Börsiteade

Pealkiri

25.02.2011: Interim report 4 quarter and 12 months 2010

Teade

Group Chief Executive's review

In 2010, a total of 129 apartments and plots were sold in the projects of Arco
Vara - 73 in Estonia, 45 in Latvia and 11 in Bulgaria. Our largest ever
completely self-developed project Boulevard Residence Madrid in Sofia was
granted a use permit at the end of June. Most of the commercial rental premises
that were covered with preliminary contracts have already been transferred to
customers and tenants have moved in. We have also signed the first real right
contracts on the apartments and have transferred the apartments to customers.
Our Development division continues completing apartments in the Bishumuiza-1
project in Riga and developing the Manastirski project in Sofia. 



The increasing sales of the past quarters have reduced the inventory balance
significantly and construction prices continue to be favourable. Therefore, we
have launched new developments in order to be ready to satisfy the emerging
market demand. The Group's subsidiary AS Kolde joined forces with AS Merko
Ehitus for building and financing the next phase of the Kodukolde development
project. The new housing complex will consist of four apartment buildings with
100 apartment units and 40 underground garage spaces with a gross enclosed area
of 8,760 square metres. The first two buildings will be completed in spring
2011. We are pleased to report that construction is on schedule and
pre-completion sales exceed all expectations. We are also holding negotiations
with potential business partners and banks with a view to starting and
financing the construction of the Tivoli project. Subsequent to the reporting
date, we have held an architectural competition and have launched preparatory
site work. Construction should commence in spring 2011. In addition, at the
beginning of 2011 we have announced a plan to build a four-floor apartment
building in Tehnika street in Tallinn. 



The Service division continues to benefit from administrative cost savings
yielded by effective restructuring. Although sales have contracted too, this
has happened at a slower pace. As a result, in the third quarter the division
was able to post its first post-crisis quarterly operating profit of 1.3
million kroons (0.08 million euros). In 2010 the number of brokerage
transactions grew by 11% year-over-year and the number of valuation reports
issued increased by 25% although the number of brokers and appraisers decreased
by 4%. 

The division's Bulgarian team moved to new first-class office premises in the
Madrid Boulevard Residence. The division is planning to increase the number of
brokers in order to be ready for the recovery of the real estate market. 



During the year, the Construction division secured new contracts of 347 million
kroons (22.2 million euros). At the reporting date, the order backlog amounted
to 262 million kroons (16.8 million euros) compared with 80.0 million kroons
(5.1 million euros) at the end of 2009. The main customers continue to be the
public sector and local governments. In addition to environmental and
infrastructure projects, funds are being allocated to the education sector. It
should be noted that in 2010 practically all of the Group's construction
revenue was external - the proportion of internally generated sales was
negligible. 



The reporting period brought significant improvement to most of the Group's
financial performance indicators - both revenue and gross profit grew on a
quarterly basis. Over several years, all divisions ended the third quarter with
an operating profit. The reduction of fixed costs that began in 2009 has had a
positive impact also on the results for 2010. Management will continue
monitoring fixed costs. Compared with the previous year administrative expenses
have shrunk by 26%. 



To improve liquidity, the Group has disposed of a number of smaller investment
properties that were not under its complete control or otherwise did not fit
the corporate strategy. 

In addition, the Group extended the loans taken from Piraeus Bank Bulgaria for
the development of the Madrid project in Sofia and SEB Pank for the Navigator
and Tivoli projects in Tallinn of 360.7 million kroons (23.1 million euros) in
aggregate. As a result, the maturity date of the loan taken for the Madrid
project was deferred by three years from 2012 to 2015 and the term of the
Navigator and Tivoli projects was extended until 31 January 2011. 



In December 2009 the shareholders of Arco Vara AS decided to reduce the
company's share capital. A corresponding Commercial Registry entry took effect
on 16 March 2010. The reduction of share capital has curbed the volatility of
the share price, has allowed more effective pricing of the share on the stock
exchange (through a decrease in the difference between the bid and ask prices)
and has created new opportunities for further strengthening the capital
structure. 



In 2010 Arco Vara AS' wholly-held subsidiary Arco Investeeringute AS
transferred its claim against Celia Crowd AS (formerly Ühendatud Kapital AS) to
AS EMF Invest for 52 million kroons (3.3 million euros). The transaction
improved the Group's fourth quarter results by an exceptional sales gain of
18.9 million kroons (1.2 million euros). 

