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Liven AS - Consolidated unaudited interim report for the I quarter of 2025

Teade

A  webinar on the presentation of the results (in Estonian only) will take place
on        30 April        at        13:00 (EEST),        more        information
(https://view.news.eu.nasdaq.com/view?id=1357258&lang=en).

The  recovery from the market lows that started  in the second half of last year
continued in the first quarter of 2025. During the quarter, we signed a total of
25 contracts  under the  law of  obligation (sales  contracts; 2024 Q1: 16). The
biggest  contributions came  from the  sale of  homes under  construction in the
Iseära  phase II project (both  terraced houses and apartments)  as well as from
the Regati development project. Among completed homes, the main contributions to
sales came from the Uus-Meremaa and Luuslangi projects.

The  weekly sales ratio, which reflects the  number of homes going out of supply
through either sales contracts or paid reservations, remained at a similar level
compared  to the  previous quarter.  Over the  period, the  average was close to
1.9%, and  even exceeded 2.5% during March.  The long-term average is considered
to be 1.5-2.0%.

Contracts  under the law of obligations concluded during the period, where homes
are not delivered under real right contracts within the same period, are treated
as  presales. At the beginning  of the quarter, the  estimated monetary value of
presales  was  35.6 million  euros,  all  relating  to  projects  scheduled  for
completion  during  the  last  three  quarters  of  2025. During the quarter, we
concluded  new contracts  with a  revenue value  of 7.0 million  euros, of which
presales  accounted for  5.1 million euros.  Together with  earlier presales, we
enter  the  following  quarters  of  2025 with  104 contracts  under  the law of
obligations  for homes  in buildings  scheduled for  completion during the year,
with a total revenue value of 40.7 million euros.

There were no new construction completions during the first quarter of 2025, and
during  the quarter we handed over a  total of only 5 new homes and 1 commercial
space  under real right contracts in previously completed developments (2024 Q4:
24; 2024 Q1:  12). Of these, 1 home  and 1 commercial space  were handed over in
phase  II of the  Uus-Meremaa development, 2 homes  in phase I  of the Luuslangi
development,  1 home in phase  II of the  Iseära development, and  1 home in the
Magdaleena  development. In the same  order, the projects also  had an impact on
the  sales revenue for  the first quarter,  which amounted to EUR 1,931 thousand
(2024 Q4: EUR 8,164 thousand; 2024 Q1: EUR 3,498 thousand), and the net loss for
the  quarter was EUR 705 thousand (2024  Q4: EUR +78 thousand; 2024 Q1: EUR -150
thousand).  The loss for  the first quarter  was primarily due  to the low sales
volume and lower-than-average profitability of the homes sold.

The  balance of cash and cash equivalents increased by EUR 4,011 thousand during
the  quarter to EUR 9,916 thousand, and total assets grew by EUR 10,512 thousand
during  the quarter, reaching EUR 88,810 thousand at  the end of the period. The
main  contributors to the increase were the  green bond issue carried out at the
end  of the  quarter and  the increase  in inventories  of the Regati and Iseära
projects under construction.

Total  borrowings increased  by EUR  10,427 thousand during  the quarter  to EUR
57,684 thousand. During the quarter, a total of EUR 6,808 thousand in bank loans
were disbursed to finance the construction of projects, and we raised additional
debt capital of EUR 6,200 thousand through a public offering of green bonds. The
balance  of construction  loans increased  by EUR  3,535 thousand in  the Regati
project  and  by  EUR  1,713 thousand  in  the  Iseära  project.  The balance of
construction  loans will increase also in the  next quarter at a similar rate to
the  current quarter, primarily due to the  financing of the construction of the
Regati  project but  will decrease  very significantly  by the  end of the year,
following the completion of the construction and the delivery of the homes.

At  the  end  of  the  quarter,  we redeemed EUR 2,000 thousand bonds previously
issued  to finance the Juhkentali 48 project  and extended the maturity date for
the bonds issued for the Peakorter project development (previously 31.12.2025).
Current  borrowings decreased  by EUR  4,367 thousand during  the quarter to EUR
2,039 thousand.  The decrease in  the current borrowings  was also influenced by
the  final repayments of the Uus-Meremaa project investor loan and the Luuslangi
project bank loan.


