Kojamo plc's Half-Year Financial Report 1 January–30 June 2020

Unless otherwise stated, the comparison figures in brackets refer to the corresponding period of the previous year. The figures in this Half-Year Financial Report have not been audited.

All statements made in this report regarding the company or its business are based on the views of the management, and the sections addressing the general macro-economic or industry situation are based on third-party information.

If there are differences between different language versions of the Half-Year Financial Report, the Finnish version is the official one.

KOJAMO PLC'S HALF-YEAR FINANCIAL REPORT 1 JANUARY–30 JUNE 2020

PROFITABLE GROWTH, NEARLY 2,400 APARTMENTS UNDER CONSTRUCTION

SUMMARY OF APRIL–JUNE 2020

Total revenue increased by 1.9 per cent to EUR 94.8 (93.1) million.
Net rental income increased by 3.1 per cent, totalling EUR 68.9 (66.8) million. Net rental income represented 72.7 (71.8) per cent of revenue.
Profit before taxes was EUR 73.5 (85.9) million. The profit includes EUR 26.2 (42.2) million in net gain on the valuation of investment properties at fair value and EUR -0.6 (0.0) million in profits and losses from the sale of investment properties. Earnings per share was EUR 0.24 (0.27).
Funds From Operations (FFO) increased by 4.9 per cent and amounted to EUR 42.1 (40.1) million.
Gross investments totalled EUR 116.9 (58.6) million, representing 123.3 (62.9) per cent of total revenue.

SUMMARY OF JANUARY–JUNE 2020

Total revenue increased by 3.2 per cent to EUR 190.5 (184.6) million.
Net rental income increased by 6.2 per cent, totalling EUR 124.9 (117.7) million. Net rental income represented 65.6 (63.8) per cent of revenue.
Profit before taxes was EUR 125.2 (124.8) million. The profit includes EUR 48.2 (52.6) million in net gain on the valuation of investment properties at fair value and EUR -0.7 (0.0) million in profits and losses from the sale of investment properties. Earnings per share was EUR 0.40 (0.40).
Funds From Operations (FFO) increased by 7.6 per cent and amounted to EUR 71.5 (66.4) million.
The fair value of investment properties was EUR 6.5 (5.3) billion at the end of the review period, including EUR 2.4 (23.7) million in investment properties held for sale.
The financial occupancy rate decreased year-on-year and stood at 96.3 (96.9) per cent.
Gross investments totalled EUR 179.0 (96.6) million, representing 94.0 (52.3) per cent of total revenue.

Equity per share was EUR 12.53 (9.55) and return on equity was 6.5 (8.5) per cent. Return on investment was 5.1 (6.2) per cent.
At the end of the review period, there were 2,380 (1,329) Lumo apartments under construction.
Kojamo specifies its outlook for 2020.

Kojamo owned 35,474 (35,194) rental apartments at the end of the review period. Since June of the previous year, 206 (167) apartments have been acquired, 634 (952) have been completed, 534 (100) have been sold and -26 (3) have been demolished or altered.

EFFECTS OF THE COVID-19 PANDEMIC ON KOJAMO

Kojamo takes the coronavirus seriously and is committed to looking after the health and well-being of the Group's employees, customers and partners. Kojamo monitors the recommendations issued by the authorities and complies with them. The pandemic did not have a significant impact on the Group's profit, balance sheet or cash flow during the review period.

The Group's day-to-day operations have continued normally in spite of the exceptional circumstances. The systems used at Kojamo enable remote work, and employees worked remotely, for the most part, from 16 March to 31 July 2020. The transition to remote work went smoothly and did not cause any disruptions to services. All of Kojamo's development projects have progressed as planned in spite of the pandemic.

Lumo Home Centres throughout Finland are currently closed, but customer service operates via digital channels and by phone. The My Lumo online service offered to residents enables effective communication with residents regarding exceptional arrangements. Thanks to the Lumo webstore, apartment rental operations have continued almost as normal, and customers can rent an apartment without physical contact by taking advantage of safe virtual tours of apartments. Non-urgent maintenance and repair visits have been postponed to ensure the safety of residents. Restrictions have been introduced on the use of shared facilities, such as saunas and club rooms. Kojamo offers flexibility to residents with regard to rent payment.

The pandemic has had an impact on the housing market and the operating environment, and the supply of rental apartments has increased temporarily in the market. Due to the restrictions on travel, apartments intended for short-term rentals have been switched to long-term leases. Workrelated immigration has stopped for the time being and students, for example, have temporarily moved in with their parents, while foreign students have returned to their home countries for now. Nevertheless, Kojamo expects that the impacts of the pandemic will be short-lived and urbanisation will continue.

Kojamo's financial position and liquidity are good. At the end of the review period, Kojamo's cash and cash equivalents stood at EUR 449.2 (139.1) million and liquid financial assets at EUR 146.3 (127.4) million. The Group also had EUR 300 million in unused credit limits. Kojamo has taken measures to ensure its financing during the COVID-19 pandemic, and the Group's diverse financing structure supports this.

OUTLOOK FOR KOJAMO IN 2020 (specified)

Kojamo estimates that in 2020, the Group's total revenue will increase by 2–5 per cent year-onyear (previously 2–6 per cent). In addition, the company estimates that the Group's FFO for 2020 will amount to between EUR 146–158 million, excluding non-recurring costs.

The outlook takes into account the effects of the completed housing divestments and acquisitions, the estimated occupancy rate and rises in rents, as well as the number of apartments to be completed. The outlook is based on the management's assessment of total revenue, net rental income, administrative expenses, financial expenses, taxes to be paid and new development to be completed, as well as the management's view on future developments in the operating environment.

Additionally, the outlook is based on strong demand sustained by migration, which will increase Like-for-Like rental income. The management can influence total revenue and FFO through the company's business operations. In contrast, the management has no influence over market trends, the regulatory environment or the competitive landscape.

Effects of the COVID-19 pandemic on Kojamo's outlook

In spite of the pandemic, Kojamo's management expects the Group's operating activities to continue undisrupted for the most part. The webstore enables the renting of apartments to continue almost as normal. The pandemic has not led to an increase in the Group's rental receivables or credit losses, and they are not expected to grow significantly in the near future. The development of rental receivables and credit losses is actively monitored. Efforts are made to prevent increases in rental receivables through active resident advisory services as well as payment plans and arrangements agreed on with customers.

Kojamo's management estimates that the demand for rental apartments will remain strong going forward. The restrictions implemented in response to the pandemic may, in the short term, affect people's willingness to relocate as well as prevent both migration within the country and work-related immigration. Economic uncertainty may influence people's willingness to take housing loans, which may increase the popularity of rental housing. On the other hand, supply in the rental housing market has increased as apartments intended for short-term rentals have moved to the longterm leasing market following restrictions on travel.

Kojamo will continue to implement its growth strategy. All development projects have progressed as planned thus far. However, challenges potentially faced by construction companies due to the pandemic may result in delays to Kojamo's projects. In Kojamo's construction contracts, the construction company takes on the overall responsibility for the entire construction project and payments are made in accordance with the degree of completion. Kojamo's management estimates that potential delays in projects will not have a material impact on the Group's total revenue and FFO for the year.

Kojamo's financial position and liquidity are good. Thanks to the Group's diverse financing structure, Kojamo has been able to carry out financing arrangements without disruptions.

KEY FIGURES

			4–6/2020 4–6/2019 Change %			1–6/2020 1–6/2019 Change %	2019
Total revenue, M€	94.8	93.1	1.9	190.5	184.6	3.2	375.3
Net rental income, M€ *)	68.9	66.8	3.1	124.9	117.7	6.2	247.3
Net rental income margin, % *)	72.7	71.8		65.6	63.8		65.9
Profit before taxes, M€ *)	73.5	85.9	-14.4	125.2	124.8	0.3	1,031.3
EBITDA, M€ *)	85.2	99.2	-14.0	153.6	151.5	1.4	1,083.1
EBITDA margin, % *)	89.9	106.5		80.6	82.1		288.6
Adjusted EBITDA, M€ *)	59.6	56.9	4.9	106.1	98.8	7.3	210.3
Adjusted EBITDA margin, % *)	62.9	61.1		55.7	53.6		56.0
Funds From Operations (FFO), M€ *)	42.1	40.1	4.9	71.5	66.4	7.6	140.7
FFO margin, % *)	44.4	43.1		37.5	36.0		37.5
FFO excluding non-recurring costs, M€ *)	42.1	40.1	4.9	71.5	66.4	7.6	140.7
Investment properties, M€ 1)				6,486.4	5,303.2	22.3	6,260.8
Financial occupancy rate, %				96.3	96.9		97.2
Interest-bearing liabilities, M€ 2)*)				3,212.8	2,616.1	22.8	2,674.2
Return on equity, % (ROE) *)				6.5	8.5		30.3
Return on investment, % (ROI) *)				5.1	6.2		20.5
Equity ratio, % *)				43.3	41.9		46.9
Loan to Value (LTV), % 3) *)				42.6	46.9		40.5
EPRA NAV, M€				3,861.2	2,936.0	31.5	3,828.0
Gross investments, M€ *)	116.9	58.6	99.6	179.0	96.6	85.3	259.9
Number of personnel, end of period				340	329		296
Key figures per share, €			4–6/2020 4–6/2019 Change %			1–6/2020 1–6/2019 Change %	2019
FFO per share *)	0.17	0.16	6.3	0.29	0.27	7.4	0.57
Earnings per share	0.24	0.27	-11.1	0.40	0.40	0.0	3.34

*) In accordance with the guidelines issued by the European Securities and Markets Authority (ESMA), Kojamo provides an account of the Alternative Performance Measures used by the Group in the section Key figures, the formulas used in their calculation, and reconciliation calculations in accordance with the ESMA guidelines of the Half-Year Financial Report.

EPRA NAV per share 15.62 11.88 31.5 15.49 Equity per share 12.53 9.55 31.2 12.51

1) Including items held for sale.

2) Excluding liabilities related to non-current assets held for sale.

3) Excluding non-current assets held for sale or liabilities related to non-current assets held for sale.

CEO'S REVIEW

The first half of the year went well in spite of the COVID-19 pandemic. Our total revenue, net rental income and FFO increased. The fair value of investment properties was EUR 6.5 billion.

The impacts of the COVID-19 pandemic on our operations have been minor and we do not expect them to have an impact on our guidance for 2020. The pandemic has, however, had an impact on the housing market. Work-related immigration has stopped for the time being, students have temporarily moved in with their parents and foreign students have returned to their home countries. Supply has increased due to new development projects completed during the review period, and the restrictions on travel have resulted in apartments intended for short-term rentals moving to the long-term housing market. Our financial occupancy rate is at a good level in spite of the growing supply of rental housing. We expect the impacts of the pandemic to be short-lived. In the long term, urbanisation will continue even stronger after the crisis.

Housing production in the market has slowed down significantly as a result of the pandemic, but the demand for new apartments will continue to grow due to urbanisation. The situation has presented us with opportunities in our property development operations, and during the first half of the year we have announced the start of several new projects, such as the start of construction of the Lumo One high-rise building to be built next to the Redi shopping centre. We now have a recordhigh 2,380 apartments under construction. When you add the apartments included in our existing cooperation agreements for which construction is yet to begin, we will build some 3,600 apartments in total during the next four years. Kojamo is one of the largest companies investing in Finland, and we are in a good position to continue our profitable growth going forward.

We strengthened our financing position early on in the year to prepare for the potential consequences of the pandemic, supported by our diverse financing structure. We also secured the financing for our development projects ahead of time by carrying out a successful senior unsecured notes issue of EUR 500 million in May under our EMTN programme. Established in March, the programme covers our financing needs for the current strategy period as well as the refinancing of bonds that will mature thereafter.

