Taaleri Plc Half-Year Financial Report 2018
Operating profit on good level; assets under management and guaranty insurance portfolio grew
- The Group’s income was EUR 35.2 (38.7) million, a decrease of 9.0 per cent.
- The Group’s continuing earnings grew by 7.1 per cent to EUR 26.9 (25.1) million.
- The Group’s assets under management grew by 7.5 per cent to EUR 6.0 (5.6) billion.
- The Group’s performance fees remained at last year’s level at EUR 5.6 (5.7) million.
- The Group’s earnings from investment operations were EUR 3.0 (8.1) million. The decrease was due to the development of Garantia’s investment operations.
- The Group’s operating profit was EUR 12.4 (15.6) million, due to lower investment income
- Earnings per share were EUR 0.32 (0.44).
- Wealth Management’s excellent profitability was due to the development of continuing earnings, the additional earn-out from a wind power project, and the decreased personnel costs.
- In the Financiang-segment, income from Garantia’s insurance operations grew by 9.5 per cent and the insurance exposure by 7.0 per cent. Balance on the technical account was excellent. Garantia’s investment income was at zero.
- Energy successfully advanced the committed projects in Solar Wind (Aurinkotuuli) fund and a wind power project in the United States, and in June received the alternative investment fund manager license.
- Income and operating profit from balance sheet investments was burdened by the impairment of the geothermal project in Germany.
| Group key figures | 1-6/2018 | 1-6/2017 | 1-12/2017 | Long-term target |
| Earnings key figures | ||||
| Income, MEUR | 35.2 | 38.7 | 81.0 | |
| Operating profit, MEUR | 12.4 | 15.6 | 27.6 | |
| Operating profit, % | 35.1 | 40.3 | 34.1 | > 20.0 |
| Profit for the period, MEUR | 9.4 | 12.5 | 21.8 | |
| Return on equity*, % | 17.4 | 26.2 | 21.8 | > 15.0 |
| Balance sheet key figures | ||||
| Equity ratio, % | 48.3 | 46.7 | 46.3 | > 30.0 |
| Group’s capital adequacy ratio, % | 178.1 | 272.9 | 251.2 | > 150.0 |
| Per share key figures | ||||
| Earnings/share, EUR | 0.32 | 0.44 | 0.76 | |
| Equity/share, EUR | 3.84 | 3.44 | 3.73 | |
| Share closing price, EUR | 10.00 | 9.20 | 10.35 | |
| Other key figures | ||||
| Cost/income ratio | 65.1 | 59.9 | 66.2 | |
| Average full-time employees | 177 | 175 | 175 | |
| Market capitalisation MEUR | 283.1 | 260.4 | 293.0 | |
| Assets under management BEUR | 6.0 | 5.3 | 5.6 |
* annualised
Income statement items are compared with figures for the corresponding period last year. The balance sheet is compared to the situation at the end of 2017, unless otherwise stated.
Taaleri publishes its Half-Yearl Financial Report as a PDF file attached to a stock exchange release. The half-year financial report is also available at https://www.taaleri.com/en/investor-relations/reports-and-presentations.
CEO Juhani Elomaa
”The Group’s business developed favourably and was growing. The Group’s continuing earnings grew more than seven per cent and totalled EUR 26.8 million, assets under management grew also correspondingly more than seven per cent to EUR 6 billion, and in addition the guaranty insurance portfolio grew more than seven per cent. January-June 2018 income of EUR 35.2 million and operating profit of EUR 12.4 million were at a lower level compared to the corresponding period of the previous year, this was mainly due to the substantial decrease in sales profit and the weak development of stock markets, which had a direct impact on the earnings of Garantia’s investment portfolio.
Wealth Management’s profitability was excellent and the continuing earnings grew. The improved profitability was due to the development of continuing earnings, the decreased personnel costs, and also to the additional earn-out from the wind power project. The main drivers for earnings growth were the higher assets under management than the previous year, and increased advisory fees. During the financial period Taaleri arranged, e.g., financing for Turun Toripark, and acted as financial adviser to Keilaniemen kiinteistökehitys Oy (real-estate development) in the issue of a EUR 100 million senior secured bond.
