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Ettevõte Arco Vara AS

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Parandatud versioon Correction: 2019. aasta IV kvartali ja 12 kuu konsolideeritud auditeerimata vahearuanne
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Kategooria Juhtkonna vaheteadaanne või kvartaalne finantsaruanne
Avaldamise aeg 13 veebr 2020 14:17:23 +0200
Manused
ArcoVara-10003185331-en.pdf
ArcoVara-10003185333-et.pdf
Keeleversioonid
Keel English
Valuuta
Pealkiri Unaudited consolidated interim report for Q4 and 12 months of 2019
Tekst
KEY PERFORMANCE INDICATORS

In Q4 2019, the group's revenue was 10.9 million euros, which is 18.6 times more
than  the revenue of 0.6 million euros from continuing operations in Q4 2018. In
Q4  2018, revenue together with the discontinued service segment was 1.3 million
euros.  In 12 months 2019, the group's revenue  was 13.1 million euros, which is
3.6 times  more than  the revenue  of 3.6 million  euros in  12 months 2018. The
group  recognizes revenue from the sale of  apartments at the date of conclusion
of the right in notary, so fluctuations in revenue periodically mostly depend on
the time of completion of the developed houses.

In  Q4 2019, the group's  operating profit (=EBIT)  was 1.068 thousand euros and
net  profit 848 thousand euros (in 12 months 2019: operating profit 950 thousand
euros and net profit of 388 thousand euros). In Q4 2018, the group had operating
profit  of  1 thousand  euros  from  continuing  operations (loss of 75 thousand
overall)  and net loss of 107 thousand  euros. In 12 months 2018, the group made
operating  profit of 101 thousand euros and  net loss of 382 thousand euros from
continuing operations.

In  Q4 2019, 70 apartments were sold in projects  developed by the group (in 12
months  2019 82 apartments). In Q4 2018, 1 commercial  area and 1 land plot were
sold (12 apartments, 3 commercial areas and 2 land plots in 12 months).

In  12 months 2019, the group's debt burden (net loans) decreased by 2.8 million
euros  down to the level of 11.5 million euros as of 31 December 2019. As of 31
December  2019, the weighted  average annual  interest rate  of interest-bearing
liabilities  was 4.2%. This is  a decrease of  0.8 percentage points compared to
31 December 2018.


GROUP CEO'S REVIEW

The  Christmas of Arco Vara  was green. The cash  flow of the fourth quarter was
enough  to dampen the small numbers of the  first nine months and make the whole
year  profitable. On the one  hand, one ought to  suffer through quite many news
during  the year that were carried by  conservative realism, in other words, the
drought  of  good  news.  Our  development  processes in Bulgaria Iztok Parkside
project were not fast enough which led to unsold apartments in the value of more
than 9 million euros, which in turn led to losses in the profit of the Group. On
the other hand, the performance of the fourth quarter of Arco Vara is an example
of  what kind  of positive  emotions can  a good  property development  bring to
clients, the team and the shareholders of the company itself.

The  development  of  Kodulahe  will  continue  as  planned  in  the pace of the
construction as well as preselling. We do not intend to reduce the profit margin
and,  on the  current presumptions,  it is  conceivable that  we will  start the
construction of two succeeding apartment buildings still in this year. The first
clients have started to buy apartments in the development project of Iztok, even
though  it  is  presumed  after  the  decision  of  the  Bulgarian government to
dispossess  the street lands to the city of  Sofia, that it will take up to five
more  months  before  the  certificate  of  occupancy  for  the building will be
granted.  The board  has so  far also  been wrong  when making presumptions. The
beginning  of construction  of the  new development  project in Sofia, Lozen, is
possible  if it is supported by the sufficient interest of the clients. We would
like to determine the interest of the clients during the first half of the year.

