Börsiteade

Pealkiri

Hepsor AS consolidated unaudited interim report for Q1 2023

Teade

The  consolidated sales revenue  of Hepsor amounted  to 6.0 million euros in the
first quarter of 2023 and the net profit was 0.14 million euros (including a net
profit attributable to the owners of the parent of 0.24 million euros).

The handover of apartments in the Paevälja Hoovimajad project accounted for most
of  the sales revenue in the first quarter of 2023. Two apartment buildings with
a  total of 96 apartments were built as part  of the project, of which the first
40 apartments were  handed over to homebuyers at  the end of 2022. An additional
34 apartments  were handed over to homebuyers during the first quarter of 2023,
and  as  at  31 March  2023 real  rights  agreements  have  been  signed for 74
apartments  (77%)  and  law  of  obligations  agreements  or written reservation
agreements have been signed for 4 apartments (4%).

The Group's revenues and profitability are directly dependent on the development
cycle  of projects,  which is  approximately 24 to  36 months. Sales  revenue is
generated  only at the end of the cycle.  Calendar quarters vary in terms of the
number  of projects  ending during  the quarter,  which is  why both profits and
sales  revenue can differ significantly  across quarters. Therefore, performance
can  be  considerably  weaker  or  stronger  in  some years and quarters than in
others.  The  portfolio  of  the  company's  development projects and three-year
average  financial  results  are  a  better  criteria  for assessing the group's
performance  in order to assess the  overall sustainability and economic results
of a real estate development company.

Hepsor  has six residential  development projects under  construction in Estonia
and  Latvia, with  a total  of 527 new  apartments. There  are three development
projects under construction and available for sale in Riga, with a total of 246
apartments   as  at  31 March  2023. Contracts  under  law  of  obligations  and
reservation agreements have been signed for 198 of these apartments (80%). There
are  also three  development projects  with a  total of 281 new apartments under
construction  and  available  for  sale  in  Tallinn.  Contracts  under  law  of
obligations  and  reservation  agreements  have  been  signed  for  61 of  these
apartments  (23%) as at 31 March 2023. In the commercial real estate development
segment Grüne Maja, which is an office building that follows a green concept, is
being  completed  in  Tallinn.  The  office  building is 100% covered with lease
agreements  and approximately 79% is  in active use.  The remaining tenants will
move to the new premises in the second quarter of 2023 at the latest.

The  Group started the  construction of two  residential real estate development
projects in the first quarter of 2023. In Tallinn, the construction of 154 homes
of  the Manufaktuuri 7 project was started in the Manufaktuuri quarter, which is
being  developed together with the  long-term cooperation partner Tolaram Group.
Law  of obligations  agreements and  reservation agreements  had been signed for
32 apartments (21%)  of Manufaktuuri  7 homes as  at the  end of the quarter. In
Riga,  the construction of 38 homes was started in the Nameja Rezidence project,
of  which law  of obligations  agreements and  reservation agreements  have been
signed for 10 apartments (26%).

Two  projects under  construction in  Riga received  an occupancy  permit, which
allows  the completed homes to be handed over to buyers in the second quarter of
2023 -  92 homes  will  be  completed  in  the  M?rupes  D?rzs project, of which
78 apartments (85%)  have been sold  according to law  of obligations agreements
and  reservations agreements,  and 116 homes  will be  completed in the Kuldigas
Parks  project, of which 110 apartments (95%) have been sold according to law of
obligations agreements and reservations agreements.

The  year 2023 started on a moderately optimistic note in the real estate sector
-  consumer confidence, which fell to a record low in the last quarter of 2022,
showed  signs of recovery, and the  stabilization of energy prices and inflation
continued, which create the preconditions for the recovery of real estate market
demand.  Unfortunately, Euribor rates  continue to rise,  which directly affects
the  monthly housing costs of homebuyers and forces them to postpone making real
estate  purchase  decisions.  In  Tallinn,  the  transaction activity of the new
development  market  is  higher  than  at  the  end  of 2022 but continues to be
significantly  below the previous long-term average. On the other hand, in Riga,
the  previously described effects were more short-term, and transaction activity
remains  at the usual level  after a temporary dip.  Customers do not make quick
purchase  decisions in  the current  economic situation,  but there is continued
interest  in  the  Group's  projects,  which  is  why  the  board  is moderately
optimistic and continues to implement existing and new projects.

