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Taaleri Plc Interim Statement 1 January–31 March 2022: Taaleri’s continuing earnings increased to EUR 9.3 million in Q1, but unrealized changes in the fair value of investment operations weighed on income and operating profit
TAALERI PLC STOCK EXCHANGE RELEASE 6 MAY 2022 AT 8:00 (EEST)
Taaleri Plc Interim Statement 1 January–31 March 2022: Taaleri’s continuing earnings increased to EUR 9.3 million in Q1, but unrealized changes in the fair value of investment operations weighed on income and operating profit
January–March 2022
Continuing earnings grew by 4.3% to EUR 9.3 (8.9) million. The continuing earnings of the Private Asset Management segment grew by 15.8% to EUR 4.9 (4.2) million, and the continuing earnings of the Strategic Investments segment by 7.5% to EUR 3.9 (3.6) million.
Performance fees were EUR 0.5 (0.8) million and earnings from investment operations were EUR -2.6 (4.0) million due to changes in fair value.
Income was EUR 7.2 (13.7) million, a decrease of 47.6% due to unrealized changes in the fair value of investment operations amounting EUR -2.8 (1.7) million.
Operating profit was EUR -0.7 (5.8) million.
The assets under management in the Private Asset Management segment grew by 1.5% to EUR 2.3 (31.12.2021: 2.2) billion.
Earnings per share were EUR -0.05 (0.25).
The interim statement has not been prepared in accordance with IAS 34. The interim statement is unaudited. See page 16 for further information on the accounting policies of the interim statement.
REVIEW BY CEO PETER RAMSAY
In the first quarter of 2022, we continued to advance our strategy focusing on renewable energy, real estate and bioindustry. Both the private asset management business and Garantia’s guaranty insurance operations developed well, and operating profit excluding investment operations was EUR 2.0 million, corresponding to a profit margin of 20%. By contrast, changes in the fair value of the Group’s investment operations weighed on the Group’s income and operating profit. The decrease in the fair values of investments is due to, among other things, the rise in interest rates, which has affected the valuations of Garantia’s investment portfolio.
The Russian invasion of Ukraine and the resulting changed geopolitical situation has not had a direct impact on our business. Taaleri has no business operations or investments in Russia or Ukraine. Europe’s desire to break away from Russian gas, oil and coal will increase the demand for renewable energy, which will support our private asset management business in the long term. At the same time, the transition to renewable energy is reflected, for example, in project development as tightening competition and rising costs. We consider that our strong long-term investment in our own project development improves our relative competitiveness in this situation.
In spite of the geopolitical situation and the rise in interest rates, we believe that demand for private equity funds will remain strong, as they will allow investors to diversify risks and even out returns. The country risk in Finland that was dreaded in the early stages of the crisis in Ukraine does not seem to have materialised so far. One indication of this was a transaction made after the review period, in which Taaleri Datacenter Ky sold its stake in Ficolo Ltd to a British company. Taaleri expects to record profits of a total of approximately EUR 14 million from the transaction on the co-investment it manages in the form of returns and performance fees in the third quarter of the year.
In the Private Asset Management segment, operational activity has strengthened from last year, and continuing earnings grew by around 16% in the first quarter. During the review period, the renewable energy business focused, for example, on advancing projects of the Taaleri SolarWind II fund that were in the construction phase. In addition, the building of the project development portfolio started as planned and at the end of the review period our portfolio already included 12 projects.
The real estate business carried out several transactions in March. We successfully exited the Taaleri Daycare Properties fund by selling the fund’s ten daycare properties to a Norwegian buyer. In addition, we carried out four new investments in Aktia’s special investment funds in the portfolio management of the real estate business.
In the bioindustry business, the sale of the Taaleri Bioindustry I private equity fund began in Aktia. During the review period, a decision was made to invest in a torrefied biomass plant to be built in Joensuu. The project will be implemented as a co-investment. In addition, we made an investment in Nordtreat, a company that produces environmentally friendly fire retardants, which opens up investment opportunities for the private equity fund.
In the Strategic Investments segment, Garantia’s guaranty insurance operations continued to develop well. The net income from the guaranty insurance operations grew from the corresponding period by 7.4% to EUR 3.9 million, and the combined ratio describing the profitability of insurance operations was excellent at 31.3%. In particular, Garantia’s investment operations suffered from rising interest rates and changes in risk premiums, but most of the investment losses were unrealized changes in fair value.
