Toivo Group Plc’s business review 1 January–30 September 2022: Operating profit almost doubled to EUR 18.0 (9.9) million, growth of 81%*. Occupancy rate 98.7%.

 Business Review, 9. November 2022 at 8:30

 

* Unaudited

 

FINANCIAL PERIOD 1 JANUARY–30 SEPTEMBER 2022 KEY EVENTS

• Operating profit MEUR 18.0 (9.9).
• Contracts for building a total of 302 (650) apartments were made during the period under review.
• 417 (464) apartment start-ups during the period under review.
• 309 (112) apartments were completed during the period under review.

 

PROSPECTS FOR 2022 UNCHANGED

• The company expects the operating profit of the financial year of 1 January–31 December 2022 to be EUR 22–28 million. (Unchanged)
• The company expects the fair value of investment properties to be approximately EUR 175 (12/2021: 97.6) million at the end of 2022. (Unchanged)

 

CONSOLIDATED KEY FINANCIALS*

 

EUR thousand *unaudited	1 January– 30 September 2022	1 January– 30 September 2021	Change %	1 January–31 December 2021
Revenue	13,283	11,120	19%	13,574
Operating profit	18,015	9,927	81%	15,818
Profit or loss for the financial year	13,400	7,767	73%	12,071
Earnings per share (EUR)	0.25	0.15	60%	0.24
Fair value of investment properties	160,681	83,433	93%	97,649
Economic occupancy rate	98.7%	98.6%	0%	98.9%
Total equity	70,962	51,169	39%	54,420
Total assets	183,317	101,182	81%	121,054

 

EUR thousand *unaudited	1 July– 30 September 2022	1 July– 30 September 2021	Change %
Revenue	6,707	3,180	111%
Operating profit	4,697	3,941	19%
Profit or loss for the financial year	3,363	3,278	3%
Earnings per share (EUR)	0.06	0.06	10%
Fair value of investment properties	160,681	83,433	93%
Economic occupancy rate	98.7%	98.5%	0%
Total equity	70,962	51,169	39%
Total assets	183,317	101,182	81%

 

CEO MARKUS MYLLYMÄKI

Building a house and building a great company share many similarities. When you build a good foundation and frame for your house, it will endure all kinds of weather conditions. Toivo’s foundations have been laid on a sturdy and successful strategy that is now proving its strength.

Affordable rental housing in the Helsinki metropolitan area, Turku and Tampere never go out of fashion. Our 2022 occupancy rate of 98.7% is also a sign of that. There is a huge demand in the customer interface for the products produced by the company.

Housing investors and developers are now facing difficult changes in the market. Interest rate hikes as well as increases in construction costs and inflation are posing challenges for the market. The business model created by Toivo, in which a cash flow yield of over 6% is generated with new apartments, an occupancy rate of 98.7% and a conservative valuation, is more sustainable against market changes.

Over the years, we have also developed pillars that support the company’s core business in addition to the traditional housing rental business. In 2023, one of these pillars is pre-sold projects, from which we are expecting an operating profit of approximately EUR 2-4 million in 2023.

In addition to this, we have improved and will improve our competitiveness in the following months with specific project selection, calculating construction costs in project start-ups, cost savings, additional sources of income and rent increases.

DEVELOPMENT: The challenging market conditions open up opportunities in development in particular, but we must be very cautious with new opportunities. During 2022, the company selects projects with particular care and analysis. During the period under review, the company agreed on the construction of 120 new apartments in an excellent location in Itäkeskus in Helsinki.

CONSTRUCTION: During the period under review, the company started up the construction of 417 apartments, but during the third quarter of the period under review, no new sites were started. The company is scheduled to start some new housing projects in late 2022. Great attention is paid to the price and location of projects to be initiated. For new project start-ups, the aim is to tender the construction costs to lower them significantly.

OWNERSHIP:  With regard to lease activities and management, Asuntomestarit® have succeeded well. The economic occupancy rate for the period was 98.7%. Toivo’s competitive, high-quality apartment product combined with the services of Asuntomestarit has proved its price-quality ratio in the challenging market.

Toivo’s business is very capital-intensive, and an optimal financial structure is vital for the company. The company’s equity ratio was 39.2% and the financial loan to value (LTV) rate of its properties was 55.5%, both providing Toivo with financial resources.

I would like to thank everyone at Toivo for their disciplined and determined work and for the good results in the challenging market. I would also like to thank the many customers that have chosen us.

ANALYST AND MEDIA EVENT

Toivo Group Plc is organising a public analyst and media event on Wednesday, 9 November 2022 at approximately 10:00. Guests can join the event at the website https://toivo.videosync.fi/2022-q3-tulos.

The results will be presented by Toivo Group’s CEO Markus Myllymäki and CFO Samuli Niemelä. Presented material will be available at company website sijoittajille.toivo.fi/en after the event.

 

Toivo Group Plc

Board of Directors

 

Further information
Markus Myllymäki
CEO
Toivo Group Plc
Tel. +358 (0)40 847 6206
[email protected]

Certified Adviser: Danske Bank A/S, Finland branch, +358 (0)50 575 4422

 

About Toivo
Toivo is a Finnish real estate company that was founded in 2015. Its business consists of developing apartment lots, constructing housing and ownership of apartments. The Company’s business model is unique as Toivo’s business combines the value chain of real estate business from development and construction to ownership, management and rental of a completed property. Toivo manages the entire life cycle of residential real estate with its own team, from raw land development to renting apartments. This way Toivo is able to generate additional value to its customers, shareholders and stakeholders.

Toivo’s strategy is to develop apartments in accordance with the Toivo concept. The apartments aim for a strong development margin and a stable and attractive return, and this way enable long-term ownership and the generation of higher additional value to Toivo’s customers. Toivo has a knowledgeable and experienced team of experts with strong merits in the real estate business. The members of Toivo’s team have been involved in the development and construction of over 17,000 apartments, and they have an average of ten years of experience.

Toivo’s revenue in 2021 was EUR 13.6 million and its operating profit was EUR 15.8 million.