eQ PLC STOCK EXCHANGE RELEASE
14 August 2014 at 08:45 a.m.
eQ PLC’S INTERIM REPORT 1 JANUARY TO 30 JUNE 2014 – INCOME FROM CLIENT OPERATIONS INCREASED BY ALMOST 50% AND PROFIT MORE THAN DOUBLED
April to June 2014 in brief
- In the second quarter, the Group’s net revenue totalled EUR 6.7 million (EUR 4.1 million from 1 April to 30 June 2013).
- The Group’s net fee and commission income totalled EUR 5.8 million (EUR 3.9 million).
- The Group’s net investment income from own investment operations was EUR 0.2 million (EUR 0.2 million).
- The Group’s non-recurring other income and expenses totalled EUR 0.6 million (net) (EUR 0.0 million).
- The operating profit of client operations (Asset Management and Corporate Finance) was EUR 3.0 million (EUR 1.3 million).
- The Group’s operating profit was EUR 2.7 million (EUR 1.1 million).
- Earnings per share were EUR 0.06 (EUR 0.02).
January to June 2014 in brief
- During the period under review, the Group’s net revenue totalled EUR 11.1 million (EUR 9.8 million from 1 Jan. to 30 June 2013).
- The Group’s net fee and commission income totalled EUR 10.3 million (EUR 7.4 million).
- The Group’s net investment income from own investment operations was EUR 0.1 million (EUR 2.5 million).
- The Group’s non-recurring other income and expenses totalled EUR 0.6 million (net) (EUR 0.0 million).
- The operating profit of client operations (Asset Management and Corporate Finance) was EUR 4.5 million (EUR 1.8 million).
- The Group’s operating profit was EUR 3.6 million (EUR 3.2 million).
- Earnings per share were EUR 0.08 (EUR 0.06).
- The assets under management totalled EUR 7.1 billion at the end of the period (EUR 6.7 billion on 31 Dec. 2013).
- The net cash flow from own investment operations was EUR 3.0 million (EUR 4.8 million from 1 Jan. to 30 June 2013).
| Key ratios | 4-6/ 2014 | 4-6/ 2013 | Change % | 1-6/ 2014 | 1-6/ 2013 | Change % | 1-12/ 2013 |
| Net revenue, Group, EUR million | 6.7 | 4.1 | 66 % | 11.1 | 9.8 | 14 % | 18.8 |
| Net revenue, Asset Management, EUR million | 5.3 | 3.5 | 51 % | 8.6 | 6.7 | 28 % | 13.6 |
| Net revenue, Corporate Finance, EUR million | 1.3 | 0.5 | 183 % | 2.6 | 0.9 | 194 % | 2.2 |
| Net revenue, Investments, EUR million | 0.1 | 0.1 | 33 % | -0.0 | 2.3 | -101 % | 3.0 |
| Net revenue, other segments | |||||||
| and eliminations, EUR million | 0.0 | 0.0 | 111 % | 0.0 | 0.0 | -326 % | 0.0 |
| Key ratios | 4-6/ 2014 | 4-6/ 2013 | Change % | 1-6/ 2014 | 1-6/ 2013 | Change % | 1-12/ 2013 |
| Operating profit, Group, EUR million | 2.7 | 1.1 | 161 % | 3.6 | 3.2 | 12 % | 4.9 |
| Operating profit, Asset Management, EUR million | 2.4 | 1.2 | 104 % | 3.4 | 1.7 | 102 % | 3.1 |
| Operating profit, Corporate Finance, EUR million | 0.6 | 0.1 | 512 % | 1.1 | 0.1 | 850 % | 0.4 |
| Operating profit, Investments, EUR million | 0.1 | 0.1 | 33 % | -0.0 | 2.3 | -101 % | 3.0 |
| Operating profit, other segments, EUR million | -0.4 | -0.3 | 17 % | -0.8 | -0.8 | 1 % | -1.6 |
| Profit for the period, EUR million | 2.2 | 0.7 | 196 % | 2.8 | 2.2 | 29 % | 3.4 |
| Earnings per share, EUR | 0.06 | 0.02 | 200 % | 0.08 | 0.06 | 33 % | 0.10 |
| Equity per share, EUR | 1.97 | 1.95 | 1 % | 1.97 | 1.95 | 1 % | 1.97 |
| Liquid assets and interest-bearing receivables, EUR million | 11.6 | 5.9 | 96 % | 11.6 | 5.9 | 96 % | 11.3 |
| Private equity investments, EUR million | 30.7 | 35.8 | -14 % | 30.7 | 35.8 | -14 % | 30.6 |
| Interest-bearing liabilities, EUR million | 0.0 | 0.0 | 0 % | 0.0 | 0.0 | 0 % | 0.0 |
| Assets under management, EUR billion | 7.1 | 6.3 | 13 % | 7.1 | 6.3 | 13 % | 6.7 |
Janne Larma, CEO
The first part of the year has mainly given equity investors good returns. The world stock exchange index (MSCI World) gave a 7.3 per cent return, the Helsinki Stock Exchange (OMXH Cap) an 8.4 per cent return and emerging markets (MSCI) a 6.9 per cent return during the six-month period. Long-term interest rates have fallen in both developed and emerging markets and given investors good returns.
