Hepsor

Annual Report • Apr 23, 2025

Hepsor AS 2024 audited annual report

Hepsor AS 2024 audited annual report

The Management Board of Hepsor AS has prepared the audited annual report for
2024. Compared to the unaudited financial results published on 19 February
2025, there are no differences in the financial results in the audited report.

The consolidated sales revenue of Hepsor for the 2024 financial year amounted to
38.4 million euros (2023: 41.1 million euros).

The Group's net profit in 2024 was 2.1 million euros (2023: 3.5 million euros).
The net profit attributable to the owners of the parent company in the reporting
year was 0.4 million euros (2023: 1.2 million euros).

In coordination with the Group's Supervisory Board, the Management Board
proposes to distribute 1,002 thousand euros (EUR 0.26 per share) in dividends to
shareholders in 2025 from the profits of previous periods. Based on the share
price as of 31 December 2024, this results in a dividend yield of 6.2%.

Development projects under construction and available for sale

In 2024, we delivered 194 homes to customers- 165 in Tallinn and 29 in Riga.

In Riga, at Ulbrokas 34, we started the construction of the StokOfiss 34
commercial building and continued the construction of the Annenhof Maja
residential development with 40 apartments, which will be completed in early
2025.

In Tallinn, we began Hepsor's largest development project to date, the
construction and sale of the main building of the former Baltic Cotton Spinning
and Weaving Factory located at Manufaktuuri 5. The project is being developed in
stages. In the first stage, the construction of 150 new apartments is planned.

In the commercial building P113 Tervisemaja, owned by the affiliated company
Hepsor P113 OÜ, the signing of new rental contracts continued. As of 31 December
2024, 77% of the building was covered by lease agreements, whereas by today,
agreements have been signed for 84% of the total rental space.

Based on the Group's business strategy, the Lembitu 4 property in Tallinn, which
is intended to be used for the construction of a hotel with approximately 110
rooms, was sold in Q4 2024. Freed-up capital was used to finance new
developments as well as to reduce interest costs at the Group level.

New projects in Tallinn and Riga

In September 2024, Hepsor acquired a new property in Tallinn, at Võistluse 7. It
is a sLender-type apartment building, designed by researchers-architects at the
Estonian Academy of Arts, built in the style of an early 20th century Lender
wooden house. The building will be constructed entirely of wood, with the
exception of the staircase in the centre of the building. At the heart of the
project is environmental preservation and the utilisation of green technology
solutions for climate resilience.

On 18 July 2024, Hepsor E18 SIA, a subsidiary of Hepsor Latvia OÜ, acquired a
property at Eizhenijas iela 18, in Riga. The plan is to develop two buildings
there with a total of 54 apartments.

In December, Hepsor Latvia OÜ signed an option agreement to acquire a 50% stake
in a real estate development company. The development company is planning to
build 103 new homes at Dzelzavas 74c, in Riga.

Hepsor in Canada

To date, Hepsor has invested in five development projects in Toronto. In
cooperation with business partners, the primary objective of the projects
acquired in Canada's largest city is to prepare a detailed plan and thereby
achieve building rights for a total of around 3,000 new rental apartments.

In 2024, Hepsor made three new investments in Canada:

• a development project consisting of seven properties at 17-29 Glenavy Avenue,
  in Toronto;

• a development project consisting of 11 properties in High Park, located in
  downtown Toronto;

• a development project consisting of 17 properties on Brownville Avenue, in
  Toronto.

Vision for the future

In 2025, we intend to begin the construction and sale of up to five new
development projects.

In Latvia, we are planning to begin the construction and sale of up to four
projects. In total, 227 new homes will be built and sold in three residential
projects. In the field of commercial buildings, we would like to begin the
construction of a stock-office type development project in the Veidema Quarter
at Ganibu Dambis 17a.

We will also be starting the next phase in the Manufaktuuri Quarter - the sale
and construction of 49 new homes at Manufaktuuri 12.

Nevertheless, the declining interest rate environment allows us to look to the
future with moderate optimism. The real estate business is a long process.
That's why we want to initiate and develop new projects, always analysing risks
and opportunities over market cycles.