Ground-breaking is also the refinancing of the loan agreement with the reduction
of  interest rates for Madrid Blvd which was preceded by the selling of the last
apartment.  The outstanding amount of the bank loan for Madrid Blvd is under EUR
6 million  and the building  has started to  operate as a  full investee that is
profitable  for the  owner. There  are still  the daily  challenges to  keep the
occupancy  rate of the building,  the satisfaction of the  lessees and the lease
payment.

With  this, the year 2019 is successfully  concluded. The objectives of the year
2020 are  to bring  joy to  the clients  with the  construction and  sale of the
development  project of Oa  Street in Tartu  (1,967 m(2) GSA)  at the end of the
year  and with  the certificate  of occupancy  and sale  of apartments  of Iztok
Parkside in Sofia (6,553 m(2) GSA) by the middle of the year. The results of the
year  should also be supported by the rental income from Madrid Blvd and licence
fees.  The results of 2021 and  the following years will  depend on the way Arco
Vara  realizes the third  building of Kodulahe  that is being constructed (3,406
m(2)  GSA) and if Arco  Vara starts building in  Lozen, Sofia and the fourth and
fifth building in Kodulahe during the year 2020.

The  company is sufficiently capitalised to  continue with the foregoing. It can
also  be said that the maximum has been undertaken with the equity in the amount
of  EUR 13 million in total. The board  is therefore aware of the expectation of
many shareholders about subsequently raising dividend rates in comparison to the
dividends paid between 2014-2019.


OPERATING REPORT

The  revenue  of  the  group  totalled  10,887 thousand  euros in Q4 2019 (in Q4
2018: 1,285 thousand   euros,   of  which  586 thousand  euros  from  continuing
operations)   and   13,109 thousand   euros   in  12 months  2019 (in  12 months
2018: 6,632 thousand  euros,  of  which  3,635 thousand  euros  from  continuing
operations),  including revenue from  the sale of  properties in the group's own
development  projects in the  amount of 10,665 thousand  euros in Q4 and 12,152
thousand  euros in  12 months 2019 (2018:  241 thousand euros  in Q4  and 2,778
thousand euros in 12 months).

Most  of  the  other  revenue  of  the  group  consisted  of  rental income from
commercial  and office premises  in Madrid Blvd  building in Sofia, amounting to
159 thousand  euros in Q4  2019 and 696 thousand euros  in 12 months (2018: 167
thousand  euros in Q4  and 586 thousand euros  in 12 months). In Q4 2019, nearly
all office and commercial spaces together with parking places were rented out.

In  Q4 and  12 months 2019, the  group had  an operating  profit of 848 thousand
euros  and 388 thousand euros, respectively. In 2018, the group had an operating
profit  from continuing  operations of  1 thousand euros  in Q4 and 101 thousand
euros in 12 months.

In Q4 2019, construction works finished in Stage II of Kodulahe project and keys
were  handed  over  for  65 apartment  owners  of  total  68 apartments.  By the
publishing  date of the interim report, 3 apartments and a commercial space have
not been sold.

In Q4, construction of Kodulahe Stage III continued. In Stage III, a residential
building with 50 apartments will be constructed at Soodi 4 in Merimetsa district
in Tallinn. Under favourable market conditions, the joint construction of Stages
IV-V  will be  started in  2020. The apartment  buildings will  become ready for
final sale in about 1,5 years after the start of construction. By the publishing
date  of the interim  report, presale agreements  for 13 apartments in the Stage
III building have been concluded.

In  Q4 also continued construction of 4 smaller apartment buildings with a total
of  30 apartments  on  Oa  street  plots  in  Tartu  under  the  project name of
Kodukalda.  The construction is  scheduled to end  in Q4 2020. By the publishing
time of the interim report, 6 apartments have been presold.

In  Iztok Parkside project in Sofia, the final sale of apartments started at the
end  Q4  2019, but  the  main  sales  are planned during 2020 after receiving an
occupancy  permit.  By  the  publishing  date  of  the  interim  report, presale
agreements  for 10 apartments have not been concluded. Iztok project consists of
three apartment buildings with 67 apartments.

