Skip to main content

Pro Kapital Council approved Consolidated Interim Report for IV Quarter and 12 Months of 2021 (Unaudited)

MANAGEMENT REPORT

Chairman’s summary 

The fourth quarter of 2021 has confirmed the positive trend seen in the previous quarter. The overall market is healthy and we are seeing a solid and steady demand for our projects. The construction market still poses some challenging issues, mainly due to complications related to Covid-19 and relative problems in the supply chain and increase in cost of materials due to lower overall supply, which makes it harder to fix a price for the works with the construction companies.

Real estate development

In Tallinn, we have continued construction of Kindrali Houses and Kalaranna projects. In the third quarter of 2021 we started handing over apartments in Kalaranna project, where completion of eight buildings with the total of 240 apartments will be achieved. Today we are handing over apartments in the fifth and sixth building and we have reservations or presales concluded for all business premises and for 99% of apartments in this phase of the project. Last year we started construction of the new project Kindrali Houses in Kristiine City, where three building-complexes with the total of 195 apartments will be raised. In this project we had booked or presold more than half of the apartments before signing the construction agreement. Today we have no apartment available in Kindrali.

In Riga we are selling our ready luxury product River Breeze Residence and started the tendering process for the further development of Kliversala Residential Quarter – Blue Marine. We have invited several construction companies to the tender and are in the process of identifying the best option, subject to the offers we will receive. Latvian real estate sector is lagging its’ neighbouring countries (Estonia and Lithuania) due to what we see as contingent reasons that will have little impact on our long-term value creation strategy. However, it is undeniable that the market is currently moving at a slower pace compared to the other Baltic Republics. This comes with some short-term challenges, but we believe that this untapped potential could also be favourable should we decide to expand our land portfolio in the area, by giving us the chance to buy at a lower price relative to the other Baltic capitals.

In Vilnius, we only have 4 unsold apartments in our Šaltiniu Namai Attico project. The real estate market has had a great run in 2021 and we saw a great deal of interest for our luxury properties, achieving some of the highest prices per sq.m2 in all the local market. We just started the tendering process for the following phase of city villas and a commercial building and we can start construction works this summer.

Hotel operations

The Covid-19 pandemic had a strong impact on all the tourism sector, but luckily the German government has provided a great deal of support in terms of subsidies provided to PK Parkhotel Kurhaus in Bad Kreuznach.

The current restrictions are still based on the “2G+ model”, meaning that all the hotel guest who have 2 doses of vaccines still must present daily negative Covid tests. This clearly complicates the job of selling rooms and we decided to turn this problem into an opportunity, by speeding up the process of renovation of the second half of the rooms (first half has been renovated 5 years ago), doing works in a period where we will not disturb our guests due to the lower occupation of the hotel.

The works will also have the added benefit of converting an unused area into 7 standard rooms and creation of a luxurious suite with private sauna and terrace, which will greatly improve the overall prestige of the hotel.

In the following months we plan on continuing the construction works of ongoing developments and prepare for the upcoming phases. The real estate development is going well, the market is strong and we will continue implementing our strategy of creating long-term value for our shareholders and for the communities that we aim to develop in a sustainable, comfortable and aesthetically pleasing way.

Edoardo Preatoni
CEO

Key financials

The total revenue of the Company in of 2021 was 44.8 million euros, having increased by 133% compared to the reference period (2020 12M: 19.2 million euros). The total revenue of the fourth quarter was 23.7 million euros, which is 4.23 times more than
5.6 million euros during the same period in 2020.

The real estate sales revenues are recorded at the moment of handing over the premises to the buyer. Therefore, the revenues from sales of real estate depend on the completion of the residential developments. The real estate sales have been influenced by completion of Ratsuri Houses project, where all apartments were sold and handed over to new owners and start of handing over apartments in first buildings of Kalaranna project.  The Company has continued with sales of completed developments – River Breeze Residence in Riga and Šaltinių Namai Attico development in Vilnius and with presales of ongoing development projects Kalaranna District and Kindrali Houses in Tallinn.

The gross profit in 2021 increased by 69% amounting to 11.4 million euros compared to 6.8 million euros in 2020. In the fourth quarter the gross profit figures were 5.3 million euros and 1.4 million euros respectively.

