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City Service SE
Annual / Quarterly Financial Statement • Dec 1, 2023
5564_rns_2023-12-01_8e435b6e-3fc7-44a3-ae82-0af8cfc94611.pdf
Annual / Quarterly Financial Statement
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City Service SE
CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER, 2023 (UNAUDITED)
Beginning of the reporting period 1 January 2023 End of the reporting period 30 September 2023
Business name City Service SE Registration number 12827710 Telephone +370 5 239 49 00 Fax +370 5 239 48 48 E-mail [email protected] Auditor Ernst & Young Baltic AS
Legal address Narva mnt. 5, 10117 Tallinn, the Republic of Estonia Website http://www.cityservice.eu
| DECLARATION OF THE MANAGEMENT 4 | |
|---|---|
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION 5 | |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 7 | |
| STATEMENTS OF COMPREHENSIVE INCOME 8 | |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 9 | |
| CONSOLIDATED STATEMENT OF CASH FLOWS 10 | |
| GENERAL INFORMATION 11 | |
| 1.1. ACTIVITY 11 | |
| 1.2. SHARE CAPITAL OF THE COMPANY 12 | |
| 1.3. SHAREHOLDERS OF THE COMPANY 12 | |
| 1.4. CITY SERVICE GROUP 13 | |
| 1.5. COMPANY'S SUPERVISORY BOARD 16 | |
| 1.6. COMPANY'S MANAGEMENT BOARD 17 | |
| 1.7. ACTIVITY AND SEGMENT INFORMATION 18 | |
| ACCOUNTING POLICIES 20 | |
| GOODWILL 20 | |
| SIGNIFICANT EVENTS 22 | |
| OTHER INTANGIBLE ASSETS 24 | |
| PROPERTY, PLANT AND EQUIPMENT 25 | |
| DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE 26 | |
| RIGHT OF USE ASSETS AND LEASE 29 | |
| TRADE RECEIVABLES 30 | |
| BORROWINGS 30 | |
| COST OF SALES 31 | |
| GENERAL AND ADMINISTRATIVE EXPENSES 31 | |
| OTHER OPERATING INCOME (EXPENSES) 32 | |
| INTEREST AND OTHER FINANCE INCOME AND (EXPENSES) 32 | |
| DIVIDENDS PER SHARE 32 | |
| RELATED PARTY TRANSACTIONS 33 | |
| SUBSEQUENT EVENTS 34 |
DECLARATION OF THE MANAGEMENT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| As of 30 | As of 31 | |||
|---|---|---|---|---|
| Notes | September 2023 | December 2022 | ||
| Assets | ||||
| NON-CURRENT ASSETS | ||||
| Goodwill | 3 | 8,800 | 8,799 | |
| Other intangible assets | 5 | 18,967 | 18,978 | |
| Property, plant and equipment | 6 | 723 | 994 | |
| Right of use assets | 8 | 2,011 | 3,902 | |
| Non-current receivables | 9 | 4,816 | 4,941 | |
| Deferred income tax asset | 2,003 | 1,501 | ||
| TOTAL NON-CURRENT ASSETS | 37,320 | 39,115 | ||
| CURRENT ASSETS | ||||
| Inventories | 1,127 | 1,047 | ||
| Prepayments | 1,640 | 1,579 | ||
| Trade receivables | 9 | 24,369 | 20,483 | |
| Receivables from related parties | 16 | 1,945 | 217 | |
| Contract assets | 1,085 | 1,485 | ||
| Other receivables and current assets | 3,481 | 4,311 | ||
| Cash and cash equivalents | 4,504 | 3,434 | ||
| TOTAL CURRENT ASSETS | 38,151 | 32,556 | ||
| Assets held for sale | - | 6,032 | ||
| Total assets | 75,471 | 77,703 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (cont'd)
| As of 30 | As of 31 | |||
|---|---|---|---|---|
| Notes | September 2023 | December 2022 | ||
| Equity and liabilities | ||||
| EQUITY | ||||
| Share capital | 9,483 | 9,483 | ||
| Other reserves | 948 | 948 | ||
| Share premium | 21,066 | 21,067 | ||
| Retained earnings (deficit) | (9,009) | (13,525) | ||
| Reserves of a disposal group classified as held for sale | - | (92) | ||
| 22,488 | 17,881 | |||
| Non-controlling interests | 172 | 138 | ||
| TOTAL EQUITY | 22,660 | 18,019 | ||
| Liabilities | ||||
| NON-CURRENT LIABILITIES | ||||
| Non-current borrowings | 10 | 9,141 | 10,459 | |
| Lease liabilities | 8 | 1,441 | 2,739 | |
| Deferred income tax liabilities | 1,242 | 1,335 | ||
| Non-current payables | 4,520 | 4,553 | ||
| TOTAL NON-CURRENT LIABILITIES | 16,344 | 19,086 | ||
| CURRENT LIABILITIES | ||||
| Current portion of non-current borrowings | 10 | 2,583 | 3,038 | |
| Current portion of lease liabilities | 8 | 564 | 1,313 | |
| Current loans | 10 | 4,782 | 1,829 | |
| Trade payables | 7,102 | 8,611 | ||
| Payables to related parties | 16 | 4,586 | 3,475 | |
| Contract liabilities | 6,496 | 7,891 | ||
| Other current liabilities | 10,354 | 10,427 | ||
| TOTAL CURRENT LIABILITIES | 36,467 | 36,584 | ||
| Liabilities related to assets held for sale | - | 4,014 | ||
| Total liabilities | 52,811 | 59,684 | ||
| Total equity and liabilities | 75,471 | 77,703 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(for the period 1 January – 30 September)
| Notes | 2023 Q3 | 2022 Q3 (Restated) | |
|---|---|---|---|
| Revenue from contracts with customers | 1.7 | 73,696 | 59,376 |
| Cost of sales | 11 | (54,340) | (42,226) |
| Gross profit (loss) | 19,356 | 17,150 | |
| General and administrative expenses | 12 | (14,446) | (14,306) |
| Credit loss expenses on financial assets | (150) | (344) | |
| Other operating activity, net | 13 | 27 | 484 |
| Profit (loss) from operations | 4,787 | 2,984 | |
| Interest and other finance income | 14 | 5,935 | 2,110 |
| Interest and other finance expenses | 14 | (4,877) | (2,839) |
| Profit (loss) before tax | 5,845 | 2,255 | |
| Income tax | (1,235) | (616) | |
| Profit (loss) from continued operations | 4,610 | 1,639 | |
| Discontinued operations | |||
| Net profit (loss) from discontinued operations | 7 | (60) | (3,163) |
| Net profit (loss) | 4,550 | (1,524) | |
| Other comprehensive income | |||
| Exchange differences on translation of foreign operations | - | 1,915 | |
| Total comprehensive income | 4,550 | 391 | |
| Attributable to: | |||
| The shareholders of the Company | 4,516 | (1,031) | |
| Non-controlling interests | 34 | (506) | |
| 4,550 | (1,537) | ||
| Total comprehensive income attributable to: | |||
| The shareholders of the Company | 4,516 | 884 | |
| Non-controlling interests | 34 | (506) | |
| 4,550 | (378) | ||
| Basic and diluted earnings per share (EUR) | 0.14 | (0.03) |
STATEMENTS OF COMPREHENSIVE INCOME
(for the period 1 July – 30 September)
| 2023 Q3 | 2022 Q3 (Restated) | |
|---|---|---|
| Sales | 25,357 | 20,858 |
| Cost of sales | (19,076) | (14,669) |
| Gross profit (loss) | 6,281 | 6,189 |
| General and administrative expenses | (4,279) | (4,503) |
| Credit loss expenses on financial assets | (294) | (150) |
| Other operating income, net | (124) | 115 |
| Gain (loss) from operations | 1,584 | 1,651 |
| Finance activity result, net | 1,617 | 1,581 |
| Gain (loss) before tax | 3,201 | 3,232 |
| Income tax | (406) | (332) |
| Net gain (loss) from continued operations | 2,795 | 2,900 |
