Market announcement

Title

UPP Olaines OÜ Audited Annual Report 2019

Message

MANAGEMENT REPORT

General information

UPP  Olaines OÜ (hereinafter  the Company and  jointly with its subsidiaries the
Group)  was established for the purpose of financing, acquisition and management
of  the  investment  property  Olaines  Logistics Park (buildings and registered
immovable).  Olaines  Logistics  Park  is  located  in  Latvia, Sharlote, Olaines
County,  Olaines Municipality, cadastral  reference 8080 003 0029, registered in
the  Olaine Land Cadastre under number  5439. The Company was established on 24
August  2017 and it had no economic  activities until 15 December 2017, when the
cold storage facility of Olaines Logistics Park was acquired.

The  commercial activities of the Company  are not affected by seasonal factors.
The commercial activities of the Company have no social or environmental impact.

The   Company  has  been  established  solely  for  the  purpose  of  financing,
acquisition  and management of  Olaines Logistics Park;  therefore, no strategic
changes in the commercial activities of the Company have been planned.

The  management does not have  any information concerning trends, uncertainties,
claims, obligations or events that could likely have a significant impact on the
prospects  of the company  in the period  following the reporting period outside
the regular commercial activities of the company.

UPP Olaines OÜ is acting based on going concern.

Impact of COVID-19 on the economic activities of the Company

The  coronavirus, which started  spreading all over  the world in early 2020 and
caused  a  global  economic  recession  in  March  2020, also reached the Baltic
States,  which led to the  closure of borders to  foreign nationals and schools,
and  panic buying  of convenience  goods. The  scope of  the consequences of the
recession  caused by the  pandemic is unclear,  but there is  no doubt that they
will be serious.

The  virus outbreak has had  no direct impact on  the economic activities of the
Company. The virus has had an impact on the economic activities of the companies
that  lease the  property acquired  by the  Company, which  may have an indirect
impact  on the Company's performance results. Some signs of stabilisation of the
COVID-19 outbreak  could be seen at  the time this report  was prepared, but the
scope  and impact of the  recession on the Group's  performance results is still
difficult  to assess. The best  estimate of the management  board is that if the
virus  outbreak and  the resulting  recession do  not worsen  significantly, the
impact  of  these  circumstances  on  the  Group's  performance  results will be
moderate due to the area of activities of the companies that lease property from
the Company.

Management report

General  administrative expenses amounted to 71,123  euros, which comprise 2.7%
of net lease income.

The  company's assets  comprised 31,675,413 euros  as at 31 December 2019, incl.
the  investment property at fair value, which comprised 97.6% of assets. The net
debt  of the company  as at 31 December  2019 was 24,982,851 euros. The net debt
was  calculated as follows:  cash and cash  equivalents were subtracted from the
Company's  total  loan  and  the  subordinated  loan  granted by United Partners
Property OÜ was then subtracted from the result.

No  significant events  other than  regular operating  activities, including the
timely  receipt of rent  and utility charges,  took place from 1 January 2019 to
31 December 2019.

Financial overview of the year

The  total net lease  income of the  Group in 2019 amounted to 2,589,379  euros.
The  total net lease income  calculated in the Group  from 24 August 2017 to 31
December  2018 amounted to 2,607,869  euros. The increase  in the net lease flow
in  the financial  year in  comparison with  other financial  year was caused by
indexation and more efficient business activities.

The  total operating profit  of the Group  in 2019 amounted to 2,649,256  euros.
The  operating  profit  of  the  Group  from 24 August 2017 to 31 December 2018
amounted  to 2,651,520 euros. The increase in  operating profit in comparison of
financial  years was caused by the  lack of one-off transaction-related costs in
2019 and the Group being more efficient in its business activities.

The Group increased its net profit in 2019 to 1,399,103 euros in comparison with
the net profit of 967,219 euros earned from 24 August 2017 to 31 December 2018.
The  increase in the net profit in 2019 was  caused by the lack of large one-off
expenses  and income in 2019, the Group earned income from an interest rate swap
for  the first  time, and  was also  more efficient  in its  business activities
during the financial year.

The Group used the services of an independent attested assessor to recognise the
property  of Olaines Logistics Park  at its fair value  as of the reporting date
and  profit  from  revaluation  of  property  in the amount of 147,000 euros was
therefore recognised during the financial year.

There are no vacancies on the investment property as at 31 December 2019.

