eQ Plc’s interim report Q3 2023 – eQ’s profit in the review period
fell
eQ Plc interim report24 October 2023, at 8:00
AM
January to September 2023 in brief
- The Group's net revenue during the period was EUR 52.3 million
(EUR 64.2 million from 1 Jan. to 30 September 2022). The Group’s
net fee and commission income was EUR 51.5 million (EUR 62.8
million).
- The Group’s operating profit fell by 24% to EUR 30.0 million
(EUR 39.5 million).
- The Group’s profit was EUR 23.8 million (EUR 31.4
million).
- The consolidated earnings per share were EUR 0.59 (EUR
0.79).
- The net revenue of the Asset Management segment decreased by
14% to EUR 50.3 million (EUR 58.6 million) and the operating profit
by 17% to EUR 31.7 million (EUR 38.4 million). The management fees
of the Asset Management segment grew by 2 per cent to EUR 46.8
million (EUR 45.6 million) and the performance fees fell by 71 per
cent to EUR 3.9 million (EUR 13.3 million).
- The net revenue of the Corporate Finance segment was EUR 1.2
million (EUR 4.3 million) and the operating profit was EUR -0.9
million (EUR 1.5 million).
- The operating profit of the Investments segment was EUR 0.4
million (EUR 1.4 million).
- The net cash flow from the Group’s own private equity and real
estate fund investment operations was EUR 0.2 million (EUR 2.3
million).
July to September 2023 in brief
- In the third quarter, the Group’s net revenue totalled EUR 16.6
million (EUR 20.1 million from 1 July to 30 September 2022). The
Group’s net fee and commission income was EUR 16.2 million (EUR
19.9 million).
- The Group’s operating profit fell by 18% to EUR 10.2 million
(EUR 12.4 million).
- The Group’s profit was EUR 8.1 million (EUR 9.8 million).
- The consolidated earnings per share were EUR 0.20 (EUR
0.24).
Key ratios |
1-9/23 |
1-9/22 |
Change |
7-9/23 |
7-9/22 |
Change |
1-12/22 |
Net
revenue, Group, MEUR |
52.3 |
64.2 |
-18% |
16.6 |
20.1 |
-18% |
77.8 |
Net revenue, Asset Management, MEUR |
50.3 |
58.6 |
-14% |
15.9 |
18.5 |
-14% |
71.8 |
Net revenue, Corporate Finance, MEUR |
1.2 |
4.3 |
-72% |
0.3 |
1.4 |
-77% |
5.4 |
Net revenue, Investments, MEUR |
0.4 |
1.4 |
-71% |
0.3 |
0.2 |
8% |
0.7 |
Net revenue, Group administration and |
|
|
|
|
|
|
|
eliminations, MEUR |
0.4 |
-0.1 |
|
0.1 |
0.0 |
|
-0.1 |
|
|
|
|
|
|
|
|
Operating profit, Group, MEUR |
30.0 |
39.5 |
-24% |
10.2 |
12.4 |
-18% |
45.7 |
Operating profit, Asset Management, MEUR |
31.7 |
38.4 |
-17% |
10.5 |
12.1 |
-14% |
45.9 |
Operating profit, Corporate Finance, MEUR |
-0.9 |
1.5 |
-158% |
-0.2 |
0.5 |
-140% |
1.7 |
Operating profit, Investments, MEUR |
0.4 |
1.4 |
-71% |
0.3 |
0.2 |
8% |
0.7 |
Operating profit, Group administration, MEUR |
-1.3 |
-1.9 |
|
-0.4 |
-0.5 |
|
-2.6 |
|
|
|
|
|
|
|
|
Profit for the period, MEUR |
23.8 |
31.4 |
-24% |
8.1 |
9.8 |
-18% |
36.3 |
|
|
|
|
|
|
|
|
Key ratios |
1-9/23 |
1-9/22 |
Change |
7-9/23 |
7-9/22 |
Change |
1-12/22 |
Earnings
per share, EUR |
0.59 |
0.79 |
-25% |
0.20 |
0.24 |
-19% |
0.91 |
Equity
per share, EUR |
1.65 |
1.89 |
-13% |
1.65 |
1.89 |
-13% |
2.02 |
Cost/income ratio, Group, % |
42.6 |
38.4 |
11% |
38.5 |
38.3 |
1% |
41.1 |
|
|
|
|
|
|
|
|
Liquid
assets, MEUR |
22.4 |
31.6 |
-29% |
22.4 |
31.6 |
-29% |
43.8 |
Private
equity and real estate fund investments, MEUR |
17.1 |
18.0 |
-5% |
17.1 |
18.0 |
-5% |
16.8 |
Interest-bearing loans, MEUR |
0.0 |
0.0 |
0% |
0.0 |
0.0 |
0% |
0.0 |
|
|
|
|
|
|
|
|
Assets
under management excluding reporting services, EUR billion |
9.9 |
9.4 |
5% |
9.9 |
9.4 |
5% |
9.7 |
Assets under management, EUR billion |
12.8 |
12.3 |
4% |
12.8 |
12.3 |
4% |
12.6 |
Mikko Koskimies, CEO
The central themes of the third quarter of 2023 continued to be
inflation, economic growth and the interest policies of central
banks. Economic growth in the US remained surprisingly strong, led
especially by the service sector, despite rising interest rates.
However, Europe got more data that interest rate rises would begin
to clearly slow down economic growth. The outlook for economic
growth in China deteriorated and concerns regarding the real estate
sector, in particular, grew. China has not suffered from similar
inflation pressures as Western countries.
