Source: Inderes

Multitude's topline developed in line with our expectations, but the profit exceeded our expectations and the company’s guidance. This was an unexpected positive surprise, as the company had not issued a profit warning or preliminary results. We have only seen the key figures so far, not the full report, which limits our analysis of business unit-level performance, among other things. The guidance for 2026 was already known (30 MEUR in net profit), and, given the stronger-than-expected profitability in Q4, we now believe that the guidance will be easier to reach than we previously thought.

Topline development in line with our expectations

Multitude’s total net operating income (NOI) for Q4 came in at 51.9 MEUR, which aligned with our expectations (51.8 MEUR). Thus, the NOI declined 10% year-on-year. The full report hasn’t been published yet, so we don't have insight into the performance of the business units. Net interest income developed slightly worse than expected. On the other hand, fee and commission income developed better than expected and grew strongly. We find this promising, as fee income is largely a more scalable, asset-light revenue stream.

Profitability clearly better than expected

The Group’s earnings before taxes (EBT) in Q4 was 7.5 MEUR, clearly surpassing our expectation of 5.4 MEUR. Thus, earnings declined only slightly from the comparison period, which was a strong performance given the large topline decline. Net profit was 6.4 MEUR for Q4 and for the whole year 26.6 MEUR, meaning that Multitude exceeded its guidance of 24-26 MEUR. This was a clear surprise as the company had not issued a positive profit warning or preliminary results.

The impairment losses were 20.1 MEUR, which was in line with our expectations (20.0 MEUR). The cost level was not yet disclosed (full report not yet published), but we believe the item largely explains the difference to our estimates.

The dividend proposal was not yet disclosed in the preliminary results. 

Guidance for 2026 was already known

The guidance for 2026 was already known and the company expects the net profit to reach 30 MEUR this year. Prior to Q4 our estimates were below the guidance (26.7 MEUR), but given the Q4 results, we now believe that the guidance is more easily reachable. We preliminarily estimate that the Q4 numbers will exert some upward pressure on our estimates. However, our analysis is still limited because we haven’t had access to the full report yet. Once we have the full report, we can analyze the business unit-level development in more detail.

Multitude issues 70 MEUR perpetual capital notes bond for refinancing of the current notes

Multitude announced yesterday that its subsidiary, Multitude Capital Oyj, has successfully placed 70 MEUR in subordinated perpetual capital notes under a 120 MEUR framework. The main purpose of this refinancing is to replace the existing 45 MEUR perpetual notes. We view this proactive refinancing as an expected step to manage the balance sheet ahead of the interest rate increase happening this year. However, the size of the refinancing was somewhat larger than anticipated.

The new 70 MEUR capital notes carry a floating rate coupon of 3-month EURIBOR plus 8.90% and were priced at 96.00% of the nominal amount. Thus, the pricing of the notes is the same as that of the old perpetual notes. This was an unexpected negative development, as we had expected the company to be able to obtain financing at a lower interest rate due to its improved financial performance (the previous perpetual notes were issued in 2021).

Although the transaction strengthens the Group's IFRS equity and capital positions, the increased volume of high-coupon hybrid capital will result in higher interest expenses, which will be deducted from the net profit attributable to shareholders. This will put downward pressure on our EPS estimates.