We have also taken measures to pursue renewal through digital solutions. In the early summer, we completed our Digital Road Map 2023, which specifies development actions that support the execution of Kojamo's strategy. We already have a strong frontrunner position with respect to the use of our webstore, for example, and we will continue to strengthen our position through the digital transformation of the complete customer path. We have also made progress in our sustainability efforts. As part of the development of our sustainability programme, we carried out a materiality analysis of sustainability in May–June to ensure that our sustainability efforts are focused on the sustainability themes that are the most material with regard to our strategy, business operations and stakeholders. During the summer, we have also participated in the Global Real Estate Sustainability Benchmark (GRESB) survey for the first time. We will tell more about the Digital Road Map and we will publish our sustainability programme during 2020.

We are in a good position to continue our operations. Much of the credit for this belongs to our employees, who have done an excellent job of maintaining our operating activities during the exceptional circumstances.

Jani Nieminen CEO

OPERATING ENVIRONMENT

General operating environment

As Kojamo operates in the residential real estate sector, the company is affected particularly by urbanisation as well as the situation in the residential property market and development in Finnish growth centres. The company is also affected by macroeconomic factors, such as economic growth, employment, disposable income, inflation and population growth.

OPERATING ENVIRONMENT KEY FIGURES	2021e	2020e
GDP growth forecast, %	2.5	-6.0
Unemployment, %	9.0	8.5
Inflation, %	1.1	0.3

Source: Ministry of Finance, Economic survey 6/2020

According to the forecast issued by the Ministry of Finance, there is a great deal of uncertainty in the economic outlook. The restrictions introduced to prevent the spread of the COVID-19 pandemic will significantly contract the Finnish economy this year, but the restrictions began to be lifted during the early part of the summer. According to the forecast, the economy will start recovering during the second half of the year, but the recovery will be slow due to the increased uncertainty. The key risks are a potential second wave of the COVID-19 pandemic and a strong contraction in export demand. The recovery of investments is also weakened by the decrease in residential construction. The decline in the employment rate will steepen as companies have adjusted their labour costs through redundancies and temporary layoffs. The significant contraction of consumer demand and uncertainty regarding the future development of the economy will reduce inflation. (Source: Ministry of Finance, Economic survey 6/2020)

Industry operating environment

INDUSTRY KEY FIGURES	2020e	2019
Residential start-ups, units	28,000	38,700
Building permits granted, annual, units 1)	35,479	40,281
Construction costs, change %	n/a	1.0
Prices of old apartments in the whole country, change, %	1.0	1.2
Prices of old apartments in the capital region, change, %	1.0–3.1	0.5–3.4
Rents of non-subsidised apartments in the whole country, change, %	1.6	1.4
Rents of non-subsidised apartments in the capital region, change, %	1.6–1.8	1.6–2.0

1) Rolling 12 months, May 2020

Sources: Statistics Finland, Building and dwelling production 2020, May; Pellervo Economic Research PTT, Housing market 2020 forecast. Confederation of Finnish Construction Industries, Business Survey Spring 2020.

According to the business survey of the Confederation of Finnish Construction Industries, the slowing down of housing production will be increased by the COVID-19 pandemic. According to a survey conducted by the Confederation of Finnish Construction Industries, the current estimate of housing start-ups in 2020 among housing developers is 25 per cent lower than the corresponding estimate at the beginning of the year. Housing production has declined since the spring and it is predicted to be below the annual demand for housing in 2020 and 2021. According to Pellervo Economic Research, increased economic uncertainty makes people postpone their plans to buy a

home. When the economy dips, many people earn lower incomes due to layoffs and redundancies. They may be unwilling to take a housing loan in such circumstances.

Effects of urbanisation

	Population growth forecast	Share of rental household-dwelling units
Area	2019–2030	2010	2018
Helsinki	11.7%	47.1%	49.3%
Capital region 1)	13.0%	41.9%	44.9%
Helsinki region 2)	10.5%	37.7%	40.6%
Jyväskylä	7.1%	40.2%	43.8%
Kuopio	2.9%	36.5%	39.6%
Lahti	0.3%	37.3%	40.4%
Oulu	7.3%	36.7%	40.7%
Tampere	11.7%	42.2%	48.2%
Turku	8.5%	43.0%	48.3%
Other areas	-6.4%	23.8%	25.3%

1) Helsinki, Espoo, Kauniainen, Vantaa

2) Capital region, Hyvinkää, Järvenpää, Kerava, Kirkkonummi, Mäntsälä, Nurmijärvi, Pornainen, Porvoo, Riihimäki, Sipoo, Tuusula, Vihti

Sources: Statistics Finland, Dwellings and Housing Conditions 2018, Population forecast 2019

According to the business survey of the Confederation of Finnish Construction Industries, urbanisation will not stop and the demand for apartments will continue after the crisis. According to a report published by VTT Technical Research Centre of Finland in June on the demand for housing production in 2020–2040, a minimum of 30,000 new apartments should be built annually in Finland in spite of the stagnation of population growth. The demand for new apartments is strongly focused on the major urban areas and especially the Helsinki Metropolitan Area. If young adults begin to move out from the family home earlier and the number of single-adult households continues to grow, the annual need for new apartments would be 35,000.

Households living in rental homes outnumber those living in owner-occupied housing in Helsinki. The use of rental housing will also grow to exceed the use of owner-occupied housing in Tampere and Turku in the near future. This is a strong sign of the acceleration of urbanisation on the one hand and the change in housing preferences on the other hand. For younger generations, owning a home is not as significant as it was for previous generations. Owning a home is also no longer seen as the only way to accumulate wealth. Instead, people are increasingly attracted by the freedom provided by rental housing. This will support the development of the rental housing market for a long time to come.

BUSINESS OPERATIONS

Kojamo is the largest¹ private residential real estate company in Finland measured by the fair value of investment properties. Kojamo offers rental apartments and housing services for tenants primarily in Finnish growth centres² . At the end of the review period, Kojamo's property portfolio comprised 35,474 (35,194) rental apartments. The fair value of Kojamo's investment properties amounted to EUR 6.5 (5.3) billion at the end of the period, including EUR 2.4 (23.7) million in

¹⁾ KTI Property Information Ltd: The Finnish property market 2019. Investment properties include apartments, ongoing projects, plots owned by the company and ownership of certain assets through shares, such as parking spaces. Fair value represents the fair value of investment properties and includes investment properties classified as Non-current assets held for sale. 2) Helsinki, Tampere, Turku, Kuopio and Lahti regions and the cities of Oulu and Jyväskylä.

investment properties held for sale. Investment properties include completed apartments as well as development projects and land areas.

Measured at fair value on 30 June 2020, 98.8 per cent of Kojamo's rental apartments were located in the seven largest Finnish growth centres, 87.5 per cent in the Helsinki, Tampere and Turku regions and 73.4 per cent in the Helsinki region.

FINANCIAL DEVELOPMENT APRIL–JUNE 2020

TOTAL REVENUE

Kojamo's total revenue increased to EUR 94.8 (93.1) million in April–June. Total revenue is generated entirely by income from rental operations.

The increase in total revenue was mainly due to the completion of rental apartments in 2019 and the Like-for-Like (LfL) growth of rental income. Like-for-Like growth is defined as the change of rental income for properties owned for two consecutive years in the past 12 months compared to the previous 12-month period.

RESULT AND PROFITABILITY

Net rental income grew to EUR 68.9 (66.8) million, representing 72.7 (71.8) per cent of revenue. The increase in net rental income was mainly due to the completion of rental apartments in 2019, the Like-for-Like (LfL) growth of rental income and maintenance costs being lower than in the comparison period.

Profit before taxes was EUR 73.5 (85.9) million. The profit includes EUR 26.2 (42.2) million in net gain on the valuation of investment properties at fair value and EUR -0.6 (0.0) million in profits and losses from the sale of investment properties. Profit before taxes and excluding the net valuation gain on the fair value assessment of investment properties increased by EUR 3.6 million.

Financial income and expenses totalled EUR -11.5 (-13.0) million. Financial income and expenses include EUR 0.5 (-0.9) million in unrealised changes in the fair value of derivatives.

Funds From Operations (FFO) amounted to EUR 42.1 (40.1) million. The increase in FFO during the review period was attributable to the improved net rental income.

Kojamo has assessed the impact of the COVID-19 pandemic on the Group's result and determined that the pandemic did not have a significant impact during the review period.

FINANCIAL DEVELOPMENT JANUARY–JUNE 2020

TOTAL REVENUE

Kojamo's total revenue increased to EUR 190.5 (184.6) million. Total revenue is generated entirely by income from rental operations.

RESULT AND PROFITABILITY

Net rental income grew to EUR 124.9 (117.7) million, representing 65.6 (63.8) per cent of revenue. The increase in net rental income was mainly due to the completion of rental apartments in 2019,

the Like-for-Like (LfL) growth of rental income and maintenance costs being lower than in the comparison period.

Profit before taxes was EUR 125.2 (124.8) million. The profit includes EUR 48.2 (52.6) million in net gain on the valuation of investment properties at fair value and EUR -0.7 (0.0) million in profits and losses from the sale of investment properties. Profit before taxes and excluding the net valuation gain on the fair value assessment of investment properties increased by EUR 4.7 million.

Financial income and expenses totalled EUR -27.8 (-26.1) million. Financial income and expenses include EUR -1.2 (-2.5) million in unrealised changes in the fair value of derivatives. Financial income and expenses increased by EUR 1.8 million year-on-year, mainly due to higher debt and valuation gain and losses on investments of EUR -0.7 (0.9) million.

Funds From Operations (FFO) amounted to EUR 71.5 (66.4) million. The increase in FFO during the review period was attributable to the improved net rental income.

Kojamo has assessed the impact of the COVID-19 pandemic on the Group's result and determined that the pandemic did not have a significant impact during the review period.

BALANCE SHEET, CASH FLOW AND FINANCING

	30 Jun 2020	30 Jun 2019	31 Dec 2019
Balance sheet total, M€	7,149.2	5,638.9	6,590.4
Equity, M€	3,095.8	2,360.1	3,090.6
Equity per share, €	12.53	9.55	12.51
Equity ratio, %	43.3	41.9	46.9
Return on equity, % (ROE)	6.5	8.5	30.3
Return on investment, % (ROI)	5.1	6.2	20.5
Interest-bearing liabilities, M€	3,212.8	2,616.1	2,674.2
Loan to Value (LTV), %	42.6	46.9	40.5
Average interest rate of loan portfolio, % *)	1.7	1.8	1.8
Average loan maturity, years	4.8	5.1	4.7
Cash and cash equivalents, M€	449.2	139.1	137.3

*) Includes interest rate derivatives

Kojamo's liquidity was very good during the review period. At the end of the period, Kojamo's cash and cash equivalents stood at EUR 449.2 (139.1) million and liquid financial assets at EUR 146.3 (127.4) million.

EUR 109.9 (50.0) million of the EUR 250 million commercial paper programme was in use at the end of the review period. In addition, Kojamo has committed credit facilities of EUR 300 million and an uncommitted credit facility of EUR 5 million, which were unused at the end of the period.

In March, Kojamo plc and OP Corporate Bank signed an unsecured loan agreement of EUR 75 million. The 5.5-year loan will be used for the Group's general financing purposes. The loan was withdrawn in April.

In April, Kojamo plc and Danske Bank A/S, Finnish branch signed an unsecured loan agreement of EUR 50 million, with a maturity of two years with a one-year extension option. The loan was withdrawn in April.

In April, Lumo Kodit Oy and the European Investment Bank (EIB) signed an unsecured loan agreement of EUR 34 million. The financing is the third part of the long-term financing of EUR 204 million granted by the EIB, which will be used to fund the construction of nearly zero-energy buildings. At the end of the review period, the loan was still unwithdrawn.

In May, Kojamo issued EUR 500 million senior unsecured notes under the EUR 2.5 billion EMTN (Euro Medium Term Notes) programme established in March. The maturity of the Notes is 7 years and the maturity date is 27 May 2027. The Notes carry a fixed annual coupon of 1.875 per cent.

Kojamo has assessed the impact of the COVID-19 pandemic on the Group's balance sheet and cash flow and determined that the pandemic did not have a significant impact on company's operations during the review period.

