Annual report 2023

About us

Baltic Sea Properties is a Norwegian public listed, open-ended and fully integrated investment company. The company is among the Baltics' leading real estate investors and developers – owning a diversified cash flow generating portfolio of modern real estate in the logistics, industrial and commercial segments.

Our strategy is to develop long-term relationships with strong clients and to hold high-quality assets in attractive locations. We grow our portfolio by own developments and acquisitions with the objective to maximise shareholder values and the company's dividend capacity.

The property management is conducted through fully-owned subsidiaries by a professional management team with deep knowledge of the Baltic real estate market

About us	2
Our Vision, Mission & Values	4
Highlights	6
Financial Overview — Year-end 2023 Key figures group Financing Financial Expenses Overview Loan-to-Value (LTV) Income From Property Management (IFPM) Net Asset Value (NAV)	8 9 10 11 12 14 15
Market update from Newsec Baltics	16
Annual Statements — 2023 Board of Directors & CEO's annual report & declaration Consolidated statement of profit or loss Consolidated statement of comprehensive income Consolidated statement of financial position Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the consolidated financial statements Annual financial statement for the parent company Independent auditor's report	18 20 30 31 32 34 35 36 58 70
Property portfolio Client mix Investment strategy Our development approach Sustainability in development BREEAM certification status Investment projects Development projects	74 75 76 77 78 79 80 89
Contact	92
Euronext Growth Oslo	94
Appendix 1 — Reconciliation of APM's	95

Disclaimer:

This report has been prepared by Baltic Sea Properties AS in good faith and to our best ability with the purpose to give the company's shareholders updated information about the company's operations and status. This document must not be understood as an offer or encouragement to invest in the company. Baltic Sea Properties AS further makes reservations that errors may have occurred in its calculations of key figures or in the development of the report which may contribute to an inaccurate impression of the company's status and/or operations. The report also includes descriptions and comments which are based on subjective assumptions and considerations, and thus must not be understood as a guarantee of future events or future profits.

Our Vision

Our vision is to be the preferred real estate partner and leading investment company in the region.

We will achieve this by staying true to our mission and values.

Our Mission

Our mission is to foster a great team, to provide high quality and sustainable solutions for our partners, thus creating superior long-term value and returns for our shareholders.

Our Values

• Commitment to our people and their professional development.
Focusing on innovation and value creation.
• Respect for our social and physical environment.
• Accountability and fairness with our stakeholders.
• Reliability and integrity in all we do

Highlights

Year-end report 2023

As we wrap up 2023, we're pleased to report consistent progress despite the global challenges, showcasing our investment portfolio resilience. At the end of fourth quarter, our rental income (EUR) increased by 16% compared to last year, demonstrating the effectiveness of our business strategies and adaptability. This increase highlights the importance of expanding our revenue streams for sustained growth going forward.

Resilience and Strategic Growth

In the face of rising financial costs and higher interest rates throughout 2023, our strategic focus remained the same. Our initiatives in launching new developments, focus on property management and integrating investment assets have been important, ensuring the continuation of our cash flow development.

Key highlights from the year include:

The completion of solar panel installations at Klaipėda Business Park, affirming our commitment to sustainability and offering competitive electricity rates to our clients.
Finalising the Oribalt expansion project, emphasising on our solid client relationship in facilitating business expansions.
Progressing our BREEAM In-Use certification strategy on our portfolio, highlighting our dedication to environmental sustainability.
Implementing International Financial Reporting Standards (IFRS) to bolster transparency for our stakeholders.
Distributing dividends of NOK 1.60 per share in June, aligned with our strategic financial goals.
Building up our development project pipeline, particularly with preliminary agreements for the Liepų Parkas project in Klaipėda.
Initiating a 17,255 sqm expansion for Rhenus Logistics, entering a new 15-year lease. Upon completing the expansion, the total leasable area will be approximately 35,600 sqm, making it one of the largest and modern built to suit logistics terminals in the Baltics.
We have strategically acquired an adjacent land plot next to our business park in Klaipeda Free Economic Zone. This acquisition will enable us to broaden our real estate offerings for both current and new clients
Throughout 2023 and into the new year, our team has been actively working on our project pipeline. We have several interesting projects in our pipeline, making it particularly rewarding to announce our latest project in collaboration with ESO, a subsidiary of the publicly listed energy company Ignitis. This project involves the development of an office and partial warehouse complex, covering 4,340 square meters, within our 'Liepų Parkas' development. 'Liepų Parkas' is a 16,000 square meter business and retail park located in Klaipėda, Lithuania's third-largest city.