The  Group forecasts a revenue of  41.3 million euros, net profit of 3.3 million
euros  and net profit  attributable to the  owners of the  parent of 1.1 million
euros  in 2023. The  Group's sales  results for  the first  quarter of 2023 give
confidence that we the forecasts can be met for 2023.

Consolidated statement of financial position

+---------------------------------+-------------+----------------+-------------+
|in thousands of euros            |31 March 2023|31 December 2022|31 March 2022|
+---------------------------------+-------------+----------------+-------------+
|Assets                           |             |                |             |
+---------------------------------+-------------+----------------+-------------+
|Current assets                   |             |                |             |
+---------------------------------+-------------+----------------+-------------+
|Cash and cash equivalents        |        2,126|           3,754|        7,440|
+---------------------------------+-------------+----------------+-------------+
|Trade and other receivables      |        1,291|           1,731|          946|
+---------------------------------+-------------+----------------+-------------+
|Current loan receivables         |            0|               0|          455|
+---------------------------------+-------------+----------------+-------------+
|Inventories                      |       73,610|          69,760|       45,128|
+---------------------------------+-------------+----------------+-------------+
|Total current assets             |       77,027|          75,245|       53,969|
+---------------------------------+-------------+----------------+-------------+
|Non-current assets               |             |                |             |
+---------------------------------+-------------+----------------+-------------+
|Property, plant and equipment    |          269|             314|          209|
+---------------------------------+-------------+----------------+-------------+
|Intangible assets                |            7|               7|            3|
+---------------------------------+-------------+----------------+-------------+
|Financial investments            |            2|               2|            2|
+---------------------------------+-------------+----------------+-------------+
|Investments in associates        |          972|           1,086|            0|
+---------------------------------+-------------+----------------+-------------+
|Non-current loan receivables     |        1,766|           1,766|        2,308|
+---------------------------------+-------------+----------------+-------------+
|Other non-current receivables    |           61|              30|          340|
+---------------------------------+-------------+----------------+-------------+
|Total non-current assets         |        3,077|           3,205|        2,862|
+---------------------------------+-------------+----------------+-------------+
|Total assets                     |       80,104|          78,450|       56,831|
+---------------------------------+-------------+----------------+-------------+
|Liabilities and equity           |             |                |             |
+---------------------------------+-------------+----------------+-------------+
|Current liabilities              |             |                |             |
+---------------------------------+-------------+----------------+-------------+
|Loans and borrowings             |       22,456|          22,565|        3,833|
+---------------------------------+-------------+----------------+-------------+
|Current lease liabilities        |           96|             127|           92|
+---------------------------------+-------------+----------------+-------------+
|Prepayments from customers       |        4,366|           3,054|        1,856|
+---------------------------------+-------------+----------------+-------------+
|Trade and other payables         |        3,481|           4,008|        3,537|
+---------------------------------+-------------+----------------+-------------+
|Total current liabilities        |       30,399|          29,754|        9,318|
+---------------------------------+-------------+----------------+-------------+
|Non-current liabilities          |             |                |             |
+---------------------------------+-------------+----------------+-------------+
|Loans and borrowings             |       26,686|          26,015|       26,854|
+---------------------------------+-------------+----------------+-------------+
|Non-current lease liabilities    |           68|              68|           66|
+---------------------------------+-------------+----------------+-------------+
|Other non-current liabilities    |        2,481|           2,290|        1,410|
+---------------------------------+-------------+----------------+-------------+
|Total non-current liabilities    |       29,235|          28,373|       28,330|
+---------------------------------+-------------+----------------+-------------+
|Total liabilities                |       59,634|          58,127|       37,648|
+---------------------------------+-------------+----------------+-------------+
|Equity                           |             |                |             |
+---------------------------------+-------------+----------------+-------------+
|Share capital                    |        3,855|           3,855|        3,855|
+---------------------------------+-------------+----------------+-------------+
|Share premium                    |        8,917|           8,917|        8,917|
+---------------------------------+-------------+----------------+-------------+
|Retained earnings                |        7,698|           7,551|        6,411|
+---------------------------------+-------------+----------------+-------------+
|Total equity                     |       20,470|          20,323|       19,183|
+---------------------------------+-------------+----------------+-------------+
|incl. total equity attributable  |             |                |             |
|to owners of the parent          |       20,092|          19,937|       18,823|
+---------------------------------+-------------+----------------+-------------+
|incl. non-controlling interest   |          378|             386|          360|
+---------------------------------+-------------+----------------+-------------+
|Total liabilities and equity     |       80,104|          78,450|       56,831|
+---------------------------------+-------------+----------------+-------------+