Change in accounting for jointly controlled entities

The Group's management has revised the policy for accounting for interests in
jointly controlled entities. Previously, interests in jointly controlled
entities were accounted for using proportionate consolidation. As from 1
January 2010, interests in jointly controlled entities are accounted for using
the equity method. Management believes that the equity method provides a more
faithful representation of the Group's assets, liabilities and equity. 



KEY PERFORMANCE INDICATORS

  -- In 2010 the Group generated revenue and other income of 358.4 million
     kroons (22.9 million euros), a 27% decrease year-over-year
  -- Operating loss for 2010 amounted to 2.0 million kroons (0.1 million euros),
     a 98% improvement on 2009
  -- Net loss was 4.6 million kroons (0.3 million euros), a 99% improvement on
     2009
  -- Equity to assets ratio at period-end was 39.4% (end of 2009: 36.7%). Return
     on equity was negative (2009: negative). Return on invested capital was
     1.8% (2009: negative)
  -- At the end of 2010, our order backlog (in the construction business) stood
     at 262.2 million kroons (16.8 million euros), compared with 79.6 million
     kroons (5.1 million euros) at the end of 2009
  -- In the twelve months of 2010 we sold a total of 129 apartments and plots
     (2009: 82).







                               EEK                             EUR              
--------------------------------------------------------------------------------
                    12M      12M      Q4      Q4     12M     12M      Q4      Q4
                   2010     2009    2010    2009    2010    2009    2010    2009
--------------------------------------------------------------------------------
In millions                                                                     
---------------                                  -------------------------------
Revenue and       358.4    493.1   129.2   131.7    22.9    31.5     8.3     8.4
other income                                                                    
--------------------------------------------------------------------------------
Operating          -2.0    -91.7     8.5    36.9    -0.1    -5.9     0.5     2.4
profit / loss                                                                   
--------------------------------------------------------------------------------
Incl. net loss     -8.2    -40.6    -2.6   -40.6    -0.5    -2.6    -0.2    -2.6
from the                                                                        
revaluation of                                                                  
investment                                                                      
properties and                                                                  
inventories                                                                     
--------------------------------------------------------------------------------
Profit / loss      -4.2   -363.9    15.2     3.5    -0.3   -23.3     1.0     0.2
before tax                                                                      
--------------------------------------------------------------------------------
Incl. net          -2.4     -4.5     0.0     0.0    -0.2    -0.3     0.0     0.0
gain/loss from                                                                  
the disposal                                                                    
of financial                                                                    
assets                                                                          
--------------------------------------------------------------------------------
Net profit /       -4.6   -363.1    15.3     5.6    -0.3   -23.2     1.0     0.4
loss                                                                            
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
EPS (in kroons    -0.92   -76.26    3.26    1.46   -0.06   -4.87    0.21    0.09
and euros)                                                                      
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Total assets    1,104.4  1,224.4                    70.6    78.3                
at period end                                                                   
--------------------------------------------------------------------------------
Invested          931.5  1,015.3                    59.5    64.9                
capital at                                                                      
period end                                                                      
--------------------------------------------------------------------------------
Net loans at      430.2    500.8                    27.5    32.0                
period end                                                                      
--------------------------------------------------------------------------------
Equity at         435.4    449.8                    27.8    28.7                
period end                                                                      
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Average loan        0.8      1.2                     0.8     1.2                
term (in                                                                        
years)                                                                          
--------------------------------------------------------------------------------
Average            6.4%     5.9%                    6.4%    5.9%                
interest rate                                                                   
of loans (per                                                                   
year)                                                                           
--------------------------------------------------------------------------------
ROIC (rolling,     1.8%      neg                    1.8%     neg                
4 quarters)                                                                     
--------------------------------------------------------------------------------
ROE (rolling,       neg      neg                     neg     neg                
4 quarters)                                                                     
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Number of           153      171                     153     171                
staff at                                                                        
period end                                                                      
--------------------------------------------------------------------------------




