Copyright © 2019. Inderes Oy. All rights reserved.
Etsi
Käyttäjätili

Hei!

Luo ilmainen tili jotta voit seurata yrityksiä, osallistua foorumin keskusteluun sekä kommentoida meidän sisältöä. Valitse sinulle sopivin tili.

Oliko sinulla jo tili?

Kirjaudu sisään

MANAGEMENT REPORT

Chairman’s summary

During the first half of the year Pro Kapital continued construction works of the new T1 Mall of Tallinn shopping and entertainment centre in Tallinn, which is the Company´s largest single-object development project. The Company is continuously carrying out negotiations to find suitable retail operators for the T1, either international or local. The T1 Mall of Tallinn is expected to be opened this autumn.

The Company continued the development of residential areas of Kristiine City in Tallinn, Kliversala in Riga and Šaltinių Namai in Vilnius.

In Tallinn, Kristiine City, the Company has completed five of ten Kristina Houses where 149 apartments out of 155 have been handed over to the clients. Following phase of Kristina Houses is currently ongoing with two buildings under development. Each building has 31 apartments. With active presale being carried out simultaneously to construction works, altogether 36 apartments have been presold. Presales have started also for the last set of three buildings of Kristina Houses in Sammu Street, construction of which is expected to commence this autumn. The Company completed renovation of Marsi 6 into a loft apartment building this spring. Being a very popular project in co-operation with Estonian designers, only 1 flat of 45 is still available for sale.

Kalaranna residential development projecting works in Tallinn are ongoing for obtaining the building permit. As the interest for the project is very high, we have started with initial reservations in July. We are proud to announce that 7 reservations have been already made.

The Company finished the construction works of prestigious River Breeze Residence in Kliversala, Riga, this spring. 6 out of 47 luxury apartments have already been handed over to the clients and two will be handed over in the nearest future. Sales for 39 apartments of River Breeze Residence is currently ongoing.  The Company is proceeding with other key projects in Riga. The following phase of Kliversala and Tallinas Residential Complex projecting works are ongoing, as well as the office complex in Zvaigznes Quarter.
In Vilnius the first stage of Šaltinių Namai development has been almost sold. Last year the construction works for the second stage residential buildings started and
74 preliminary agreements have been already signed. Four buildings of the second stage should be completed in the middle of 2019. The Company is interested in obtaining new attractive developments in the region, to start new projects after the completion of Šaltinių Namai.

Excellent results

At the end of the reporting period the Company recorded net revenue of 15.1 million euros, an increase of 150% as compared to 6.0 million euros in the same period in 2017. Revenues have increased in real estate segment due to completion of 3 apartment buildings in Tallinn and 1 in Riga as the revenues are recorded at the moment notary deed of sale is concluded. The net profit was 2.8 million euros profit for the first six months in 2018, which was 210% better as compared to 2.6 million euros loss during the same period in 2017. The Company is working on increasing its efficiency and results show significant improvement. For 2018 we foresee a positive year end result, which is influenced by completion of residential real estate developments in Tallinn and in Riga and opening of T1 Mall of Tallinn.

Overall loans from financial institutions were 48.9 million euros as at 30 June 2018. The loans from minority shareholders were 0.3 million euros. The Company had 10.2 million euros worth convertible bonds debt and 29.1 million euros worth non-convertible bonds debt at the end of reporting date.

As at 30 June 2018 there were 87 employees working in the Company, 44 of them were employed in the hotel and property maintenance business.

Paolo Michelozzi
CEO

Key figures

Total revenue was 15 065 thousand euros, which is an increase of 150% compared to the reference period (2017 6M: 6 024 thousand euros from continuing operations and 7 566 thousand euros including discontinued operations). Total revenue of the second quarter was 8 267 thousand euros comparing to 2 950 thousand euros from continuing operations in 2017 (3 952 thousand euros including discontinued operations). Revenues of the Company depend on completing residential developments, as sales revenues are recorded at the moment of handing over the premises. Improved results of 2018 were influenced by the completion of the 4th and 5th apartment buildings in the Kristina Houses development, renovation works of Marsi 6 in Tallinn and River Breeze Residence in Riga, as presales were turned into notarised sales transactions.
Gross profit was 5 033 thousand euros, which is an increase of 185% compared to the reference period (2017 6M: 1 768 thousand euros for continuing operations and 2 347 thousand euros including discontinued operations).  Gross profit of the second quarter was 3 229 thousand euros comparing to 954 thousand euros from continuing operations in 2017 (1 412 thousand euros including discontinued operations). Gross profit margin of continuing operations increased by 14%.
Operating result increased by 5 333 thousand euros (590%) compared to the reference period, totalling to operating profit of 4 429 thousand euros (2017 6M: loss of 904 thousand euros for continuing operations and loss of 524 thousand euros including discontinued operations). Operating profit of the second quarter was 3 742 thousand euros comparing to 379 thousand euros loss from continuing operations in 2017 (27 thousand euros loss including discontinued operations). Operating result includes profit from revaluation of Kalaranna project. The project was revalued in connection to reclassification from investment property into inventories. The increase in the value comparing to last year end valuation is related to change of input information in terms of volumes of construction of the project. Total impact from revaluation is 1 910 thousand euros.
Net result increased positively by 5 394 thousand euros (210%) compared to the reference period and totalling to positive result of 2 822 thousand euros (2017 6M: loss of 2 572 thousand euros for continuing operations and loss of 2 310 thousand euros including discontinued operations). Net profit of the second quarter was 2 940 thousand euros comparing to 1 170 thousand euros loss from continuing operations in 2017 (881 thousand euros loss including discontinued operations).
Cash generated from operating activities was 3 172 thousand euros (2017 6M: cash used in operating activities was 2 135 thousand euros).  In the second quarter cash generated from operating activities was 269 thousand euros comparing to 423 thousand euros during same period in 2017.
Net assets per share on 30 June 2018 totalled to 1.51 euros (30 June 2017: 1.43 euros).

