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IR - Pro Kapital Council approved Consolidated Interim Report for IV Quarter and 12 Months of 2024 (Unaudited)

Company: Pro Kapital Grupp Date: 2025-02-28 Language: English Register to download
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# Pro Kapital Council approved Consolidated Interim Report for IV Quarter and 12 Months of 2024 (Unaudited)

MANAGEMENT REPORT

Real Estate Development

In  2024, we achieved substantial completion of the final stage of our Kalaranna
development  (4 buildings,  146 units) and  a slightly  over 55% sellout  of the
inventory. On the construction budget we managed to achieve significant savings,
proving  that the decision on taking on the construction management in-house was
the  right  step.  The  construction  market  definitely stabilized during 2024
(especially  the cost of materials) but the general contractors' market is still
on shaky grounds.

In  Kristiine City, we  are actively engaged  in the design  and building permit
application  process for three different projects  submitted to the Tallinn City
Planning Department:

  \* "Dunte" - awaiting the issuance of the building permit
  \* Sammu 2/4 / Sõjakooli 15 - building permit application was submitted in
    December 2024
  \* Marsi 1 / Sõjakooli 13 - building permit application was submitted in
    February 2025

All the above listed projects will add ca 33.000 sqm of GBA with ca 320 units of
predominantly residential function (95% residential/5% commercial) to our
portfolio in a well-established neighbourhood in Kristiine City.

In  2024 we  continued  the  construction  of  our  Uus-Kindrali  project (White
building)  in Kristiine City (91  residential units). By the  end of 2024 we had
reached the full height of the building. We achieved nearly a 50% sellout during
the  first stage of  construction. The final  completion is expected in November
2025.

Further  to the above, the  management has decided to  start the construction of
another  7-story residential building  with 90 units, located  next to the White
Building  in Kristiine  City. We  plan to  start excavation  work in March-April
2025, with presales having begun in February 2025.

In  Riga, the sales River Breeze  Residence have finished. The team successfully
sold all the remaining inventory during 2024 , with only two parking spots left.
At  the end of 2024, Group's management tasked Pro Kapital Latvia with exploring
the possibility of launching another stage in our Kliversala project called Blue
Marine. It is a residential development of 101 units. If suitable conditions are
met, construction is planned to start in the first half of 2025. The development
already has a building permit.

In  Vilnius we  have completed  five residential  buildings in  S?altiniu? Namai
Attico project with 115 apartments in 2019. Today all the remaining inventory is
sold  (1 last unit is committed to  but expected to close in April 2025). During
2024 we  continued the construction of the  final stage of Shaltini? Namai Attico
with city villas and a commercial building.

Our  latest investment on  Naugarduko Street in  Vilnius involves transforming a
former  school  into  a  high-end  residential  complex.  Located on a hill with
breathtaking   views   of  Vilnius'  Old  Town,  the  development  will  feature
approximately 50 luxury apartments. An architectural competition was carried out
for the purpose, and the winning studio has been in the process of designing and
carrying  out the building permit process with the city. Subject to the issuance
of the permit, we plan to start renovation works in 2025.

Hotel operations

The  hotel sector has regained  momentum, and there is  still a notable surge in
demand.  In  2024, just  like  in  2023, the  hotel  achieved excellent results,
outperforming the budget.

Other operations

The  Group holds a majority stake in Preatoni Nuda Proprietà and its subsidiary,
Preatoni   Intermediazioni  Immobiliari,  which  continue  to  strengthen  their
position  in the  Italian real  estate market,  specializing in the acquisition,
sale, and brokerage of bare ownership properties.

In  2024, rising interest  rates led  investors to  shift away from real estate,
causing  a  market  slowdown  from  February to September. Financial instruments
became the preferred choice, temporarily dampening property investments.

However,  by October, as interest rates began to decline, confidence in the real
estate  sector started  to recover.  A full  market normalization is expected by
late  2025. Despite the challenges of 2024, Preatoni Nuda Proprietà enters 2025
on solid footing.