| Discontinued operations | ||
| Net profit (loss) from discontinued operations | - | (1,275) |
| Net profit (loss) | 2,795 | 1,625 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Notes | Share capital | Share premium |
Foreign currency translation reserve |
Other reserves |
Retained earnings |
Assets held for sale |
Total | Non controlling interest |
Total | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance as of | 9,483 | 21,067 | (3,249) | 948 | (8,865) | - | 19,384 | 492 | 19,876 | ||
| 1 January 2022 | |||||||||||
| Net profit (loss) | - | - | - | - | (1,031) | - | (1,031) | (506) | (1,537) | ||
| Other comprehensive | |||||||||||
| Income | - | - | 1,863 | - | - | - | 1,863 | 52 | 1,915 | ||
| Total comprehensive | |||||||||||
| Income | - | - | 1,863 | - | (1,031) | - | 832 | (454) | 378 | ||
| Disposal of subsidiaries | - | - | 1,837 | - | - | - | 1,837 | 114 | 1,951 | ||
| Balance as of | 9,483 | ||||||||||
| 30 September 2022 | 21,067 | 451 | 948 | (9,896) | - | 22,053 | 152 | 22,205 | |||
| Balance as of | 9,483 | ||||||||||
| 1 January 2023 | 21,067 | - | 948 | (13,525) | (92) | 17,881 | 138 | 18,019 | |||
| Net profit (loss) | - | - | - | - | 4,516 | - | 4,516 | 34 | 4,550 | ||
| Total comprehensive | |||||||||||
| Income | - | - | - | - | 4,516 | - | 4,516 | 34 | 4,550 | ||
| Disposal of subsidiaries | - | - | - | - | - | 92 | 92 | - | 92 | ||
| Balance as of | |||||||||||
| 30 September 2023 | 9,483 | 21,067 | - | 948 | (9,009) | - | 22,489 | 172 | 22,661 |
CONSOLIDATED STATEMENT OF CASH FLOWS
| Notes | 2023 Q3* | 2022 Q3* | |
|---|---|---|---|
| Cash flows from (to) operating activities | |||
| Net profit (loss) from continued operations | 4,610 | 1,639 | |
| Net profit (loss) from discontinued operations | (60) | (3,163) | |
| Adjustments for non-cash items: | |||
| Income tax expenses | 1,265 | 627 | |
| Depreciation and amortisation | 5,6,8 | 3,138 | 2,986 |
| Impairment and discounting of accounts receivable | 2,306 | 480 | |
| Gain (loss) on disposal of property, plant and equipment | 13 | 160 | (484) |
| Gain (loss) from sale of investments | (2,183) | (115) | |
| Impairment of goodwill | 581 | - | |
| Interest (income) | (80) | (100) | |
| Interest (expenses) | 1,767 | 773 | |
| Other financial activity, net | (422) | 1,165 | |
| 11,082 | 3,808 | ||
| Changes in working capital: | |||
| (Increase) decrease in inventories | 539 | (1,415) | |
| (Increase) decrease in receivables, contract assets and other current assets | (4,326) | 3,817 | |
| (Increase) decrease in prepayments | 92 | (757) | |
| Increase (decrease) in trade payables and payables to related parties | 6,503 | 1,850 | |
| Income tax (paid) | (650) | (1,143) | |
| Increase (decrease) in advances received, contract liabilities and other current | (8,589) | 1,975 | |
| liabilities | |||
| Net cash flows from (to) operating activities | 4,651 | 8,135 | |
| Cash flows from (to) investing activities | |||
| (Acquisition) of non-current assets (except investments) | 5,6 | (4,008) | (2,988) |
| Proceeds from sale of non-current assets | 3,482 | 1,066 | |
| (Acquisition) of investments in subsidiaries (net of cash acquired in the Group) | 52 | (6,288) | |
| Disposal of investments in subsidiaries | (695) | (854) | |
| Interest received | 144 | 100 | |
| Loans (granted) | - | (1) | |
| Loans repaid | - | 3 | |
| Net cash flows (to) from investing activities | (1,025) | (8,962) | |
| Cash flows from (to) financing activities | |||
| (Repayment) proceeds of loans | 1,272 | 332 | |
| (Repayment) of financial lease liabilities | (2,341) | (1,372) | |
| Interest (paid) | (1,767) | (773) | |
| Net cash (to) financial activities | (2,836) | (1,813) | |
| Net increase (decrease) in cash and cash equivalents | 790 | (2,640) | |
| Foreign exchange difference | 48 | 191 | |
| Cash and cash equivalents at the beginning of the period* | 3,666 | 6,172 | |
| Cash and cash equivalents at the end of the period | 4,504 | 3,723 |
*Group cash flows for 2023 Q3 and 2022 Q3 comprise total consolidated Group, including discontinued operations.
1. GENERAL INFORMATION
City Service SE (hereinafter – "the Company") is a public limited liability company registered in the Republic of Estonia on 2 April 2015, which in the course of reorganization has taken over a public limited liability company City Service AS rights and liabilities.
The Company controls corporate group, engaged in provision of facility management and integrated utility services in Eastern Europe. The City Service group is the market leader in facility management and integrated utility services in the Baltic States. It provides services in whole Lithuania and Latvia.
City Service group provides facility management; maintenance and repair of engineering systems; management and renovation of energy resources; technical and energy audit of buildings; maintenance and cleaning of territories and premises; maintenance and construction of gas stations.
The most important buildings segments, administered by the City Service group are: residential apartment buildings; commercial buildings; public buildings; industrial buildings. The total area of buildings under the management of the Group is 15.6 million sq. m. at present.
1.2. 1.2. SHARE CAPITAL OF THE COMPANY
The share capital of the Company is EUR 9,483 thousand as of 30 September 2023. It is divided into 31,610 thousand ordinary shares with the nominal value of EUR 0.30 each. All shares of the Company are paid up.
The Company does not have any other classes of shares than ordinary shares mentioned above, there are no any restrictions of share rights or special control rights for the shareholders settled in the Articles of Association of the Company. No shares of the Company are held by itself or its subsidiaries. No convertible securities, exchangeable securities or securities with warrants are outstanding; likewise, there are no outstanding acquisition rights or undertakings to increase share capital.
As of 30 September 2023 all 31,610 thousand ordinary shares of the Company are included into the Parallel Market of Warsaw Stock Exchange and Baltic First North Foreign Shares trading list of NASDAQ Baltic Market (ISIN Code of the shares is EE3100126368). Trading Code of the shares on Warsaw Stock Exchange is CTS, on NASDAQ Baltic Market - CTS1L.
1.3. 1.3. SHAREHOLDERS OF THE COMPANY
As of 30 September 2023 the total number of shareholders of the Company was 658.
