Market announcement

Title

16.11.2012: Arco Vara AS Interim report for III quarter and 9 months 2012

Message

Group Chief Executive’s review

In the third quarter of 2012, the most important internal developments for Arco
Vara AS were changes on the supervisory board and in the Group’s structure and
staffing. 

In our second quarter report we informed you about the resignation of three
members of the supervisory board and the election of three new members - Toomas
Tool, Stephan David Balkin and Aivar Pilv. At an extraordinary general meeting,
which convened on 30 July 2012, the supervisory board was further strengthened
by the election of Arvo Nõges and Rain Lõhmus. The new board members’
contribution to the Group’s development has triggered reshuffling aimed at
modernising the Group’s management and improving internal efficiency. We are
not planning any other major staffing changes. From now on, we are going to
focus on utilising our existing resources more effectively and streamlining our
management structure (mostly by reducing the formal levels of management and
simplifying the decision-making and accountability mechanism). 

In the third quarter, we reduced the number of staff by 23 (by 13 in Estonia, 5
in Latvia and 5 in Bulgaria). 

The structural change in Latvia was aimed at gaining complete control and
ownership of the Bišumuiža apartments, which from the point of view of further
development constitute assets with additional profit potential, and dividing
the Mazais Baltezers plots, which are located in naturally beautiful
surroundings near Riga, with the former Latvian development partner. 

In other respects, we continued our ordinary business operations.

Development operations in Estonia
Tivoli project (joint venture Tivoli Arenduse OÜ): In May we signed a
construction contract of 13 million euros and continued preparations for
commencing construction. 
Kodukolde project: Construction of phase VI (48 apartments) at Helme 16 in
Tallinn ended in June 2012. By the end of the third quarter, 35 apartments had
been sold. 
Tehnika 53 project: The contract for the construction of a residential and
commercial building called Kastanimaja (Chestnut House) was signed in June 2012
and construction began in July. Sales have been successful - by the end of the
third quarter 11 of the 14 apartments were covered with contracts under the law
of obligations (pre-sale contracts). 
Ahtri 3 project (joint venture Arco HCE OÜ): We continued preparing the
business plan together with a partner. 

Development operations in Latvia
The Bišumuiža apartment buildings development project in Latvia was suspended
in the third quarter but sales of completed apartments continued. At the
reporting date, three completed apartments were still unsold. The number of
uncompleted apartments is 28. 
We also continued selling the Mazais Baltezers plots.

Development operations in Bulgaria
The construction of phase I in the Manastirski project in Sofia (over 7,000
square metres) has been completed. At the reporting date, 57 of the 74
apartments had either been sold or reserved (on a prepayment basis). 
In addition, we continue to lease out commercial premises and to sell the
remaining free apartments in the commercial and residential building Boulevard
Residence Madrid in Sofia (approximately 7,000 square metres). At the reporting
date, 66 units had either been sold or reserved (on a prepayment basis) and 21
units were still on sale. 

Construction operations
In the third quarter, the Group signed construction contracts of 0.4 million
euros. At the reporting date, the order backlog was 4.5 million euros compared
with 8.6 million euros at the end of the third quarter of 2011. The
Construction division ended the first nine months of 2012 with a operating
profit of 0.2 million euros compared with an operating loss of 2.2 million
euros for the first nine months of 2011. 

Service operations
In the first nine months of 2012, the Service division generated revenue of 1.9
million euros, 9% up on the first nine months of 2011, and earned an operating
profit of 663 thousand euros (includes non-recurring income of 556 thousand
euros from the reassessment of the carrying values of liabilities performed on
the merger of companies). Excluding non-recurring income, the operating profit
of the Service division would have been 107 thousand euros, which is still 18%
larger than the 91 thousand euros earned a year ago. The number of brokerage
transactions increased by 6% and the number of valuation reports issued grew by
8% year over year. At the same time, the number of brokers has increased by 1%
and the number of appraisers by 31%. 

