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Hoivatilat Oyj: Hoivatilat announces preliminary information about the third quarter result and revises its 2019 guidance
Hoivatilat announces preliminary information about the third quarter result and revises its 2019 guidance
Preliminary business review information 1 January – 30 September 2019 (unaudited)
Hoivatilat Plc stock exchange release, 4 November 2019 at 8 a.m.
Summary January–September 2019
| EUR thousand | 30 Sep 2019 | 30 Sep 2018 | Change, % | 31 Dec 2018 |
| Total revenue | 16,894 | 12,528 | 34.8% | 17,182 |
| Result for the period | 19,026 | 21,002 | -9.4% | 37,003 |
| EPRA Earnings | 7,797 | 5,186 | 50.3% | 7,663 |
| Earnings per share, undiluted (EUR) | 0.75 | 0.83 | -9.6% | 1.46 |
| Earnings per share, diluted (EUR) | 0.74 | 0.82 | -9.8% | 1.45 |
| EPRA Earnings per share (EPRA EPS, EUR) | 0.31 | 0.20 | 55.0% | 0.30 |
| Value of investment properties | 457,367 | 310,450 | 47.3% | 348,899 |
| EPRA NAV per share (EUR) | 8.05 | 6.43 | 25.3% | 7.28 |
| Value of the lease portfolio (without index increases) | 500,916 | 399,812 | 25.3% | 426,953 |
| Economic occupancy rate, % | 100 | 100 | - | 100 |
| Average maturity of the lease portfolio (years) | 14.8 | 15.0 | - | 14.9 |
The impacts of IFRS 16, adopted on 1 January, on the key figures for the review period are shown below in the Financial development section.
Significant events
- EPRA Earnings increased by 50%, and the value of the lease portfolio exceeded 500 EUR million during the review period
- 20 properties were completed
- Two school projects were secured through competitive bidding after the review period
Financial guidance for 2019
Hoivatilat expects its total revenue to be around EUR 23 million in 2019. EPRA Earnings are expected to be at least 40% of revenue. The fair value of the investment properties is expected to be EUR 470–490 million at the end of 2019 (previously EUR 460–490 million). The guidance is based on the assumption that, in 2019, the company will not make significant purchases or sales of completed investment properties, and that the market yields used in the valuation of real estate will remain at their current level.
Financial development
The value of investment properties at the end of September was EUR 457.4 (310.4) million, representing an increase of 47.3%. The company adopted the IFRS 16 standard on 1 January 2019. As a result of this, lease agreements on plots – which had previously been treated as other leases in line with IAS 17 – were transferred to the consolidated balance sheet, where they increased the value of investment properties and non-current liabilities by EUR 27.9 million. The IFRS 16 standard has not been applied retrospectively, and the figures for the comparison period have not been adjusted in this respect. The valuation of investment properties on 30 September 2019 is based on the assumptions and yields applied in the half-year report per 30 June 2019. The next comprehensive external valuation of the property portfolio will be carried out based on the situation on 31 December 2019.
The rental occupancy rate was 100% (100%), with the average maturity of leases being 14.8 (15.0) years. The value of the lease portfolio (excluding index increases) was EUR 500.9 (399.8) million. At the end of the review period, the number of properties under construction and in the planning phase was 40 (44). Their investment value was EUR 146.7 (120.5) million.
| Properties, 30 September | Completed | In progress and not started* | Total | |||
| Q3/2019 | Q3/2018 | Q3/2019 | Q3/2018 | Q3/2019 | Q3/2018 | |
| Number of properties | 148 | 107 | 40 | 44 | 188 | 151 |
| Leasable area, thousand floor m² | 126.5 | 93.8 | 53.4 | 46.9 | 179.9 | 140.8 |
| Annual rents, EUR million | 25.5 | 18.9 | 10.1 | 8.9 | 35.6 | 27.8 |
| Investment (acquisition cost), EUR million | 293.0 | 209.9 | 146.7 | 120.5 | 439.7 | 330.4 |
| * = Properties in progress and not started also include properties for which binding leases or preliminary agreements have been signed, but construction has not yet begun. | ||||||
Events after the review period
Hoivatilat Oyj announced on 25 October 2019 that it has been selected to implement the Salonpää School project in Oulu and the Central Uusimaa Christian School and Day-care Centre project in Järvenpää. Both projects will be implemented in line with the lease model and will also include facilities for early education. The buildings will be completed in August 2020 and December 2021. The total value of these two lease agreements is around EUR 22 million, with their duration being 25 years.
Hoivatilat Oyj
Board of Directors
Further information:
Jussi Karjula, CEO
Tel. +358 40 773 4054
Hoivatilat in brief:
Hoivatilat Oyj specialises in producing, developing, owning and leasing out nursing homes, day-care centres and service communities. Founded in 2008, the company has been working in cooperation with as many as 60 Finnish municipalities and has launched over 200 property projects throughout Finland and in Sweden. www.hoivatilat.fi