Outlook and Core Principles

Our fundamental approach to real estate management and development, supported by a strong capital structure, positions us to navigate market cycles effectively. We remain a key player in our sector, and are optimistic about our future opportunities in development, new acquisitions and asset management of our existing portfolio.

We encourage our shareholders and interested parties to stay informed of any updates by visiting our website at balticsea.no. Additionally, for real-time notifications and to subscribe to stock market announcements, please visit live.euronext.com.

We value your engagement and participation in our corporate events and look forward to sharing new milestones with you.

BSP Park - Vilnius A4 (top) | Photo of current terminal. BSP Park - Vilnius A4 (bottom) | Illustration of terminal after planned expansion.

Financial overview

Year-end 2023

Key figures group
Financing
Financial Expenses Overview
Loan-to-Value (LTV)
Income From Property Management (IFPM)
Net Asset Value (NAV)

Key figures group

Year-end report 2023

Per share	31/12/2023	31/12/2022	31/12/2021
Net Asset Value (NAV) in NOK	68.95	62.11	53.93
NAV in EUR	6.13	5.91	5.40
YTD Return NAV incl. dividend (EUR)	6.39%	12.11 %	20.69 %
YTD Return NAV incl. dividend (NOK)	13.56%	17.95 %	15.19 %
Dividend distributed (NOK)	1.60	1.50	1.50
Dividend distributed (EUR)	0.14	0.15	0.15
Last transaction price per date (NOK)	47.40	50.00	50.50
Number of shares issued	6 688 232	6 688 232	6 688 232
EURNOK rate, balance sheet date 1	11.24	10.51	9.99
EURNOK rate, YTD average 2	11.42	10.10	10.16

1) EURNOK rate per balance sheet date is used when converting balance sheet figures.

2) EURNOK YTD average rate is used when converting P&L figures.

Group key figures	31/12/2023	31/12/2022	31/12/2021
Fair value of portfolio (MNOK)	1 121	1 016	754
Fair value of portfolio (MEUR)	99.8	96.7	75.4
Value of equity based on NAV - BSP method (MNOK)	460	414	360
Value of equity based on NAV - BSP method (MEUR)	40.9	39.5	36.1
Annualised contracted rent (MNOK)	93.6	88.4	66.5
Annualised contracted rent (MEUR)	8.3	8.0	6.5
Net income from property management (IFPM) (MNOK)	33.3	29.7	26.3
Net income from property management (IFPM) (MEUR)	2.9	3.0	2.6
NOI yield (investment projects)	8.06%	7.88 %	7.60 %
Dividend yield (NAV)	2.44%	2.50%	2.80%
Occupancy rate	100%	99 %	98 %
WAULT (years)	9.1 yrs	9.1 yrs	10.1 yrs
IBD (incl. mezzanine facility) (NOK)	656	604	406
IBD (incl. mezzanine facility) (EUR)	58.3	57.4	40.7
LTV investment portfolio (incl. mezzanine facility)	58.43%	59.42 %	53.9%
Net LTV (inc. Cash)	56.37%	56.95 %	50.3 %
Interest cost coverge ratio (ICR) - Group	2.09	2.39	2.45
Interest cost coverge ratio (ICR) - SPV finance	3.10	4.22	4.50

Terms/abbreviations used in this report:

• NOI = Net operating income from property portfolio (incl.internal property management expenses)

• NOI yield = NOI / Market value of the investment portfolio excluding development land value (land bank).

• Net rent = Income from rental activity from property portfolio minus (-) all unrecovered property expenses (not including internal property management fees).

• IFPM (Income From Property Management) = Profit/loss before tax excluding depreciations, profit/loss/value movements on properties, realised investments, currency and other financial instruments.