REAL ESTATE PROPERTY AND FAIR VALUE

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Fair value of investment properties on 1 Jan	6,260.8	5,093.2	5,093.2
Acquisition of investment properties ) *)	168.4	145.7	288.6
Modernisation investments	10.7	11.5	30.7
Disposals of investment properties	-3.3	-0.6	-26.0
Capitalised borrowing costs	1.5	0.9	1.9
Profit/loss on fair value of investment properties**)	48.2	52.6	872.4
Fair value of investment properties at the end of the
period	6,486.4	5,303.2	6,260.8

The value of investment properties includes EUR 2.4 (23.7) million in investment properties held for sale.

*) Includes the existing apartment stock and the acquisition costs of new projects under construction.

**) Includes IFRS 16 Leases

**Right-of-use assets recognised in investment properties *)**

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Fair value 1 Jan	60.2
Increases and decreases	1.6	61.5	61.3
Profit/loss on fair value of investment properties	-0.5	-0.5	-1.1
Fair value at the end of the period	61.3	60.9	60.2

*) IFRS 16 Leases

Kojamo owned a total of 35,474 (35,194) rental apartments at the end of the review period. Measured at fair value, 98.8 per cent of the portfolio was located in the seven largest Finnish growth centres.

Kojamo shifted from a transaction-based valuation technique to a yield-based valuation technique in the valuation of investment properties from 31 December 2019 onwards. This represents a change in accounting estimates and it was not applied retrospectively. The effect of the change on the fair value of investment properties was approximately EUR 800 million. The yield-based valuation technique makes Kojamo more comparable with its relevant international peer group.

The fair value of Kojamo's investment properties is determined quarterly on the basis of the company's own evaluation. An external expert gives a quarterly statement on the valuation of Kojamo's investment properties. The latest valuation statement was issued on 30 June 2020. The criteria for determining fair value are presented in the Notes to the Financial Statements 2019.

At the end of the review period, the plot and real estate development reserve held by the Group totalled about 192,000 floor sq.m. (195,000 floor sq.m.). The fair value of the plot and real estate development reserve (including the Metropolia properties) was EUR 155 (165) million at the end of the review period.

RENTAL HOUSING

Lumo apartments	30 Jun 2020	30 Jun 2019	31 Dec 2019
Number of apartments	35,048	33,539	34,677
Average rent, €/m2 /month	16.31	16.04	16.13
Average rent, €/m2 /month, yearly average	16.27	15.92	15.96

At the end of the review period, Kojamo also had 426 (1,655) rental apartments under the VVO brand.

Kojamo responds to the trends of urbanisation, digitalisation and communality in accordance with its strategy, providing its customers with apartments with good locations and services that make daily life easier, increase the attractiveness of housing and improve the sense of community. Our aim is to develop a networked service platform that will enable agile innovation implementation in cooperation with other operators. Kojamo's properties serve as a platform to which the new services can easily be connected.

The number of tenancy agreements signed via the Lumo webstore continued to increase sharply during the review period. By the end of the review period, more than 18,000 tenancy agreements had been signed on the Lumo webstore. All Lumo rental apartments that become vacant are available for rent on the Lumo webstore, where customers can choose their preferred apartment.

Rental housing key figures	1–6/2020	1-6/2019	1–12/2019
Financial occupancy rate, %	96.3	96.9	97.2
Tenant turnover rate, excluding internal turnover, %	16.2	15.1	29.6
Like-for-Like rental income growth, % *)	2.4	2.8	2.7
Rent receivables in proportion to revenue, %	1.3	1.4	1.3

*) Change of rental income for properties owned for two consecutive years in the past 12 months compared to the previous 12-month period.

The financial occupancy rate remained nearly at the previous year's level in spite of increased turnover. At the end of the period, 286 (103) apartments were vacant due to renovations.

Area	Number of apartments, units	Number of commercial premises and other leased prem ises, units	Fair value, M€	Fair value, EUR thou sand/unit	Fair value, €/sq.m.	Financial occupancy rate, %3)
Helsinki region	20,719	315	4,395	209	3,713	96.6
Tampere region	4,934	126	623	123	2,385	96.1
Turku region	1,904	17	216	113	1,969	97.4
Oulu	2,220	19	185	82	1,567	96.8
Jyväskylä	1,771	2	185	105	1,989	92.3
Kuopio region	1,674	47	161	94	1,758	95.1
Lahti region	1,436	4	148	103	1,832	95.8
Other	816	20	71	85	1,515	95.0
Total	35,474	550	5,9851)	166	3,015	96.3
Other			5022)
Total portfolio	35,474	550	6,486

Kojamo's property portfolio by region as at 30 June 2020

1)The figures reflect income-generating portfolio assets, which excludes ongoing projects, plots owned by the company and ownership of certain assets through shares.

2) Fair value of ongoing projects, plots owned by the company and ownership of certain assets through shares and IFRS 16 right-of-use assets.

3) Financial occupancy rate does not include commercial premises and other leased premises.

INVESTMENTS, DIVESTMENTS AND REAL ESTATE DEVELOPMENT

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Acquisition of investment properties *)	166.8	84.2	227.3
Modernisation investments	10.7	11.5	30.7
Capitalised borrowing costs	1.5	0.9	1.9
Total	179.0	96.6	259.9
Repair expenses, M€	15.4	15.2	36.9

*) Not including IFRS 16 Leases

Number of apartments	30 Jun 2020	30 Jun 2019	31 Dec 2019
Apartments at the start of the review period	35,272	34,713	34,713
Divestments	-18	-4	-520
Acquisitions	45	99	260
Completed	201	383	816
Demolished or altered	-26	3	3
Apartments at the end of the review period	35,474	35,194	35,272

Started during the review period	1,265	648	1,066
Under construction at the end of the period	2,380	1,329	1,316
Preliminary agreements for new construction	1,252	580	930

Kojamo estimates that investments in development projects will amount to approximately EUR 320–370 million in 2020.

On 27 January, Kojamo signed an agreement with Lehto on the construction of 106 apartments in Kilo, Espoo. On 11 February, Kojamo signed an agreement with Hausia on the construction of 45 apartments in Espoon keskus. The agreement with Hausia is part of the cooperation agreement signed by Kojamo and Hausia in August 2019 regarding the development of 378 apartments in Espoo. On 11 March, Kojamo signed an agreement with Skanska on the construction of 47 apartments in Leinelä, Vantaa. On 22 April, Kojamo signed an agreement with Hausia on the construction of 59 apartments in Matinkylä, Espoo. On 13 May, Kojamo signed an agreement with Peab on the construction of 137 apartments in Vermonniitty, Espoo. On 20 May, Kojamo signed an agreement with Rakennuspetäjä on the construction of 72 apartments in Suurpelto, Espoo. On 30 June, Kojamo signed an agreement with SRV on the construction of 95 apartments in Matinkylä, Espoo. The agreement is part of the cooperation agreement signed by Kojamo and SRV in August 2019 regarding the development of 527 apartments in Helsinki, Espoo, Vantaa and Kerava.

On 2 March, Kojamo announced the signing of a cooperation agreement with SRV on the construction of 676 Lumo rental apartments. As part of the agreement, Kojamo signed an agreement with SRV on 21 April on the construction of 291 apartments in Helsinki's Kalasatama district, in the Lumo One highrise building next to the Redi shopping centre. On 30 June, Kojamo also announced it had signed a cooperation agreement with Lehto on the construction of 392 apartments. The completion of individual projects specified in the agreements is subject to fulfilling the customary terms and conditions.

On 30 June, Kojamo also announced it had acquired 45 apartments in Vuosaari, Helsinki.

Of the apartments under construction, 2,380 (1,127) are located in the Helsinki region and 0 (202) in other Finnish growth centres. A total of 201 (383) apartments were completed during the review period.

Modernisation investments during the review period amounted to EUR 10.7 (11.5) million and repair costs totalled EUR 15.4 (15.2) million.

Binding acquisition agreements for new development, M€			30 Jun 2020	30 Jun 2019		31 Dec 2019
Actual costs incurred from new construction in progress			282.1	115.5		166.8
Cost of completing new construction in progress			304.7	145.1		148.2
Total			586.8	260.6		314.9
Plots and real estate development sites owned by the company	M€	30 Jun 2020 1,000 fl.sq.m.	M€	30 Jun 2019 1,000 fl.sq.m.	M€	31 Dec 2019 1,000 fl.sq.m.
Plots	41.5	68	43.2	70	45.9	75
Plots and existing residential building	27.6	43	28.8	44	27.6	42
Conversions	85.5	81	92.5	81	85.5	77
Total 1)	154.6	192	164.5	195	159.0	194

Binding preliminary agreements and provisions for plots and real estate devel opment	M€	30 Jun 2020 1,000 fl.sq.m.	M€	30 Jun 2019 1,000 fl.sq.m.	M€	31 Dec 2019 1,000 fl.sq.m.
Preliminary agreements for new construction 2) Estimate of the share of plots of preliminary	269.5		121.8		208.9
agreements for new development 1) Preliminary agreements and reservations for	45.6	62	17.5	27	32.4	53
plots 1)	36.9	48	49.2	68	42.1	68

1) The management's estimate of the fair value and building rights of the plots.

2) Including plots.

STRATEGIC TARGETS AND ACHIEVEMENTS

Strategic targets 2020–2023	30 Jun 2020	Target 2023
Annual growth of total revenue, %	3.2	4–5
Annual investments, M€	179.0	200–400
FFO/total revenue, %	37.5	> 36
Loan to Value (LTV), %	42.6	< 50
Equity ratio, %	43.3	> 40
Net Promoter Score (NPS)	37	40

Kojamo's objective is to be a stable dividend payer whose annual dividend payment will be at least 60 per cent of FFO, provided that the Group's equity ratio is 40 per cent or more and taking account of the company's financial position.

Digital Road Map 2023

In the early summer, we completed our Digital Road Map 2023, which specifies development actions that support the execution of Kojamo's strategy. Kojamo is recognised as a frontrunner in the use of a webstore in the rental housing market. Going forward, we will strengthen our position through the digital transformation of the urban housing experience and services throughout the customer path. We will support these efforts by using NPS as an indicator of the customer experience. We will take advantage of technology and revise our operating models to achieve operational excellence. The employee experience will be included in our performance indicators in this area. We will also ensure the development of our competencies by developing a culture of being open to experimentation, which will support the development of our anchor product, which is housing, as well as new service products.

SHARES AND SHAREHOLDERS

Issued shares and share capital

Kojamo's share capital on 30 June 2020 was EUR 58,025,136.00 and the number of shares at the end of the review period totalled 247,144,399.

Kojamo has a single series of shares, and each share entitles its holder to one vote in the general meeting of shareholders of the company. There are no voting restrictions related to the shares. The shares have no nominal value. The company shares belong to the book-entry system.

The trading code of the shares is KOJAMO and the ISIN code is FI4000312251.

Trading in the company's share

Kojamo's shares are listed on the official list of Nasdaq Helsinki.

Share price and trading	1 January– 30 June 2020	1 January– 30 June 2019	1 January– 31 December 2019
Lowest price, €	13.64	8.00	8.00
Highest price, €	18.96	13.52	16.48
Average price, €	17.17	10.48	13.48
Closing price, €	18.80	13.12	16.20
Market value of share capital, end of period, M€	4,646.3	3,242.5	4,003.7
Share trading, million units	67.5	15.3	51.1
Share trading of total share stock, %	27.3	6.2	20.7
Share trading, M€	1,158.9	160.1	688.7

In addition to the Nasdaq Helsinki stock exchange, Kojamo shares were traded on other marketplaces, such as Cboe APA, Cboe BXE and Cboe CXE. From 1 January to 30 June 2020, more than 90 million (approx. 12 million) Kojamo shares were traded on alternative marketplaces, corresponding to roughly 60 per cent (approx. 44 per cent) of the total trading volume (Source: 2020: Reuters, 2019: Fidessa).

Own shares

Kojamo did not hold any of its own shares during or at the end of the review period.

Dividend

In accordance with the Board of Directors' proposal, the Annual General Meeting on 12 March 2020 decided that a dividend of EUR 0.34 per share, or EUR 84,029,095.66 in total, be paid for the financial year 2019 and that EUR 304,567,729.26 be retained in unrestricted equity. The dividend payment date was 2 April 2020.

