Helsinki, Finland, 2017-02-01 13:30 CET (GLOBE NEWSWIRE) --
Norvestia Oyj Financial Statement Release 1 February 2017 at 14:30
NORVESTIA’S FINANCIAL STATEMENT RELEASE FOR 2016
The result of the Group amounted to EUR 18.9 million in 2016 (EUR 25.0 million in 2015).
Earnings per share was EUR 1.24 (1.63).
Investment income was EUR 27.2 million (30.3).
Net Asset Value per share was EUR 8.13 at year-end (11.04)
Net Asset Value (dividend-adjusted) increased by 11.8% (17.2%).
The Board proposes that no dividend be distributed for 2016 (EUR 4.14 per share for 2015).
NORVESTIA BECAME CAPMAN’S SUBSIDIARY
2016 was a year of big changes for Norvestia and its shareholders. In November, Norvestia’s main owner CapMan Plc made a voluntary exchange offer to shareholders for Norvestia’s shares. CapMan offered to exchange all Norvestia shares for CapMan shares so that one Norvestia share would entitle shareholders to six CapMan shares. Norvestia’s shareholders were paid a dividend of EUR 3.35 per share before the completion of the exchange offer.
A committee comprised of the independent members of Norvestia’s Board of Directors recommended the acceptance of the exchange offer. Norvestia’s largest shareholders also committed themselves in advance to accepting the offer. When the original offer period ended 16 December 2016, over 90% of Norvestia’s shareholders had accepted it. Consequently, a right and obligation arose, as per the Finnish Companies Act, for CapMan to redeem the rest of the Norvestia shares. CapMan has announced that it will offer EUR 7.14 per share in cash to Norvestia’s minority shareholders. The final redemption price will be determined by the Arbitral Tribunal designated by the Redemption Committee of the Finnish Central Chamber of Commerce. The redemption is expected to take place during 2017, and the aim is to remove Norvestia shares from the main list of the Helsinki stock exchange.
CAPITAL MARKETS
On the capital markets 2016 was a year of big surprises. The year began in very negative sentiment, with share prices falling during January-February on all central stock exchanges. On the Helsinki stock exchange some shares lost over 30% of their value during the first weeks of the year, and the decline in share prices at the beginning of the year was indeed one of the worst in the history of the stock exchange. There was no single factor behind the fall although concern about economic growth in China and the uncertain situation in the Eurozone flustered investors and caused a minor panic.
In February the European Central Bank (ECB) stepped in once again and promised to increase its monetary easing further by including company loans with certain conditions in its massive purchasing program. This calmed the markets and share prices rallied strongly towards March.
In the early summer, a new surprise shook the capital markets. A consultative referendum was organized in Great Britain 23 June as to whether or not the country should leave the EU. Contrary to all the pollsters a majority voted in favor of the exit. This caused complete panic on the capital markets which lasted, however, for only one day. Very few analysts predicted that share prices would quickly rally after the initial panic, and fewer still forecast that at the end of July share prices would be up on their pre-referendum levels.
It is difficult to explain the reaction on the capital markets to these events even with the benefit of hindsight. It is undeniable that the growth of the economies of the EU and Great Britain looks weaker since the referendum. The best explanation is probably that after the referendum was over, there was a sense of relief. Fear is the enemy of the capital markets.
The surprises on the capital markets did not, however, end here. Analysts were almost certain that Donald Trump’s election as the President of the US would lead to a meltdown of share prices. Contrary to almost all forecasts, Trump was elected President in the election held in November. The post-election market reaction was very surprising and interesting. Share prices declined sharply during the opening of the day and shot right up after that. At the end of the stock exchange day share prices were a couple of percent up on the day. Astonishing many, share prices continued to increase strongly in stock exchanges around the world until the end of the year.
Now perhaps this share price reaction can be explained and may even have been foreseeable. In his first speech following his election Donald Trump promised something to everybody. He promised to reduce taxation, discontinue the expensive ObamaCare, increase several industrial support measures and make America great again. This was all to the stock markets’ liking.
Analysts believe that Trump’s reforms will increase US economic growth and revitalize the world economy. The opinions of economists are clearly divided however as to how sensible it is to increase public spending and reduce taxation by increasing debt. In any case the reaction of the capital markets has been positive at least up until now, with the value of the S&P 500 Index, which describes the US stock market, 10% up on its pre-election levels at the end of the year.