Consolidated statement of financial position

in thousands of euros 31 Dec 2024 31 Dec 2023

-------------------------------------------------------+-----------+-----------
Assets | |
-------------------------------------------------------+-----------+-----------
Current assets | |
-------------------------------------------------------+-----------+-----------
Cash and cash equivalents | 6,249| 7,604
-------------------------------------------------------+-----------+-----------
Trade and other receivables | 761| 1,544
-------------------------------------------------------+-----------+-----------
Current loan receivables | 200| 311
-------------------------------------------------------+-----------+-----------
Inventories | 64,141| 77,439
-------------------------------------------------------+-----------+-----------
Total current assets | 71,351| 86,898
-------------------------------------------------------+-----------+-----------
Non-current assets | |
-------------------------------------------------------+-----------+-----------
Property, plant and equipment | 288| 162
-------------------------------------------------------+-----------+-----------
Intangible assets | 2| 4
-------------------------------------------------------+-----------+-----------
Investment properties | 7,980| 0
-------------------------------------------------------+-----------+-----------
Financial investments | 6,424| 2,005
-------------------------------------------------------+-----------+-----------
Non-current loan receivables | 2,428| 1,729
-------------------------------------------------------+-----------+-----------
Other non-current receivables | 340| 203
-------------------------------------------------------+-----------+-----------
Total non-current assets | 17,462| 4,103
-------------------------------------------------------+-----------+-----------
Total assets | 88,813| 91,001
-------------------------------------------------------+-----------+-----------
Liabilities and equity | |
-------------------------------------------------------+-----------+-----------
Current liabilities | |
-------------------------------------------------------+-----------+-----------
Loans and borrowings | 23,336| 40,600
-------------------------------------------------------+-----------+-----------
Current lease liabilities | 52| 40
-------------------------------------------------------+-----------+-----------
Trade and other payables and prepayments | 7,266| 9,808
-------------------------------------------------------+-----------+-----------
Total current liabilities | 30,654| 50,448
-------------------------------------------------------+-----------+-----------
Non-current liabilities | |
-------------------------------------------------------+-----------+-----------
Loans and borrowings | 31,352| 16,305
-------------------------------------------------------+-----------+-----------
Non-current lease liabilities | 162| 29
-------------------------------------------------------+-----------+-----------
Other non-current liabilities | 4,635| 2,058
-------------------------------------------------------+-----------+-----------
Total non-current liabilities | 36,149| 18,392
-------------------------------------------------------+-----------+-----------
Total liabilities | 66,803| 68,840
-------------------------------------------------------+-----------+-----------
Equity | |
-------------------------------------------------------+-----------+-----------
Share capital | 3,855| 3,855
-------------------------------------------------------+-----------+-----------
Share premium | 8,917| 8,917
-------------------------------------------------------+-----------+-----------
Reserves | 385| 385
-------------------------------------------------------+-----------+-----------
Retained earnings | 8,853| 9,004
-------------------------------------------------------+-----------+-----------
Total equity | 22,010| 22,161
-------------------------------------------------------+-----------+-----------
Incl. total equity attributable to owners of the | |
parent | 20,912| 20,993
-------------------------------------------------------+-----------+-----------
Incl. non-controlling interest | 1,098| 1,168
-------------------------------------------------------+-----------+-----------
Total liabilities and equity | 88,813| 91,001
-------------------------------------------------------+-----------+-----------

Consolidated statement of profit and loss and other comprehensive income

in thousands of euros 2024 2023

---------------------------------------------------------------+-------+-------
Revenue | 38,397| 41,135
---------------------------------------------------------------+-------+-------
Cost of sales (-) |-31,635|-34,067
---------------------------------------------------------------+-------+-------
Gross profit | 6,762| 7,068
---------------------------------------------------------------+-------+-------
Marketing expenses (-) | -898| -576
---------------------------------------------------------------+-------+-------
Administrative expenses (-) | -1,802| -1,472
---------------------------------------------------------------+-------+-------
Other operating income | 449| 166
---------------------------------------------------------------+-------+-------
Other operating expenses (-) | -179| -152
---------------------------------------------------------------+-------+-------
Operating profit of the year | 4,332| 5,034
---------------------------------------------------------------+-------+-------
Financial income | 421| 1,192
---------------------------------------------------------------+-------+-------
Financial expenses (-) | -2,578| -2,746
---------------------------------------------------------------+-------+-------
Profit before tax | 2,175| 3,480
---------------------------------------------------------------+-------+-------
Income tax | -41| 0
---------------------------------------------------------------+-------+-------
Net profit for the year | 2,134| 3,480
---------------------------------------------------------------+-------+-------
Attributable to owners of the parent | 423| 1,185
---------------------------------------------------------------+-------+-------
Non-controlling interest | 1,711| 2,295
---------------------------------------------------------------+-------+-------
| |
---------------------------------------------------------------+-------+-------
Other comprehensive income (loss) | |
---------------------------------------------------------------+-------+-------
| |
---------------------------------------------------------------+-------+-------
Changes related to change of ownership | -313| 286
---------------------------------------------------------------+-------+-------
Change in value of embedded derivatives with minority | |
shareholders | -1,874| -2,053
---------------------------------------------------------------+-------+-------
Exchange rate differences from foreign entities | -103| 0
---------------------------------------------------------------+-------+-------
Other comprehensive income (loss) for the period | -2,290| -1,767
---------------------------------------------------------------+-------+-------
Attributable to owners of the parent | -504| -58
---------------------------------------------------------------+-------+-------
Non-controlling interest | -1,786| -1,709
---------------------------------------------------------------+-------+-------
Comprehensive income (loss) for the period | -156| 1,713
---------------------------------------------------------------+-------+-------
Attributable to owners of the parent | -81| 1,127
---------------------------------------------------------------+-------+-------
Non-controlling interest | -75| 586
---------------------------------------------------------------+-------+-------
Earnings per share | |
---------------------------------------------------------------+-------+-------
Basic (euros per share) | 0.11| 0.31
---------------------------------------------------------------+-------+-------
Diluted (euros per share) | 0.11| 0.31
---------------------------------------------------------------+-------+-------

Please see full version of Hepsor AS audited 2024 annual
report: https://hepsor.ee/en/for-investors/stock/reports-2/.

The annual report will be presented for approval to the General Meeting of
Shareholders.

Henri Laks
Member of the Management Board
Phone: +372 5693 9114
e-mail: [email protected] (mailto:[email protected])

Hepsor AS (www.hepsor.ee (http://www.hepsor.ee)) is a developer of residential
and commercial real estate. The Group operates in Estonia, Latvia and Canada.
During our thirteen years of operation, we have created 2,076 homes and nearly
36,300 m(2) of commercial space. As the first developer in the Baltic countries,
Hepsor has implemented several innovative engineering and technical solutions
that make the buildings built by the company more energy-efficient and thus more
environmentally friendly. The company's portfolio includes a total of 24
development projects with a total area of 172,500 m(2).