eQ PLC INTERIM REPORT
25 April 2018 at 8:00 AM
January to March 2018 in brief
- During the period under review, the Group's net revenue totalled EUR 9.6 million (EUR 9.4 million from 1 Jan. to 31 March 2017).
- The Group’s net fee and commission income was EUR 8.9 million (EUR 9.2 million).
- The Group’s net investment income from own investment operations was EUR 0.7 million (EUR 0.2 million).
- The Group’s operating profit grew by 4% to EUR 4.4 million (EUR 4.2 million).
- The Group’s profit was EUR 3.5 million (EUR 3.4 million).
- The consolidated earnings per share were EUR 0.09 (EUR 0.09).
- The net cash flow from the Group’s own private equity fund investment operations was EUR 0.7 million (EUR 0.0 million).
- The net revenue of the Asset Management segment increased by 6% to EUR 8.5 million (EUR 8.0 million) and the operating profit by 8% to EUR 4.3 million (EUR 4.0 million).
- The net revenue of the Corporate Finance segment fell to EUR 0.4 million (EUR 1.2 million). It is typical of corporate finance business that success fees have a considerable impact on invoicing, due to which the result of the segment may vary considerably.
| Key ratios | 1-3/18 | 1-3/17 | Change % | 1-12/17 |
| Net revenue, Group, M€ | 9.6 | 9.4 | 3% | 40.7 |
| Net revenue, Asset Management, M€ | 8.5 | 8.0 | 6% | 33.9 |
| Net revenue, Corporate Finance, M€ | 0.4 | 1.2 | -64% | 5.2 |
| Net revenue, Investments, M€ | 0.7 | 0.1 | 509% | 1.4 |
| Net revenue, Group administration and | ||||
| eliminations, M€ | -0.0 | 0.0 | 0.1 | |
| Operating profit, Group, M€ | 4.4 | 4.2 | 4% | 20.1 |
| Operating profit, Asset Management, M€ | 4.3 | 4.0 | 8% | 18.0 |
| Operating profit, Corporate Finance, M€ | -0.1 | 0.5 | -132% | 2.0 |
| Operating profit, Investments, M€ | 0.7 | 0.1 | 509% | 1.4 |
| Operating profit, Group administration, M€ | -0.5 | -0.3 | 36% | -1.3 |
| Profit for the period, M€ | 3.5 | 3.4 | 3% | 15.9 |
| Key ratios | 1-3/18 | 1-3/17 | Change % | 1-12/17 |
| Earnings per share, € | 0.09 | 0.09 | 2% | 0.43 |
| Equity per share, € | 1.27 | 1.36 | -7% | 1.67 |
| Cost/income ratio, Group, % | 54.2 | 54.5 | 0% | 50.5 |
| Liquid assets, M€ | 25.8 | 21.3 | 21% | 24.7 |
| Private equity fund investments, M€ | 18.8 | 20.1 | -6% | 18.8 |
| Interest-bearing liabilities, M€ | 0.0 | 0.0 | 0% | 0.0 |
| Assets under management, € billion | 8.6 | 8.9 | -3% | 8.4 |
Janne Larma, CEO
The net revenue of the Group increased to EUR 9.6 million and the operating profit grew by 4% to EUR 4.4 million. The Group’s profit increased by 3% to EUR 3.5 million.
The management fees of eQ Asset Management grew by 25% from the previous year
The demand for real estate and private equity asset management continued to be very strong. Within real estate asset management, net subscriptions amounted to EUR 111 million in the first quarter, and the fund capital of our two real estate funds exceeded one billion euros at the end of March. Private equity asset management also gathered new capital. EUR 97 million has been raised to the eQ PE X North private equity fund and EUR 81 million to the eQ PE SF II fund since the beginning of the year. The final close of these funds will take place in June, and our aim is to raise about EUR 100 million of additional new capital in total. Within traditional asset management, the return of the funds managed by eQ continued to be excellent. During an investment period of three years, 86% of the funds managed by eQ have surpassed their benchmark indices.
The net revenue of eQ Asset Management increased by 6% from the previous year to EUR 8.5 million. The operating profit grew by 8% to EUR 4.3 million. The management fees of real estate and private equity asset management grew by EUR 1.4 million from the previous year, i.e. by 34%, and the management fees from traditional asset management grew by 7%. Performance based fees fell by EUR 1.0 million from the year before. It is normal that performance fees vary from quarter to quarter.
Advium’s fee income at a lower level than last year
In the Corporate Finance segment Advium acted as advisor in one transaction during the first three months. Advium acted as advisor to the seller, as the real estate investment company Kojamo Plc agreed on the sale of 1 594 rental flats at market price to a real estate fund managed by Morgan Stanley. Advium’s net revenue fell to EUR 0.4 million and operating profit to EUR -0.1 million from the previous year. Great variations in fees per quarter are typical of corporate finance operations. After the period under review, Advium has already acted as advisor in two transactions. Advium acted, e.g. as advisor to the seller, as Marimekko sold its head office in Herttoniemi, Helsinki to a fund managed by OP Group. The market activity in corporate and real estate transactions continues to be at a good level.
The result of the Investments segment higher than last year
The operating profit and net cash flow of the Investments segment increased considerably from the previous year. The operating profit of the segment was EUR 0.7 million (EUR 0.1 million from 1 Jan. to 31 March 2017). The net cash flow from investments was EUR 0.7 million (EUR 0.0 million). At the end of March, the balance sheet value of the private equity fund investments was EUR 18.8 million. eQ Plc made an investment commitment of EUR 1.0 million to the eQ PE X North fund in January.
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eQ’s interim report 1 January to 31 March 2018 is enclosed to this release and it is also available on the company website at www.eQ.fi.
Additional information: Janne Larma, CEO, tel. +358 9 6817 8920
Distribution: Nasdaq Helsinki, www.eQ.fi, media
eQ Group is a group of companies that concentrates on asset management and corporate finance business. eQ Asset Management offers a wide range of asset management services (including private equity funds and real estate asset management) for institutions and private individuals. The assets managed by the Group total approximately EUR 8.6 billion. Advium Corporate Finance, which is part of the Group, offers services related to mergers and acquisitions, real estate transactions and equity capital markets.
More information about the Group is available on our website www.eQ.fi.
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