The first quarter of 2022 was atypical. The war in Ukraine, which began in February, has raised some concerns due to perceived geopolitical risks in the region. However, after the initial (and understandable) concerns, the markets showed good resilience on the demand side, and we saw no decline in property prices or interest from potential property buyers. real estate assets. The construction market still poses difficult problems, due to the increase in the cost of materials caused by the complications related to Covid-19 and the relative problems in the supply chain and the impossibility of obtaining materials from war-affected areas.
Real estate development
In Tallinn, we continued construction of the Kindrali Houses and Kalaranna projects. In the first quarter of 2022, we continued to deliver apartments in the Kalaranna project, where the completion of eight buildings with a total of 240 apartments will be realized. Today we deliver apartments in the Kalaranna 8/3 and 8/4 buildings and we have bookings or pre-sales concluded for all the commercial premises and for 99% of the apartments in this phase of the project.
Last year we started the construction of the new Kindrali Houses project in Kristiine City, where three housing complexes with a total of 195 apartments will be built. In this project, we had reserved or pre-sold more than half of the apartments before signing the construction contract. Today we have no apartments available at Kindrali Houses. Two of the buildings are nearing completion at the end of May and June and the contractor starts delivering the apartments the fourth week of May.
In Riga, we are selling our ready-made luxury product River Breeze Residence and have started the tender process for the further development of the residential area of Kliversala – Blue Marine. We have received several offers from construction companies and are in the process of identifying the best option.
In Vilnius, we have only 4 unsold apartments in our Šaltiniu Namai Attico project (one of which is used as a showroom). The real estate market has been very successful in 2021 and we have seen great interest in our luxury properties, achieving some of the highest prices per square meter in the entire local market. We have received bids from construction companies for the next phase of town villas and a commercial building and are aiming to start construction this summer.
The Covid-19 pandemic has had a strong impact on the entire tourism sector, but fortunately the German government has provided significant support in terms of subsidies granted to the PK Parkhotel Kurhaus in Bad Kreuznach.
We are in the process of renovating the second half of the rooms (the first half was renovated 5 years ago), which will be finished by the end of the year. The works will also have the added benefit of converting an unused area into 7 standard rooms and creating a luxurious suite with private sauna and terrace, which will significantly improve the overall prestige of the hotel.
We have signed a preliminary agreement to purchase a 380 key hotel in Sicily (Domina Zagarella Sicily), located near the largest city on the island, Palermo. We are currently conducting extensive due diligence of the asset and believe this can be a great opportunity to expand our portfolio.
We are satisfied with the results for the first quarter, although they were influenced by one-off expenses amounting to 318 thousand euros related to the change of management. In the coming months, we plan to continue the construction work of the developments in progress and to prepare the phases to come. Real estate development is going well, the market is strong and we will continue to implement our strategy of creating long-term value for our shareholders and for the communities we aim to develop in a sustainable, comfortable and aesthetic way.
Key financial data
The total income of the Company in the first quarter of 2022 was €7.9 million, up 42% compared to the reference period (3M 2021: €5.6 million). Real estate sales were influenced by the handover of completed apartments in the Kalaranna district.
gross profit in the first quarter of 2022 increased by 61% to 2.6 million euros compared to 1.6 million euros in 2021.
The operating result in 2022 decreased to €989,000 in profit, compared to €1.8 million in the same period in 2021. The increase in profit in 2021 was affected by one-off sales of investment properties and related income .
The net result for the first three months of 2022 was 251 thousand euros of loss, compared to 377 thousand euros of profit (continuing operations) during the reference period.
Cash flows used in operating activities during the first quarter of 2022 was minus €3.1 million, compared to €1.3 million generated during the same period in 2021.
Net assets per share as of March 31, 2022 amounted to 0.75 euro compared to 0.13 euro as of March 31, 2021.
Key performance indicators
|2022 3M||2021 3M||2021 12M|
|Turnover, in EUR||7,916||5,580||43,095|
|Gross profit, e EUR||2,558||1,591||10,576|
|Gross profit, %||32%||29%||25%|
|Operating result, e EUR||989||1,786||39,821|
|Operating results, %||12%||32%||28%|
|Net result, in EUR||-251||-2,112||29,757|
|Net profit, %||-3%||-38%||69%|
|Earnings per share, EUR||0.00||-0.03||0.52|
|Total assets, th EUR||117,371||185 287||116,027|
|Total liabilities, e EUR||74,779||177,829||73 184|
|Total equity, e EUR||42,592||7,458||42,843|
|Debt equity *||1.76||23.84||1.71|
|Return on assets, %**||-0.2%||0.2%||23.7%|
|Return on equity, % ***||-0.6%||5.1%||113.5%|
|Net asset value per share, EUR ****||0.75||0.13||0.76|
*debt / equity = total debt / total equity
**return on assets = net income / total average assets
*** return on equity = net income / total average equity
****net asset value per share = shareholders’ equity / number of shares
CONSOLIDATED FINANCIAL STATEMENTS
Interim Consolidated Statement of Financial Position
|in thousands of euros||31.03.2022||31.03.2021||31.12.2021|
|Cash and cash equivalents||7,650||13,331||9,626|
|Total current assets||69,081||76,354||67,961|
|Total non-current assets||48,290||108,933||48,065|
|TOTAL ASSETS||117,371||185 287||116,026|
|LIABILITIES AND EQUITY|
|Total current liabilities||35,691||140,419||25,527|
|Other non-current debts||20||2,638||20|
|Deferred tax liabilities||1,134||1,151||1,133|
|Total non-current liabilities||39,088||37,410||47,656|
|TOTAL RESPONSIBILITIES||74,779||177,829||73 183|
|Equity attributable to owners of the Company|
|Share capital in nominal value||11,338||11,338||11,338|
|Profit/ Loss for the period||-251||-1,951||26,773|
| Attributable equity
to the owners of the Company
|TOTAL LIABILITIES AND EQUITY||117,371||185 287||116,026|
Interim Consolidated Statements of Comprehensive Income
|in thousands of euros||2022 3M||2021 3M||2021 12M|
|Cost of Goods Sold||-5,358||-3,989||-32,519|
|Profit/loss before income tax||-236||394||33,862|
|Net income from continuing operations||-251||377||33,872|
|Profit from discontinued operations||0||– 2,489||-4,115|
|Net income for the period||-251||-2,112||29,757|
|Parent company shareholders||-251||-1,950||29,757|
|Total comprehensive income / loss for the year||-251||-2,112||29,757|
|Parent company shareholders||-251||-1,950||29,757|
|Earnings per share (continuing operations) €||0.00||0.01||0.60|
|Earnings per share for the period €||0.00||-0.03||0.52|
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