Reminder: The first-ever UB earnings live stream has just kicked off! Welcome! 
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United Bankers’ Financial Statements Bulletin: United Bankers Oyj:n tilinpäätöstiedote 2023: Tulosennätystä tukivat uudet strategiset rahastot - Inderes
January–December 2023 in brief
- Group revenue (income from operations) during the financial year was EUR 52.1 million (EUR 48.6 million in 1–12/2022).
- Group operative EBITDA was EUR 19.1 million (EUR 18.5 million in 1–12/2022) and operative operating profit was EUR 16.9 million (EUR 16.6 million in 1–12/2022).
- Profit for the financial year was EUR 13.8 million (EUR 12.9 million in 1–12/2022).
- Earnings per share were EUR 1.24 (EUR 1.19 in 1–12/2022).
- Assets under management (AUM) at the end of the financial year were EUR 4.6 billion (EUR 4.4 billion on 31 December 2022). The growth in assets under management was especially supported by new funds launched during the year. Two of these, the private equity fund UB Forest Industry Green Growth Fund I Ky, which invests in forest and bio-industry innovations, and the Special Investment Fund UB Renewable Energy, which invests in renewable energy projects and power plants, represent new pillars in the Group’s fund business.
- Net fee and commission income from asset management for the financial year was EUR 43.6 million (EUR 41.4 million in 1–12/2022). The steady growth in management fees from funds contributed to the increase in the share of recurring fee income within net fee and commission income from asset management.
- Net fee and commission income from capital market services was EUR 0.7 million (EUR 1.7 million in 1–12/2022). The Group’s capital markets business suffered from the very low level of market activity.
- The cost-to-income ratio weakened during the financial year to 0.67 (0.65).
- The Board of Directors proposes a distribution of funds for the financial year of EUR 1.00 per share (dividend of EUR 0.50 and capital repayment of EUR 0.50). The distribution of funds is proposed to be paid in two installments.
- Guidance for 2024: The company estimates its operative operating profit to increase from the 2023 level.
July–December 2023 in brief
- Group revenue (income from operations) in the second half of the year was EUR 27.4 million (EUR 25.2 million in 7–12/2022).
- Group operative EBITDA in the second half of the year was EUR 11.1 million (EUR 10.1 million in 7–12/2022) and operative operating profit was EUR 9.9 million (EUR 9.1 million in 7–12/2022).
- Earnings per share were EUR 0.74 (EUR 0.65 in 7–12/2022).
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Sale and Kassu have written a new company report on United Bankers. 
The H2 report was slightly better than our expectations in light of the numbers, and the guidance indicating earnings growth was also a positive surprise. The breakdown of fees was somewhat weaker than our expectations, which, together with rather sluggish new sales, left a neutral overall impression of the report.
https://www.inderes.fi/research/myynnin-pitaisi-piristya-selvasti-alkuvuonna
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The CEO says the forest grows about 5% per year, which is correct. UB’s forests yielded 10% per year, and the CEO claimed the difference was due to the scale effect. Larger timber deals, etc. If I get 70 €/m3 from selling pine logs, UB doesn’t get 140€! They’d hardly even get 80 €.
That 10% comes from the fact that UB is logging the forests beyond the annual growth rate. In other words, they are eating into the capital. But you can do that for a while, especially as long as new forests are being bought and heavy logging is started in them immediately.
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Since UB’s forest fund returns have also been regularly criticized and questioned here, here is some concrete evidence from the company for a change: United Bankers Oyj: Sisäpiiritieto: United Bankersin hallinnoiman UB Nordic Forest Fund II Ky:n metsäomaisuuden myynnistä on sovittu Munich Re Groupin omaisuudenhoitoyhtiön, MEAG:n, kanssa - Inderes
A wild +13% annual return from a stable asset class like forestry 
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Great news. UB is delivering consistently strong results and flying nicely under the radar. On this forum too, tracking and discussion are concentrated around earnings releases, i.e., mainly twice a year. @Sauli_Vilen, will the company report be updated, at least regarding the target price?
