eQ PLC INTERIM REPORT
26 October 2018 at 8:00 AM
January to September 2018 in brief
- During the period under review, the Group's net revenue totalled EUR 30.6 million (EUR 26.8 million from 1 Jan. to 30 Sept. 2017).
- The Group’s net fee and commission income was EUR 28.9 million (EUR 26.0 million).
- The Group’s net investment income from own investment operations was EUR 1.7 million (EUR 0.8 million).
- The Group’s operating profit grew by 17% cent to EUR 15.1 million (EUR 12.8 million).
- The Group’s profit was EUR 11.9 million (EUR 10.1 million).
- The consolidated earnings per share were EUR 0.32 (EUR 0.27).
- The net cash flow from the Group’s own private equity fund investment operations was EUR 2.6 million (EUR 0.7 million).
- The net revenue of the Asset Management segment increased by 14% to EUR 26.8 million (EUR 23.5 million) and the operating profit by 16% to EUR 14.4 million (EUR 12.4 million).
- The net revenue of the Corporate Finance segment fell to EUR 2.3 million (EUR 2.7 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.
July to September 2018 in brief
- In the third quarter, the Group’s net revenue totalled EUR 10.2 million (EUR 8.0 million from 1 July to 30 Sept. 2017).
- The Group’s net fee and commission income was EUR 9.8 million (EUR 7.7 million).
- The Group’s net investment income from own investment operations was EUR 0.5 million (EUR 0.3 million).
- The Group’s operating profit grew by 35% to EUR 5.6 million (EUR 4.1 million).
- The Group’s profit was EUR 4.4 million (EUR 3.3 million).
- The consolidated earnings per share were EUR 0.12 (EUR 0.09).
| Key ratios | 1-9/18 | 1-9/17 | Change % | 7-9/18 | 7-9/17 | Change % | 1-12/17 |
| Net revenue, Group, M€ | 30.6 | 26.8 | 14% | 10.2 | 8.0 | 28% | 40.7 |
| Net revenue, Asset Management, M€ | 26.8 | 23.5 | 14% | 9.3 | 7.4 | 26% | 33.9 |
| Net revenue, Corporate Finance, M€ | 2.3 | 2.7 | -15% | 0.5 | 0.3 | 61% | 5.2 |
| Net revenue, Investments, M€ | 1.6 | 0.6 | 174% | 0.4 | 0.3 | 56% | 1.4 |
| Net revenue, Group administration | |||||||
| and eliminations, M€ | -0.0 | 0.1 | -0.0 | 0.0 | 0.1 | ||
| Operating profit, Group, M€ | 15.1 | 12.8 | 17% | 5.6 | 4.1 | 35% | 20.1 |
| Operating profit, Asset Management, M€ | 14.4 | 12.4 | 16% | 5.4 | 4.2 | 29% | 18.0 |
| Operating profit, Corporate Finance, M€ | 0.4 | 0.7 | -40% | 0.1 | -0.1 | 175% | 2.0 |
| Operating profit, Investments, M€ | 1.6 | 0.6 | 174% | 0.4 | 0.3 | 56% | 1.4 |
| Operating profit, Group administration, M€ | -1.4 | -0.9 | 55% | -0.3 | -0.3 | 18% | -1.3 |
| Profit for the period, M€ | 11.9 | 10.1 | 18% | 4.4 | 3.3 | 36% | 15.9 |
| Key ratios | 1-9/18 | 1-9/17 | Change % | 7-9/18 | 7-9/17 | Change % | 1-12/17 |
| Earnings per share, € | 0.32 | 0.27 | 17% | 0.12 | 0.09 | 33% | 0.43 |
| Equity per share, € | 1.49 | 1.53 | -3% | 1.49 | 1.53 | -3% | 1.67 |
| Cost/income ratio, Group, % | 50.9 | 52.1 | -2% | 45.6 | 48.4 | -6% | 50.5 |
| Liquid assets, M€ | 15.8 | 8.4 | 88% | 15.8 | 8.4 | 88% | 24.7 |
| Private equity fund investments, M€ | 17.9 | 20.1 | -11% | 17.9 | 20.1 | -11% | 18.8 |
| Interest-bearing liabilities, M€ | 0.0 | 0.0 | 0% | 0.0 | 0.0 | 0% | 0.0 |
| Assets under management, € billion | 9.0 | 8.3 | 9% | 9.0 | 8.3 | 9% | 8.4 |
Janne Larma, CEO
During the first nine months of the year, the net revenue of the Group grew by 14 per to EUR 30.6 million and the operating profit by 17% to EUR 15.1 million. The Group’s profit increased to EUR 11.9 million (EUR 10.1 million from 1 Jan. to 30 Sept. 2017).
The growth of eQ Asset Management’s management fees and operating profit continued
eQ Asset Management’s strong profit growth continued. The net revenue of the Asset Management segment increased by 14% to EUR 26.8 million and the operating profit grew by 16% to EUR 14.4 million. The management fees of the segment have grown by 26% during the year, and growth has been especially strong in real estate and private equity asset management. Net subscriptions in eQ’s real estate funds have continued to grow rapidly, amounting to EUR 278 million in the nine-month period. Within private equity asset management, we held the final close of the eQ PE X North private equity fund at EUR 175 million and of the secondary market fund eQ PE SF II private equity fund at 135 million during the third quarter. We also launched the marketing of eQ’s second private credit fund eQ Private Credit II. We believe that the interest of investors in real estate and private equity investments will remain at a good level.
Within traditional asset management, the returns of the funds managed by eQ have continued to be excellent. Since the beginning of the year, 60% of the funds managed by eQ have surpassed their benchmark indices, and during an investment period of three years, 71% of the funds managed by eQ have surpassed their benchmark indices.
Advium’s third quarter slightly better than last year
In the Corporate Finance segment Advium acted as advisor in five finalised transactions during the nine-month period. In the third quarter, Advium acted as advisor as Berfin Oy, the investment company of the Berner family, sold Berner Ltd’s former head office in the city centre of Helsinki.
In the third quarter, Advium’s income was higher than last year, but the income of the first nine months was lower that during the corresponding period last year. Advium’s net revenue during the period under review was EUR 2.3 million (EUR 2.7 million from 1 Jan. to 30 Sept. 2017). The operating profit was EUR 0.4 million (EUR 0.7 million).
The market situation in corporate and real estate transactions continues to be good, and we estimate that the last quarter of the year will be the most active quarter of the current year for Advium. Great variations in fees per quarter are typical of corporate finance operations.
The result of the Investments segment higher than last year
The net revenue and operating profit of the Investments segment increased markedly on the previous year. The operating profit of the segment was EUR 1.6 million (EUR 0.6 million). During the period under review, the net cash flow from investments was EUR 2.6 million (EUR 0.7 million). At the end of September, the fair value of the private equity fund investments was EUR 17.9 million (EUR 18.8 million on 31 Dec. 2017).
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eQ’s interim report 1 January to 30 September 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 +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 9.0 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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