Management report for the fourth quarter and 12 months of 2007
SELECTED FINANCIALS FOR 2007
Revenue and other income for 2007 totalled 886.1 million kroons (56.6 million
euros), 2.2% down from 2006.
Operating profit for 2007 was 103.1 million kroons (6.6 million euros), a 60.4%
decrease year-on-year.
Net profit grew to 235.5 million kroons (15.1 million euros), a 10.3%
improvement on 2006.
Equity ratio rose to 54.1 % (2006: 32.8%). Return on equity was 14.2% (2006:
31.5%) and return on invested capital 10.0% (2006: 15.7%)
At 31 December 2007, construction backlog stood at 331.4 million kroons (21.2
million euros)
In 2007, 110 apartments and plots were sold or reserved.
--------------------------------------------------------------------------------
| | EEK | | | | EUR | | | |
--------------------------------------------------------------------------------
| | 12 | 12 | Q4 | Q4 | 12 | 12 | Q4 | Q4 |
| | month | month | 2007 | 2006 | months | months | 2007 | 2006 |
| | s | s | | | 2007 | 2006 | | |
| | 2007 | 2006 | | | | | | |
--------------------------------------------------------------------------------
| In | | | | | | | | |
| millions | | | | | | | | |
--------------------------------------------------------------------------------
| Revenue | 886.1 | 906.5 | 199.4 | 518.2 | 56.6 | 57.9 | 12.7 | 33.1 |
| and | | | | | | | | |
| other | | | | | | | | |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| Operatin | 103.1 | 260.4 | -9.3 | 187.9 | 6.6 | 16.6 | -0.6 | 12.0 |
| g profit | | | | | | | | |
--------------------------------------------------------------------------------
| Includin | 76.6 | 374.9 | 10.5 | 353.9 | 4.9 | 24.0 | 0.7 | 22.6 |
| g net | | | | | | | | |
| gain on | | | | | | | | |
| the | | | | | | | | |
| revaluat | | | | | | | | |
| ion of | | | | | | | | |
| investme | | | | | | | | |
| nt | | | | | | | | |
| property | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | 250.3 | 226.9 | -28.9 | 168.3 | 16.0 | 14.5 | -1.8 | 10.8 |
| before | | | | | | | | |
| tax | | | | | | | | |
--------------------------------------------------------------------------------
| Includin | 131.1 | 0.0 | 8.1 | 0.0 | 8.4 | 0.0 | 0.5 | 0.0 |
| g net | | | | | | | | |
| gain on | | | | | | | | |
| the | | | | | | | | |
| divestme | | | | | | | | |
| nt of | | | | | | | | |
| financia | | | | | | | | |
| l assets | | | | | | | | |
--------------------------------------------------------------------------------
| Net | 235.5 | 217.3 | -28.6 | 162.5 | 15.1 | 13.9 | -1.8 | 10.4 |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| EPS 1 | | | | | | | | |
--------------------------------------------------------------------------------
| (in | 2.76 | 3.07 | -0.30 | 2.26 | 0.18 | 0.20 | -0.02 | 0.14 |
| kroons/e | | | | | | | | |
| uros) | | | | | | | | |
--------------------------------------------------------------------------------
| EPS 2 | | | | | | | | |
--------------------------------------------------------------------------------
| (in | 2.39 | 3.07 | -0.30 | 2.26 | 0.15 | 0.20 | -0.02 | 0.14 |
| kroons/e | | | | | | | | |
| uros) | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 3,564 | 2,257 | | | 227.8 | 144.3 | | |
| assets | .0 | .4 | | | | | | |
| at | | | | | | | | |
| period | | | | | | | | |
| end | | | | | | | | |
--------------------------------------------------------------------------------
| Invested | 3,283 | 1,898 | | | 209.9 | 121.3 | | |
| capital | .6 | .7 | | | | | | |
| at | | | | | | | | |
| period | | | | | | | | |
| end | | | | | | | | |
--------------------------------------------------------------------------------
| Net Debt | 517.7 | 1,142 | | | 33.1 | 73.0 | | |
| | | .5 | | | | | | |
--------------------------------------------------------------------------------
| Equity | 1,929 | 741.9 | | | 123.3 | 47.4 | | |
| at | .6 | | | | | | | |
| period | | | | | | | | |
| end | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| ROIC | 10.0% | 15.7% | | | 10.0% | 15.7% | | |
| (rolling | | | | | | | | |
| 12 | | | | | | | | |
| months) | | | | | | | | |
--------------------------------------------------------------------------------
| ROE | 14.2% | 31.5% | | | 14.2% | 31.5% | | |
| (rolling | | | | | | | | |
| 12 | | | | | | | | |
| months) | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Number | 664 | 478 | | | 664 | 478 | | |
| of staff | | | | | | | | |
| at | | | | | | | | |
| period | | | | | | | | |
| end | | | | | | | | |
--------------------------------------------------------------------------------
Commentary by chairman of the management board
The difficulties in the Baltic market which emerged in spring 2007 prevailed
through the fourth quarter. The decline in transaction volumes has stabilised at
the level of three years ago. Liquidity issues on international capital markets
are postponing the development of ever larger projects, providing well
capitalised companies attractive investment opportunities. Nevertheless, the
Group's focus is shifting on Ukraine and the Balkans retail- and office sector.