Consolidated statement of financial position

 (in thousands of euros)                       31.03.2025 31.12.2024 31.03.2024
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 Current assets

 Cash and cash equivalents                          9 916      5 905      3 002

 Trade and other receivables                           56      1 270         99

 Prepayments                                          635        385        517

 Inventories                                       75 349     67 902     62 789
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 Total current assets                              85 956     75 462     66 407
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 Non-current assets

 Prepayments                                           44         44          0

 Investment property                                1 350      1 350          0

 Property, plant and equipment                        406        423        429

 Intangible assets                                    395        401        340

 Right-of-use assets                                  659        618        375
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 Total non-current assets                           2 854      2 836      1 144
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 TOTAL ASSETS                                      88 810     78 298     67 551
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 Current liabilities

 Borrowings                                         2 039      6 405      4 933

 Trade and other payables                          11 789     11 234      7 097

 Provisions                                            50         99      2 384
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 Total current liabilities                         13 878     17 739     14 414
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 Non-current liabilities

 Borrowings                                        55 645     40 851     34 411

 Trade and other payables                           1 610      1 398        673

 Provisions                                            89         72         29
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 Total non-current liabilities                     57 344     42 322     35 113
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 Total liabilities                                 71 222     60 061     49 527
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 Equity

 Share capital                                      1 200      1 200      1 184

 Share premium                                      9 575      9 562      9 354

 Share option reserve                                 331        317        390

 Own (treasury) shares                                 -8         -9          0

 Statutory capital reserve                            118        118        115

 Retained earnings (prior periods)                  7 077      6 491      7 131

 Profit/Loss for the year                            -705        558       -150

 Total equity attributable to owners of the
 parent                                            17 588     18 237     18 024
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 Total equity                                      17 588     18 237     18 024
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 TOTAL LIABILITIES AND EQUITY                      88 810     78 298     67 551
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Consolidated statement of comprehensive income

  (in thousands of euros)                    2025 3 months     2024 3 months
                                           (January-March)   (January-March)
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  Revenue                                            1 931             3 498

  Cost of sales                                     -1 698            -2 981
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  Gross profit/loss                                    233               517
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  Distribution costs                                  -454              -275

  Administrative expenses                             -461              -298

  Other operating income                                22                 0

  Other operating expenses                             -27                -4
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  Operating profit/loss                               -687               -60
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  Finance income                                        14                15

  Finance costs                                        -33              -105

  Total finance income and finance costs               -19               -90
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  Profit/Loss before tax                              -705              -150
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  Income tax expense                                     0                 0
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  Net profit/loss for the year                        -705              -150
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  Attributable to owners of the parent                -705              -150


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  Comprehensive income for the year                   -705              -150
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  Attributable to owners of the parent                -705              -150
-----------------------------------------------------------------------------


  Basic profit/loss per share                       -0.059            -0.013

  Diluted profit/loss per share                     -0.058            -0.012
-----------------------------------------------------------------------------

The  customer satisfaction score for the  last 12 months, collected at different
stages  of the customer  journey, increased to  9.5 out of 10 by  the end of the
year (2024 Q4: 9.2; 2024 Q1: 7.5).

Key events in development projects
In  January, Liven AS issued a guarantee  in favour of the Tallinn City Property
Department  in  the  amount  of  EUR  1,249 thousand, effective until 29 January
2032, in  connection with the Kadaka tee 88 development project, in the planning
phase,  and the agreement between  Liven Kodu 10 OÜ and  the City of Tallinn for
the coverage of the costs related to the construction works at Tallinn Meelespea
kindergarten.

During  the quarter,  the final  investor loan  payments were  made in  the Uus-
Meremaa project, and at the end of the quarter, the last home in the development
remained  to be sold. Likewise, at the end of the quarter, only the last home in
the Magdalena development remained to be sold.

