EAB Group Oyj: EAB Group Plc's half-year report January-June 2022: The Group's operating income increased by 41%, and its result for the period was EUR 3.3 million
EAB Group Plc, Stock Exchange Release, 5 August 2022, 9:00 a.m. (EET)
EAB Group Plc's half-year report January-June 2022: The Group's operating income increased by 41%, and its result for the period was EUR 3.3 million
In January-June 2022, the EAB Group's (hereinafter "EAB" or the "Group") operating income increased by 41%, and its result improved by 308% year-on-year as a result of higher operating income. Despite the challenging market situation, the Group's continuing operating income increased further by 4% and was EUR 9.0 million (EUR 8.7 million in the comparison period).
The EAB Group's operating income (IFRS) was EUR 14.8 million in January-June 2022 (EUR 10.5 million in January-June 2021), and its result for the review period was EUR 3.3 million (EUR 0.8 million). The Group's operating profit* was EUR 4.2 million (EUR 1.1 million). Income from fund management accounted for EUR 10.6 million (EUR 6.3 million) of the operating income, including EUR 4.4 million (EUR 0.3 million) in performance-based fees. Income from asset management and other investment services amounted to EUR 3.0 million (EUR 3.2 million). Income from the service business and other operating income amounted to EUR 1.3 million (EUR 1.1 million).
The figures presented in the stock exchange release are unaudited.
The Group's financial performance in January-June 2022 (compared with January-June 2021):
- Operating income (IFRS) increased by 41%, totalling around EUR 14.8 million (EUR 10.5 million).
- Comparable operating income** grew by 41% to around EUR 14.7 million (EUR 10.4 million).
- The operating profit* was around EUR 4.2 million (EUR 1.1 million).
- The result for the period was around EUR 3.3 million (EUR 0.8 million).
- The reported solvency of the Consolidation Group*** was 196.9%.
The amount of assets under management and insurance assets, including investment commitments to private equity funds, decreased by 7% and was EUR 3,547 million on 30 June 2022 (EUR 3,799 million on 30 June 2021). The decrease in the amount of assets under management and insurance assets was largely due to the decrease in the market in early 2022 and the partial return of equity from some of the Group's real estate funds.
The EAB Group fared well in the first half of 2022, and it adjusted its full-year guidance upwards in June. The Group's business operations continued to perform well during the first half of the year thanks to its continuing operations and exits from assets in certain real estate funds. The systematic cost discipline exercised by the Group in recent years has contributed positively to keeping the growth of expenses very moderate compared to business growth.
Despite the elevated risk caused by the coronavirus pandemic and the war in Ukraine, the Group has performed its debt liabilities without interruptions, and the availability of financing has remained good.
Group's key figures in brief (more detailed information is provided in the notes)
+-----------------------------+--------+--------+---------+
|Group's key figures |1-6/2022|1-6/2021|1-12/2021|
+-----------------------------+--------+--------+---------+
|Operating income, EUR million|14.8 |10.5 |22.2 |
+-----------------------------+--------+--------+---------+
|Operating profit*, EUR |4.2 |1.1 |2.9 |
|million | | | |
+-----------------------------+--------+--------+---------+
|Operating profit, percentage |28.3 |10.8 |12.8 |
|of operating income | | | |
+-----------------------------+--------+--------+---------+
|Result for the period, EUR |3.3 |0.8 |2.1 |
|million | | | |
+-----------------------------+--------+--------+---------+
|Result for the period, % of |22.2 |7.7 |9.6 |
|operating income | | | |
+-----------------------------+--------+--------+---------+
|Earnings per share, diluted, |0.24 |0.06 |0.15 |
|EUR | | | |
+-----------------------------+--------+--------+---------+
|Comprehensive earnings per |0.24 |0.06 |0.15 |
|share, diluted, EUR | | | |
+-----------------------------+--------+--------+---------+
|Alternative performance |1-6/2022|1-6/2021|1-12/2021|
|measures | | | |
+-----------------------------+--------+--------+---------+
|Comparable operating |14.7 |10.4 |21.9 |
|income**, EUR million | | | |
+-----------------------------+--------+--------+---------+
|Adjusted earnings per |0.22 |0.06 |0.15 |
|share****, diluted, EUR | | | |
+-----------------------------+--------+--------+---------+
|Adjusted comprehensive |0.22 |0.06 |0.15 |
|earnings per share****, | | | |
|diluted, EUR | | | |
+-----------------------------+--------+--------+---------+
|Profitability indicators | | | |
+-----------------------------+--------+--------+---------+
|Return on equity (ROE), % |15.3 |4.1 |10.7 |
+-----------------------------+--------+--------+---------+
|Return on assets (ROA), % |9.5 |2.4 |6.4 |
+-----------------------------+--------+--------+---------+
*) IAS 1 Presentation of Financial Statements does not define the concept of operating profit. The Group has defined it as follows: The operating profit is the net sum remaining after employee benefit expenses, other administrative expenses, depreciation and impairment losses, other operating expenses, and impairment losses on receivables have been deducted from the operating income. The operating profit also includes the share of the profit or loss of associates.
