eQ PLC INTERIM REPORT
28 April 2017 at 8:00 a.m.
January to March 2017 in brief
- During the period under review, the Group's net revenue totalled EUR 9.4 million (EUR 9.4 million from 1 Jan. to 31 March 2016).
- The Group’s net fee and commission income was EUR 9.2 million (EUR 9.1 million).
- The Group’s net investment income from own investment operations was EUR 0.2 million (EUR 0.4 million).
- The Group’s operating profit grew by 3 per cent to EUR 4.2 million (EUR 4.1 million).
- The Group’s profit was EUR 3.4 million (EUR 3.3 million).
- The consolidated earnings per share were EUR 0.09 (EUR 0.09).
- The net cash flow from own investment operations was EUR 0.0 million (EUR 0.1) and the change in fair value was EUR 0.7 million (EUR 0.0 million).
- The net revenue of the Asset Management segment increased by 30 per cent to EUR 8.0 million (EUR 6.1 million) and the operating profit by 51 per cent to EUR 4.0 million (EUR 2.7 million).
- The net revenue of the Corporate Finance segment fell to EUR 1.2 million (EUR 3.0 million). It is typical of corporate finance business that success fees have a considerable impact on invoicing, due to which the result may vary considerably from quarter to quarter.
| Key ratios | 1-3/17 | 1-3/16 | Change % | 1-12/16 |
| Net revenue, Group, M€ | 9.4 | 9.4 | -1% | 35.4 |
| Net revenue, Asset Management, M€ | 8.0 | 6.1 | 30% | 25.6 |
| Net revenue, Corporate Finance, M€ | 1.2 | 3.0 | -58% | 7.9 |
| Net revenue, Investments, M€ | 0.1 | 0.3 | -63% | 1.9 |
| Net revenue, Group administration | ||||
| and eliminations, M€ | 0.0 | 0.0 | 0% | 0.0 |
| Operating profit, Group, M€ | 4.2 | 4.1 | 3% | 16.2 |
| Operating profit, Asset Management, M€ | 4.0 | 2.7 | 51% | 12.0 |
| Operating profit, Corporate Finance, M€ | 0.5 | 1.6 | -71% | 3.7 |
| Operating profit, Investments, M€ | 0.1 | 0.3 | -63% | 1.9 |
| Operating profit, Group administration, M€ | -0.3 | -0.4 | 18% | -1.4 |
| Profit for the period, M€ | 3.4 | 3.3 | 3% | 12.8 |
| Key ratios | 1-3/17 | 1-3/16 | Change % | 1-12/16 |
| Earnings per share, € | 0.09 | 0.09 | 3% | 0.35 |
| Equity per share, € | 1.36 | 1.50 | -9% | 1.74 |
| Cost/income ratio, Group, % | 54.5 | 55.0 | -1% | 53.0 |
| Liquid assets, M€ | 21.3 | 24.2 | -12% | 16.7 |
| Private equity investments, M€ | 20.1 | 22.8 | -12% | 19.2 |
| Interest-bearing liabilities, M€ | 0.0 | 0.0 | 0% | 0.0 |
| Assets under management, € billion | 8.9 | 7.5 | 19% | 8.8 |
Janne Larma, CEO
The net revenue of the Group remained at previous year’s level totalling EUR 9.4 million and the operating profit grew slightly to EUR 4.2 million. The Group’s profit increased by 3 per cent to EUR 3.4 million.
The net revenue of eQ Asset Management grew by 30 per cent
The business operations of eQ Asset Management developed extremely positively. The net revenue of the Asset Management segment increased by 30 per to EUR 8.0 million and the operating profit by 51 per cent to EUR 4.0 million. The management fees of real estate and private equity asset management grew the most, i.e. by 47 per cent, but the management fees from traditional asset management also grew by 17 per cent. The strong interest of investors in real estate funds continued in the first quarter, during which we received new subscriptions worth EUR 57 million to the eQ Finnish Real Estate Fund. Subscriptions in the eQ Care Fund were interrupted temporarily during one quarter in order to secure the benefits of the present unit holders. eQ Private Equity also succeeded excellently in its operations. At the end of January, we held the first close of the eQ PE IX US Fund at USD 45 million, and at the end of April, the second close at USD 82 million. Our aim is to hold the final close in June. We also established a fund called eQ Private Credit, to which we raised EUR 90 million of capital. The fund makes investments in non-listed debt instruments in Europe. Traditional asset management also grew in the first quarter, and the returns of our funds were at a good level. During the past three years, 93 per cent of all the funds managed by eQ have surpassed their benchmark indices. eQ’s product portfolio is very well suited for the present market situation, and we believe that the market situation will continue to be favourable for us.
Advium’s commissions at a lower level than last year
In the Corporate Finance segment Advium acted as advisor in four finalised transactions during the first quarter. Advium was advisor to the sellers when they agreed on the sale of Temet Oy’s share capital to Väistö Group Oy. Advium also acted as advisor to Genesta, when a fund managed by it, Genesta Nordic Baltic Real Estate Fund I, sold an office property in Pitäjänmäki, Helsinki to a fund managed by the Swedish Areim. Advium’s net revenue fell to EUR 1.2 million from the previous year (EUR 3.0 million from 1 Jan. to 31 March 2016) and its operating profit fell to EUR 0.5 million (EUR 1.6 million). Great variations in commissions per quarter are typical of corporate finance operations. The low interest rates and good availability of financing still maintain a high activity level in corporate and real estate transactions, and we believe that the good market situation will continue.
The result of the Investments segment slightly lower than last year
The operating profit of the Investments segment fell slightly from last year to EUR 0.1 million (EUR 0.3 million). At the end of March, the balance sheet value of the private equity investments was EUR 20.1 million (EUR 19.2 million on 31 December 2016). In January, eQ Plc made a USD 1.0 million investment commitment in the eQ PE IX US Fund.
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eQ’s interim report 1 January to 31 March 2017 is enclosed to this release and it is also available on the company website at www.eQ.fi.
Additional information: Janne Larma, CEO, tel. +358 9 6817 8920 +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 8.9 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 www.eQ.fi.