All in all, 2016 was a good year on the stock exchange for those investors who held their nerves throughout the various twists of the markets. During the year in question share prices rose on the majority of the world’s stock exchanges. The following table illustrates index yields on various exchanges in 2016:
Finland / OMX Helsinki Index | 3.6% |
Finland / OMX Helsinki CAP Yield Index | 13.3% |
Sweden / OMX Stockholm Index | 5.8% |
Norway / OBX Index | 14.6% |
Denmark / OMX Copenhagen Index | -7.9% |
USA / Nasdaq Composite Index | 7.5% |
USA / S&P 500 Index | 9.5% |
Bloomberg European 500 Index | -2.0% |
MSCI World Index | 5.3% |
Japan / Nikkei 225 Index | 0.4% |
Norvestia’s share price (dividend-adjusted) | 44.6% |
Norvestia’s Net Asset Value (dividend-adjusted) | 11.8% |
NORVESTIA’S INVESTMENTS
Norvestia’s twofold investment strategy consists of market investments and Growth Equity. Market investments are made primarily in Nordic listed shares, hedge funds and bonds. Growth Equity investments are made in Nordic unlisted companies, growth-oriented listed companies and private equity funds.
Norvestia’s investments excluding cash and other liquid assets were 96% (91%) of total assets at year-end. The fair value breakdown of the investments was as follows:
2016 | 2015 | |||
MEUR | % | MEUR | % | |
Listed shares and share funds* | 70.1 | 51.5% | 88.7 | 50.9% |
Growth Equity portfolio | 45.3 | 33.3% | 34.2 | 19.7% |
Bonds and bond funds | 10.5 | 7.7% | 16.1 | 9.2% |
Hedge funds | 5.3 | 3.9% | 18.9 | 10.8% |
Cash and other liquid assets | 4.9 | 3.6% | 16.3 | 9.4% |
In total | 136.1 | 100.0% | 174.2 | 100.0% |
* of which share funds EUR 6.6 million (14.0).
At year-end, 85.0% of the Group’s assets were in euros, 7.9% in Swedish krona, 6.9% in US dollars and 0.2% in other currencies.
The return of the company’s Net Asset Value during the year was, after expenses and taxes, 11.8% and was achieved with a monthly calculated volatility of 5.5%. At the same time the OMX Helsinki CAP Yield Index yielded 13.3% with a volatility of 11.0%.
Norvestia’s market investments yielded well during 2016. At the beginning of the year, Norvestia focused particularly on Finnish stocks with strong dividend yields. At the end of the year, investment activities were adjusted in preparation for the large dividend distribution of over EUR 51 million. Accordingly, various fund investments, corporate bonds and listed shares were sold. Growth Equity investments were the only asset class the amount of which increased during the year. The amounts of all other asset classes decreased. The greatest relative change took place in hedge funds. The proportion of these in the portfolio decreased to approximately 4%. Euro-wise the biggest decline took place in listed shares and funds, the amount of which decreased by approximately EUR 19 million.
Norvestia also succeeded in hedging its market investments. Worth a separate mention are Norvestia’s extensive contingency plans for the possible negative result of the Brexit vote. The dismantling of this hedge was started at just the right time on the day after the Brexit vote. The value of Norvestia’s market portfolio increased by EUR 2 million due to the hedge against Brexit.
GROWTH EQUITY
Return on Norvestia’s Growth Equity portfolio was over 44% in 2016. The highlight of 2016 was the successful exit from Touhula Varhaiskasvatus Oy. The company was an 80% subsidiary of Coronaria Hoitoketju, and was sold to a Nordic private equity investor yielding a good return. Due to the exit, Coronaria distributed an extra dividend of EUR 50 million in the spring of 2016, Norvestia’s share of this extra dividend was nearly EUR 10 million. As part of the sale of Touhula by Coronaria, Norvestia reinvested in Touhula as a direct investment. The investment amounted to EUR 2 million, and additionally Norvestia offered EUR 2 million mezzanine financing for the company.
In July Norvestia committed itself to investing approximately EUR 5 million (USD 5.5 million) in Hamilton Lane PE IX Fund, which focuses on US and European small- and medium-sized companies. After the year under review, in January, Norvestia invested EUR 1.6 million in the Finnish Digital Workforce Services Oy which offers robotic process automation services.
Investments in unlisted companies belong to Norvestia’s Growth Equity portfolio, which is administered by Norvestia’s subsidiary Norvestia Industries Oy. The aim of Norvestia’s Growth Equity investment activities is to find interesting companies with strong growth potential, the long-term and active development of which can yield significant increases in value and thereby return to Norvestia’s shareholders. In accordance with the investment strategy, Norvestia aims to find target companies that operate in sufficiently large markets and have the opportunity to take advantage of their service and solution innovations both in Finland and internationally.
