The Board of Pro Capital approved the consolidated interim report

MANAGEMENT REPORT

CEO Summary

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.

Hotel operations

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.

Edoardo Preatoni
CEO

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
31.03.2022 31.03.2021 31.12.2021
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
ASSETS
Current assets
Cash and cash equivalents 7,650 13,331 9,626
Current receivables 2,071 1,542 802
Inventories 59,360 61,481 57,533
Total current assets 69,081 76,354 67,961
Non-current assets
Non-current receivables 20 3,715 21
Fixed assets 6,866 6,678 6,754
Right-of-use assets 173 357 202
Investment property 40,871 97,814 40,734
Intangible assets 360 369 354
Total non-current assets 48,290 108,933 48,065
TOTAL ASSETS 117,371 185 287 116,026
LIABILITIES AND EQUITY
Current liabilities
Current debt 16,131 104,373 3,955
customer advances 11,477 10,284 12,419
Current debts 7,253 24,011 7,297
Tax debts 116 1,280 1,143
Short-term provisions 714 471 713
Total current liabilities 35,691 140,419 25,527
Non-current liabilities
long-term debt 37,909 33,425 46,455
Other non-current debts 20 2,638 20
Deferred tax liabilities 1,134 1,151 1,133
Long-term provisions 25 196 48
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
Premium 1,748 5,661 1,748
Legal reserve 0 1,134 0
Revaluation reserve 2,984 2,984 2,984
Retained earnings 26,773 -8,031 0
Profit/ Loss for the period -251 -1,951 26,773
Attributable equity
to the owners of the Company
42,592 11,135 42,843
Non-controlling interest 0 -3,677 0
EQUITY 42,592 7,458 42,843
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
CONTINUED OPERATIONS
Operating result
Revenue 7,916 5,580 43,095
Cost of Goods Sold -5,358 -3,989 -32,519
Gross profit 2,558 1,591 10,576
Marketing costs -114 -125 -502
Administrative expenses -1,449 -992 -5,592
Other income 0 1,332 35,616
Other expenses -6 -20 -278
Operating profit/loss 989 1,786 39,820
Financial products 1 1 6
Financial charge -1,226 -1,393 -5,964
Profit/loss before income tax -236 394 33,862
Income tax -15 -17 ten
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
Attributable to:
Parent company shareholders -251 -1,950 29,757
Non-controlling interest 0 -162 0
Total comprehensive income / loss for the year -251 -2,112 29,757
Attributable to:
Parent company shareholders -251 -1,950 29,757
Non-controlling interest 0 -162 0
Earnings per share (continuing operations) € 0.00 0.01 0.60
Earnings per share for the period € 0.00 -0.03 0.52

Angelique Annus
CFO
+372 614 4920
[email protected]

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