REVENUE AND PROFIT



                               EEK                             EUR              
                     12M     12M      Q4      Q4     12M     12M      Q4      Q4
                    2010    2009    2010    2009    2010    2009    2010    2009
--------------------------------------------------------------------------------
In millions                                                                     
---------------------------------                ----------------               
Revenue and                                                                     
other income                                                                    
--------------------------------------------------------------------------------
Service             30.0    38.0     8.3     9.3     1.9     2.4     0.5     0.6
--------------------------------------------------------------------------------
Development        196.7   218.1    82.8    49.8    12.6    13.9     5.3     3.2
--------------------------------------------------------------------------------
Construction       139.6   277.2    39.7    75.7     8.9    17.7     2.5     4.8
--------------------------------------------------------------------------------
Eliminations        -7.9   -40.2    -1.6    -3.1    -0.5    -2.6    -0.1    -0.2
--------------------------------------------------------------------------------
Total revenue      358.4   493.1   129.2   131.7    22.9    31.5     8.3     8.4
and other income                                                                
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Operating profit                                                                
/ loss                                                                          
--------------------------------------------------------------------------------
Service             -2.7   -16.6    -1.4    -7.5    -0.2    -1.1    -0.1    -0.5
--------------------------------------------------------------------------------
Development         27.1   -36.8    21.8    56.7     1.8    -2.4     1.3     3.6
--------------------------------------------------------------------------------
Construction        -3.6    -8.1    -4.7    -5.3    -0.2    -0.5    -0.3    -0.3
--------------------------------------------------------------------------------
Eliminations         0.0     0.0    -0.6    -0.2     0.0     0.0     0.0     0.0
--------------------------------------------------------------------------------
Unallocated        -22.8   -30.2    -6.6    -6.8    -1.5    -1.9    -0.4    -0.4
expenses                                                                        
--------------------------------------------------------------------------------
Total operating     -2.0   -91.7     8.5    36.9    -0.1    -5.9     0.5     2.4
profit / loss                                                                   
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Interest income    -18.2   -22.6   -10.6   -10.7    -1.2    -1.4    -0.7    -0.7
and expense                                                                     
--------------------------------------------------------------------------------
Other finance       15.9  -249.7    17.3   -22.7     1.0   -16.0     1.2    -1.4
income and                                                                      
expense                                                                         
--------------------------------------------------------------------------------
Income tax          -0.3     0.9     0.1     2.1     0.0     0.1     0.0     0.1
expense                                                                         
--------------------------------------------------------------------------------
Net profit /        -4.6  -363.1    15.3     5.6    -0.3   -23.2     1.0     0.4
loss                                                                            
--------------------------------------------------------------------------------


The Construction division's fourth quarter results were adversely affected by a
write-down of receivables by 4.6 million kroons (0.3 million euros), conducted
due to the bankruptcies of a major customer and a consortium partner. 
The main cost cuts have been made and managing and reducing expenses has become
a daily routine at all units. For the time being, the Group's main focus is on
increasing sales, completing projects in progress and launching new ones, and
improving liquidity by selling new projects and inventories. 

Finance income and expense for the fourth quarter were influenced the most by
the sale of a receivable from Ühendatud Kapital AS. Despite a decrease in
revenue and other income across all divisions, thanks to determined cost
control the Group's operating loss has decreased by 98% compared with 2009. 



CASH FLOWS



                                                 EEK                 EUR        
                                          12M 2010  12M 2009  12M 2010  12M 2009
--------------------------------------------------------------------------------
In millions                                                                     
--------------------------------------------------------------------------------
Cash flows from operating activities          27.4     -51.1       1.8      -3.3
--------------------------------------------------------------------------------
Cash flows from investing activities          95.1     104.9       6.1       6.7
--------------------------------------------------------------------------------
Cash flows from financing activities        -121.3    -145.2      -7.8      -9.3
--------------------------------------------------------------------------------
Net cash flow                                  1.2     -91.4       0.1      -5.8
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Cash and cash equivalents at beginning        64.7     156.1       4.1      10.0
of period                                                                       
--------------------------------------------------------------------------------
Effect of movements in exchange rates          0.0       0.0       0.0       0.0
--------------------------------------------------------------------------------
Cash and cash equivalents at end of           65.9      64.7       4.2       4.1
period                                                                          
--------------------------------------------------------------------------------




In May 2010 Arco Vara AS redeemed commercial paper of 18.9 million kroons (1.2
million euros) before maturity. 

In December 2010 Arco Vara AS repaid early 4.5 million kroons (0.3 million
euros) of the loan received from LHV bank. 

