eQ PLC STOCK EXCHANGE RELEASE
3 August 2016 at 8:00 a.m.
January to June 2016 in brief
- During the period under review, the Group's net revenue grew by 22 per cent to EUR 18.4 million (EUR 15.0 million from 1 Jan. to 30 June 2015).
- The Group’s net fee and commission income increased to EUR 17.7 million (EUR 14.1 million).
- The Group’s net investment income from own investment operations was EUR 0.6 million (EUR 0.9 million).
- The Group’s operating profit grew by 29 per cent to EUR 8.1 million (EUR 6.3 million).
- The Group’s profit was EUR 6.4 million (EUR 5.0 million).
- Consolidated earnings per share grew by 28 per cent to EUR 0.17 (EUR 0.14).
- The net cash flow from own investment operations was EUR 0.7 million (EUR 4.7 million from 1 Jan. to 30 June 2015) and the change in fair value was EUR -0.4 million (EUR 1.1 million).
April to June 2016 in brief
- In the second quarter, the Group’s net revenue grew by 6 per cent to EUR 9.0 million (EUR 8.5 million from 1 Jan. to 30 June 2015).
- The Group’s net fee and commission income increased to EUR 8.7 million (EUR 7.9 million).
- The Group’s net investment income from own investment operations was EUR 0.3 million (EUR 0.6 million).
- The Group’s operating profit grew by 5 per cent to EUR 4.0 million (EUR 3.8 million).
- The Group’s profit was EUR 3.1 million (EUR 3.0 million).
- Consolidated earnings per share grew by 5 per cent to EUR 0.09 (EUR 0.08).
| Key ratios | 1-6/16 | 1-6/15 | Change % | 4-6/16 | 4-6/15 | Change % | 1-12/15 |
| Net revenue, Group, M€ | 18.4 | 15.0 | 22% | 9.0 | 8.5 | 6% | 30.5 |
| Net revenue, Asset Management, M€ | 12.1 | 11.2 | 8% | 6.0 | 5.8 | 3% | 21.7 |
| Net revenue, Corporate Finance, M€ | 5.8 | 3.1 | 87% | 2.8 | 2.2 | 28% | 7.0 |
| Net revenue, Investments, M€ | 0.5 | 0.8 | -38% | 0.2 | 0.5 | -64% | 1.8 |
| Net revenue, Group admin. | |||||||
| and eliminations, M€ | 0.0 | 0.0 | 0% | 0.0 | 0.0 | 0% | 0.0 |
| Operating profit, Group, M€ | 8.1 | 6.3 | 29% | 4.0 | 3.8 | 5% | 13.2 |
| Operating profit, Asset Management, M€ | 5.3 | 4.9 | 8% | 2.7 | 2.6 | 4% | 9.6 |
| Operating profit, Corporate Finance, M€ | 3.0 | 1.4 | 111% | 1.5 | 1.1 | 29% | 3.4 |
| Operating profit, Investments, M€ | 0.5 | 0.8 | -38% | 0.2 | 0.5 | -64% | 1.8 |
| Operating profit, Group admin., M€ | -0.8 | -0.9 | -14% | -0.4 | -0.4 | -21% | -1.6 |
| Profit for the period, M€ | 6.4 | 5.0 | 28% | 3.1 | 3.0 | 5% | 10.5 |
| Key ratios | 1-6/16 | 1-6/15 | Change % | 4-6/16 | 4-6/15 | Change % | 1-12/15 |
| Earnings per share, € | 0.17 | 0.14 | 28% | 0.09 | 0.08 | 5% | 0.29 |
| Equity per share, € | 1.58 | 1.77 | -11% | 1.58 | 1.77 | -11% | 1.91 |
| Cost/income ratio, Group, % | 54.9 | 56.7 | -3% | 54.9 | 54.4 | 1% | 55.1 |
| Liquid assets, M€ | 7.5 | 13.7 | -45% | 7.5 | 13.7 | -45% | 21.6 |
| Private equity investments, M€ | 22.0 | 24.6 | -11% | 22.0 | 24.6 | -11% | 22.5 |
| Interest-bearing liabilities, M€ | 0.0 | 0.0 | 0% | 0.0 | 0.0 | 0% | 0.0 |
| Assets under management, € billion | 8.2 | 7.8 | 5% | 8.2 | 7.8 | 5% | 7.6 |
Janne Larma, CEO
eQ’s success continued in the second quarter. In the first half of the year, the net revenue of the Group grew by 22 per cent to EUR 18.4 million and the operating profit by 29 per cent to EUR 8.1 million. The first half of the year has been challenging for equity investors, as the market has been very volatile. At the beginning of the year, share prices plummeted, but recovered later in spring. In May and June, prices fluctuated again greatly in both directions due to the Brexit referendum. Due to the market situation, the returns for the first six months were round zero. The best returns came from emerging market equities (4.1% MSCI) and the poorest from European equities (-7.2% MSCI). Bonds gave an excellent return, and the return of the 10-year German Government bond already fell below zero and was -0.13% at the end of June.
eQ Asset Management succeeded excellently in a difficult market situation
The excellent development of eQ Asset Management’s business continued in the second quarter. In the first six months, the net revenue of the Asset Management segment increased by 8 per to EUR 12.1 million and the operating profit by 8 per cent to EUR 5.3 million. The increase of the net revenue was based on the growth of real estate and private equity asset management. The sales of the real estate funds continued to be very strong during the first six months, and new subscriptions worth EUR 138 million were made in our two real estate funds. Our private equity asset management was also very successful during the first half of the year. We raised a record amount of capital, EUR 160 million, to our latest private equity fund eQ PE VIII North, which makes investments in Northern Europe. In addition, we have obtained several new mandate clients to our private equity asset management. One of the major deals was a private equity mandate of almost EUR 80 million, where the investors are the Federation of Finnish Technology Industries, Technology Industries of Finland Centennial Foundation and nine other technical and technology sector foundations and associations. Within traditional asset management, the assets under management decrease from the year before due to market development, and the fee and commission income was lower than in the comparison period 2015.
Advium’s profit more than doubled
Advium’s positive development continued in the second quarter. Advium acted, for instance, as advisor to the Finnish Government, as it sold 49.9 per cent of Patria to Norwegian Kongsberg, and to Viking Malt Oy as it bought three malting plats of Carlsberg Group. In addition, Advium acted as advisor to the LocalTapiola Group as it sold a 21,000 m2 residential block to Nordea Life Assurance Finland. During the six-month period, Advium has acted as advisor in nine finalised transactions. As a result of these transactions, the net revenue of Advium almost doubled to EUR 5.8 million and the operating profit grew to EUR 3.0 million (EUR 1,4 million from 1 Jan. to 30 June 2015).
The result of the Investments segment lower than last year
The net revenue and operating profit of the Investments segment were lower than last year, both EUR 0.5 million (EUR 0.8 million from 1 Jan. to 30 June 2015). The net cash flow from investments was also lower than last year, EUR 0.7 million (EUR 4.7 million). During the period under review, there occurred less exits from the private equity funds and more capital calls than during the comparison period.
With confidence into the second half
The third quarter has started off with a positive trend in the equity market, and this combined with the strong sales of the real estate and private equity asset management during the first half lays a good foundation for eQ Asset Management's operations. Advium’s commission income was exceptionally high in the first half, as several success fees were allocated to this period. Advium's mandate base is still at a good level, but the number of finalised transactions is expected to be lower than in the first half.
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eQ’s half year financial report 1 January to 30 June 2016 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 9 6817 8920
Distribution: Nasdaq Helsinki, www.eQ.fi, media
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 8.2 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.
