Market announcement

Arco Vara AS

LEI code

097900BHCB0000066171

Size of the entity

Small group

Economic activities

Professional, Scientific and Technical Activities

Country of registered office

Estonia

General information

Categories

Management interim statement or quarterly financial report

Unique data record identifier

7277

Submission date and time

09.05.2019 16:02:28

Content of announcement in Estonian

Title

2019. aasta I kvartali konsolideeritud auditeerimata vahearuanne

Message

PÕHILISED NÄITAJAD

Grupi  2019. aasta I kvartali müügitulu oli 1,1 miljonit eurot, mis on 28% vähem
kui  2018. aasta I kvartali  jätkuvate tegevusvaldkondade müügitulu 1,5 miljonit
eurot. 2018. aasta I kvartali müügitulu koos lõpetatud teeninduse segmendiga oli
2,1 miljonit eurot.

2019. aasta   I   kvartali   ärikasumiks   (=EBIT)   kujunes  5 tuhat  eurot  ja
puhaskahjumiks  112 tuhat eurot.  2018. aasta I  kvartalis sai  grupp ärikasumit
jätkuvatest  tegevusvaldkondadest  91 tuhat  eurot  (63  tuhat  kokkuvõttes)  ja
puhaskahjumit 51 tuhat eurot.

2019. aasta  I kvartalis müüdi grupi poolt arendatavates projektides 7 korterit.
2018. aasta I kvartalis müüdi 7 korterit ja 1 hoonestamata kinnistu.

Grupi  laenukoormus (netolaenud) tõusis 2019. aasta I kvartalis 1,7 miljoni euro
võrra,  tasemele 15,9 miljonit eurot  31.03.2019 seisuga. Grupi intressikandvate
kohustuste  kaalutud keskmine  intressimäär oli  31.03.2019 seisuga 4,8%, mis on
0,2% võrra madalam võrreldes 31.12.2018 seisuga.


JUHATAJA KOMMENTAARID

Esimene  kvartal ei  ületanud ootusi  ning ei  jäänud neile  ka alla.  Arco Vara
teenis  elamisraha  Madrid  Blvd  hoone  rendi-  ja  haldustasudest  ning endise
teenusdivisjoni  ettevõtete poolt makstavatest  litsentsitasudest, samuti mõnede
Madrid  Blvd  korterite  müügist.  Kvartali  jooksul  vähenes ka kulubaas seoses
Madrid Blvd hoone pangalaenu osalise tagasimaksega ja intressimäära alandamisega
panga poolt.

Grupi  põhiline  väljakutse  on  jätkuvalt  juba  valmis ehitatud ja suures osas
eelmüüdud  Iztok Parkside projekti realiseerimine. Ilmselt oleme ainus Bulgaaria
arendaja, kes peab korterite müügi alustamiseks saama Bulgaaria valitsuse otsuse
kahe   erinevale   avalikule   institutsioonile   kuuluvate   maatükkide,  mille
kogupindala ei ületa paarisadat ruutmeetrit, võõrandamiseks kolmandale avalikule
institutsioonile,  kes  selle  maa  kasutusotstarvet  ei  muuda. Maatüki kasutus
tänavana   on   juba  planeeringutega  kehtestatud  ning  asfaldiga  kinnitatud.
Juriidilise  protsessi läbiviimiseks  on kokku  vaja üle  50 allkirja ja templi,
millest  suur enamus on  tänaseks olemas. Kahjuks  on sellistes tingimustes kogu
ajakulu  prognoosimine  tänamatu  tegevus,  mille  käigus  ka  juhatus on teinud
vigu.

Muud  arendused kulgevad  plaanipäraselt ning  teise kvartali  jooksul on oodata
kolme olulist otsust:

 a. Kodulahe III etapi ehituse alustamine või ka mittealustamine sõltuvalt
    ehitushinna ja oodatud müügitulu vahekorrast. Arco Vara tõstis hiljuti
    Kodulahe II etapi allesjäänud korterite müügihindu;
 b. Tartus, Oa tn Kodukalda projektis ehituse alustamine või mittealustamine,
    lähtudes samadest kaalutlustest;
 c. Botanica Lozen'i projektis esimese etapi ehitusloa saamine ning ehituse
    alustamine, lähtudes samadest kaalutlustest.