In Sofia the construction of first 112 apartments is under way.
The demand for commercial real estate in city centres has not subsided. For
example, in Tallinn vacancies of centrally located category A office and
commercial premises are almost down to zero. Situation is the same in Vilnius,
Kiev and Bucharest. The situation enhances the value of the Group's existing
cash generating properties in Tallinn and creates a sound basis for launching
the construction of Ahtri 3 and Laeva 2 in Tallinn within the next six months.
We are pleased about the strong results of the Construction division which
indicate that the recovery and restructuring processes launched in 2006 are
bearing fruit. Operating profit for 2007 is almost 15.0 million kroons (0.9
million euros) up on 2006, with fourth quarter operating profit amounting to 7.0
million kroons (0.5 million euros). New contracts include provisions which
better divide construction price risk with the client.
Service division results show some signs of improvement. If third quarter sales
in 2007 was 16.4% less compared to the same period in 2006, then fourth quarter
sales in 2007 improved considerably compared to fourth quarter in 2006. The
number of brokerage deals has stabilised.
Greatest achievements of the period has been the expansion of development
activities to the Balkans and major improvements in the zoning processes in
Tivoli, Ahtri, Laeva and Baltezers-3 projects.
Already in the third quarter, the capital of the two-year old Explorer Property
Fund - Baltic States AB, a real estate investment company managed by AVEC Asset
Management AS, was fully invested. The assets of the fund have grown to 3,129
million kroons (200 million euros) and the average entrance yield is 8.35%.
REVENUE AND PROFIT
--------------------------------------------------------------------------------
| | EEK | | | | EUR | | | |
--------------------------------------------------------------------------------
| In | | | | | | | | |
| million | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| | 12 | 12 | Q4 | Q4 | 12 | 12 | Q4 | Q4 |
| | month | month | 2007 | 2006 | months | months | 2007 | 2006 |
| | s | s | | | 2007 | 2006 | | |
| | 2007 | 2006 | | | | | | |
--------------------------------------------------------------------------------
| Revenue | | | | | | | | |
| and | | | | | | | | |
| other | | | | | | | | |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| Service | 139.6 | 119.4 | 43.2 | 34.5 | 8.9 | 7.6 | 2.8 | 2.2 |
--------------------------------------------------------------------------------
| Develop | 585.0 | 626.6 | 91.5 | 437.2 | 37.4 | 40.0 | 5.8 | 27.9 |
| ment | | | | | | | | |
--------------------------------------------------------------------------------
| Constru | 425.5 | 359.3 | 131.8 | 117.9 | 27.2 | 23.0 | 8.4 | 7.5 |
| ction | | | | | | | | |
--------------------------------------------------------------------------------
| Elimina | -264. | -198. | -67.1 | -71.4 | -16.9 | -12.7 | -4.3 | -4.6 |
| tions | 1 | 9 | | | | | | |
--------------------------------------------------------------------------------
| Total | 886.1 | 906.5 | 199.4 | 518.2 | 56.6 | 57.9 | 12.7 | 33.1 |
| revenue | | | | | | | | |
| and | | | | | | | | |
| other | | | | | | | | |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| EBIT | | | | | | | | |
--------------------------------------------------------------------------------
| Service | -16.5 | 8.6 | -5.1 | -1.0 | -1.1 | 0.6 | -0.3 | -0.1 |
--------------------------------------------------------------------------------
| Develop | 162.0 | 278.2 | 16.7 | 181.9 | 10.4 | 17.8 | 1.1 | 11.6 |
| ment | | | | | | | | |
--------------------------------------------------------------------------------
| Constru | 16.9 | 1.0 | 7.0 | 14.0 | 1.1 | 0.1 | 0.4 | 0.9 |
| ction | | | | | | | | |
--------------------------------------------------------------------------------
| Elimina | -16.5 | 1.4 | -5.2 | 7.8 | -1.1 | 0.1 | -0.3 | 0.5 |
| tions | | | | | | | | |
--------------------------------------------------------------------------------
| Unalloc | -42.9 | -28.8 | -22.7 | -14.8 | -2.7 | -0.6 | -1.4 | -0.9 |
| ated | | | | | | | | |
| expense | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 103.1 | 260.4 | -9.3 | 187.9 | 6.6 | 17.9 | -0.6 | 12.0 |
| EBIT | | | | | | | | |
--------------------------------------------------------------------------------
| Interes | -3.7 | -27.4 | 6.6 | -13.5 | -0.2 | -1.8 | 0.4 | -0.9 |
| t | | | | | | | | |