The operating result in 2021 has improved to 12.4 million euros profit comparing to 43.1 million euros loss during the same period in 2020. The operating result of the fourth quarter was 8.7 million euros profit comparing to 1.1 million euros loss in 2020.

The net result in 2021 was 29.8 million euros profit and in the fourth quarter 7.3 million euros profit, comparing to losses of 59.5 million euros and 48.4 million euros in the reference periods respectively. While the results of the reference period 2020 were influenced by the decrease in the value of investment property in the subsidiary AS Tallinna Moekombinaat, then positive results of the reporting period reflect positive effect of loss of control and derecognition of the above-mentioned subsidiary as well as increased sales revenues from property developments in Estonia.  

Cash generated from operating activities during 2021 was 13.3 million euros comparing to 7.7 million euros used during the same period in 2020. In the fourth quarter of 2021 cash generated from operating activities was 11.9 million euros and 3.1 million euros were used during the same period in 2020.

Net assets per share on 31 December 2021 totalled to 0.76 euros compared to 0.17 euros on 31 December 2020.

Key performance indicators (including discontinued operations)

 2021 12M2020 12M2021 Q42020 Q4
Revenue, th EUR44 83019 23423 7225 619
Gross profit, th EUR11 4246 7755 3211 404
Gross profit, %25%35%22%25%
Operating result, th EUR12 380-43 1088 666-44 244
Operating result, %28%-224%37%-787%
Net result, th EUR29 757-59 4567 292-48 371
Net result, %66%-309%31%-861%
     
Earnings per share, EUR0.52-0.980.13-0.79

 31.12.202131.12.2020
Total Assets, th EUR116 027179 048
Total Liabilities, th EUR73 184169 477
Total Equity, th EUR42 8439 571
Debt / Equity *1.7114.15
   
Return on Assets, % **20.2%-30.7%
Return on Equity, % ***113.5-141.2%
Net asset value per share, EUR ****0.760.23

  
*debt / equity = total debt / total equity
**return on assets = net profit/loss / total average assets
***return on equity = net profit/loss / total average equity

****net asset value per share = net equity / number of shares

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated interim statement of financial position

in thousands of euros30.09.202131.12.2020
ASSETS  
Current assets  
Cash and cash equivalents9 6269 393
Current receivables8021 797
Inventories57 53358 352
Total current assets67 96169 542
Non-current assets  
Non-current receivables213 517
Property, plant and equipment6 7546 745
Right-of-use assets202357
Investment property40 73498 512
Intangible assets355375
Total non-current assets48 066109 506
TOTAL ASSETS116 027179 048
LIABILITIES AND EQUITY  
Current liabilities  
Current debt3 955107 581
Customer advances12 4197 866
Current payables4 379 22 211
Tax liabilities1 144458
Short-term provisions1 125459
Total current liabilities23 022138 575
Non-current liabilities  
Long-term debt46 45527 255
Other non-current payables2 5262 295
Deferred income tax liabilities1 1331 170
Long-term provisions48182
Total non-current liabilities50 16230 902
TOTAL LIABILITIES73 184169 477
Equity attributable to owners of the Company  
Share capital in nominal value11 33811 338
Share premium5 6615 661
Statutory reserve1 1341 134
Revaluation reserve2 9842 984
Retained earnings-8 03147 647
Profit/ Loss for the period29 757-55 678
Total equity attributable to owners of the Company42 84313 086
Non-controlling interest0-3 515
TOTAL EQUITY42 8439 571
TOTAL LIABILITIES AND EQUITY116 027179 048

* See Note 2 for details regarding restatement.

