Following is a correction for UPP Olaines OÜ 1st quarter 2019 unaudited
financial results published on 4th June 2019. A commentary for the interim
period financial results has been added and the wording for 2018 audited annual
report delay reasoning has been modified.
MANAGEMENT REPORT FOR 3 MONTHS 2019
General information
UPP Olaines OÜ (hereafter 'the company') was established for the purpose of
funding, acquiring and managing the real estate investment of Olaines Logistics
Park: (buildings and land) located at "Sharlotes", Olaines county, Olaines
parish, Latvia, cadastre number 8080 003 0029, registered in the Land Register
compartment No.5439 of the city of Olaine parish. The company was established in
24.08.2017 and had no economic activity until 15.12.2018, when it acquired the
cold storage warehouse Olaines Logistics Park.
To finance the acquisition of the property, the company issued secured
subordinated bonds in the total nominal value of 6.215 million euros. The bonds
were listed and admitted to trading on Nasdaq Tallinn Bond List on 29.11.2018.
The business performance is not affected by seasonal factors. The activities of
the company have no environmental or social impact.
As the company has been established solely for the purpose funding, acquiring
and managing the property, no strategic changes in the business are planned.
The management board is aware of no trends, uncertainties, demands, commitments
or events that are reasonably likely to have a material effect on the company's
prospects for the period after the reporting period of this interim financial
statement outside the course of its regular business activities.
UPP Olaines OÜ is a going concern.
Management commentary for the first quarter of 2019 ('Q1 2019')
Delayed audited annual report for 2018
Publishing of audited annual report for 2018 UPP Olaines OÜ has been delayed
because completing UPP Olaines OÜ audited annual report has not yet been
finalised.
The delay in the completion of the audited annual report for 2018 is due to the
annual reports of the Latvian subsidiaries Olaines Logistics SIA and Olaines
Logistics Park SIA being prepared according to IFRS accounting principles and
audited for the first time, and the preparation and auditing of the first
consolidated annual report of UPP Olaines OÜ. These processes have taken longer
than initially expected.
The management of UPP Olaines OÜ confirms that the delay in publishing audited
annual report for 2018 is not intentional. The management of UPP Olaines OÜ
confirms the delay is not caused by economic, financial or business activities
of UPP Olaines OÜ, or its subsidiaries.
Commentary on interim period financial results
In Q1 2019 the company made 644 147 EUR operating income, which has increased by
27% compared to Q1 2018. The increase in operating income was due to the reduced
administrative expenses which amounted to EUR 5 566 in Q1 2019. The high
administrative expenses in Q1 2018 were related to the transaction costs which
were compensated to United Partners group. Investment loan assignment price, the
cost of establishing mortgages for the investment loan and the bond investors,
and the legal fees related to bond issue and transaction documents constituted
to majority of the transaction costs.
In Q1 2019 the company's financial expenses amounted to 376 674 EUR, which has
increased by 29% compared to Q1 2018. By the time Q1 2018 interim report was
published, the company's subsidiary Olaines Logistics SIA had not yet entered
into a SWAP agreement with the investment loan provider. Unlike the current
interim report, the interim report published in Q1 2018 did not account for the
SWAP market value, which has caused the increase in financial expenses across
interim reports.
Company's other financial results are comparable to the Q1 2018 results. During
the interim period the company did not receive or pay any extraordinary, or one-
off nature revenues or expenses.
The company's sole business activity is to collect rental revenue, manage the
Olaine property and service its liabilities to lenders and investors.
Liabilities include the subordinated bonds with a fixed interest rate, and the
investment loan which rate is also fixed with a SWAP agreement. On the revenue
side the company earns stable rental income from reputable tenants, which is
fixed with medium-term agreements but is subject to indexation. During the
interim period there has been no cases, except for the ones stated above, which
would have had a noticeable effect on the company's business activities or its
financial results. Due to the previously explained economically stable nature of
the company, there needs to be major event in the overall economy in order for
it to have effect on the company's business activity or financial results.
No other significant events occurred in Q1 2019 and all regular operations of
the premise are running smoothly, including duly and timely collection of rental
and utilities payments from the tenants.
As of the end of Q1 2019, there is no vacancy in the premises.
Management board and supervisory board
The management board of UPP Olaines OÜ has one member: Marko Tali, the chairman
of the management board.
The supervisory board of UPP Olaines OÜ has three members: Mart Tooming, Tarmo
Rooteman, Hallar Loogma.
No remuneration or other benefits have been allotted to the members of the
management board and supervisory board.
There are no employees in the company besides the members of the management and
supervisory board.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed consolidated interim statement of comprehensive income
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(in EUR) Note Q1 2019 Q1 2018
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Sales revenue 4 649,713 624,518
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Net rental income 649,713 624,518
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Administrative expenses 5 (5,566) (118,605)
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Operating profit 644,147 505,913
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Financial income / (cost) 6 (376,674) (291,198)
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Profit before income tax 267,473 214,715
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Profit for the period 267,473 214,715
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Total comprehensive income for the period 267,473 214,715
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Condensed consolidated interim statement of financial position
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(in EUR) Note 31.03.2019 31.12.2018
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Cash and cash equivalents 7 523,170 426,691
Accounts receivable and prepayments 8 281,913 300,576
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Total current assets 805,083 727,267
Investment property 9 30,762,000 30,762,000
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Total non-current assets 30,762,000 30,762,000
TOTAL ASSETS 31,567,083 31,489,267
Accounts payable and other settlements 10 939,259 862,915
Loans and borrowings 11 1,064,000 1,064,004
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Total current liabilities 2,003,259 1,926,919
Loans and borrowings 11 28,326,632 28,592,629
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Total non-current liabilities 28,326,632 28,592,629
TOTAL LIABILITIES 30,329,891 30,519,548
Share capital 2,500 2,500
Retained earnings 1,234,692 967,219
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TOTAL EQUITY 1,237,192 969,719
TOTAL EQUITY AND LIABILITIES 31,567,083 31,489,267
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Siim Sild
Director
+372 5626 0107
siim.sild@unitedpartners.ee
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