| income | | | | | | | | |
| and | | | | | | | | |
| interes | | | | | | | | |
| t | | | | | | | | |
| expense | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 150.9 | -6.0 | -26.3 | -6.0 | 9.6 | -0.4 | -1.7 | -0.4 |
| financi | | | | | | | | |
| al | | | | | | | | |
| income | | | | | | | | |
| and | | | | | | | | |
| expense | | | | | | | | |
--------------------------------------------------------------------------------
| Income | -14.8 | -9.6 | 0.3 | -5.9 | -0.9 | -0.6 | 0.0 | -0.4 |
| tax | | | | | | | | |
| expense | | | | | | | | |
--------------------------------------------------------------------------------
| Net | 235.5 | 217.3 | -28.6 | 162.5 | 15.1 | 15.1 | -1.8 | 10.4 |
| profit | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
The largest revenue was earned by the Development division where sales of
apartments and registered properties totalled 381.3 million kroons (24.4 million
euros). Sales of “Kolde” apartments contributed 130.0 million kroons (8.3
million euros), the divestment of the retail and office building “Kerese Keskus”
yielded 106 million kroons (6.8 million euros), and sales of the “Ulmana Gatves”
property and “Kase” project generated 74.0 million kroons (4.7 million euros)
and 46.0 million kroons (2.9 million euros) respectively.
Consolidated net profit for 2007 was significantly improved by net gain of 76.6
million kroons (4.5 million euros) on fair value adjustments to investment
property and property, plant and equipment, finance income of 118.4 million
kroons (7.6 million euros) generated by the sale of the Group's interest in
Sportings Riga SIA, finance income of 42.6 million kroons (2.7 million euros)
contributed by AVEC Asset Management AS, income of 8.4 million kroons (0.5
million euros) derived from the divestment of a stake in Varamaad Kinnisvara OÜ
and net gain of 27.6 million kroons (1.8 million euros) earned on the Kolde
project.
The Group's profit was adversely affected by the loss of the Service division of
16.5 million kroons (1.0 million euros), caused mostly by rapid expansion.
Despite this, expansion to new markets remains a priority.
The Construction division's fourth quarter and whole-year results surpassed all
expectations. The division's fourth quarter results are not comparable with the
same period in 2006 because the previous year's profit figures were affected by
some price disputes which were resolved positively for the Group and recognised
in the fourth quarter. The improvement in profitability may be ascribed to
structural changes in the division's order backlog where many unfavourable
contracts were replaced with more profitable ones.
CASH FLOWS
--------------------------------------------------------------------------------
| | EEK | | EUR | |
--------------------------------------------------------------------------------
| | 12 months | 12 months | 12 months | 12 months |
| | 2007 | 2006 | 2007 | 2006 |
--------------------------------------------------------------------------------
| In millions | | | | |
--------------------------------------------------------------------------------
| Cash flows | -547.7 | -117.5 | -35.0 | -7.5 |
| from | | | | |
| operating | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flows | 136.7 | -341.9 | 8.7 | -21.8 |
| from | | | | |
| investing | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flows | 1,118.2 | 374.9 | 71.5 | 23.9 |
| from | | | | |
| financing g | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| Net cash | 707.1 | -84.5 | 45.2 | -5.4 |
| flow | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Cash and | 58.3 | 144.0 | 3.7 | 9.2 |
| cash | | | | |
| equivalents | | | | |
| at beginning | | | | |
| of period | | | | |
--------------------------------------------------------------------------------
| Effect of | -0.5 | -1.1 | 0.0 | 0 |
| exchange | | | | |
| rate | | | | |
| fluctuations | | | | |
--------------------------------------------------------------------------------
| Cash and | 765.0 | 58.3 | 48.9 | 3.7 |
| cash | | | | |
| equivalents | | | | |
| at end of | | | | |
| period | | | | |
--------------------------------------------------------------------------------
Operating cash flows were strongly affected by expenditures related to the
acquisition of properties in Bulgaria and Lithuania (348.3 million kroons or
22.2 million euros), investments in ongoing projects (266.4 million kroons or
17.0 million euros) and an increase in VAT receivables (91 million kroons or 5.9
million euros).