IBD = Interest-Bearing Debt all outstanding debt to credit institutions and/or other credit facilities
LTV = Loan to Value ratio
EBITDA = Earnings before interest, tax, depreciation and amortisation
WAULT = Weighted average unexpired lease term
Interest Coverage Ratio (ICR) Group Group EBITDA/all interest paid

• Interest Coverage Ratio (ICR) SPV finance - Consolidated EBITDA of real estate subsidiaries/interest paid from real estate finance

• ROE - Return on Equity

^• Fair value of portfolio = valuation of the real estate assets

Financing

Year-end report 2023

		Debt maturity			Interest Swap maturity
Year	EUR	Share %	Interest margin	EUR	Share %	Swap fixed rate
0-1 year
1-3 years				2 502 386	100.00 %	0.72 %
4-5 years	53 017 219	90.94 %	2.19 %
Total funding real estate portfolio1	53 017 219	90.94 %	2.19 %	2 502 386	4.72 %	0.72 %
Mezzanine2	4 448 201	7.63 %	9.30 %
Seller credit3	836 100	1.43 %	8.00 %
Sum loan	58 301 520	100 %	2.81 %	2 502 386	4.29 %	0.72 %

1) Weighted average bank interest margin is 2.19 % + 3-months EURIBOR ( per 31st of December 2023). The interest swap is against 3-months EURIBOR.

2) Interest rate for the mezzanine loan is including margin. In October, the company decided to draw up mNOK 30 on same conditions. The loan facility expires in September 2024.

3) Interest rate for the seller credit is including margin. Interest cost all-inclusive. Seller credit is related to the transaction of Grandus SC and expires at the end of 2024.

Loan financing	31/12/2023	31/12/2022
Interest-bearing debt incl. Mezzanine loan and seller credit (MEUR)	58.30	57.4
LTV incl. mezzanine loan and seller credit	58.43%	59.38%
Interest-bearing debt excl.mezzanine loan and seller credit (MEUR)	53.02	52.1
LTV excl. mezzanine loan and seller credit	53.13%	53.92%
12-month running interest margin all loans (margin)*	2.83%	2.73%
Interest rate hedging ratio	4.29%	39.74%
Interest rate coverage (ICR) - group	2.09	2.81
Interest rate coverage (ICR) - SPV finance	2.68	4.13
Time until maturity interest-bearing debt (weighted)	3.41 yrs	4.4 yrs
Time until maturity interest hedging contracts (weighted)	1.34 yrs	1.3 yrs

* Excl. 3-months EURIBOR & swap agreements. ** LTV does not include cash position.

(MEUR)	31/12/2023	31/12/2022
Interest-bearing debt, total	58.30	57.40
Interest-bearing debt, bank loan	53.02	52.10
Interest-bearing debt, mezzanine	4.45	2.07
Interest-bearing debt, seller credit	0.84	3.21
Cash	3.64	4.19
Net LTV, total	56.37%	56.91%

* LTV does not include cash position, only interest bearing debt/valuation of RE assets

Financial Expenses Overview

Specification

BSP Group	Per 31.12.2023		Per 31.12.2022
	NOK	EUR	NOK	EUR
EBITDA	66 917 866	5 859 400	47 814 775	4 733 160
Interest payable	31 990 528	2 801 125	17 017 333	1 684 537

ICR - group	2.09	2.09	2.81	2.81

Net realised interest cost & finance expenses
Interest on real estate portfolio	32 951 035	2 885 380	11 189 704	1 107 663
SWAP costs	41 797	3 660	1 602 099	158 591
SWAP income	-5 939 299	-520 051	-294 102	-29 113
Interest mezzanine incl. contract fee	2 513 583	220 104	2 519 813	249 435
Interest seller's credit	2 732 817	239 301	1 999 819	197 961
Interest income	-311 398	-27 268	-	-
Sum interest expenses	31 990 528	2 801 125	17 017 333	1 684 537

Consolidated SPV-financed entities	Per 31.12.2023		Per 31.12.2022
	NOK	EUR	NOK	EUR
EBITDA (incl. internal management cost)	72 474 739	6 345 966	51 651 710	5 112 976
Interest payable	27 055 266	2 368 988	12 497 701	1 237 141

ICR - SPV finance	2.68	2.68	4.13	4.13

Net realised interest cost & finance expenses
Interest on real estate portfolio	32 952 766	2 885 380	11 189 704	1 107 663
SWAP costs	41 799	3 660	1 602 099	158 591
SWAP income	(5 939 299)	(520 051)	(294 102)	(29 113)
Sum interest expenses	27 055 266	2 368 988	12 497 701	1 237 141

Terms/abbreviations used above:

EBITDA = Earnings Before Interest, Taxes, Depreciations and Amortisations ICR = Interest Coverage Ratio

Loan-to-Value (LTV)