During the first quarter, we completed the project on corporate culture and values we started last year. Taaleri changed as a company with the sale of the wealth management operations, so we wanted to update our target culture and values into something that supports the implementation of our strategy and our daily work in the best possible way. Our three new values – With know-how, skills and will, Dare to succeed and Support each other – give us an excellent foundation from which to pursue our vision of being a Nordic pioneer in alternative investments focusing on sustainability.
GROUP KEY FIGURES
Group key figures | 1–3/2022 | 1–3/2021 | Change, % | 1–12/2021 |
Earnings key figures | ||||
Continuing earnings, MEUR | 9.3 | 8.9 | 4.3 | 40.7 |
Income, MEUR | 7.2 | 13.7 | -47.6 | 69.7 |
Operating profit, MEUR | -0.7 | 5.8 | n/a | 30.8 |
Operating profit, % | neg | 42.7 | 44.2 | |
Profit for the period in consolidated income statement, MEUR | -1.2 | 6.8 | n/a | 136.1 |
Return on equity*, % | -2.2 | 20.7 | 75.0 | |
Balance sheet key figures | ||||
Equity ratio, % | 72.1 | 48.1 | 72.1 | |
Other key figures | ||||
Cost/income ratio excluding investment operations | 83.3 | 88.6 | 77.9 | |
Cost/income ratio | 111.6 | 60.8 | 58.3 | |
Full-time personnel in continuing operations, at the end of the period | 101 | 103 | -2.0 | 104 |
Assets under management in Private Asset Management segment, BEUR | 2.3 | 1.7 | 2.2 | |
Guaranty insurance portfolio, BEUR | 1.7 | 1.7 | 1.7 |
*Annualised
OUTLOOK AND FINANCIAL TARGETS
Taaleri does not publish a short-term outlook. However, the company has set itself targets related to growth, profitability and return on invested capital.
Taaleri’s long-term targets include:
Continuing earnings growth at least 15 per cent
Operating profit at least 25 per cent of income
Return on equity at least 15 per cent.
The company’s goal is to distribute to its shareholders at least 50 per cent of the profit for the financial year as well as the capital that the company does not need for growth investments or to fulfil its targets for solvency.
WEBCAST PRESENTATION FOR ANALYSTS AND MEDIA
A live webcast for analysts and the media will be held on May 6, 2022, at 11:00 a.m. The event is in Finnish. The webcast can be followed online at https://taaleri.videosync.fi/osavuosikatsaus-q1-2022/. The event will be recorded and available later on Taaleri's investor pages at www.taaleri.com/investors/reports-and-presentations.
Helsinki, 6 May 2022
Taaleri Plc
Board of Directors
For further information, please contact:
CEO Peter Ramsay, +358 50 343 7493, peter.ramsay@taaleri.com
CFO Minna Smedsten, +358 40 700 1738, minna.smedsten@taaleri.com
Head of Communications and IR Siri Markula, +358 40 743 2177, siri.markula@taaleri.com
Distribution:
Nasdaq Helsinki
Key media
www.taaleri.com
Taaleri in brief
Taaleri is a Nordic investment and asset manager with an emphasis on renewable energy and other alternative investments. We channel capital towards economically profitable undertakings that have a lasting positive impact on the environment and society. We combine capital with talent, expertise, entrepreneurship, and a bold sense of purpose. We are a signatory of the UN Principles for Responsible Investment (UNPRI) since 2010, and we joined the Net Zero Asset Managers initiative in 2021. Taaleri’s vision is to be a Nordic forerunner in alternative investments focusing on sustainability.
Taaleri has two business segments: Private Asset Management and Strategic Investments. Private Asset Management consists of renewable energy, real estate and bioindustry businesses. The Strategic Investments segment includes Garantia Insurance Company Ltd.
Taaleri has EUR 2.3 bn of assets under management in its private equity funds and co-investments. The company has approximately 120 employees. Taaleri Plc is listed on Nasdaq Helsinki.
Siri Markula, Head of Communications and IR, tel. +358 40 743 2177, siri.markula@taaleri.com
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