CEO’s review Q3/2024
Taaleri Group’s third-quarter result was strong due to the recognised earn-out from last year’s sale of the renewable energy project development portfolio. Garantia’s net income from investment operations developed positively. We continued to systematically promote our strategy in a challenging operating environment.
Taaleri Group’s income amounted to EUR 21.6 million in the third quarter, increasing by 65% from the comparison period as a result of the recognition of the earn-out from the sale of the renewable energy project development portfolio in 2023. Continuing earnings decreased by 6% to EUR 9.7 million. The operating profit margin was excellent at 68%.
In the Private Asset Management segment, continuing earnings decreased by 5% to EUR 6.1 million, partly due to a non-recurring fee recorded for the renewable energy business in the comparison period. The management fees received from private equity funds increased as a result of the increase in fee-generating assets under management. Income, in turn, increased by 72% from the comparison period to EUR 14.4 million. The increase in income was due to the earn-out from the renewable energy project development portfolio recorded in the review period.
We promoted our strategy of internationalisation, which was reflected, for example, in investors from new geographical areas. The renewable energy business continued the fundraising for Taaleri SolarWind III Fund. In addition to capital raised in the third quarter, we received further commitments to the fund in October, which will bring the fund to EUR 470 million. Our goal is to raise EUR 700 million for the fund by the end of June next year. We will also continue the active development of the fund’s project development portfolio. In the third quarter of the year, the fund invested in a 154-megawatt wind power project in Serbia. Preparations to exit the Taaleri Wind II and Taaleri Wind III Funds continued during the third quarter.
We continue the value creation work in the existing investments of the Taaleri Bioindustry I Fund. Over one-third of the fund’s investment commitments have now been deployed, and the fund continues to actively source potential new investments. The bioindustry business has decided to discontinue preparations for the new venture capital fund and to refrain from launching it. The torrefied biomass plant in Joensuu will be completed during 2024, after which production can be launched in small batches and ramped up next year.
The real estate business continued to develop new products in the third quarter of the year. The expertise of the real estate team was strengthened. Our goal is to develop and launch new products next year. The real estate market remains soft, but simultaneously provides opportunities in real estate development.
Garantia’s insurance service result fell slightly in the third quarter to EUR 3.4 million from EUR 3.6 million in the comparison period due to the sluggish development of the housing market. The combined ratio, which measures the profitability of insurance operations, remained strong at 25.8%. Garantia’s net income from investment operations was EUR 3.5 million and the return on investment at fair value was 4.0% in the third quarter, mainly due to positive market developments and the transition towards the investment portfolio’s target allocation.
We continued taking long-term systematic operational actions in line with our strategy. Fundraising for our new and established funds is progressing, albeit at a slower pace than the original schedule. Creating value for our customers is at the heart of our operations now and in the future, as our industry’s outlook improves.