There were no other exceptional loan settlements in 2010. Interest payments
accounted for 35.1 million kroons (2.2 million euros) of net financing cash
flows. Scheduled and inventory sale-related settlements of loan principal
totalled 109.3 million kroons (7.0 million euros). The largest proportion of
credit limits utilised during the period was related to the completion of the
Madrid project and the construction of the last but one phase in the Kodukolde
project that accounted for 67.4 million kroons (4.3 million euros) of the
total. 

The largest current liabilities to be settled in the next 12 months comprise:

  -- The loan taken for the Boulevard Residence Madrid project in Sofia of 238.1
     million kroons (15.2 million euros) in aggregate has been reclassified to
     current liabilities because due to the write-down of collateral it is
     temporarily not in full compliance with the covenant for the value of
     collateral. The loan is to be repaid by 2015. According to the sales
     forecast and settlement schedule, as at 31 December 2010 the portion to be
     repaid in the next 12 months would be 72.1 million kroons (4.6 million
     euros).
  -- Loans of 102.5 million kroons (6.6 million euros) related to the Tivoli and
     Laeva2 projects.
  -- A loan of 25.5 million kroons (1.6 million euros) related to the Bishumuiza
     project.
  -- The scheduled current portion of a loan related to the Manastirski project
     of 31.7 million kroons (2.0 million euros).

During the year the Group made regular repayments of loans taken for the
Kodukolde and Merivälja2 projects in Tallinn, the Bishumuiza-1 project in Riga,
and the Madrid project in Sofia and also settlements under some cash flow
generating projects (including the entire loan of the Enerpoint project). Most
of the Group's liabilities are denominated in euros. 



SERVICE DIVISION

We constantly monitor expenses so as to avoid a situation where expenses are
growing faster than revenue. 

In connection with the revival of the housing market, we are continuing an
active marketing campaign in Estonia. In addition, we are continuing partnering
negotiations with other major housing and commercial real estate developers.
Through effective cooperation, the number of properties brokered has increased.
Our goal is to offer the customers both a wide range of services and an
extensive selection of properties. 



In Sofia, the Service division's Bulgarian team moved to new first-class office
premises in the Madrid Boulevard Residence. We are also planning to increase
the number of brokers in order to be ready for the recovery of the real estate
market in Bulgaria. 



The Service division ended 2010 with an operating loss of 2.7 million kroons
(0.17 million euros) compared with an operating loss of 16.6 million kroons
(1.06 million euros) in 2009. The most successful quarter was the third one
where the division generated an operating profit of 1.3 million kroons (0.08
million euros). Before that, the division last earned an operating profit in
the third quarter of 2006. Compared with 2009, the number of brokerage
transactions has grown by 11% and the number of valuation reports issued has
increased by 25%. 



DEVELOPMENT DIVISION

In 2010, a total of 129 apartments and plots were sold in Arco Vara projects.
In Latvia, 26 apartments were sold in the Bishumuiza project and 19 residential
plots in a project near Lake Mazais Baltezers. In Estonia, 41 apartments were
sold in the Kodukolde project and 32 residential plots in the Merivälja
project. In Bulgaria, the Group sold 11 apartments in the Madrid project in
Sofia. 

For building and financing the next phase in the Kodukolde project (100
apartments), we have signed a contract with AS Merko Ehitus. Construction work
has commenced and is on schedule. Two out of the four buildings will be
completed in spring 2011. 

The Development division has acquired a property for building a nursery school
in Harku rural municipality. There is a rental agreement with the local
government, a construction contract with YIT Ehitus AS and a financing
agreement with DnB NORD bank. Construction work has commenced and the nursery
school will be completed in April 2011. 

The Boulevard Residence Madrid commercial and residential building in Sofia was
granted a use permit in June. Most of the commercial rental premises that were
covered with preliminary contracts have been transferred to customers and
tenants have moved in. We have also signed the first real right contracts on
the apartments and have transferred the apartments to customers. In addition,
we are negotiating with potential partners and banks for starting the
construction and financing of the Tivoli project. Preparatory site work is
underway and construction should begin in spring 2011. 

The real estate market of the Baltic countries has stabilised. The sharpest
price increase has occurred in Latvia. In response, we have increased prices
also in our own development projects. 

At the end of 2010, the Development division employed 26 people (31 December
2009: 23). 

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



CONSTRUCTION DIVISION

The Construction division is typically actively involved in environmental,
infrastructure and civil engineering (mostly educational establishments
related) projects. 

