Kojamo Oyj — Earnings Release 2020

Feb 18, 2021

Kojamo plc’s Financial Statements Release 1 January–31 December 2020

Kojamo plc’s Financial Statements Release 1 January–31 December 2020

Kojamo plc Stock Exchange Release, 18 February 2021 at 8:00 a.m. EET

Kojamo plc’s Financial Statements Release 1 January–31 December 2020

Profitability and growth despite of exceptional year

This is a summary of the 2020 Financial Statements Release, which is in its
entirety attached to this release and can be downloaded from the company’s
website at www.kojamo.fi/investors.

Unless otherwise stated, the comparison figures in brackets refer to the
corresponding period of the previous year. The information in the financial
statements release is based on the Kojamo Plc’s audited financial statements for
the year 2020. The quarterly figures are unaudited.

Summary of October–December 2020

· Total revenue increased by 2.2 per cent to EUR 97.1 (95.1) million
· Net rental income increased by 6.2 per cent, totalling EUR 63.8 (60.1)
million. Net rental income represented 65.7 (63.3) per cent of revenue
· Profit before taxes was EUR 193.2 (839.9) million. The profit includes EUR
151.7 (801.4) million in net gain on valuation of investment properties at fair
value and EUR 0.0 (-0.1) million in profits and losses from the sale of
investment properties. During the comparison period, the Group adopted a yield
-based valuation technique, which had a positive effect of approximately EUR 800
million on the fair value of investment properties in the comparison period.
Earnings per share was EUR 0.62 (2.72)
· Funds From Operations (FFO) increased by 9.7 per cent and amounted to EUR
38.0 (34.6) million.
· Gross investments totalled EUR 107.2 (84.3) million, representing 110.3
(88.7) per cent of total revenue

Summary of January–December 2020

· Total revenue increased by 2.3 per cent to EUR 383.9 (375.3) million.
· Net rental income increased by 4.2 per cent, totalling EUR 257.6 (247.3)
million. Net rental income represented 67.1 (65.9) per cent of revenue.
· Profit before taxes was EUR 391.2 (1,031.3) million. The profit includes EUR
225.8 (872.4) million in net gain on the valuation of investment properties at
fair value and EUR -0.7 (0.1) million in profits and losses from the sale of
investment properties. During the comparison period, the Group adopted a yield
-based valuation technique, which had a positive effect of approximately EUR 800
million on the fair value of investment properties in the comparison period.
Earnings per share was EUR 1.27 (3.34).
· Funds From Operations (FFO) increased by 7.7 per cent and amounted to EUR
151.5 (140.7) million.
· The fair value of investment properties was EUR 6.9 (6.3) billion at the end
of the financial year.
· The financial occupancy rate stood at 96.4 (97.2) per cent during the
financial year.
· Gross investments totalled EUR 371.2 (259.9) million, representing 96.7
(69.2) per cent of total revenue.
· Equity per share was EUR 13.39 (12.51) and return on equity was 9.8 (30.3)
per cent. Return on investment was 7.4 (20.5) per cent.
· EPRA NRV per share (net asset value) grew by 7.6 per cent and amounted to
EUR 17.21 (16.00).
· At the end of the financial year, there were 2,624 (1,316) Lumo apartments
under construction.
· The Board of Directors’ dividend proposal is EUR 0.37 per share.

Kojamo owned 35,802 (35,272) rental apartments at the end of the financial year.
In 2020, Kojamo acquired 71 (260) apartments, completed 532 (816) apartments,
sold 18 (520) apartments and demolished or otherwise altered -55 (3) apartments.

Key figures

                 10–12/  10–12/  Change%     2020     2019  Change%
                   2020    2019

Total revenue, M€ 97.1 95.1 2.2 383.9 375.3 2.3
Net rental income, 63.8 60.1 6.2 257.6 247.3 4.2
M€ *
Net rental income 65.7 63.3 67.1 65.9
margin, % *
Profit before 193.2 839.9 -77.0 391.2 1,031.3 -62.1
taxes, M€ *
EBITDA, M€ * 206.9 851.5 -75.7 447.6 1,083.1 -58.7
EBITDA margin, % * 213.0 895.7 116.6 288.6
Adjusted EBITDA, 55.2 50.0 10.2 222.6 210.3 5.8
M€ *
Adjusted EBITDA 56.8 52.6 58.0 56.0
margin, % *
Funds From 38.0 34.6 9.7 151.5 140.7 7.7
Operations (FFO),
M€ *
FFO margin, % * 39.1 36.4 39.5 37.5
FFO excluding non 38.0 34.6 9.7 151.5 140.7 7.7
-recurring costs,
M€ *
Investment 6,863.1 6,260.8 9.6
properties, M€
Financial occupancy 96.4 97.2
rate, %
Interest-bearing 3,053.3 2,674.2 14.2
liabilities, M€ *
Return on equity 9.8 30.3
(ROE), % *
Return on 7.4 20.5
investment (ROI), %
*
Equity ratio, % * 45.6 46.9
Loan to Value 41.4 40.5
(LTV), % *
EPRA Reinstatement 4,254.6 3,953.3 7.6
value (NRV), M€
Gross investments, 107.2 84.3 27.1 371.2 259.9 42.9
M€ *
Number of 317 296
personnel, end of
the period

Key figures per 10–12/ 10–12/ Change% 2020 2019 Change%
share, € 2020 2019
FFO per share * 0.15 0.14 7.1 0.61 0.57 7.0
Earnings per share 0.62 2.72 -77.2 1.27 3.34 -62.0
EPRA NRV per share 17.21 16.00 7.6
Equity per share 13.39 12.51 7.0
Dividend per share 0.37 0.34 8.8
¹⁾

* 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
Key figures, the
formulas used in
their calculation,
and reconciliation
calculations in
accordance with
ESMA guidelines
section of its
financial
statements.
¹⁾ Including non
-current assets
held for sale
²⁾ Excluding non
-current assets
held for sale or
liabilities related
to non-current
assets held for
sale.
³⁾ 2020: The Board
of Directors
proposes to the
Annual General
Meeting that a
dividend of EUR
0.37 per share be
paid.

