Source: Inderes *Adjusted for change in fair value due to change in required rate of return

Translation: Original published in Finnish on 8/4/2026 at 8:00 am EEST.

Toivo Group will publish its Q2 report on Wednesday, August 5, at around 8:00 am EEST. We expect the company's revenue and earnings to have grown strongly from the comparison period, as we estimate Q2 was a busy quarter for project completions. However, it is worth remembering that there is always uncertainty associated with revenue and earnings due to the typical quarterly fluctuations in the business. On the earnings day, our attention will be drawn to housing market comments and the development of the company's project pipeline. The company's results webcast can be followed here starting at 11:00 am EEST.

Completions drive strong revenue growth

We estimate Toivo's revenue to have grown very strongly by 87% in Q2, reaching 21.8 MEUR (Q2'25: 11.6 MEUR). The strong growth is partly due to the business increasingly focusing on off-balance sheet grind and project management contracting projects, in addition to timing-related factors. In any case, we expect strong growth, which for the previous volume metric "Investments and volume" would mean 39% growth. However, it is good to remember that Toivo's revenue varies significantly between quarters depending on the exact completion status and delivery times of projects, and there is always a lot of uncertainty associated with forecasting it.

Earnings will increase with volumes

We expect Toivo's EBIT to grow to 2.7 MEUR in Q2 (Q2'25: 1.5 MEUR). Earnings growth is driven by strong revenue growth, and we expect the operating margin to remain at a healthy 12.5% (Q2'25: 12.7%). In Q1, the company's project profitability exceeded our expectations, and acquisition costs remained under control. We expect profitability to have continued its good trend. We do not expect changes in the fair value of investment properties to impact the Q2 result, and we predict development gains to remain small. We do not expect any unusual items on the lower lines of the income statement and estimate earnings per share to have settled at EUR 0.03 (Q2'25: 0.01 EUR).

Eyes on the future, as usual

We expect Toivo to reiterate its current year guidance, according to which 2026 revenue will be 65–85 MEUR and EBIT 6–11 MEUR. Our full-year forecasts are at the mid-points of the guidance ranges (revenue 74 MEUR, EBIT 7.9 MEUR). The recovery of the housing market has been slow, and elevated interest rates and inflation concerns continue to overshadow the market. However, the oversupply of rental apartments in the Helsinki metropolitan area has gradually started to melt away due to low new construction, and according to KTI, on June 1, the average occupancy rate of rental apartments owned by professional landlords in the Helsinki metropolitan area was 93.5%, an increase of 1.5 percentage points from the previous year. Despite the downturn in the housing market, Toivo has found opportunities in carefully selected residential properties and social infrastructure properties. On earnings day, we will again follow the company's comments on the market situation and project pipeline with interest.

The Supreme Administrative Court rejected the appeal filed by Luona, the operator of the reception center, concerning the center's operations in a property owned by Toivo in Miilukorpi, Espoo. As a result of the decision, operations cannot continue in the current property and must cease by September 30, 2026. Some 80 apartments will become available on the rental market from the property. We are seeking further information from the company regarding the more detailed effects and timing of the decision. The number of dwellings becoming available is significant in Toivo's rental portfolio (~13% of dwellings), but the overall impact on the company is moderate, as development and construction are currently Toivo's clearly most important value drivers.

The otherwise positive news flow following Toivo's Q1 results supports our expectations for project launches weighted towards H2. In July, Toivo announced the start of two owner-occupied housing projects in Verkkosaari, Helsinki, valued at 14 MEUR and 9 MEUR, respectively, in a joint venture with Westons. Both of these projects are group-building projects converted into housing limited liability company (RS) projects, and we are seeking more information on whether more such projects could be in the pipeline and what their profitability potential is from Toivo's perspective. In addition, the company announced in June that it would build a 15 MEUR apartment building for Premico's housing fund in Puistola, Helsinki. It also signed an agreement for a 7.5 MEUR owner-occupied housing project in Pakila, Helsinki, and was selected to implement a day-care center project in Yli-Ii for the City of Oulu. These projects demonstrate Toivo's ability to find and initiate projects even in a challenging housing market, and their completion will particularly support 2027 volumes.