  Continuing operations Continuing and discontinued operations*
  2018 6M 2017 6M 2018 Q2 2017 Q2 2018 6M 2017 6M 2018 Q2 2017
Q2
                 
Revenue, th EUR 15 065 6 024 8 267 2 950 15 065 7 566 8 267 3 952
Gross profit, th EUR 5 033 1 768 3 229 954 5 033 2 347 3 229 1 412
Gross profit, % 33% 29% 39% 32% 33% 31% 39% 36%
Operating result, th EUR 4 429 -904 3 742 -379 4 429 -524 3 742 -27
Operating result, % 29% -15% 45% -13% 29% -7% 45% -1%
Net result, th EUR 2 822 -2 572 2 940 -1 170 2 822 -2 310 2 940 -881
Net result, % 19% -43% 36% -40% 19% -31% 36% -22%
                 
Earnings per share, EUR 0.05 -0.05 0.05 -0.02 0.05 -0.03 0.05 -0.02

*Comparable period includes discontinued hotel operations in Tallinn and Riga

  30.06.2018 30.06.2017 31.12.2017
       
Total Assets, th EUR 197 777 151 944 175 158
Total Liabilities, th EUR 112 273 74 529 92 476
Total Equity, th EUR 85 504 77 415 82 682
Debt / Equity 1.31 0.96 1.12
       
Return on Assets, % 1.5% -1.6% -0.3%
Return on Equity, % 3.4% -2.9% -0.6%
Net asset value per share, EUR 1.51 1.43 1.46



CONSOLIDATED FINANCIAL STATEMENTS

Consolidated interim statement of financial position

in thousands of euros 30.06.2018 30.06.2017 31.12.2017
ASSETS      
Current assets      
  Cash and cash equivalents 6 711 3 181 10 317
  Current receivables 3 153 4 737 4 888
  Inventories 57 078 29 524 38 024
Total current assets 66 942 37 442 53 229
Non-current assets      
  Non-current receivables 35 40 37
  Property, plant and equipment 7 101 18 130 7 435
  Investment property  123 390 96 038 114 140
  Intangible assets 309 294 317
Total non-current assets 130 835 114 502 121 929
TOTAL ASSETS 197 777 151 944 175 158
       
LIABILITIES AND EQUITY      
Current liabilities      
  Current debt  9 319 7 319 6 738
  Customer advances 5 070 5 290 7 224
  Current payables 12 597 5 316 10 091
  Tax liabilities 116 318 132
  Short-term provisions 7 145 170
Total current liabilities 27 109 18 388 24 355
Non-current liabilities      
  Long-term debt  79 273 50 580 62 527
  Other non-current payables 3 738 2 182 3 437
  Deferred income tax liabilities 2 003 3 330 2 058
  Long-term provisions 150 49 99
Total non-current liabilities 85 164 56 141 68 121
TOTAL LIABILITIES 112 273 74 529 92 476
       
Equity attributable to owners of the Company      
  Share capital in nominal value 11 338 10 854 11 338
  Share premium 5 661 1 816 5 661
  Statutory reserve 1 082 1 082 1 082
  Revaluation reserve 3 262 9 462 3 256
  Retained earnings 59 944 55 017 60 369
  Loss for the period 2 870 -2 265 -419
Total equity attributable to owners of the Company 84 157 75 966 81 287
Non-controlling interest 1 347 1 449 1 395
TOTAL EQUITY 85 504 77 415 82 682
       
TOTAL LIABILITIES AND EQUITY 197 777 151 944 175 158



Consolidated interim statements of comprehensive income

in thousands of euros 2018 6M Adjusted
2017 6M*
2018 Q2 Adjusted
2017 Q2* 
2017 12M
           
Continuing operations:          
Operating income          
Revenue 15 065 6 024 8 267 2 950 12 077
Cost of goods sold -10 032 -4 256 -5 038 -1 996 -7 516
Gross profit 5 033 1 768 3 229 954 4 561
           