Cash flows from investing activities were influenced by the divestment of an
interest in the BM-2 project (127.0 million kroons or 8.1 million euros) and an
investment in short-term bonds (78.6 million kroons or 5.0 million euros).
Cash flows from financing activities were increased by IPO-related proceeds (987
million kroons or 63.1 million euros).
SERVICE DIVISION
Developments in the Lithuanian, Bulgarian and Romanian markets have corresponded
to expectations and the Ukrainian market is perking up. In financial terms, the
best performance is posted by the Bulgarian office. The cooling of the Latvian
and Estonian markets continues to exert a negative effect. A decline in
brokerage transactions affects the provision of valuation services. To resolve
the situation, we are optimising our back-office expenses and right-sizing the
staff. The measures should yield a positive effect in 2008. Although the foreign
investors' interest in Romania and Bulgaria began decreasing in the fourth
quarter, we intend to sustain vigorous growth.
The service division's year-over-year revenue growth was 17% for the year and
25% for the fourth quarter. The divisions' overall result is increasingly
affected by the results of the new offices. If third quarter sales were 16.4%
smaller than in the third quarter of 2006, the result for the fourth quarter was
significantly better than in 2006.
Compared with 2006, the number of valuation reports issued has decreased by 9%.
Although the figures posted by the Lithuanian office are improving steadily, the
overall result is weakened by the nosedive in the Latvian market. In 2007, our
appraisers issued 8,785 valuation reports in six countries (2006: 9,699). The
division is introducing valuation services in the new markets and has launched
property advisory services in the Baltics.
--------------------------------------------------------------------------------
| | 12 | 12 | Change, | Q4 2007 | Q4 2006 | Change, % |
| | months | months | % | | | |
| | 2007 | 2006 | | | | |
--------------------------------------------------------------------------------
| Number | 2 007 | 2 509 | -20% | 542 | 603 | -10% |
| of | | | | | | |
| properti | | | | | | |
| es | | | | | | |
| brokered | | | | | | |
--------------------------------------------------------------------------------
| Number | 240 | 124 | 94% | 240 | 124 | 94% |
| of | | | | | | |
| projects | | | | | | |
| on sale | | | | | | |
--------------------------------------------------------------------------------
| Number | 8 785 | 9 699 | -9% | 1 828 | 2307 | -21% |
| of | | | | | | |
| valuatio | | | | | | |
| n | | | | | | |
| reports | | | | | | |
| issued | | | | | | |
--------------------------------------------------------------------------------
| Number | 45 | 38 | 18% | 46 | 42 | 10% |
| of | | | | | | |
| appraise | | | | | | |
| rs | | | | | | |
--------------------------------------------------------------------------------
| Number | 215 | 126 | 71% | 237 | 153 | 55% |
| of real | | | | | | |
| estate | | | | | | |
| brokers | | | | | | |
--------------------------------------------------------------------------------
| Estonia | 53 | 43 | 23% | 58 | 44 | 32% |
--------------------------------------------------------------------------------
| Latvia | 55 | 49 | 12% | 55 | 50 | 10% |
--------------------------------------------------------------------------------
| Lithuani | 31 | 11 | 182% | 34 | 16 | 113% |
| a | | | | | | |
--------------------------------------------------------------------------------
| Ukraine | 47 | 19 | 147% | 54 | 35 | 54% |
--------------------------------------------------------------------------------
| Bulgaria | 18 | 3 | 500% | 21 | 7 | 200% |
--------------------------------------------------------------------------------
| Romania | 11 | 1 | 1000% | 15 | 1 | 1400% |
--------------------------------------------------------------------------------
| Average | 363 | 224 | 62% | 395 | 276 | 43% |
| number | | | | | | |
| of staff | | | | | | |
--------------------------------------------------------------------------------
Project sales contracts totalled 240, 94% up on 2006. The number of brokerage
transactions was 2,007, a 20% decrease year-over-year.