Norvestia invests in minority shares or can be in the majority together with another investor. At the end of 2016, the Growth Equity portfolio consisted of six unlisted companies: Aste Helsinki which offers media production and consulting, Coronaria Hoitoketju which offers health care services, Fluido which offers cloud services consulting, Idean Enterprises which offers customer experience design services, Polystar Instruments which develops telecommunications business intelligence software solutions, and Touhula Varhaiskasvatus which offers early childhood and preschool education. The total fair value of the interests in these companies amounted to EUR 34.8 million.
Growth Equity also includes investments in private equity funds. Norvestia has committed itself to investing EUR 2.0 million in the Amanda V East private equity fund, of which EUR 1.4 million is now invested; approximately EUR 5 million (USD 5.5 million) in Hamilton Lane PE Fund IX, of which EUR 1.2 million is now invested; EUR 2.0 million in Lifeline Ventures Fund I, of which EUR 1.7 million is now invested; EUR 5.0 million in Lifeline Ventures Fund III, of which EUR 0.5 million is now invested; and EUR 3.0 million in Open Ocean Fund 2015, of which EUR 0.4 million is now invested. In addition, Norvestia has invested EUR 0.1 million in Lifeline Ventures Fund III AB.
VOLUNTARY CHANGE IN ACCOUNTING PRINCIPLE
In April 2016 Norvestia’s Board decided to apply the venture capital organization exemption of the IAS 28 standard and to value associates and joint ventures at fair value through profit or loss in Norvestia’s consolidated IFRS financial statements according to the IAS 39 standard from 1 January 2016. As a result, all Norvestia’s investments will be valued at fair value through profit or loss. Norvestia considers the valuation of investments at fair value to give more meaningful information about the real value of investments and to better describe the company’s business, the company’s way of reviewing its investments and making decisions relating to them.
Similarly, investments in unlisted private equity funds previously booked as available-for-sale financial assets will be reclassified as financial assets at fair value through profit or loss. Thus, in future any change in value will be recognized directly in profit or loss, and not in the statement of comprehensive income. Norvestia believes that classifying investments as assets at fair value through profit or loss better describes their nature and the accumulation of returns taking into account the company’s business.
The change in question is a voluntary change in accounting principle according to the IAS 28 standard which requires that comparative figures be presented retrospectively according to the new accounting principles, including the balance sheet at thebeginning of the first comparative period. Norvestia published 14 April 2016 a separate stock exchange release in which thecomparative periods have been adjusted.
NET ASSET VALUE AND SHARE PRICE
31 December 2016, Norvestia’s Net Asset Value stood at EUR 124.6 million or EUR 8.13 per share (EUR 169.1 million or EUR 11.04 per share at the end of 2015). Taking into account the dividend of EUR 0.79, which was distributed in March 2016 and the extra dividend of EUR 3.35, which was distributed in December, the company’s Net Asset Value increased by EUR 1.24 per share (1.63) in the year under review, equal to a 11.8% increase (17.2%) from the beginning of the year. In the last quarter, the increase in Net Asset Value amounted to EUR 0.40 per share (0.98).
Amended Net Asset Value will no longer be published, as after the change in the accounting principle, which came into force 1 January 2016, it corresponds to Norvestia’s Net Asset Value and the Group’s shareholders’ equity. The comparative figures in the previous paragraph have been adjusted to correspond with the change in the accounting principle.
The dividend-adjusted price of Norvestia’s share rose by 44.6% (12.0%) during the year. The price of the share stood at EUR 7.41 (7.99) 31 December 2016, corresponding to a discount in Net Asset Value of 8.9% (27.6%). The market capitalization of the shares 31 December 2016 was EUR 113.5 million (122.4).
GROUP RESULT
The result of the Group in 2016 amounted to EUR 18.9 million (25.0/2015; 6.2/2014), and operating expenses to EUR 4.5 million (2.7/2015; 2.0/2014). Operating expenses were 3.6% (1.6%/2015; 1.3%/2014) of Net Asset Value. In 2016 the Group had non-recurring expenses related to the exchange offer amounting to EUR 1.6 million. The result for the last quarter was EUR 6.1 million (15.0/2015; 1.1/2014). The return on equity was 12.9% (15.8%) and the return on investment 14.9% (17.1%).
LIQUIDITY AND SOLVENCY
Norvestia Group’s cash and cash equivalents totalled EUR 4.9 million at year-end (15.3/2015; 14.1/2014). The equity ratio stood at 88.6% (96.6%/2015; 98.8%/2014). The Group’s shareholders’ equity totalled EUR 124.6 million (169.0/2015; 148.6/2014).
PERSONNEL
In 2016, Norvestia Group employed an average of 7 (7/2015, 6/2014) people. Personnel expenses were EUR 2.0 million (1.7/2015; 1.1/2014).
