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SATO renews its financial reporting

Apr 12, 2017

SATO Corporation, Other information disclosed according to the rules of the Exchange, 12th April 2017 at 1:30 p.m.

SATO Corporation will alter to its financial reporting as of the first quarter in year 2017. The alterations are due to changes in the SATO's strategy and business. The information given in the new reporting model is considered to better reflect the current strategy and the recent development of the business. 

The reporting is aligned with SATO's strategic decision to give up the production of owner-occupied properties and focus on the rental business. Sale of new apartments and land stock is not a part of the group's core business and their share of the group's income has decreased remarkably. Sales income from new apartments, sales income from land stock sales and the corresponding expenses which has earlier been presented as a part of the net sales are reclassified into other operating income in the new reporting model.

Due to the alterations, the net sales of the group will be only comprised of the rental income. The corresponding expenses, i.e. property maintenance expenses and ground rents, will be disclosed as one item in property maintenance expenses.

Accordingly, the group's unbuilt land stock reserve and properties under construction that are not classified as investment property will be included in the Group's balance sheet in the tangible assets. The reporting changes have no impact on the shareholders' equity and liabilities.

The first Interim report based on the new reporting structure for the period January-March 2017 will be published on 27 April 2017.

Comparison data of the new financial reporting for the year 2016 is presented below.

|||||||
|:- | -----------:| -----------:| -----------:| -----------:| ---------:|
| Consolidated Income statement, IFRS |   |   |   |   |   |
|   |   |   |   |   |   |
| MEUR | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | 2016 |
| Net Sales | 61,1 | 65,4 | 68,3 | 67,9 | 262,7 |
| Property maintenance expenses | -22,8 | -22,2 | -23,6 | -27,0 | -95,7 |
| Net operating income | 38,2 | 43,2 | 44,7 | 40,9 | 167,1 |
|   |   |   |   |   |   |
| Changes in value of investment properties, realised | 0,7 | 0,0 | -0,2 | 0,3 | 0,7 |
| Changes in value of investment properties, unrealised | 39,8 | 23,2 | 38,5 | 22,7 | 124,3 |
| Sales, marketing and administrative expenses | -7,2 | -8,3 | -6,7 | -7,8 | -30,0 |
| Other operating income | 2,0 | 1,8 | 0,4 | 3,6 | 7,7 |
| Other operating expenses | -0,5 | -0,9 | -0,7 | -0,5 | -2,6 |
|   |   |   |   |   |   |
| Operating profit | 72,9 | 58,9 | 76,1 | 59,3 | 267,2 |
|   |   |   |   |   |   |
| Financial income | 0,1 | 0,2 | 0,2 | 0,2 | 0,6 |
| Financial expenses | -9,7 | -13,5 | -12,3 | -12,9 | -48,4 |
| ** ** | -9,6 | -13,3 | -12,1 | -12,7 | -47,8 |
|   | ** ** | ** ** | ** ** | ** ** | ** ** |
| Profit before tax | 63,3 | 45,6 | 64,0 | 46,5 | 219,4 |
|   |   |   |   |   |   |
| Income tax expenses | -12,9 | -9,5 | -12,8 | -9,6 | -44,8 |
| Profit for the period | 50,4 | 36,1 | 51,2 | 36,9 | 174,7 |

|||||||
|:-:| -----------:| -----------:| -----------:| -----------:| ----------:|
| Assets |   |   |   | ** ** | ** ** |
| ** ** | ** ** | ** ** | ** ** |   |   |
| MEUR | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | 2016 |
| ASSETS |   |   |   |   |   |
| Non-current assets |   |   |   |   |   |
| Investment property | 2823,4 | 3248,6 | 3335,7 | 3383,2 | 3383,2 |
| Tangible assets | 106,4 | 109,8 | 102,8 | 105,1 | 105,1 |
| Intangible assets | 1,9 | 2,1 | 1,7 | 1,6 | 1,6 |
| Investments in associated companies | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 |
| Available-for-sale financial assets | 1,7 | 1,7 | 1,7 | 1,7 | 1,7 |
| Non-current receivables | 12,5 | 12,3 | 12,2 | 13,4 | 13,4 |
| Deferred tax assets | 16,9 | 18,2 | 18,3 | 16,1 | 16,1 |
| Total | 2962,7 | 3392,7 | 3472,3 | 3521,1 | 3521,1 |
|   |   |   |   |   |   |
| Current assets |   |   |   |   |   |
| Account and other receivables | 16,5 | 18,6 | 24,4 | 18,0 | 18,0 |
| Deferred tax assets | 6,3 | 7,4 | 8,5 | 4,9 | 4,9 |
| Cash and cash equivalents | 301,6 | 79,7 | 35,4 | 18,3 | 18,3 |
| Total | 324,3 | 105,7 | 68,3 | 41,2 | 41,2 |
|   |   |   |   |   |   |
| TOTAL ASSETS | 3287,1 | 3498,3 | 3540,6 | 3562,2 | 3562,2 |

For more information please contact:

Saku Sipola, President & CEO, tel. +358 201 34 4001
Markku Honkasalo, CFO, tel. +358 201 34 4226

www.sato.fi/en 

SATO is one of Finland's leading rental housing providers. SATO's aim is to offer comprehensive alternatives in rental housing and an excellent customer experience. SATO holds roughly 25,300 apartments in Finland's largest growth centres and in St Petersburg.

In our operations, we promote sustainable development and initiative-taking, and work in open interaction with our stakeholders to create added value. We operate profitably and with a long-term view. We increase the value of our housing property through investments, divestments and repair work.

SATO Group's net sales in 2016 were €262,7 million, operating profit €267.2 million and profit before taxes €219.4 million. SATO's investment properties have a value of roughly €3.4 billion.