Sievi Capital Plc’s Business Review for January–March 2022
Sievi Capital Plc
Stock Exchange Release 5 May 2022 at 8:00 am EEST
Sievi Capital Plc’s Business Review for January–March 2022
The strong growth of KH-Koneet Group continued, unrealised changes in fair values had a negative effect on Sievi Capital’s result
This is the summary of the Business Review for January–March 2022. The full Business Review is attached to this release and is also available on the company’s website at www.sievicapital.fi
January-March 2022
- Operating profit was EUR -2.9 (3.7) million
- Net profit for the period was EUR -2.4 (3.5) million
- Earnings per share (undiluted and diluted) were EUR -0.04 (0.06)
- Net asset value per share at the end of the review period was EUR 1.57 (1.39)
- Return on equity for rolling 12 months was 14.6% (23.2%)
- Gearing at the end of the review period was 10.3% (-13.2%)
- KH-Koneet Group made an acquisition in Sweden after the end of the review period
- Tuomas Joensuu became the interim CFO of Sievi Capital in March
Figures in parentheses are figures from the corresponding period in the previous year, unless indicated otherwise. Information in the Business Review is unaudited. Sievi Capital does not consolidate the data of its subsidiaries into Group-level calculations line item by line item but recognises investments in the companies at fair value through
CEO Jussi Majamaa:
“Development in the first quarter of 2022 was two-fold. Four of our five target companies increased their net sales, and three of them improved their profits. The strongest performance was achieved by KH-Koneet Group, which recorded substantial growth in net sales and EBITDA. After the review period, KH-Koneet Group also acquired the Swedish machinery rental company Törnells Maskinuthyrning, which strengthens its market position in Sweden.
While there were many successes during the review period, our target companies faced a number of challenges and uncertainties, the most significant of these being related to the crisis in Ukraine, inflation, and delays associated with availability. These difficulties had the biggest impact on Indoor Group, where the the beginning of the year was much slower than expected.
Fortunately, our target companies have no business operations in Russia or dependence on trade with Russia, so Russia’s armed offensive against Ukraine has only indirect impacts on us. It remains to be seen whether the crisis will have long-term impacts on consumer demand, or whether the impacts will be short-lived, as in the case of the coronavirus pandemic.
Sievi Capital’s result for the first quarter showed a loss due to unrealised changes in the values of investments, with the negative change in the value of the Indoor Group investment having the largest effect. Return on equity for a rolling 12 months at the end of the review period was 14.6%, which exceeds our long-term minimum target level.
During the first months of the year, we focused particularly on supporting our target companies in the organic and inorganic development of their business, as well as our strategy work. Our objective is to increase Sievi Capital’s shareholder value by increasing transparency, among others. This Business Review marks the first time we are reporting the key net sales and profit figures, including comparison figures, for our target companies for the first three months of the year. There was also a change in our organisation during the review period. Tuomas Joensuu, who had been a member of our investment team since 2019, became Sievi Capital’s interim CFO in March.”
Future Outlook
In line with its current strategy, Sievi Capital will continue to explore new investment opportunities. The company plans to make an average of 1–2 new investments per year but the number of investments made may vary from year to year. For existing investments, the active development of the companies’ business operations will continue. Exit planning and the assessment of exit opportunities will also continue. Sievi Capital will carry out strategy work during the current year, as part of which alternative strategies for increasing shareholder value that differ from the current strategy will also be considered.
Sievi Capital does not consolidate the data of its subsidiaries into Group-level calculations line item by line item but recognises investments in the companies at fair value through profit or loss. Changes in the fair values of the investments have a material impact on Sievi Capital’s results. In addition to the target companies’ own development, factors that influence the development of the fair values of the investments include, for instance, the general development of different sectors and national economies as well as changes in their outlooks, the development of stock market and interest rates and other factors beyond Sievi Capital’s control. Furthermore, the coronavirus pandemic increases uncertainty when it comes to anticipating development.
Sievi Capital’s financial target is a return on equity of at least 13%, the achievement of which the company considers to be realistic in the long term. Due to the nature of the business, the company’s short-term result development is subject to volatility that is difficult to predict. Therefore, Sievi Capital does not provide an estimate of the result development in 2022.
SIEVI CAPITAL PLC
Jussi Majamaa
CEO
FURTHER INFORMATION:
CEO Jussi Majamaa, tel. +358 400 412 127
DISTRIBUTION:
Nasdaq Helsinki Ltd
Major media
www.sievicapital.fi
Sievi Capital is a partner for Finnish entrepreneurs. We support the growth, performance and value creation of small and medium-sized companies and concurrently build national competitiveness. We believe that we succeed together as co-entrepreneurs. Sievi Capital’s share is listed on Nasdaq Helsinki.
Attachment
