TECHNOPOLIS PLC HALF YEAR FINANCIAL REPORT August 26, 2016 at 9:00 a.m.
Technopolis Group Half-yearly Report January 1 – June 30, 2016
Solid First Half
- Net sales EUR 84.3 (89.1) million, down 5.4% mainly due to 2015 termination fees
- EBITDA EUR 45.4 (50.2) million, down 9.6% mainly due to 2015 termination fees
- On a constant currency basis, net sales were down 3.6% and EBITDA was down 7.5%
- Financial occupancy rate 93.4% (94.1%)
- Earnings per share EUR 0.18 (0.17)
- Direct result (EPRA) EUR 26.3 (27.3) million, down 3.9%
- Direct result per share, diluted (EPRA) EUR 0.25 (0.26)
- Net asset value per share (EPRA) EUR 4.81 (4.59)
| 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | |||||||||
| Key Indicators | 2016 | 2015 | 2016 | 2015 | 2015 | ||||||||
| Net sales, EUR million | 43.2 | 47.9 | 84.3 | 89.1 | 170.6 | ||||||||
| EBITDA, EUR million | 23.5 | 28.0 | 45.4 | 50.2 | 93.0 | ||||||||
| Operating profit, EUR million | 20.6 | 23.4 | 42.0 | 38.7 | 88.9 | ||||||||
| Net result for the period, EUR million | 10.1 | 11.7 | 23.9 | 20.9 | 50.0 | ||||||||
| Earnings/share, EUR | 0.08 | 0.11 | 0.18 | 0.17 | 0.38 | ||||||||
| Cash flow from operations/share, EUR | 0.33 | 0.28 | 0.60 | ||||||||||
| Equity ratio, % | 36.5 | 37.9 | 39.3 | ||||||||||
| Equity/share, EUR | 4.29 | 4.28 | 4.36 | ||||||||||
| EPRA-based Key Indicators |
4-6/ 2016 |
4-6/ 2015 |
1-6/ 2016 |
1-6/ 2015 |
1-12/ 2015 |
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| Direct result, EUR million | 14.0 | 14.7 | 26.3 | 27.3 | 55.0 | ||||||||
| Direct result/share, diluted, EUR | 0.13 | 0.14 | 0.25 | 0.26 | 0.52 | ||||||||
| Net asset value/share, EUR | 4.81 | 4.59 | 4.70 | ||||||||||
| Net rental yield, % | 7.3 | 7.7 | 7.7 | ||||||||||
| Financial occupancy rate, % | 93.4* | 94.1 | 94.6* | ||||||||||
* 6/2016: 13,500 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.
The new guidelines of the European Securities and Markets Authority (ESMA) regarding Alternative Performance Measures (APMs, performance measures not based on financial statements standards) entered into force on July 3, 2016. Technopolis reports APMs, such as EPRA performance measures, to reflect the underlying business performance and to enhance comparability between financial periods. APMs may not be considered as a substitute for measures of performance in accordance with the IFRS.
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:
“The second quarter demonstrated an improving earnings trend from Q1 to Q2: net sales, EBITDA and the EPRA direct result increased quarter-on-quarter. Year-on-year, on a constant currency basis and excluding the revenue from the 2015 termination fees (EUR 5.4 million), net sales were up 1.2% and EBITDA was down 0.9%. Therefore, while it is true that the Group’s net sales and EBITDA were lower than they were at this time last year, we have improved our operational cash flow, boosted service penetration and made good progress with organic growth project completions. The completion of Yliopistonrinne and acquisition of Gårda will boost the Group’s earnings in the second half.
We ended 2015 with a 94.6% occupancy, which dropped to 92.5% in Q1 but rose to 93.4% in Q2. Service income grew by 10% and penetration reached 13% of total net sales in the first half. We think this is a good demonstration of how our concept and sales power cope with business conditions and structural changes. It also highlights that there are now signs of gradual recovery in the Finnish economy, including declining unemployment.
In May, we took an important step in the execution of our growth strategy with the acquisition of a 34,300 m2 campus in Gothenburg, our first in Sweden. The Gårda campus has flexible, good quality assets with an excellent location, and it offers good development and expansion potential. We are well underway with the integration process and are deploying the Technopolis concept.
Organic expansion projects continue to play a central role in our growth. In June, the Board approved the expansion of our Ruoholahti campus in Helsinki, which will launch this fall. The new building will have a GLA of 10,300 m2 and is due for completion in July 2018. The pre-let rate of Ruoholahti 3 was 35.7% at the end of Q2. The pre-let rates of our other organic growth projects, Delta in Vilnius and Yliopistonrinne 3-4 in Tampere, also rose during the quarter, with Yliopistonrinne now complete and move-ins in progress.
In Oslo, we increased our holding in the Fornebu campus by acquiring an additional 30% stake. Technopolis now holds an 81% interest in the campus, while Ilmarinen has a 19% stake.
The Board and management have started preparations for a 125 million euro rights issue in the autumn. The issue will strengthen the company’s balance sheet following the Gothenburg acquisition and the Oslo buy-out, as well as provide capital for our current and upcoming organic pipeline and future acquisitions. Technopolis’ two largest shareholders, Varma and Ilmarinen, have indicated that they will participate pro rata in the rights issue.”
Full version of Technopolis Plc’s Half-yearly Report January 1 –June 30, 2016 attached.
Additional information:
Keith Silverang
CEO
tel. +358 40 566 7785
Technopolis provides the best addresses for success in six countries in the Nordic-Baltic region. The company develops, owns and operates a chain of 21 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 49,000 employees in Finland, Sweden, Norway, Estonia, Russia and Lithuania. The Technopolis Plc share (TPS1V) is listed on Nasdaq Helsinki.
