year. On the other hand, we were able to boost our average rent over the previous quarter in Finland, as well as year-on-year.
In the long term, Oulu is gradually recovering. The challenge now is to find customers for the 15,800 m2 of office space released from the agreements that we prematurely terminated in 2015. To put this into perspective, in 2015 we did 24,000 m2 in new deals in Oulu and in 2016 so far another 12,000 m2 of new deals. To achieve equilibrium, we must be successful in our sales efforts, but we must also reduce capacity in Oulu. This process may take a couple of years.
There have also been positive developments in the first months of the year. Our service business grew by 14.5% and service penetration reached 12.6%. In Tallinn, we completed the new Lõõtsa 5 building with a 100% occupancy rate. In April, Innopoli 3 in Espoo received a LEED Gold certificate, and our flagship coworking space, UMA Esplanadi, was opened in the heart of Helsinki in May.
We are pleased with the lower loan-to-value ratio and improved operational cash flow. We also paid off the remainder of our EBRD loan, which will reduce currency-related volatility since the euro-denominated loan was funding our Russian operations.
The transaction market shows no signs of cooling down. In Europe interest rates are expected to stay low at least through 2017, which means that a lot of capital is looking for yield from properties. This is having an impact on the execution of our growth strategy. However, there are opportunities on our target markets that offer good strategic fit and risk adjusted returns. We will be disciplined in our pursuit of deals and we will not stray from our investment criteria. As for divestitures, the appetite among both foreign and domestic investors in the Finnish real estate market still appears to be increasing and gradually expanding outside prime locations.
We will keep growing organically. The pre-let rates of our current projects grew nicely in Tampere and Vilnius during the first quarter. In Helsinki, we have started planning the third phase of our Ruoholahti campus.
We will continue to focus on operational excellence, superior customer service and cost-efficiency in order to enhance our competitive advantage in a challenging business environment. We will continue to build our service penetration, and expand our network of shared working environments under the Technopolis brand.”
Full version of Technopolis Plc’s Interim Report January 1 – March 31, 2016 attached.
Additional information:
Keith Silverang
CEO
tel. +358 40 566 7785
Distribution:
Nasdaq Helsinki, main news media, www.technopolis.fi
Technopolis provides the best addresses for success in five countries in the Nordic-Baltic region. The company develops, owns and operates a chain of 20 smart business parks that combine services with flexible and modern office space. The company’s core value is to continuously exceed customer expectations by providing outstanding solutions to 1,700 companies and their 47,000 employees in Finland, Norway, Estonia, Russia and Lithuania. The Technopolis Plc share (TPS1V) is listed on Nasdaq Helsinki.