COMPANY'S SHARES DISTRIBUTION AMONG SHAREHOLDERS WHO HAVE MORE THAN 5% SHARES OF THE COMPANY AS OF 30 SEPTEMBER 2023 WAS THE FOLLOWING:
| Number of shares held | Owned percentage of the share capital and votes, % |
|
|---|---|---|
| UAB Unit Invest, legal entity code 305873584, address: Ozo str. 12A-1, Vilnius, Lithuania |
26,813,293 | 84.83% |
| Other private and institutional shareholders | 4,796,707 | 15.17% |
| TOTAL | 31,610,000 | 100 % |
1.4. 1.4. CITY SERVICE GROUP
AS OF 30 SEPTEMBER 2023 THE CITY SERVICE GROUP CONSISTS OF CITY SERVICE SE AND THE FOLLOWING SUBSIDIARIES (HEREINAFTER REFERRED TO AS "THE GROUP"):
| Company | Region | Share of the stock held by the Group as of 30 September 2023 |
Share of the stock held by the Group as of 31 December 2022 |
Main activities |
|---|---|---|---|---|
| UAB Alytaus namų valda | Lithuania | 76% | 76% | Dormant |
| UAB Baltijos būsto priežiūra | Lithuania | - | 100% | Dormant |
| UAB Baltijos NT valdymas | Lithuania | 100% | 100% | Real estate management |
| UAB Baltijos transporto valdymas | Lithuania | 100% | 100% | Asset management |
| UAB Biržų butų ūkis | Lithuania | 57.71% | 57.71% | Administration of dwelling-houses |
| UAB BonoDomo | Lithuania | 100% | 100% | IT servisas |
| UAB BonoDomo Pay | Lithuania | 100% | 100% | Intermediary activities of an electronic money institution |
| UAB Butų ūkio valdos | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Būsto aplinka | Lithuania | 100% | 100% | Maintenance and cleaning of dwelling houses territories and premises |
| UAB Mano būstas | Lithuania | 100% | 100% | Holding company |
| UAB City Service Cleaning | Lithuania | 100% | 100% | Maintenance and cleaning of commercial real estate, territories and premises |
| UAB City Service Engineering | Lithuania | 100% | 100% | Commercial real estate management and building maintenance |
| UAB CSG IT | Lithuania | 100% | 100% | IT services |
| UAB Energijos taupymo paslaugos | Lithuania | 100% | 100% | Energy saving solution services |
| UAB Energetinių projektų valdymas | Lithuania | 100% | 100% | PPP project company |
| UAB EPC projektai | Lithuania | 100% | 100% | Dormant |
| UAB Exergio | Lithuania | 100% | 100% | IT energy saving solutions for buildings |
| UAB Getfiks | Lithuania | - | 100% | Supply chain management |
| UAB Neries būstas | Lithuania | - | 100% | Dormant |
| UAB Mano aplinka | Lithuania | 100% | 100% | Maintenance and cleaning of public territories and premises |
| UAB Mano bendrabutis | Lithuania | 100% | 100% | Administration of buildings |
| UAB Mano Būsto klientų patirčių centras |
Lithuania | 100% | 100% | Client service center services |
| UAB Mano Būstas Alytus | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Aukštaitija | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Baltija | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Dainava | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Neris | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas NPC | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Kaunas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Klaipėda | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Radviliškis | Lithuania | 100% | 100% | Administration of dwelling-houses |
|---|---|---|---|---|
| UAB Mano Būstas Sostinė | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Šiauliai | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Ukmergė | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būstas Vakarai | Lithuania | 99.97% | 99.97% | Administration of dwelling-houses |
| UAB Mano Būstas Vilnius | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Mano Būsto priežiūra | Lithuania | 100% | 100% | Building maintenance |
| UAB Medžiagų tiekimo centras | Lithuania | - | 100% | Supply of materials |
| UAB Merlangas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Nacionalinis renovacijos fondas | Lithuania | 100% | 100% | Administration of dwelling-houses renovation projects |
| UAB Pastatų priežiūra | Lithuania | 100% | 100% | Building maintenance |
| UAB Pastatų priežiūros tarnyba | Lithuania | - | 100% | Technical maintenance of heating systems |
| UAB Pastatų valdymas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB PortalPRO | Lithuania | - | 100% | Supply chain management |
| UAB Rinkų vystymas | Lithuania | 100% | 100% | Dormant |
| UAB Skolos LT | Lithuania | 100% | 100% | Debt collection services |
| UAB Šiaulių NT valdymas | Lithuania | 100% | 100% | Dormant |
| UAB Unitechna | Lithuania | 100% | 100% | Maintenance and construction of gas stations |
| PortalPRO s.r.o. | Czech | - | 100% | IT services |
| Aresi administracion de fincas S. L. | Spain | - | 100% | Administration of dwelling-houses |
| Concentra Servicios y Mantenimiento, S.A.* |
Spain | 100% | 100% | Commercial real estate management and building maintenance |
| Eurobroker Advisors Sorreduria de Seguros, S.L. |
Spain | - | 100% | Insurance services |
| Euronamas Gestion de Fincas Centro, S.L. |
Spain | - | 100% | Administration of dwelling-houses |
| Grupo Aresi de Inversiones, S.L. | Spain | - | 100% | Holding company |
| PORTALPRO, S.L. | Spain | - | 100% | Supply chain management |
| Vetell dos iberica, S.L.* | Spain | 100% | 100% | Administration of dwelling-houses |
| SIA BILANCE | Latvia | 100% | 100% | Administration of dwelling-houses |
| SIA BonoDomo | Latvia | 100% | 100% | Dormant |
| SIA City Service | Latvia | 100% | 100% | Holding company |
| SIA City Service Engineering | Latvia | 100% | 100% | Commercial real estate management and building maintenance |
| SIA Ēku pārvaldīšanas serviss | Latvia | 100% | 100% | Building maintenance |
| SIA PortalPRO | Latvia | - | 100% | Dormant |
| SIA Latvijas Namsaimnieks | Latvia | 100% | 100% | Administration of dwelling-houses |
| SIA Livonijas Nami | Latvia | 100% | 100% | Administration of dwelling-houses |
| SIA Namu serviss APSE | Latvia | 100% | 100% | Administration of dwelling-houses |
| SIA Manas MĀJAS | Latvia | 100% | 100% | Administration of dwelling-houses |
| SIA Manas MĀJAS 2 | Latvia | 100% | 100% | Administration of dwelling-houses |
| SIA Manas Mājas Salnas 21 | Latvia | 100% | 100% | Administration of dwelling-houses |
| SIA Manas MĀJAS 3 | Latvia | 100% | 100% | Administration of dwelling-houses |
| SIA Multihouse | Latvia | 100% | - | Administration of dwelling-houses |
| SIA Ventspils nami | Latvia | 100% | 100% | Administration of dwelling-houses |
| Atrium 21 sp. z o.o. | Poland | - | 100% | Administration of dwelling-houses |
| Deleterma sp. z o.o. | Poland | - | 100% | Country holding company |
|---|---|---|---|---|
| Certus-Serwis Sp. z o. o. | Poland | - | 100% | Administration of dwelling-houses |
| Concierge - Zarządzanie Nieruchomościami sp. z o.o. |
Poland | - | 100% | Administration of dwelling-houses |
| Dom Best sp. z o.o. | Poland | - | 100% | Administration of dwelling-houses |
| EnergiaOK sp. z o.o. | Poland | - | 100% | Sale of electricity |
| Famix sp. z o.o. | Poland | - | 100% | Administration of dwelling-houses |
| Grupa Techniczna 24 sp. z o.o. | Poland | - | 100% | Building maintenance |
| Parama Blue sp. z o.o. | Poland | - | 100% | Dormant |
| Parama Group sp. z o.o. | Poland | - | 100% | Holding company |
| Parama Yellow sp. z o.o. | Poland | - | 100% | Dormant |
| Parama Red sp. z o.o. | Poland | - | 100% | Dormant |
| Parama White sp. z o.o. | Poland | - | 100% | Dormant |
| PORTALPRO sp. z o.o. | Poland | - | 100% | Supply chain management |
| Progresline sp. z o.o. | Poland | - | 100% | Administration of dwelling-houses |
| Santer Zarządzanie Nieruchomościami sp. z o.o. |
Poland | - | 100% | Administration of dwelling-houses |
| Skydas - Przeglądy Budowlane sp. z o.o. |
Poland | - | 100% | Dormant |
| TED sp. z o.o. | Poland | - | 100% | Real estate management |
| Tumieszkamy sp. z o. o. | Poland | - | 100% | Dormant |
| Wolska Aparthotel sp. z o. o. | Poland | - | 100%** | Accommodation services |
| Zespół Zarządców Nieruchomości sp. z o.o. |
Poland | - | 100% | Administration of dwelling-houses |
| ZZN Inwestycje sp. z o.o. | Poland | - | 100% | Dormant |
| PORTALPRO, UNIPESSOAL LDA | Portugal | - | 100% | Dormant |
* The Group ceased to consolidate Concentra Servicios y Mantenimiento, S.A. (including sub-consolidated subsidiary Vetell dos iberica, S.L.) in its Financial statements after bankruptcy administrator was appointed on 10 May 2017, as from that date the Group has lost its control.
