Taaleri Plc interim statement from January 1 to March 31, 2022:
TAALERI PLC STOCK EXCHANGE RELEASED ON MAY 6, 2022 AT 8:00 AM (EEST)
Taaleri Plc Interim Statement January 1–March 31, 2022: by Taaleri the continuing result increased to 9.3 million euros in the first quarter, but the unrealized changes in the fair value of the investment operations weighed on the result and the operating result
- The continuing result increased by 4.3% to EUR 9.3 (8.9) million. The continuing result of the Private Asset Management segment increased by 15.8% to EUR 4.9 (4.2) million, and the continuing result of the Strategic Investments segment by 7.5% to EUR 3.9 (3.6) million.
- Outperformance fees amounted to 0.5 (0.8) million euros and income from investment transactions to -2.6 (4.0) million euros due to changes in fair value.
- Revenues amounted to 7.2 (13.7) million euros, down 47.6% due to unrealized changes in the fair value of investment operations for -2.8 (1.7) millions of euros.
- The operating result amounts to -0.7 (5.8) million euros.
- Assets under management in the Private Asset Management segment increased by 1.5% to EUR 2.3 (31.12.2021: 2.2) billion.
- Earnings per share were EUR -0.05 (0.25).
The interim statement has not been prepared in accordance with IAS 34. The interim statement is unaudited. See page 16 for more information on interim statement accounting policies.
REVIEW BY CEO Pierre RAMSAY
In the first quarter of 2022, we continued to advance our strategy with a focus on renewable energy, real estate and bioindustry. Both Garantia’s private wealth management and guarantee insurance activities developed well and operating profit excluding investment operations amounted to 2.0 million euros, corresponding to a profit margin of 20%. On the other hand, changes in the fair value of the Group’s investment operations weighed on the Group’s profit and operating profit. The decrease in the fair value of investments is explained, among other things, by the rise in interest rates which affected the valuations of Garantia’s investment portfolio.
The Russian invasion of Ukraine and the resulting change in the geopolitical situation did not have a direct impact on our activities. Taaleri has no business activities or investments in Russia or Ukraine. Europe’s drive to break away from Russian gas, oil and coal will increase demand for renewables, which will sustain our private management business in the long term. At the same time, the transition to renewable energies is reflected, for example, in the development of projects by a tightening of competition and an increase in costs. We believe that our strong long-term investment in the development of our own projects improves our relative competitiveness in this situation.
Despite the geopolitical situation and rising interest rates, we believe that demand for private equity funds will remain strong, as they will allow investors to diversify risk and even out returns. The country risk in Finland feared at the start of the Ukrainian crisis does not yet seem to have materialized. An indication of this is a transaction made after the reporting period, in which Taaleri Datacenter Ky sold its stake in Ficolo Ltd to a UK company. Taaleri expects to record profits totaling approximately €14 million from the co-investment transaction it manages in the form of returns and performance fees in the third quarter of the year.
In the private asset management segment, operating activity strengthened compared to last year and continued profit increased by approximately 16% in the first quarter. During the reporting period, the renewable energy sector focused, for example, on advancing Taaleri SolarWind II fund projects that were in the construction phase. Furthermore, the construction of the project development portfolio has started as planned and at the end of the review period, our portfolio already included 12 projects.
The real estate activity carried out several transactions in March. We successfully exited the Taaleri Daycare Properties fund by selling the fund’s ten daycares to a Norwegian buyer. In addition, we made four new investments in Aktia’s special investment funds in the portfolio management of the real estate business.
In the field of bioindustry, the sale of private equity fund Taaleri Bioindustry I has started in Aktia. During the review period, it was decided to invest in a torrefied biomass plant to be built in Joensuu. The project will be implemented as a co-investment. Additionally, we have invested in Nordtreat, a company that produces environmentally friendly flame retardants, which opens up investment opportunities for the private equity fund.