Specification

Loan-to-Value ratio	Per 31.12.2023		Per 31.12.2022
	NOK	EUR	NOK	EUR
Net nominal interest-bearing debt excl. mezzanine loan	595 940 050	53 017 219	548 432 958	52 163 153
Mezzanine	50 000 000	4 448 201	21 715 329	2 065 412
Seller's credit	9 398 185	836 100	33 760 033	3 211 021
Net nominal interest-bearing debt incl. mezzanine loan	655 338 235	58 301 520	603 908 319	57 439 586

Valuation of real estate portfolio	1 121 658 258	99 787 221	1 016 368 594	96 669 957
Loan to value excl. cash	58.43%	58.43%	59.42%	59.42%
Cash	40 889 578	3 637 701	44 083 000	4 192 870
Loan to value incl. cash (Net LTV)	56.37%	56.37%	56.95%	56.95%

Net LTV per 31/12/2023 Net LTV per 31/12/2023

Concept visualisation | Liepų Street, Klaipėda Liepų Parkas (3.6 hectare) | Retail and business park

Income From Property Management

Specification

Income From Property Management	31/12/2023	31/12/2022	31/12/2021	31/12/2023	31/12/2022	31/12/2021
	EUR	EUR	EUR	NOK	NOK	NOK
	thousand	thousand	thousand	thousand	thousand	thousand

Rental income	7 994	6 882	6 278	91 286	69 521	63 803
Property expenses ex mng	-323	-298	-137	-3 683	-3 014	-1 393
Net rent	7 671	6 584	6 141	87 603	66 507	62 410

Other operating income	66	113	198	754	1 138	2 016
Administration cost	-1 356	-1 292	-1 206	-15 487	-13 056	-12 262
Other operating cost	-522	-671	-762	-5 956	-6 774	-7 746
Earnings before interest, taxes, depreciations and	5 859	4 733	4 370	66 918	47 815	44 418
amortisations (EBITDA)
Net realised interest cost & finance expenses	-2 940	-1 775	-1 781	-33 582	-17 931	-18 103

Net income from property management (IFPM)	2 919	2 958	2 589	33 336	29 884	26 315

Changes in value of investment properties	347	1 708	5 541	3 961	17 252	56 314
Changes in value of financial instruments	-565	1 019	377	-6 449	10 295	3 832
Realised changes in value of investment properties	-	-198	649	-	-2 000	6 596
Depreciation, amortisation and impairment	-91	-22	-30	-1 035	-219	-305
Net currency exchange differences	5	97	81	58	981	824
Profit before tax	2 615	5 563	9 207	29 869	56 193	93 577

Current tax	176	-117	-61	2 013	-1 181	-616
Deferred tax	-255	-795	-1 118	-2 913	-8 032	-11 366
Profit from continued operations	2 537	4 651	8 028	28 969	46 980	81 595

Net Asset Value (NAV)	31/12/2023	31/12/2022	31/12/2021	31/12/2023	31/12/2022	31/12/2021
Currency	EUR	EUR	EUR	NOK	NOK	NOK
Equity as recognised in balance sheet	40 041	38 586	34 787	450 061	405 682	347 492
Pr share	6.00	5.78	5.2	67.40	60.75	52.07
Net Asset Value - BSP method
Equity as recognised in balance sheet	40 041	38 586	34 787	450 061	405 690	347 492
Deferred tax according to balance sheet (-)	4 317	4 068	3390	48 518	42 773	33 866
Equity excluding deferred tax	44 358	42 654	38 178	498 579	448 463	381 358
Deferred tax according to BSP orignal NAV definition (-)	3 390	3 203	2 147	38 109	33 676	21 451
Net asset value - BSP Method	40 967	39 451	36 030	460 470	414 786	359 906
Pr share	6.13	5.91	5.40	68.95	62.11	53.93

Net Asset Value (NAV)

Net Asset Value (NAV) is a measure of the fair value of the company's net assets on an on-going long-term basis, calculated as the total value of the company's assets minus the total value of its liabilities, with certain adjustments.

Public and private real estate companies and real estate funds use slightly different adjustment principles when calculating their NAV. Below is therefore an explanation of how NAV is calculated in Baltic Sea Properties.

Assets valuation and adjustments for NAV:	• • •	Investment (income generating) property and development land is valued and included using the most recent market value based on independent valuations (using discounted cash flow method.) External financial investments are valued and included at their most recently published/ recorded NAV (alternatively most recent transaction price if NAV is not available.) Development property, unfinished construction and other assets are valued and included at book value (cost price less depreciation)

Liabilities adjustments for NAV:	• • •	Financial liabilities are valued and included at book value. Deferred tax liabilities are valued and included at 50 % of the deferred profit tax calculated on the difference between the current property market value and tax book value. (This adjustment principle is based on market practice and a deemed fair value basis) Interest rate swaps are valued and included at book value.

