Kojamo plc Stock Exchange Release, 15 February 2023 at 8.00 a.m. EET
Kojamo plc’s Financial Statements Release 1 January–31 December 2022
Total revenue, net rental income and FFO increased; the fair value of investment properties EUR 8.2 billion
This is a summary of the 2022 Financial Statements Release, which is in its entirety attached to this release and can be downloaded from the company’s website at www.kojamo.fi/investors.
Unless otherwise stated, the comparison figures in brackets refer to the corresponding period of the previous year. The information in the Financial Statements Release is based on the Kojamo plc’s audited Financial Statements for the year 2022. The quarterly figures are unaudited.
Summary of October–December 2022
Total revenue increased by 8.3 per cent to EUR 107.9 (99.6) million.
Net rental income increased by 10.5 per cent totalling EUR 72.4 (65.5) million. Net rental income represented 67.1 (65.8) per cent of revenue.
Result before taxes was EUR -748.3 (662.9) million. The result includes EUR -792.8 (621.6) million in net gain on the valuation of investment properties at fair value. Earnings per share was EUR -2.42 (2.15).
Funds From Operations (FFO) increased by 5.5 per cent and amounted to EUR 40.7 (38.6) million.
Gross investments totalled EUR 85.1 (98.7) million, representing 78.9 (99.1) per cent of total revenue.
Summary of January–December 2022
Total revenue increased by 5.5 per cent to EUR 413.3 (391.7) million.
Net rental income increased by 6.8 per cent, totalling EUR 280.1 (262.3) million. Net rental income represented 67.8 (67.0) per cent of revenue.
Result before taxes and excluding the net valuation gain on the fair value assessment of investment properties increased by EUR 9.0 million, and it was EUR 182.2 (173.2) million.
Result before taxes was EUR -499.8 (1,278.9) million. The result includes EUR -682.0 (1,105.7) million in net gain/loss on the valuation of investment properties at fair value and EUR 0.2 (0.3) million in profits from the sale of investment properties. Earnings per share was EUR -1.62 (4.14).
Funds From Operations (FFO) increased by 5.0 per cent and amounted to EUR 160.7 (153.1) million.
The fair value of investment properties was 8.2 (8.3) billion at the end of the financial year, including EUR 0.0 (1.1) million in Investment properties held for sale.
The financial occupancy rate stood at 92.0 (93.9) per cent during the financial year.
Gross investments totalled EUR 501.6 (356.9) million, representing 121.4 (91.1) per cent of total revenue.
Equity per share was EUR 15.55 (17.25) and return on equity was -9.9 (27.0) per cent. Return on investment was -5.7 (19.2) per cent.
EPRA NRV per share (net reinstatement value) decreased by -11.4 per cent and amounted to EUR 19.53 (22.04).
At the end of the financial year, there were 1,804 (2,675) Lumo apartments under construction.
The Board of Directors’ dividend proposal is EUR 0.39 (0.38) per share.
Kojamo owned 39,231 (36,897) rental apartments at the end of the financial year. In 2022, Kojamo acquired 985 (0) apartments, completed 1,348 (1,282) apartments and demolished or otherwise altered 1 (-187) apartments.
Key figures
10–12/2022
10–12/2021
Change %
2022
2021
Change %
Total revenue, M€
107.9
99.6
8.3
413.3
391.7
5.5
Net rental income, M€ *
72.4
65.5
10.5
280.1
262.3
6.8
Net rental income margin, % *
67.1
65.8
67.8
67.0
Profit/loss before taxes, M€ *
-748.3
662.9
-212.9
-499.8
1,278.9
-139.1
EBITDA, M€ *
-732.3
678.5
-207.9
-441.3
1,334.8
-133.1
EBITDA margin, % *
-678.7
681.1
-106.8
340.8
Adjusted EBITDA, M€ *
60.6
57.0
6.3
240.4
228.5
5.2
Adjusted EBITDA margin, % *
56.2
57.2
58.2
58.3
Funds From Operations (FFO), M€ *
40.7
38.6
5.5
160.7
153.1
5.0
FFO margin, % *
37.8
38.7
38.9
39.1
FFO excluding non-recurring costs, M€ *
40.7
38.6
5.5
160.7
153.1
5.0
Investment properties, M€ ¹⁾
8,150.2
8,327.5
-2.1
Financial occupancy rate, %
92.0
93.9
Interest-bearing liabilities, M€ *
3,678.2
3,334.5
10.3
Return on equity (ROE), % *
-9.9
27.0
Return on investment (ROI), % *
-5.7
19.2
Equity ratio, % *
45.3
49.0
Loan to Value (LTV), % * ²⁾
43.7
37.7
EPRA Reinstatement value (NRV), M€
4,825.9
5,447.9
-11.4
Gross investments, M€ *
85.1
98.7
-13.8
501.6
356.9
40.6
Number of personnel, end of the period
304
325
Key figures per share, €
10–12/2022
10–12/2021
Change %
2022
2021
Change %
FFO per share *
0.16
0.16
0.0
0.65
0.62
4.8
Earnings per share
-2.42
2.15
-212.6
-1.62
4.14
-139.1
EPRA NRV per share
19.53
22.04
-11.4
Equity per share
15.55
17.25
-9.9
Dividend per share ³⁾
0.39
0.38
2.6
* In accordance with the guidelines issued by the European Securities and Markets Authority (ESMA), Kojamo provides an account of the Alternative Performance Measures used by the Group in the Key figures, the formulas used in their calculation, and reconciliation calculations in accordance with ESMA guidelines section of the Financial Statements
¹⁾ Including Non-current assets held for sale
²⁾ Excluding Non-current assets held for sale
³⁾ 2022: The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.39 per share to be paid
Outlook for 2023
Kojamo estimates that in 2023, the Group’s total revenue will increase by 7–10 per cent year-on-year. In addition, Kojamo estimates that the Group’s FFO for 2023 will amount to between EUR 153–165 million, excluding non-recurring items.