Outlook for 2021

Kojamo estimates that in 2021, the Group’s total revenue will increase by 3–5
per cent year-on-year. In addition, Kojamo estimates that the Group’s FFO for
2021 will amount to be-tween EUR 150–163 million, excluding non-recurring items.

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.

The outlook takes into account the estimated occupancy rate and rises in rents
as well as the number of apartments to be completed. The outlook does not take
into account the impact of potential acquisitions on total revenue and FFO.

The outlook is also based on the estimate that sufficient vac-cination coverage
will be achieved in the summer and that migration will gradually recover to pre
-pandemic levels thereafter. Migration sustains strong demand, which will
increase Like-for-Like rental income. However, due to the impacts of the
pandemic on the operating environment, the Group expects the development of Like
-for-Like rental income to be moderate during the first half of the year.

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 regu-latory environment or the competitive landscape.

CEO’s review

We were successful in implementing our strategy and making progress towards our
key targets in 2020 in spite of the exceptional circumstances. Our total
revenue, net rental income and Funds From Operations (FFO) increased. The fair
value of our investment properties rose to EUR 6.9 billion and the number of
apartments we own increased by more than 500 Lumo homes during the year.

We enter 2021 with confidence. We expect the strong trend of urbanisation to
continue after the COVID-19 pandemic. The appeal of cities as providers of jobs
and services on the one hand, and the decreasing average size of households on
the other hand, create a need for new apartments in growth centres. We are
making significant investments in order to respond to this demand.

The pandemic affected the housing market in 2020. The restrictions slowed down
migration and students temporarily moved back in with their parents. In
addition, apartments intended for short-term rentals were switched to long-term
leases. A large number of new apartments were also completed in the market in
2020, which means that supply has temporarily increased relative to demand.
These factors have been reflected in our occupancy rate, although we have been
able to maintain it at a good level at 96.4%. While the impacts of the pandemic
will still be visible in the market during the early part of the new year, we
expect them to be temporary.

The past year was particularly successful for us with regard to new construction
projects. We started construction on more than 1,800 apartments. We also have
preliminary agreements for the construction of nearly 1,000 apartments. We
currently have 2,600 apartments under construction in central locations in the
Helsinki region, close to good transport connections and services. Furthermore,
our Metropolia real estate development project will see us create as many as
1,000 new homes in buildings previously occupied by educational institutions in
Helsinki’s central business district and other good locations.

Gross investments totalled EUR 371.2 million in 2020. Fair value of investment
properties saw strong growth during the year. The fair value was increased
particularly by our investments and gains from fair value measurement. Our
strong balance sheet and diverse financing structure have enabled us to make
investments in a challenging economic environment. We established an EMTN
programme in the spring and subsequently carried out a successful EUR 500
million bond issue under the programme. Our balance sheet indicators developed
in line with our strategy during the year.

In 2020, people spent more time at home, which highlighted the significance of
comfort and safety. Accordingly, we have put special focus on keeping our
properties tidy and comfortable. We have also put emphasis on effective and
comprehensive communication, which has been helped by the My Lumo application
that is already used by about 75 per cent of our customers. The application
makes it quick and easy for our customers to manage all of the important aspects
of their tenancy relationship. We will continue to invest in service development
in 2021 in accordance with our digital roadmap.

In December, we published our sustainability programme, which brings together
our long-term sustainability efforts in the form of practical targets and
actions. Corporate responsibility and sustainable development are a strategic
priority for Kojamo and part of the Group’s DNA. In our sustainability
programme, we commit to the UN Sustainable Development Goals and carbon-neutral
energy use at our properties by 2030. During the year, we also participated in
the real estate industry’s global GRESB sustainability benchmark survey for the
first time and received a Green Star award with a rating of three stars out of
five. After the review period, in January, we also completed our first financing
arrangement linked to our sustainability targets by signing a revolving credit
facility for EUR 75 million. We will publish our Sustainability Report as part
of our Annual Report.

Lastly, I want to take this opportunity to thank our customers, partners and
everyone at Kojamo for good cooperation during the last year despite of
exceptional circumstances

Jani Nieminen

CEO

News conference as a webcast

Kojamo will hold a news conference for institutional investors, analysts and
media on 18 February 2021 at 10:00 a.m. EET as a webcast. The event will be held
in English.

A recording of the webcast will be available later on the com-pany website at
https://kojamo.fi/en/investors/releases-and-publications/financial-reports/

The news conference can be streamed online at https://kojamo.videosync.fi/2020
-q4-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: 58882215#

For more information, please contact:

Maija Hongas, Manager, Investor Relations, Kojamo plc, tel. +358 20 508 3004,
maija.hongas@kojamo.fi

Erik Hjelt, CFO, Kojamo plc, tel. +358 20 508 3225, erik.hjelt.@kojamo.fi

Distribution:

Nasdaq Helsinki, Irish Stock Exchange, key media

Kojamo is Finland’s largest private residential real estate company and a
frontrunner in the housing business. Our mission is to create better urban
housing. The Lumo brand provides environmental-friendly housing and services in
Finland’s biggest growth centres. We actively develop the value of our
investment properties by developing new properties and our existing property
portfolio. We want to be the property market frontrunner and the number one
choice for our customers. Kojamo’s shares are listed on the official list of
Nasdaq Helsinki. For more information, please visit kojamo.fi/en/

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