In 2007, the real estate investment companies managed by the Group's joint
venture AVEC Asset Management AS acquired the retail and office building Kerese
Keskus in Narva, three shopping malls in Jõhvi, the Laracija office block in
Lithuania, Hotel Portus in Tallinn, AS Favor's production complex in Maardu,
Jeruzalemes Centrs in Riga and phase I in the office and commercial building
Papiniidu Keskus in Pärnu. After the acquisition of Papiniidu Keskus, the
capital of AVEC Baltic Property Fund AB was fully invested. In addition, in the
third quarter 56.5 million kroons (3.6 million euros) was raised through the
issue of shares in Arco Balti Kinnisvaraportfell AS. Through the transactions,
the assets of the real estate investment companies managed by AVEC Asset
Management AS have grown to 3,442 million kroons (220 million euros).
DEVELOPMENT DIVISION
Developments in the new markets do not outweigh the cooling in the Baltics. The
discussion is no longer about the devaluation of the Latvian lats or the Baltic
macroeconomic indicators as it was three months ago but a turbulence on global
capital markets. The situation has unnerved market participants who are
postponing their real estate acquisitions because of the risk of a general
economic slump in the Baltics. It is positive that the Group has been able to
maintain its liquidity and to reinvest its profits. Group brokerage already
shows a signs of stabilisation and improvement in the sentiment.
In the Baltic market, the priorities of the Development division are further
development of projects in progress, the launch of the construction of
commercial properties Ahtri 3 and Laeva 2, and the mitigation of the risk levels
of properties by the adoption of detailed plans. In the Balkans, the Group is
already developing the Madrid project in Sofia (112 apartments) and will soon
launch the Manastirski project. Further expansion of the land bank will be
characterized by the assumption of greater zoning risk in the Balkans and
realisation of opportunities in Ukraine.
The Development division ended 2007 with sales of 585.0 million kroons (37.4
million euros), 6.5% down from 2006, and an operating profit of 162.0 million
kroons (10.4 million euros), a 41.7% decrease year-over-year. Major fluctuations
in quarterly sales and profit figures are common in real estate development.
However, it ought to be noted that revaluation gains (fair value adjustments to
investment properties and property, plant and equipment) for the fourth quarter
and full year totalled 3.5 million kroons (0.2 million euros) and 71.6 million
kroons (4.6 million euros) respectively which means that the division earned
positive EBITDA of 84.5 million kroons (5.4 million euros).
In 2007, 110 apartments and plots were sold or reserved. In the current stages
of the projects, 139 plots and apartments remain to be sold.
CONSTRUCTION DIVISION
In the near future, a reduction of orders in the residential sector is going to
exert downward pressure on residential construction prices. The commercial and
industrial sectors are still stable - there is no visible decline in orders. In
connection with allocations from the EU Structural Funds, the number of
environmental engineering projects is going to increase. Development of the
Group's environmental engineering capabilities is a priority. The number of
public procurement tenders for the construction and rehabilitation of local
government facilities remains large as well.
The Construction division ended 2007 with revenue of 425.5 million kroons (27.2
million euros), an 18.4% rise year-over-year, and an operating profit of 16.9
million kroons (1.1 million euros), an exceptional 17-fold improvement on a year
ago. Significant profit growth was achieved in the second half-year because a
number of unfavourable fixed-price environmental engineering contracts in
Saaremaa and commercial construction contracts in Tallinn expired in the first
half-year (the contracts were concluded two years ago). The current market
situation provides better opportunities for sharing the price risk.
A major transaction of 2007 was the acquisition of a 55% stake in the Latvian
construction company Dinamo Buve SIA which completed the implementation of the
Group's full business model in Latvia. Consolidation in the construction sector
will continue.
In the fourth quarter, the division acquired construction contracts of 96.7
million kroons (6.2 million euros), including contracts of 77.6 million kroons
(5.0 million euros) in Latvia and 19.1 million kroons (1.2 million euros) in
Estonia.
At the end of the fourth quarter, the division's order backlog stood at 331.4
million kroons (21.2 million euros). The largest contracts comprised the
rehabilitation of Matsalu water and wastewater systems (67.5 million kroons or
4.31 million euros) and the construction of the Bishumuizhas apartment houses
(63.0 million kroons or 4.0 million euros). Intra-group sales for 12 months and
the fourth quarter of 2007 accounted for 57.2% and 52.4% of the division's sales
respectively. At 31 December 2007, the Construction division employed 173
people, 50.3% of them in Latvia.