** The Group ceased to consolidate Wolska Aparthotel sp. z o. o. in its Financial statements after bankruptcy administrator was appointed on 3 June 2020, as from that date the Group has lost its control.
1.5. 1.5. COMPANY'S SUPERVISORY BOARD
AS OF 30 SEPTEMBER 2023, THE SUPERVISORY BOARD OF THE COMPANY COMPRISES OF THE FOLLOWING PERSONS:
| Name and surname | Position | Start of term | End of term |
|---|---|---|---|
| Andrius Janukonis | Chairman of the Supervisory Board |
June 21, 2023 | June 21, 2027 |
| Gintautas Jaugielavičius | Member of the Supervisory Board |
June 21, 2023 | June 21, 2027 |
The Supervisory Board members do not own any shares of the Company.
Andrius Janukonis
Andrius Janukonis (born in 1971) is the Chairman of the Supervisory Board of City Service SE (since 2009 until 2015 the Chairman of the Board). He holds a Master's degree in Law. He is a member of the board of UAB Unit Invest (since 2021).
Gintautas Jaugielavičius
Gintautas Jaugielavičius (born in 1971) is a Member of the Supervisory Board of City Service SE (since 2005 until 2015 a Member of the Board). He holds a Bachelor's degree in Economics. At present, he works as a consultant for UAB Unit Invest and is a member of the board of UAB Unit Invest (since 2021).
1.6. 1.6. COMPANY'S MANAGEMENT BOARD
AS OF 30 SEPTEMBER 2023 AND AS OF DATE OF SUBMISSION OF THIS REPORT, THE MANAGEMENT BOARD OF THE COMPANY COMPRISES OF THE FOLLOWING PERSONS:
| Name and surname | Position within the Group | Start of term | End of term |
|---|---|---|---|
| Artūras Gudelis | Chairman of the Management Board | June 26, 2021 | June 26, 2025 |
| Vytautas Turonis | Member of the Management Board | June 26, 2021 | June 26, 2025 |
| Dalius Šimaitis | Member of the Management Board | June 26, 2021 | June 26, 2025 |
They do not own any shares of the Company.
Artūras Gudelis
Artūras Gudelis (born in 1977) is a Chairman of the Management Board of City Service SE (since 2017). Artūras Gudelis was a Member of the Supervisory Board of City Service SE (2015 – 2017). He holds Bachelor's degree in Economics and Master's degree in Business Management.
Artūras Gudelis is responsible for carrying the formal functions of the chairman of the Management Board as well as for signing of the consolidated financial statements, representing the Company in the stock exchanges, securities depositories and in relations with the investors, as well as in all other general matters related to the Company.
Vytautas Turonis
Vytautas Turonis (born in 1972) is a Member of the Management Board of City Service SE (since 2017). Vytautas Turonis works as the General Manager at UAB City Service. He holds a Bachelor's degree in International Business. Previously he worked as the Marketing Manager of UAB Specialus Autotransportas (2003 – 2004). He started to work in the Company as the Market Development Department Manager (2004 – 2008).
Vytautas Turonis is responsible and accountable for the organization and supervision of Group activities (including the financial matters) in Lithuania, Latvia and Estonia.
Dalius Šimaitis
Dalius Šimaitis (born in 1977) is a Member of the Management Board of City Service SE (since 2019). Previously he worked as the maintenance department director at UAB Mano būstas (2016 - 2019). Mr. Šimaitis works in the Group since 2016. He holds a Bachelor's degree in Thermal Engineering and a Master's degree in Energy Engineering.
Dalius Šimaitis is responsible and accountable for technical operations and supply chain management, standardization policy within the Group in all jurisdictions.
1.7. 1.7. ACTIVITY AND SEGMENT INFORMATION
INFORMATION ON MAIN GROUP'S OPERATING SEGMENTS (CONTINUED OPERATIONS):
| 2023 Q3 | Lithuania | Latvia | All other segments | Total |
|---|---|---|---|---|
| Revenue from contracts with | ||||
| customers: | 68,830 | 4,753 | 113 | 73,696 |
| Total revenue from contracts with | ||||
| customers | 73,696 | |||
| Segment results | 6,627 | (24) | (312) | 6,291 |
| Unallocated expenses | (1,504) | |||
| Profit (loss) from operations | 4,787 | |||
| Net financial income (expenses) | 1,058 | |||
| Profit (loss) before income tax | 5,845 | |||
| Income tax expenses | (1,235) | |||
| Net profit (loss) for the year | 4,610 | |||
| OTHER SEGMENT INFORMATION | ||||
| Capital expenditure | 3,273 | 9 | - | 3,282 |
| 2022 Q3 | Lithuania | Latvia | All other segments | Total |
|---|---|---|---|---|
| Revenue from contracts with | ||||
| customers: | 55,275 | 4,075 | 26 | 59,376 |
| Total revenue from contracts with | ||||
| customers | 59,376 | |||
| Segment results | 6,033 | 75 | (620) | 5,488 |
| Unallocated expenses | (2,504) | |||
| Profit (loss) from operations | 2,984 | |||
| Net financial income (expenses) | (729) | |||
| Profit (loss) before income tax | 2,255 | |||
| Income tax expenses | (616) | |||
| Net profit (loss) for the year | 1,639 | |||
| OTHER SEGMENT INFORMATION | ||||
| Capital expenditure | 1,833 | 24 | - | 1,857 |
1.7. ACTIVITY AND SEGMENT INFORMATION (cont'd)
INFORMATION ON MAIN GROUP'S OPERATING SEGMENTS:
| Lithuania | Latvia | All other segments | Total | |
|---|---|---|---|---|
| Revenue from contracts from external customers | ||||
| 2023 Q3 | 68,830 | 4,753 | 113 | 73,696 |
| 2022 Q3 | 55,275 | 4,075 | 26 | 59,376 |
| Lithuania | Latvia | All other segments | Total | |
|---|---|---|---|---|
| Segment non-current assets | ||||
| As of 30 September 2023 | 32,217 | 5,103 | - | 37,320 |
| As of 31 December 2022 | 33,703 | 5,313 | 99 | 39,115 |
MAIN ACTIVITY INDICATORS FOR THE GROUP*:
| 2023 Q3 | 2022 Q3 | Change | |
|---|---|---|---|
| Area of residential apartment buildings under administration (million square meters)**** |
10.7 | 12.0 | (10.8%) |
| Area of public, commercial building and atypical properties under administration |
5.0 | 4.7 | 6.4% |
| (million square meters) | |||
| Number of employees | 1,508 | 1,569 | (3.9%) |
| Sales for the period | 81.502 | 86,299 | (5.6%) |
| Sales (main activity)** | 81.502 | 73,553 | 10.8% |
| Gross margin** | 24.5% | 31.4% | (6.9) p.p. |
| EBITDA margin** | 9.7% | 5.1% | 4.6 p.p. |
| EBIT margin** | 5.9% | 1.0% | 4.9 p.p. |
| Net margin** | 5.6% | (2.1)% | 7.7 p.p. |
| Number of shares (thousand) | 31,610 | 31,610 | - |
| Return on equity | 20.1% | (6.9)% | 27.0 p.p. |
| Return on assets | 6.0% | (1.9)% | 7.9 p.p. |
| Financial Net Debt to equity*** | 53.0% | 90.0% | (37.0) p.p. |
* Main activity indicators are presented including subsidiaries that were disposed in 2023 and 2022 (further disclosed in Note 7 discontinued operations)
** Calculated by reducing sales for the resale of utility services.
*** Interest bearing debt (net of cash balance) to Shareholders' equity.
**** The decrease in areas was mainly due to the sale of business in Poland and Spain.
2. ACCOUNTING POLICIES
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.
In the Interim Financial Statements same accounting policies and methods of computation are followed as compared with the most recent annual financial statements.
Interim Financial Statements are prepared in compliance with International Accounting Standard (IAS) 34 Interim financial reporting.
These Interim Financial Statements were authorised for issue on 30 November 2023 by responsible persons listed in the confirmation, which is attached to the Interim Financial Statements.
