Kojamo Plc

Good morning all and welcome to LUMO Home's half-year result webcast. I'm Niina Saarto, I'm Treasury and Investor Relations Director. Soon we will hear the Q2 results. Our CEO, Reima Rytsola, starts giving also an update on the markets as well as on the acquired portfolios leasing and how the integration to our platform has started. Then, entering CFO Antti Sivanen continues with financial development and outlook. Q&A follows the presentation and there we welcome both live questions and chat questions. So, now we can start with the presentation.

Very good morning on behalf of myself as well and welcome to this LUMO Q2 earnings release webcast. We had actually a strong quarter behind us and all the total revenue, net rental income and FFO grew strongly in second quarter. All in all, the market conditions seem to improve, and I come back on later stage a little bit more detailed on the market conditions. Our occupancy rate grew from last year's comparison point, even though we acquired on 1st of April Portfolio 4761 apartments which occupancy was much lower, 83 on the date of 1st of April. but already during Q2 we managed to raise the occupancy from 83 to 89 on this acquired portfolio and it was truly a success and the development has continued in very favorable terms since the end of June also. We also refinanced 300 million of our acquisition financing with the bond issue in May and all in all our financial position remains stable. In June we also signed 500 million backstop facility agreement which which is very favorable terms in cost effective wise to us and enables us to kind of refinance the maturing bond not earlier than next spring. If I then start with the operating environment, so all in all, I think The first half of the year for Finnish economy has been very good and it's glad to see that finally Finnish economy is leading the pack also in European context and on growth terms in first half. Both the first quarter and the second quarter preliminary GDP figures are 0.9% growth in each quarter, which is strong compared to what it has been in previous muted years. So, of course, the kind of geopolitical tensions and somewhat rising interest rates are giving some kind of clouds for the development, but so far so good on Finnish economy-wise. and also the kind of supply-demand balance seem to finally start balancing out, especially if we look at the supplied rental apartments, which, especially in Helsinki area, In Helsinki the amounts of offered apartments have declined meaningfully close to 20 percent from last year's comparison point or last 12 months time. Year to date the decline of a supply department has been even even higher, but then we need to bear in mind that we always have a kind of a seasonal effect from year to year, beginning of the year when we're coming to summertime, which is the kind of a seasonally best time for landlords. But also, as I said, that for example, Helsinki, it's roughly 20% decline in the year. in apartments that are offered for rental. So it's meaningful in that sense. Also the construction has been very muted. This year and even some of the forecasts seem to be that also the next year for residential construction will be even lower than this year and at the moment the latest forecast is 15 000 apartments. still the especially the growth triangle so to say so Helsinki area, Tampere, Turku area is growing on population terms and even the household terms even though the households haven't grown as number of households haven't grown as fast as population and that has been probably the one thing that has kind of postponed the recovery of a rental market. But now it seems to be started, that it has started from Helsinki area and it's, of course, the most important area for us, especially Helsinki as a city, but Helsinki area, our role, so 76% of our portfolio value is in Helsinki area, and in that growth triangle, close to 90% of our apartments are located in the growth triangle. So I would say that our portfolio is in good shape to kind of face the recovery that has started from the capital area. Then as we already announced in February and the deal was closing in 1st of April, so we acquired 4,761 apartments and I think the only weak spot of the portfolio was that it has a very low occupancy at the time of acquisition or closing and it was roughly 83 percent but already during as I said already earlier so already during the Q2 we were able to raise the occupancy from 83 to 89 and the development has has been very favorable since that either. So it looks good. And on the last Q1 earnings release, I said that we expect to reach with this portfolio, the stabilized occupancy rate, which we mean that roughly the same occupancy rate than we have in our legacy portfolio. So we expect to reach that, probably not this year but but latest on during next year but I have to revise that due to favorable development so that we already expect to reach that stabilized level already in Q3 so by the end of September if this kind of a favorable development carries on like we do believe at the moment.

All in all I would say that we had a kind of a