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Sale and Kassu gave their comments regarding UB’s latest announcement.
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With this firm, you can clearly see the exact moment the analyst breaks and starts recommending an asset management firm built on a forest bubble 
Don’t get me wrong, UB’s performance has been incredibly impressive, but those forest investments just can’t keep yielding like that in the long run, considering it’s a low-yield asset class comparable to interest rates in a normal market. It just can’t 
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That’s a fairly strong statement. The results speak for themselves, and at least for now, the company’s track record is impressive. UB has not disappointed. I am a significantly larger-than-average forest owner myself, but I won’t speculate on the returns of UB’s forest funds. The price obtained now is high, but it is also right from the buyer’s perspective, since the deal was made. The market is usually right. And UB is, of course, much more than just forest funds.
In my opinion, Vilén was overly conservative in his forecasts during the early years of following UB, but the analysis has improved since then – although this has certainly required strong performance from UB in line with those forecasts.
Personally, I like the significant ownership by management and certain families (apparently involved in founding UB). I believe management is doing its best to increase shareholder value. The flip side is, of course, the limited liquidity of the stock, which inevitably affects valuation. Up or down.
In my view, UB is not about a bubble, but rather the determined execution of a long-term strategy.
I’ve been involved since the company’s IPO and will continue to stay on board.
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I don’t know how much “upside” the buyer has received from the wind power lease agreements made in addition to timber production. A single turbine can generate tens of thousands annually at current prices just for the person on whose land the turbine stands. There are, of course, many types of agreements, but in my own case, for example, the guaranteed lease for the land area alone is at least four times that of timber production.
I don’t really know about those agreements made by UB (United Bankers) (which are said to have existed), but I assume they have been significant, i.e., forest land generates money through other means than just timber sales. Large operators often also have income from plot rentals, gravel pits, hunting rights, etc. And perhaps potential future carbon sequestration schemes also influenced the purchase price. As you said, the buyer almost without exception feels they have made a good deal (this may not necessarily apply to the shopping done by private individuals).
And if we look into the crystal ball, Matti Kylävainio, the chairman of the Finnish Sawmill Association (Sahateollisuus ry), was of the opinion in the latest issue of Metsälehti that “There will be a dire shortage of wood in the world”; he predicts golden ages in about 5 years. Quite strong talk from an industry where people usually paint devils on the walls (forecast gloom and doom).
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United Bankers 80k trade @ 16.10€
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CEO Patrick Anderson’s review from today’s Annual General Meeting! 
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For some strange reason, UB’s execution is convincing. It’s hard to point out any specific highlights from the aforementioned speech. Or actually, there was that one takeaway… Finland is the second most capital-poor country in Western Europe after Portugal. That, if anything, was actually somewhat surprising.
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On the valuation of forest estates:
“Tornator’s CEO Henrik Nieminen estimates that funds are returning to the forest estate market. Competition is expected to tighten as early as this autumn.”
“Stumpage earnings rose to 3.1 billion euros in 2023”
https://www.luke.fi/fi/uutiset/kantorahatulot-nousivat-31-miljardiin-euroon-vuonna-2023
– The end of Russian timber imports has increased competition for domestic wood. This has been reflected in higher prices in the timber trade, particularly regarding pulpwood and energy wood.
Real prices for pulpwood rose by 18–23 percent, and the average prices for energy wood in standing sales increased as much as 1.7-fold compared to the previous year.
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United Bankers extensive report: 
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We discussed UB with @Kasper_Mellas regarding the new comprehensive report. 
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Here are Kasper’s preview comments, as the company reports its H1 results on Friday, August 23, around 9:00 am.
UB’s start to the year has gone quite well and an excellent half-year is expected in terms of earnings. However, the massive earnings growth stems from performance-based fees, and for other business operations, we expect clearly more moderate growth. As usual, our focus in the report is on the outlook for new sales, as the company has ongoing fundraising for several significant-sized funds.
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How should this be interpreted correctly? If the performance fees from the sale are adjusted for, is the result a loss?
