0GZL Arco Vara As

GROUP CEO’S REVIEW

In spite of the times with low sunlight, the team of Arco Vara showed excellent results in Q4. We got to enjoy the fruits of our extensive work and our customers got acquainted with the high level of construction quality that Arco Tarc provides. The delivery of homes at Kodulahe Rannakalda began in the previous quarter, ensuring a quarterly profit of 4.5 million euros and over 17.5 million euros in sales revenue. Nearly 3 million euros’ worth of new sales were secured in Q4, indicating faith in the projects of Arco Vara.

In Q4, the construction activities in Kodulahe Kvartal reached a new milestone: the construction works ended in Rannakalda and we delivered 66 homes. The number of inquiries for the homes at Kodulahe Kvartal remained high during the final quarter of the year, providing a sense of certainty that the 47 units with a combined value of nearly 14.5 million euros will be sold in 2024.

The completion of the Rannakalda project also marked the end of the first construction site of the building team of Arco Vara: we managed to exceed the goals without compromising on quality. The next project of Arco Tarc will be constructing a new sports building at Kolde avenue, where preparations have already begun as at the issuance of this report. The new sports building will be nearly 2,000 m² in area and open for everyone interested in trying their hand at padel as early as at the end of 2024.

We also have good news from the Botanica Lozen Residences project in Bulgaria where the majority of the 16 private homes have now reached their complete height. As the project has progressed visually, the number of customers with serious interest has also increased, shaping into preliminary sales amounting to 1.2 million euros in Q4. As at the end of 2023, five private homes have been sold in the scope of the project, expected to be completed in Q4 of 2024.

Construction also continues according to schedule in the Kuldlehe development project in Pirita. The homes there are still waiting for happy residents who are welcome to their new homes starting from the end of Q1 of 2024.

The slow market has no impact on the design process of developments. We have great anticipations for the projects currently in the planning stages, as we would like to start the construction works at Soodi 6 as early as in the first half of 2024 and the first stage of Arcojärve by the end of 2024.

In 2023, Arco Vara exceeded its goals. We reached the aim of 20% ROE and a profit margin extraordinary in the field of real estate development. The company holds a strong capital position both in terms of financial statistics and in the form of our staff which will continue to carry our success in the upcoming periods.

KEY PERFORMANCE INDICATORS

In Q4 2023, the group's sales revenue was 17,687 thousand euros, which is several times more than the sales revenue of the Q4 2022 of 327 thousand euros. In 12 months 2023, the group’s revenue was 18,339 thousand euros, which is 36% more than the revenue of 13,494 thousand euros in 12 months 2022.

In Q4 2023, the group’s operating profit (=EBIT) was 4,594 thousand euros and net profit 4,478 thousand euros (in 12 months 2023: operating profit 3,940 thousand euros and net profit of 3,550 thousand euros). In Q4 2022, the group had operating loss of 723 thousand euros and net loss of 811 thousand euros. In 12 months 2022, the group made operating profit of 1,062 thousand euros and net profit of 695 thousand euros.

In Q4 2023, 63 apartments, 3 commercial premises in Estonia and 3 land plots in Latvia were sold – same for 12 months of 2023. In Q4 2022, only 12 parking spaces were sold in projects developed by the group (additionally, 72 apartments in Estonia and 1 land plot in Latvia in 12 months 2022).

In the 12 months of 2023, the group’s debt burden (net loans) decreased by 6,054 thousand euros down to the level of 8,608 thousand euros as of 31 December 2023. As of 31 December 2023, the weighted average annual interest rate of interest-bearing liabilities was 8.2%. This is an increase of 2.4 percentage points compared to 31 December 2022.

OPERATING REPORT

The group's sales revenue was 17,687 thousand euros in Q4 2023 (Q4 2022: 327 thousand euros) and 18,339 thousand euros in 12 months (12 months 2022: 13,494 thousand euros), including the sale of real estate in the group’s own development projects in Q4 17,567 thousand euros and 17,581 thousand euros in 12 months (2022: 89 thousand euros in Q4 and 12,426 thousand euros in 12 months).

Most of the other revenue of the group consisted of rental and property management services income from commercial and office premises in Madrid Blvd building in Sofia, amounting to 371 thousand euros in 6 months (2022: 406 thousand euros in 6 months). The sale process of the Madrid building was completed in July 2023. There was no profit or loss from the sale of the building in 2023 because the discounts were recognized in 2022. The transaction is not reflected in the sales revenue, as it is the sale of a real estate investment. Equity capital worth 4.1 million euros was released from the transaction.

Arco Vara's own construction company Arco Tarc OÜ is the main contractor for the most premium stage of Kodulahe - Rannakalda. By the end of 2023, a pavilion, 4 service areas and 108 apartments (in three separate apartment buildings), many of which have sea views, were completed. As at the date of publishing the interim report, 69 units out of the 113 have been sold.

A subsidiary of Arco Vara, Aktsiaselts Kolde, in 2021 signed an agreement for land acquisition beside Lake Harku, address Paldiski road 124b, Tallinn. More than 35,000 m² of residential and commercial real estate (GBA) is planned for development. The project is called Arcojärve. In Q2 2023, the next land purchase prepayment of 1,626 thousand euros was paid, as of 31.12.2023, the total advance payment for the said land is 4,978 thousand euros. The start of the construction of the first stage is planned for 2024.

In the Kuldlehe project, a spacious and exclusive cluster house with 5 homes was built in Pirita in 2023. The sale of the project has started.

The Botanica Lozen project foresees construction of 54 homes (houses) in three stages. Construction and sales of the first 16 buildings have begun – the private houses of the firat phase will be completed by the end of 2024. By the date of publication of the quarterly report, 6 out of 16 houses have been pre-sold.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

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

Attachment

• ArcoVara_aruanne Q4 2023 ENG

Arco Vara As (LSE:0GZL)
Gráfica de Acción Histórica
De Dic 2024 a Ene 2025

Arco Vara As (LSE:0GZL)
Gráfica de Acción Histórica
De Ene 2024 a Ene 2025