Investors House’s Results Impacted by Reduction in Real Estate Values

The real estate investment firm, Investors House, disclosed its financial results for the previous year and the last quarter (October-December).

The company’s turnover for the last quarter dropped from 2.1 million euros the previous year to 1.8 million euros.

The net income came in at 0.55 million euros, down from 0.65 million euros from the prior year.

The operating result was 0.34 million euros, slightly lower than the 0.36 million euros recorded the previous year.

Decrease in Real Estate Value

The operating profit reported was 0.04 million euros, a significant decline from the 3.9 million euros recorded a year ago.

The company’s performance in the last quarter was 0.1 million euros compared to 2.3 million euros in the same quarter of 2022.

The company’s result in the last quarter was negatively affected by the decrease in the values ​​of wholly owned properties by approximately 1.0 million euros, the goodwill write-down of subsidiary Juhola Asset Management by 0.6 million euros, and incentive fees by 0.03 million euros. However, the positive change in the value of investment properties owned by associated companies boosted the result by about 1.5 million euros.

The net asset value per share, as described by the EPRA NRV, was 5.76 euros, compared to 6.23 euros at the end of 2022.

Financial analysis firm, Inderes, which closely follows Investors House, had forecasted a turnover of 1.8 million euros, a net income of 0.6 million euros, and a fall in the reported operating result to a loss of 0.2 euros.

The company’s board is proposing a dividend of 0.33 euros for 2023, compared to the 0.31 euros paid out for 2022. Inderes had also predicted a dividend of 0.33 euros.

Investors House anticipates that the financial performance of 2024 will be on par with the results of 2023.

The company’s Managing Director, Petri Roininen, believes that the strategic plan for 2020-23 was successful.

Roininen commented, “Nearly all of the strategic goals set in 2020 were achieved despite the challenges posed by the coronavirus pandemic, inflation, and a rapid rise in interest rates. This is a testament to Investors House’s capacity to generate shareholder value across business cycles.

“Over the course of the strategy period and its last year in 2023, we forged significant partnerships with clients. Our profitability trended positively. Despite inflation and rising interest rates, expenditure levels remained manageable. Our equity and liquidity positions are strong.”

Partial Compensation for Real Estate Value Write-downs

According to the review, property valuations were especially affected by the increased yield requirements resulting from rising interest rates. The value changes of wholly owned properties at the start and end of the year varied between -25 percent and +2 percent.

However, in line with its strategy, the company succeeded in offsetting the decrease in value caused by the increased yield requirements by enhancing occupancy rates, applying full rent increases, and carrying out property development.