The Financing segment’s earnings grew due to an increase in premiums written and the balance on the technical account was excellent. Claims incurred remained especially low, but the return on investments at fair value was -0.1 per cent.
The Energy segment took significant growth steps during the first part of the year: the Solar Wind fund’s wind power and solar energy projects were successfully developed forward and Taaleri Energia purchased project rights for a 227 MW wind power project. Taaleri Energy’s aim is to significantly grow the size of private equity funds to be established by expanding the sales and marketing functions to large Finnish and international professional investors. The premise is to establish new renewable energy private equity funds outside Finland.
In Other operations, i.e. balance sheet investments we are constantly pursuing new opportunities, and during the first part of the year we increased our holding in, e.g., Fellow Finance, we invested in Turun Toripark and in real estate projects in Barrie in Canada and in Finland.
Climate change, digitalisation and market developments are constantly impacting our environment and therefore also customer behaviours. Our aim is to improve the company’s profitability and growth by growing continuing earnings and increasing automation. The robo-advisor asset manager Evervest that was acquired in summer was a step in response to the changes in the sector. Evervest’s functioning digital platform expands Taaleri’s wealth management service offering for customers and complements the conventional meeting-based wealth management service model. The product collaboration with the Savings Bank Group also creates new opportunities. The goal is to launch, together, the first environmentally themed investment solution still this year.”
Outlook
Short-term risks and concerns
The most significant external factors affecting the Group’s operating profit are changes in the operating environment and changes in the financial situation in Finland.
The result of the Wealth Management- and the Energy segments are influenced by the development of assets under management, which depends on the progress of the private equity funds’ projects and the development of private equity markets. The profit development is also influenced by the realisation of performance fee and commission income tied to the success of investment operations. On the other hand, private equity fund management fees are based on long-term contracts that bring in a steady cash flow.
Financing’s i.e. Gararantia’s guaranty insurance business and investment activity have a major impact on Taaleri’s business income.
The Other operations segment’s returns consist of the changes in the value of investments and of sales profits/losses gained in connection with investment sales. The returns and income of the Other operations segment may thus vary significantly between periods under review.
Long-term targets
Taaleri’s long-term operating profit target is at least 20 per cent of income, its long-term return on equity is at least 15 per cent, and its long-term equity ratio target is at least 30 per cent.
The company strives to increase the amount of dividend it distributes, and to annually distribute a competitive dividend, taking into account the company’s financial and financing situation as well as the expiration of the special permission by the Finnish Financial Supervisory Authority regarding the capital adequacy requirement.
Helsinki, 15 August 2018
Taaleri Plc
Board of Directors
Additional info:
CEO Juhani Elomaa, +358 40 778 9020
CFO Minna Smedsten, +358 40 700 1738
Head of Communications and IR Sophie Jolly, +358 40 828 7317, investors@taaleri.com
Taaleri in brief
Taaleri is a Finnish financial service company, whose parent company Taaleri Plc is listed on Nasdaq Helsinki's main market. The Taaleri Group comprises three business areas: Wealth Management, Financing, and Energy. Taaleri provides services to institutional investors, companies and private individuals. The Group’s operational subsidiaries are: Taaleri Wealth Management Ltd and its subsidiaries, Taaleri Private Equity Funds Group, Taaleri Investments Group, Taaleri Energia Oy Group and Garantia Insurance Company Ltd. In addition, Taaleri has associated companies Fellow Finance Plc, which offers peer-to-peer lending services, Ficolo Oy developing data centers, and Turun Toriparkki Oy and Munkkiniemi Group Oy that are real estate project companies.
At the end of June 2018, Taaleri had assets under management totalling EUR 6.0 billion and 4,600 asset management customers. Taaleri Plc has some 4,100 shareholders. Taaleri’s operations are supervised by the Finnish Financial Supervisory Authority.
More information about our company and services:
www.taaleri.com/en
www.fellowfinance.fi/en
www.garantia.fi/en
Sophie Jolly, Head of Communications and IR, sophie.jolly@taaleri.com, tel. +358 40 828 7317