3. GOODWILL
COST:
| Balance as of 1 January 2022 | 12,144 |
|---|---|
| Additions | 6,142 |
| Exchange differences | 69 |
| Discontinued operations | (7,880) |
| Balance as of 31 December 2022 | 10,475 |
| Balance as of 30 September 2023 | 10,475 |
| IMPAIRMENT: | |
| Balance as of 1 January 2022 | 1,564 |
| Exchange differences | (20) |
| Impairment recognized | 130 |
| Discontinued operations | 2 |
| Balance as of 31 December 2022 | 1,676 |
| Balance as of 30 September 2023 | 1,676 |
| Net book value as of 30 September 2023 | 8,799 |
| Net book value as of 31 December 2022 | 8,799 |
3. GOODWILL (cont'd)
During reporting period the Company through its subsidiary acquired SIA MultiHouse.
| Fair value of assets, liabilities and contingent liabilities of acquired subsidiaries | SIA MultiHouse |
|---|---|
| At the date of acquisition | 30 May |
| Property, plant and equipment | 1 |
| Other non-current assets | 83 |
| Trade receivables | 37 |
| Other current assets | 84 |
| Total assets | 205 |
| Long-term liabilities | 12 |
| Trade payables | 23 |
| Other current liabilities | 123 |
| Total liabilities | 158 |
| Total identifiable net assets at fair value | 47 |
| Fair value of acquired assets, liabilities and contingent liabilities | 47 |
| Goodwill | (15) |
| Total purchase consideration | 32 |
| Cash acquired | 84 |
| Total purchase consideration, net of cash acquired | (52) |
4. SIGNIFICANT EVENTS
Investments and other changes during the nine months of the year 2023
On 10 January 2023 SIA Nira Fonds apsaimniekošana Salnas 21 title was changed into SIA Manas Mājas Salnas 21. Other contact details did not change.
On 25 January 2023 UAB Apex Intelligence title was changed into UAB Exergio. Other contact details did not change.
On 06 February 2023 reorganization on the companies UAB Pastatų priežiūros tarnyba and UAB Mano būsto priežiūra was completed. After the process of reorganization UAB Pastatų priežiūros tarnyba was incorporated into UAB Mano būsto priežiūra with all the assets, rights and obligations. UAB Pastatų priežiūros tarnyba ceased operations and were deregistered. After reorganization UAB Mano būsto priežiūra management and other contact details did not change.
On 10 March 2023, an increase of the share capital of PortalPRO S. L. was registered. The share capital of PortalPRO S. L. increased to EUR 435,972. Share capital of the company is divided into 1,000 ordinary shares, the nominal value of which remained at EUR 3.
On 21 March 2023 the Group, through its Polish subsidiary, initiated voluntary liquidation of Parama Blue Sp. z o.o.
On 27 March 2023 the Group sold 100% stake in PortalPRO s.r.o., which provided supply chain management services. Value of the share sale-purchase agreement is CZK 50 thousand (EUR 2,1 thousand). Net assets of disposed subsidiary at the date of disposal amounted to EUR (20) thousand (CZK (475) thousand).
On 13 April 2023 the Group, through its Polish subsidiary, initiated voluntary liquidation of Parama White Sp. z o.o.
On 18 April 2023, an increase of the share capital of LDA PortalPRO was registered. The share capital of LDA PortalPRO increased to EUR 46,900. Share capital of the company is divided into 46,900 ordinary shares, the nominal value of which remained at EUR 1.
On 28 April 2023, an increase of the share capital of PortalPRO Sp. z. o. o. was registered. The share capital of UAB PortalPRO Sp. z. o. o. increased to PLN 960,600 (EUR 216,410). Share capital of the company is divided into 960,600 ordinary shares, the nominal value of which remained at PLN 1.
On 03 May 2023, an increase of the share capital of UAB PortalPRO was registered. The share capital of UAB PortalPRO increased to EUR 2,338,557. Share capital of the company is divided into 2,338,557 ordinary shares, the nominal value of which remained at EUR 1.
On 03 May 2023 the Group sold 100% stake in UAB PortalPRO and its subsidiary UAB Getfiks, which provided supply chain management services. Value of the share sale-purchase agreement is EUR 393 thousand. The carrying value of the net asset of the subsidiaries disposed at the date of issuing these financial statements amounted to EUR 606 thousand.
On 03 May 2023 the Group sold 100% stake in UAB Medžiagų tiekimo centras, which provided supply of materials services. Value of the share sale-purchase agreement is EUR 629 thousand. The carrying value of the net asset of the subsidiary disposed at the date of issuing these financial statements amounted to EUR 290 thousand.
On 08 May 2023 the Group, through its Polish subsidiary, initiated voluntary liquidation of Parama Red Sp. z o.o.
On 09 May 2023 the Group, through its Polish subsidiary, initiated voluntary liquidation of Parama Yellow Sp. z o.o.
On 11 May 2023 UAB Mano Būstas title was changed into Mano Būsto klientų patirčių centras, UAB. Other contact details did not change.
On 12 May 2023 UAB City Service title was changed into Mano Būstas, UAB. Other contact details did not change.
4. SIGNIFICANT EVENTS (cont'd)
On 12 May 2023 the Group sold 100% stake in SIA PortalPRO. Value of the share sale-purchase agreement is EUR 32 thousand. The carrying value of the net asset of the subsidiary disposed at the date of issuing these financial statements amounted to EUR 32 thousand.
On 16 May 2023 the Company signed the share purchase-sale agreement for the sale of UAB Baltijos būsto priežiūra and all of its subsidiaries operating in Poland. Value of the share sale-purchase agreement is EUR 956 thousand. The carrying value of the net asset of the subsidiaries disposed at the date of issuing these financial statements amounted to EUR (6,624) thousand. UAB Baltijos būsto priežiūra and its subsidiaries were operating in the field of utilities and apartment building administration in Poland.
On 18 May 2023 the Company signed the share purchase-sale agreement for the sale of Deleterma Sp. z o.o. and all of its subsidiaries operating in Poland. Value of the share sale-purchase agreement is EUR 1. The carrying value of the net asset of the subsidiaries disposed at the date of issuing these financial statements amounted to EUR (1,094) thousand. Deleterma Sp. z o.o. and its subsidiaries were engaged in administration of dwelling-houses services provided in Poland.
On 22 May 2023 the Group sold 100% stake in PortalPRO LDA. Value of the share sale-purchase agreement is EUR 100. The carrying value of the net asset of the subsidiary disposed at the date of issuing these financial statements amounted to EUR (28) thousand.
On 30 May 2023 the Group, through its Latvian subsidiary acquired 100% of the shares of SIA MultiHouse (acquisition price EUR 32 thousand) which is based in Latvia. SIA MultiHouse is engaged in administration of dwelling-houses.
On 21 June 2023 the Supervisory Board of the Company was re-elected. The supervisory board will continue to consist of Andrius Janukonis and Gintautas Jaugielavičius.
On 29 June 2023 the Group sold 100% stake in PortalPRO Sp. Z o.o., which provided supply chain management services. Value of the share sale-purchase agreement is PLN 49 thousand (EUR 11 thousand). Net assets of disposed subsidiary at the date of disposal amounted to EUR (85) thousand (PLN (377) thousand).
On 28 July 2023 the Group sold 100% stake in PortalPRO, S.L., which provided supply chain management services. Value of the share sale-purchase agreement is EUR 26 thousand. The carrying value of the net asset of the subsidiary disposed at the date of issuing these financial statements amounted to EUR (13) thousand.
On 7 August 2023 reduced share capital of UAB Pastatu valdymas was registered. The share capital of UAB Pastatu valdymas after the reduction amounts to EUR 3 486. Share capital of the company is divided into 1 202 ordinary shares, the nominal value of which remained at EUR 2,9.
On 31 August 2023 reduced share capital of UAB Mano Būstas NPC was registered. The share capital of UAB Mano Būstas NPC after the reduction is EUR 1 674 902. Share capital of the company is divided into 57 835 ordinary shares, the nominal value of which remained at EUR 28,96.
