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Kojamo Showcases Financial Fortitude in Q1 2024 Amid Rising Real Estate Market Demands

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Michael Chen

May 8, 2024 - 11:23 am

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Kojamo's First-Quarter Earnings Reveal Growth Amid Stable Investment Property Values

HELSINKI, May 8, 2024 /PRNewswire/ -- Kojamo plc, a prolific player in the Finnish real estate sector, has divulged its financial outcomes for the first quarter of the year, indicating heightened total revenue and net rental income without significant fluctuations in investment property valuations. The comprehensive report can be accessed and scrutinized in full detail on the company's official investor relations website: www.kojamo.fi/investors.

Unaudited figures juxtapose the current financial year against its predecessor, casting light on the company's robust performance thus far.

Enhanced Financial Performance in Early 2024

For the period spanning January to March 2024, an upbeat narrative unfolded with Kojamo's total revenue escalating by 4.7 percent to 113.3 million euros, outpacing the last year's mark of 108.2 million euros. The net rental income saw a progression, albeit more moderate, amounting to a 1.9 percent increase to rest at 60.6 million euros, which constituted 53.5 percent of the total revenue, diverting slightly from the previous year's 55.0 percent.

Pre-tax results experienced a significant surge, with profits climbing up to 39.3 million euros, a stark contrast to the 24.0 million euros recorded in the previous corresponding period. These figures included an uplifting net result of 11.1 million euros on the valuation of investment properties at fair value. Earnings per share were boosted to 0.13 euros, towering over the former 0.08 euros.

Despite encouraging signs in other operational metrics, the Funds From Operations (FFO) revealed an 11.5 percent downturn, with 25.5 million euros against the prior year's 28.8 million euros.

Investment properties evaluated at fair value experienced a minor decrease at the end of the period, sitting at 8.1 billion euros, inclusive of non-current assets poised for sale. The financial occupancy rate presented slight improvement at 92.4 percent, marginally up from 92.2 percent.

Gross investments took a nosedive to 8.4 million euros, representing a mere 7.4 percent of the total revenue – a stark decrease from the previous year's 50.8 percent, or 54.9 million euros.

Shareholders witnessed equity per share decreasing to 14.83 euros, a subtle dip from 15.22 euros. Meanwhile, the Return on Equity (ROE) swelled to 3.5 percent from 2.0 percent, showing alignment with the Return on Investment (ROI), which also rose to 3.5 percent. The Net Reinstatement Value (NRV) per share, as defined by the European Public Real Estate Association (EPRA), contracted by 3.3 percent, falling to 18.60 euros from 19.23 euros.

A Synopsis of Kojamo's Portfolio Dynamics

Kojamo's portfolio of rental apartments reached 40,860 by the end of the first quarter, reflecting a net increase from the previous year's tally of 39,550. Throughout the past 12 months, the company acquired no new apartments, diverging from the preceding year's total acquisition of 985 units. However, Kojamo adhered to its development trajectory by completing 1,372 apartments, rivaling last year's 1,397 completed units. In a conscious portfolio adjustment move, Kojamo offloaded 73 apartments and either demolished or altered 11, marking a strategic departure from the stance of not selling or altering units in the previous year.

Delving into the underlying financial scaffolding, the period witnessed minor inflation in interest-bearing liabilities, which grew by 1.1 percent to reach 3,676.0 million euros. The company’s equity ratio remained stable at 44.3 percent, slightly below the previous year’s 44.5 percent, while the Loan to Value (LTV) ratio climbed to 44.5 percent, up from 42.9 percent.

Bedrock Key Metrics

Kojamo's key financial indicators delineate the company's operational health. The comprehensive metrics covering total revenue, net rental income, FFO, and investment properties, among others, can be examined in extensive numerical detail. The tables articulate the comparative performance of the first quarter of 2024 against the same interval last year, alongside annual observations for 2023. This meticulous financial scrutiny aligns with the stringent guidelines provided by the European Securities and Markets Authority (ESMA) ensuring transparency and uniformity in the portrayal of Kojamo's alternative performance measures.