• Other liabilities are valued and included at book value.

Net Asset Value (NAV) per share development	31/12/2023	31/12/2022	31/12/2021
NAV (NOK) - BSP method (IFRS)	68.95	62.11	53.93
Dividend (NOK)	1.60	1.50	1.50
Accumulated dividends (NOK)	6.10	4.50	3.00
Return on equity inc. dividend (NOK)	13.56 %	17.95 %	15.19 %

NAV (EUR) - BSP method (IFRS)	6.13	5.91	5.40
Dividend (EUR)	0.15	0.15	0.15
Accumulated dividends (EUR)	0.60	0.44	0.30
Return on equity inc. dividend (EUR)	6.39 %	12.11 %	20.69 %

Applied EURNOK conversion rate	11.24	10.51	9.98

Market Update

Provided by Kristina Živatkauskaitė and Mindaugas Kulbokas at Newsec Baltics (26 March 2024)

2024 begins with a more positive outlook

Lithuania's open economy has demonstrated resilience in the face of challenges. GDP performed better than expected in 2023, contraction only a modest 0.3% in the year. While negative, that number has paved the way to positive expectations for 2024. Forecasts are for a rebound to 1.7% growth this year.

One beacon of strength is the labour market, as an increasing population has helped keep the unemployment rate quite stable at 6.8%. Inflation, while present, is under control, having gradually declined to under 9% on an average annual basis while the year-on-year rate fell below 2% by year-end. All eyes are on the prospect of an interest rate cut in the end of the first half of 2024.

More broadly, Lithuania appears well-positioned to start a recovery. Encouraging economic indicators and optimistic forecasts suggest the most challenging phase may now be behind us.

The economic and geopolitical challenges of the past two years had consequences for the market. There were substantial hurdles to investments in commercial real estate in the Baltic region. Towards the end of 2023, however, things turned around quite unexpectedly in Lithuania and total real estate investment for the year was almost the same as in 2022. Real estate transactions in the Baltics totalled EUR 785 million. Lithuania contributed 55% of that figure, which is just over 80% of the long-term average for the region.

Local investors have been asserting dominance in the market over at least the last three years, and their influence is perceptibly still on the rise. Meanwhile, some long-standing Nordic investors have maintained their interest and involvement in the market as well.

We expect the market size to remain at current levels, with foreign investor interest likely to grow only in the long term. Thus, the activity of local investors is crucial and may significantly impact the annual results of real estate investments. The transaction volume indicates a narrowed gap between current interest rates and the targeted returns on commercial projects, highlighting a potential alignment in the market.

In the Baltic region, especially Lithuania, the decline in market activity has been more moderate than in the broader European context. Such resilience reflects opportunities, capacities, and the keen interest of local investors, who continue to underpin overall market vitality. While there's a shortage of assets that are easy to sell, there are still appealing opportunities that catch the eye of the local investors. Considering how well 2023 ended, we

feel quite positive about what's coming in 2024.

The office segment and its lead in the investment market

Each Baltic country had its real estate investment segment leader in 2023. The highlight of the year was Lords LB Asset Management's agreement at year end to acquire the Ozas Campus from Technopolis. That major transaction underscores the continued prominence of the office segment. It includes 106,000 sqm of gross leasable area spread across six buildings, or almost 10% of the modern office stock on the Vilnius market. It sets a precedent for strategic investments, shaping the future trajectory of the city's office sector.

Resilience on the office market

The Vilnius office market has proven resilient, maintaining a relatively stable vacancy rate thanks to take-up aligning with new supply. Looking ahead to 2024, though, we anticipate a reduction in new supply. Given the economic uncertainties, developers are adapting their strategies.

Tenant profiles are unique in the Baltic region, particularly in Lithuania. Global Business Services (GBS) companies with large numbers of employees, the thriving startup scene, and the robust Fintech ecosystem collectively account for a big portion of the office market. That diverse mix together with IT companies and varied other local tenants ensures steady demand and is helping keep office occupancy high. New demand from international companies, which is eagerly anticipated, should further strengthen the market in Vilnius. As the office market navigates anticipated changes, the overarching theme is adaptability.

