Toivo Group Plc’s Financial Statement Release 1 January–31 December 2023: Operational business grew strongly and was profitable in a challenging market.
Financial statement release, 28. February 2024 at 8:30 a.m.
| EUR thousand | 1 January–31 December 2023 | 1 January–31 December 2022 | Change, % |
| Revenue | 43,692 | 20,323 | 115% |
| Operating profit | -305 | 15,640 | -102% |
| Operating profit without changes in values of investment properties | 10,525 | 21,959 | -52% |
| Profit or loss for the financial year | -4,364 | 12,143 | -136% |
| Earnings per share (EUR) | -0.08 | 0.22 | -136% |
| Fair value of investment properties | 164,122 | 155,716 | 5% |
| Economic occupancy rate | 97.0% | 98.4% | -1% |
| Total equity | 68,830 | 70,007 | -2% |
| Total assets | 192,132 | 187,694 | 2% |
| EUR thousand | 1 October–31 December 2023 | 1 October–31 December 2022 | Change, % |
| Revenue | 10,073 | 7,040 | 43% |
| Operating profit | -8,058 | -2,375 | -239% |
| Operating profit without changes in values of investment properties | 2,772 | 3,944 | -30% |
| Profit or loss for the financial year | -8,476 | - 1,257 | -574% |
| Earnings per share (EUR) | -6.57 | -0.02 | -28,629% |
| Fair value of investment properties | 164,122 | 155,716 | 5% |
| Economic occupancy rate | 95.0% | 97.8% | -3% |
| Total equity | 68,830 | 70,007 | -2% |
| Total assets | 192,132 | 187,694 | 2% |
FINANCIAL PERIOD 1 JANUARY–31 DECEMBER 2023 KEY EVENTS
- Revenue EUR 43.7 (20.3) million.
- Contracts for building a total of 126 (302) apartments were signed during the period under review.
- 118 (464) apartment start-ups during the period under review.
- 377 (309) apartments were completed during the period under review.
PROSPECTS FOR 2024
The company expects the operating profit without changes in values of investment properties for the financial year of 1 January–31 December 2024 to be EUR 6 - 12 million.
The company expects the operating profit for the financial year of 1 January–31 December 2024 to be EUR 8–14 million
CEO MARKUS MYLLYMÄKI
The real prices of old apartments decreased by approximately 26% in the Helsinki metropolitan area over the period from Q2/2021 to Q4/2023. The operating environment for residential developers, construction companies and investors has been very challenging.
At Toivo, we decided in 2022 to look at the market honestly and directly. We initiated intensive measures to secure our cash flow. As a result, we achieved an operating profit in excess of EUR 10 million during the year under review, excluding the change in fair values. Every Toivo employee makes me proud and grateful. The change achieved by Toivo’s team represents strong performance in the prevailing market conditions.
In 2024, we expect interest rates to fall, apartment prices to rise and rents to be increased. Not all of the companies in the market will be able to benefit from the improved operating conditions. We are prepared to see a number of bankruptcies in the industry in 2024. Nevertheless, we believe the operating environment will improve in 2024, and the challenges in the industry will present opportunities for Toivo’s special situations unit.
We will update our strategy in connection with publishing our financial statements for 2023. Our business model of development, construction and ownership will be complemented by an important new element: selling. The aim of property sales is to cycle capital from properties currently on the balance sheet to properties that are under development and construction and have the highest return on equity in our value chain.
DEVELOPMENT: The company is prepared for the future and the opening up of the market with a project development portfolio of some 3,200 apartments, of which approximately 91% are located in the Helsinki metropolitan area. The company will implement these projects primarily as Energy Class A buildings with geothermal heating. The company will start these projects when the market conditions are more favourable.
CONSTRUCTION: The company started three new construction sites in October–December. Two of the properties are special situation projects. One of the properties is a project management service contract. Starting three properties in the latter part of 2023 represents a good achievement in the current market conditions.
OWNERSHIP: With regard to lease activities and management, Asuntomestarit® have succeeded well. The company carried out rent increases of 4–5% in autumn 2023. Toivo’s competitive, highquality apartment product combined with the services of Asuntomestarit has proved its pricequality ratio in the challenging market.
SELLING: In December 2023, the company announced it is negotiating the sale of five residential properties. The company also has several other negotiations under way regarding the sale of properties that have already been completed or are currently under construction. We expect to see progress in these negotiations in H1/2024.
Toivo’s business is very capital-intensive, and an optimal financial structure is important for the company. The company’s debt financing consists primarily of long-term bank financing. The company’s equity ratio was 36.47% and the financial loan to value (LTV) rate of its properties was 62.6%.
I would like to thank all customers, partners and Toivo employees for 2023
ANALYST AND MEDIA EVENT
Toivo Group Plc is organising a public analyst and media event in Finnish on Wednesday, 28 February 2024 at approximately 11:00 as an audio webcast. Guests can join the event at the website https://toivo.videosync.fi/tilinpaatos-2023/register
The financial statement 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: Nordic certified adiviser
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 2023 was EUR 43.7 million and its operating profit was EUR -0.3 million.