ADJUSTED NAV
During the IPO, major projects of the Group were valuated by Colliers
international by discounted cash flow (DCF) method. Although the Group's
investment properties are measured in the financial statements by applying the
fair value model, IFRS provides that it is not always possible to estimate the
values of all properties using the DCF method, ‘cause the method uses cash flows
that take place in the future and this is not an approved method to revalue
non-cash generating properties for accounting purposes. Therefore, the Group
upholds the tradition that once a year an independent international property
valuation company appraises all major projects using the comparable sales method
and the discounted cash flow method.
If all assets had been measured using the DCF method, the carrying amounts of
the Group's properties as at 31 December 2007 would have been 864 million kroons
(55.2 million euros) larger - assets under construction by 76.0 million kroons
(4.8 million euros), inventories by 335.8 million kroons (21.5 million euros)
and investment property by 452.9 million kroons (28.9 million euros).
The following projects were analysed using DCF: Ahtri 3, Laeva 2, Narva mnt 67
(Tivoli), the potential of TOP Residential premises, Ilmarine, Kaarli 2 and
Hills. The adjusted NAV does not include the cost of the Construction and
Service divisions as during the IPO. It should be noted that Colliers
International has not appraised Baltezers-3 for which a general plan was adopted
in December and whose book value is 0.6 million kroons (0.04 million euros). Nor
has the valuation company appraised the whole volume of TOP's detailed plan of
ca 110,000 m2.
Condensed consolidated interim income statement (EEK)
--------------------------------------------------------------------------------
| | Note | 12 months | 12 months | Q4 2007 | Q4 2006 |
| | | 2007 | 2006 | | |
--------------------------------------------------------------------------------
| In | | | | | |
| thousands | | | | | |
| of kroons | | | | | |
--------------------------------------------------------------------------------
| Rendering | | 345,856 | 324,656 | 113,422 | 89,761 |
| of | | | | | |
| services | | | | | |
--------------------------------------------------------------------------------
| Sale of | | 381,332 | 158,930 | 20,023 | 42,509 |
| goods | | | | | |
--------------------------------------------------------------------------------
| Total | 5 | 727,188 | 483,586 | 133,445 | 132,270 |
| revenue | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Cost of | | -542,135 | -349,067 | -107,194 | -95,070 |
| sales | | | | | |
--------------------------------------------------------------------------------
| Gross | | 185,053 | 134,519 | 26,251 | 37,200 |
| profit | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Other | | 158,868 | 422,928 | 65,943 | 385,942 |
| income | | | | | |
--------------------------------------------------------------------------------
| Selling | | -22,534 | -18,595 | -3,771 | -4,381 |
| and | | | | | |
| distributi | | | | | |
| on costs | | | | | |
--------------------------------------------------------------------------------
| Administra | | -136,053 | -115,713 | -42,867 | -69,951 |
| tive | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Other | | -82,276 | -162,788 | -54,816 | -160,925 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Operating | 5 | 103,058 | 260,351 | -9,260 | 187,885 |
| profit | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Finance | 6 | 215,005 | 16,215 | 16,874 | 13,280 |
| income | | | | | |
--------------------------------------------------------------------------------
| Finance | 6 | -67,744 | -49,654 | -36,515 | -32,825 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Profit | | 250,319 | 226,912 | -28,901 | 168,340 |
| before tax | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Income tax | | -14,808 | -9,563 | 304 | -5,852 |
| expense | | | | | |
--------------------------------------------------------------------------------
| Profit for | | 235,511 | 217,349 | -28,597 | 162,488 |
| the period | | | | | |
--------------------------------------------------------------------------------
| Attributab | | 7,924 | 9,404 | -243 | 9,061 |
| le to | | | | | |
| minority | | | | | |
| interests | | | | | |
--------------------------------------------------------------------------------
| Attributab | | 227,587 | 207,945 | -28,354 | 153,427 |
| le to | | | | | |
| equity | | | | | |
| holders of | | | | | |
| the parent | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Earnings | 7 | | | | |
| per share | | | | | |
| (in | | | | | |
| kroons) | | | | | |
--------------------------------------------------------------------------------
| - Basic | | 2.76 | 3.07 | -0.30 | 2.26 |