Action plan for the fourth quarter
In the fourth quarter we are going to continue: (i) enhancing the Group’s
structure, (ii) completing the cost-cutting programme, (iii) streamlining our
management operations and (iv) making preparations for improving the Group’s
capitalisation and reducing its liquidity risks. At the same time, we will have
to resolve significant sustainability issues surrounding the business plans of
several subsidiaries and joint ventures and to renegotiate the terms of some
important contracts which currently do not meet our long-term targets of
earnings a profit and increasing our business volumes. It is possible that the
values of some assets will be reassessed. All significant developments and
transactions will first be disclosed via the stock exchange information system. 



KEY PERFORMANCE INDICATORS

  -- The Group ended the first nine months of 2012 with revenue of 16.0 million
     euros. Revenue for the first nine months of 2011 was 31.3 million euros
     (including 8.3 million euros earned on the sale of the Tivoli properties).
     Excluding the effect of the Tivoli transaction, revenue for the first nine
     months of 2012 was 30% smaller than a year ago.
  -- Operating profit for the period was 0.1 million euros. In the same period
     in 2011, the Group incurred an operating loss of 2.7 million euros.
  -- Net loss for the first nine months was 1.1 million euros, a 69% decrease
     from the net loss of 3.6 million euros incurred in the first nine months of
     2011.
  -- Equity to assets ratio at period-end was 44.1% (30 September 2011: 37.0%).
     Return on equity (12 months rolling) was negative.
  -- At the end of the third quarter, the Group’s order backlog stood at 4.5
     million euros compared with 8.6 million euros at the end of the third
     quarter of 2011.
  -- Within the first nine months, the Group sold 57 apartments and plots (9M
     2011: 81 apartments and plots) in its self-developed projects.

                                           9M 2012  9M 2011  Q3 2012  Q3 2011
-----------------------------------------------------------------------------
In millions of euros                                                         
-----------------------------------------------------------------------------
Revenue                                       16.0     31.3      4.9      7.8
-----------------------------------------------------------------------------
Operating profit/loss                          0.1     -2.7      0.7     -1.2
-----------------------------------------------------------------------------
Net profit/loss                               -1.1     -3.6      0.2     -1.7
-----------------------------------------------------------------------------
                                                                             
-----------------------------------------------------------------------------
EPS (in euros)                               -0.23    -0.77     0.04    -0.36
-----------------------------------------------------------------------------
                                                                             
-----------------------------------------------------------------------------
Total assets at period-end                    51.9     64.0                  
-----------------------------------------------------------------------------
Invested capital at period-end                42.5     49.0                  
-----------------------------------------------------------------------------
Net loans at period-end                       18.4     23.4                  
-----------------------------------------------------------------------------
Equity at period-end                          22.9     23.7                  
-----------------------------------------------------------------------------
                                                                             
-----------------------------------------------------------------------------
Average loan term (in years)                   1.9      2.0                  
-----------------------------------------------------------------------------
Average interest rate of loans (per year)     6.5%     7.6%                  
-----------------------------------------------------------------------------
ROIC (rolling, four quarters)                  neg      neg                  
-----------------------------------------------------------------------------
ROE (rolling, four quarters)                   neg      neg                  
-----------------------------------------------------------------------------
                                                                             
-----------------------------------------------------------------------------
Number of staff at period-end                  103      147                  
-----------------------------------------------------------------------------



REVENUE AND PROFIT

                                 9M 2012  9M 2011  Q3 2012  Q3 2011
-------------------------------------------------------------------
In millions of euros                                               
-------------------------------------------------------------------
Revenue                                                            
-------------------------------------------------------------------
Development                          5.7     17.0      1.9      3.0
-------------------------------------------------------------------
Service                              1.9      1.8      0.6      0.6
-------------------------------------------------------------------
Construction                         8.6     12.8      2.5      4.3
-------------------------------------------------------------------
Eliminations                        -0.2     -0.3     -0.1     -0.1
-------------------------------------------------------------------
Total revenue                       16.0     31.3      4.9      7.8
-------------------------------------------------------------------
                                                                   