In  March,  Liven  Kodu  22 OÜ  and  Coop  Pank AS entered into a long-term loan
agreement for 1,560 thousand euros to partially refinance the previous financing
of  the Olemuse project. Liven AS also provided  a guarantee to Coop Pank AS for
the  loan amount. The presale of the first  homes in the project started also in
March.

Public offering of the second series of green bonds
In  March 2025, a public  offering of series  II green bonds  was made under the
previous  bond  programme  of  Liven  AS,  in  which  Liven offered up to 4,000
unsecured  bonds with a nominal  value of 1,000 euros, a  redemption date of 19
March  2029 and a fixed interest rate  of 9.0% per annum, payable quarterly. The
871 investors  who participated in the offering subscribed for a total of 8,301
bonds,  resulting  in  an  oversubscription  of  2.1 times.  As  a result of the
oversubscription,  Liven's management board decided to  increase the size of the
offering to 6,200 bonds, i.e. to 6,200 thousand euros.

Events after the reporting period
In  April, Liven AS entered  into a cooperation agreement  with Oma Grupp OÜ for
the realisation of a development project on the property located at Erika 6a and
6b in  Põhja-Tallinn. The  residential quarter,  designed by  PIN Arhitektid OÜ,
will  comprise approximately 4,900 m²  of sellable area  and 68 homes, including
two  six-storey residential buildings and a nine-storey building that combines a
reconstructed  water tower with a new structure built on top of it. Sales of the
first  homes are scheduled to begin in the summer of 2025, with construction set
to  start at the end  of the same year.  The completion of construction works is
planned  for  2027. The  project  will  be  implemented by a 50/50 joint venture
established  by Liven  AS and  Oma Grupp OÜ, and  the general contractor for the
construction is Oma Ehitaja AS.

In  April, the Tallinn City  Council decided to adopt  the detailed plan for the
Peakotrer project at Erika 12 .

In  April, we started pre-sales of homes in the Virmalise development project in
the  Uus Maailm district in central  Tallinn. The Virmalise project will consist
of  28 homes, with construction scheduled to start in the third quarter of 2025
and end in 2026.

The  management board  of Liven  AS has  convened an  annual general  meeting of
shareholders, which will be held on 14 May 2025 at 10.00 a.m. at the Liven salon
office  at Telliskivi 60/5.The management  board of Liven  has proposed to pay a
dividend of EUR 180 thousand to the shareholders in accordance with the dividend
policy  and to  appoint KPMG  Baltics OÜ  as auditor  for the  years 2025-2026.
Information  and documents related  to the shareholders'  annual general meeting
are available on the Liven AGM website https://liven.ee/investor/uldkoosolek.

Significant developments in the economic environment in the period under review
The downward trend in the 6-month Euribor (Euribor), observed throughout the
previous year, continued in the first quarter of 2025. By the end of the
quarter, the Euribor rate had fallen to 2.39% (31.12.2024: 2.63%).

As  inflation in the euro  area has moved closer  to the European Central Bank's
long-term  target, and to support economic growth in the European Union amid the
negative  impact of U.S.-imposed tariffs, the  Governing Council of the European
Central  Bank continued  to ease  monetary policy.  In the  first four months of
2025, it  cut key  interest rates  three times,  by a  total of 75 basis points.
According  to economic  analysts, interest  rate cuts  are expected  to continue
during the year, which should lead to a further decline in the Euribor.

In Estonia, the annual growth rate of consumer prices in Q1 2025 was faster than
in  the euro area, with prices rising by 4.4% compared to the same period in the
previous  year (Q4 2024: 3.9%). According to  forecasts by Eesti Pank, inflation
in  2025 is expected to  reach 6.6%, driven by  tax increases and continued wage
growth.

According  to  the  latest  data  from  Statistics Estonia, the estimated annual
increase   in   average  gross  wages  in  the  first  quarter-between  8.0% and
8.5%-outpaced price   growth.   Nevertheless,   consumer   confidence   remained
persistently  low. Consumers tend to view the  purchase of durable goods as more
favourable over the next 12 months than at present, which has led to a continued
sentiment  of caution  and postponement  of purchasing  decisions. Based  on the
latest  data from  the Institute  of Economic  Research, the consumer confidence
indicator  in the  first quarter  remains at  a level  similar to the end of the
previous  year (Q1 2025 average: -37;  12-month 2024 average: -33; 2023 average:
-30).

