TECHNOPOLIS PLC PRESS RELEASE May 7, 2015 at 8:10 a.m
Strong EBITDA Growth Driven by Cost Control and Scale Advantages
Technopolis’ net sales increased from EUR 39.7 million to EUR 41.2 million, up 3.8%. EBITDA increased from EUR 20.6 million to EUR 22.2 million, up 7.9%. Premises expenses decreased by 7.9% during the period, boosting the EBITDA margin from 51.9% to 53.9%. The financial occupancy rate decreased 0.2 %, from 94.0% to 93.8%.
The company’s EPRA-based (European Public Real Estate Association) direct result, which highlights the company’s operational and cash flow-based earnings, stayed stable at EUR 0.12 per share.
The IFRS-based net profit per share decreased slightly and it was EUR 0.06 comparing to EUR 0.07 in last year’s first quarter.
Technopolis’ CEO Keith Silverang:
“Operationally the first quarter of 2015 was solid. Net sales grew almost 4% over 2014 with EBITDA growing almost 8% for the same period, indicating that our cost-effectiveness continues to improve.
The moderate growth we are seeing is a result of successful sales and growth project work in 2014. Last year we commissioned Löötsa 8A in Tallinn and Pulkovo 2 in St. Petersburg. The financial occupancy rates of these buildings are now almost 100%. Filling up Pulkovo 2 is a clear sign of our concept’s strength in the St. Petersburg office real estate market. The Group’s occupancy overall held up well.
We have made a conscious decision to safeguard long-term occupancy and customer satisfaction in the domestic market by investing in the quality and flexibility of our campuses. This will require an ongoing investment program that will have a negative impact on domestic fair values over the next couple of years. In the first quarter the fair value of investment properties came down EUR 5.9 million which was caused mainly by domestic renovations and modernization reservations.
In the beginning of the year we focused on customer satisfaction and sales. The results of the first quarter surveys show that our customer satisfaction performance has been improving during the period. We have also learned that our measurement system is among the best in our field.
The currency-related problems we experienced at the end of last year have alleviated to some extent in the beginning of 2015 with the strengthening of the Ruble. In February we also reduced Ruble exposure by repaying EUR 17 million of the company’s euro denominated EBRD loan. With only about EUR 22 million left of the loan, both the transaction risks and liabilities have declined.
On April 2 we sold 40% of our Kuopio business unit at fair value to a local investor KPY Sijoitus Oy. The deal brought us EUR 50 million in cash and a strong local partner. We can now recirculate this capital into new investments and use it to service or replace existing debt. Our view is that the Kuopio deal is an indication of increasing activity in the domestic transaction market, also in secondary regions.
It’s still too early to predict how 2015 will turn out, but with occupancies in the high nineties in our international campuses and domestic occupancies holding up well we had a good start for the year.”
Technopolis Plc
Keith Silverang
CEO
Tel. +358 40 566 7785
Technopolis provides the best addresses for companies to operate and succeed in five countries in the Nordic-Baltic region. The company develops, owns and operates a chain of 20 smart business parks that combine services with flexible and modern office space. The company’s core value is to continuously exceed customer expectations by providing outstanding solutions to 1,700 companies and their 47,000 employees in Finland, Norway, Estonia, Russia and Lithuania. The Technopolis Plc share (TPS1V) is listed on NASDAQ OMX Helsinki.