Shareholders

At the end of the review period, the number of registered shareholders was 7,185 (3,875), including nominee-registered shareholders. The proportion of nominee-registered and direct foreign shareholders was 35.5 (26.2) per cent of the company's shares at the end of the review period. The 10 largest shareholders owned in aggregate 56.2 (66.6) per cent of Kojamo's shares at the end of the review period.

The list of Kojamo's shareholders is based on information provided by Euroclear Finland Ltd (formerly the Finnish Central Securities Depository).

The Board of Directors' authorisations

Kojamo's Annual General Meeting on 12 March 2020 authorised the Board of Directors to decide on the repurchase and/or acceptance as pledge of an aggregate maximum of 24,714,439 of the company's own shares according to the proposal of the Board of Directors. The proposed amount of shares corresponds to approximately 10 per cent of all the shares of the company. The authorisation will remain in force until the closing of the next Annual General Meeting, however no longer than until 30 June 2021.

The Board of Directors was also authorised to decide on the issuance of shares and the issuance of special rights entitling to shares as referred to in Chapter 10, Section 1 of the Companies Act according to the proposal of the Board of Directors. The number of shares to be issued on the basis of the authorisation shall not exceed an aggregate maximum of 24,714,439 shares, which corresponds to approximately 10 per cent of all the shares of the company. The authorisation applies to both the issuance of new shares and the conveyance of own shares held by the company. The authorisation will remain in force until the closing of the next Annual General Meeting, however no longer than until 30 June 2021.

Flagging notifications

Flagging notification 24 February 2020

On 24 February 2020, Kojamo received a notification pursuant to Chapter 9, Section 5 of the Securities Market Act from Rakennusliitto ry. The holding of Rakennusliitto ry in Kojamo's shares fell below 5 per cent on 21 February 2020. Following the transaction, Rakennusliitto ry's holdings in Kojamo plc amounted to 12,316,660 shares, corresponding to 4.9835 per cent of Kojamo plc's shares and votes.

Managers' transactions

Managers' transactions at Kojamo in 2020 have been published as stock exchange releases and they are available on the Kojamo website at https://kojamo.fi/en/news.

GOVERNANCE

Annual General Meeting

Kojamo's Annual General Meeting on 12 March 2020 adopted the financial statements and discharged the members of the Board of Directors and the CEO from liability for the financial year 2019. The AGM also elected the members of the Board of Directors and decided on their remuneration. The AGM authorised the Board of Directors to resolve on one or more share issues or the issuance of special rights entitling to shares, as referred to in Chapter 10, Section 1 of the Companies Act. The minutes of the AGM are available at https://www.kojamo.fi/agm.

Board of Directors and auditors

The members of Kojamo's Board of Directors are Mikael Aro (Chairman), Mikko Mursula (Vice-Chairman), Matti Harjuniemi, Anne Leskelä, Minna Metsälä, Heli Puura and Reima Rytsölä. The company's auditor is KPMG Oy Ab, with Authorised Public Accountant Esa Kailiala as the auditor with principal responsibility.

Board committees

Kojamo's Board of Directors has established two permanent committees, an Audit Committee and a Remuneration Committee. Anne Leskelä (Chairman), Matti Harjuniemi, Mikko Mursula and Heli Puura serve in the Audit Committee. Mikael Aro (Chairman), Minna Metsälä and Reima Rytsölä serve in the Remuneration Committee.

A stock exchange release was issued on 10 September 2019 announcing the composition of Kojamo plc's Nomination Board. Kojamo's three largest shareholders nominated the following members to the Shareholders' Nomination Board: Jouko Pölönen, CEO, Ilmarinen Mutual Pension Insurance Company; Risto Murto, CEO, Varma Mutual Pension Insurance Company; and Riku Aalto, President, Finnish Industrial Union. In addition, the Chairman of Kojamo's Board of Directors serves as an expert member of the Nomination Board.

The Shareholders' Nomination Board is a body established by the Annual General Meeting consisting of shareholders, with the task of annually preparing and presenting proposals for the General Meeting concerning the number, composition and Chairman of the Board of Directors, remuneration of the Board of Directors and remuneration of the members of the Board Committees.

CEO

Jani Nieminen, M.Sc. (Tech.), MBA was the CEO during the review period. The CEO's deputy was CFO Erik Hjelt, Licentiate in Laws, eMBA.

Management Team

At the end of the review period, the members of the Management Team were Jani Nieminen, CEO; Erik Hjelt, CFO; Irene Kantor, Marketing and Communications Director; Tiina Kuusisto, Chief Customer Officer; Katri Harra-Salonen, Chief Digital Officer; and Ville Raitio, Chief Investment Officer.

PERSONNEL

At the end of the review period, Kojamo had a total of 340 (329) employees. The average number of personnel during the period was 310 (311). Kojamo employed nearly 50 summer workers in summer 2020.

The salaries and fees paid during the review period totalled EUR 9.1 (8.6) million.

Annual performance bonus and incentive system

Kojamo's employees are included in an annual performance bonus system which is based on the achievement of the company's general targets as well as personal targets.

Kojamo also has a long-term share-based incentive plan for the Group's key personnel. The reward is based on reaching the targets set for Kojamo's key business criteria in relation to the Group's strategic goals. Three performance periods were ongoing at the end of the review period: 2018–2020, 2019–2021, 2020–2022.

On 13 February 2020, Kojamo's Board of Directors resolved on the long-term incentive plan's performance period of 2020–2022. The possible rewards for the performance period are based on the Group's revenue (%) and Funds From Operations (FFO) per share. The rewards to be paid on the basis of the performance period correspond to the value of a maximum total of 102,242 shares including the proportion to be paid in cash.

If the three ongoing earning periods were accrued in full, the maximum bonus would be a sum corresponding to 312,345 Kojamo shares, of which 50 per cent would be paid in Kojamo shares and

50 per cent in cash. More information on the long-term incentive plan is provided in Kojamo's Remuneration Statement for 2019 and Kojamo's website.

SUSTAINABILITY

Corporate responsibility and sustainable development are one of Kojamo's strategic focus areas. Sustainability is integral to Kojamo's operations and corporate culture. Sustainability is part of our DNA and it plays an important role in the work of everyone at Kojamo. This is reflected on various levels of our operations, including our business operations, working conditions and the customer interface. We emphasise responsibility towards customers, our obligations as a contractor as well as clear communication to our shareholders about the Kojamo's corporate and social responsibility efforts and their progress. We are committed to developing new and modern construction solutions, housing services and ecological innovations related to energy-efficient housing solutions. We operate openly and ethically and also require our partners to operate responsibly.

Materiality analysis

We conducted a materiality analysis of sustainability in May–June 2020 as part of the development of our sustainability programme. The materiality analysis helps us ensure that our sustainability efforts are focused on the sustainability themes that are the most material with regard to our strategy, business operations and stakeholders. In the materiality analysis, we identified Kojamo's material sustainability aspects and analysed them based on industry analyses, background analyses, key stakeholder views and an assessment of business impacts as well as impacts on society.

The materiality analysis was conducted in accordance with the requirements of the Global Reporting Initiative (GRI) standards and the EPRA (European Public Real Estate Association) sustainability best practices recommendations. In accordance with the GRI standards, the materiality of the sustainability aspects was assessed based on the extent of the Group's impact on the economy, environment and society as well as the significance of each aspect to the Group's stakeholders.

The key aspects of sustainability defined as part of the materiality analysis were grouped under four main themes: Sustainable urban development, delivering the best customer experience, the most competent personnel and a dynamic place to work, and a responsible corporate citizen. The key sustainability aspects identified in the analysis were as follows: ensuring the safety and comfort of residential areas; mitigating climate change; optimising and continuously improving energy efficiency; promoting the circular economy and material efficiency; leveraging innovative and intelligent solutions to reduce environmental impacts; being a responsible corporate citizen; ensuring the long-term profitability and growth of business; fair and equal treatment of employees; and developing employee competence, leadership and managerial work.

The Management Team approved the results of the materiality analysis in June 2020. The results of the materiality analysis provide the foundation for our sustainability programme, which will be published during 2020.

Towards lower-emission property development

Since 2016, we have implemented all of our new construction projects using our own plot reserves as near-zero energy buildings in accordance with the nZEB principles. At the end of the review period, near zero-energy buildings represented 81 per cent (1,936 apartments) of all Kojamo projects completed since 2016. Of the properties under construction at the end of the period, near zero-energy buildings represented 86 per cent (2,042 apartments).

Continuous improvement of energy efficiency

Kojamo has joined the Rental Property Action Plan (VAETS II) for the period 2017-2025. Our target under this action plan is to enhance the efficiency of energy consumption by 7.5 per cent during the period in question, using 2015 as the baseline (28,944 MWh/a in total). During the first three years of the period, 2017–2019, our energy efficiency measures have amounted to 21,255 MWh/a in total, which means that we had achieved 73% of our 2025 VAETS target by the end of 2019. Our energy efficiency measures have included Leanheat energy optimisation, new elevators and windows, the installation of low-consumption water fittings and adjustments to ventilation systems.

We focus on managing the energy consumption of the buildings in our property portfolio and use an AI-driven IoT solution by Leanheat Oy to control the temperature of 29,000 apartments owned by Kojamo.

Lumo, a responsible and environmentally friendly lessor

All of Kojamo's properties use Helen's hydropower-certified property electricity. We have also started to use carbon-neutral district heating at many of our properties. In 2019, Fortum's carbonneutral district heating was introduced at 79 properties. All residents of Lumo homes have the opportunity to use shared vehicles that are self-charging full hybrid cars. We aim to continuously develop recycling and offer comprehensive recycling opportunities to our residents.

We also focus on developing the environmental responsibility of our own operations. All Kojamo offices have been WWF Green Office certified since December 2019.

Social responsibility and being a responsible employer

We ensure our future competitiveness through competence development and offer an employee experience that attracts the best talent in the industry. We also work continuously to promote our corporate culture and the well-being of our personnel. We launched the Kojamo Cultural Compass project in 2020. The project aims to sharpen the objective for our culture and, through employee engagement and participation, strengthen the common day-to-day corporate culture that we use to create an even better employee experience for Kojamo's personnel.

Kojamo's sponsorship and grant programme provides financial support for young talents. The programme covers not only individual sports but also team sports. Personal grants are awarded to athletes aged 12–20 to encourage them in their sporting careers. Those living in Lumo and VVO homes are given priority. Grants have been awarded since 2012.

Corporate Governance

The anti-grey economy models used by Kojamo exceed legislative requirements in many respects. We continuously monitor the fulfilment of contractor obligations for all companies in our supplier network through the Reliable Partner service on the tilaajavastuu.fi website.

Development of sustainability reporting

We are continuing to focus on transparent sustainability reporting and, in 2020, we participated in the Global Real Estate Sustainability Benchmark (GRESB) survey for the first time. We report on our sustainability each year as part of our Annual Report.

Our sustainability report on the year 2019 marked the first time that we have applied the Global Reporting Initiative (GRI) framework and the EPRA (European Public Real Estate Association) Sustainability Best Practices Recommendations (EBRA sBPR, 3rd edition).

NEAR-TERM RISKS AND UNCERTAINTIES

Kojamo estimates that the most significant risks and uncertainties in the current review period are related to the development of the Finnish economy. The near-term risks arise particularly from the COVID-19 pandemic. The risks and their magnitude are affected by the development of the pandemic as well as the scope and duration of the measures introduced to limit the pandemic. Predicting the development of the pandemic and the impact of the restrictions is exceptionally difficult.

Economic development may affect the housing and financial markets in exceptional ways. These factors may have an impact on Kojamo's profit and cash flow as well as the fair value of apartments. The economic downturn may lead to unemployment, which can affect the ability of residents to pay rent and, subsequently, the company's rental income. The development of rental receivables and credit losses is actively monitored.

Urbanisation is expected to continue in the longer term. The supply of rental apartments may, however, increase locally in the main areas in which Kojamo operates, and the changes in supply and demand could have an impact on Kojamo's tenant turnover or the financial occupancy rate and, thereby, rental income. The restrictions implemented in response to the pandemic may, in the short term, also affect people's willingness to relocate and reduce migration.

