CEO’s review Q1/2024
In the first quarter of 2024, we continued to promote our strategy that focuses on renewable energy, bioindustry and real estate. In the strategy update published at the end of last year, we put direct investments at the core of our strategy. During the first quarter, we built them a dedicated strategy and organisation, in addition to which we revised the strategy of our real estate business.
Taaleri Group’s net income developed positively in the first quarter. The Group’s continuing earnings grew to EUR 10.3 million, mainly driven by the Private Asset Management segment. Income increased to EUR 17.0 million as a result of growth in continuing earnings and a strong net income from investment operations. The strong growth in income also supported the strengthening of the operating profit, and the operating profit margin was 56.2%.
The Private Asset Management segment’s continuing earnings grew to EUR 5.9 million and operating income to EUR 6.7 million. Operating profit improved and was EUR 0.5 million. No performance fees were recognised during the quarter.
During the first quarter, the renewable energy business continued the active fundraising for Taaleri SolarWind III Fund and the active development of the fund’s project development portfolio. Our goal is to raise EUR 700 million for the fund. Several of the fund’s projects approached towards a construction decision during the review period. The Taaleri SolarWind II Fund focused on the high-quality and efficient operation of projects already in production. Preparations to exit the Taaleri Wind II and Taaleri Wind III Funds continued.
The new strategy for the real estate business was completed in the review period. According to the strategy, we will develop new products and services for the real estate business and aim to launch them on the market this year. In accordance with the new strategy of the real estate business, the focus of operations will shift more strongly to the structuring of new investment products, as well as to the investment activities themselves.
In the bioindustry business, we continued to support the investees of the Taaleri Bioindustry I Fund in promoting growth and profitability, as well as in sustainability work. We also promoted the due diligence processes of the fund’s new potential investees. In addition to the preparations for the new venture capital fund and its provisional fundraising, we continued the construction work of the torrefied biomass plant being built in Joensuu. In Taaleri’s updated strategy, the bioindustry business will play a greater role in increasing direct investments and raising the Group’s international profile. This role change is supported, among other things, by the recruitment processes we completed during the review period.
In the Strategic Investments segment, Garantia’s insurance service result increased to EUR 4.0 million as insurance service expenses decreased. The combined ratio, which measures the profitability of insurance operations, improved during the first quarter to 21.5%. Garantia’s net income from investment operations increased to EUR 4.8 million mainly as a result of unrealised fair value changes and the strong development of the stock market and the stabilisation of the interest rate environment.
The year 2024 started at Taaleri actively with the determined promotion of our updated strategy. Our optimism is also boosted by the positive trends seen in our operating environment, such as the stabilisation of the interest rate environment, the pick-up of the investment and fundraising markets, and, especially from an international perspective, the better-than-expected momentum of general economic development in early 2024.