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Sievi Capital Plc’s Business Review for January–September 2022
Sievi Capital Oyj
Stock Exchange Release 3 November 2022 at 8:00 am EET
Sievi Capital Plc’s Business Review for January–September 2022
KH-Koneet Group’s growth continued, Indoor Group’s market environment remained challenging
This is the summary of the Business Review for January–September 2022. The full Business Review is attached to this release and is also available on the company’s website at www.sievicapital.fi
July–September 2022
Operating profit was EUR -3.2 (5.2) million
Net profit for the period was EUR -2.6 (4.1) million
Earnings per share (undiluted and diluted) were EUR -0.04 (0.07)
January–September 2022
Operating profit was EUR -8.5 (18.3) million
Net profit for the period was EUR -6.9 (15.2) million
Earnings per share (undiluted and diluted) were EUR -0.12 (0.26)
Net asset value per share at the end of the review period was EUR 1.49 (1.55)
Return on equity for rolling 12 months was -4.1% (24.9%)
Gearing at the end of the review period was 13.8% (-4.7%)
Figures in parentheses are figures from the corresponding period in the previous year, unless indicated otherwise. Information in the Business Review is unaudited. Sievi Capital does not consolidate the data of its subsidiaries into Group-level calculations line item by line item but recognises investments in the companies at fair value through profit or loss.
CEO Jussi Majamaa:
“This year, Sievi Capital’s target companies have operated in market environments that have been highly exceptional in many respects. Rising interest rate pressures and inflation driven by energy prices have created cost pressures on many companies and, at the same time, these factors have opened up new business opportunities for other companies. The common theme for many of Sievi Capital’s target companies in the third quarter of the financial period has been improving operational efficiency through the development of business processes and cost savings, amongst other things.
The market environment has been challenging, particularly for Indoor Group, which was reflected negatively in the company’s result. However, Indoor Group took steps in the right direction operationally. KH-Koneet Group continued its good growth in spite of the normalisation of the market situation. Logistikas achieved strong growth as service demand remained at a good level, although operational efficiency was somewhat negatively affected by challenges related to the predictability of the flows of goods as well as rising costs. HTJ continued its active tendering efforts and its order book developed favourably. During the first three quarters of the year, the company has successfully expanded its service offering both organically and through an acquisition. Nordic Rescue Group’s result was adversely affected particularly by non-recurring costs related to Vema Lift’s two cancelled orders and also by low delivery volumes. The company has also faced challenges related to the price development of raw materials and components, which has been negatively reflected in the company’s margins.
The unrealised changes in the values of our investments were primarily negative in the third quarter. This was due to the companies’ profit performance and changes in the general market environment. Our return on equity was below our minimum target level and came to -4.1% for rolling 12 months. This was due to unrealised changes in value and the fact that we did not make any exits during the review period, nor did our target companies pay any dividends or capital repayments during the period. For this reason, the Board of Sievi Capital has not made decision on the distribution of a dividend so far.
Sievi Capital’s strategy process continued during the autumn. We aim to publish the new strategy by the end of the year.”
Future outlook
Sievi Capital will continue to explore new investment opportunities in line with its strategy. The company plans to make an average of 1–2 new investments per year but the number of investments made may vary from year to year. For existing investments, the active development of the companies’ business operations will continue. Exit planning and the assessment of exit opportunities will also continue.
Sievi Capital does not consolidate the data of its subsidiaries into Group-level calculations line item by line item but recognises investments in the companies at fair value through profit or loss. Changes in the fair values of the investments have a material impact on Sievi Capital’s results. In addition to the target companies’ own development, factors that influence the development of the fair values of the investments include, for instance, the general development of different sectors and national economies as well as changes in their outlooks, the development of stock market and interest rates and other factors beyond Sievi Capital’s control. Furthermore, the coronavirus pandemic increases uncertainty when it comes to anticipating development.
Sievi Capital’s financial target is a return on equity of at least 13%, the achievement of which the company considers to be realistic in the long term. Due to the nature of the business, the company’s short-term result development is subject to volatility that is difficult to predict. Therefore, Sievi Capital does not provide an estimate of the result development in 2022.
SIEVI CAPITAL PLC
Jussi Majamaa
CEO
FURTHER INFORMATION:
CEO Jussi Majamaa, puh. +358 400 412 127
DISTRIBUTION:
Nasdaq Helsinki Ltd
Major media
www.sievicapital.fi
Sievi Capital is a partner for Finnish entrepreneurs. We support the growth, performance and value creation of small and medium-sized companies and concurrently build national competitiveness. We believe that we succeed together as co-entrepreneurs. Sievi Capital’s share is listed on Nasdaq Helsinki.
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