If prolonged, the pandemic may have an impact on the operations of construction companies, which could result in delays in new projects. The prolongation of the pandemic could also have broader impacts on the housing market and property market, including apartment prices, rents and yield requirements.

A more detailed description of Kojamo's strategic risks and uncertainties is provided in the 2019 financial statements.

Helsinki, 20 August 2020

Kojamo plc Board of Directors

Further information: Maija Hongas, Manager, Investor Relations, Kojamo plc, tel. +358 20 508 3004 Erik Hjelt, CFO, Kojamo plc, tel. +358 20 508 3225

NEWS CONFERENCE AND WEBCAST

Kojamo will hold a news conference for institutional investors, analysts and media on 20 August 2020 at 10:00 a.m. at the company's head office at Mannerheimintie 168A, Helsinki. The event will be held in English. Members of the media will also have the opportunity to ask questions in Finnish after the event.

Participants are requested to only attend the event in person if they are completely healthy. The practical arrangements take into account the official recommendations concerning the coronavirus pandemic.

The event can also be streamed as a live webcast. A recording of the webcast will be available later on the company website at https://kojamo.fi/en/investors/releases-and-publications/financial reports/

The news conference can be streamed online athttps://kojamo.videosync.fi/2020-q2-results

You can also participate in the press conference by calling:

FI: +358 981 710 310 SE: +46 856 642 651 UK: +44 333 300 0804 US: +1 631 913 1422 Please use the following PIN code to participate in the press conference by telephone: 76954984#

EPRA performance measures

EPRA (European Public Real Estate Association) is an advocacy organisation for publicly listed European property investment companies. Kojamo is a member of EPRA. As part of its activities, the organisation promotes financial reporting in the industry and the adoption of best practices to ensure the quality of information provided to investors and improve comparability between companies. Kojamo follows EPRA recommendations in its reporting practices. This section covers EPRA performance measures and their calculation.

In accordance with EPRA's new guidelines, Kojamo will adopt revised features of the Net Asset Valuation metrics, namely EPRA Net Reinstatement Value (NRV), EPRA Net Tangible Assets (NTA) and EPRA Net Disposal Value (NDV) in the 2020 financial statements. These will replace EPRA NAV and EPRA NNNAV going forward.

	4–6/2020	4–6/2019	1–6/2020	1–6/2019	2019
EPRA Earnings, M€	43.1	40.1	70.0	66.7	144.0
EPRA Earnings per share (EPS), €	0.17	0.16	0.28	0.27	0.58
EPRA Net Asset Value (NAV), M€			3,861.2	2,936.0	3,828.0
EPRA NAV per share, €			15.62	11.88	15.49
EPRA Triple Net Asset Value (NNNAV), M€			3,040.5	2,306.9	3,030.1
EPRA NNNAV per share, €			12.30	9.33	12.26
EPRA Net Initial Yield (NIY), %			4.2	4.9	4.2
EPRA 'topped-up' NIY, %			4.2	4.9	4.2
EPRA Vacancy Rate, %			3.8	3.2	2.8
EPRA Cost Ratio (including direct vacancy costs), %	13.3	15.1	15.0	16.3	15.0
EPRA Cost Ratio (excluding direct vacancy costs), %	11.6	13.9	13.0	14.5	13.6

M€	4–6/2020	4–6/2019	1–6/2020	1–6/2019	2019
Earnings per IFRS income statement (i) Change in value of investment properties, development properties held for investment and other in terests (ii) Profits or losses on disposal of investment properties,	58.6 -26.2	67.8 -42.2	100.1 -48.2	100.0 -52.6	825.2 -872.4
development properties held for investment and other in terest (iii) Profits or losses on sales of trading properties includ ing impairment charges in respect of trading properties	0.6	0.0 -0.1	0.7	0.1 -0.1	-0.1 -0.2
(iv) Tax on profits or losses on disposals (vi) Changes in fair value of financial instruments and as sociated close-out costs	-0.2 -0.5	0.0 0.9	-0.2 1.2	0.0 2.5	3.3 2.0
(viii) Deferred tax in respect of EPRA adjustments	10.8	13.7	16.4	16.9	186.2
EPRA Earnings	43.1	40.1	70.0	66.7	144.0
EPRA Earnings per share (EPS), €	0.17	0.16	0.28	0.27	0.58

M€			1–6/2020	1–6/2019	2019
NAV per the financial statements			3,095.8	2,360.1	3,090.6

(iv) Fair value of financial instruments	82.8	76.4	69.5
(v.a) Deferred tax	682.7	499.4	667.9
EPRA Net Asset Value (NAV)	3,861.2	2,936.0	3,828.0
EPRA NAV per share, €	15.62	11.88	15.49

M€		1–6/2020	1–6/2019	2019
EPRA NAV		3,861.2	2,936.0	3,828.0
(i) Fair value of financial instruments		-82.8	-76.4	-69.5
(ii) Fair value of debt 1)		-55.3	-53.3	-60.5
(iii) Deferred tax		-682.7	-499.4	-667.9
EPRA Triple Net Asset Value (NNNAV) 1) Balance sheet at amortised cost and the fair value of interest bearing loans and borrowings.		3,040.5	2,306.9	3,030.1
EPRA NNNAV per share, €		12.30	9.33	12.26

M€		1–6/2020	1–6/2019	2019
Investment property		6,486.4	5,303.2	6,260.8
Trading property		0.1	0.3	0.1
Developments		-449.0	-246.5	-334.9
Completed property portfolio		6,037.5	5,056.9	5,926.1
Allowance for estimated purchasers' costs		120.7	101.1	118.5
Gross up completed property portfolio valuation	B	6,158.2	5,158.1	6,044.6
Annualised cash passing rental income		383.1	378.2	385.3
Property outgoings		-123.5	-127.1	-128.9
Annualised net rents Notional rent expiration of rent free periods or other lease incentives	A	259.6 -	251.1 -	256.4 -
Topped-up net annualised rent	C	259.6	251.1	256.4
EPRA Net Initial Yield (NIY), %	A/B	4.2	4.9	4.2
EPRA 'topped-up' NIY, %	C/B	4.2	4.9	4.2

M€		1–6/2020	1–6/2019	2019
Estimated rental value of vacant space 1) Estimated rental value of the	A	7.1	5.7	10.2
whole portfolio 1)	B	186.6	181.2	365.2
EPRA Vacancy Rate, % 1) Including rental value of apartments.	A/B	3.8	3.2	2.8

M€	4–6/2020	4–6/2019	1–6/2020	1–6/2019	2019
Include:
(i) Administrative expense line per IFRS income
statement	9.9	10.5	20.1	19.8	38.7
(i) Maintenance expense line per IFRS income statement	17.1	17.8	50.2	51.7	91.1
(i) Repair expense line per IFRS income statement	8.8	8.5	15.4	15.2	36.9
(ii) Net service charge costs/fees	-2.0	-1.6	-4.0	-3.1	-6.9
(iii) Management fees less actual/ estimated profit
element (iv) Other operating income/recharges intended to	0.0	0.0	0.0	0.0	0.0
cover overhead expenses less any related profits	-0.1	-0.1	-0.1	-0.1	-0.4
Exclude:
(vii) Ground rent costs	0.0	0.0	0.0	0.1	0.1
(viii) Service charge costs recovered through
rents but not separately invoiced	-24.7	-25.0	-63.1	-64.4	-122.7
EPRA Costs (including direct vacancy costs) A	9.0	10.1	18.5	19.0	36.8

(ix) Direct vacancy costs	-1.1	-0.8	-2.5	-2.1	-3.6
EPRA Costs (excluding direct vacancy costs) B	7.9	9.2	16.0	16.9	33.3
(x) Gross Rental Income less ground rent costs -
per IFRS	92.7	91.4	186.4	181.3	368.0
(xi) Service fee and service charge costs
components of Gross Rental Income	-24.7	-25.0	-63.1	-64.4	-122.7
Gross Rental Income C	68.0	66.4	123.3	116.9	245.3

EPRA Cost Ratio
(including direct vacancy costs), % A/C	13.3	15.1	15.0	16.3	15.0
EPRA Cost Ratio (excluding direct vacancy costs), % B/C	11.6	13.9	13.0	14.5	13.6

CONDENSED CONSOLIDATED INCOME STATEMENT

M€	Note	4–6/2020	4–6/2019	1–6/2020	1–6/2019	1–12/2019
Total revenue		94.8	93.1	190.5	184.6	375.3
Maintenance expenses		-17.1	-17.8	-50.2	-51.7	-91.1
Repair expenses		-8.8	-8.5	-15.4	-15.2	-36.9
Net rental income		68.9	66.8	124.9	117.7	247.3
Administrative expenses		-9.9	-10.5	-20.1	-19.8	-38.7
Other operating income		0.5	0.5	1.4	1.0	2.2
Other operating expenses		0.1	0.0	-0.1	-0.1	-0.5
Profit/loss on sales of investment properties		-0.6	0.0	-0.7	0.0	0.1
Profit/loss on sales of trading properties			0.1		0.1	0.2
Profit/loss on fair value of investment
properties	3	26.2	42.2	48.2	52.6	872.4
Depreciation, amortisation and impairment
losses		-0.3	-0.3	-0.5	-0.6	-1.1
Operating profit		85.0	98.9	153.1	150.9	1,081.9
Financial income		0.7	0.7	1.3	1.6	2.6
Financial expenses		-12.2	-13.7	-29.1	-27.7	-53.4
Total amount of financial income and expenses		-11.5	-13.0	-27.8	-26.1	-50.8
Share of result from associated companies				0.0	0.0	0.2
Profit before taxes		73.5	85.9	125.2	124.8	1,031.3
Current tax expense		-4.2	-4.4	-8.7	-8.0	-19.9
Change in deferred taxes		-10.8	-13.7	-16.4	-16.9	-186.2
Profit for the period		58.6	67.8	100.1	100.0	825.2

Profit for the financial period attributable to
Shareholders of the parent company		58.6	67.8	100.1	100.0	825.2

Earnings per share based on profit at tributable to shareholders of the parent company
Basic, €		0.24	0.27	0.40	0.40	3.34
Diluted, €		0.24	0.27	0.40	0.40	3.34

Average number of shares, million	8	247.1	247.1	247.1	247.1	247.1
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Cash flow hedges		-4.1	-15.2	-12.7	-31.9	-26.0
Deferred taxes		0.8	3.0	2.5	6.4	5.2
Items that may be reclassified subse
quently to profit or loss		-3.3	-12.1	-10.1	-25.5	-20.8
Total comprehensive income
for the period		55.3	55.7	89.9	74.4	804.4

Total comprehensive income attributable to
Shareholders of the parent company		55.3	55.7	89.9	74.4	804.4

CONDENSED CONSOLIDATED BALANCE SHEET

M€	Note	30 Jun 2020	30 Jun 2019	31 Dec 2019
ASSETS
Non-current assets
Intangible assets		0.1	0.2	0.2
Investment properties	3	6,484.0	5,279.5	6,260.8
Property, plant and equipment	4	30.6	31.2	30.9
Investments in associated companies		2.4	2.2	2.4
Financial assets	7	0.7	0.6	0.7
Non-current receivables		3.1	5.1	3.2
Derivatives	6, 7	0.0	0.4	0.2
Deferred tax assets		17.8	17.7	14.4
Non-current assets total		6,538.7	5,336.9	6,312.8
Non-current assets held for sale	10	2.4	23.8
Current assets
Trading property		0.1	0.3	0.1
Derivatives	6, 7	0.4	0.3	0.3
Current tax assets		1.8	2.4	0.1
Trade and other receivables		10.2	8.8	7.7
Financial assets	7	146.3	127.4	132.1
Cash and cash equivalents		449.2	139.1	137.3
Current assets total		608.1	278.2	277.6
ASSETS TOTAL		7,149.2	5,638.9	6,590.4