NORVESTIA GROUP
Norvestia Oyj is the parent company of Norvestia Industries Oy and Norventures Oy. Norvestia Industries Oy was established in September 2007 in order to realize the Group’s Growth Equity strategy. Norvestia Oyj became CapMan Group’s subsidiary on 19 December 2017.
SHARES AND SHARE CAPITAL
Norvestia Oyj’s share capital is divided into 15,316,560 shares with one vote each. All shares have an equal right to dividend and the assets of the company. Norvestia Oyj’s share is listed on Nasdaq Helsinki.
SHAREHOLDERS
At the end of 2016, Norvestia Oyj had 1,679 shareholders (5,226). 0.4% (8.8%) of the shares were in foreign ownership and 0.4% (8.4%) were nominee-registered.
Norvestia’s largest shareholder is CapMan Plc with a holding of 90.7% (28.7) of shares and votes at year-end. The ten major shareholders held a total of 93.2% (53.6%) of shares and votes.
ANNUAL GENERAL MEETING
The Annual General Meeting (AGM) held 15 March 2016 decided to distribute EUR 0.79 per share as dividend for 2015. The dividend was paid out 24 March 2016.
The following persons were re-elected to the Board:
Heikki Westerlund, Chairman
Hannu Syrjänen, Vice Chairman
Georg Ehrnrooth, member
Niko Haavisto, member
Arja Talma, member.
PricewaterhouseCoopers Oy was re-elected as auditor, with APA Lauri Kallaskari as main responsible auditor and APA Mikko Nieminen as deputy auditor. The AGM unanimously decided to discharge the Board of Directors and the Managing Director from liability for 2015.
The AGM authorized the Board of Directors to decide on a repurchase of own shares, publicly on the Helsinki stock exchange. The authorization gives the right to acquire up to 1,531,656 shares by 31 May 2017. No acquisitions were made in 2016. The Board of Directors was also authorized to decide upon a share issue and on an issue of special rights entitling to shares. The maximum amount that may be issued is 1,531,656 shares. The authorization is effective until 31 May 2017.
EXTRAORDINARY GENERAL MEETING
The Extraordinary General Meeting held 8 December 2016 resolved to distribute a dividend of EUR 3.35 per share on the condition that all conditions of CapMan’s voluntary exchange offer, published 3 November 2016, concerning Norvestia’s shares are fulfilled or their fulfilment has been waived.
CapMan announced 19 December 2016 that it will complete the exchange offer, whereafter Norvestia’s Board of Directors decided on the extra dividend payment. The dividend was paid 29 December 2016.
RISKS IN INVESTMENT ACTIVITIES
In addition to pursuing steady asset growth, one of the guiding principles of Norvestia’s investment activities is to diversify investments and thereby reduce overall risks. From time to time a significant proportion of investments may be focused on certain types of investments and securities, the possible negative development of which may substantially decrease Norvestia’s result. Norvestia occasionally hedges its investments with options and futures, although there may be situations where such hedges are not effective.
Norvestia’s five largest investments as of 31 December 2016, consisted of the Lifeline Ventures Fund III Ky and RAM One funds, SPDR S&P 500 ETF Trust share index, and the growth investments in Coronaria Hoitoketju Oy and Idean Enterprises Oy.
Norvestia’s result is greatly affected by economic developments and changes in share prices both in Finland and abroad. Changes in exchange rates also impact the company’s result. General uncertainty on the capital markets increases the volatility of Norvestia’s investments and therefore also increases their risks.
INTERNAL SUPERVISION AND RISK MANAGEMENT
More information about the company’s principles of internal supervision and risk management can be found in Norvestia Group’s separate corporate governance statement.
DIVIDEND POLICY
Norvestia aims to distribute an annual dividend in excess of the Finnish stock market average. The long-term objective is to distribute on average approximately 60% of earnings per share as dividends.
PROPOSED DIVIDEND DISTRIBUTION
Due to the extra dividend paid in 2016, the Board of Directors proposes that no dividend be distributed for 2016.
FUTURE PROSPECTS
The situation on the capital markets remains difficult to assess. The surest forecast is that the low interest level of those euro countries considered risk-free will remain extremely low during 2017. The larger unknowns, the significance of which is difficult to forecast for now, will be the various elections in Europe, and the development in the US during the era of the new president.
Norvestia’s market portfolio will be managed according to previous principles. The aim is to achieve the best possible risk-adjusted return. The expectations of the Growth Equity portfolio for the current year look good.
