TECHNOPOLIS PLC INTERIM REPORT August 20, 2015 at 8:30 a.m.
Technopolis Group Interim Report January 1 – June 30, 2015
Operational Performance Increased by Non-recurring Income of EUR 5.4 Million
- Net sales rose to EUR 89.1 (80.0) million, up 11.3%
- EBITDA rose to EUR 50.2 (42.6) million, up 17.8%
- The financial occupancy rate was 94.1% (93.5%)
- Earnings per share were EUR 0.17 (0.08)
- Direct result (EPRA) was EUR 27.3 (25.0) million, up 9.2%
- Direct result per share (EPRA) was EUR 0.26 (0.24)
- Net asset value per share (EPRA) was EUR 4.59 (4.86)
Compared to the first half of 2014, Technopolis’ EBITDA margin increased from 53.3% to 56.4%. Net sales and EBITDA were increased by a non-recurring income of EUR 5.4 million that correlates to two early termination agreements with customers in Oulu. Excluding non-recurring income net sales growth was 4.4% and EBITDA 5.1%. The non-recurring income affects all Group and Finnish segment financials.
| 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | |
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Net sales, EUR million | 47.9 | 40.4 | 89.1 | 80.0 | 161.7 |
| EBITDA, EUR million | 28.0 | 22.0 | 50.2 | 42.6 | 87.2 |
| Operating profit, EUR million | 23.4 | 9.7 | 38.7 | 30.4 | 42.9 |
| Net result for the period, EUR million | 11.7 | 5.4 | 20.9 | 16.9 | -3.0 |
| Earnings/share EUR | 0.11 | 0.01 | 0.17 | 0.08 | -0.15 |
| Cash flow from operations/share, EUR | 0.28 | 0.32 | 0.63 | ||
| Equity ratio, % | 37.9 | 40.6 | 38.5 | ||
| Equity/share, EUR | 4.28 | 4.56 | 4.17 | ||
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4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ |
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Direct result, EUR million | 14.7 | 12.3 | 27.3 | 25.0 | 55.9 |
| Direct result/share, diluted, EUR | 0.14 | 0.12 | 0.26 | 0.24 | 0.53 |
| Net asset value/share, EUR | 4.59 | 4.86 | 4.52 | ||
| Net rental yield, % | 7.7 | 7.2 | 7.5 | ||
| Financial occupancy rate, % | 94.1*) | 93.5 | 94.7 |
*) 10,000 m² under renovation and 8,500 m² of unoccupied but rented space
The EPRA-based (European Public Real Estate Association) direct result does not include unrealized exchange rate gains, losses or fair value changes.
Keith Silverang, CEO:
“The positive trend in Technopolis’ operational performance seen in the first quarter has continued into the second. With net sales growth in excess of 11% over 2014 and EBITDA growing almost 18% (including non-recurring income) for the same period, positive momentum is increasing.
In the first half of the year we booked a net figure of -9.5 million euros against fair values. The main drivers were actual modernization expenses and reserves for the future totaling roughly 21 million euros. These investments in our brand, campus infrastructure and minimum standards will safeguard Technopolis’ occupancy, earnings and customer satisfaction for years to come. This program is now basically ready, and the combination of completed projects and reservations for the future should mitigate the need for further reductions in fair values.
Organic investment activities have also continued apace, both in Finland and abroad. Growth project pre-let rates in Tallinn, Vantaa and Tampere have all increased, with the Lõõtsa 5 project in Tallinn already over 70% and the Vantaa project almost 80%. The Yliopistonrinne project in downtown Tampere has progressed more slowly (pre-let rate 35.8%), but we remain confident in the project. Our newest expansion project in Vilnius got off to an excellent start with a 48% pre-let rate in a market that shows every sign of continued dynamism.
In April we sold 40% of our Kuopio business unit at fair value to a local investor. The deal brought us EUR 50 million in cash and a strong local partner. This new partnership is now fully operational, and we are satisfied with both the deal and the quality of the collaboration that has taken place in its aftermath.
On the financial side the company continues to enjoy a low average interest rate, despite the marginally higher coupon rate on the unsecured 150 million euro bond we floated this spring. This bond has also enhanced the flexibility and maturity structure of our funding. Our solvency and liquidity are at healthy levels and are positioned to remain so, even if we make further growth investments over the next half year.
The transaction market in our territory has two faces at the moment. The buy side is becoming more challenging as Nordic markets heat up, but the sell side is becoming somewhat easier as market yields fall and buyers in search of targets become increasingly active. This includes the Finnish primary and secondary markets. Technopolis will continue to be active on both the buy and sell side of the transaction market. We will selectively divest non-core assets, while making acquisitions that meet our investment criteria and move the company’s growth strategy forward. Our goal remains the same: to increase earnings by building up the scale of our operations while restructuring our campus portfolio to optimize its risk-adjusted return.”
Full version of Technopolis Plc’s interim report for January-June, 2015 attached.
Additional information:
Keith Silverang
CEO
Tel. +358 40 566 7785
Distribution:
NASDAQ OMX Helsinki, main news media, www.technopolis.fi
About Technopolis:
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.