SHAREHOLDERS' EQUITY AND LIABILITIES
Equity attributable to shareholders of the parent company
Share capital		58.0	58.0	58.0
Share issue premium		35.8	35.8	35.8
Fair value reserve		-54.8	-49.4	-44.7
Invested non-restricted equity reserve		164.4	164.4	164.4
Retained earnings		2,892.3	2,151.3	2,877.0
Equity attributable to shareholders of the parent company		3,095.8	2,360.1	3,090.6
Total equity		3,095.8	2,360.1	3,090.6

LIABILITIES
Non-current liabilities
Loans and borrowings	5, 7	2,907.2	2,386.9	2,429.3
Deferred tax liabilities		701.0	516.4	683.8
Derivatives	6, 7	82.3	77.0	69.8
Provisions		0.4	0.6	0.5
Other non-current liabilities		4.8	14.0	5.1
Non-current liabilities total		3,695.7	2,994.8	3,188.4
Liabilities related to non-current assets held for sale	10		0.2
Current liabilities
Loans and borrowings	5, 7	305.7	229.2	244.9

Derivatives Current tax liabilities	6, 7	1.0 1.3	0.1 0.7	0.2 2.0

Trade and other payables		49.8	53.6	64.3
Current liabilities total		357.7	283.7	311.4
Total liabilities		4,053.5	3,278.7	3,499.8
TOTAL EQUITY AND LIABILITIES		7,149.2	5,638.9	6,590.4

CONSOLIDATED STATEMENT OF CASH FLOWS

M€	1–6/2020	1–6/2019	1–12/2019
Cash flow from operating activities
Profit for the period	100.1	100.0	825.2
Adjustments	5.2	-1.8	-614.5
Change in net working capital
Change in trade and other receivables	-2.2	-0.4	0.6
Change in trading properties		0.1	0.3
Change in trade and other payables	8.3	8.0	-0.8
Interest paid	-34.6	-32.0	-48.6
Interest received	0.3	0.4	0.8
Other financial items	-6.3	-0.4	-0.0
Taxes paid	-11.1	-13.9	-22.2
Net cash flow from operating activities	59.8	59.9	140.8

Cash flow from investing activities
Acquisition of investment properties	-193.6	-111.8	-273.9
Acquisition of property, plant and equipment and intangible assets	0.0	-0.1	-0.2
Proceeds from sale of investment properties	2.6	0.5	26.1
Proceeds from sale of property, plant and equipment and intangible assets		0.0	0.0
Purchases of financial assets	-103.0	-38.1	-111.1
Proceeds from sale of financial assets	88.0	84.0	152.5
Non-current loans, granted			0.0
Repayments of non-current loan receivables	0.1	0.1	0.4
Interest and dividends received on investments	0.2	0.1	0.3
Net cash flow from investing activities	-205.7	-65.3	-206.0
Cash flow from financing activities
Non-current loans and borrowings, raised	643.3	105.8	289.8
Non-current loans and borrowings, repayments	-160.6	-38.2	-164.0
Current loans and borrowings, raised	169.8	69.9	139.9
Current loans and borrowings, repayments	-109.9	-70.0	-139.9
Repayments of lease liabilities	-0.8	-1.5	-1.6
Dividends paid	-84.0	-71.7	-71.7
Net cash flow from financing activities	457.8	-5.7	52.4

Change in cash and cash equivalents	311.9	-11.0	-12.8
Cash and cash equivalents at the beginning of the period	137.3	150.1	150.1
Cash and cash equivalents at the end of the period	449.2	139.1	137.3

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

M€	Share capital	Share issue premium	Fair value reserve	Invested non restricted equity reserve	Retained earnings	Equity at tributable to share holders of the parent company	Total equity
Equity at 1 Jan 2020	58.0	35.8	-44.7	164.4	2,877.0	3,090.6	3,090.6
Comprehensive income
Cash flow hedging			-10.1			-10.1	-10.1
Profit for the period					100.1	100.1	100.1
Total comprehensive income for the period			-10.1		100.1	89.9	89.9
Transactions with shareholders
Share-based incentive scheme					-0.7	-0.7	-0.7
Dividend payment					-84.0	-84.0	-84.0
Total transactions with shareholders					-84.8	-84.8	-84.8
Total change in equity			-10.1		15.3	5.2	5.2
Equity at 30 Jun 2020	58.0	35.8	-54.8	164.4	2,892.3	3,095.8	3,095.8

M€	Share capital	Share issue premium	Fair value reserve	Invested non restricted equity re serve	Retained earnings	Equity at tributable to share holders of the parent company	Total equity
Equity at 1 Jan 2019	58.0	35.8	-23.9	164.4	2,123.7	2,358.1	2,358.1
Comprehensive income
Cash flow hedging			-25.5			-25.5	-25.5
Profit for the period					100.0	100.0	100.0
Total comprehensive income for the period			-25.5		100.0	74.4	74.4
Transactions with shareholders
Share-based incentive scheme					-0.7	-0.7	-0.7
Dividend payment					-71.7	-71.7	-71.7
Total transactions with shareholders					-72.4	-72.4	-72.4
Total change in equity			-25.5		27.6	2.0	2.0
Equity at 30 Jun 2019	58.0	35.8	-49.4	164.4	2,151.3	2,360.1	2,360.1

M€	Share capital	Share issue premium	Fair value reserve	Invested non restricted equity reserve	Retained earnings	Equity at tributable to share holders of the parent company	Total equity
Equity at 1 Jan 2019	58.0	35.8	-23.9	164.4	2,123.7	2,358.1	2,358.1
Comprehensive income
Cash flow hedging			-20.8			-20.8	-20.8
Profit for the period					825.2	825.2	825.2
Total comprehensive income for the period			-20.8		825.2	804.4	804.4
Transactions with shareholders
Share-based incentive scheme					-0.3	-0.3	-0.3
Dividend payment					-71.7	-71.7	-71.7
Total transactions with shareholders					-71.9	-71.9	-71.9
Total change in equity			-20.8		753.3	732.5	732.5
Equity at 31 Dec 2019	58.0	35.8	-44.7	164.4	2,877.0	3,090.6	3,090.6

CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATE-MENTS

Basic information about the Group

Kojamo plc is Finland's largest market-based, private housing investment company that offers rental apartments and housing services in Finnish growth centres. Its range of apartments is extensive. On 30 June 2020, Kojamo owned a total of 35,474 rental apartments across Finland.

The Group's parent company, Kojamo plc, is a Finnish company domiciled in Helsinki. Its registered address is Mannerheimintie 168, 00300 Helsinki, Finland.

Trading in Kojamo's shares commenced on the pre-list of Nasdaq Helsinki on 15 June 2018 and on the official list of Nasdaq Helsinki on 19 June 2018. In addition, a bond issued by Kojamo in 2016 is listed on the official list of Nasdaq Helsinki Ltd. Three other bonds issued by the company have been listed on the official list of the Irish Stock Exchange. The Group has chosen Finland as its home state for the disclosure of periodic information pursuant to Chapter 7, Section 3 of the Finnish Securities Market Act.

Kojamo plc's Board of Directors approved this Half-Year Financial Report for publication at its meeting on 20 August 2020.

1. ACCOUNTING POLICIES

Basis for preparation

This Half-Year Financial Report was prepared in accordance with IAS 34 Interim Financial Reporting as well as by applying the same accounting policies as in the previous annual financial statements, excluding the exceptions described below. The figures of the Half-Year Financial Report have not been audited.

The figures for 2019 are based on Kojamo plc's audited financial statements for 2019. The figures in brackets refer to the corresponding period in 2019, and the comparison period is the corresponding period the year before, unless otherwise stated.

The preparation of the Half-Year Financial Report in accordance with IFRS requires application of judgement by Kojamo's management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the balance sheet date and the reported amounts of income and expenses for the period. Management must also make judgements when applying the Group's accounting policies. Actual results may differ from the estimates and assumptions used. The most significant items of this Half-Year Financial Report where judgement has been applied by management, as well as the assumptions about the future and other key uncertainty factors in estimates at the end of the reporting period that create a significant risk of change in the carrying amounts of Kojamo's assets and liabilities within the next review period, are the same as those presented in the consolidated financial statements for the 2019 financial year. Of these, the most important are the determination of the fair values of investment properties and financial instruments. The COVID-19 pandemic may affect the housing and financial markets in exceptional ways. These factors may have an impact on Kojamo's profit and cash flow as well as the fair value of apartments.

2. REVENUE

Specification of revenue from contracts with customers:

M€	1–6/2020	1–6/2019	1–12/2019
Rental income	186.4	181.3	367.9
Water fees	3.8	2.8	6.2
Sauna fees	0.2	0.3	0.6
Total	190.3	184.4	374.8

Revenue consists primarily of rental income based on tenancy agreements. In the Group's business, the scope of IFRS 15 includes maintenance and service revenue, which include usebased charges collected from tenants.

3. INVESTMENT PROPERTIES

Change in valuation method

Kojamo shifted from a transaction-based valuation technique to a yield-based valuation technique in the valuation of investment properties from 31 December 2019 onwards. This represents a change in accounting estimates. The change is not applied retrospectively. The effect of the change on the fair value of investment properties was approximately EUR 800 million in the 2019 financial statements. The yield-based valuation technique makes Kojamo more comparable with its relevant international peer group.

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Fair value of investment properties on 1 Jan *)	6,260.8	5,093.2	5,093.2
Acquisition of investment properties ) *)	168.4	145.7	288.6
Modernisation investments	10.7	11.5	30.7
Disposals of investment properties	-3.3	-0.6	-26.0
Capitalised borrowing costs	1.5	0.9	1.9
Profit/loss on fair value of investment properties *)	48.2	52.6	872.4
Fair value of investment properties at the end of
the period	6,486.4	5,303.2	6,260.8

The value of investment properties includes EUR 2.4 (23.7) million in investment properties held for sale.

*) Includes IFRS 16 Leases

**) Includes the acquisition costs of completed housing stock and new properties under construction.

Right-of-use assets included in the fair values of investment properties (IFRS 16 Leases):

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Fair value 1 Jan	60.2
Increases/decreases	1.6	61.5	61.3
Profit/loss on fair value of investment properties	-0.5	-0.5	-1.1
Fair value at the end of the period	61.3	60.9	60.2

Modernisation investments are often significant and they are primarily related to repairs and renovations of plumbing, facades, roofs, windows and balconies. The expected average technical useful lives of the plumbing systems, facades, roofs and balconies of residential properties are taken into consideration in the planning of modernisation investments.

Capitalised borrowing costs totalled EUR 1.5 (0.9) million. The interest rate applied to capitalised borrowing costs was 2.2 (2.1) per cent.

Fair value of investment properties by valuation

method
M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Transaction value		4,562.0
Yield value before 31 December 2019		263.2
Yield value starting from 31 December 2019	5,859.7		5,740.7
Acquisition cost	565.4	417.1	459.9
Right-of-use assets	61.3	60.9	60.2
Total	6,486.4	5,303.2	6,260.8

Properties measured at yield value, DCF EUR 5,810.0 million, versatile modernisations, Q2/2020 acquisitions and held for sale total EUR 49.7 million = property portfolio measured at yield value EUR 5,859.7 million

Number of apartments	30 Jun 2020	30 Jun 2019	31 Dec 2019
Transaction value		29,220
Yield value before 31 December 2019		2,598
Yield value starting from 31 December 2019	32,841		32,286
Acquisition cost	2,633	3,376	2,986
Total	35,474	35,194	35,272

Kojamo has used the following average parameters when applying the yield-based valuation method in 2020:

Investment properties	Capital region	Other regions of Finland	Group total
Unobservable inputs:
Yield requirement, weighted, %	3.84	5.05	4.24
Inflation assumption, %	1.5	1.5	1.5
Market rents, weighted by square metres,
€/m2 /month	18.58	14.41	16.52
Property maintenance expenses, repairs
and modernisation investments €/m2 /month	6.11	6.05	6.08
10-year average financial occupancy
rate, %	98.0	96.4	97.1
Rent increase assumption, %	2.0	1.6	1.8
Expense increase assumption, %	2.0	2.0	2.0

Investment properties	Capital region	Other regions of Finland	Group total
Unobservable inputs:
Yield requirement, weighted, %	3.84	5.05	4.25
Inflation assumption, %	1.5	1.5	1.5
Market rents, weighted by square metres,
€/m2 /month	18.70	14.48	16.58
Property maintenance expenses, repairs
and modernisation investments €/m2 /month	6.11	6.07	6.09
10-year average financial occupancy
rate, %	98.0	96.4	97.1
Rent increase assumption, %	2.0	1.6	1.8
Expense increase assumption, %	2.0	2.0	2.0

Sensitivity analysis for measuring the fair value of investment properties

Properties measured at yield value *)			30 Jun 2020
Change % (relative)	-10%	-5%	0%	5%	10%
Change, M€
Yield requirement	649.7	307.6		-278.1	-530.7
Market rents	-749.0	-374.5		374.5	749.0
Maintenance expenses	247.5	123.8		-123.8	-247.5

Change % (absolute)	-2%	-1%	0%	1%	2%
Change, M€
Financial occupancy rate	-153.5	-76.8		76.8	153.5

*) The cash flow based valuation method (DCF) was adopted on 31 December 2019.