Norvestia’s prospects for 2017 will be governed by the ongoing redemption proceedings for Norvestia shares by CapMan Plc. CapMan currently owns 92.5% of the shares and has the right and obligation to redeem the rest of the shares. This is expected to happen sometime during 2017. The redemption schedule is bound to the resolution of the Arbitral Tribunal. After the redemption CapMan will own 100% of Norvestia shares. According to the plan, Norvestia’s Board of Directors will apply for a delisting of the Norvestia share from the Helsinki stock exchange during the spring. Until the delisting all the obligations and responsibilities of a listed company will apply to Norvestia. After the delisting Norvestia’s journey as an independent stock-listed company will end, and from then on Norvestia’s future will be bound to CapMan’s policies and decisions.
The Board of Directors of Norvestia wants to thank Norvestia’s shareholders for the trust they have placed in the Board. The Board also wants to thank Norvestia’s personnel and management for the professional and excellent work done over the years.
KEY FIGURES
1/1-31/12/ | 1/1-31/12/ | |
2016 | 2015 | |
Earnings per share, EUR | 1.24 | 1.63 |
31/12/2016 | 31/12/2015 | |
Equity ratio | 88.6% | 96.6% |
Shareholders’ equity per share, EUR | 8.13 | 11.04 |
Net Asset Value per share, EUR | 8.13 | 11.04 |
Net Asset Value, EUR million | 124.6 | 169.0 |
Share price, EUR | 7.41 | 7.99 |
Number of shares | 15,316,560 | 15,316,560 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR 1,000 | 1/10-31/12/ | 1/10-31/12/ | 1/1-31/12/ | 1/1-31/12/ |
2016 | 2015 | 2016 | 2015 | |
Realized gains and losses from investments | -124 | -1,740 | -351 | 824 |
Fair value movements of investments, unrealized | 9,326 | 18,852 | 12,004 | 23,682 |
Dividends | 252 | 96 | 14,584 | 4,907 |
Interest income | 241 | 203 | 978 | 843 |
Total investment income | 9,695 | 17,411 | 27,215 | 30,256 |
Personnel expenses | -495 | -589 | -1,977 | -1,689 |
Depreciation and impairment charges | -2 | -3 | -7 | -9 |
Other operating expenses | -1,777 | -397 | -2,554 | -1,041 |
OPERATING PROFIT | 7,421 | 16,422 | 22,677 | 27,517 |
Financial income and expenses | 111 | 47 | -9 | 157 |
RESULT BEFORE TAXES | 7,532 | 16,469 | 22,668 | 27,674 |
Income taxes* | -1,467 | -1,487 | -3,736 | -2,638 |
RESULT FOR THE FINANCIAL PERIOD | 6,065 | 14,982 | 18,932 | 25,036 |
* Based on the result for the period | ||||
Earnings per share, EUR | 0.40 | 0.98 | 1.24 | 1.63 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR 1,000 | 31/12/2016 | 31/12/2015 |
NON-CURRENT ASSETS | ||
ASSETS | ||
Intangible assets | 4 | 2 |
Tangible assets | 14 | 17 |
Investment portfolio | ||
Growth Equity investments | 34,751 | 28,379 |
Investments in private equity funds | 6,989 | 4,217 |
Loan receivables from Growth Equity investments | 3,104 | 1,660 |
NON-CURRENT ASSETS IN TOTAL | 44,862 | 34,275 |
CURRENT ASSETS | ||
Financial assets held for trading | ||
Investments in listed shares | 63,552 | 74,762 |
Investments in funds | 11,839 | 32,876 |
Investments in interest-bearing securities | 10,516 | 17,111 |
Receivables | 4,908 | 657 |
Cash and cash equivalents | 4,886 | 15,263 |
CURRENT ASSETS IN TOTAL | 95,701 | 140,669 |
ASSETS IN TOTAL | 140,563 | 174,944 |
SHAREHOLDERS' EQUITY AND LIABILITIES | ||
SHAREHOLDERS' EQUITY | ||
Share capital | 53,608 | 53,608 |
Share premium | 6,896 | 6,896 |
Retained earnings | 45,121 | 83,495 |
Result for the period | 18,932 | 25,036 |
SHAREHOLDERS' EQUITY IN TOTAL | 124,557 | 169,035 |
LIABILITIES | ||
Current liabilities | 8,226 | 1,842 |
