Taaleri Q3'24 preview: One-offs boost results to wild levels

Translation: Original published in Finnish on 11/1/2024 at 7:22 am EET.

Taaleri publishes its Q3 result on Tuesday, November 5, at approximately 08:00 am EEST. The reported result is exceptionally high, but this is explained by the previously announced one-off gain from the sale of the project portfolio. On earnings day, as usual, we will focus on the sales outlook for the SolarWind 3 fund. Otherwise, the report is unlikely to offer any bigger surprises.

One-off income from the sale of the project portfolio added to the forecasts

We have taken into account the announced one-off gain from the sale of the Renewable Energy project portfolio, which has led to a significant increase in our earnings forecast for the current year. However, this was partly a timing matter, as our forecast for next year assumed a return of around 5 MEUR from the sale of the portfolio. As a result, our cumulative EBIT forecast for 2024-2025 was only about 4% higher as a result of the booking.

Earnings rise to record level thanks to one-off in private equity funds

Taaleri’s revenue is a rather poor indicator of the development of the Group’s business operations, as most of the investment income that fluctuates by quarter is also reflected in revenue. We recommend focusing on the development of the individual segments.

At Group level, we expect Taaleri's revenue to reach 20.3 MEUR, significantly up year-on-year due to the one-off income recognized in the result of Private Asset Management. Our Q3 EBIT estimate is 12.9 MEUR.

Private equity fund ramp-up in focus on earnings day

We expect continuing earnings from Private Asset Management to have been around the level of the comparison period, at 6.4 MEUR. In addition, Renewable Energy will recognize an additional 8.3 MEUR from the sale of the project portfolio to the SolarWind 3 fund in the period under review, which we expect to result in an EBIT of 8.8 MEUR for Private Asset Management.

We expect Renewable Energy's profitability, adjusted for one-off gains, to continue to improve, driven by an increase in management fees. However, other private equity funds are still loss-making as the biotech industry's front-loaded growth investments weigh on profitability.

In terms of new sales, the focus is naturally on the SolarWind 3 fund, which is in the fundraising stage. We look forward to management's comments on sales performance, although we do not expect to hear about any further closures until the end of the year. Comments on the development of the demand outlook for other funds are also welcome.

Strong results expected from Garantia

We expect Garantia's insurance service result to have been at the previous quarter's level. We also estimate that the stock of guarantees remained at the previous quarter's level as demand for mortgages remained sluggish. We consider this to be a temporary challenge, however, that will pass as the housing market picks up. We expect claims costs to remain moderate and therefore the company should once again report a good insurance service result (3.3 MEUR).

Our forecast for the return on Garantia's investment portfolio at fair value is around 2%. Overall, we expect Garantia's EBIT for the third quarter to amount to 5.3 MEUR.