Nii  Tallinna kui  Sofia eluasemeturgu  iseloomustab teatav  ülekuumenemine, mis
väljendub   järsult  tõusnud  maa-  ja  ehitushindades.  Kuigi  pangad  laenavad
kinnisvara  ostmiseks endiselt, on näha langusemärke  nii tehingute arvus kui ka
uute  ehituste  alustamisel.  Ka  tarbijad  on  hakanud ostuotsustega viivitama,
oodates  hindade  alanemist.  Arvestades  meie  maapanga kvaliteeti, mida ei ole
mõtet  raisata iga hinna eest arendamisele,  ja väikeseks viidud üldkulusid, mis
võimaldavad  istuda kannatlikult enne uute  võimalustega alustamist, ei ole meil
tingimata vaja uute arenduste alustamisega kiirustada.

Seega  esimese kvartali  kokkuvõtteks ja  teise kvartali  ootuseks: Arco Vara ei
vaja juurde kapitali ega ideid ega töökäsi, vaid kannatust.


TEGEVUSTE ARUANNE

Grupi  müügitulu  oli  2019. aasta  I  kvartalis  1 051 tuhat  eurot  (I kvartal
2018: 2 147 tuhat     eurot,     sellest     1 456 tuhat    eurot    jätkuvatest
tegevusvaldkondadest),  sealhulgas kinnisvara müük grupi enda arendusprojektides
moodustas  I  kvartalis  823 tuhat  eurot  (2018.  aasta  I kvartal: 1 310 tuhat
eurot).

Muust  müügitulust moodustas suurema osa  kaubandus- ja kontoripindade renditulu
Madrid  Blvd hoonest  Sofias, mis  2019. aasta I  kvartalis oli  172 tuhat eurot
(2018.  aasta I  kvartalis 124 tuhat  eurot). 2019. aasta  I kvartalis olid kõik
kaubandus- ja kontoripinnad koos kaasnevate parkimiskohtadega välja renditud.

Grupi  ärikasumiks kujunes 2019. aasta I  kvartalis 5 tuhat eurot, 2018. aasta I
kvartalis 91 tuhat eurot.

2019. aasta  I kvartalis jätkusid  ehitustööd Kodulahe kvartali  II etapis, kuhu
tuleb 68 korteriga ja 1 äripinnaga hoone. Projekt on plaanis realiseerida 2019.
aasta lõpuks. Vahearuande avaldamise päevaks on eelmüüdud 58 korterit.

Jätkus  ka Kodulahe III-V  etapi projekteerimine, mis  peaks lõppema 2019. aasta
suvel.  III  etapi  ehitust  on  soodsate turutingimuste korral plaanis alustada
2019. aasta  sügisel ning IV-V etapi ühist ehitust 2020. aastal. Lõppmüügi faasi
jõuavad kortermajad umbes poolteist aastat pärast ehituse alustamist.

2019. aasta  I  kvartalis  lõppesid  projekteerimistööd  Oa  tänava  kinnistutel
Tartus,  kuhu on  plaanis rajada  4 väiksemat kortermaja  Kodukalda projektinime
all. Ehitus peaks plaanide kohaselt algama 2019. aasta suvel.

Ehitustööd  Iztok Parkside projektis Sofias  on lõppenud. Vahearuande avaldamise
päevaks on eelmüüdud 53 korterit. Projekt koosneb kolmest kortermajast kokku 67
korteriga (korterite müüdav pind 7 070 m2).

Madrid  Blvd hoonest  on aruande  avaldamise kuupäevaks  müüdud 10 2018. aastani
majutusteenust pakkunud 15-st korterist.