Net deferred tax liabilities | 7,780 | 4,067 |
LIABILITIES IN TOTAL | 16,006 | 5,909 |
SHAREHOLDERS' EQUITY AND LIABILITIES IN TOTAL | 140,563 | 174,944 |
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR 1,000 | 1/10-31/12/ | 1/10-31/12/ | 1/1-31/12/ | 1/1-31/12/ |
2016 | 2015 | 2016 | 2015 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||||
Result before taxes | 7,532 | 16,469 | 22,668 | 27,674 |
Adjustments: | ||||
Unrealized gains and losses | -458 | -17,501 | 3,068 | -23,180 |
Other operations which do not include cash transactions | 2 | 3 | 7 | 45 |
Interest income | -241 | -215 | -978 | -855 |
Dividend income | -252 | -96 | -14,584 | -4,907 |
6,583 | -1,340 | 10,181 | -1,223 | |
Changes in working capital | ||||
Change in shares and other investments | 33,060 | -8,116 | 30,842 | 1,092 |
Change in receivables | -4,052 | 269 | -4,250 | 2,214 |
Change in current liabilities | 90 | -723 | 158 | 1,472 |
29,098 | -8,570 | 26,750 | 4,778 | |
Dividends received | 252 | 96 | 14,584 | 4,907 |
Interest received | 241 | 215 | 978 | 855 |
Received and paid taxes | -6 | -6 | -23 | 83 |
487 | 305 | 15,539 | 5,845 | |
CASH FLOW FROM OPERATING ACTIVITIES | 36,168 | -9,605 | 52,470 | 9,400 |
CASH FLOW FROM INVESTING ACTIVITIES | ||||
Acquisitions of Growth Equity investments and private equity funds | -698 | -125 | -4,635 | -3,859 |
Sales of Growth Equity investments and private equity funds | 66 | 7 | 425 | 21 |
Loan receivables from Growth Equity investments | - | - | -1,444 | 215 |
Investments in intangible and tangible assets | - | -1 | -6 | -8 |
CASH FLOW FROM INVESTING ACTIVITIES | -632 | -119 | -5,660 | -3,631 |
CASH FLOW FROM FINANCING ACTIVITIES | ||||
Proceeds from loans | -5,000 | - | 10,000 | - |
Repayments of loans | - | - | -10,000 | - |
Dividends paid | -45,087 | - | -57,187 | -4,595 |
CASH FLOW FROM FINANCING ACTIVITIES | -50,087 | - | -57,187 | -4,595 |
CHANGE IN CASH AND CASH EQUIVALENTS | -14,551 | -9,724 | -10,377 | 1,174 |
Cash and cash equivalents at the beginning of the period | 19,437 | 24,987 | 15,263 | 14,089 |
Cash and cash equivalents at the end of the period | 4,886 | 15,263 | 4,886 | 15,263 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Result | ||||||
Share | Share | Retained | for the | |||
EUR 1,000 | capital | premium | earnings | period | Total | |
Shareholders’ equity 1.1.2015 | 53,608 | 6,896 | 81,904 | 6,186 | 148,594 | |
Allocations | 6,186 | -6,186 | 0 | |||
Dividends | -4,595 | -4,595 | ||||
Result for the period | 25,036 | 25,036 | ||||
Shareholders’ equity 31.12.2015 | 53,608 | 6,896 | 83,495 | 25,036 | 169,035 | |
Shareholders’ equity 1.1.2016 | 53,608 | 6,896 | 83,495 | 25,036 | 169,035 | |
Allocations | 25,036 | -25,036 | 0 | |||
Dividends | -63,410 | -63,410 | ||||
Result for the period | 18,932 | 18,932 | ||||
Shareholders’ equity 31.12.2016 | 53,608 | 6,896 | 45,121 | 18,932 | 124,557 |
NOTES TO THE FINANCIAL STATEMENT RELEASE
ACCOUNTING PRINCIPLES
The Group’s financial statement release has been prepared in accordance with the IAS 34 Interim Report standard adopted by the EU. The same accounting principles have been used in the financial statement release as in the 2016 consolidated financial statements. Formulas for calculating key figures remain the same as in the financial statements and annual report 2016. The diluted earnings per share is not shown, as the company has issued no instruments with a diluting effect.
New and revised IFRS standards and interpretations effective from 1 January 2016 did not have a material effect on Norvestia’s financial statement release for 2016.