Marketing expenses -459 -454 -280 -266 -822
Administrative expenses -2 323 -2 466 -1 238 -1 273 -5 256
Other income 2 210 273 2 034 228 4 114
Other expenses -32 -25 -3 -22 -800
Operating profit/ loss 4 429 -904 3 742 -379 1 797
           
Financial income 2 2 1 1 6
Financial expense -1 661 -1 657 -802 -810 -3 352
Profit/ loss before income tax 2 770 -2 559 2 941 -1 188 -1 549
Income tax 52 -13 -1 18 596
Profit/ loss from continuing operations 2 822 -2 572 2 940 -1 170 -953
           
Profit from discontinued operations* 0 262 0 289 435
Profit/ loss for the period 2 822 -2 310 2 940 -881 -518
           
Attributable to:          
Equity holders of the parent 2 870 -2 265 2 966 -854 -419
Non-controlling interest -48 -45 -26 -27 -99
           
Other comprehensive income, net of income tax            
Income that will not be reclassified subsequently to profit            
Net change in properties revaluation reserve 0 0 0 0 -4
Total comprehensive income for the year          
Attributable to:          
Equity holders of the parent 2 870 -2 265 2 966 -854 -423
Non-controlling interest -48 -45 -26 -27 -99
           
Earnings per share from continuing operations (EUR) 0.05 -0.05 0.05 -0.02 -0.02
Earnings per share for the period (EUR) 0.05 -0.04 0.05 -0.02 -0.01

*2017 comparable information of the reporting period has been adjusted by separating discontinued operations from financial results and indicating them as a total net result on a separate line "profit from discontinued operations".



Consolidated interim statements of cash flows

in thousands of euros 2018 6M  2017 6M 2018 Q2 2017 Q2  2017 12M
           
Cash flows from operating activities          
Loss for the year 2 822 -2 310 2 940 -881 -518
Adjustments for:          
  Depreciation, amortisation of non-current assets 104 351 52 176 455
  Gain from disposal of property, plant, equipment -4 0 14 0 -3 045
  Change in fair value of property, plant, equipment 0 0 0 0 -26
  Change in fair value of investment property -1 910 0 -1 910 0 -530
  Loss from disposal of shares of subsidiaries 0 0 0 0 346
  Finance income and costs 1 659 1 744 801 857 3 460
  Other non-monetary changes (net amounts) 16 456 12 898 16 109 314 12 410
Changes in working capital:          
  Trade receivables and prepayments 1 736 -260 1 306 -167 -408
  Inventories -19 054 -15 380 -17 590 -2 438 -23 880
  Liabilities and prepayments 1 528 997 -1 322 2 749 6 556
  Provisions -110 -175 -129 -187 -101
Net cash used in/ generated by operating activities 3 172 -2 135 269 423 -5 281
           
Cash flows from investing activities          
Payments for property, plant and equipment -90 -141 -33 -43 -281
Payments for intangible assets 0 -24 0 0 -52
Proceeds from disposal of property, plant, equipment 336 0 0 0 6 651
Payments for investment property -22 186 -9 057 -12 896 -4 972 -24 772
Net cash from disposal of shares of subsidiaries 0 0 0 0 6 249
Interests received 2 3 1 2 6
Net cash used in by investing activities -21 938 -9 219 -12 928 -5 013 -12 199
           
Cash flows from financing activities          
Proceeds from increase of share capital 0 0 0 0 4 328
Dividend payment -850 0 0 0 0
Net changes related to non-controlling interests 0 0 0 0 -480
Proceeds from bonds 0 0 0 0 1 446
Redemption of convertible bonds 0 -539 0 -17 -773
Proceeds from borrowings 22 514 11 034 15 071 4 584 28 260
Repayment of borrowings -4 755 -324 -2 704 -156 -7 048
Interests paid -1 749 -1 702 -1 222 -1 135 -3 318
Net cash generated by financing activities 15 160 9 153 11 145 4 440 22 415
           
Net change in cash and cash equivalents -3 606 -2 201 -1 514 -150 4 935
           
Cash and cash equivalents at the beginning of the period 10 317 5 382 8 225 3 331 5 382
Cash and cash equivalents at the end of the period 6 711 3 181 6 711 3 181 10 317




Allan Remmelkoor
Member of the Board
+372 614 4920
[email protected]


Attachment

Pro Kapital Grupp is one of the leading Estonian real estate developer focussing on contemporary large-scale commercial and residential property developments in the capitals of Estonia, Latvia and Lithuania.

Since its establishment in 1994, Pro Kapital has completed about 20 projects with the total surface area for sale extending over 190,000 square meters. Pro Kapital projects have been among the most remarkable developments in the Baltic real estate sector.

Every day more than 50,000 people wake up, work, shop or dine in buildings constructed by Pro Kapital.