On 1 September 2023 reduced share capital of UAB Mano Būstas Vilnius was registered. The share capital of UAB Mano Būstas Vilnius after the reduction is EUR 1 572 222. Share capital of the company is divided into 5 421 454 ordinary shares, the nominal value of which remained at EUR 0,29.
On 6 September 2023 the Group sold 100% stake in Eurobroker advisors correduria de seguros, S.L. which provided insurance brokerage services. Value of the share sale-purchase agreement was EUR 1000. The carrying value of the net asset of the subsidiary disposed at the date of issuing these financial statements amounted to EUR (113) thousand.
On 20 September 2023 the Group sold 100% stake in Grupo Aresi de inversiones (Spain), S.L. which was the holding company of Company's activities in Spain. Value of the share sale-purchase agreement was EUR 1 (one euro). The carrying value of the net asset of the subsidiary disposed at the date of issuing these financial statements amounted to EUR (714) thousand.
5. OTHER INTANGIBLE ASSETS
Movement of other intangible assets in 2023 Q3 and 2022 is presented below:
| Total | |
|---|---|
| COST: | |
| Balance as of 1 January 2022 | 37,712 |
| Additions arising from acquisitions of subsidiaries | 180 |
| Additions | 2,886 |
| Disposals of subsidiaries | (3,239) |
| Disposals and retirements | (210) |
| Reclassification to assets held for sale | (11,468) |
| Exchange differences | 322 |
| Balance as of 31 December 2022 | 26,183 |
| Additions | 2,795 |
| Disposals and retirements | (2,934) |
| Balance as of 30 September 2023 | 26,044 |
ACCUMULATED AMORTISATION AND IMPAIRMENT:
| Balance as of 1 January 2022 | 16,623 |
|---|---|
| Charge for the year | 1,180 |
| Disposals and retirements | (212) |
| Disposals of subsidiaries | (777) |
| Reclassification to assets held for sale | (9,598) |
| Exchange differences | (11) |
| Balance as of 31 December 2022 | 7,205 |
| Charge for the period | 843 |
| Disposals and retirements | (971) |
| Balance as of 30 September 2023 | 7,077 |
| Net book value as of 30 September 2023 | 18,967 |
|---|---|
| Net book value as of 31 December 2022 | 18,978 |
6. PROPERTY, PLANT AND EQUIPMENT
Movement of fixed assets in 2023 Q3 and 2022 is presented below:
| Buildings | Vehicles | plant and | Total | |
|---|---|---|---|---|
| equipment | ||||
| 1,086 | 3,162 | 10,173 | 21 | 14,442 |
| 97 | 21 | 11 | - | 129 |
| - | 45 | 352 | 442 | 839 |
| (560) | (859) | (709) | - | (2,128) |
| (96) | (923) | (614) | - | (1,633) |
| (45) | (315) | (7,991) | - | (8,351) |
| - | 206 | 1 | - | 207 |
| - | - | 463 | (463) | - |
| 482 | 1,337 | 1,686 | - | 3,505 |
| - | - | 4 | - | 4 |
| - | 6 | 481 | - | 487 |
| (387) | (383) | (103) | - | (873) |
| 95 | 960 | 2,068 | - | 3,123 |
| 9,922 | ||||
| 1,157 | ||||
| (1,682) | ||||
| (1,182) | ||||
| (5,907) | ||||
| 203 | ||||
| 147 | 1,317 | 1,047 | - | 2,511 |
| 3 | ||||
| 293 | ||||
| (408) | ||||
| 95 | 945 | 1,359 | - | 2,399 |
| 724 994 |
||||
| 452 17 (276) - (45) (1) - 6 (58) - 335 |
2,985 50 (845) (760) (304) 191 - 2 (374) 15 20 |
Other property, 6,485 1,090 (561) (422) (5,558) 13 3 285 24 709 639 |
Construction in progress - - - - - - - - - - - |
7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
Group management evaluated IFRS 5 criteria for assets held for sale and in 30 September 2023 and there were no entities which met the criteria to be classified as held for sale and represented in Consolidated Statement of financial position.
As of 31 December 2022, the criteria to be classified as held for sale and presented as such in Consolidated Statement of financial position, was met by Deleterma sp. z o.o. and UAB Baltijos būsto priežiūra along with the subsidiaries of both entities: PROGRESLINE Sp.z o.o., ZZN Inwestycje Sp.z o.o., Tumieszkamy Sp.z o.o., Wolska Aparthotel Sp.z o.o., Parama Group Sp.z o.o., Atrium 21 Sp.z o.o., Skydas - Przeglądy Budowlane Sp.z o.o., Parama Red Sp.z o.o., Parama White Sp.z o.o., Concierge - Zarządzanie Nieruchomościami Sp.z o.o., Parama Blue Sp.z o.o., Parama Yellow Sp.z o.o., EnergiaOK sp. z o.o., Grupa Techniczna 24 Sp. z o.o, UAB Neries būstas, Zespół Zarządców Nieruchomości sp. z o.o. , Famix sp. z.o.o., TED Sp. z o.o., Dom - Best Sp. z o.o., Certus - Serwis Sp. z o.o, SANTER Zarządzanie Nieruchomościami. Deleterma sp. z o.o. and UAB Baltijos būsto priežiūra together with subsidiaries represent the business segment in Poland.
Group of companies that develops business related to the PortalPRO platform in various European countries were also classified as assets held for sale as of 31 December 2022. These group of companies includes SIA PortalPRO, PortalPRO S.L., PortalPRO Sp.z o.o, PortalPRO LDA, PortalPRO s.r.o., UAB PortalPRO, UAB Medžiagų tiekimo centras, UAB Getfiks.
In 2022, immediately after the classification of the above mentioned subsidiaries as assets held for sale, the Group management performed the re-measurement of the carrying amount of the assets in the disposal group to their fair value less costs to sell which is estimated to be EUR 2,018 thousand. Therefore EUR 5,374 thousand write-off was recognised on 31 December 2022 to reduce the carrying amount of the assets in the disposal group to their fair value less costs. This was recognised in discontinued operations in the consolidated statement of comprehensive income. No additional write-off was recognized in nine months of 2023.
7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (cont'd)
The major classes of assets, equity and liabilities attributable to assets held for sale as of 30 September 2023 and 31 December 2022 are the following:
| As of 30 | As of 31 | |
|---|---|---|
| September 2023 | December 2022 | |
| NON-CURRENT ASSETS | ||
| Goodwill | - | 207 |
| Other intangible assets | - | 1,872 |
| Property, plant and equipment | - | 2,445 |
| Right of use assets | - | 578 |
| Non-current receivables | - | 94 |
| Deferred income tax asset | - | 688 |
| TOTAL NON-CURRENT ASSETS | - | 5,884 |
| CURRENT ASSETS | ||
| Inventories | - | 1,150 |
| Prepayments | - | 380 |
| Trade receivables | - | 1,701 |
| Other receivables and current assets | - | 2,059 |
| Cash and cash equivalents | - | 232 |
| TOTAL CURRENT ASSETS | - | 5,522 |
| Fair value less costs to sell measurement | - | (5,374) |
| Total assets | - | 6,032 |
| EQUITY | ||
| Equity | - | 2,110 |
| Reserves of a disposal group classified as held for sale | - | (92) |
| TOTAL EQUITY | - | 2,018 |
| NON-CURRENT LIABILITIES | ||
| Financial lease obligations | - | 381 |
| Non-current payables | - | 55 |
| TOTAL NON-CURRENT LIABILITIES | - | 436 |
| CURRENT LIABILITIES | ||
| Current portion of financial lease obligations | - | 209 |
| Trade payables | - | 1,508 |
| Contract liabilities | - | 138 |
| Other current liabilities | - | 1,723 |
| TOTAL CURRENT LIABILITIES | - | 3,578 |
| Total liabilities | - | 4,014 |
| Total equity and liabilities | - | 6,032 |
7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (cont'd)
On May 2022, the Group sold 100% stake in UAB Baltijos turto valdymas along with the subsidiaries, which was a 100% shareholder of companies based in St. Petersburg, Russian Federation.