In the Strategic Investments segment, Garantia’s guarantee insurance activities continued to develop well. The net result of the insurance and guarantee operations increased compared to the corresponding period by 7.4% to EUR 3.9 million, and the combined ratio describing the profitability of the insurance operations was excellent at 31.3% . In particular, Garantia’s investment operations suffered from rising interest rates and changes in risk premiums, but most of the investment losses were unrealized changes in fair value.
During the first quarter, we completed the culture and corporate values project started last year. Taaleri has changed as a business with the sale of the wealth management business, so we wanted to update our target culture and values to something that best supports the implementation of our strategy and our day-to-day work. Our three new values - With Know-How, Skills and Will, Daring to Succeed and Supporting Each Other – give us an excellent base from which to pursue our vision of being a Nordic pioneer in alternative investments with a focus on sustainability.
GROUP KEY FIGURES
|Group key figures||1–3/2022||1–3/2021||Switch, %||1-12/2021|
|Key results figures|
|Continuing profit, MEUR||9.3||8.9||4.3||40.7|
|Operating profit, MEUR||-0.7||5.8||n / A||30.8|
|Operating profit, %||negative||42.7||44.2|
|Profit for the period in the consolidated income statement, MEUR||-1.2||6.8||n / A||136.1|
|Return on equity*, %||-2.2||20.7||75.0|
|Balance sheet key figures|
|Equity ratio, %||72.1||48.1||72.1|
|Other key figures|
|Cost-to-income ratio excluding investment operations||83.3||88.6||77.9|
|Full-time employees of continuing operations, end of period||101||103||-2.0||104|
|Assets under management in the Private Asset Management segment, BEUR||2.3||1.7||2.2|
|Guaranteed insurance portfolio, BEUR||1.7||1.7||1.7|
FINANCIAL OUTLOOK AND OBJECTIVES
Taaleri does not publish short-term outlooks. However, the company has set targets for growth, profitability and return on invested capital.
Taaleri’s long-term goals include:
- Continued earnings growth of at least 15%
- Operating profit at least 25 percent of revenue
- Return on equity of at least 15%.
The company’s objective is to distribute to its shareholders at least 50 percent of the profit for the financial year as well as the capital that the company does not need for growth investments or to achieve its solvency objectives.
WEBCAST PRESENTATION FOR ANALYSTS AND MEDIA
A live webcast for analysts and media will take place on May 6, 2022 at 11:00 a.m. The event is in Finnish. The webcast can be followed online at https://taaleri.videosync.fi/osavuosikatsaus-q1-2022/. The event will be recorded and available later on Taaleri’s investor pages at www.taaleri.com/investors/reports-and-presentations.
Helsinki, 6 May 2022
board of directors
For more information, please contact:
CEO Peter Ramsay, +358 50 343 7493, [email protected]
Chief Financial Officer Minna Smedsten, +358 40 700 1738, [email protected]
Communication and IR Manager Siri Markula, +358 40 743 2177, [email protected]
Taaleri in a nutshell
Taaleri is a Nordic investment and asset manager specializing in renewable energy and other alternative investments. We channel capital into economically profitable businesses that have a lasting positive impact on the environment and society. We combine capital with talent, expertise, entrepreneurship and an audacious sense of purpose. We have been a signatory to the United Nations Principles for Responsible Investment (UNPRI) since 2010 and joined the Net Zero Asset Managers initiative in 2021. Taaleri’s vision is to be a Nordic pioneer in alternative investments focused on sustainability.
Taaleri has two business lines: Private Asset Management and Strategic Investments. Private Asset Management includes renewable energy, real estate and bio-industry companies. The Strategic Investments segment includes Garantia Insurance Company Ltd.
Taaleri has €2.3 billion in assets under management in its private equity funds and co-investments. The company has approximately 120 employees. Taaleri Plc is listed on Nasdaq Helsinki.
Siri Markula, Communication and IR Manager, tel. +358 40 743 2177, [email protected]
Taaleri Q1 2022 interim statement