Defence Properties Finland’s financial statements 2022: Level of preparedness improved to a fast schedule
The financial statements and annual report 2022 of Defence Properties Finland, which is responsible for the facilities of the Finnish Defence Forces, have now been completed. Defence Properties Finland, which is part of Senate Group, reached the service goals set by Parliament and the Ministry of Defence. The reporting year was marked by the changed security situation caused by Russia’s invasion of Ukraine and the ensuing accelerated preparedness and contingency measures as well as the energy crisis and the preparedness for it.
Defence Properties Finland’s turnover in 2022 was €316.2 million and earnings were €4.3 million. Earnings slightly exceeded both last year’s and budgeted earnings. Earnings from central government clients were at the level required by the government leasing system and the ROE was 0.4%.
Property costs were successfully reined in despite exceptionally high inflation. The costs of the properties owned were around €13 million or 11% higher than budgeted. Electricity costs accounted for most of the increase and were almost 50% or around €10 million more than budgeted.
Warmer than normal weather and Senate Group’s energy saving programme launched towards the end of the year meant that heating costs were around 6% or €1.4 million lower than budgeted.
Defence Properties Finland and Finnish Defence Forces prepared a savings potential study for the entire property stock. The study clearly identified savings targets of around €1 million that could be immediately implemented. A start will be made on implementing the programme this year. In the longer term, properties were identified that, if they were relinquished, could provide an opportunity to save around €85 million in future renovation costs.
Major efforts in preparedness and contingency
Preparedness was speeded up after Russia’s invasion of Ukraine. “We had identified the necessary measures for contingency and preparedness in the strategy drawn up in 2021 but in the changed situation we decided to fast track their implementation. We launched dozens of measures aimed in particular at ensuring the continuation of critical facilities and related services of the Finnish Defence Forces also in any event of any rapidly deteriorating crisis situation,” says CEO Matias Warsta.
“We successfully took additional preparedness measures such as the procurement of various supplies and spare parts as well as increasing fuel stocks and backup power and heating capacity. Besides which, we effectively began to take forward the planning and implementation of investments to improve key intelligence, control and command facilities,” Warsta adds.
Extensive renovations of barracks and other garrison facilities
Defence Properties Finland spent €94 million on investment and construction projects. The most significant construction projects included extensive renovations of barracks in a number of locations and logistics, general staff and mess facilities catering to client needs. In terms of euros, the biggest projects completed were depot and security projects and the refurbishment of the barracks in Upinniemi.
The infrastructure project planning for the F-35 project progressed to plan and the first building projects will enter the construction phase in 2023. The planning focus was on the bases in Rovaniemi and Rissala.
Good client cooperation
“Client cooperation had gone well and was implemented in accordance with the cooperation agreement between the Finnish Defence Forces and Defence Properties Finland. Development of the customer experience and deployment of the customer experience management system progressed to plan. We have set customer experience development goals for all levels of client cooperation, and these are measured in accordance with the management system,” Matias Warsta says.
The satisfaction of Defence Properties Finland clients, both at the decision-maker and user levels, improved and positive development was also seen in the satisfaction of internal Defence Properties Finland employees last year. Clients particularly appreciated the ease of cooperation, the readiness to serve, understanding clients and know-how and expertise.
The Board of Directors adopted Defence Properties Finland’s accounts and annual report for 2022 at its meeting on 27 February.
Read more:
Tilinpäätös Puolustuskiinteistöt 2022 (pdf) (in Finnish)
