Kojamo Oyj: Kojamo plc Interim Report 1 January-30 September 2024

Kojamo plc Interim Report 1 January-30 September 2024

Total revenue and net rental income increased, the fair value of investment properties remained unchanged

This is a summary of the January-September Interim Report, 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 figures in this Interim Report have not been audited.

Summary of July-September 2024

• Total revenue increased by 1.5 per cent to EUR 113.2 (111.5) million
• Net rental income increased by 3.1 per cent totalling EUR 85.7 (83.1) million. Net rental income represented 75.8 (74.6) per cent of total revenue
• Result before taxes was EUR 50.6 (-88.5) million. The result includes EUR 0.9 (-141.8) million net result on the valuation of investment properties at fair value. Earnings per share was EUR 0.16 (-0.29)
• Funds From Operations (FFO) decreased by 5.9 per cent and amounted to EUR 45.6 (48.5) million
• Gross investments totalled EUR 2.2 (45.0) million, representing 2.0 (40.3) per cent of total revenue

Summary of January-September 2024

• Total revenue increased by 3.1 per cent to EUR 338.8 (328.6) million
• Net rental income increased by 3.1 per cent to EUR 228.4 (221.6) million. Net rental income was 67.4 (67.4) per cent of total revenue
• Result before taxes was EUR -14.3 (7.2) million. The result includes EUR -137.9 (-136.7) million net result on the valuation of investment properties at fair value and EUR -0.8 (-0.1) million in profit/loss from the sale of investment properties. Earnings per share was EUR -0.05 (0.02)
• Funds From Operations (FFO) decreased by 11.8 per cent to EUR 113.8 (128.9) million
• The fair value of investment properties was EUR 7.9 (8.2) billion at the end of the review period, including EUR 1.3 (0.0) million in Investment properties held for sale
• The financial occupancy rate was 91.5 (92.7) per cent for the review period
• Gross investments amounted to EUR 21.6 (161.3) million, representing 6.4 (49.1) per cent of total revenue
• Equity per share was EUR 14.56 (15.18), and return on equity was -0.4 (0.2) per cent. Return on investment was 1.3 (1.2) per cent
• EPRA NRV (Net Reinstatement Value) per share fell by 4.0 per cent to EUR 18.34 (19.11)
• There were no Lumo apartments under construction at the end of the review period. In the comparison period, 779 Lumo apartments were under construction

Kojamo owned 40,973 (40,192) rental apartments at the end of the review period. Since September of last year, Kojamo has completed 779 (1,273) apartments, sold 0 (73) and demolished or otherwise altered 2 (9) apartments.

Key figures

7-9/20 7-9/20 Change 1-9/2024 1-9/2023 Change 2023
24 23 % %
Total revenue, M€ 113.2 111.5 1.5 338.8 328.6 3.1 442.2
Net rental income, 85.7 83.1 3.1 228.4 221.6 3.1 297.2
M€ *
Net rental income 75.8 74.6 67.4 67.4 67.2
margin, % *
Profit/loss before 50.6 -88.5 157.2 -14.3 7.2 -299.1 -112.3
taxes, M€ *
EBITDA, M€ * 78.9 -67.9 216.1 63.0 55.0 14.5 -39.9
EBITDA margin, % * 69.7 -60.9 18.6 16.7 -9.0
Adjusted EBITDA, 77.9 73.8 5.6 201.7 191.8 5.2 255.1
M€ *
Adjusted EBITDA 68.9 66.2 59.6 58.4 57.7
margin, % *
Funds From 45.6 48.5 -5.9 113.8 128.9 -11.8 167.2
Operations (FFO),
M€ *
FFO margin, % * 40.3 43.5 33.6 39.2 37.8
FFO excluding non 45.6 48.5 -5.9 113.8 128.9 -11.8 167.2
-recurring costs,
M€ *
Investment 7,925.9 8,171.4 -3.0 8,038.8
properties, M€ ¹⁾
Financial occupancy 91.5 92.7 93.0
rate, %
Interest-bearing 3,860.7 3,650.3 5.8 3,600.4
liabilities, M€ *
Return on equity -0.4 0.2 -2.4
(ROE), % *
Return on 1.3 1.2 -0.4
investment (ROI), %
*
Equity ratio, % * 43.1 45.0 44.5
Loan to Value 44.7 44.3 44.6
(LTV), % *²⁾
EPRA Net 4,531.5 4,722.9 -4.1 4,558.8
Reinstatement Value
(NRV), M€
Gross investments, 2.2 45.0 -95.1 21.6 161.3 -86.6 190.7
M€ *
Number of 260 311 288
personnel, end of
the period

