SATO Oyj: SATO Corporation Half-Year Report 1 January - 30 June 2025: Oversupply in the rental market continues

SATO Corporation, Half-Year Report 15 July 2025 at 9:00 am EET

This is a summary of SATO's half-year report for January-June, which has been published in full as an appendix to the release and at www.sato.fi/en. The figures in the report are unaudited.

Summary for 1 Jan - 30 Jun 2025 (1 Jan - 30 Jun 2024)

• The economic occupancy rate was 95.0% (95.1).
• Net sales totalled EUR 154.7 million (150.5).
• Net rental income was EUR 104.3 million (101.1).
• Profit before taxes was EUR 45.2 million (50.9).
• The unrealised change in the fair value of investment properties included in the result was EUR 2.1 million (6.8).
• Housing investments amounted to EUR 11.9 million (22.8).
• Invested capital at the end of the review period was EUR 4,587.9 million (4,531.2).
• Return on invested capital was 3.7% (3.8).
• Equity was EUR 2,634.8 million (2,564.7) or EUR 31.04 per share (30.21).
• Earnings per share were EUR 0.43 (0.53).
• 0 rental apartments (92) were completed.
• Renovation of 0 apartments (56) was completed.
• 0 rental apartments (257) were under construction.
  
  

Summary for 1 Apr - 30 Jun 2025 (1 Apr - 30 Jun 2024)

• The economic occupancy rate was 94.9% (95.3).
• Net sales totalled EUR 77.5 million (75.8).
• Net rental income was EUR 57.5 million (57.5).
• Profit before taxes was EUR 26.9 million (31.4).
• The unrealised change in the fair value of investment properties included in the result was EUR 0.7 million (5.1).
• Housing investments amounted to EUR 8.0 million (10.0).
• Earnings per share were EUR 0.25 (0.30).
• 0 rental apartments (0) were completed.
• Renovation of 0 apartments (0) was completed.
• 0 rental apartments (257) were under construction.
• The occupancy rate declined slightly due to the oversupply in the rental market.
  
  

President and CEO Antti Aarnio:
We kept our economic occupancy rate at a good level despite the volatile market. The occupancy rate declined slightly year on year and was 95.0% (95.1). Average rents per square metre increased compared with the corresponding period last year, with the average monthly rent being EUR 18.52 per m² (18.30) at the end of the review period.

Uncertainty in the global economy grew as trade policy tensions increased. This uncertainty has an adverse effect on household consumption and slows down Finland's economic recovery.

The substantial oversupply in the rental housing market continued and the volume of new residential building starts is expected to remain low for the current year. SATO will not launch any newbuild projects this year and is not planning any new building starts for next year, either.

The scaling up of the SATO webshop for rental homes opened at the beginning of the year proceeded as planned. The supply of SATO's offering of homes rented through a self-service system is stepped up in a controlled manner in the Helsinki Metropolitan Area, Turku and Tampere.

In June, we signed a EUR 150 million unsecured sustainability-linked loan facility.

Investments in local energy production continued. By the end of the year, 9,108 SATO homes at 127 properties will be making use of locally produced renewable energy.

According to research conducted by the market research company Nepa, the positive trend in rental housing continues. More than half of the survey respondents reported an increased interest in renting a home.

We celebrated the 85 years of SATO history with SATO alumni. The anniversary year celebrations will continue throughout the year with our various stakeholders.

Key figures

	1-6/2025	1-6/2024	1-12/2024
Net sales, EUR million	154.7	150.5	304.1
Number of rental apartments, pcs	25,847	25,578	25,849
Investment property, EUR million	5,004.0	4,929.4	4,971.4
Housing investments, EUR million	11.9	22.8	48.6
Under construction, pcs	0	257	0
Average rent at the end of the review period, €/m2/month	18.52	18.30	18.40
Cash earnings (CE), EUR million	31.8	34.3	88.2
Shareholders' equity, EUR million	2,634.8	2,564.7	2,599.8

Events after the review period
On 1 July 2025, SATO signed a purchase agreement for 968 rental homes. The acquisition includes 16 residential properties located in the Helsinki Metropolitan Area, Turku, Tampere, Jyväskylä and Oulu. SATO now owns approximately 27,000 rental homes. The acquired properties are an excellent addition to SATO's housing portfolio in Finland's largest growth centres.

Outlook
The outlook for the euro area and the United States as well as for the global economy as a whole has declined, as trade policy tensions intensified early this year. Finland's economic growth is projected to turn positive during the current year, but the major uncertainty is conducive to reducing both household consumption and enterprise investments. If the tariff increases announced by the United States cannot be negotiated to lower levels, they will have a clear weakening effect on global economic growth, Finland's exports and, consequently, economic growth expectations.

The unemployment rate is forecast to peak this year and then take a downturn, provided that the economy will not re-enter recession due to high tariffs.

The economic uncertainty and the shadow cast over the economy by rapid trade and geopolitical changes are still slowing down recovery in construction. In addition, the number of unsold new homes remains a a high level. In the rental market, competition for good tenants continues and the imbalance between supply and demand is unlikely to enable any large-scale commencement of newbuild rental housing construction next year, either.

Rental housing is becoming increasingly popular, with more than a million household-dwelling units already renting. In an uncertain economic and employment situation, rental housing is regarded as a safer and more flexible option from the cost management perspective.

Going forward, the current low newbuild construction level, urbanisation and immigration will correct some of the supply-demand imbalance. Towards the end of the decade, new rental homes will also be required to support economic growth, urbanisation and growing immigration, particularly in growth centres in locations with good access to public transport and services.

In line with its majority shareholder's operating model, SATO Corporation will not publish guidance on its 2025 earnings. The parent company of Balder Finska Otas AB is Fastighets AB Balder, which is quoted on the Stockholm Stock Exchange.

For more information, please contact:
CEO Antti Aarnio, tel. [phone], [e-mail]
CFO Markku Honkasalo, tel. [phone], [e-mail]

Enclosures
Half-Year Report 1 January to 30 June 2025
Half-Year Report presentation 1 January to 30 June 2025

Distribution
Euronext Dublin, main media, www.sato.fi/en

SATO Corporation
SATO is an expert in sustainable rental housing and one of Finland's largest rental housing providers. SATO owns around 27,000 rental homes in the Helsinki Metropolitan Area, Tampere and Turku.

SATO aims to provide an excellent customer experience and a comprehensive range of urban rental housing alternatives with good access to public transport and services. We promote sustainable development and work in open interaction with our stakeholders.

SATO invests profitably, sustainably and with a long-term view. We increase the value of our assets through investments, divestments and repairs. In 2025 SATO celebrates its 85^th anniversary. www.sato.fi/en