SATO Corporation will switch to using a yield-based valuation method
Jan 23, 2020
SATO Corporation Stock exchange release 23.1.2020 at 4:00 pm
The Board of Directors of SATO Corporation has today, 23 January 2020, taken the decision to begin using a yield-based valuation method to determine the value of the company’s investment properties. As a result of the change, the company’s property value is expected to increase by €400-500 million and thus the result for 2019 will improve accordingly. The company will switch to the yield-based valuation method in its financial statements as of 31 December 2019. SATO Corporation’s 2019 result will be made public on 27 February 2020.
Prior to the change, SATO Corporation used a sales comparison valuation method, i.e. the market approach, in which investment properties are valued in relation to the known price of comparable investment properties found in the market. The yield-based valuation method is based on the cash flow from net rental income. The change is thus a matter of a change in the accounting estimates, and the impact of the change will be entered in the company’s consolidated income statement and balance sheet beginning from the period during which the change was enacted.
The yield-based valuation method gives the company a better opportunity to make comparisons with other real estate investment operators.
SATO Corporation’s independent property evaluator is Jones Lang LaSalle Finland Oy (JLL).
The change does not apply retroactively.
President and CEO Sharam Rahi, tel. +358 201 34 4001
CFO Markku Honkasalo, tel. +358 201 34 4226
Nasdaq Helsinki, main media, www.sato.fi
SATO is one of Finland's leading rental housing providers. SATO aims to offer a comprehensive choice of rental housing and an excellent customer experience. At year-end 2018 SATO owned around 25,900 apartments in Finland's largest growth centres and in St. Petersburg.
We promote sustainable development and initiative through our operations and work in open interaction with our stakeholders to generate added value. We operate profitably and with a long-term view. We increase the value of our housing stock through investments, divestments and repairs.
The SATO Group's net sales in 2018 were EUR 290 million, operating profit EUR 273 million and profit before taxes EUR 231 million. The value of SATO's investment properties was roughly EUR 3.9 billion.