-------------------------------------------------------------------
Operating profit/loss                                              
-------------------------------------------------------------------
Development                          0.0      0.2      0.4      0.4
-------------------------------------------------------------------
Service                              0.6      0.1      0.6      0.0
-------------------------------------------------------------------
Construction                         0.2     -2.2     -0.1     -1.4
-------------------------------------------------------------------
Eliminations                         0.0      0.2     -0.2      0.0
-------------------------------------------------------------------
Unallocated income and expenses     -0.7     -1.0      0.0     -0.3
-------------------------------------------------------------------
Total operating profit/loss          0.1     -2.7      0.7     -1.2
-------------------------------------------------------------------
                                                                   
-------------------------------------------------------------------
Interest income and expense         -0.9     -1.2     -0.3     -0.4
-------------------------------------------------------------------
Other finance income and costs      -0.3      0.2     -0.2     -0.1
-------------------------------------------------------------------
Net profit/loss                     -1.1     -3.6      0.2     -1.7
-------------------------------------------------------------------

In 2011, the Development division’s revenue was significantly impacted by the
sale of inventory of 8.3 million euros to the joint venture Tivoli Arendus OÜ. 



CASH FLOWS

                                                  9M 2012  9M 2011
------------------------------------------------------------------
In millions of euros                                              
------------------------------------------------------------------
Cash flows from operating activities                  0.2     -1.9
------------------------------------------------------------------
Cash flows from investing activities                  0.8      0.0
------------------------------------------------------------------
Cash flows from financing activities                 -2.0     -0.4
------------------------------------------------------------------
Net cash flow                                        -1.0     -2.3
------------------------------------------------------------------
                                                                  
------------------------------------------------------------------
Cash and cash equivalents at beginning of period      2.2      4.2
------------------------------------------------------------------
Cash and cash equivalents at end of period            1.2      1.9
------------------------------------------------------------------

At 30 September 2012, the largest current liabilities to be settled in the next
12 months comprised: 

  -- estimated principal repayments to be made on the sale of reserved premises
     and payments under the settlement schedule of the loan of the Boulevard
     Residence Madrid project in Sofia of 2.6 million euros;
  -- repayments of the loan taken for the Manastirski project of 3.0 million
     euros;
  -- repayments of the loan taken for the Bišumuiža 1 project of 0.5 million
     euros;
  -- repayments of the construction loan taken for the Kodukolde project of 0.4
     million euros;

In the reporting period, we made repayments of the loans taken for the
Bišumuiža 1 project in Riga, the Baltezers 5 project near Riga, the Kodukolde
project in Tallinn, the Manastirski project in Sofia and repaid the Kerberon
loan in full. 

In addition, we made scheduled repayments of the loans taken for our cash flow
generating projects, Madrid and Pärnu market, and followed the principal
repayments schedule agreed for the bank loan taken by Arco Real Estate AS
(previously the loan of Koduküla OÜ). 



SERVICE DIVISION

In the first nine months of 2012, the Service division performed better than in
the comparative period, generating an operating profit of 663 thousand euros
(includes non-recurring income of 556 thousand euros from the reassessment of
the carrying values of liabilities performed on the merger of companies)
compared with an operating profit of 91 thousand euros a year ago. Revenue for
the first nine months of 2012 was 1,927 thousand euros, 9% up on the first nine
months of 2011. The number of brokerage transactions increased by 6% and the
number of valuation reports issued grew by 8% year over year. At the same time,
the number of brokers has increased by 1% and the number of appraisers by 31%. 

                                            9M 2012  9M 2011  Change, %
-----------------------------------------------------------------------
Number of completed brokerage transactions    1,106    1,045         6%
-----------------------------------------------------------------------
Number of projects on sale                      229      178        29%
-----------------------------------------------------------------------
Number of valuation reports issued            4,753    4,390         8%
-----------------------------------------------------------------------
Number of appraisers*                            47       36        31%
-----------------------------------------------------------------------
Number of brokers*                               74       73         1%
-----------------------------------------------------------------------
Number of staff at end of period                 37       46       -20%
-----------------------------------------------------------------------
* Includes people working under service contracts                      



DEVELOPMENT DIVISION

In the first nine months of 2012, Arco Vara sold 53 apartments and four plots
in its own projects: five apartments in the Bišumuiža project and four plots in
the Baltezers project in Latvia and 37 apartments in the Kodukolde project in
Estonia. In addition, in the third quarter we sold 11 apartments in the
Manastirski project in Bulgaria. It should be noted that the Bulgarian sales
figures do not yet include all the apartments sold in the Manastirski project.
The sales of 46 apartments are still being finalised. Respective revenue will
be recognised from the fourth quarter onwards. 

