Source: Inderes

Translation: Original published in Finnish on 10/27/2026 at 8:30 am EET.

Toivo Group will publish its Q3 business review on Wednesday, October 28, at around 8:00 am EET. We expect revenue to have grown strongly year-on-year, driven by project starts. Including balance sheet investments, however, we estimate that business volume remained at the comparison period’s level. We forecast EBIT to have risen to 2.4 MEUR (Q3'25: 1.6 MEUR), with good earnings quality, as the result is cash flow-based. Toivo’s earnings declined in H1, and the guidance relies on project starts during the rest of the year. We nonetheless see a good basis for the required earnings improvement, supported by completions and increased starts. On earnings day, our focus will be particularly on the outlook for project starts, comments on the housing market, and occupancy trends. The company’s earnings call can be followed here from 10:00 am EET.

Strong revenue growth expected

We forecast Toivo’s Q3 revenue to have grown by 56% to 21.5 MEUR (Q3'25: 13.8 MEUR). We estimate that growth came mainly from project management contracting. We expect relatively few developer-contracted housing projects to have been completed, though at good margins. Including balance sheet investments, we expect revenue and investments combined to have been roughly in line with the comparison period (Q3'26e: 22.1 MEUR, Q3'25: 22.7 MEUR), indicating a shift in focus toward off-balance-sheet projects. Quarterly fluctuations are typical for Toivo, so revenue forecasts are always subject to a high degree of uncertainty.

In leasing operations, we are closely monitoring the Miilukorpi property in Espoo, where the reception center had to close by the end of September following a Supreme Administrative Court ruling. This released around 80 apartments onto the rental market, of which 76% are still unlet, according to the company’s website. This will weigh on the occupancy rate for the rest of the year (Q2'26: 94.4%). We nonetheless see reasonable prospects for letting the apartments, given the high occupancy of the other property on the same plot and the gradually recovering rental housing market.

Construction volumes expected to lift earnings

We forecast Toivo’s EBIT to have risen to 2.4 MEUR (Q3'25: 1.6 MEUR), with an EBIT margin of 11.2% (Q3'25: 11.4%). The comparison period was supported by development gains of 0.4 MEUR, whereas for Q3 we expect only minor development gains (0.1 MEUR), as we do not expect any further significant projects to be completed on the company’s own balance sheet. We estimate the margin for project management contracting and development services at ~13% (not reported). Project profitability, which fell short of our expectations in Q2, is one of the key items to watch on results day. It should be assessed on an annual basis, however, as project revenue recognition always fluctuates between quarters.

We expect financing costs to have increased year-on-year on project starts (Q3'26e: 0.9 MEUR, Q3'25: 0.7 MEUR). We estimate that EPS rose to EUR 0.02 (Q3'25: EUR 0.00).

Project start outlook in focus

Toivo guides for 2026 revenue of 65–85 MEUR and EBIT of 6–11 MEUR. Our revenue forecast (81 MEUR) is at the upper end of the range, and our EBIT forecast (7.7 MEUR) slightly below the midpoint. With H1 EBIT at 2.7 MEUR, our forecast implies EBIT of ~5.0 MEUR for H2, which we consider realistic, as the company said in its Q2 report that revenue recognition would again be weighted toward the end of the year. We expect the company to reiterate its guidance, the lower end of which requires a reasonable H2 performance.

The new residential construction market remains difficult, and in its October economic review, the Confederation of Finnish Construction Industries RT forecasts housing starts to remain at 15,000 this year and rise to only 16,000 next year. Higher interest rates and weak investor demand are slowing the recovery. Toivo has nevertheless found demand for carefully selected projects. Construction of Gemma in Sompasaari began in October, and all 34 apartments were reserved within a few hours. The company immediately began designing the second phase, and the website for Sompasaaren Vega is now live. In addition, the company started a ~7.5 MEUR resident-owned housing project in Oulunkylä, Helsinki, in October, and agreed on a 2.9 MEUR area development project in Kaitaa, Espoo, in August.

However, the Oulunkylä project was the first project start announced after Q2, meaning that project starts in Q3 remained rather low. October starts will particularly support volumes in 2027, but we estimate that the continuation of growth beyond that will require a gradual recovery of the market. We will closely monitor management's comments on the progress of the project pipeline and the start-up outlook for the rest of the year on the report day.