eQ PLC’S FINANCIAL STATEMENTS RELEASE 2016 – eQ’S RESULT INCREASED BY 23%, DISTRIBUTION PROPOSAL OF EUR 0.50 PER SHARE TO THE SHAREHOLDERS

eQ PLC FINANCIAL STATEMENTS RELEASE

3 February 2017 at 8:00 a.m.

 

 

January to December 2016 in brief  

 

• The Group’s net revenue grew by 16 per cent to EUR 35.4 million (EUR 30.5 million from 1 Jan. to 31 Dec. 2015).

• The Group’s net fee and commission income increased to EUR 33.2 million (EUR 28.5 million).
• The Group’s net investment income from own investment operations was EUR 2.2 million (EUR 2.1 million).

• The Group’s operating profit grew by 23 per cent to EUR 16.2 million (EUR 13.2 million).
• The Group’s profit was EUR 12.8 million (EUR 10.5 million).
• The consolidated earnings per share grew by 23 per cent to EUR 0.35 (EUR 0.29).
• The net cash flow from own investment operations was EUR 4.4 million (EUR 7.2 million from 1 Jan. to 31 Dec. 2015) and the change in fair value was EUR -1.0 million (EUR 0.3 million).
• Dividend proposal EUR 0.35 (EUR 0.30) and proposal for equity repayment EUR 0.15 (EUR 0.20) per share.

 

 

October to December 2016 in brief  

 

• In the fourth quarter, the Group’s net revenue grew by 5 per cent to EUR 9.2 million (EUR 8.8 million from 1 Oct. to 31 Dec. 2015).

• The Group’s net fee and commission income increased to EUR 8.6 million (EUR 8.3 million).
• The Group’s net investment income from own investment operations was EUR 0.7 million (EUR 0.4 million).

• The Group’s operating profit grew by 12 per cent to EUR 4.2 million (EUR 3.7 million).
• The Group’s profit was EUR 3.3 million (EUR 2.9 million).
• The consolidated earnings per share grew by 12 per cent to EUR 0.09 (EUR 0.08).

 

 

Key ratios	1-12/16	1-12/15	Change %	10–12/16	10–12/15	Change %
Net revenue, Group, M€	35.4	30.5	16%	9.2	8.8	5%
Net revenue, Asset Management, M€	25.6	21.7	18%	7.0	5.6	26%
Net revenue, Corporate Finance, M€	7.9	7.0	12%	1.6	2.8	-43%
Net revenue, Investments, M€	1.9	1.8	8%	0.6	0.4	64%
Net revenue, Group administration
and eliminations, M€	0.0	0.0	0%	0.0	0.0	0%
Operating profit, Group, M€	16.2	13.2	23%	4.2	3.7	12%
Operating profit, Asset Management, M€	12.0	9.6	25%	3.3	2.3	41%
Operating profit, Corporate Finance, M€	3.7	3.4	9%	0.7	1.5	-56%
Operating profit, Investments, M€	1.9	1.8	8%	0.6	0.4	64%
Operating profit, Group administration, M€	-1.4	-1.6	12%	-0.4	-0.5	19%
Profit for the period, M€	12.8	10.5	23%	3.3	2.9	12%
Key ratios	1-12/16	1-12/15	Change %	10–12/16	10–12/15	Change %
Earnings per share, €	0.35	0.29	23%	0.09	0.08	12%
Proposal for dividend and equity repayment per share, €	0.50	0.50	0%
Equity per share, €	1.74	1.91	-9%	1.74	1.91	-9%
Cost/income ratio, Group, %	53.0	55.1	-4%	54.1	56.2	-4%
Liquid assets, M€	16.7	21.6	-23%	16.7	21.6	-23%
Private equity investments, M€	19.2	22.5	-14%	19.2	22.5	-14%
Interest-bearing liabilities, M€	0.0	0.0	0%	0.0	0.0	0%
Assets under management, € billion	8.8	7.6	15%	8.8	7.6	15%

 

 

 

Janne Larma, CEO

 

eQ’s result was excellent in 2016. We managed to increase our net revenue by 16 per cent to EUR 35.4 million and our operating profit to EUR 16.2 million. The Group’s profit for the financial period increased by 23 per cent to EUR 12.8 million, i.e. 35 cents per share. The results of all segments grew from the previous year.

 

The Group’s balance sheet remains very strong. The market value of eQ’s own private equity investments totalled EUR 19.2 million and liquid assets amounted to EUR 16.7 million at the close of the year. The Group has no interest-bearing liabilities.

 

 

eQ Asset Management grew and improved its profitability, excellent returns in the funds

 

eQ Asset Management was able to increase its net fee and commission income by 18% per cent to EUR 25.6 million. The profitability of the segment improved markedly, and the operating profit grew by 25 per cent to EUR 12.0 million. Particularly real estate and private equity asset management grew strongly. In 2016, net subscriptions for EUR 247 million were made in eQ’s real estate funds, and both funds gave very good returns to investors. The return of the eQ Care Fund in 2016 was 9.8 per cent and that of the eQ Finnish Real Estate Fund 10.5 per cent. Private equity asset management also consolidated its position and gained a lot of new capital. We raised a record amount of capital, EUR 160 million, to the eQ PE VIII North fund of almost 80 investors. In addition, our private equity asset management obtained several new asset management clients. The equity and bond funds as well as asset management portfolios of eQ also showed excellent results in return comparisons. During the past three years, 93% per cent of eQ’s funds registered in Finland that the company manages itself have surpassed their benchmark indices.

 

 

Advium had a successful year

 

eQ’s corporate finance unit Advium had a successful year. Advium acted as advisor in 14 finalised transactions, and its net revenue increased by 12 per cent to EUR 7.9 million. The operating profit of Advium rose to EUR 3.7 million. Advium held its market leading position in large real estate transactions and was chosen the best Finnish investment bank in the real estate sector, already for the tenth time, in a survey made by the distinguished Euromoney magazine. In addition, Advium took the fourth place in TNS Prospera’s M&A Advisors 2016 Finland inquiry.

 

Advium acted, for instance, as advisor to the Finnish Government, as it sold 49.9 per cent of Patria to Norwegian Kongsberg for EUR 279 million. In addition, Advium advised Elo Mutual Pension Insurance Company as it divested six office properties to funds managed by NIAM for EUR 160 million. Advium further acted as advisor to the LocalTapiola Group in three separate real estate transactions in 2016.

 

 

 

 

The profit of the Investments segment improved from the previous year

 

The operating profit of the Investments segment was EUR 1.9 million (EUR 1.8 million). The net cash flow of investments was lower than the year before, i.e. EUR 4.4 million (EUR 7.2 million). The market value of the private equity investments was EUR 19.2 million at the close of the year.

 

 

Dividend proposal and outlook

 

The Board of Directors’ dividend proposal for 2016 is 35 cents per share, and in addition, the Board proposes an equity repayment of 15 cents per share.

 

The asset management business grew well in 2016, which gives an excellent starting point for the year 2017. We expect that the net revenue and operating profit of the Asset Management segment will grow in 2017. In accordance with our disclosure policy, we do not issue profit guidance for the Corporate Finance and Investments segments. The results of these segments are highly dependent of factors that are not dependent of the company. Consequently, the operating profit of these segments may vary considerably and is difficult to foresee.

 

 

***

 

eQ’s financial statements release 1 January to 31 December 2016 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 Finnish group of companies specialising in 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 individuals. The assets managed by the Group total approximately EUR 8.8 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.