Pro Kapital Council approved Consolidated Interim Report for I
Quarter and 3 Months of 2023 (Unaudited)
MANAGEMENT REPORT
CEO summary
Q1 2023 marks as a start of new developments in
AS Pro Kapital Grupp.
Real estate development
In Tallinn, we took the decision to start the
final stage of development in Kalaranna 8. This last and final
stage consists of 4 residential buildings with 146 apartments
and 4 commercial units. What is different this time around is
that we decided to proceed the construction without the general
contractor. Due to several reasons stemming from the pandemic and
the ongoing war, the general contractors’ market still seems to be
on shaky ground and it is close to impossible to reach agreements
for fixed price. Hence, we decided to split the construction
agreement in smaller pieces and the contracting of which, we will
manage in house with our highly skilled technical department.
At the end of Q1, we initiated a tender for the
excavation and retaining walls contract and we started works in
mid-April.
Kalaranna 1st stage construction is formally
finished, all units delivered to clients and the main activity
there is property management by our Pro Halduse OÜ and the
management of warranty works, if any.
We also started the presales of Kalaranna final
stage with 31 apartments and 4 business premises closed with
notarial presale deeds.
As with the already completed stages of
Kalaranna development, we are grateful to the local authorities and
community to have been helpful and understanding also in this
preliminary preparatory stage. The completion of this final stage
will definitely close the circle and add to the beautiful
neighbourhood of the city.
In Kindrali Houses in Kristiine City we have
also completed the 3 residential buildings for a total of 195
apartments. The project is entirely sold out and by now the
handovers of the last building are all done and final notarial
deeds closed.
In Riga we continue the sales of our luxury
product River Breeze Residence which has been awarded the Baltics
Prestige Award for its outstanding architecture. During Q1, 2023 we
signed 4 new sales. Overall, we see an upwards trend in the real
estate segment in Riga as it pertains to our project.
We hold a building permit for City Oasis
residential quarter, a project consisting of ca 330 apartments and
32.500 sqm GBA located in Tallinas iela– a tranquil and green
living environment in the city centre. We will be ready to proceed
with construction activities as soon as the market situation
becomes fit for such an ambitious and vast project.
Out of the three capitals (Tallinn, Riga,
Vilnius), Riga seems to have the most challenges in terms of
overall market conditions. However, our long-term outlook for the
Latvian real estate sector remains bullish.
In 2019 we completed five buildings in Šaltinių
Namai Attico project in Vilnius with 115 apartments. Today we have
only 2 apartments unsold, out of which one is a model unit. We are
preparing for the following phase with city villas (43 units) and a
commercial building and plan to start the construction this
year.
Despite the geopolitical situation, Vilnius
market is very active in the high-end segment and we look forward
to the next stage of our high-end development.
The Company has also expanded its land portfolio
in Vilnius, purchasing a school in Naugarduko street for the price
of 6.25M euros. The school will be converted into a high-end
residential property, consisting of circa 50 luxury apartments. An
architectural competition was carried out for the purpose, the
winning studio which is currently in the design process and ready
to start the permitting process.
Hotel operations
After two difficult years, which clearly
affected the global sector of tourism because of the pandemic,
there seems to be a strong demand in the hotel industry.
In Bad Kreuznach we have reached a substantial
operational break even, despite the fact that a large portion of
the rooms were not available to the public due to ongoing
renovations. A few years ago, we renovated half of the rooms and
part of the common areas. The renovations of the remaining rooms
were completed by the end of Q1 2023, and all the room count (116
units) are available. We are seeing an increase in Average Daily
Rate already and also positive trends in outperforming against the
budgeted proforma.
The Baltic real estate sector showed great
resilience throughout the pandemic period as well as during the
turbulent geopolitical period we live in, and we are confident that
we will manage to develop our pipeline of projects in line with the
market’s expectations, thus continuing to provide a stream of
high-quality properties to the local population. We are aware of
the challenging historical times we live in; we will need to be
fast to adapt to an ever-changing and fast paced world (especially
in regards of the construction works and the related challenges to
the supply chain and cost of materials), but we still have a very
positive outlook on the Baltic region and thus far the market has
been supporting our sentiment.
The economic outlook for the Baltic region is
generally positive. The Baltic countries of Estonia, Latvia, and
Lithuania have experienced steady economic growth in recent years,
driven by a combination of factors such as increasing foreign
investment, a growing service sector, and export-oriented
manufacturing. The region has also benefited from its proximity to
Northern Europe and its membership in the European Union, which has
helped to boost trade and investment.
All the positive indicators above will not
disappear despite the challenges that are posed to the real estate
sector by the global macroeconomic outlook and the geopolitical
turmoil caused by the war in Ukraine.
As the CEO of a successful development company,
I see the future of real estate being heavily impacted by
technology and changing consumer preferences. Smart home
technology, virtual and augmented reality, and online marketplaces
are becoming increasingly popular and will continue to shape the
way we buy, sell, and experience real estate. Additionally, there
is a growing demand for sustainable and energy-efficient homes, as
well as for flexible living spaces that can adapt to the changing
needs of residents. Overall, the future of real estate is exciting
and dynamic, and we are constantly looking for innovative ways to
stay ahead of the curve and meet the evolving needs of our
customers.
Edoardo PreatoniCEO
Key financials
The total revenue of the
Company in first three months of 2023 was 13.4 million euros
compared to 7.9 million euros in the reference period.
The gross profit for three
months of 2023 has increased by 43% amounting to 3.7 million euros
compared to 2.6 million euros in 2022.
The operating
result in three months of 2023 has increased to
2.2 million euros profit comparing to 1 million euros profit during
the same period in 2022.