Other matters

Group  considers it  important to  highlight that  SA PREATONI Group, which owns
49,62% of  Pro Kapital shares,  has announced the  listing of its  shares on the
Euronext  Access+ Paris segment through a technical admission. The first trading
day for PREATONI Group shares (ISIN: FR001400WXE7) was 12 February 2025.

SA  PREATONI Group is an international company specializing in the ownership and
operation  of hospitality  assets, as  well as  residential and  commercial real
estate development.

Conclusion

The  turbulent  prior  years,  due  to  the  pandemic  and the start of the war,
definitely  changed  the  economic  landscape  of  all the Baltic countries. The
increased public spending (especially on defence) has resulted in changes to the
taxation system which has forced the industries to adapt, become more efficient,
find  new markets. It is fair to say, however, that the resilience in weathering
the  difficult times has resulted in a  new stable platform for growth. The real
estate  industry definitely  saw a  slight bounce-back  in Q4,  2024 and it is a
general  belief in  the market  that the  worst is  now past  us. In  making our
planning  for 2025, we are  exercising modest optimism.  The developments in the
lending  market are also supporting  our buyers and we  feel their confidence is
making purchase decisions is on the rise.

Edoardo Preatoni
CEO

Key financials

The  total revenue of the Group in 2024 was 18.2 million euros compared to 23.0
million  euros in 2023. The total revenue  of the fourth quarter was 7.6 million
euros compared to 3.1 million euros in 2023.

The  real estate  sales revenues  are recorded  at the  point of time when legal
title  is transferred to the  buyer. Therefore, the revenues  from sales of real
estate  depend on the  construction cycle and  the completion of the residential
developments.

Revenue from sale of real estate has decreased compared to the previous year, as
most  apartments in our completed real estate  projects had been sold by the end
of 2023. In 2024, sales of the remaining inventory continued in Kliversala, Riga
and  in Shaltini?  Namai, Vilnius.  In December  2024 we started handing over the
first  apartments from the final stage of Kalaranna District, Tallinn, while the
majority will be ready for the customers in the first quarter of 2025.

The gross profit of twelve months of 2024 has decreased by 23% amounting to 5.4
million  euros compared  to 7.0 million  euros in  2023. The gross profit of the
fourth quarter was 2.6 million euros compared to 1.0 million euros in 2023.

The  operating  result  in  the  twelve  months  was  123 thousand  euros profit
comparing  to  3.0 million  euros  profit  during  the  same period in 2023. The
operating  result of the fourth quarter was 1.9 million euros profit compared to
1.3 million euros profit in the fourth quarter of 2023.

The  net  result  for  the  twelve  months  of  2024 was 2.8 million euros loss,
comparing  to 0.9 million euros loss in the  reference period. The net result of
the  fourth quarter was 1.3 million euros  profit compared to 125 thousand euros
profit in the same period of 2023.

Cash  used in operating activities  during 2024 was 10.2 million euros comparing
to  9.1 million euros  generated during  the same  period in  2023. Cash used in
operating  activities during fourth  quarter was 219 thousand  euros compared to
440 thousand euros used in the fourth quarter of 2023.

Net  assets per  share on  31 December 2024 totalled  to 0.92 euros  compared to
0.96 euros on 31 December 2023.

Key performance indicators

                             2024 12M   2023 12M   2024 Q4   2023 Q4
---------------------------------------------------------------------
  Revenue, th EUR              18 158     23 021     7 554     3 052

  Gross profit, th EUR          5 423      7 028     2 567     1 028

  Gross profit, %                 30%        31%       34%       34%

  Operating result, th EUR        123      2 963     1 853     1 296

  Operating result, %              1%        13%       25%       42%

  Net result, th EUR           -2 804       -900     1 257       125

  Net result, %                  -15%        -4%       17%        4%



  Earnings per share, EUR       -0.05      -0.02      0.02      0.00


                                        31.12.2024   31.12.2023
----------------------------------------------------------------
  Total Assets, th EUR                     118 758      107 237

  Total Liabilities, th EUR                 66 466       52 814

  Total Equity, th EUR                      52 292       54 423

  Debt / Equity \*                             1.27         0.97



  Return on Assets, % \*\*                     -2.5%       -0.08%

  Return on Equity, % \*\*\*                    -5.3%        -1.5%

  Net asset value per share, EUR \*\*\*\*         0.92         0.96


\*debt / equity = total debt / total equity
\*\*return on assets = net profit/loss / total average assets
\*\*\*return on equity = net profit/loss / total average equity