--------------------------------------------------------------------------------
| - Diluted | | 2.76 | 3.07 | -0.30 | 2.26 |
--------------------------------------------------------------------------------
Condensed consolidated interim income statement (EUR)
--------------------------------------------------------------------------------
| | Note | 12 months | 12 months | Q4 2007 | Q4 2006 |
| | | 2007 | 2006 | | |
--------------------------------------------------------------------------------
| In | | | | | |
| thousand | | | | | |
| of euros | | | | | |
--------------------------------------------------------------------------------
| Rendering | | 22,104 | 20,749 | 7,249 | 5,737 |
| of | | | | | |
| services | | | | | |
--------------------------------------------------------------------------------
| Sale of | | 24,372 | 10,156 | 1,280 | 2,717 |
| goods | | | | | |
--------------------------------------------------------------------------------
| Total | 5 | 46,476 | 30,907 | 8,529 | 8,454 |
| revenue | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Cost of | | -34,649 | -22,309 | -6,852 | -6,076 |
| sales | | | | | |
--------------------------------------------------------------------------------
| Gross | | 11,827 | 8,596 | 1,678 | 2,378 |
| profit | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Other | | 10,154 | 27,030 | 4,215 | 24,666 |
| income | | | | | |
--------------------------------------------------------------------------------
| Selling | | -1,440 | -1,188 | -241 | -280 |
| and | | | | | |
| distributi | | | | | |
| on costs | | | | | |
--------------------------------------------------------------------------------
| Administra | | -8,695 | -7,395 | -2,740 | -4,470 |
| tive | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Other | | -5,259 | -10,404 | -3,503 | -10,286 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Operating | 5 | 6,587 | 16,639 | -592 | 12,008 |
| profit | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Finance | 6 | 13,741 | 1,036 | 1,078 | 848 |
| income | | | | | |
--------------------------------------------------------------------------------
| Finance | 6 | -4,330 | -3,173 | -2,334 | -2,097 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Profit | | 15,997 | 14,502 | -1,847 | 10,759 |
| before tax | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Income tax | | -946 | -611 | 19 | -374 |
| expense | | | | | |
--------------------------------------------------------------------------------
| Profit for | 7 | 15,052 | 13,891 | -1,828 | 10,385 |
| the period | | | | | |
--------------------------------------------------------------------------------
| Attributab | | 506 | 601 | -15 | 579 |
| le to | | | | | |
| minority | | | | | |
| interests | | | | | |
--------------------------------------------------------------------------------
| Attributab | | 14,545 | 13,290 | -1,812 | 9,806 |
| le to | | | | | |
| equity | | | | | |
| holders of | | | | | |
| the parent | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Earnings | | | | | |
| per share | | | | | |
| (in euros) | | | | | |
--------------------------------------------------------------------------------
| - Basic | | 0.18 | 0.20 | -0.02 | 0.14 |
--------------------------------------------------------------------------------
| - Diluted | | 0.18 | 0.20 | -0.02 | 0.14 |
--------------------------------------------------------------------------------
Condensed consolidated interim balance sheet (EEK, EUR)
--------------------------------------------------------------------------------
| | | EEK | | EUR | |
--------------------------------------------------------------------------------
| | Note | 31 | 31 | 31 | 31 December |
| | | December | December | December | 2006 |
| | | 2007 | 2006 | 2007 | |
--------------------------------------------------------------------------------
| In | | | | | |
| thousands | | | | | |
--------------------------------------------------------------------------------
| Cash and | | 765,008 | 58,345 | 48,893 | 3,729 |
| cash | | | | | |
| equivalent | | | | | |
| s | | | | | |
--------------------------------------------------------------------------------
| Short-term | | 78,595 | 0 | 5,023 | 0 |
| investment | | | | | |
| s in | | | | | |
| financial | | | | | |
| assets | | | | | |
--------------------------------------------------------------------------------
| Trade and | 8 | 297,189 | 102,498 | 18,994 | 6,551 |
| other | | | | | |
| receivable | | | | | |
| s | | | | | |
--------------------------------------------------------------------------------
| Prepayment | | 10,450 | 4,429 | 667 | 283 |
| s | | | | | |
--------------------------------------------------------------------------------
| Inventorie | 9 | 1,148,433 | 431,817 | 73,399 | 27,598 |
| s | | | | | |
--------------------------------------------------------------------------------