The net result for the three
months of 2023 was 1.3 million euros profit, comparing to 251
thousand euros loss in the reference period.
Cash generated in operating
activities during first three months of 2023 was 10.3
million euros comparing to 3.2 million euros used during the same
period in 2022.
Net assets per share on 31
March 2023 totalled to 1.00 euro compared to 0.75 euros on 31 March
2022.
Key performance indicators
|
|
2023 3M |
2022 3M |
2022 12M |
Revenue, th
EUR |
|
13 415 |
7 916 |
65 654 |
Gross profit, th
EUR |
|
3 666 |
2 558 |
16 965 |
Gross profit,
% |
|
27% |
32% |
26% |
Operating
result, th EUR |
|
2 160 |
989 |
17 657 |
Operating
result, % |
|
16% |
12% |
27% |
Net result, th
EUR |
|
1 303 |
-251 |
13 452 |
Net result,
% |
|
10% |
-3% |
20% |
|
|
|
|
|
Earnings per
share, EUR |
|
0.02 |
0.00 |
0.24 |
|
31.03.2023 |
31.03.2022 |
31.12.2022 |
Total Assets, th
EUR |
101 587 |
117 371 |
101 256 |
Total
Liabilities, th EUR |
44 961 |
74 779 |
45 933 |
Total Equity, th
EUR |
56 626 |
42 592 |
55 323 |
Debt / Equity
* |
0.79 |
1.76 |
0.83 |
|
|
|
|
Return on
Assets, % ** |
1.2% |
-0.2% |
12.4% |
Return on
Equity, % *** |
2.6% |
-0.6% |
27.4% |
Net asset value
per share, EUR **** |
1.00 |
0.75 |
0.98 |
*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 euros |
31.03.2023 |
31.03.2022 |
31.12.2022 |
ASSETS |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
18 773 |
7 650 |
10 589 |
Current receivables |
2 331 |
1 546 |
955 |
Prepaid expenses |
395 |
525 |
64 |
Inventories |
26 113 |
59 360 |
34 224 |
Total
current assets |
47 612 |
69 081 |
45 832 |
Non-current
assets |
|
|
|
Non-current receivables |
15 |
20 |
2 016 |
Property, plant and equipment |
7 733 |
6 866 |
7 294 |
Right-of-use assets |
268 |
173 |
195 |
Investment property |
45 615 |
40 871 |
45 575 |
Goodwill |
262 |
262 |
262 |
Intangible assets |
82 |
98 |
82 |
Total
non-current assets |
53 975 |
48 290 |
55 424 |
TOTAL
ASSETS |
101 587 |
117 371 |
101 256 |
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities |
|
|
|
Current debt |
28 422 |
16 131 |
173 |
Customer advances |
1 270 |
11 477 |
1 659 |
Current payables |
3 156 |
7 961 |
4 626 |
Tax liabilities |
816 |
116 |
111 |
Short-term provisions |
19 |
6 |
5 |
Total
current liabilities |
33 683 |
35 691 |
6 574 |
Non-current
liabilities |
|
|
|
Long-term debt |
10 086 |
37 909 |
38 184 |
Other non-current payables |
0 |
20 |
0 |
Deferred income tax liabilities |
1 132 |
1 134 |
1 130 |
Long-term provisions |
60 |
25 |
45 |
Total
non-current liabilities |
11 278 |
39 088 |
39 359 |
TOTAL
LIABILITIES |
44 961 |
74 779 |
45 933 |
Equity
attributable to owners of the Company |
|
|
|
Share capital in nominal value |
11 338 |
11 338 |
11 338 |
Share premium |
5 661 |
1 748 |
5 661 |
Statutory reserve |
1 134 |
0 |
1 134 |
Revaluation reserve |
2 012 |
2 984 |
2 012 |
Retained earnings |
36 481 |
26 522 |
35 178 |
TOTAL
EQUITY |
56 626 |
42 592 |
55 323 |
TOTAL
LIABILITIES AND EQUITY |
101 587 |
117 371 |
101 256 |
Consolidated interim statements of comprehensive
income
in thousands of euros |
|
2023 3M |
2022 3M |
2022 12M |
CONTINUING OPERATIONS |
|
|
|
|
Operating income |
|
|
|
|
Revenue |
|
13 415 |
7 916 |
65 654 |
Cost of goods
sold |
|
-9 749 |
-5 358 |
-48 689 |
Gross
profit |
|
3 666 |
2 558 |
16 965 |
|
|
|
|
|
Marketing
expenses |
|
-133 |
-114 |
-498 |
Administrative
expenses |
|
-1 374 |
-1 449 |
-4 946 |
Other
income |
|
1 |
0 |
6 278 |
Other
expenses |
|
0 |
-6 |
-142 |
Operating profit/ loss |
|
2 160 |
989 |
17 657 |
|
|
|
|
|
Financial
income |
|
20 |
1 |
3 |
Financial
expense |
|
-874 |
-1 226 |
-4 211 |
Profit
/ loss before income tax |
|
1 306 |
-236 |
13 449 |
Income
tax |
|
-3 |
-15 |
3 |
Net
profit / loss for the period |
|
1 303 |
-251 |
13 452 |
|
|
|
|
|
Other
comprehensive income net of income tax: |
|
|
|
|
Net change in
asset revaluation reserve |
|
0 |
0 |
-972 |
|
|
|
|
|
Total
comprehensive income / loss for the year |
|
1 303 |
-251 |
12 480 |
|
|
|
|
|
Earnings per
share (continuing operations) € |
|
|
|
|
Earnings per
share for the period € |
|
0.02 |
0.00 |
0.24 |
The full report can be found in the file attached.
Angelika AnnusCFO +372 614 4920
prokapital@prokapital.ee
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