 Consolidated interim statements of profit and loss and other comprehensive income

in thousands of euros2021
12M
2020 12M2021
Q4
2020 Q4
CONTINUING OPERATIONS    
Operating income    
Revenue43 09513 63723 7224 894
Cost of goods sold-32 519-9 424-18 401-3 386
Gross profit10 5764 2135 3211 508
     
Marketing expenses-502-610-144-193
Administrative expenses-5 592-4 372-2 043-1 201
Other income7 6543845 541358
Other expenses-632 876-92 891
Operating profit/ loss12 0732 4918 6663 363
     
Financial income53 81341  1
Financial expense-30 882-5 420-1 408-1 327
Profit / loss before income tax35 004-2 9257 2592 037
Income tax10-35433-143
Net profit / loss from continuing operations35 014-3 2797 2921 894
     
Profit from discontinued operations-5 257-56 1770-50 265
Net profit / loss for the period29 757-59 4567 292-48 371
     
Attributable to:    
            Equity holders of the parent                                               29 757-55 6787 292-45 005
            Non-controlling interest0     -3 778        0     -3 366
     
Other comprehensive income, net of income tax    
Items that will not be reclassified subsequently to profit or loss    
Net change in properties revaluation reserve0-27800
     
Total comprehensive income / loss for the year29 757-59 7347 292-48 371
Attributable to:    
            Equity holders of the parent29 757-55 9567 292-45 005
            Non-controlling interest0-3 7780-3 366
     
Earnings per share (continuing operations) €0.62-0.060.130.03
Earnings per share for the period €0.52-0.990.13-0.79

Consolidated interim statements of cash flows

in thousands of euros2021 12M2020 12M2021 Q42020 Q4
Cash flows from operating activities    
Profit/loss for the period29 757-59 4567 302-48 373
Adjustments for:    
     Depreciation, amortisation of non-current assets           37441692105
     Gain from disposal of investment property-1 092000
     Loss from write-off of plant, property, equipment0808
     Change in fair value of property, plant, equipment-56-16-56-16
     Change in fair value of investment property        -5 48443 127-5 48443 127
     Gain from derecognition of subsidiary-53 808000
     Finance income and costs36 44015 9941 4073 984
     Changes in deferred tax assets and liabilities-37-1780-60
     Other non-monetary changes (net amounts)1 536-3 110-714
Changes in working capital:    
     Trade receivables and prepayments4 492-1 514686535
     Inventories818-13 01110 278-636
     Liabilities and prepayments47710 025-2 323-1 845
     Provisions-127591231
Net cash used in operating activities13 290-7 65611 907-3 126
     
Cash flows from investing activities    
Payments for property, plant and equipment-178-94-76-71
Payments for intangible assets-20-43-8-45
Payments for investment property-458-844-48-187
Proceeds from disposal of investment property2 000000
Change in cash from derecognition of subsidiary-182000
Interests received3100
Net cash used in investing activities 1 165-980-132-303
     
Cash flows from financing activities    
Net proceeds from secured bonds028 50000
Redemption of convertible bonds-337-330-30
Repurchase of non-convertible bonds0-28 00000
Proceeds from borrowings22 34014 4103 8436 721
Repayment of borrowings-30 581-1 376-18 726-692
Repayment of lease liabilities-163-135-34-5
Interests paid-5 481-5 953-515-488
Net cash used/ generated by financing activities -14 2227 413-15 4325 506
     
Net change in cash and cash equivalents233-1 223-3 6572 077
Cash and cash equivalents at the beginning9 39310 61613 2837 316
Cash and cash equivalents at the end of the period9 6269 3939 6269 393

The full report can be found in the file attached.

Angelika Annus
Member of the Board
+372 614 4920
prokapital@prokapital.ee

Attachment

Disclaimer & Cookie Notice

Welcome to GOLDEA services for Professionals

Before you continue, please confirm the following:

Professional advisers only

I am a professional adviser and would like to visit the GOLDEA CAPITAL for Professionals website.

Cookie Notice

We use cookies to improve your experience on our website

Information we collect about your use of Goldea Capital website

Goldea Capital website collects personal data about visitors to its website.

When someone visits our websites, we use a third party service, Google Analytics, to collect standard internet log information (such as IP address and type of browser they’re using) and details of visitor behavior patterns. We do this to allow us to keep track of the number of visitors to the various parts of the sites and understand how our website is used. We do not make any attempt to find out the identities or nature of those visiting our websites. We won’t share your information with any other organizations for marketing, market research or commercial purposes and we don’t pass on your details to other websites.

Use of cookies
Cookies are small text files that are placed on your computer or other device by websites that you visit. They are widely used to make websites work, or work more efficiently, as well as to provide information to the owners of the site.