Toivo Group Plc’s half-year review 1 January–30 June 2023: Strong revenue growth. We will launch special situations of properties business.

Half-year Financial Report, 9. August 2023 at 8:30

* Unaudited

FINANCIAL PERIOD 1 JANUARY–30 JUNE 2023 KEY EVENTS

• Revenue MEUR 19,7 (6,6).
• Operating profit MEUR 5,7 (13,3)
• Contracts for building a total of 50 (182) apartments were made during the period under review.
• 76 (417) apartment start-ups during the period under review.
• 199 (242) apartments were completed during the period under review.

PROSPECTS FOR 2023 UNCHANGED

• The company expects the operating profit of the financial year of 1 January–31 December 2023 to be EUR 10 – 17 million. (Unchanged)

CONSOLIDATED KEY FINANCIALS*

* Unaudited

EUR thousand	1 January – 30 June 2023	1 January– 30 June 2022		Change %		1 January– 31 Dec. 2022
Revenue	19 727	6,576		200%		20 323
Operating profit	5 650	13,318		-58%		15 640
Profit or loss for the financial year	3 248	10,037		-68%		12 143
Earnings per share (EUR)	0,06	0,19		-69%		0,22
Fair value of investment properties	168 139	144,965		16%		155 716
Economic occupancy rate	97,8%	98.8%		-1%		98,40%
Total equity	73 227	67,972		8%		70 007
Total assets	194 476	173,058		12%		187 694
EUR thousand	1 April–30 June 2023	1 April– 30 June 2022	Change %
Revenue	6 090	2,945	107%
Operating profit	2 878	6,325	-54%
Profit or loss for the financial year	1 670	4,715	-65%
Earnings per share (EUR)	0,03	0.09	-66%
Fair value of investment properties	168 139	144,965	16%
Economic occupancy rate	97,2%	98.70%	-2%
Total equity	73 227	67,972	8%
Total assets	194 476	173,058	12%

CEO MARKUS MYLLYMÄKI

The company’s revenue for the first half of 2023 was EUR 19.7 million and its operating profit was EUR 5.65 million. I am satisfied with the operations of the company and its great personnel and their ability to react in the exceptional market environment.

Approximately one year ago, in 2022, the company began to react to the potential market change and its prolongation. Rent increases, ensuring financing, shifting to cash flow business and postponing investments are now bearing fruit. The company’s overall situation is good.

Every market situation also provides opportunities. During spring 2023, we commenced negotiations on four exceptional situations of properties. We are now establishing a Special situations of properties unit that aims to help the investors and owners of properties to overcome any problematic situations.

Toivo is a housing developer that focuses on the full value chain of residential real estate development, construction and ownership. Toivo develops, builds and owns its housing properties but can also implement one or more components of the value chain. The business model has enabled rent increases, shifting to cash flow business and assistance with special situations of properties.

DEVELOPMENT: In addition to reacting to the operating environment, conducting cash flow business and managing special situations of properties, the company has its eyes firmly on the future. The company is prepared for the future with a project development portfolio of some 3,300 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 up four new projects with a total of 76 apartments during the review period. One of the projects is a project management contracting project and three are owner-occupied housing projects to be sold.

OWNERSHIP: With regard to lease activities and management, Asuntomestarit® have succeeded well. The economic occupancy rate for the review period was 97.8% in spite of the company implementing rent increases of approximately 4.5% at the turn of the year 2022–2023. The company will commence rent increases of 4–5% in autumn 2023. 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 financing is exclusively comprised of bank financing with mainly a duration of approximately 5–10 years. The repayment schedules of bank financing are mainly 15–25 years. The company’s equity ratio was 39.3% and the financial loan to value (LTV) rate of its properties was 57.3%.

I would like to thank everyone at Toivo for their disciplined and determined work in the challenging market situation. I would also like to thank the increasing number of tenants, residential building customers and home-buyers for choosing Toivo as their partner. We can look into the future and the opportunities is offers with confidence.

ANALYST AND MEDIA EVENT

Toivo Group Plc is organising an analyst and media event on Wednesday, 9 August 2023 at 11:00. Guests can join the event at the website https://toivo.videosync.fi/2023-h1-tulosjulkistus

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 2022 was EUR 20,3 million and its operating profit was EUR 15,6 million.