In  Madrid Blvd  building, out  of the  apartments previously  used for offering
accommodation service, 2 remain presold as of the date of this report; there are
no unsold apartments left.

In  the Lozen project near  Sofia in Bulgaria, design  works have been completed
and main contractor has been chosen for Stage 1. Construction permit is expected
in  Q1  2020. The  project  foresees  construction  of 179 homes (apartments and
houses),   commercial   spaces  and  a  kindergarten.  Under  favourable  market
conditions,  construction may  start in  Q2 2020, possibly  divided into smaller
stages.  Considering  the  nature  of  terrain  on  a  mountain  slope,  minimum
construction period is 2 years.

As  of 31 December 2019 and the date of this report, 4 Marsili residential plots
remained unsold in Latvia.



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

-------------------------------------------------------------------------------
 In thousands of euros                        12m 2019 12m 2018 Q4 2019 Q4 2018
-------------------------------------------------------------------------------


 Continuing operations

 Revenue from sale of own real estate           12,152    2,778  10,665     241

 Revenue from rendering of services                957      857     222     345

 Total revenue                                  13,109    3,635  10,887     586



 Cost of sales                                 -11,295   -2,446  -9,654    -344

 Gross profit                                    1,814    1,189   1,233     242



 Other income                                      137      135      46       2

 Marketing and distribution expenses               -96     -133     108     -37

 Administrative expenses                          -777   -1,224    -239    -387

 Other expenses                                    -52      -73     -21     -15

 Loss on inventory write-down                      -76      -21     -76     -21

 Gain on sale of subsidiaries                        0      228       0     213

 Operating profit/loss                             950      101   1,068       1



 Financial income and costs                       -562     -482    -220    -107

 Profit/loss before tax                            388     -381     848    -106

 Income tax                                          0       -1       0      -1

 Net profit/loss from continuing operations        388     -382     848    -107



 Net loss from discontinued operations               0     -162       0     -77

 Net profit/loss for the period                    388     -544     848    -184



 Total comprehensive income/expense for the
 period                                            388     -544     848    -184
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Earnings per share from continuing
 operations (in euros)

 - basic                                          0.04    -0.04    0.09   -0.01

 - diluted                                        0.04    -0.04    0.09   -0.01
-------------------------------------------------------------------------------
 Earnings per share (in euros)

 - basic                                          0.04    -0.06    0.09   -0.02

 - diluted                                        0.04    -0.06    0.09   -0.02
-------------------------------------------------------------------------------


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

----------------------------------------------------------------------
   In thousands of euros          31 December 2019   31 December 2018
----------------------------------------------------------------------


  Cash and cash equivalents                    870              2,327

  Investments                                    0                 69

  Receivables and prepayments                  544                739

  Inventories                               15,807             17,482

  Total current assets                      17,221             20,617



  Receivables and prepayments                    0                 25

  Investment property                       11,051             12,344

  Property, plant and equipment                265                267

  Intangible assets                            217                262

  Total non-current assets                  11,533             12,898

  TOTAL ASSETS                              28,754             33,515



  Loans and borrowings                       6,416             12,547

  Payables and deferred income               3,135              3,982

  Total current liabilities                  9,551             16,529



  Loans and borrowings                       5,904              3,985

  Total non-current liabilities              5,904              3,985

  TOTAL LIABILITIES                         15,455             20,514



  Share capital                              6,299              6,299

  Share premium                              2,285              2,285

  Statutory capital reserve                  2,011              2,011

  Other reserves                               245                245

  Retained earnings                          2,459              2,161

  TOTAL EQUITY                              13,299             13,001

  TOTAL LIABILITIES AND EQUITY              28,754             33,515
----------------------------------------------------------------------


Tiina Malm
CFO
Arco Vara AS
E-mail: info@arcovara.com
www.arcovara.com