On September 2022 the Company has signed the share purchase - sale agreement for the sale of UAB InHouse Digital and all of its subsidiaries, which were acquired in Portugal, the Czech Republic, Romania and Hungary from the end of 2021 until the transaction.
On May 2023 the Company signed the share purchase-sale agreement for the sale of UAB Baltijos būsto priežiūra and Deleterma Sp. z o.o. and all of these entities subsidiaries operating in Poland.
After evaluation of IFRS 5 Discontinued operations criteria in 2023 Q3 entities related to business segment in Poland (Deleterma Sp. z o.o., PROGRESLINE Sp.z o.o., ZZN Inwestycje Sp.z o.o., Tumieszkamy Sp.z o.o., Wolska Aparthotel Sp.z o.o., Parama Group Sp.z o.o., Atrium 21 Sp.z o.o., Skydas - Przeglądy Budowlane Sp.z o.o., Parama Red Sp.z o.o., Parama White Sp.z o.o., Concierge - Zarządzanie Nieruchomościami Sp.z o.o., Parama Blue Sp.z o.o., Parama Yellow Sp.z o.o., UAB Baltijos būsto priežiūra, EnergiaOK sp. z o.o., Grupa Techniczna 24 Sp. z o.o, UAB Neries būstas, Zespół Zarządców Nieruchomości sp. z o.o., Famix sp. z.o.o., TED Sp. z o.o., Dom - Best Sp. z o.o., SANTER Zarządzanie Nieruchomościami, Certus - Serwis Sp. z o.o) were classified as discontinued operations and presented as such in Consolidated Statement of Comprehensive Income. In addition to entities mentioned above, in 2022 Q2 these entities were also classified as discontinued operations: UAB Baltijos turto valdymas, ООО МН Групп, OOO Чистый дом, OOO Spec RNU, OOO ПорталПРО, OOO Подъемные механизмы, OAO City Service, ZAO City Service, ООО Жилкомсервис № 3 Фрунзенского района, UAB InHouse Digital, IMPROXY - TECHNOLOGIAS DE INFORMACAO LDA, INTEGRI, s.r.o., Homefile S.R.L., Homefile Suport Solutions S.R.L., InHouse Finance Kft., Starlit s.r.o. and Swan Liberec s.r.o.
The result of discontinued operations is as following:
| 2023 Q3 | 2022 Q3 | |
|---|---|---|
| Revenue from contracts with customers | 7,806 | 26,923 |
| Cost of sales | (7,193) | (20,970) |
| Gross profit (loss) | 613 | 5,953 |
| General and administrative expenses | 92 | (6,366) |
| Credit loss expenses on financial assets | 62 | (245) |
| Other operating activity, net | (786) | (1,561) |
| Gain (loss) from operations | (19) | (2,219) |
| Interest and other finance income | 28 | 101 |
| Interest and other finance expenses | (39) | (1,034) |
| Gain (loss) before tax | (30) | (3,152) |
| Income tax | (30) | (11) |
| Net profit (loss) | (60) | (3,163) |
All income tax expenses presented in the disclosure are attributable to discontinued operations. Gain (loss) on sale of discontinued operation is non-taxable item.
The net cash flows incurred from discontinued operations are as follows:
| 2023 Q3 | 2022 Q3 | |
|---|---|---|
| Net cash flows (to) from operating activities | 1,393 | 6,340 |
| Net cash flows (to) from investing activities | (483) | (2,351) |
| Net cash flows from (to) from financing activities | (4) | 959 |
| Net increase (decrease) in cash flows | 906 | 4,948 |
8. RIGHT OF USE ASSETS AND LEASE
Effect to the consolidated statement of financial position as at 30 September 2023 and 2022:
| Buildings | Vehicles | Total | |
|---|---|---|---|
| ASSETS | |||
| Cost | |||
| Balance as of 1 January 2022 | 7,185 | 3,942 | 11,127 |
| Additions | 1,357 | - | 1,357 |
| Disposals | (1,464) | (1,461) | (2,925) |
| Exchange differences | 307 | - | 307 |
| Disposals related to discontinued operations | (2,485) | - | (2,485) |
| Balance as of 31 December 2022 | 4,900 | 2,481 | 7,381 |
| Additions | 706 | - | 706 |
| Disposals and retirements | (3,364) | (24) | (3,388) |
| Balance as of 30 September 2023 | 2,242 | 2,457 | 4,699 |
| Accumulated depreciation | |||
| Balance as of 1 January 2022 | 2,433 | 2,869 | 5,302 |
| Charge for the year | 1,083 | 421 | 1,504 |
| Disposals and retirements | (1,307) | (1,351) | (2,658) |
| Exchange differences | 57 | - | 57 |
| Disposals related to discontinued operations | (726) | - | (726) |
| Balance as of 31 December 2022 | 1,540 | 1,939 | 3,479 |
| Charge for the year | 586 | 281 | 867 |
| Disposals and retirements | (1,634) | (24) | (1,658) |
| 492 | 2,196 | 2,688 | |
| Balance as of 30 September 2023 | |||
| Right of use assets as of 30 September 2023 | 1,750 | 261 | 2,011 |
Set out below are IFRS 16 impact to profit (loss) statement:
| 2023 Q3 | 2022 Q3 | |
|---|---|---|
| Depreciation expense of right-of-use assets | 867 | 1,424 |
| Interest expense on lease liabilities | 860 | 1,188 |
| Expense relating to leases of low-value assets (included in | 241 | 259 |
| administrative expenses) | ||
| Profit (loss) from operations | 1,968 | 2,871 |
Group has no variable lease payments.
The Group had total cash outflows for leases of EUR 3,201 thousand as at 30 September 2023 (1,431 thousand as at 30 September 2022). The Group had EUR 706 thousand non-cash additions to right-of-use assets and lease liabilities as at 30 September 2023 (EUR 273 thousand as at 30 September 2022).
9. TRADE RECEIVABLES
TRADE RECEIVABLES OF THE GROUP AS OF 30 SEPTEMBER 2023 AND 31 DECEMBER 2022 WERE AS FOLLOWS:
| Balance as of | Balance as of | ||
|---|---|---|---|
| 30 September 2023 | 31 December 2022 | ||
| Trade receivables, gross | 33,074 | 27,814 | |
| Less: allowance for doubtful trade receivables | (8,705) | (7,331) | |
| Trade receivables, net | 24,369 | 20,483 |
Trade receivables and other receivables generally have 30 - 90 days payment terms.
Non-current receivables mainly comprise of long-term part of receivables for residential buildings' repair works performed.
10. BORROWINGS
BORROWINGS OF THE GROUP AND THE COMPANY AS OF 30 SEPTEMBER 2023 AND 31 DECEMBER 2022 WERE AS FOLLOWS:
| Creditor | Currency | Balance as of 30 September 2023 |
Balance as of 31 December 2022 |
|---|---|---|---|
| SHORT-TERM LOANS | |||
| Bank loans | EUR | 4,782 | 1,829 |
| SHORT-TERM LOANS BALANCE | 4,782 | 1,829 | |
| LONG-TERM LOANS | |||
| Bank loans | EUR | 11,724 | 13,497 |
| Minus: long term loans of the current year | (2,583) | (3,038) | |
| LONG-TERM LOANS BALANCE | 9,141 | 10,459 |
For the loans and overdraft the Company and its subsidiaries have pledged to the bank bank accounts of the Company and its subsidiaries in Lithuania. Shares of UAB City Service are pledged to AB SEB bankas as well.
UAB City Service, UAB Mano Būstas Baltija, UAB Mano Būstas Neris, UAB Mano Būstas NPC, UAB Mano Būstas Sostinė, UAB Mano Būstas Vilnius, UAB Mano Būstas Aukštaitija, UAB Mano Būstas Dainava, UAB Mano Būstas Radviliškis, UAB Mano Būstas Šiauliai, UAB Mano Būstas Vakarai, UAB Mano Būstas Kaunas and UAB Mano Būstas Klaipėda jointly have pledged up to EUR 9.5 million claim rights to receivables under concluded agreements.