In June, the division completed phase VI of the Kodukolde development project
at Helme 16 in Tallinn, which consists of two apartment buildings with a total
of 48 apartments. Out of the latter, 35 were sold during the second and third
quarter (under real right contracts). In October four more apartments were
sold. At the reporting date, the inventory of the project included nine unsold
apartments, four of which were reserved. 

In the fourth quarter of 2011, Tivoli Arendus OÜ obtained a permit for the
construction of six residential buildings. The design and build contract with
Nordecon AS was signed in May 2012. Because of the time required for making
changes to the design documentation and obtaining appropriate approvals,
commencement of construction operations has been scheduled for winter
2012-2013. 

In January 2012, the division obtained a permit for the construction of a
residential and commercial building of energy class B called Kastanimaja
(Chestnut House), designed to be located at Tehnika 53 in Tallinn. The work was
put out to tender in the first quarter and the construction contract with AS
Parmeron was signed in June. According to plan, construction work will be
completed in 12 months. Pre-sale of apartments, which began in May 2012, has
been successful: by the end of the third quarter 11 of the 14 apartments were
covered with contracts under the law of obligations (under Estonian
legislation, in a real estate transaction a contract under the law of
obligations is signed when the buyer makes a prepayment and the parties agree
the terms and conditions of sale, thus it is essentially a presale contract;
title to the property transfers under a real right contract, which is usually
signed when the real estate is complete). 

In Bulgaria, the construction of phase I of the Manastirski project has been
completed. At 30 September 2012, 77% of the 74 apartments were reserved or
sold. In the commercial and residential building Boulevard Residence Madrid in
Sofia the division continues to lease out commercial premises, to deliver
reserved apartments under real right contracts, and to sell the remaining free
apartments. 

In the Bišumuiža 1 project in Latvia further development and construction has
been suspended. There are two buildings of 14 apartments each in different
stages of completion. The completed phases include three unsold apartments. 

In April 2012 we divested our stake in the joint venture Bišumuižas Nami SIA to
the co-venturer SIA Linstow Baltic. Arco Vara sought possibilities for exiting
the project for over a year. Through the transaction, the Group disposed of the
obligation to support the joint venture in the development of apartment
buildings and in servicing loan liabilities. Bišumuižas Nami SIA’s loan
liabilities totalled 14 million euros. 

In July, we completed the merging of some small project companies. Arco Vara
Ärikinnistute OÜ, OÜ Waldrop Investments and AIP Projekti OÜ were merged with
Fineprojekti OÜ. 

Through a transaction finalised on 5 September 2012, the Latvian development
entity Arco Development SIA was divided into two companies - Arco Development
SIA and Newcom SIA. By the transaction, Newcom SIA acquired some of the assets
and liabilities that used to belong to Arco Development SIA. As a result of the
transaction, Arco Investeeringute AS became the sole owner of Arco Development
SIA and the former non-controlling shareholder Viktors Savins became the sole
owner of the new entity Newcom SIA. The transaction was undertaken to enable
the non-controlling shareholder to exit from the investment in Arco Development
SIA. 

At the end of September 2012, the Development division employed 12 people (30
September 2011: 24). 

For further information on our projects, please refer to:
www.arcorealestate.com/development. 



CONSTRUCTION DIVISION

The Construction division specialises in environmental and civil engineering.

At the end of the third quarter of 2012, the largest contracts in progress were
the construction of the Paide wastewater treatment plant (remaining balance 2.6
million euros) and the construction of the Kuusalu public water and wastewater
network (remaining balance 2 million euros). 

In the third quarter of 2012, the division secured new construction contracts
of 0.4 million euros. At the reporting date, the order backlog stood at 4.5
million euros compared with 8.6 million euros at the end of the third quarter
of 2011. 

At the end of September 2012, the Construction division employed 40 people (30
September 2011: 58). 