CONTINGENT LIABILITIES
Securities given as collateral for derivatives trades | ||||
31.12.2016 | 31.12.2015 | |||
Carrying amount of pledged securities | 9,580 | 4,910 | ||
FUND COMMITMENTS | ||||
Commitment to invest in Amanda V East Ky | 584 | 868 | ||
Commitment to invest in Hamilton Lane European Partners SICAV-SIF - PEF IX | 3,971 | - | ||
Commitment to invest in Lifeline Ventures Fund I Ky | 275 | 473 | ||
Commitment to invest in Lifeline Ventures Fund III Ky | 4,506 | 5,000 | ||
Commitment to invest in Open Ocean Fund 2015 Ky | 2,553 | 2,968 | ||
In total | 11,889 | 9,309 | ||
DERIVATIVE CONTRACTS | ||||
Norvestia uses standardized derivative contracts to make the portfolio management more effective. The fair values of the derivative contracts as well as the underlying values are given in the table below. The fair values are adjusted for the corresponding share's dividend income. Derivative contracts are recognized at fair value on the date on which the derivative contract is entered into and are subsequently remeasured at fair value. The fair value of futures corresponds to the futures' gain or loss. The maturity of the derivative contracts does not exceed 3 months. Hedge accounting is not used. | ||||
31.12.2016 | 31.12.2015 | |||
Equity derivatives, EUR 1,000 | ||||
Sold put options, open positions | ||||
Underlying value | - | 172 | ||
Fair value | - | -5 | ||
Sold call options, open positions | ||||
Underlying value | - | -111 | ||
Fair value | - | -3 | ||
Index derivatives, EUR 1,000 | ||||
Bought put options, open positions | ||||
Underlying value | 5,024 | 1,765 | ||
Fair value | 109 | 28 | ||
Sold futures, open positions | ||||
Underlying value | -19,440 | -32,740 | ||
Fair value | -275 | -80 | ||
Foreign exchange derivatives, EUR 1,000 | ||||
Sold futures, open positions | ||||
Underlying value | - | -10,523 | ||
Fair value | - | -66 | ||
RELATED PARTY TRANSACTIONS | ||||
The following transactions were carried out with related parties: | ||||
31.12.2016 | 31.12.2015 | |||
Related party, EUR 1,000 | ||||
Aste Holding Oy | ||||
Interest income | 43 | 102 | ||
Coronaria Hoitoketju Oy | ||||
Interest income | 26 | 85 | ||
Idean Enterprises Oy | ||||
Purchases | - | 6 | ||
Purchases from related parties were made at normal market prices. During 12 May 2015 to 31 December 2016 Norvestia had no related party transactions with CapMan Group. | ||||
Loans to related parties | ||||
The Group has granted the key personnel of a growth company a loan or EUR 0.5 million (-) to an interest rate of 3%. The loan has been granted in December 2016 and expires latest in December 2018. The Group has received company's shares as a pledge for the loan. | ||||
INVESTMENTS 31 DECEMBER 2016
Number | Acquisition | Fair | Share of | |
of shares/ | price | value | total | |
units | EUR | EUR | investment | |
1,000 | 1,000 | |||
MARKET INVESTMENTS | ||||
LISTED SHARES | ||||
Amer Sports Corporation | 55,105 | 923 | 1,393 | 1.1% |
Apetit Plc | 74,294 | 914 | 964 | 0.7% |
Atria Plc | 125,672 | 1,322 | 1,444 | 1.1% |
Caverion Corporation | 93,034 | 362 | 737 | 0.6% |
Elisa Corporation | 93,450 | 1,897 | 2,890 | 2.2% |
Finnair Plc | 353,408 | 1,334 | 1,424 | 1.1% |
Fortum Corporation | 220,271 | 2,979 | 3,209 | 2.4% |
HKScan Corporation A share | 83,875 | 541 | 268 | 0.2% |
Honkarakenne Oyj B share | 451,739 | 1,669 | 745 | 0.6% |
Huhtamäki Oyj | 66,774 | 402 | 2,356 | 1.8% |
Kemira Oyj | 110,214 | 1,314 | 1,337 | 1.0% |
Kesko Corporation B share | 68,323 | 1,804 | 3,244 | 2.5% |
Konecranes Plc | 38,531 | 928 | 1,302 | 1.0% |
Metso Corporation | 58,753 | 1,482 | 1,592 | 1.2% |
Metsä Board Corporation B share | 281,666 | 373 | 1,914 | 1.5% |