As  typical  for  the  first  quarter,  the  number of apartment transactions in
Tallinn  decreased according  to purchase-sale  statistics from  the Land Board,
falling  by 15.8% compared to the previous quarter (Q1 2025: 2,127 transactions;
Q4  2024: 2,464 transactions).  Still,  there  were  still  signs  of  increased
activity  among home buyers, as  the number of transactions  in Q1 2025 showed a
18.3% increase  compared to the same period a year earlier and was comparable to
the result of Q3 2024. However, transaction activity has mainly increased in the
secondary  market,  while  sales  in  new  developments have remained relatively
subdued.

Compared to the fourth quarter of 2024, offer prices for new developments
increased moderately by 2.6% in the first quarter of 2025. Based on data
collected from the market, the number of transactions decreased by 26% compared
to the previous quarter (Q1 2025: 414 transactions; Q4 2024: 559 transactions),
remaining at a level similar to that of Q1 2024 (368 transactions).

Throughout the first quarter, the stock of unsold ready-to-move-in apartments
showed a slight downward trend but remained relatively high, reaching an
estimated 1,040 apartments by the end of the quarter (Q4 2024: 1,110; Q1
2024: 1,020). This means that homebuyers continue to have a wide range of
options, and market competition remains elevated.

Outlook for the future
Similar to Q1 2025, we expect continued recovery in the economic environment and
demand for new residential real estate in the coming months. However, market
activity remains largely dependent on external factors, particularly interest
rates, geopolitics, the tax environment, and consumer confidence. Expectations
for 2025 suggest a continued decline in interest rates and growth in real wages,
supporting improved affordability. Still, higher income tax rates and the VAT
increase from July, combined with persistently high inflation, are expected to
slow the pace of improvement. If demand rises, we are ready to bring new supply
to the market quickly.

We  are still waiting for  the drawn-out processes for  adoption of the detailed
spatial  plans for  Kadaka tee  88, Juhkentali 48 and  Erika 12 to  finalised in
2025. As  there were no new completions in Q1 and we were only able to hand over
previously completed homes, also with below average profitability, the financial
results  for Q1 were in line with expectations. In 2025, we can still deliver up
to  194 residential and commercial units, with a maximum potential revenue of up
to 75 million euros.

If  sales remain at  the same level  as in the  last nine months, we continue to
expect  revenue to  reach around  55 million euros  in 2025 and assume that this
will  be sufficient  to achieve  the 20% return  on equity  target. No buildings
under  construction  will  be  completed  in  the  first quarter and most of the
planned revenue and profit will be generated in the second half of the year.

During  the  second  quarter  of  the  year,  we  plan to hand over homes in the
apartment buildings in the Iseära project, and in the second half of the year in
the  terraced houses in the Iseära project and in Regati project. Hence, most of
the  planned revenue and profit for 2025 will be generated in the second half of
the  year. For  the projects  to be  completed during 2025 we had 104 apartments
with  a revenue value of 41 million euros  sold under contracts under the law of
obligations  by  the  end  of  the  first quarter (31.12.2024: 86 and 36 million
euros)

With  construction completions  and home  deliveries, we  expect the  balance of
borrowings to fall to a lower level by the end of the year than at the beginning
of this year.

Real  estate development  is characterised  by a  long time  lag in  results and
higher  marketing costs in  the periods before  sales volumes start  to grow. In
addition  to the  ongoing constructions,  we are  working hard  on pre-sales and
construction starts of new projects and phases that will have an impact on 2026
results. Including the Erika 6a and 6b projects added in April.

Liven's  development  portfolio  has  sufficient  volume for the next 4-5 years.
However,  we continue to  seek new sites  and actively negotiate acquisitions or
joint developments with landowners to expand the portfolio.

Joonas Joost
Liven AS CFO
E-mail: [email protected]