Key financial indicators of the financial year

-----------------------------------------------------
                                         24.08.2017-
  (euros)                   31.12.2019    31.12.2018
-----------------------------------------------------
  Net lease income           2,589,379     2,607,869

  Operating profit           2,649,256     2,651,520

  Profit for the period      1,399,103       967,219
-----------------------------------------------------


----------------------------------------------------------------------------
  (euros)                                           31.12.2019   31.12.2018
----------------------------------------------------------------------------
  Investment property                               30,909,000   30,762,000

  Interest-bearing loans                            28,492,625   29,656,633

  Interest-bearing loans excluding owner's loan     25,544,325   26,608,333
----------------------------------------------------------------------------


-------------------------------------------------------------------------------
                                                                    24.08.2017-
 (euros)                                                 31.12.2019  31.12.2018
-------------------------------------------------------------------------------
 Net profit margin, % (Net profit / Net lease income)         54.0%       37.1%

 ROA (Net profit / Average assets)                             4.4%        6.1%

 DSCR (Operating profit / Principal repayments and interest
 payments of interest-bearing loans, excl. principal and
 interest payments of owner's loan)                             1.3         1.3



Compliance with bond rules

Pursuant  to clauses 3.5.3 and  3.5.4 of the bond  rules of UPP  Olaines OÜ, the
management  confirmes that the DSCR of UPP Olaines OÜ from 1 January 2019 to 31
December 2019 is larger than or equal to 1.1 and that no early redemption events
have occurred from 1 January 2019 to 31 December 2019.

Management board, supervisory board and audit committee

The  management board of UPP Olaines OÜ  has one member: Marko Tali, 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 are provided to the members of the management
board and the supervisory board.

Other  than the management board  and the supervisory board,  the Company has no
employees.

In 2020 UPP Olaines OÜ formed an audit committee, which has three members.

/digitally signed/

Marko Tali

Chairman of the Management Board of UPP Olaines OÜ

30 April 2020, Tallinn


CONSOLIDATED FINANCIAL STATEMENTS OF UPP OLAINES OÜ

Consolidated statement of comprehensive income

-------------------------------------------------------------------------------
                                                                    24.08.2017-
 (euros)                                         Note    31.12.2019  31.12.2018
-------------------------------------------------------------------------------
 Net lease income                                 6       2,589,379   2,607,869
-------------------------------------------------------------------------------
 Net lease income                                         2,589,379   2,607,869
-------------------------------------------------------------------------------


 General administrative expenses                  7        (71,123)   (221,480)

 Profit / (loss) from revaluation of investment
 properties                                       12        147,000     362,000

 Other income/(expenses)                                   (16,000)    (96,869)
-------------------------------------------------------------------------------
 Operating profit                                         2,649,256   2,651,520
-------------------------------------------------------------------------------


 Financial income and expenses                    8     (1,250,103) (1,720,477)
-------------------------------------------------------------------------------
 Profit before income tax                                 1,399,153     931,043
-------------------------------------------------------------------------------
 Income tax                                       9            (50)      36,176

 Net profit for the financial year                        1,399,103     967,219


-------------------------------------------------------------------------------
 Total comprehensive income for the period                1,399,103     967,219
-------------------------------------------------------------------------------


Consolidated statement of financial position

---------------------------------------------------------------------------
  (euros)                                   Note   31.12.2019   31.12.2018
---------------------------------------------------------------------------
  Cash and cash equivalents                  10       561,474      426,691

  Trade receivables and other receivables    11       204,939      300,576
---------------------------------------------------------------------------
  Total current assets                                766,413      727,267



  Investment property                        12    30,909,000   30,762,000
---------------------------------------------------------------------------
  Total non-current assets                         30,909,000   30,762,000

  TOTAL ASSETS                                     31,675,413   31,489,267



  Trade creditors and other payables         13       358,762      446,036

  Derivatives                                16       455,204      416,879

  Loans payable                              15     1,064,000    1,064,004
---------------------------------------------------------------------------
  Current liabilities                               1,877,966    1,926,919



  Loans payable                              15    27,428,625   28,592,629
---------------------------------------------------------------------------
  Total long-term liabilities                      27,428,625   28,592,629

  TOTAL LIABILITIES                                29,306,591   30,519,548



  Share capital                              14         2,500        2,500

  Retained earnings                                   967,219            0

  Profit for the financial year                     1,399,103      967,219
---------------------------------------------------------------------------
  TOTAL EQUITY                                      2,368,822      969,719



  TOTAL LIABILITIES AND EQUITY                     31,675,413   31,489,267
---------------------------------------------------------------------------


More information:

Siim Sild

Managing Director

+372 5626 0107

[email protected]

UNITED PARTNERS