Neste Corporation | 27,367 | 832 | 999 | 0.8% |
Nokia Corporation | 735,937 | 2,687 | 3,376 | 2.6% |
Nokian Tyres plc | 17,392 | 536 | 616 | 0.5% |
Oriola-KD Corporation B share | 109,320 | 184 | 471 | 0.4% |
Orion Corporation B share | 36,354 | 852 | 1,537 | 1.2% |
Outotec Oyj | 285,000 | 1,388 | 1,423 | 1.1% |
Raisio plc V share | 163,400 | 243 | 583 | 0.4% |
Ramirent Plc | 72,897 | 260 | 539 | 0.4% |
Rapala VMC Corporation | 125,700 | 761 | 519 | 0.4% |
Sampo plc A share | 72,044 | 3,108 | 3,068 | 2.3% |
Sanoma Corporation | 112,633 | 968 | 929 | 0.7% |
Sponda Plc | 798,196 | 2,900 | 3,493 | 2.7% |
Stockmann plc B share | 62,918 | 706 | 444 | 0.3% |
Stora Enso Oyj R share | 330,533 | 2,349 | 3,375 | 2.6% |
Tikkurila Oyj | 41,311 | 652 | 777 | 0.6% |
UPM-Kymmene Corporation | 102,211 | 1,552 | 2,386 | 1.8% |
Valmet Corporation | 57,753 | 387 | 807 | 0.6% |
YIT Corporation | 113,053 | 604 | 858 | 0.7% |
Nordea Bank AB FDR | 265,342 | 2,336 | 2,813 | 2.1% |
Powershares QQQ | 31,100 | 2,016 | 3,496 | 2.7% |
SPDR S&P 500 ETF Trust | 21,885 | 3,393 | 4,641 | 3.5% |
Telia Company AB | 385,000 | 1,887 | 1,474 | 1.1% |
48,845 | 63,443 | 48.5% | ||
DERIVATIVE CONTRACTS | ||||
Euro Stoxx call options (bought) | 500 | 86 | 109 | 0.1% |
FUNDS | ||||
Didner & Gerge Aktiefond | 13,699 | 1,141 | 3,636 | 2.9% |
Fourton Hannibal A | 14,482 | 1,000 | 2,148 | 1.6% |
RAM ONE | 27,521 | 2,397 | 3,983 | 3.0% |
Russian Prosperity Fund Euro A | 8,000 | 721 | 808 | 0.6% |
VISIO Allocator | 7,520 | 1,127 | 1,264 | 1.0% |
6,386 | 11,839 | 9.1% | ||
BONDS | nominal value | |||
Finnair, expires 13/10/2020 | 1,500 | 1,500 | 1,671 | 1.3% |
Outokumpu, expires 30/9/2019 | 1,750 | 1,746 | 1,840 | 1.4% |
Outotec, expires 24/3/2021 | 1,000 | 1,018 | 1,076 | 0.8% |
SRV, expires 22/3/2020 | 1,000 | 1,000 | 1,064 | 0.8% |
Stockmann, expires 31/1/2020 | 1,000 | 1,014 | 1,030 | 0.8% |
eQ Euro Investment Grade 1 K | 8,628 | 1,803 | 1,888 | 1.4% |
eQ High Yield Bond 1 K | 7,388 | 1,746 | 1,947 | 1.5% |
9,827 | 10,516 | 8.0% | ||
NORVESTIA OYJ IN TOTAL | 65,144 | 85,907 | 65.7% | |
GROWTH EQUITY | ||||
UNLISTED GROWTH COMPANIES* | ||||
Aste Holding Oy | 4,000 | 800 | ||
Coronaria Hoitoketju Oy | 35,307 | 3,112 | ||
Fluido Oy | 44,870 | 2,494 | ||
Idean Enterprises Oy | 354,920 | 3,299 | ||
Polystar Instruments AB | 266,000 | 1,717 | ||
Touhula Varhaiskasvatus Oy | 20,000 | 2,000 | ||
Loans to growth companies | 3,104 | |||
16,526 | 37,855 | 29.0% | ||
PRIVATE EQUITY FUNDS | ||||
Amanda V East Ky | 1,275 | 1,092 | 0.8% | |
Hamilton Lane European Partners SICAV-SIF - PEF IX | 1,149 | 1,193 | 0.9% | |
Lifeline Ventures Fund I Ky | 1,529 | 3,779 | 2.9% | |
Lifeline Ventures Fund III Ky | 494 | 428 | 0.3% | |
Lifeline Ventures Fund III AB | 72 | 117 | 0.1% | |
Open Ocean Fund 2015 Ky | 447 | 380 | 0.3% | |
4,966 | 6,989 | 5.3% | ||
GROWTH EQUITY IN TOTAL | 21,492 | 44,844 | 34.3% | |
NORVESTIA GROUP IN TOTAL | 86,636 | 130,751 | 100.0% |
The table does not include cash and cash equivalents of the Group.
* The fair value of unlisted Growth Equity investments is presented as the total fair value of the Growth Equity portfolio, not as fair value of individual investments.
The financial statement release is based on the audited financial statements 2016. The 2016 annual report will be published during week 7.
The Board of Directors proposes to the Annual General Meeting that no dividend be distributed.
The Annual General Meeting will be held on Tuesday 14 March 2017 at 11:00.
Helsinki 1 February 2017
NORVESTIA OYJ
Board of Directors
Additional information: Juha Kasanen, Managing Director, tel. +358 9 6226 380
DISTRIBUTION
Nasdaq Helsinki
Main media
www.norvestia.fi