Sensitivity analysis of investment properties		30 Jun 2019
Change %	-10%	-5%	0%	5%	10%
Properties measured at transaction value, M€
Change in market prices	-456.2	-228.1		228.1	456.2
Properties measured at yield value before 31 December 2019, M€
Yield requirement	28.8	13.7		-12.4	-23.6
Rental income	-44.8	-22.4		22.4	44.8
Maintenance expenses	17.0	8.5		-8.5	-17.0
Financial occupancy rate for properties measured at yield value
(change in percentage points)	-2%	-1%	0%	1%	2%
Rental income, M€	-0.8	-0.4		0.4	0.8

The weighted average yield requirement was 6.2 per cent for the 2,598 apartments included within the scope of the yield value method on 30 June 2019, and 9.3 per cent for the 415 business premises.

Sensitivity analysis for measuring the fair value of investment properties

Properties measured at yield value *)	31 Dec 2019
Change % (relative)	-10%	-5%	0%	5%	10%
Change, M€
Yield requirement	636.6	301.6		-273.8	-521.7
Market rents	-734.2	-366.7		365.9	732.6
Maintenance expenses	242.4	121.1		-122.0	-243.6
Change % (absolute)	-2%	-1%	0%	1%	2%
Change, M€
Financial occupancy rate	-151.0	-75.3		75.0	149.8

*) The cash flow based valuation method (DCF) was adopted on 31 December 2019.

Unrecognised acquisition agreements related to work in progress:

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
New development under construction	304.7	145.1	148.2
Preliminary agreements for new construction	269.5	121.8	208.9
Renovation	42.5	28.8	23.7
Total	616.8	295.7	380.7

The criteria for determining fair value are presented in the Notes to the 2019 Financial Statements.

4. PROPERTY, PLANT AND EQUIPMENT

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Carrying value, beginning of period	30.9	30.5	30.5
Increases	0.2	1.2	1.5
Decreases		-0.1	-0.1
Depreciation for the period	-0.5	-0.3	-1.0
Carrying value, end of period	30.6	31.2	30.9

Property, plant and equipment consist of assets held and used by the company, mainly buildings and land areas, as well as machinery and equipment. The right-of-use asset includes car leasing agreements in accordance with IFRS 16 Leases. These agreements are itemised below:

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Carrying value, beginning of period	0.9	1.0	1.0
Increases	0.2	0.2	0.3
Depreciation for the period	-0.2	-0.2	-0.5
Carrying value, end of period	0.9	1.0	0.9

5. INTEREST-BEARING LIABILITIES

Non-current liabilities

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Bonds	1,686.8	1,190.7	1,191.8
Loans from financial institutions	1,125.7	1,062.3	1,135.8
Interest subsidy loans	32.6	70.6	39.2
Lease liability	59.7	60.8	60.0
Other loans	2.4	2.4	2.4
Total	2,907.2	2,386.9	2,429.3

Current liabilities
M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Bonds		100.0	100.0
Loans from financial institutions	151.9	35.7	37.5
Interest subsidy loans	34.9	36.0	49.9
Other loans	6.5	6.5	6.5
Lease liability	2.4	1.1	1.1
Commercial papers	109.9	50.0	50.0
Total	305.7	229.2	244.9

Total interest-bearing liabilities	3,212.8	2,616.1	2,674.2

As a result of Kojamo's adoption of IFRS 16 Leases on 1 January 2019, land lease contracts previously treated as operating leases have been recognised as an increase in the value of the Group's investment properties and interest-bearing liabilities.

6. DERIVATIVE INSTRUMENTS

Fair values of derivative instruments					30 Jun	31 Dec
			30 Jun 2020		2019	2019
M€	Positive		Negative	Net	Net	Net
Interest rate derivatives
Interest rate swaps, cash flow hedges			-72.7	-72.7	-67.1	-60.6
Interest rate swaps, not in hedge accounting			-9.8	-9.8	-10.0	-9.3

Electricity derivatives	0.5		-0.8	-0.3	0.6	0.5
Total	0.5		-83.3	-82.8	-76.4	-69.5
Nominal values of derivative instruments
M€		30 Jun 2020		30 Jun 2019		31 Dec 2019
Interest rate derivatives
Interest rate swaps, cash flow hedges		955.8			976.7	970.0
Interest rate swaps, not in hedge accounting		42.2			42.8	42.6
Total		998.0			1,019.5	1,012.6

Electricity derivatives, MWh		109,785			141,779	135,960

During the review period, EUR -12.7 (-31.9) million was recognised in the fair value reserve from interest rate derivatives classified as cash flow hedges. The interest rate derivatives are used to hedge the loan portfolio's interest cash flows against increases in market interest rates. The interest rate derivatives mature between 2020 and 2035. At the end of the review period, the average maturity of interest rate swaps was 5.3 (6.1) years. Electricity derivatives hedge against increases in electricity prices and mature between 2020 and 2022. Electricity derivatives are not included in hedge accounting. The unrealised gains and losses from the measurement of derivatives are presented on the balance sheet under current and non-current assets or under liabilities in the item Derivative instruments.

7. FINANCIAL ASSETS AND LIABILITIES BY VALUATION CATEGORY

	30 Jun 2020
M€	Carrying value total	LEVEL 1	LEVEL 2	LEVEL 3	Fair value total
Financial assets
Measured at fair value
Electricity derivatives	0.5	0.5			0.5
Financial assets recognised at fair value through profit or loss	147.0	72.3	74.1	0.7	147.0

Measured at amortised cost
Cash and cash equivalents	449.2		449.2		449.2
Trade receivables	5.6				5.6

Financial liabilities
Measured at fair value
Interest rate derivatives	82.5		82.5		82.5
Electricity derivatives	0.8	0.8			0.8
Measured at amortised cost
Other interest-bearing liabilities	1,526.0		1,527.8		1,527.8
Bonds	1,686.8	1,754.1			1,754.1
Trade payables	6.9				6.9

	31 Dec 2019
M€	Carrying value total	LEVEL 1	LEVEL 2	LEVEL 3	Fair value total
Financial assets
Measured at fair value
Electricity derivatives	0.5	0.5			0.5
Financial assets recognised at fair value
through profit or loss	132.8	129.6	2.5	0.7	132.8
Measured at amortised cost
Cash and cash equivalents	137.3		137.3		137.3
Trade receivables	5.7				5.7
Financial liabilities
Measured at fair value
Interest rate derivatives	70.0		70.0		70.0
Electricity derivatives	0.0	0.0			0.0
Measured at amortised cost
Other interest-bearing liabilities	1,382.4		1,385.2		1,385.2
Bonds	1,291.8	1,349.5			1,349.5
Trade payables	15.6				15.6

There were no transfers between the hierarchy levels during the review period. The fair value of floating rate loans is the same as their nominal value, as the margins of the loans correspond to the margins of new loans. The fair values of bonds are based on market price quotations. The fair value of other fixed-rate liabilities is based on discounted cash flows, in which market interest rates are used as input data.

If there is no active market for the financial instrument, judgment is required to determine fair value and impairment. External mark to market valuations may be used for some interest rate

derivatives. Recognition of impairment is considered if the impairment is significant or long-lasting. If the amount of impairment loss decreases during a subsequent financial year and the decrease can be considered to be related to an event occurring after the recognition of impairment, the impairment loss will be reversed.

Financial assets and liabilities measured at fair value are classified into three fair value hierarchy levels in accordance with the reliability of the valuation technique:

Level 1:

The fair value is based on quoted prices for identical instruments in active markets.

Level 2:

A quoted market price exists in active markets for the instrument, but the price may be derived from directly or indirectly quoted market data. Fair values are measured using valuation techniques. Their inputs are based on quoted market prices, including e.g. market interest rates, credit margins and yield curves.

Level 3:

There is no active market for the instrument, the fair value cannot be reliably derived and input data used for the determination of fair value is not based on observable market data.

Level 3 reconciliation

Financial assets recognised at fair value through profit or loss

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Beginning of period	0.7	0.6	0.6
Change		0.0	0.0
End of period	0.7	0.6	0.7

Investments measured at fair value through profit and loss on hierarchy level 3 are investments in unlisted securities and they are mainly measured at acquisition cost, as their fair value cannot be reliably measured in the absence of an active market. With regards to these items, it is evaluated that the acquisition cost is an appropriate estimate of fair value.

8. EARNINGS PER SHARE

	1–6/2020	1–6/2019	1–12/2019
Profit for the period attributable to shareholders of the parent company, M€	100.1	100.0	825.2
Weighted average number of shares during the period (million)	247.1	247.1	247.1
Earnings per share
Basic, €	0.40	0.40	3.34
Diluted, €	0.40	0.40	3.34

The company has no diluting instruments.

9. GUARANTEES AND COMMITMENTS

M€	30 Jun 2020	30 Jun 2019	31 Dec 2019
Loans covered by pledges on property
and shares as collateral	1,155.0	1,339.8	1,298.1
Pledges given	1,180.6	1,445.7	1,401.1
Shares *)	194.2	254.0	220.4
Pledged collateral, total	1,374.8	1,699.7	1,621.5
Other collateral given
Mortgages and shares	17.5	17.3	16.9
Guarantees **)	572.7	411.7	500.2
Pledged deposits	0.1	0.1	0.1
Other collateral, total	590.2	429.1	517.1

*) Pledged mortgages and shares relate in some cases to the same properties.

**) Guarantees given are mainly absolute guarantees granted as collateral for group companies' loans for which property pledges have also been given as collateral.

10. NON-CURRENT ASSETS HELD FOR SALE

M€	30 Jun 2020	30 Jun 2019
Investment properties	2.4	23.7
Receivables		0.1
Total assets	2.4	23.8

Trade and other payables		0.2
Total liabilities		0.2

Net carrying value	2.4	23.6

On 30 June 2019, Investment properties included EUR 0.3 million in Right-of-use assets and Interest-bearing liabilities included EUR 0.3 million in Lease liabilities that have not been transferred to Non-current assets held for sale.

On 17 April 2020, Kojamo Group companies signed a preliminary agreement to sell a plot in Kirkkonummi and the properties located on the plot to T2H Rakennus Oy on 31 March 2021 at the latest.

On 12 July 2019, Kojamo Group companies signed an agreement on the sale of 478 rental apartments in 12 locations across Finland to Olo Asunnot. The transaction was completed in August 2019 and the gain on the sale amounted to approximately EUR 0.4 million.

The investment properties have been measured at fair value in the financial statements (fair value hierarchy level 3).

11. THE IMPACT OF COVID-19

Kojamo has assessed the impact of the COVID-19 pandemic on the Group's profit, balance sheet and cash flow and determined that the pandemic did not have a significant impact on the items in question during the review period.

12. EVENTS AFTER THE REVIEW PERIOD

Kojamo has assessed the impact of the COVID-19 pandemic on the Group's profit, balance sheet and cash flow after the review period, on 20 August 2020, and determined that the pandemic did not have a significant impact on the items in question. Rental receivables and credit losses have not increased to a significant degree. Kojamo actively monitors the development of these items.