Käesoleva aruande avaldamise kuupäevaks on sisuliselt lõppenud Botanica Lozeni
projekti projekteerimistööd Bulgaarias Sofia lähedal. Projekti raames on plaanis
rajada 179 kodu (korterid ja eramud), kaubanduspinnad ja lasteaed. Ehitus võiks
soodsate turutingimuste jätkudes alata 2019. aasta teises pooles, tõenäoliselt
jaotatuna väiksemateks etappideks. Arvestades maastiku eripära -  paiknemist
mäenõlval - on oodatavaks ehitusajaks vähemalt 2 aastat.

Lätis  oli 31.03.2019 ja vahearuande avaldamise kuupäeva seisuga müümata veel 4
Marsili elamukrunti.


KONSOLIDEERITUD KOONDKASUMIARUANNE


--------------------------------------------------------------------------
 EUR tuhandetes                                    3 kuud 2019 3 kuud 2018
--------------------------------------------------------------------------


 Jätkuvad tegevusvaldkonnad

 Müügitulu enda kinnisvara müügist                         823       1 310

 Müügitulu teenuste müügist                                228         146

 Müügitulu kokku                                         1 051       1 456



 Müüdud kinnisvara ja teenuste kulu                       -815      -1 016

 Brutokasum                                                236         440



 Muud äritulud                                              91           5

 Turustuskulud                                             -85         -43

 Üldhalduskulud                                           -233        -316

 Muud ärikulud                                              -4         -10

 Kasum tütarettevõtte müügist                                0          15

 Ärikasum                                                    5          91



 Finantstulud- ja kulud                                   -117        -114

 Kahjum enne tulumaksu                                    -112         -23

 Puhaskahjum jätkuvatest tegevusvaldkondadest             -112         -23



 Puhaskahjum mittejätkuvatest tegevusvaldkondadest           0         -28

 Aruandeperioodi puhaskasum                               -112         -51



 Aruandeperioodi koondkasum                               -112         -51
--------------------------------------------------------------------------

--------------------------------------------------------------------------
 - tava                                                  -0,01        0,00

 - lahustatud                                            -0,01        0,00
--------------------------------------------------------------------------
 - tava                                                  -0,01       -0,01

 - lahustatud                                            -0,01       -0,01
--------------------------------------------------------------------------


KONSOLIDEERITUD FINANTSSEISUNDI ARUANNE

-----------------------------------------------------------
  EUR tuhandetes                   31.03.2019   31.12.2018
-----------------------------------------------------------


  Raha ja raha ekvivalendid             1 644        2 327

  Finantsinvesteeringud                     0           69

  Nõuded ja ettemaksed                    608          739

  Varud                                19 145       17 482

  Käibevara kokku                      21 397       20 617



  Nõuded ja ettemaksed                     20           25

  Kinnisvarainvesteeringud             11 721       12 344

  Materiaalne põhivara                    287          267

  Immateriaalne põhivara                  256          262

  Põhivara kokku                       12 284       12 898

  VARAD KOKKU                          33 681       33 515



  Laenukohustused                      12 792       12 547

  Võlad ja saadud ettemaksed            4 092        3 982

  Lühiajalised kohustused kokku        16 884       16 529



  Laenukohustused                       3 908        3 985

  Pikaajalised kohustused kokku         3 908        3 985

  KOHUSTUSED KOKKU                     20 792       20 514



  Aktsiakapital                         6 299        6 299

  Ülekurss                              2 285        2 285

  Kohustuslik reservkapital             2 011        2 011

  Muud reservid                           245          245

  Jaotamata kasum                       2 049        2 161

  OMAKAPITAL KOKKU                     12 889       13 001

  KOHUSTUSED JA OMAKAPITAL KOKKU       33 681       33 515
-----------------------------------------------------------


Kristel Tumm
Finantsjuht
Arco Vara AS
Tel: +372 614 4662
www.arcovara.com

Content of announcement in English

Title

Unaudited consolidated interim report for Q1 2019

Message

KEY PERFORMANCE INDICATORS

In  Q1 2019, the group's  revenue was 1.1 million  euros, which is 28% less than
the  revenue of 1.5 million  euros from continuing  operations in Q1 2018. In Q1
2018, revenue  together with  the discontinued  service segment  was 2.1 million
euros.