Modifying the Forecast for 2024

Kojamo has fine-tuned its financial forecast for the remaining year. The company presumes that total revenue will see an uptick of 4–7 percent, amending the previous forecast of 4–8 percent. Kojamo also projects its FFO for the year to oscillate between 152 and 164 million euros, relieving non-recurring costs from the estimation, which shows a slight revision from the earlier projection of 154 to 166 million euros.

These outlooks derive from management's discernment of revenue flows, property management expenditures, administrative and financial costs, tax obligations, and new developments. Moreover, assumptions about the occupancy rate, rent ascension, and completion of apartments in progress inform this perspective.

The outlook remains exclusive of potential acquisitions or disposal activities' impacts on the company's revenue streams and FFO.

Commentary from the CEO

According to Jani Nieminen, CEO of Kojamo, the company welcomed 2024 with a proliferation in total revenue, net rental income, and pre-tax profit. However, FFO experienced a downturn as a direct result of spiking financial expenses and an uptick in maintenance costs precipitated by an especially harsh winter. Despite these challenges, investment property valuation remained consistent, and the company retains a robust financial foundation complemented by excellent liquidity.

An increment in the financial occupancy rate and stable tenant turnover manifested, with demand and supply still seeking equilibrium in the market. The completed developments have injected a substantial number of rental apartments into the market, hinting at an impending declination in supply, which will potentially underpin further rent increases.

Nieminen detailed the strides in the company’s austerity program, emphasizing reduced personnel numbers and controlled investment activities geared towards completing existing projects. He highlighted the successful implementation of a new ERP system, which promises efficiency gains and enhanced digitalization benefits.

Additionally, financial arrangements ensure ample coverage for the intermediate loans maturing in the next two years. January saw the issuance of a 200 million euro unsecured bond, and March ended with the secured bank financing of 250 million euros.

Upcoming Webcast for Stakeholders

Kojamo has scheduled a webcast tailored for institutional investors, analysts, and the press, set for May 8, 2024, at 3.00 p.m. EEST at the company headquarters in Helsinki. While English will be the medium of the presentation, a subsequent Finnish-language Q&A session will be available.

The webcast can be accessed at https://kojamo.videosync.fi/q1-2024. For those unable to participate live, a recorded version of the webcast will be accessible on Kojamo's website.

Additional Information and Queries

For further information, you can reach out to Niina Saarto, Director of Treasury & Investor Relations at Kojamo plc (+358 20 508 3283, [email protected]) or CFO Erik Hjelt (+358 20 508 3225, [email protected]).

Kojamo's Commitment and Presence

Kojamo remains unwavering in its mission to craft superior urban housing solutions. As Finland's largest private residential real estate entity, Lumo's environmentally conscious dwellings complement the city dwellers' pursuit of quality and convenience. The commitment to asset value enhancement through new constructions and meticulous property portfolio management projects Kojamo as a market innovator and a premier choice for customers. Notably, Kojamo's shares are publicly traded on the Nasdaq Helsinki.

For further insights, visit Kojamo's website.

Cision distributes this information further, accessible at http://news.cision.com.

Relevant links to detailed reports and presentations for Kojamo's interim report are provided below:

In Closing

Kojamo's announcement solidifies its reputation as a key figure in Finland's residential real estate market, exhibiting a competent start to the year with lucrative growth in income figures and a stable outlook on investment property evaluations. The company's recalibration of anticipations for the remaining year and strategic approaches underline a confidence in its enduring market leadership and investor value proposition.

Overall, while the company faces challenges in the form of rising costs, Kojamo's leadership's prudent steering and strategic maneuvers point towards sustained prosperity and resilience.

Please note that this article is solely intended to inform and does not constitute investment advice or an offer to sell, or a solicitation of an offer to buy any securities. Investors are advised to conduct their own research or consult a financial advisor before making any investment decisions.

Disclosure

This news article includes forward-looking statements. Actual results could differ materially from those projected due to various risk factors, market conditions, and business strategies adopted by Kojamo plc.

End of Article


The information provided above is a detailed rendering of the news release by Kojamo plc, reflecting a precise account of the company's financial performance in the first quarter of 2024. The data and projections contained herewith should serve investors and stakeholders in making well-informed decisions regarding the company's current and future position in the market.