At the year-end, the largest new construction contracts were the Tallinn-Muuga
water and sewerage networks and facilities of 103 million kroons (6.6 million
euros) and the new building of the Estonian Aviation Academy of 31 million
kroons (2.0 million euros). 

In 2010, the division secured new contracts of 347 million kroons (22.2 million
euros). At the end of 2010, the order backlog of the Construction division
stood at 262 million kroons (16.8 million euros) against 80.0 million kroons
(5.1 million euros) at the end of 2009. 

At the reporting date, the division employed 49 people (31 December 2009: 59
people). 



Condensed consolidated statement of comprehensive income



  For the period ended 31 December    Note  12M 2010  12M 2009  Q4 2010  Q4 2009
                2010                                                            
--------------------------------------------------------------------------------
EEK In thousands                                                                
--------------------------------------------------------------------------------
Revenue from rendering of services           181,239   293,316   47,734   86,814
--------------------------------------------------------------------------------
Revenue from sale of goods                   149,423    92,274   58,586   40,908
--------------------------------------------------------------------------------
Total revenue                          2     330,662   385,590  106,320  127,722
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Cost of sales                          3    -254,049  -414,186  -62,978  -43,642
--------------------------------------------------------------------------------
Gross profit / loss                           76,613   -28,596   43,342   84,080
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Other income                           4      27,776   107,502   22,880    3,991
--------------------------------------------------------------------------------
Distribution expenses                  5      -4,734    -4,401   -1,339   -1,086
--------------------------------------------------------------------------------
Administrative expenses                6     -63,225   -85,666  -20,803  -30,065
--------------------------------------------------------------------------------
Other expenses                         4     -38,453   -80,496  -35,586  -20,024
--------------------------------------------------------------------------------
Operating profit / loss                       -2,023   -91,657    8,494   36,896
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Finance income                         7      26,448     8,152   16,541   -3,446
--------------------------------------------------------------------------------
Finance expenses                       7     -28,616  -280,419   -9,851  -29,971
--------------------------------------------------------------------------------
Profit / loss before tax                      -4,191  -363,924   15,184    3,479
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Income tax expense                              -398       868       67    2,103
--------------------------------------------------------------------------------
Profit / loss for the period                  -4,589  -363,056   15,251    5,582
--------------------------------------------------------------------------------
Profit / loss attributable to owners   8      -4,385  -361,618   15,455    6,910
of the parent                                                                   
--------------------------------------------------------------------------------
Loss attributable to non-controlling            -204    -1,438     -204   -1,328
interests                                                                       
--------------------------------------------------------------------------------
Other comprehensive income / expense                                            
--------------------------------------------------------------------------------
Exchange differences on translating                0       303     -178       40
foreign operations                                                              
--------------------------------------------------------------------------------
Total other comprehensive income /                 0       303     -178       40
expense                                                                         
--------------------------------------------------------------------------------
Total comprehensive income / expense          -4,589  -362,753   15,073    5,622
for the period                                                                  
--------------------------------------------------------------------------------
Total comprehensive income / expense          -4,385  -361,315   15,277    6,950
attributable to owners of the parent                                            
--------------------------------------------------------------------------------
Total comprehensive expense                     -204    -1,438     -204   -1,328
attributable to                                                                 
non-controlling interests                                                       
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Earnings per share (in EEK)                                                     
                                           -------------------------------------
                             - Basic           -0.92    -76.26     3.26     1.46
--------------------------------------------------------------------------------
                           - Diluted           -0.92    -76.26     3.26     1.46
--------------------------------------------------------------------------------


