Press Releases

Strong Occupancy and Earnings

TECHNOPOLIS PLC                            PRESS RELEASE                  August 20, 2014 at 8:40 a.m.

Strong Occupancy and Earnings

In the first half of 2014 Technopolis’ EPRA-based (European Public Real Estate Association) direct result rose by 35.5% from 18.5 million euros to 25.0 million euros compared to 2013. The direct result per share rose from 0.22 euros to 0.24 euros. Net sales rose 31.5% from 60.9 million euros to 80.0 million euros and EBITDA by 41.3% from 30.2 million euros to 42.6 million euros. The financial occupancy rate remained strong at 93.5%.

Technopolis’ CEO Keith Silverang says, “This year we’ve focused on integrating the acquisitions made in 2013, improving profitability, and developing operational efficiency. We have nearly completed the integration of the Vilnius and Espoo Innopoli 3 campuses. The initial take-over phase in our Oslo campus is also complete, but full-scale service integration will take a year or two.” Service operations usually take 2–3 years to reach their net sales targets from the point of acquisition.

Investors are worried about the Ukrainian crisis and recent electronics industry shutdowns in Oulu. Silverang acknowledges those concerns, but emphasizes that the situation is not new to the company.

“There is no denying that the crisis and the related sanctions have damaged prospects for the Russian economy, but aside from a volatile Ruble we have not yet observed any significant impact on  our operations in St. Pete”, says Silverang. “It’s also important for investors to remember that the St. Pete unit is only about 6% of our balance sheet, so if things go from bad to worse I’m confident we can handle it. We now have operations in 12 cities and 5 countries, and I think the current crisis actually illustrates the reasoning behind our geographic diversification very well. ”

As for Oulu, the summer saw two large IT-sector customers announce that they are shutting down operations in the city. Silverang acknowledges that this is bad news for Oulu, but points out that this is nothing new. “What we are seeing is the tail end of a major industry restructuring process that began more than five years ago. Oulu is getting used to this and will bounce back. I think Oulu has shown its resilience and I’m certain it will recover from these hits with a stronger, better diversified economy.”

For Technopolis the shut-downs will have little short-term impact, but it will have to replace about 30,000 m² that will become vacant in blocks mainly between 2015–2020. Silverang is confident that Technopolis will be able to replace the lost customers. “We have a very strong team and an excellent track record in Oulu. Since 2010 we have re-let more than 90,000 m² of space. So I think re-letting 30,000 m2 over the next 5 years is definitely doable.”

According to Silverang the rest of 2014 will continue to be about business basics. “We are keeping our eye on the ball. The second half will continue to center around efficiency, customer satisfaction, successful integration of new units and building chain-driven economies of scale so that we will be ready for more growth down the line.” Technopolis remains confident in its 2014 growth guidance. It expects net sales to grow by 27–32% and EBITDA by 35–40%.

Technopolis Plc

Keith Silverang
Tel. +358 40 566 7785

Technopolis provides the best addresses for companies to operate and succeed in five countries in the Nordic-Baltic region. The company develops, owns and operates a chain of 21 smart business parks that combine services with flexible and modern office space. The company’s core value is to continuously exceed customer expectations by providing outstanding solutions to 1,700 companies and their 40,000 employees in Finland, Norway, Estonia, Russia and Lithuania. The Technopolis Plc share (TPS1V) is listed on NASDAQ OMX Helsinki.