Following is a correction to UPP Olaines OÜ consolidated unaudited financial
results for Q3 and 9 months of 2019 published 12:36 on November 26th 2019. The
company included wrong attachments to the financial results release. With this
correction the company has included the correct attachments.
Management commentary for the third quarter of 2019 ('Q3 2019')
During Q3 2019 the company made 634,901 EUR in operating income and during the
first 9 months of 2019 the operating income amounted to 1,879,700 EUR in total.
Compared to Q3 2018 the operating income has increased by 6.3% and compared to
first 9 months of 2018 the operating income has increased by 7.6%. The
difference in operating income on quarterly basis is mainly due to adjustment
made in Q3 2018 to correct mistakes of the previous quarters of 2018. 9 month
results outperform comparative period of 2018 mainly due to rent indexation and
decrease in administrative costs.
During Q3 2019 the company's financial costs amounted to 323,574 EUR and during
9 months of 2019 the financial costs amounted to 1,111,940 EUR in total.
Compared to Q3 2019 the financial expenses have increased by 60% and compared to
9 months of 2018 the financial expenses have decreased by 6.6%. The increase of
nearly 60% YoY in financial costs in Q3 is caused by the abnormally low
financial costs in Q3 2018 which were affected by significant changes in the
current value of the interest rate swap agreement. Since the financial cost
takes into account the current balance of the interest rate swap agreement, it
can affect the quarterly financial income and expenses significantly. Comparing
longer periods gives a better indication for trends in company's cost of
financing.
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 an interest rate swap agreement.
On the revenue side the company earns stable triple-net rental income from
reputable tenants, which is fixed with medium-term agreements but is subject to
indexation. Due to the economically fixed nature of the company, there needs to
be major event in the overall economy or in the company's business activities
for them to have significant effect on the company's financial results.
As of reporting date all regular business operations of the company are running
smoothly, including duly and timely collection of rental and utilities payments
from the tenants.
As of the end of Q3 2019, there is no vacancy in the premises.
Key indicators of financial performance and position for 9 months 2019
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(in EUR) Q3 2019 Q3 2018 9 months 2019 9 months 2018
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Net rental income 642,452 599,759 1,933,970 1,877,856
Operating profit 634,901 596,731 1,879,700 1,745,645
Profit for the
period 311,327 392,785 767,760 557,274
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(in EUR) 30.09.2019 31.12.2018
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Investment property 30,762,000 30,762,000
Interest-bearing loans 28,958,633 29,656,633
Interest-bearing loans less
shareholder loan 25,910,333 26,608,333
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9 months 2019
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Net profit margin (Total comprehensive income for the
period / Net rental income) 40%
ROA (Net profit for the period / Average total assets
for the period) 2.4%
DSCR (Operating profit / Loan principal and interest
payments on interest-bearing loans) 1.3
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed consolidated interim statement of comprehensive income
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(in EUR) Note Q3 2019 Q3 2018 9 months 2019 9 months 2018
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Net rental income 5 642,452 599,759 1,933,970 1,877,856
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Net rental income 642,452 599,759 1,933,970 1,877,856
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General and
administrative expenses (7,551) (3,028) (39,270) (132,211)
Other income / (cost) 0 0 (15,000) 0
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Operating profit 634,901 596,731 1,879,700 1,745,645
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Financial income / (cost) (323,574) (203,946) (1,111,940) (1,188,371)
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Profit before income tax 311,327 392,785 767,760 557,274
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Profit for the period 311,327 392,785 767,760 557,274
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Total comprehensive
income for the period 311,327 392,785 767,760 557,274
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Condensed consolidated interim statement of financial position
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(in EUR Note 30.09.2019 31.12.2018
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Cash and cash equivalents 719,578 426,691
Trade and other receivables 206,490 300,576
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Total current assets 926,068 727,267
Investment property 30,762,000 30,762,000
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Total non-current assets 30,762,000 30,762,000
TOTAL ASSETS 31,688,068 31,489,267
Trade and other payables 376,757 446,036
Financial derivatives 615,204 416,879
Loans and borrowings 6 1,064,004 1,064,004
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Total current liabilities 2,055,961 1,926,919
Loans and borrowings 6 27,894,629 28,592,629
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Total non-current liabilities 27,894,629 28,592,629
TOTAL LIABILITIES 29,950,590 30,519,548
Share capital 2,500 2,500
Retained earnings 1,734,979 967,219
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TOTAL EQUITY 1,737,479 969,719
TOTAL EQUITY AND LIABILITIES 31,688,068 31,489,267
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Siim Sild
Director
+372 5626 0107
siim.sild@unitedpartners.ee
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