For the period ended 31 December 2010     Note      12M      12M      Q4      Q4
                                                   2010     2009    2010    2009
--------------------------------------------------------------------------------
EUR In thousands                                                                
--------------------------------------------------------------------------------
Revenue from rendering of services               11,583   18,746   3,051   5,548
--------------------------------------------------------------------------------
Revenue from sale of goods                        9,550    5,897   3,744   2,614
--------------------------------------------------------------------------------
Total revenue                              2     21,133   24,643   6,795   8,162
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Cost of sales                              3    -16,237  -26,471  -4,025  -2,789
--------------------------------------------------------------------------------
Gross profit / loss                               4,896   -1,828   2,770   5,373
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Other income                               4      1,775    6,871   1,462     255
--------------------------------------------------------------------------------
Distribution expenses                      5       -302     -281     -86     -69
--------------------------------------------------------------------------------
Administrative expenses                    6     -4,041   -5,475  -1,330  -1,922
--------------------------------------------------------------------------------
Other expenses                             4     -2,458   -5,145  -2,274  -1,280
--------------------------------------------------------------------------------
Operating profit / loss                            -130   -5,858     542   2,357
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Finance income                             7      1,690      521   1,057    -220
--------------------------------------------------------------------------------
Finance expenses                           7     -1,829  -17,922    -630  -1,915
--------------------------------------------------------------------------------
Profit / loss before tax                           -269  -23,259     969     222
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Income tax expense                                  -25       55       4     134
--------------------------------------------------------------------------------
Profit / loss for the period                       -294  -23,204     973     356
--------------------------------------------------------------------------------
Profit / loss attributable to owners of    8       -294  -23,112     973     441
the parent                                                                      
--------------------------------------------------------------------------------
Loss attributable to non-controlling                  0      -92       0     -85
interests                                                                       
--------------------------------------------------------------------------------
Other comprehensive income / expense                                            
--------------------------------------------------------------------------------
Exchange differences on translating foreign           0       19     -11       3
operations                                                                      
--------------------------------------------------------------------------------
Total other comprehensive income /                    0       19     -11       3
expense                                                                         
--------------------------------------------------------------------------------
Total comprehensive income / expense for           -294  -23,185     962     359
the period                                                                      
--------------------------------------------------------------------------------
Total comprehensive income / expense               -281  -23,093     975     444
attributable to owners of the parent                                            
                                               ---------------------------------
Total comprehensive expense attributable            -13      -92     -13     -85
to                                                                              
non-controlling interests                                                       
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Earnings per share (in EUR)                                                     
                                               ---------------------------------
                                 - Basic          -0.06    -4.87    0.21    0.09
--------------------------------------------------------------------------------
                               - Diluted          -0.06    -4.87    0.21    0.09
--------------------------------------------------------------------------------



Condensed consolidated statement of financial position





As at 31 December                          Note       2010       2009       2008
--------------------------------------------------------------------------------
In EEK thousands                                                                
--------------------------------------------------------------------------------
Cash and cash equivalents                           65,858     64,724    156,061
--------------------------------------------------------------------------------
Investments                                              0          0     40,416
--------------------------------------------------------------------------------
Receivables                                 9       90,130    150,939    276,541
--------------------------------------------------------------------------------
Prepayments                                          3,004      2,999      6,077
--------------------------------------------------------------------------------
Inventories                                 10     559,215    754,805    827,237
--------------------------------------------------------------------------------
Biological assets                                        0          0      3,680
--------------------------------------------------------------------------------
Total current assets                               718,207    973,467  1,310,012
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Investments                                         15,588     17,853    216,025
--------------------------------------------------------------------------------
Receivables                                          1,189      2,635        921
--------------------------------------------------------------------------------
Investment property                         11     358,104    219,129    157,367
--------------------------------------------------------------------------------
Property, plant and equipment                       10,994     10,545     41,664
--------------------------------------------------------------------------------
Intangible assets                                      312        812     12,475
--------------------------------------------------------------------------------
Total non-current assets                           386,187    250,974    428,452
--------------------------------------------------------------------------------
TOTAL ASSETS                                     1,104,394  1,224,441  1,738,464
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Loans and borrowings                        12     424,433    371,615    223,598
--------------------------------------------------------------------------------
Trade and other payables                    13      78,828     83,621    124,190
--------------------------------------------------------------------------------
Deferred income                                     72,501     81,902     64,172
--------------------------------------------------------------------------------
Provisions                                          21,555     43,571     37,999
--------------------------------------------------------------------------------
Total current liabilities                          597,317    580,709    449,959
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Loans and borrowings                        12      60,316    186,578    454,048
--------------------------------------------------------------------------------
Other liabilities                                   11,337      6,278      1,418
--------------------------------------------------------------------------------
Provisions                                               0      1,100      3,191
--------------------------------------------------------------------------------
Total non-current liabilities                       71,653    193,956    458,657
--------------------------------------------------------------------------------
TOTAL LIABILITIES                                  668,970    774,665    908,616
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Share capital                                       47,417    952,842    952,842
--------------------------------------------------------------------------------
Share premium                                            0          0    712,514
--------------------------------------------------------------------------------
Statutory capital reserve                           31,463     31,463     31,463
--------------------------------------------------------------------------------
Retained earnings / accumulated losses             356,544   -530,537   -862,979
--------------------------------------------------------------------------------
Own shares                                               0     -3,992     -3,992
--------------------------------------------------------------------------------
Total equity attributable to equity                435,424    449,776    829,848
holders of the parent                                                           
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Non-controlling interests                           -1,103     -1,191      3,614
--------------------------------------------------------------------------------
Total equity                                       436,527    450,967    826,234
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY                     1,104,394  1,224,441  1,738,464
--------------------------------------------------------------------------------
                                                                                
