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Kojamo plc’s Interim Report 1 January–30 September 2021

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Kojamo plc Stock Exchange Release 4 November 2021 at 8:00 a.m. EET

Kojamo plc’s Interim Report 1 January–30 September 2021

Total revenue increased, the fair value of investment properties was EUR 7.6 billion

This is a summary of the January–September Interim Report, which is in its entirety attached to this release and can be downloaded from the company’s website at www.kojamo.fi/investors.

Unless otherwise stated, the comparison figures in brackets refer to the corresponding period of the previous year. The figures in this Interim Report have not been audited.

Summary of July–September 2021

  • Total revenue increased by 1.9 per cent to EUR 98.1 (96.3) million

  • Net rental income increased by 4.9 per cent totalling EUR 72.2 (68.9) million. Net rental income represented 73.6 (71.5) per cent of revenue

  • Profit before taxes was EUR 69.3 (72.8) million. The profit includes EUR 17.9 (25.8) million in net gain on the valuation of investment properties at fair value. Earnings per share was EUR 0.22 (0.24)

  • Funds From Operations (FFO) increased by 7.1 per cent and amounted to EUR 45.0 (42.0) million

  • Gross investments totalled EUR 81.6 (85.1) million, representing 83.2 (88.4) per cent of total revenue

Summary of January–September 2021

  • Total revenue increased by 1.8 per cent to EUR 292.0 (286.8) million

  • Net rental income increased by 1.5 per cent to EUR 196.7 (193.8) million. Net rental income was 67.4 (67.6) per cent of total revenue

  • Profit before taxes was EUR 616.0 (198.0) million. The profit includes EUR 484.1 (74.1) million in net gain on the valuation of investment properties at fair value and EUR 0.3 (-0.7) million in profits and losses from the sale of investment properties. Earnings per share was EUR 2.00 (0.64)

  • Funds From Operations (FFO) increased by 1.1 per cent to EUR 114.5 (113.3) million

  • The fair value of investment properties was EUR 7.6 (6.6) billion at the end of the review period, including EUR 1.1 (2.4) million in Investment properties held for sale

  • The financial occupancy rate was 94.0 (96.3) per cent for the review period

  • Gross investments amounted to EUR 258.1 (264.1) million, or 88.4 (92.1) per cent of total revenue

  • Equity per share was EUR 15.08 (12.76) and return on equity was 18.7 (6.8) per cent. Return on investment was 13.1 (5.3) per cent

  • EPRA NRV (Net Reinstatement Value) per share grew by 17.6 per cent to EUR 19.32 (16.43)

  • There were 2,624 (2,532) Lumo apartments under construction at the end of the review period

Kojamo owned 36,484 (35,613) rental apartments at the end of the review period. Since September of last year, Kojamo has acquired 26 (188) apartments, completed 1,012 (446) apartments, sold 0 (56) apartments and demolished or otherwise altered -167 (-26) apartments.

Key figures

7–9/2021

7–9/2020

Change %

1–9/2021

1–9/2020

Change %

2020

Total revenue, M€

98.1

96.3

1.9

292.0

286.8

1.8

383.9

Net rental income, M€ *

72.2

68.9

4.9

196.7

193.8

1.5

257.6

Net rental income margin, % *

73.6

71.5

67.4

67.6

67.1

Profit before taxes, M€ *

69.3

72.8

-4.8

616.0

198.0

211.1

391.2

EBITDA, M€ *

83.2

87.2

-4.6

656.3

240.8

172.6

447.6

EBITDA margin, % *

84.8

90.6

224.7

84.0

116.6

Adjusted EBITDA, M€ *

65.2

61.4

6.3

171.5

167.5

2.4

222.6

Adjusted EBITDA margin, % *

66.5

63.8

58.7

58.4

58.0

Funds From Operations (FFO), M€ * ¹⁾

45.0

42.0

7.1

114.5

113.3

1.1

151.4

FFO margin, % *

45.9

43.7

39.2

39.5

39.5

FFO excluding non-recurring costs, M€ *

45.0

42.0

7.1

114.5

113.3

1.1

151.4

Investment properties, M€ ²⁾

7,606.7

6,597.8

15.3

6,863.1

Financial occupancy rate, %

94.0

96.3

96.4

Interest-bearing liabilities, M€ *

3,351.1

3,137.6

6.8

3,053.3

Return on equity (ROE), % *

18.7

6.8

9.8

Return on investment (ROI), % *

13.1

5.3

7.4

Equity ratio, % *

46.2

44.1

45.6

Loan to Value (LTV), % * ³⁾

41.0

42.1

41.4

EPRA Reinstatement value (NRV), M€

4,775.1

4,060.4

17.6

4,254.6

Gross investments, M€ *

81.6

85.1

-4.0

258.1

264.1

-2.3

371.2

Number of personnel, end of the period

316

309

317

Key figures per share, €

7–9/2021

7–9/2020

Change %

1–9/2021

1–9/2020

Change %

2020

FFO per share *

0.18

0.17

5.9

0.46

0.46

0.0

0.61

Earnings per share

0.22

0.24

-8.3

2.00

0.64

212.5

1.27

EPRA NRV per share

19.32

16.43

17.6

17.21

Equity per share

15.08

12.76

18.2

13.39

* In accordance with the guidelines issued by the European Securities and Markets Authority (ESMA), Kojamo provides an account of the Alternative Performance Measures used by the Group in the Key figures, the formulas used in their calculation, and reconciliation calculations in accordance with ESMA guidelines section of the Interim Report

¹⁾ The formula used in the calculation was changed during the review period regarding current taxes from disposals. The comparison figures for 2020 have been adjusted to reflect the current calculation method

²⁾ Including Non-current assets held for sale

³⁾ Excluding Non-current assets held for sale

Outlook for Kojamo in 2021

Kojamo estimates that in 2021, the Group’s total revenue will increase by 2–4 per cent year-on-year. In addition, Kojamo estimates that the Group’s FFO for 2021 will amount to between EUR 150–158 million, excluding non-recurring costs.