In  Q1 2019, the group's  operating profit (=EBIT)  was 5 thousand euros and net
loss  112 thousand  euros.  In  Q1  2018, the  group had operating profit of 91
thousand euros from continuing operations (63 thousands in overall) and net loss
of 51 thousand euros.

In  Q1 2019, 7 apartments were  sold in projects  developed by the  group (in Q1
2018: 7 apartments and 1 land plot).

In  the Q1 of 2019, the group's debt burden (net loans) increased by 1.7 million
euros  up to the level of 15.9 million euros as of 31 March 2019. As of 31 March
2019, the  weighted average annual interest rate of interest-bearing liabilities
was  4.8%. This is a  decrease of 0.2 percentage  points compared to 31 December
2018.


GROUP CEO'S REVIEW

Q1  neither overperformed nor underperformed  the expectations. Arco Vara earned
its  living from  rental and  facility management  fees of Madrid Blvd building,
from  license fees of its former service division,  and from the sale of some of
its  apartments in  Madrid Blvd  building. During  the quarter, the group's cost
base  decreased after the partial  repayment of the bank  loan related to Madrid
Blvd  building, and the  subsequent decrease of  loan interest rate and interest
cost.

The  main  challenge  of  the  group  continues  to  be the realization of Iztok
Parkside project, which is fully constructed and largely presold. The group must
be  the only  developer in  Bulgaria who  needs an  approval from  Government of
Bulgaria to transfer some land plots of few hundred square meters that are owned
by  two public institutions to a third public institution, which does not change
the  land's purpose. The use  of the land plots  has already been established by
planning documents and eternalized with an asphalt layer. In order to go through
the  legal process, more than 50 signatures  and stamps are needed, the majority
of which have been obtained by today. Unfortunately, forecasting the time needed
for  completing  such  process  is  extremely  difficult  and the management has
previously made mistakes in its time estimates.

Other developments have progressed as planned and three important decisions must
be made during Q2:

 a. Starting or not starting Stage III of Kodulahe project, depending on the
    construction price versus forecasted sales revenue. Recently, Arco Vara has
    raised the prices of the remaining apartments in Stage 2 of Kodulahe
    project.
 b. Starting or not starting Kodukalda project on Oa street in Tartu, depending
    on the same considerations.
 c. Receiving the construction permit and starting or not starting Botanica
    Lozen project, depending on the same considerations.

Residential  markets  in  both  Tallinn  and  Sofia are characterised by certain
overheating,  as demonstrated by rapid increases of land prices and construction
costs.  Although banks  continue to  lend for  real estate  purchases, there are
signs  of slowdown both in terms of the number of transactions and the number of
new  constructions started. Also the  consumers are delaying purchase decisions,
expecting  the prices  to fall.  Considering the  quality of  our land reserves,
which  do not have  to be developed  at any cost,  and minimised overhead, which
allow  us to  remain patient  before commencing  any new  projects, we are in no
hurry to start new development projects.

Thus,  as a summary  of Q1 and  outlook for Q2:  Arco Vara needs patience rather
than new capital or ideas or workforce.


OPERATING REPORT

The  revenue  of  the  group  totalled  1,051 thousand  euros  in Q1 2019 (in Q1
2018: 2,147 thousand  euros,  of  which  1,456 thousand  euros  from  continuing
operations),  including revenue from  the sale of  properties in the group's own
development  projects  in  the  amount  of  823 thousand euros in Q1 2019 (in Q1
2018: 1,310 thousand euros).

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
172 thousand  euros in Q1 2019 (in Q1 2018: 124 thousand euros). In Q1 2019, all
office and commercial spaces together with parking places were rented out.

