The spread of the coronavirus into a global pandemic was reflected in Evli’s operations and financial performance in the second quarter. Evli’s commission income declined from the previous year, but the operating profit improved as a result of lower costs and improved return from own balance sheet items.
Strong result in an exceptional market environment
Financial performance January-June 2020
- Net revenue was EUR 33.0 million (1-6/2019: EUR 35.1 million)
- Operating profit was EUR 8.6 million (EUR 9.5 million)
- The Wealth Management and Investor Clients segment’s operating profit increased and was EUR 10.1 million (EUR 6.9 million)
- The Advisory and Corporate Clients segment’s operating profit declined and was EUR 0.9 million (EUR 1.0 million)
- The return from own balance sheet items declined as a consequence of the market collapse and were EUR -0.8 million (EUR 2.5 million), which resulted in a weaker operating profit in the Group Operations segment
- Net assets under management amounted to EUR 12.9 billion (EUR 13.3 billion) at the end of June
- Evli’s diluted earnings per share were EUR 0.25 (EUR 0.29) and return on equity was 17.3 percent (19.8%)
- Proportion of recurring revenue to operating costs was 121 percent (113%).
Financial performance April-June 2020
- The Group's net revenue was EUR 18.8 million (EUR 18.3 million)
- The Group's operating profit was EUR 6.5 million (EUR 5.2 million)
- Earnings per share amounted to EUR 0.18 (EUR 0.16).
Outlook for 2020
In the current market environment, we estimate that the operating profit for 2020 will be clearly positive. In a situation where market conditions would deteriorate from the current situation, we estimate the operating profit to be positive.
Despite the challenging market environment, the view is supported by a high ratio of recurring revenue to operating costs, as well as sales of alternative investment products, which have brought new, stable revenue. In addition, the company took a number of adjustment measures during March to ease the cost structure. As part of the measures, the Board of Directors and the Executive Group as well as some employees voluntarily reduced salaries and fees on a temporary basis, among other things. As a result of the rapid market recovery, the adjustment measures will be dissolved during the third quarter.
