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

Core Viewpoint - SATO Corporation's half-year report for January to June 2025 indicates a stable economic occupancy rate despite market volatility, with slight declines in occupancy and profit metrics compared to the previous year [4][6][12]. Financial Performance - Economic occupancy rate was 95.0%, down from 95.1% year-on-year [4][6]. - Net sales reached EUR 154.7 million, an increase from EUR 150.5 million in the same period last year [6][11]. - Net rental income was EUR 104.3 million, up from EUR 101.1 million [6][11]. - Profit before taxes decreased to EUR 45.2 million from EUR 50.9 million [6][11]. - Earnings per share were EUR 0.43, down from EUR 0.53 [6][11]. Market Conditions - The global economic uncertainty has increased due to trade policy tensions, negatively impacting household consumption and slowing Finland's economic recovery [5][13]. - The rental housing market is experiencing substantial oversupply, with no new building projects planned for this year or next [7][15]. - Competition for quality tenants remains high, and the imbalance between supply and demand is expected to persist [15][17]. Strategic Developments - SATO has successfully scaled up its webshop for rental homes, enhancing its self-service offerings in key urban areas [8]. - The company signed a EUR 150 million unsecured sustainability-linked loan facility in June [8]. - Investments in local energy production are ongoing, with over 9,100 SATO homes utilizing renewable energy by year-end [9]. Future Outlook - The outlook for the euro area and global economy has declined, with Finland's economic growth expected to turn positive, albeit with significant uncertainties [13][14]. - The current low level of new construction, along with urbanization and immigration trends, is anticipated to gradually correct the supply-demand imbalance in the rental market [17].