Unaudited consolidated interim report for Q3 and 9 months

GROUP CEO’S REVIEW

The cooling of the actual property market within the third quarter didn’t trigger panic in Arco Vara’s developments. The deliberate ultimate gross sales of the Kodulahe quarter have been held as anticipated and there was no seen concern amongst prospects who had purchased a house from the pre-sale in 2021, which generated 5.2 million euros in gross sales income and 560,000 euros in internet revenue within the third quarter of 2022.

As in the entire actual property market, there was a lower within the variety of inquiries additionally within the Rannakalda growth, a part of the Kodulahe undertaking. As of the date of publication, no prospects have withdrawn from their contracts, and roughly 35% of the constructing has been pre-sold. The Arco Tarc workforce continues with the development of Kodulahe Rannakalda, and works are on schedule each when it comes to building pace and finances. To get a great overview of the tempo of building, there’s a dwell broadcast on the next hyperlink: kodulahe.ee/hoone.

In the interim interval, the enlargement of the Kodulahe quarter has been confirmed. Detailed plan for the development of as much as 6,500 sqm was initiated on the Soodi 6 property, and Kodulahe OÜ received the Lammi 6 public sale of state land, buying one other roughly 1.5 hectares of land.

Botanica Lozen Residences growth of personal homes in Bulgaria reached the constructing allow within the third quarter and an settlement has been reached with the principle contractor to start out building in November. Unfortunately, the purpose of beginning building within the third quarter couldn’t be met, however on the optimistic aspect, building options have been optimized to make sure a extra environment friendly building course of each when it comes to time and finances.

As for the industrial constructing Madrid BLVD in Sofia, 20 out of twenty-two areas within the constructing have been coated with leases on the time of the publication of this report. Two remaining areas are workplace areas, for which there’s little curiosity within the Sofia market, in accordance with statistics. The native workforce evaluated attainable reductions within the quantity of particular person areas by creating extra leasable workplace models, however the attainable options and the related prices weren’t justified in in the present day’s market state of affairs.

In in the present day’s financial surroundings, one can clearly see homebuyers’ worries in regards to the future, which is amplified by media protection of attainable dramatic eventualities. However, contemplating the long-term nature of actual property growth, the Arco Vara workforce should proceed to develop with a view to attain the 2026 purpose of growing at the very least 200 residences yearly.

KEY PERFORMANCE INDICATORS

In Q3 2022, the group’s income was 5,232 thousand euros, which is 8,5 instances greater than the income of 613 thousand euros in Q3 2021. In 9 months 2022, the group’s income was 13,167 thousand euros, which is 17% greater than the income of 11,283 thousand euros in 9 months 2021.

In Q3 2022, the group’s working revenue (=EBIT) was 659 thousand euros and internet revenue 556 thousand euros (in 9 months 2022: working revenue 1,785 thousand euros and internet revenue of 1,506 thousand euros). In Q3 2021, the group had working revenue of 294 thousand euros and internet revenue of 202 thousand euros. In 9 months 2021, the group made working revenue of two,724 thousand euros and internet revenue of two,425 thousand euros.

In Q3 2022, 31 residences have been offered in initiatives developed by the group (in 9 months 2022 72 residences and a land plot in Latvia). In Q3 2021, solely garages have been offered (as well as, 63 residences and a industrial house in 9 months).

In the 9 months of 2022, the group’s debt burden (internet loans) decreased by 4,038 thousand euros right down to the extent of seven,146 thousand euros as of 30 September 2022. As of 30 September 2022, the weighted common annual rate of interest of interest-bearing liabilities was 5.0%. This is a lower of 0.2 share factors in comparison with 31 December 2021.

OPERATING REPORT

The income of the group totalled 5,232 thousand euros in Q3 2022 (in Q3 2021: 613 thousand euros,) and 13,167 thousand euros in 9 months 2022 (in 9 months 2021: 11,283 thousand euros), together with income from the sale of properties within the group’s personal growth initiatives within the quantity of 4,960 thousand euros in Q3 and 12,337 thousand euros in 9 months 2022 (2021: 305 thousand euros in Q3 and 10,441 thousand euros in 9 months).

Most of the opposite income of the group consisted of rental and property administration providers revenue from industrial and workplace premises in Madrid Blvd constructing in Sofia, amounting to 189 thousand euros in Q3 2022 and 595 thousand euros in 9 months (2021: 214 thousand euros in Q3 and 608 thousand euros in 9 months). By the time of publishing the current report, 2 workplaces stay vacant, however all industrial areas, along with parking locations, have been rented out. The free workplace areas make 13.3% of the rented workplace and retail space.

In Q1 2022, the development firm Arco Tarc OÜ was established, which laid the inspiration for a brand new business section. In 2022, the service will likely be supplied solely intra-group with a hard and fast revenue margin of 4%.

The building of the IV-V stage buildings in Kodulahe was accomplished within the second quarter of 2022. Two residential buildings with 36 residences have been accomplished at Pagi 3 and Pagi 5. In the Q2 2022, the ultimate sale was finalized for 41 residences, the remainder of the shoppers have been met on the notary originally of July. By the time of publishing the current report, the home is totally offered.

The building of the Stage VI of Kodulahe undertaking at Lammi 8 began in February 2022 by Arco Vara’s personal building firm Arco Tarc OÜ. The building features a pavilion, 4 industrial areas and 108 residences, out of which many have sea view. The house buildings will change into prepared in about 2 years after the development begins. Apartment gross sales additionally commenced in February 2022. As on the date of publishing the annual report, 42 models out of the 113 had been presold.

A subsidiary of Arco Vara, Aktsiaselts Kolde, signed an settlement for land acquisition beside Lake Harku, tackle Paldiski highway 124b, Tallinn. More than 35,000 m2 of residential and industrial actual property (GBA) is deliberate for growth. The anticipated growth interval is 6 years with the beginning of building deliberate for 2023. By the time of publishing the current report, the detailed planning has been began.

The plan is to construct a cluster home with 5 properties Pirita Kuldlehe undertaking. Road building in underway. The building of the home is deliberate to start out in the long run of 2022, and the home will likely be accomplished inside a 12 months. The sale of the undertaking has not began.

The final imaginative and prescient of the Botanica Lozen undertaking foresees building of 54 properties (homes) in three phases. The anticipated begin time of building is the autumn of 2022, when the development of the primary 16 buildings will begin. Minimum building interval is 2 years.

As of 30 September 2022 and the date of this report, 3 Marsili residential plots remained unsold in Latvia.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Tiina Malm
CFO
Arco Vara AS
Phone: +372 614 4630
www.arcovara.com

• AV_Q3 2022_overview_ENG
• Arco Vara Q3 2022 report ENG