Risks

The risks presented here are from Financial Statements Release for 2016 published in February 3, 2017.

The four most significant near term risks affecting Technopolis’ business are related to interest rates, geographical concentrations, currencies and customers.

The Group’s interest-bearing liabilities amounted to EUR 959.9 (864.8) million. A one percentage point increase in market rates would cause a EUR 2.7 (1.7) million increase in interest costs per annum.

Finland represents 61.4% of the Group’s assets (fair values of investment properties) and 70.1% of net sales. Country-related matters such as slow economic growth could have an impact on the Group’s financial performance.

The Group is exposed to changes in the Norwegian krone, the Russian ruble and, from July 1, 2016 onwards, also the Swedish krona. The direct impact of changes in exchange rates on the Group’s operating profit, balance sheet and equity ratio as of December 31, 2016 are presented below. The table does not include the conversion impacts of FX changes on net sales and EBITDA.

 

Foreign currency % change against the Euro

Transaction difference effect

Translation difference effect

Total effect on the Group’s equity

Equity ratio

RUB -10

0.0

-7.6

-7.6

41.3%

RUB +10

0.0

9.3

9.3

41.8%

NOK -10

0.0

-7.9

-7.9

41.6%

NOK +10

0.0

9.7

9.7

41.5%

SEK -10

0.0

-4.1

-4.1

41.6%

SEK +10

0.0

5.0

5.0

41.5%

 

In Russia, Norway and Sweden, the Group had liabilities only in the local currencies, and thus it is only vulnerable to translation differences in equity. At the end of the period, Russian subsidiary had equity of RUB 5.4 billion, Norwegian subsidiaries’ equity totaled NOK 792 million, and Swedish subsidiaries’ equity was SEK 429 million.

In December, the ten largest customers accounted for 17.7% of rental income. The single largest customer accounted for 3.9% of rented space and 3.1% of rental income.

For a more detailed outline of the risks, please see the company’s Annual Report 2016. It is the opinion of the Board of Directors that there have been no material changes to the near term risks outlined in the 2015 Financial Report.