Performance fees received from funds increased significantly. This was primarily driven by the sale of partnership interests and forest assets of the forest fund UB Nordic Forest Fund II Ky to the German company MEAG. Of the performance fee earned by United Bankers’ subsidiary UB Nordic Forest Management Oy from the sale, EUR 10.6 million was recorded in United Bankers’ net income for the reporting period.
The Group’s operating profit for the reporting period was EUR 13.5 million (EUR 7.0 million 1-6/2023), an increase of 93.2%, and the profit for the reporting period was EUR 10.5 million (EUR 5.4 million 1-6/2023), an increase of 93.5%.
The figures in the release are unaudited.
January–June 2024 in brief
The Group's revenue (income from operations) for the reporting period was EUR 33.0 million (EUR 24.7 million 1-6/2023), an increase of 33.5%.
The Group's operational EBITDA was EUR 15.0 million (EUR 8.0 million 1-6/2023), an increase of 86.5%, and operational operating profit was EUR 13.8 million (EUR 7.0 million 1-6/2023), an increase of 97.6%.
The Group's operating profit for the reporting period was EUR 13.5 million (EUR 7.0 million 1-6/2023), an increase of 93.2%, and the profit for the reporting period was EUR 10.5 million (EUR 5.4 million 1-6/2023), an increase of 93.5%.
The Group's earnings per share were EUR 0.96 (EUR 0.50 1-6/2023), an increase of 91.2%.
Asset management fee income grew by 31.5% during the reporting period and amounted to EUR 30.9 million (EUR 23.5 million 1-6/2023). Capital markets services fee income was EUR 0.6 million (EUR 0.1 million 1-6/2023), an increase of 452.7%.
The Group's assets under management rose to EUR 4.8 billion (EUR 4.6 billion 31 Dec 2023), an increase of 4.3% from the turn of the year.
Performance fees received from funds increased significantly. This was primarily driven by the sale of partnership interests and forest assets of the forest fund UB Nordic Forest Fund II Ky to the German company MEAG. Of the performance fee earned by United Bankers' subsidiary UB Nordic Forest Management Oy from the sale, EUR 10.6 million was recorded in United Bankers' net income for the reporting period.
The EBITDA of the asset management business for the reporting period was EUR 15.3 million (EUR 8.8 million 1-6/2023), an increase of 73.5%. The EBITDA of the Group's capital markets services business was EUR 0.1 million (EUR -0.4 million 1-6/2023).
The cost-to-income ratio was 0.59 (0.71).
The company reiterates its updated guidance for 2024 dated 4 March 2024: The company estimates its operational operating profit will grow significantly from the 2023 level.
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Patrick Anderson was interviewed by Kassu.
Topics:
00:00 H1 update
02:00 Sales
04:36 Real estate
05:34 Forest funds
07:43 Earnings outlook
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Large performance fees were recorded from forestry, but less from others:
In total, approximately EUR 10.1 million in performance-based fees were recognized from forest funds in the form of limited partnerships between January 1 and June 30, 2024 (January 1 – June 30, 2023: approximately EUR 1.9 million).
In the Group’s other receivables, the aforementioned performance-based fees are accrued at approximately EUR 5.5 million as of June 30, 2024.
H1/2023: In the Group’s other receivables, the aforementioned performance-based fees are accrued at approximately EUR 12.3 million as of June 30, 2023
H1/2022: In the Group’s other receivables, the aforementioned performance-based fees are accrued at approximately EUR 5.7 million as of June 30, 2022
So it looks like large income was received in 2023 during that period, and now we have returned to the 2022 level.
Regarding expenses, the following was stated:
The company’s personnel expenses increased during the first half of the year, rising by 9.1 percent. A significant part of the growth consisted of the calculated subscription price discount from the personnel share issue. Additionally, the increase was influenced by extensive but moderate salary increases implemented in the early part of the year, as well as increased variable fees and bonus provisions resulting from the strong performance in the first half. The 7.5 percent increase in administrative expenses is explained by partially one-off costs related to the implementation of a new information system, as well as investments especially related to sustainability work, boosting international distribution, and the launch of recently introduced new funds.
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