The Federal Reserve in the US kept interest rates unchanged in
the third quarter of the year. The European Central Bank (ECB), on
the other hand, kept raising interest rates and the deposit rate
rose by 0.25 per cent to 4.0 per cent. In their comments, both
central banks emphasised that future attention would be on economic
data which determines whether further interest rate hikes are
required.
The atmosphere in stock exchanges varied according to economic
data and ensuing expectations of interest rate increases. For the
return of the equities market as a whole, the third quarter of the
year was slightly negative with the exception of Japan. Since the
beginning of 2023 the best returns have come from the US, where the
euro-denominated return of the S&P 500 Index was 13.6 per cent.
European shares returned 8.8 per cent since the start of the year,
whereas the return in emerging markets remained sluggish due to
problems in China, for instance, with a return of 2.6 per cent. The
return of the Finnish market was as much as -6.6 per cent in the
negative, on the other hand.
Long interest rates began to climb when the ECB further raised
its rates the third quarter of the year, and both central banks
communicated that interest rates could stay high for a fairly long
time. As a result, the yield of the Euro Government Bond Index
remained 0.4 per cent in the negative, measured from the beginning
of 2023. From the start of the year, Investment Grade corporate
loans gave an index return of 2.3 per cent, High Yield loans gave a
6.2 per cent return and emerging market euro-hedged corporate loans
a +0.0 per cent return.
eQ’s profit for the period fell
eQ’s profit for the period fell in the challenging operating
environment. The net revenue of the Group during the period under
review was EUR 52.3 million and the operating profit was EUR 30.0
million. Operating profit fell by 24 per cent from the previous
year.
eQ Asset Management’s performance fees
declined
The management fees of eQ Asset Management grew by 2 per cent
despite the weak operating environment. Performance fees, on the
other hand, fell by 71 per cent to EUR 3.9 million from last year’s
EUR 13.3 million. During the period under review, the net revenue
of the Asset Management segment fell by 14 per cent to EUR 50.3
million. The operating profit of the period fell by 17 per cent to
EUR 31.7 million. The assets managed by eQ Asset Management grew by
2 per cent to EUR 12.8 billion during the period under review.
As for traditional investments, the returns of client portfolios
were positive in the review period in line with the market. Of the
funds that eQ manages itself, as much as 85 per cent surpassed
their benchmark indices, and during a three-year period the
corresponding figure was also 85 per cent. The returns of the
discretionary asset management portfolios were also positive in the
first nine months in line with the market. The returns of private
equity funds were slightly positive as well. The returns of the
real estate funds were slightly negative for the first time, on the
other hand, due to the increase of the yields resulting from the
strong increase in the interest rate level.
As for sales, the year 2023 has been good in private equity
asset management. In 2023, private equity assets are raised to the
eQ PE XV US fund, which makes investments in Northern America. In
the fourth closing, which took place in September, its size already
grew to USD 277 million.
Advium had a quiet operating environment
Advium’s net revenue during the period under review was EUR 1.2
million (EUR 4.3 million) and the operating profit EUR -0.9 million
(EUR 1.5 million).
During the year, the value of corporate acquisitions fell
clearly from the year before globally. The value of real estate
transactions in Finland was EUR 2.1 billion, which is about 70 per
cent less than the year before. However, activity in the real
estate market has increased somewhat in spite of uncertainties
relating to valuation levels.
During the period under review, Advium acted as advisor in two
assignments: Advium acted as advisor in Otava’s mandatory public
offer for shares in Alma Media Corporation. In addition, Advium
represented the global fund manager Schroders which sold an office
building in central Turku to the Niamin Core Plus II fund.
The operating profit of Investments fell
The operating profit of the Investments segment was EUR 0.4
million (EUR 1.4 million) and the net cash flow was EUR 0.2 million
(EUR 2.3 million). The balance sheet value of the private equity
and real estate fund investments was EUR 17.1 million at the end of
the period (EUR 16.8 million on 31 Dec. 2022). At the beginning of
the year, eQ Plc made a USD 1 million investment commitment in the
eQ PE XV US Fund.
Outlook
As for sales, the year 2023 has been good in private equity
asset management. In September 2023, the eQ PE XV US private equity
fund grew to USD 277 million in its fourth closing. This
strengthens our view that demand will continue to be strong among
investors, above all for private equity investment products. The
returns of real estate funds are linked to the development of
yields. Due to the rise of the yields, no performance fee is
expected to accrue from the real estate funds from the year 2023.
The performance fees of private equity funds will, on the other
hand, be at the same level due to the catch up accrual.
Consequently, we specify our outlook and estimate the net
revenue of the Asset Management segment in 2023 to be approximately
EUR 67 million and the operating profit around EUR 41–42 million.
In accordance with our disclosure policy, we do not issue profit
guidance for the Corporate Finance and Investments segments. The
results of these segments are highly dependent on factors that are
not dependent on the company. Therefore, their operating profits
may vary considerably and are difficult to foresee.
***
eQ’s interim report 1 January to 30 September 2023 is enclosed
to this release and it is also available on the company website at
www.eQ.fi.
eQ Plc
Additional information: Mikko Koskimies, CEO,
tel. +358 9 6817 8799Antti Lyytikäinen, CFO, tel. +358 9 6817
8741
Distribution: Nasdaq Helsinki, www.eQ.fi,
media
eQ Group is a group of companies that concentrates on 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
private individuals. The assets managed by the Group total
approximately EUR 12.8 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.
- eQ Plc Interim Report Q3 2023
Eq Oyj (LSE:0DK7)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Eq Oyj (LSE:0DK7)
Gráfica de Acción Histórica
De May 2023 a May 2024