The outlook is based on the management’s assessment of total revenue, property maintenance costs and repairs, administrative expenses, financial expenses, taxes to be paid and new development to be completed, as well as the management’s view on future developments in the operating environment.
The outlook takes into account the estimated occupancy rate and rises in rents as well as the number of apartments to be completed. The outlook does not take into account the impact of potential acquisitions or disposals on total revenue and FFO, nor the impact on FFO of potential premature funding of the Eurobond due in 2024.
The management can influence total revenue and FFO through the company’s business operations. In contrast, the management has no influence over market trends, the regulatory environment or the competitive landscape.
CEO’s review
We achieved our strategic targets last year in terms of both growth and profitability. Total revenue, net rental income and FFO increased, and our financial position has remained strong. The value of our investment properties decreased due to the higher yield requirements in the market.
As we anticipated, COVID-19 pandemic had only a temporary effect on the migration towards the biggest growth centres. The demand in the rental market improved after the prolonged uncertainty caused by the pandemic began to dissipate, and urbanisation continued. Our occupancy rate turned to growth in the second half of the year, and it was 93 % in the fourth quarter. Also, tenant turnover began to decrease. In smaller municipalities, our occupancy rate has almost returned to the pre-pandemic level. In the capital region, the trend turned positive with a slight delay.
Our investments for the year were the second largest in the history of the company, over 500 million euros. We began construction of 477 apartments and, at the end of the year, we had 1,804 apartments under construction. A total of 1,348 apartments were completed during the year. We managed to significantly expand our apartment portfolio also by acquiring a total of 985 apartments in the summer.
In addition to our investments in new construction, we have ongoing conversion projects to transform Metropolia’s former premises into apartments. The first Metropolia conversion project to begin was the former chemistry laboratory and teaching facilities located on Bulevardi in Helsinki, known as Uusi kemia and Vanha kemia, where construction started at the beginning of last year. We also completed Lumo One, Finland’s first residential skyscraper in Helsinki’s Kalasatama district, built above the shopping centre Redi. At a height of 120 metres, the tower building has 291 apartments on 31 floors, and very versatile common areas enabling, for example, remote work, studying or parties with amazing views.
The changes that took place in the operating environment in the second half of the year, including a sharp rise in interest rates, record-high inflation and increased economic uncertainty, began to be reflected more clearly in construction volumes. In response to the reduced visibility, we decided that we will not make new investment decisions for the time being. However, the ongoing projects have progressed according to plans.
A strong and well-managed balance sheet and a diverse financing structure have always been vital elements in the implementation of our strategy. Their significance was further underscored as uncertainty increased in the financial markets last year. In addition to issuing our second green bond in the early part of the year, we concluded a number of financing arrangements with banks to ensure that our liquidity will remain strong. Our high hedging ratio reduces the impact of rising interest rates on our financial costs.
We expanded our range of additional services for residents in 2022. As online shopping continues to grow, we have significantly expanded the network of parcel lockers available to our residents. We have also added new local service partners to MyLumo service in several locations to provide residents installation and cleaning services among other things.
We have continued to work in accordance with our sustainability programme. In addition to measures aimed at energy efficiency and emission reductions, our key initiatives in 2022 included the launch of a new Zero-carbon heating service and a carbon footprint test for residents. We have also participated in the national Down a Degree campaign and conducted an extensive communications campaign to encourage our residents reduce their electricity consumption by providing them with practical tips.
In December, we announced an organisational change that entered into effect at the turn of the year. We established a new customer experience, marketing and communications function, and our aim is to manage the customer experience and its development more cohesively. Incorporating customer insight and customer experience more deeply into our day-to-day work and the activities of our partners will enable us to create an even better Lumo customer experience.
We performed well last year in a challenging environment, and I want to take this opportunity to thank our employees for their excellent contribution. I also want to thank all of our customers, cooperation partners and shareholders for their trust in Kojamo.
Jani Nieminen
CEO
News conference as a webcast
Kojamo will hold a news conference for institutional investors, analysts and media on 15 Feb 2022 at 10.00 a.m. EET at the company’s head office at Mannerheimintie 168A, Helsinki. The event will be held in English. After the event, the media has a possibility to ask questions also in Finnish.
It is also possible to join the news conference via phone. Accessing the teleconference requires registration by clicking the following link: http://palvelu.flik.fi/teleconference/?id=10010184. After the registration you will be provided phone numbers and a conference ID to access the conference.
Kojamo is Finland’s largest private residential real estate company and one of the biggest investors in Finland. Our mission is to create better urban housing. Lumo offers environmentally friendly housing and services for the city dweller who appreciates quality and effortlessness. We actively develop the value of our investment properties by developing new properties and our existing property portfolio. We want to be the property market frontrunner and the number one choice for our customers. Kojamo’s shares are listed on the official list of Nasdaq Helsinki. For more information, please visit https://kojamo.fi/en/