\*\*\*\*net asset value per share = net equity / number of shares

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated interim statement of financial position

 in thousands of euros                                  31.12.2024 31.12.2023
-----------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                                   4 344     17 065

 Current receivables                                           822      1 411

 Prepaid expenses                                              422        268

 Inventories                                                56 951     35 563
                                                       ----------------------
 Total current assets                                       62 539     54 307

 Non-current assets

 Non-current receivables                                       317      2 010

 Property, plant and equipment                               7 595      7 763

 Right-of-use assets                                           513        365

 Investment property                                        44 210     40 361

 Goodwill                                                      863          0

 Intangible assets                                           2 721         96
                                                       ----------------------
 Total non-current assets                                   56 219     50 595

 Assets held for sale                                            0      2 335

 Total assets held for sale                                      0      2 335

 TOTAL ASSETS                                              118 758    107 237

 LIABILITIES AND EQUITY

 Current liabilities

 Current debt                                               15 427     30 141

 Customer advances                                           9 618      3 657

 Trade and other payables                                    6 685      4 911

 Tax liabilities                                               833        161

 Short-term provisions                                          24         11
                                                       ----------------------
 Total current liabilities                                  32 587     38 881

 Non-current liabilities

 Long-term debt                                             31 660     12 695

 Other long term liabilities                                     6          0

 Deferred income tax liabilities                             2 031      1 130

 Long-term provisions                                          182        108
                                                       ----------------------
 Total non-current liabilities                              33 879     13 933

 TOTAL LIABILITIES                                          66 466     52 814

 Equity attributable to owners of the Company

 Share capital in nominal value                             11 338     11 338

 Share premium                                               5 661      5 661

 Statutory reserve                                           1 134      1 134

 Revaluation reserve                                         1 977      2 092

 Retained earnings                                          31 594     34 198
                                                       ----------------------
 Total equity attributable to the owners of the Company     51 704     54 423

 Non-controlling interest                                      588          0

 TOTAL EQUITY                                               52 292     54 423

 TOTAL LIABILITIES AND EQUITY                              118 758    107 237

Consolidated interim statements of comprehensive income

 in thousands of euros                        2024 12M 2023 12M 2024 Q4 2023 Q4
-------------------------------------------------------------------------------
 CONTINUING OPERATIONS

 Operating income

 Revenue                                        18 158   23 021   7 554   3 052

 Cost of goods sold                            -12 735  -15 993  -4 987  -2 024
                                             ----------------------------------
 Gross profit                                    5 423    7 028   2 567   1 028



 Marketing expenses                             -1 136     -705    -363    -219

 Administrative expenses                        -5 293   -5 440  -1 474  -1 580

 Other income                                    1 186    2 099   1 152   2 103

 Other expenses                                    -57      -19     -29     -36
                                             ----------------------------------
 Operating profit/ loss                            123    2 963   1 853   1 296



 Financial income                                  123      254      25      80

 Financial expense                              -3 205   -4 115    -794  -1 257
                                             ----------------------------------
 Profit / loss before income tax                -2 959     -898   1 084     119

 Income tax                                        155       -2     173       6
                                             ----------------------------------
 Net profit / loss for the period               -2 804     -900   1 257     125

 Attributable to:

 Equity holders of the parent                   -2 604     -900  -1 406     125

 Non-controlling interests                        -200        0    -149       0

 Other comprehensive income net of income
 tax:

 Net change in asset revaluation reserve          -115        0    -115       0



 Total comprehensive income / loss for the
 year                                           -2 919     -900   1 142     125

 Attributable to:

 Equity holders of the parent                   -2 719     -900   1 291     125

 Non-controlling interests                        -200        0    -149       0

 Earnings per share for the period EUR             -0.05    -0.02    0.02    0.00

The full report can be found in the file attached.

Ann-Kristin Kuusik
CFO
+372 614 4920
\[email protected\]