Consolidated statement of comprehensive income

                                          Note  9M 2012  9M 2011      Q3      Q3
                                                                    2012    2011
--------------------------------------------------------------------------------
In thousands of euros                                                           
--------------------------------------------------------------------------------
Revenue from rendering of services               11,564   16,280   3,448   5,942
--------------------------------------------------------------------------------
Revenue from sale of goods                        4,455   15,033   1,494   1,866
--------------------------------------------------------------------------------
Total revenue                             2, 3   16,019   31,313   4,942   7,808
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Cost of sales                              4    -13,787  -30,640  -4,175  -8,198
--------------------------------------------------------------------------------
Gross profit/loss                                 2,232      673     767    -390
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Other income                               7        884       18     675       6
--------------------------------------------------------------------------------
Marketing and distribution expenses        5       -203     -281     -60     -67
--------------------------------------------------------------------------------
Administrative expenses                    6     -2,010   -2,970    -626    -744
--------------------------------------------------------------------------------
Other expenses                             7       -754     -108     -18     -49
--------------------------------------------------------------------------------
Operating profit/loss                               149   -2,668     738  -1,244
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Finance income                             8         71      502      26      85
--------------------------------------------------------------------------------
Finance costs                              8     -1,296   -1,469    -552    -556
--------------------------------------------------------------------------------
Profit/loss before income tax                    -1,076   -3,635     212  -1,715
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Profit/loss for the period                       -1,076   -3,635     212  -1,715
                                               ---------------------------------
-----------------------------------------------                                 
Profit/loss attributable to owners of      9     -1,082   -3,634     212  -1,701
 the parent                                                                     
                                               ---------------------------------
Profit/loss attributable to                           6       -1       0     -14
 non-controlling interests                                                      
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Total comprehensive income/expense for           -1,076   -3,635     212  -1,715
 the period                                                                     
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Earnings per share (in euros)              9                                    
--------------------------------------------------------------------------------
                                 - Basic          -0.23    -0.77    0.04   -0.36
--------------------------------------------------------------------------------
                               - Diluted          -0.23    -0.77    0.04   -0.36
--------------------------------------------------------------------------------




Consolidated statement of financial position

                                           Note     30 September     31 December
                                                            2012            2011
--------------------------------------------------------------------------------
In thousands of euros                                                           
--------------------------------------------------------------------------------
Cash and cash equivalents                                  1,199           2,209
--------------------------------------------------------------------------------
Trade and other receivables                 10             5,419           7,012
--------------------------------------------------------------------------------
Prepayments                                                  408             433
--------------------------------------------------------------------------------
Inventories                                 11            20,250          21,564
--------------------------------------------------------------------------------
Non-current assets held for sale                               0             469
--------------------------------------------------------------------------------
Total current assets                                      27,276          31,687
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Investments in equity-accounted investees                      2               4
--------------------------------------------------------------------------------
Other investments                                              8               8
--------------------------------------------------------------------------------
Trade and other receivables                 10             2,987           3,058
--------------------------------------------------------------------------------
Deferred income tax assets                                   283             250
--------------------------------------------------------------------------------
Investment property                         12            20,459          24,046
--------------------------------------------------------------------------------
Property, plant and equipment                                890             934
--------------------------------------------------------------------------------
Intangible assets                                             22              26
--------------------------------------------------------------------------------
Total non-current assets                                  24,651          28,326
--------------------------------------------------------------------------------
TOTAL ASSETS                                              51,927          60,013
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Loans and borrowings                        13             7,544           9,662
--------------------------------------------------------------------------------
Trade and other payables                    14             4,211           7,735
--------------------------------------------------------------------------------
Deferred income                                            3,338           2,012
--------------------------------------------------------------------------------
Provisions                                                 1,127           1,205
--------------------------------------------------------------------------------
Total current liabilities                                 16,220          20,614
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Loans and borrowings                        13            12,038          14,675
--------------------------------------------------------------------------------
Other payables                              14               762             741
--------------------------------------------------------------------------------
Total non-current liabilities                             12,800          15,416
--------------------------------------------------------------------------------
TOTAL LIABILITIES                                         29,020          36,030
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Share capital                                              3,319           3,319
--------------------------------------------------------------------------------
Statutory capital reserve                                  2,011           2,011
--------------------------------------------------------------------------------
Retained earnings                                         17,577          18,653
--------------------------------------------------------------------------------
Total equity                                              22,907          23,983
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Equity attributable to non-controlling                        -3             155
 interests                                                                      
--------------------------------------------------------------------------------
Equity attributable to equity holders of                  22,910          23,828
 the parent                                                                     
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY                              51,927          60,013
--------------------------------------------------------------------------------