KEY FIGURES, THE FORMULAS USED IN THEIR CALCULATION, AND RECONCILIATION CALCULATIONS IN ACCORDANCE WITH ESMA GUIDELINES

	Formula	4–6/2020	4–6/2019	1–6/2020	1–6/2019	2019
Total revenue, M€		94.8	93.1	190.5	184.6	375.3
Net rental income, M€	1	68.9	66.8	124.9	117.7	247.3
Net rental income margin, %	2	72.7	71.8	65.6	63.8	65.9
Profit before taxes, M€	3	73.5	85.9	125.2	124.8	1,031.3
EBITDA, M€	4	85.2	99.2	153.6	151.5	1,083.1
EBITDA margin, %	5	89.9	106.5	80.6	82.1	288.6
Adjusted EBITDA, M€	6	59.6	56.9	106.1	98.8	210.3
Adjusted EBITDA margin, %	7	62.9	61.1	55.7	53.6	56.0
Funds From Operations (FFO), M€	8	42.1	40.1	71.5	66.4	140.7
FFO margin, %	9	44.4	43.1	37.5	36.0	37.5
Funds From Operations (FFO) per share, €	10	0.17	0.16	0.29	0.27	0.57
FFO excluding non-recurring costs, M€	11	42.1	40.1	71.5	66.4	140.7
Adjusted Funds From Operations (AFFO), M€	12	32.9	31.2	60.8	54.9	110.0
Investment properties, M€ 1)				6,486.4	5,303.2	6,260.8
Financial occupancy rate, %	19			96.3	96.9	97.2
Interest-bearing liabilities, M€ 2)	13			3,212.8	2,616.1	2,674.2
Return on equity, % (ROE)	14			6.5	8.5	30.3
Return on investment, % (ROI)	15			5.1	6.2	20.5
Equity ratio, %	16			43.3	41.9	46.9
Loan to Value (LTV), % 3)	17			42.6	46.9	40.5
Earnings per share, €		0.24	0.27	0.40	0.40	3.34
Equity per share, €				12.53	9.55	12.51
Gross investments, M€	18	116.9	58.6	179.0	96.6	259.9
Number of personnel, end of period				340	329	296

1) Including items held for sale.

2) Excluding liabilities related to non-current assets held for sale.

3) Excluding non-current assets held for sale or liabilities related to non-current assets held for sale.

Kojamo presents Alternative Performance Measures to illustrate the financial development of its business operations and improve comparability between reporting periods. The Alternative Performance Measures, i.e. performance measures that are not based on financial reporting standards, provide significant additional information for the management, investors, analysts and other parties. The Alternative Performance Measures should not be considered substitutes for IFRS performance measures.

Formulas used in the calculation of the key figures

Alternative Performance Measures (APM) based on ESMA guidelines

1)	Net rental income	= Total revenue - Maintenance expenses - Repair expenses
		Net rental income measures the profitability of the Group's rental business after the deduction of maintenance and repair costs.
2)	Net rental income margin, %	Net rental income = x 100 Total revenue
		This figure reflects the ratio between net rental income and total revenue.
3)	Profit before taxes	Net rental income - Administrative expenses + Other operating income - Other operat ing expenses +/- Profit/loss on sales of investment properties +/- Profit/loss on sales of = trading properties +/- Profit/loss on fair value of investment properties - Depreciation, amortisation and impairment losses +/- Financial income and expenses +/- Share of re sult from associated companies
		Profit before taxes measures profitability after operative costs and financial expenses.
4)	EBITDA	Profit for the period + Depreciation, amortisation and impairment losses -/+ Financial = income and expenses -/+ Share of result from associated companies + Current tax ex pense + Change in deferred taxes
		EBITDA measures operative profitability before financial expenses, taxes and depreciation.
5)	EBITDA margin, %	EBITDA = x 100 Total revenue
		EBITDA margin discloses EBITDA in relation to net sales.
6)	Adjusted EBITDA	Profit for the period + Depreciation, amortisation and impairment losses -/+ Profit/loss on sales of investment properties -/+ Profit/loss on sales trading properties -/+ = Profit/loss on sales of other non-current assets -/+ Profit/loss on fair value of invest ment properties -/+ Financial income and expenses -/+ Share of result from associated companies + Current tax expense + Change in deferred taxes
		Adjusted EBITDA measures the profitability of the Group's underlying rental operations excluding gains/losses on sale of properties and unrealised value changes of investment properties.
7)	Adjusted EBITDA margin, %	Adjusted EBITDA = x 100 Total revenue
		Adjusted EBITDA margin discloses adjusted EBITDA in relation to total revenue.

8)	Funds From Operations (FFO)	=	Adjusted EBITDA - Adjusted net interest charges - Current tax expenses
			FFO measures cash flow before change in net working capital. The calculation of this APM takes into account financial expenses and current taxes but excludes items not directly connected to rental operations, such as unrealised value changes.
9)	FFO margin, %	=	FFO x 100 Total revenue FFO margin discloses FFO in relation to total revenue.
10)	FFO per share	=	FFO Weighted average number of shares outstanding during the financial period
			FFO per share illustrates FFO for an individual share.
11)	FFO excluding non-re curring costs	=	FFO + non-recurring costs
			FFO measures cash flow before change in net working capital. The calculation of this APM takes into account financial expenses and current taxes but excludes items not directly connected to rental operations, such as unrealised value changes and non-recurring costs.
12)	Adjusted Funds From Operations (AFFO)	=	FFO - Modernisation investments
			AFFO measures cash flow before change in net working capital, adjusted for modernisation in vestments. The calculation of this APM takes into account modernisation investments, financial expenses and current taxes but excludes items not directly connected to rental operations, such as unrealised value changes.
13)	Interest-bearing liabilities	=	Non-current loans and borrowings + Current loans and borrowings
			Interest-bearing liabilities measures the Group's total debt.
14)	Return on equity (ROE), %	=	Profit for the period (annualised) x 100 Total equity, average during the period ROE measures the financial result in relation to equity. This APM illustrates Kojamo's ability to generate a return for the shareholders.
15)	Return on investment (ROI), %	=	(Profit before taxes + Interests and other financial expenses) (annualised) x 100 (Total assets - Non-interest-bearing liabilities), average during the period
			ROI measures the financial result in relation to invested capital. This APM illustrates Kojamo's ability to generate a return on the invested funds.

16)	Equity ratio, %	=	Total equity Balance sheet total - Advances received	x 100
			Equity to assets is an APM for balance sheet structure that discloses the ratio of equity to total capital. This APM illustrates the Group's financing structure.
17)	Loan to Value (LTV), %	=	Interest-bearing liabilities - Cash and cash equivalents Investment properties Loan to value discloses the ratio of net debt to investment properties. This APM illustrates the Group's indebtedness.	x 100
18)	Gross investments	=	Acquisition and development of investment properties + Modernisation investments + Capitalised borrowing costs This APM illustrates total investments including acquisitions, development investments, moderni sation investments and capitalised interest.
	Other performance measures

19)	Financial	Rental income
	= occupancy rate, %	Potential rental income at full occupancy	x 100

Reconciliation of key indicators

M€	4–6/2020	4–6/2019	1–6/2020	1–6/2019	2019
Profit for the period	58.6	67.8	100.1	100.0	825.2
Depreciation, amortisation and impairment losses	0.3	0.3	0.5	0.6	1.1
Profit/loss on sales of investment properties	0.6	0.0	0.7	0.0	-0.1
Profit/loss on sales of trading properties		-0.1		-0.1	-0.2
Profit/loss on sales of other non-current assets				0.0	0.0
Profit/loss on fair value of investment
properties	-26.2	-42.2	-48.2	-52.6	-872.4
Financial income	-0.7	-0.7	-1.3	-1.6	-2.6
Financial expenses	12.2	13.7	29.1	27.7	53.4
Share of result from associated companies			0.0	0.0	-0.2
Current tax expense	4.2	4.4	8.7	8.0	19.9
Change in deferred taxes	10.8	13.7	16.4	16.9	186.2
Adjusted EBITDA	59.6	56.9	106.1	98.8	210.3
Financial income and expenses	-11.5	-13.0	-27.8	-26.1	-50.8
Profit/loss on fair value measurement
of financial assets	-1.9	0.7	2.0	1.6	1.1
Adjusted net interest charges	-13.4	-12.3	-25.9	-24.4	-49.7
Current tax expense	-4.2	-4.4	-8.7	-8.0	-19.9
FFO	42.1	40.1	71.5	66.4	140.7
FFO excluding non-recurring costs	42.1	40.1	71.5	66.4	140.7

Total equity			3,095.8	2,360.1	3,090.6
Assets total			7,149.2	5,638.9	6,590.4
Advances received			-6.8	-5.9	-6.7
Equity ratio, %			43.3	41.9	46.9

AI Terminal

Kojamo Oyj

3225_ir_2020-08-20_9820c187-d75b-4b74-8655-9dc47cb0db90.pdf

Kojamo plc's Half-Year Financial Report 1 January–30 June 2020

KOJAMO PLC'S HALF-YEAR FINANCIAL REPORT 1 JANUARY–30 JUNE 2020

PROFITABLE GROWTH, NEARLY 2,400 APARTMENTS UNDER CONSTRUCTION

SUMMARY OF APRIL–JUNE 2020

SUMMARY OF JANUARY–JUNE 2020

EFFECTS OF THE COVID-19 PANDEMIC ON KOJAMO

OUTLOOK FOR KOJAMO IN 2020 (specified)

Effects of the COVID-19 pandemic on Kojamo's outlook

KEY FIGURES

CEO'S REVIEW

OPERATING ENVIRONMENT

General operating environment

Industry operating environment

Effects of urbanisation

BUSINESS OPERATIONS

FINANCIAL DEVELOPMENT APRIL–JUNE 2020

TOTAL REVENUE

RESULT AND PROFITABILITY

FINANCIAL DEVELOPMENT JANUARY–JUNE 2020

TOTAL REVENUE

RESULT AND PROFITABILITY

BALANCE SHEET, CASH FLOW AND FINANCING

REAL ESTATE PROPERTY AND FAIR VALUE

Right-of-use assets recognised in investment properties *)

RENTAL HOUSING

Kojamo's property portfolio by region as at 30 June 2020

INVESTMENTS, DIVESTMENTS AND REAL ESTATE DEVELOPMENT

STRATEGIC TARGETS AND ACHIEVEMENTS

Digital Road Map 2023

SHARES AND SHAREHOLDERS

Issued shares and share capital

Trading in the company's share

Own shares

Dividend

Shareholders

The Board of Directors' authorisations

Flagging notifications

Flagging notification 24 February 2020

Managers' transactions

GOVERNANCE

Annual General Meeting

Board of Directors and auditors

Board committees

CEO

Management Team

PERSONNEL

Annual performance bonus and incentive system

SUSTAINABILITY

Materiality analysis

Towards lower-emission property development

Continuous improvement of energy efficiency

Lumo, a responsible and environmentally friendly lessor

Social responsibility and being a responsible employer

Corporate Governance

Development of sustainability reporting

NEAR-TERM RISKS AND UNCERTAINTIES

Further information: Maija Hongas, Manager, Investor Relations, Kojamo plc, tel. +358 20 508 3004 Erik Hjelt, CFO, Kojamo plc, tel. +358 20 508 3225

NEWS CONFERENCE AND WEBCAST

EPRA performance measures

CONDENSED CONSOLIDATED INCOME STATEMENT

CONDENSED CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATE-MENTS

Basic information about the Group

1. ACCOUNTING POLICIES

Basis for preparation

2. REVENUE

Specification of revenue from contracts with customers:

3. INVESTMENT PROPERTIES

Change in valuation method

Fair value of investment properties by valuation

Sensitivity analysis for measuring the fair value of investment properties

Sensitivity analysis for measuring the fair value of investment properties

Unrecognised acquisition agreements related to work in progress:

4. PROPERTY, PLANT AND EQUIPMENT

5. INTEREST-BEARING LIABILITIES

**Right-of-use assets recognised in investment properties *)**