**) For funds managed on behalf of external partners, comparable operating income is based on net fees, while reported operating income describes gross fees.
***) The Group reports its solvency to the Financial Supervision Authority in accordance with Regulation (EU) No 2034/2019 of the European Parliament and of the Council. The regulation entered into force in 2021. The solvency ratios presented correspond to those reported to the Financial Supervisory Authority and only include Group companies supervised by the Financial Supervisory Authority (EAB Group Plc, EAB Asset Management Ltd and EAB Fund Management Ltd) and the financial services companies EAB Service Ltd and SAV-Rahoitus Oyj.
****) Adjusted earnings per share are based on the number of outstanding shares. EAB Group Plc, the parent company of the Group (hereinafter the "Parent company" or the "Company"), held 30,877 treasury shares on 30 June 2022 (37,893 on 30 June 2021). These excess shares are taken into account in the adjusted earnings per share, which present a true and fair view on the Group's earnings per share.
At the end of June 2022, EAB Group had 95 employees (93 on 30 June 2021), of whom 12 had a fixed-term employment contract. There were 51 employees in business operations and asset management, and 44 were working in Group functions (administration, HR, IT, legal, compliance and risk management services, marketing and communications, as well as finance). Our customers were also served by 22 tied agents. The Group had a total of 117 employees or tied agents at the end of the review period.
THE GROUP'S OUTLOOK FOR THE REST OF 2022
The Group's net profit percentage for the entire 2022 financial year is expected to be significantly positive in case the market environment does not significantly worsen during the rest of the year. In accordance with the announcement published on 31 May 2022, the Company has entered into a merger agreement with Evli Plc and the general meetings of EAB Group Plc and Evli Plc have decided on the merger on 14 July 2022. The Company will merge into Evli Plc on 30 September 2022.
DANIEL PASTERNACK, CEO
The first half of 2022 was very exceptional in many ways. The Russia-Ukraine crisis began to escalate in January and, to the dismay of the entire world, escalated into full-scale offensive warfare at the end of February. In addition to the immeasurable human suffering and the destruction of property in Ukraine, the war is having a major negative impact on the global economy and financial markets. So far, it has caused downturn in asset values and accelerated the increase in energy prices, which has strong multiplier effects on the supply of many commodities and on the price development of national economies as a whole.
Against this backdrop, the first half of EAB's financial year went very well. We had already relinquished the direct Russian investments in our emerging market funds in February before the war had even started, and our long-term investments in the production of renewable energy has received an unexpected boost from the market developments. Europe's desire to become self-sufficient in energy production is now accelerating a trend in which we have been strongly involved for a long time as a company. This is naturally reflected in the valuation of companies benefiting from the energy transition and in the demand for investment opportunities.
The result for the last six months was €3.3 million, by far our best ever. Our previous record was €1.3 million during the second half of last year. The strong performance improvement was partly due to significant exits from some real estate funds. Our ongoing business revenue simultaneously remained higher than ever, and we also managed to maintain our planned cost level.
During the period under review, we also prepared our merger with Evli, and the plan was approved at extraordinary general meetings of both companies on 14 July 2022. We have actively and openly sought the best options to grow our business and generate shareholder value. We are very pleased with this outcome. The companies form a complementary whole with harmonious values. Responsible investments and sustainability are the cornerstones of both companies. As a result of the increased resources, larger portfolio and synergies, the merger will excellently serve the interests of our customers and shareholders alike.
EAB GROUP PLC
Board of Directors
Further information:
EAB Group Plc
Daniel Pasternack, CEO
+358 50 569 3416
daniel.pasternack@eabgroup.fi
Therese Cedercreutz, Chair of the Board
+358 40 544 2502
therese.cedercreutz@miltton.com
Elite Alfred Berg offers responsible investment and asset management services for private investors, institutions, and professional investors. Elite Alfred Berg is the marketing name of the EAB Group. The Group's parent company EAB Group Plc's shares are listed on the Nasdaq Helsinki stock exchange. The Group companies include EAB Asset Management Ltd, which offers asset management activities, and EAB Fund Management Ltd, which acts as a fund company and authorised alternative investment fund manager. The Group's customer base consists of individuals and corporations that are served nationwide in 13 different locations. The Group employs 95 investment professionals, and more than 20 tied agents provide its services. On behalf of its clients, the Group manages assets of EUR 3.5 billion. Explore EAB Group's services at www.eabgroup.fi.
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www.eabgroup.fi
APPENDIX:
EAB Group Plc H1-2022 Half-year report