Taaleri Q3'25 flash comment: Huge earnings beat from investment income

Source: Inderes

Translation: Original published in Finnish on 10/28/2025 at 9:20 am EET.

Taaleri reported significantly better figures this morning than we had estimated. The beat was purely due to investment income, and operationally the quarter was fully in line with our expectations. Otherwise, our key observation in the report is the company's clearly more active approach to its own balance sheet investments and the progress of the Canadian biochar project. Overall, the report leans towards the positive side, although we do not initially expect major forecast changes.

Changes in the fair value of the investment portfolio explain the earnings beat

Taaleri's EBIT was 15.4 MEUR, fiercely exceeding our 5.9 MEUR estimate. During the review period, Taaleri made an exceptional number of changes to the valuations of its investment portfolio, which resulted in a net positive result of around 8 MEUR. In addition, Garantia's investment portfolio returns were also a notch better than we expected. Thus, the entire earnings beat came from investment income, and EBIT from continuing earnings (Q3'25: 3.9 MEUR) was well in line with our expectations. The tax rate remained exceptionally low due to changes in the fair value of investments, and thus EPS of EUR 0.43 exceeded our forecast of EUR 0.13 by an even wider margin.

Private Equity Funds progressed as expected

In Private Equity Funds, development was in line with our estimates and recurring fees (6.7 MEUR) were exactly at our forecasted level, growing by 7% year-on-year, driven by SolarWind III. Renewable Energy recorded a 1.7 MEUR one-off item of re-invoiced expenses related to the divestment process in its revenue during the review period, which is why the reported revenue superficially shows strong growth. However, the corresponding expense entry for this item is found in the expenses, and it has no operational impact. The result of Private Equity Funds was also fully in line with our expectations, and thanks to the strong performance of Renewable Energy, the segment is handsomely profitable. The performance fees of old wind funds, recognized front-loaded, remained unchanged on the balance sheet, which we consider positive as their value is tested every quarter.

Another excellent performance from Garantia

Garantia's performance was very strong, in line with our expectations. The company's guarantee portfolio continued its cautious growth, and insurance premium income also grew from the comparison period, marginally exceeding our forecast. The company benefits from the turnaround in the housing market, but its own actions have also strengthened its market position. The insurance technical result was again strong, and claims costs clearly decreased from the previous quarter. Investment income was, as expected, at a good level thanks to the favorable capital market momentum. Overall, Garantia's performance was excellent once again.

Major movements in the investment portfolio during the quarter

As expected, the company reiterated its segment-specific outlook for the current year. The most interesting aspect of the report was the company's comments regarding its investment activities. Based on the report, the company has rolled up its sleeves and taken a clearly more active approach to its investment activities. The company has established a separate investment team to manage the Group's investments, and in the report, the company also provided more insight into the development of key holdings than before. We are naturally positive about a more active approach, as we believe that own balance sheet investment activities will be a key driver for the share in the coming years. The Canadian biochar project moved forward again as it progressed to financing negotiations. There were significant changes in the valuation of the investment portfolio. The key factor was the fair value recognition of the Texas wind farm project, which resulted in a positive earnings impact of just under 8 MEUR. The most significant write-down was seen in WasteWise Group, which saw its value decrease to near zero. The value of Fintoil and Toriparkki, on the other hand, increased.