Key figures per 7-9/20 7-9/20 Change 1-9/2024 1-9/2023 Change 2023
share, € 24 23 % %
FFO per share * 0.18 0.20 -10.0 0.46 0.52 -11.5 0.68
Earnings per share 0.16 -0.29 155.2 -0.05 0.02 -350.0 -0.36
EPRA NRV per share 18.34 19.11 -4.0 18.45
Equity per share 14.56 15.18 -4.1 14.67

* 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
Interim Report
¹⁾ Including Non
-current assets
held for sale
²⁾ Excluding Non
-current assets
held for sale

Outlook for Kojamo in 2024 unchanged

Kojamo estimates that in 2024, the Group's total revenue will increase by 2-4 per cent year-on-year. In addition, Kojamo estimates that the Group's FFO for 2024 will amount to between EUR 142-152 million, excluding non-recurring costs.

The outlook is based on the management's assessment of total revenue, property maintenance expenses and repairs, administrative expenses, financial expenses and taxes to be paid 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. The outlook does not take into account the impact of potential acquisitions or disposals on total revenue and FFO.

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

Growth in total revenue and net rental income continued in the third quarter of the year. FFO decreased compared to the previous year, which was due to increased financial and maintenance expenses. Our balance sheet has remained strong, and our liquidity situation is good.

Due to the completion of previously started projects, there is still oversupply in the rental market. The competition for residents has remained intense, although the supply of apartments has turned to a decline.

The number of residential start-ups has remained at a very low level, and no clear sign of construction recovering is visible. In the next couple of years, the number of completed market-based apartments will be very low, and this is expected to reduce the oversupply. Population growth has been rapid in the Helsinki, Tampere and Turku regions due to internal migration and immigration. Population growth is expected to continue strong in big cities.

Our cumulative occupancy rate decreased, but our occupancy rate in the third quarter nevertheless improved compared to the second quarter of the year. Although the dissipation of the oversupply has been delayed, limited construction and strongly increasing population in growth centres is expected to balance the market in the longer term.

At the end of the review period, we did not have any apartments under construction, and for the time being, we refrain from making new investment decisions. However, we will start the construction of a project at the end of this year, which is based on a previously signed binding preliminary agreement. In Helsinki, 119 apartments will be completed in the beginning of 2026.

Administrative and marketing expenses as well as repair expenses decreased significantly during the review period. During the first nine months, expenses were a total of EUR 8.8 million lower than in the previous year. The cost savings will continue during the end of the year.

Our financial situation has remained stable. At the beginning of the year, we refinanced our loans that are due next year. Our next financing need is for loans maturing in 2026. Interest rates have turned to a decline, and the market expects central banks to continue rate cuts next year as well, which will have a positive effect on the price of future financing arrangements. In the autumn, Moody's confirmed Kojamo's previous Baa2 (negative) credit rating. It is important for us to maintain the investment grade credit rating also in the future.

Our housing brand, Lumo, was launched ten years ago. It was established with the desire to offer modern services for rental living. From the beginning, the goal has been to make living easy and effortless and to give customers more freedom of choice. Shortly after the launch, we opened the Lumo webstore, which renewed the way to rent an apartment. In ten years, the importance of services has become even more pronounced. We want to be the number one choice for our customers in the future as well. Thus, our work with better and more responsible urban living goes on.

During the year, we have enhanced our operations in order to address the challenges of the operating environment. Although the challenges persist, there are positive signs in the rental and financing markets. With our active efforts, we have achieved necessary changes. I thank the personnel for the determined development of Kojamo.

Erik Hjelt

Interim CEO 

News conference as a webcast

Kojamo will hold a news conference for institutional investors, analysts and media on 7 November 2024 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.

The event can also be followed as a live webcast through which it is possible to ask questions. No registration for the webcast in advance is needed. The event will be accessible at https://kojamo.videosync.fi/q3-2024.

A recording of the webcast will be available later at the company's website at https://kojamo.fi/en/investors/releases-and-publications/financial-reports/.

For more information, please contact:

Niina Saarto, Director, Treasury & Investor Relations, Kojamo plc, tel. +358 20 508 3283, niina.saarto@kojamo.fi

Erik Hjelt, Interim CEO, Kojamo plc, tel. +358 20 508 3225, erik.hjelt@kojamo.fi

Distribution:

Nasdaq Helsinki, Irish Stock Exchange, key media

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/