                                                                                
                                                                                
                                                                                
As at 31 December                          Note       2010       2009       2008
--------------------------------------------------------------------------------
In EUR thousands                                                                
--------------------------------------------------------------------------------
Cash and cash equivalents                            4,209      4,137      9,974
--------------------------------------------------------------------------------
Investments                                              0          0      2,583
--------------------------------------------------------------------------------
Receivables                                 9        5,760      9,647     17,674
--------------------------------------------------------------------------------
Prepayments                                            192        192        388
--------------------------------------------------------------------------------
Inventories                                 10      35,740     48,241     52,870
--------------------------------------------------------------------------------
Biological assets                                        0          0        235
--------------------------------------------------------------------------------
Total current assets                                45,901     62,217     83,724
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Investments                                            996      1,141     13,806
--------------------------------------------------------------------------------
Receivables                                 9           76        168         59
--------------------------------------------------------------------------------
Investment property                         11      22,887     14,005     10,058
--------------------------------------------------------------------------------
Property, plant and equipment                          703        674      2,663
--------------------------------------------------------------------------------
Intangible assets                                       20         52        798
--------------------------------------------------------------------------------
Total non-current assets                            24,682     16,040     27,384
--------------------------------------------------------------------------------
TOTAL ASSETS                                        70,583     78,257    111,108
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Loans and borrowings                        12      27,126     23,750     14,290
--------------------------------------------------------------------------------
Trade and other payables                    13       5,038      5,344      7,937
--------------------------------------------------------------------------------
Deferred income                                      4,634      5,234      4,101
--------------------------------------------------------------------------------
Provisions                                           1,378      2,785      2,429
--------------------------------------------------------------------------------
Total current liabilities                           38,176     37,116     28,757
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Loans and borrowings                        12       3,855     11,925     29,019
--------------------------------------------------------------------------------
Other liabilities                                      724        400         91
--------------------------------------------------------------------------------
Provisions                                               0         70        204
--------------------------------------------------------------------------------
Total non-current liabilities                        4,579     12,395     29,314
--------------------------------------------------------------------------------
TOTAL LIABILITIES                                   42,755     49,511     58,071
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Share capital                                        3,030     60,897     60,897
--------------------------------------------------------------------------------
Share premium                                            0          0     45,538
--------------------------------------------------------------------------------
Statutory capital reserve                            2,011      2,011      2,011
--------------------------------------------------------------------------------
Retained earnings / accumulated losses              22,787    -33,907    -55,154
--------------------------------------------------------------------------------
Own shares                                               0       -255       -255
--------------------------------------------------------------------------------
Total equity attributable to equity                 27,828     28,746     53,037
holders of the parent                                                           
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Non-controlling interests                              -70        -76        231
--------------------------------------------------------------------------------
Total equity                                        27,758     28,670     53,268
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY                        70,583     78,257    111,108
--------------------------------------------------------------------------------