Consolidated statement of cash flows

                                                            Note      9M      9M
                                                                    2012    2011
--------------------------------------------------------------------------------
In thousands of euros                                                           
--------------------------------------------------------------------------------
Loss for the period                                               -1,076  -3,635
--------------------------------------------------------------------------------
Adjustments for non-cash transactions:                                          
--------------------------------------------------------------------------------
Interest income and expense                                  8       934   1,150
--------------------------------------------------------------------------------
Gain/loss on sale of subsidiaries and interests in joint     8         0    -285
 ventures                                                                       
--------------------------------------------------------------------------------
Share of profits and losses of equity-accounted joint        8       176       0
 ventures                                                                       
--------------------------------------------------------------------------------
Losses on other long-term investments                        8       109      99
--------------------------------------------------------------------------------
Gain/loss on sale of investment property                     7       710       0
--------------------------------------------------------------------------------
Depreciation, amortisation and impairment losses on         4, 6      64      72
 property,                                                                      
plant and equipment and intangible assets                                       
--------------------------------------------------------------------------------
Gain/loss on value adjustments to assets and liabilities            -669       0
--------------------------------------------------------------------------------
Foreign exchange gains and losses                            8         6       4
--------------------------------------------------------------------------------
Operating cash flow before working capital changes                   254  -2,595
--------------------------------------------------------------------------------
Change in receivables and prepayments                               -231   1,003
--------------------------------------------------------------------------------
Change in inventories                                                749   3,319
--------------------------------------------------------------------------------
Change in payables and deferred income                              -584  -3,628
--------------------------------------------------------------------------------
NET CASH FROM/USED IN OPERATING ACTIVITIES                           188  -1,901
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Acquisition of property, plant and equipment and                     -27     -37
 intangible assets                                                              
--------------------------------------------------------------------------------
Proceeds from sale of property, plant and equipment and                7       4
 intangible assets                                                              
--------------------------------------------------------------------------------
Paid on development of investment property                             0    -729
--------------------------------------------------------------------------------
Proceeds from sale of investment property                          1,160     177
--------------------------------------------------------------------------------
Acquisition of investments in subsidiaries and joint                   0      -3
 ventures                                                                       
--------------------------------------------------------------------------------
Proceeds from sale of investments in subsidiaries and                  0     893
 joint ventures                                                                 
--------------------------------------------------------------------------------
Loans granted                                                       -308    -492
--------------------------------------------------------------------------------
Repayment of loans granted                                             2      75
--------------------------------------------------------------------------------
Other payments related to investing activities                       -48       0
--------------------------------------------------------------------------------
Interest received                                                     14     157
--------------------------------------------------------------------------------
NET CASH FROM INVESTING ACTIVITIES                                   800      45
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Proceeds from loans received                                 13    2,230   4,591
--------------------------------------------------------------------------------
Settlement of loans and finance lease liabilities            13   -2,823  -4,185
--------------------------------------------------------------------------------
Interest paid                                                     -1,389    -846
--------------------------------------------------------------------------------
Other payments related to financing activities                       -16       0
--------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES                             -1,998    -440
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
NET CASH FLOW                                                     -1,010  -2,296
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period                   2,209   4,209
--------------------------------------------------------------------------------
Decrease in cash and cash equivalents                             -1,010  -2,296
--------------------------------------------------------------------------------
Cash and cash equivalents at end of period                         1,199   1,913
--------------------------------------------------------------------------------



Egert Paulberg
Financial Controller
Arco Vara AS
Phone: +372 614 4503
[email protected]
http://www.arcorealestate.com