In  Q1 2019, the group had an operating profit of 5 thousand euros. In Q1 2018,
the group had an operating profit of 91 thousand euros.

In  Q1 2019, construction  works continued  for Stage  II of Kodulahe project, a
building  with 68 apartments and 1 commercial space.  The project is expected to
be  finalized by the end of 2019. By  the publishing date of the interim report,
58 apartments have been presold.

Design works for Stages III-V continued in Q2, scheduled to end in the summer of
2019. Under  favourable  market  conditions,  the  construction  of Stage III is
scheduled  to start in the  autumn of 2019 and the  joint construction of Stages
IV-V  in 2000. The apartment buildings will become ready for final sale in about
1,5 after the construction begins.

In  Q1,  design  works  of  Oa  street  plots  in Tartu were completed. The plan
foresees  construction of 4 smaller apartment  buildings under Kodukalda project
name. The construction is scheduled to start in the summer of 2019.

In  Iztok Parkside  project in  Sofia, construction  has been  completed. By the
publishing date of the interim report, presale agreements for 53 apartments have
been  concluded. Iztok  project consists  of three  apartment buildings with 67
apartments (7,070 square meters of apartments' sellable area).

In  Madrid Blvd building, out of  the 15 apartments previously used for offering
accommodation service, 10 have been sold as of the date of this report.

By the date of this report, design works of Botanica Lozen project near Sofia in
Bulgaria  have been essentially completed.  The project foresees construction of
179 homes  (apartments and houses), commercial  spaces and a kindergarten. Under
favourable  market  conditions,  construction  may  start  in the second half of
2019, possibly  divided  into  smaller  sub-stages.  Considering  the  nature of
terrain on a mountain slope, minimum construction period is 2 years.

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


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

-------------------------------------------------------------------------------
  In thousands of euros                                      3m 2019   3m 2018
-------------------------------------------------------------------------------


  Continuing operations

  Revenue from sale of own real estate                           823     1,310

  Revenue from rendering of services                             228       146

  Total revenue                                                1,051     1,456



  Cost of sales                                                 -815    -1,016

  Gross profit                                                   236       440



  Other income                                                    91         5

  Marketing and distribution expenses                            -85       -43

  Administrative expenses                                       -233      -316

  Other expenses                                                  -4       -10

  Gain on sale of subsidiaries                                     0        15

  Operating profit/loss                                            5        91



  Finance income and costs                                      -117      -114

  Profit before tax                                             -112       -23

  Net profit/loss from continuing operatsions                   -112       -23



  Net profit/loss from discontinued operations                     0       -28

  Net profit/loss for the period                                -112       -51



  Total comprehensive income/expense for the period             -112       -51
-------------------------------------------------------------------------------

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

  - basic                                                      -0.01      0.00

  - diluted                                                    -0.01      0.00
-------------------------------------------------------------------------------
  Earnings per share (in euros)

  - basic                                                      -0.01     -0.01

  - diluted                                                    -0.01     -0.01
-------------------------------------------------------------------------------


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

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


  Cash and cash equivalents               1,644              2,327

  Investments                                 0                 69

  Receivables and prepayments               608                739

  Inventories                            19,145             17,482

  Total current assets                   21,397             20,617



  Receivables and prepayments                20                 25

  Investment property                    11,721             12,344

  Property, plant and equipment             287                267

  Intangible assets                         256                262

  Total non-current assets               12,284             12,898

  TOTAL ASSETS                           33,681             33,515



  Loans and borrowings                   12,792             12,547

  Payables and deferred income            4,092              3,982

  Total current liabilities              16,884             16,529



  Loans and borrowings                    3,908              3,985

  Total non-current liabilities           3,908              3,985

  TOTAL LIABILITIES                      20,792             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                       2,049              2,161

  TOTAL EQUITY                           12,889             13,001

  TOTAL LIABILITIES AND EQUITY           33,681             33,515
-------------------------------------------------------------------




Kristel Tumm
CFO
Arco Vara AS
Phone: +372 614 4662
www.arcovara.com