Condensed consolidated statement of cash flows

                                                    EEK                EUR      
For the period ended 31 December       Note  12M 2010  12M 2009     12M      12M
2010                                                               2010     2009
--------------------------------------------------------------------------------
In thousands                                                                    
--------------------------------------------------------------------------------
Loss for the period                            -4,589  -363,056    -293  -23,204
--------------------------------------------------------------------------------
Interest income and interest expense    7      18,163    22,595   1,161    1,444
--------------------------------------------------------------------------------
Gain/loss on sale of subsidiaries       7      -1,328     4,492     -85      287
and interests in jointly controlled                                             
entities                                                                        
--------------------------------------------------------------------------------
Gain/loss on other long-term            7     -18,246    -2,001  -1,166     -128
investments                                                                     
--------------------------------------------------------------------------------
Impairment losses on financial          7       1,788    18,888     114    1,207
assets                                                                          
--------------------------------------------------------------------------------
Share of profits and losses of equity           2 841   225,284     182   14,398
accounted investees                                                             
--------------------------------------------------------------------------------
Depreciation, amortisation and         3, 6     2,115     4,975     135      318
impairment losses on property, plant                                            
and equipment and intangible assets                                             
--------------------------------------------------------------------------------
Gain/loss on the sale of property,      4          15     1,550       1       99
plant and equipment and intangible                                              
assets                                                                          
--------------------------------------------------------------------------------
Gain/loss on the sale of investment     4      -2,887    -1,088    -185      -70
property                                                                        
--------------------------------------------------------------------------------
Change in the fair value of           4, 11    30,021   -24,265   1,919   -1,551
investment property and biological                                              
assets                                                                          
--------------------------------------------------------------------------------
Gain/loss on inventory write-downs      3     -21,868    64,905  -1,398    4,148
and reversals of inventory                                                      
write-downs                                                                     
--------------------------------------------------------------------------------
Exchange gains and losses               7      -1,050     2,823     -67      180
--------------------------------------------------------------------------------
Income tax expense                                398      -868      25      -55
--------------------------------------------------------------------------------
Operating cash flow before working capital      5,373   -45,766     343   -2,927
changes                                                                         
--------------------------------------------------------------------------------
Change in receivables and prepayments         -26,119    30,546  -1,669    1,952
--------------------------------------------------------------------------------
Change in inventories                          37,490     7,527   2,396      481
--------------------------------------------------------------------------------
Change in biological assets                         0     3,680       0      235
--------------------------------------------------------------------------------
Change in payables and deferred income         10,653   -47,037     681   -3,006
--------------------------------------------------------------------------------
NET CASH FROM / USED IN OPERATING              27,397   -51,050   1,751   -3,265
ACTIVITIES                                                                      
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Acquisition of property, plant and               -628    -1,961     -40     -125
equipment and intangible assets                                                 
--------------------------------------------------------------------------------
Proceeds from sale of property,                    25     5,729       2      366
plant and equipment and intangible                                              
assets                                                                          
--------------------------------------------------------------------------------
Acquisition of investment property     11      -3,725    -2,776    -238     -177
--------------------------------------------------------------------------------
Proceeds from sale of investment               24,530     8,581   1,568      548
property                                                                        
--------------------------------------------------------------------------------
Acquisition of subsidiaries and                  -500      -585     -32      -37
interests in jointly controlled                                                 
entities                                                                        
--------------------------------------------------------------------------------
Proceeds from sale of investments in           23,105    69,479   1,477    4,441
subsidiaries and jointly controlled                                             
entities                                                                        
--------------------------------------------------------------------------------
Proceeds from sale of other                         0    29,383       0    1,878
investments                                                                     
--------------------------------------------------------------------------------
Loans granted                                  -3,613   -12,768    -231     -816
--------------------------------------------------------------------------------
Repayment of loans granted                     52,078     5,878   3,328      377
--------------------------------------------------------------------------------
Interest received                               3,809     3,929     243      251
--------------------------------------------------------------------------------
NET CASH FROM INVESTING ACTIVITIES             95,081   104,889   6,077    6,706
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Proceeds from loans received                   65,157   115,005   4,164    7,350
--------------------------------------------------------------------------------
Settlement of loans and finance              -151,386  -226,560  -9,675  -14,480
lease liabilities                                                               
--------------------------------------------------------------------------------
Interest paid                                 -35,070   -33,662  -2,241   -2,150
--------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES        -121,299  -145,217  -7,752   -9,280
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
NET CASH FLOW                                   1,179   -91,378      76   -5,839
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Cash and cash equivalents at                   64,724   156,061   4,137    9,974
beginning of period                                                             
--------------------------------------------------------------------------------
Increase / decrease in cash and cash            1,179   -91,378      76   -5,839
equivalents                                                                     
--------------------------------------------------------------------------------
Effect of exchange rate fluctuations              -45        41      -4        2
on cash held                                                                    
--------------------------------------------------------------------------------
Cash and cash equivalents at end of            65,858    64,724   4,209    4,137
period                                                                          
--------------------------------------------------------------------------------