| Biological | | 8,360 | 6,141 | 534 | 392 |
| assets | | | | | |
--------------------------------------------------------------------------------
| Total | | 2,308,035 | 603,230 | 147,510 | 38,553 |
| current | | | | | |
| assets | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Long-term | 8 | 40,124 | 10,673 | 2,564 | 682 |
| receivable | | | | | |
| s | | | | | |
--------------------------------------------------------------------------------
| Long-term | 10 | 48,515 | 65,769 | 3,101 | 4,203 |
| investment | | | | | |
| s in | | | | | |
| financial | | | | | |
| assets | | | | | |
--------------------------------------------------------------------------------
| Investment | 11 | 999,999 | 1,479,281 | 63,912 | 94,543 |
| property | | | | | |
--------------------------------------------------------------------------------
| Property, | 12 | 141,863 | 81,713 | 9,067 | 5,222 |
| plant and | | | | | |
| equipment | | | | | |
--------------------------------------------------------------------------------
| Intangible | 13 | 25,505 | 16,705 | 1,630 | 1,069 |
| assets | | | | | |
--------------------------------------------------------------------------------
| Total | | 1,256,006 | 1,654,141 | 80,274 | 105,719 |
| non-curren | | | | | |
| t assets | | | | | |
--------------------------------------------------------------------------------
| TOTAL | | 3,564,041 | 2,257,371 | 227,784 | 144,272 |
| ASSETS | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Interest-b | 14 | 753,077 | 699,568 | 48,130 | 44,710 |
| earing | | | | | |
| loans and | | | | | |
| borrowings | | | | | |
--------------------------------------------------------------------------------
| Payables | 15 | 223,591 | 249,275 | 14,290 | 15,932 |
--------------------------------------------------------------------------------
| Advances | | 47,216 | 63,427 | 3,018 | 4,054 |
| received | | | | | |
--------------------------------------------------------------------------------
| Provisions | | 3,468 | 1,953 | 222 | 124 |
--------------------------------------------------------------------------------
| Total | | 1,027,352 | 1,014,223 | 65,660 | 64,820 |
| current | | | | | |
| liabilitie | | | | | |
| s | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Interest-b | 14 | 600,938 | 457,258 | 38,407 | 29,224 |
| earing | | | | | |
| loans and | | | | | |
| borrowings | | | | | |
--------------------------------------------------------------------------------
| Long-term | 15 | 4,607 | 41,561 | 294 | 2,657 |
| payables | | | | | |
--------------------------------------------------------------------------------
| Deferred | | 1,321 | 1,353 | 84 | 86 |
| income tax | | | | | |
| liability | | | | | |
--------------------------------------------------------------------------------
| Provisions | | 251 | 1,095 | 16 | 70 |
--------------------------------------------------------------------------------
| Total | | 607,117 | 501,267 | 38,802 | 32,037 |
| non-curren | | | | | |
| t | | | | | |
| liabilitie | | | | | |
| s | | | | | |
--------------------------------------------------------------------------------
| TOTAL | | 1,634,469 | 1,515,490 | 104,463 | 96,857 |
| LIABILITIE | | | | | |
| S | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Share | | 952,842 | 304,530 | 60,898 | 19,463 |
| capital | | | | | |
--------------------------------------------------------------------------------
| Share | | 712,514 | 123,083 | 45,538 | 7,866 |
| premium | | | | | |
--------------------------------------------------------------------------------
| Statutory | | 20,084 | 5,486 | 1,284 | 351 |
| capital | | | | | |
| reserve | | | | | |
--------------------------------------------------------------------------------
| Other | | 37 | -184 | 2 | -12 |
| reserves | | | | | |
--------------------------------------------------------------------------------
| Retained | | 218,830 | 292,002 | 13,986 | 18,663 |
| earnings | | | | | |
--------------------------------------------------------------------------------
| Total | | 1,904,307 | 724,917 | 121,707 | 46,331 |
| equity | | | | | |
| attributab | | | | | |
| le to | | | | | |
| equity | | | | | |
| holders of | | | | | |
| the parent | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Minority | | 25,265 | 16,964 | 1,615 | 1,084 |
| interests | | | | | |
--------------------------------------------------------------------------------
| Total | 16 | 1,929,572 | 741,881 | 123,322 | 47,415 |
| equity | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| TOTAL | | 3,564,041 | 2,257,371 | 227,784 | 144,272 |
| LIABILITIE | | | | | |
| S AND | | | | | |
| EQUITY | | | | | |
--------------------------------------------------------------------------------
Additional information:
Heigo Metsoja
IRO
+372 6144 654
heigo.metsoja@arcovara.ee
http://www.arcorealestate.com