In the first half of the year, eQ Asset Management’s sales developed in an excellent manner. Our net sales in funds registered in Finland totalled about EUR 180 million. The eQ Emerging Dividend Fund continued to grow, and at the end of June, its size exceeded EUR 285 million. The eQ Care Fund also received new subscriptions, and at the end of June, its size was almost EUR 130 million.
The eQ PE VI North investment programme established by eQ Asset Management was closed at the end of June at EUR 130 million. The assets were raised in record time, 9 months, and the programme exceeded the EUR 100 million target considerably. This clearly shows that investors trust eQ Asset Management and that we offer our clients products that are competitive and interesting. Our consolidated real estate asset management team will begin working in full in the third quarter, and we strongly believe that investors find real estate products interesting. According to estimates, we will launch a new, interesting real estate investment product already during the second half of the year.
Corporate finance business operations have also developed favourably, and during the first six months of the year, Advium has acted as advisor in six transactions. Advium acted, for instance, as financial advisor to Rake Oy, as it sold the Klaus K lifestyle hotel to Kämp Group. Besides, Advium acted as advisor to Sveafastigheter as it agreed on the sale of 68 grocery stores in Finland to the Trophi Fastighets AB fund. After the end of the period under review, Advium acted as advisor to the seller as the State of Finland sold the entire stock of the infrastructure and construction service company Destia Ltd to Ahlström Capital.
During the first half of the year, the income from client operations increased by 47 per cent and the operating profit by 149 per cent from the previous year. The operating profit of the Asset Management segment doubled to EUR 3.4 million from EUR 1.7 million in 2013. The result improvement is due to increasing management fees, above all from real estate asset management. The result comprises EUR 0.6 million (net) of non-recurring income and expenses. The result of the Corporate Finance segment improved clearly, the operating profit being EUR 1.1 million, as compared with EUR 0.1 million the year before. In the Investments segment, the net cash flow was EUR 3.0 million positive, and the value change since the beginning of the year EUR 3.1 million positive. The operating profit was EUR -0.0 million due to write-downs of EUR 0.7 million.
The balance sheet of the Group is in excellent shape. At the end of June, the Group’s liquid assets and interest-bearing receivables totalled EUR 11.6 million, and the balance sheet value of the private equity investments was EUR 30.7 million.
I am very pleased with the result of the operations, which has been achieved through some years of consistent work. We will continue with our work eagerly and confidently in the second half of the year.
***
eQ’s interim report 1 January to 30 June 2014 is enclosed to this release and it will also be available on the company website at www.eQ.fi.
Additional information: Janne Larma, CEO, tel. +358 40 500 4366
Distribution: NASDAQ OMX Helsinki, www.eQ.fi
eQ Group is a Finnish group of companies specialising in asset management and corporate finance business. eQ Asset Management offers a wide range of asset management services (including private equity funds and real estate asset management) for institutions and individuals. The assets managed by the Group total approximately EUR 7.1 billion. Advium Corporate Finance, which is part of the Group, offers services related to mergers and acquisitions, real estate transactions and equity capital markets.
More information about the Group is available on our website at www.eQ.fi.