11. COST OF SALES
| 2023 Q3 | 2022 Q3 (Restated) | |
|---|---|---|
| Services of subcontractors and materials used | 28,974 | 22,303 |
| Wages and salaries and social security | 18,515 | 15,580 |
| Cost of goods sold | 641 | 1,186 |
| Depreciation | 9 | 8 |
| Other | 6,201 | 3,149 |
| Total cost of sales | 54,340 | 42,226 |
12. GENERAL AND ADMINISTRATIVE EXPENSES
| 2023 Q3 | 2022 Q3 (Restated) | |
|---|---|---|
| Wages and salaries and social security | 7,540 | 7,462 |
| Depreciation and amortisation | 2,056 | 2,131 |
| Consulting and similar expenses | 1,269 | 1,056 |
| Computer software maintenance | 417 | 332 |
| Advertising | 357 | 400 |
| Transportation and fuel expenses | 278 | 359 |
| Rent of permises and other assets | 241 | 259 |
| Commissions for collection of payments | 234 | 264 |
| Insurance | 214 | 172 |
| Taxes other than income tax | 200 | 75 |
| Representational costs | 180 | 162 |
| Communication expenses | 122 | 145 |
| Business trips and training | 113 | 77 |
| Bank payments | 82 | 74 |
| Utilities | 39 | 52 |
| Charity and support | 12 | 32 |
| Other | 1,092 | 1,254 |
| Total general and administrative expenses | 14,446 | 14,306 |
13. OTHER OPERATING INCOME (EXPENSES)
| 2023 Q3 | 2022 Q3 (Restated) | |
|---|---|---|
| Gain (loss) on disposal of property, plant and equipment | (218) | 220 |
| Other income (expenses), net | 245 | 264 |
| Total other operating activity | 27 | 484 |
14. INTEREST AND OTHER FINANCE INCOME AND (EXPENSES)
| 2023 Q3 | 2022 Q3 (Restated) | |
|---|---|---|
| Gain (loss) on sale of investments | 5,333 | 2,025 |
| Foreign currency exchange gain (loss) | 352 | - |
| Interest income | 122 | 84 |
| Other financial income | 128 | 1 |
| Total finance income | 5,935 | 2,110 |
| Gain (loss) on sale of investments | (3,150) | (1,911) |
| Interest (expenses) | (1,728) | (623) |
| Foreign currency exchange (loss) | - | (303) |
| Other financial (expense) | - | (2) |
| Total finance (expenses) | (4,878) | (2,839) |
| Financial activity, net | 1,057 | (729) |
15. DIVIDENDS PER SHARE
| 2023 Q3 | 2022 Q3 | |
|---|---|---|
| Number of shares (in thousand) | 31,610 | 31,610 |
| Approved dividends | - | - |
| Approved dividends per share | - | - |
16. RELATED PARTY TRANSACTIONS
The parties are considered related when one party has the possibility to control the other one or have significant influence over the other party in making financial and operating decisions. The related parties of the Group and the Company are considered the following:
- − UAB Unit Invest the ultimate parent of the Company;
- − Subsidiaries and associates of UAB Unit Invest (same ultimate controlling shareholder);
- − Associates of City Service SE subsidiaries (for the list of the associates, see also Note 1.4);
- − A. Gudelis, V. Turonis, D. Šimaitis (Company's management board);
Transactions with related parties include sales and purchases of goods and services in the ordinary course of business and acquisitions and disposals of property, plant and equipment.
UAB City Service, SIA City Service and Deleterma sp. z o.o. have provided surety for City Service SE to AB SEB bankas under credit agreement. Companies are liable to the extent of all its assets to the Bank with respect to the same amount as the City Service SE. Shares of UAB City Service are pledged to AB SEB bankas as well. Also UAB City Service, UAB Mano Būstas Baltija, UAB Mano Būstas Neris, UAB Mano Būstas NPC, UAB Mano Būstas Sostinė, UAB Mano Būstas Vilnius, UAB Mano Būstas Radviliškis, UAB Mano Būstas Aukštatija, UAB Mano Būstas Dainava, UAB Mano Būstas Kaunas, UAB UAB Mano Būstas Šiauliai, UAB Mano Būstas Vakarai and UAB Mano Būstas Klaipėda have pledged to AB SEB bankas current and future claim rights to receivables arising from all agreements concluded by the companies with other natural and legal persons jointly up to EUR 9.5 million (with all existing and future amendments and additions thereto).
Payables and receivables between related parties are non-interest bearing. Receivables and payables payment terms between the related parties are up to 15-30 days, except for the dividends and loans, which are repaid in accordance to the legal and contractual requirements, respectively.
| 2023 Q3 | Purchases | Sales | Receivables and prepayments |
Loans granted |
Borrowings | Payables and advances received |
|---|---|---|---|---|---|---|
| UAB Veikmės statyba | - | 47 | 45 | - | - | - |
| UAB Verslo finansavimo sprendimai | 3 | 393 | 260 | - | - | 4,211 |
| UAB Axioma Servisas | 193 | 32 | 12 | - | - | 9 |
| UAB InHouse Digital | - | 89 | - | - | - | 29 |
| UAB InHouse Finance | - | - | - | - | 90 | - |
| UAB Medžiagų tiekimo centras | - | - | 36 | 78 | - | 294 |
| UAB ICOR | 335 | 305 | 135 | - | - | 31 |
| Associates and other related | 1,929 | 1,718 | 827 | 552 | - | |
| parties | 12 | |||||
| Total | 2,460 | 2,584 | 1,315 | 630 | 90 | 4,586 |
17. SUBSEQUENT EVENTS
On 23 October 2023 reduced share capital of UAB Būsto aplinka was registered. The share capital of UAB Būsto aplinka after the reduction is EUR 358 125. Share capital of the company is divided into 1 234 914 ordinary shares, the nominal value of which remained at EUR 0,29.
On 25 October 2023 reduced share capital of UAB Mano Būstas Kaunas was registered. The share capital of UAB Mano Būstas Kaunas after the reduction is EUR 323 889. Share capital of the company is divided into 11 184 ordinary shares, the nominal value of which remained at EUR 28,96.
On 25 October 2023 reduced share capital of UAB Mano Būstas Šiauliai was registered. The share capital of UAB Mano Būstas Šiauliai after the reduction is EUR 939 463. Share capital of the company is divided into 3 239 528 ordinary shares, the nominal value of which remained at EUR 0,29.
On 26 October 2023 reduced share capital of UAB City Service Cleaning was registered. The share capital of UAB City Service Cleaning after the reduction is EUR 203 891. Share capital of the company is divided into 703 072 ordinary shares, the nominal value of which remained at EUR 0,29.
On 26 October 2023 reduced share capital of UAB Mano Būstas Sostinė was registered. The share capital of UAB Mano Būstas Sostinė after the reduction is EUR 74 369. Share capital of the company is divided into 2 568 ordinary shares, the nominal value of which remained at EUR 28,96.
On 6 November 2023 reduced share capital of UAB Mano Būstas Baltija was registered. The share capital of UAB Mano Būstas Baltija after the reduction is EUR 99 548. Share capital of the company is divided into 103 293 ordinary shares, the nominal value of which remained at EUR 2,90.
On November 30, 2023, City Service SE (hereinafter - the Company) signed a financing agreement with "Swedbank", AB (enterprise code 112029651), which allows the Company to borrow up to EUR 18,9 million. The loan shall be used to finance working capital and to refinance existing loans.
City Service SE
Narva mnt. 5, 10117, Tallinn, the Republic of Estonia; address in Lithuania: Ozo str. 12A, LT – 08200 Vilnius, Phone (+370 5) 2394900, fax (+370 5) 2394848, E-mail. [email protected] www.cityservice.eu
35
Consolidated interim financial statements for the nine months period ended
30 September, 2023 (unaudited), thousand euros