The outlook is based on the management’s assessment of total revenue, net rental income, administrative expenses, financial expenses, taxes to be paid and new development to be completed, as well as the management’s view on future developments in the operating environment.

The outlook takes into account the estimated occupancy rate and rises in rents as well as the number of apartments to be completed. The outlook does not take into account the impact of potential acquisitions on total revenue and FFO.

The outlook also takes into account that delays in lifting COVID-19 restrictions affect the rate at which migration recovers to the level seen before the COVID-19 pandemic. Migration sustains strong demand, which will increase Like-for-Like rental income.

The management can influence total revenue and FFO through the company’s business operations. In contrast, the management has no influence over market trends, the regulatory environment or the competitive landscape.

CEO’s review
Our total revenue and net rental income grew during the first nine months of the year. Funds From Operations (FFO) also developed favourably, especially in the third quarter. Our financial position was strong at the end of September, with our equity ratio and Loan to Value (LTV) being in line with our strategic targets.

Despite the good progress with vaccinations, the COVID-19 pandemic, the related restrictions and the uncertainty around the lifting of the restrictions have had a temporary impact on migration. This, together with the increased supply, continued to affect our operations especially in the capital region, and our financial occupancy rate decreased during the period under review. The recovery of migration is a key factor in the recovery of demand. According to the current estimate, COVID-19 restrictions and recommendations will be lifted in Finland when over 80 per cent of people over the age of 12 have received two vaccine doses.

There are signs of a recovery and the lifting of the restrictions has already begun. For example, the national remote work recommendation was lifted in mid-October and universities have announced they will increase the proportion of contact instruction during the remainder of the year. The number of job vacancies in the capital region increased significantly in the third quarter. The prevailing labour shortages in the service industry are slowing down the recovery of that sector. However, decision-making has been somewhat slow and uncertain, and the effects of lifting the restrictions will be reflected in the recovery of migration with a delay. These uncertainties have slowed down the migration of labour to the Helsinki region. There are regional differences in recovery, with normalisation of the market already seen in Finland’s other large university cities during the summer. Our occupancy rate improved in the third quarter in Tampere and Turku, for example, while the recovery in the Helsinki region has been slower to start.

We are in a good position to respond to the recovery of demand and we expect urbanisation to continue in line with forecasts. We focus on creating long-term growth in the regions where future demand will be concentrated. The 36,484 apartments in our portfolio are located in Finland’s largest cities and our strong project pipeline is situated entirely in the Helsinki region. We are also making good progress in our development projects, with the first projects under the Metropolia real estate development undertaking set to be put up for tender during the remainder of the year. We also expect zoning for rest of the projects to be completed during this and next year.

Our investments have progressed in line with our strategic targets during the year. The substantial increase in construction costs in the market has not affected us significantly, as our contracts have been signed at fixed prices. Approximately 800 apartments have already been completed this year and their development margin has been at a very good level.

Jani Nieminen
CEO

News conference and webcast

Kojamo will hold a news conference for institutional investors, analysts and media on 4 November 2021 at 10.00 a.m. EET at the company’s head office at Mannerheimintie 168A, Helsinki. The event will be held in English. Members of the media will also have the opportunity to ask questions in Finnish after the event. Participants are requested to only attend the event in person if they are completely healthy.

The event can also be followed as a live webcast. A recording of the webcast will be available later on the company website at https://kojamo.fi/en/investors/releases-and-publications/financial-reports/.

The news conference can be followed online at https://kojamo.videosync.fi/2021-q3-results.

You can also participate in the press conference by calling:
FI: +358 981 710 310
SE: +46 856 642 651
UK: +44 333 300 0804
US: +1 631 913 1422

Please use the following PIN code to participate in the press conference by telephone: 66303324#.

For more information, please contact

Maija Hongas, Manager, Investor Relations, Kojamo Plc, tel. +358 20 508 3004, maija.hongas@kojamo.fi

Erik Hjelt, CFO, Kojamo Plc, tel. +358 20 508 3225, erik.hjelt@kojamo.fi

Jakelu:

Nasdaq Helsinki, Irish Stock Exchange, key media

Kojamo is Finland’s largest private residential real estate company and one of the biggest investors in Finland. Our mission is to create better urban housing. Lumo offers environmentally friendly housing and services for the city dweller who appreciates quality and effortlessness. We actively develop the value of our investment properties by developing new properties and our existing property portfolio. We want to be the property market frontrunner and the number one choice for our customers. Kojamo’s shares are listed on the official list of Nasdaq Helsinki. For more information, please visit kojamo.fi/en/

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