Consolidated statement of profit and loss and other comprehensive income

+------------------------------------------------------------+-------+---------+
|in thousands of euros                                       |Q1 2023|Q1 2022  |
+------------------------------------------------------------+-------+---------+
|                                                            |       |         |
+------------------------------------------------------------+-------+---------+
|Revenue                                                     |  5,975|    1,272|
+------------------------------------------------------------+-------+---------+
|Cost of sales (-)                                           | -5,040|   -1,166|
+------------------------------------------------------------+-------+---------+
|Gross profit                                                |    935|      106|
+------------------------------------------------------------+-------+---------+
|Marketing expenses (-)                                      |    -71|      -95|
+------------------------------------------------------------+-------+---------+
|Administrative expenses (-)                                 |   -347|     -328|
+------------------------------------------------------------+-------+---------+
|Other operating income                                      |     20|       10|
+------------------------------------------------------------+-------+---------+
|Other operating expenses (-)                                |    -23|       -7|
+------------------------------------------------------------+-------+---------+
|Operating profit (-loss) of the year                        |    514|     -314|
+------------------------------------------------------------+-------+---------+
|Financial income                                            |     50|      509|
+------------------------------------------------------------+-------+---------+
|Financial expenses (-)                                      |   -425|     -168|
+------------------------------------------------------------+-------+---------+
|Profit before tax                                           |    139|       27|
+------------------------------------------------------------+-------+---------+
|Current income tax                                          |      0|       -5|
+------------------------------------------------------------+-------+---------+
|Net profit for the year                                     |    139|       22|
+------------------------------------------------------------+-------+---------+
|    Attributable to owners of the parent                    |    240|        5|
+------------------------------------------------------------+-------+---------+
|    Non-controlling interest                                |   -101|       17|
+------------------------------------------------------------+-------+---------+
|                                                            |       |         |
+------------------------------------------------------------+-------+---------+
| Other comprehensive income (-loss)                         |       |         |
+------------------------------------------------------------+-------+---------+
|Changes related to change of ownership                      |      0|      135|
+------------------------------------------------------------+-------+---------+
|Change in value of embedded derivatives with minority       |       |         |
|shareholders                                                |      8|       18|
+------------------------------------------------------------+-------+---------+
|Other comprehensive income (-loss) for the period           |      8|      153|
+------------------------------------------------------------+-------+---------+
|    Attributable to owners of the parent                    |    -14|      -86|
+------------------------------------------------------------+-------+---------+
|    Non-controlling interest                                |     22|      239|
+------------------------------------------------------------+-------+---------+
|                                                            |       |         |
+------------------------------------------------------------+-------+---------+
|Comprehensive income (-loss) for the period                 |    147|      175|
+------------------------------------------------------------+-------+---------+
|    Attributable to owners of the parent                    |    226|      -81|
+------------------------------------------------------------+-------+---------+
|    Non-controlling interest                                |    -79|      256|
+------------------------------------------------------------+-------+---------+
|                                                            |       |         |
+------------------------------------------------------------+-------+---------+
|Earnings per share                                          |       |         |
+------------------------------------------------------------+-------+---------+
|   Basic (euros per share)                                  |   0.06|     0.00|
+------------------------------------------------------------+-------+---------+
|   Diluted (euros per share)                                |   0.06|     0.00|
+------------------------------------------------------------+-------+---------+



Henri Laks
Member of the Management Board
Phone: +372 5693 9114
e-mail: [email protected] (mailto:[email protected])

Hepsor AS (www.hepsor.ee) is one of the fastest growing residential and
commercial real estate developers in Estonia and Latvia. Over the last twelve
years Hepsor has developed more than 1,500 homes and 32,000 m(2) of commercial
space. Hepsor has been the first real estate developer in the Baltic States to
implement a number of innovative engineering solutions that make the buildings
we construct more energy-efficient and thus more environmentally friendly. The
company's portfolio is comprised of 26 development projects with a total
sellable space of 176,000 m(2).