Growth in sustainability and proactive strategies for the industrial segment

The industrial segment is seeing heightened activity, particularly in warehouse development, with a focus on built-to-suit projects for large end users. Notably, there is a growing trend towards attractive portfolio creation, particularly in Lithuania. For warehouse properties, sustainability has become a highly relevant topic. The logistics and industrial segment is at a juncture, having drawn significant attention after recent major projects in Lithuania. Grocery and DIY retailers are primarily taking a built-to-own or built-to-suit approach. As those new projects near completion, vacancies and availability are shifting towards older stock, and that is making most speculative market developers put further new developments on hold. Still, a few proactive logistics and warehouse developers are taking the risk and planning new deliveries.

Annual Statements 2023

1. Board of Directors & CEO's annual report and declaration
1. Consolidated statement of profit or loss & comprehensive income
1. Consolidated statement of financial position
1. Consolidated statement of changes in equity
1. Consolidated statement of cash flows

6. Notes to the consolidated financial statements

Note 1	Accounting Principles
Note 2	Critical accounting estimates and subjective judgement
Note 3	Operating income from contract customers
Note 4	Investment property
Note 5	Employee benefit expenses
Note 6	Other operating assets
Note 7	Operating costs
Note 8	Other administrative costs
Note 9	Finance income and expenses
Note 10	Interest rate swap agreements
Note 11	Tax
Note 12	Earnings per share
Note 13	Lease agreements where the group is the lessee
Note 14	Classification and measurement of financial assets and liabilities
Note 15	Long-term receivables
Note 16	Other receivables and other current assets
Note 17	Cash and bank deposits
Note 18	Share capital and shareholder information
Note 19	Interest bearing liabilities
Note 20	Debt to credit institutions
Note 21	Other short-term debt
Note 22	Financial risk management
Note 23	Subsidiaries
Note 24	Segment information and rental income
Note 25	Reconciliation of liabilities from financing activitites
Note 26	Uncertain liabilities
Note 27	Transactions with related parties
Note 28	Russia's invasion of Ukraine
Note 29	Events after reporting date

7. Annual financial statement 2023 for the parent company

8. Independent auditor's report

The Board of Directors & CEO's

Annual report 2023

Year summary

We are pleased to report sustained progress throughout 2023 and into the early part of 2024, notwithstanding the global challenges, which showcases the resilience of our investment portfolio. By the close of 2023, our rental income, denominated in EUR, saw an increase of 16% over the previous year. This achievement stands as a testament to our business strategies and our ability to adapt to changing conditions. Despite escalating financial costs and higher interest rates, our strategic focus has remained steadfast. Our commitment to new developments, thorough asset management and adapting to market changes will all play an important part in continuing our growth strategy.

It's worth noting that, in 2023, we successfully completed the expansion project for Oribalt, alongside securing a substantial agreement with Rhenus Logistics for a 17,255 m2 expansion of their terminal, thereby deepening our long-term partnership. Moreover, in March 2024, we entered into a new development and lease agreement with ESO (a subsidiary of the publicly listed energy company, Ignitis Group) for an office and part warehouse complex. This project marks the first stage of our "Liepų Parkas" development—a 16,000 m2 business and retail park in Klaipėda.

Throughout the year, we have also made significant strides in our ESG initiatives, including continuing with our certification strategy on our real estate portfolio according to the BREEAM certification system, completing the installation of solar panels at Klaipėda Business Park, and commencing reporting in line with the Norwegian Transparency Act ("Åpenhetsloven").

In conclusion, our performance in 2023 serves as robust evidence of our capability to manage risks while delivering value to our shareholders, steadfast in our commitment to our strategy and our focus on sustainable long-term return for our shareholders.

Nature of business and location

Baltic Sea Properties AS (BSP) is a Norwegian publicly listed real estate company and a leading investor, owner, and developer in the Baltics, owning a portfolio of logistics, industrial, and commercial assets. Our aim is to become the preferred real estate partner and a leading investment company in the region. The company (ticker: BALT) has been listed on Euronext Growth Oslo (formerly known as "Merkur Market") since November 2017.

The management and development of the group's properties are undertaken by our local team, which possesses extensive experience in the Baltic real estate market, through seventeen wholly owned subsidiaries, all registered in Lithuania. In addition to refining the current portfolio, the company is continuously working to enhance the portfolio with new cash flow and development projects that will increase shareholder value and strengthen the company's capacity for dividend distribution.

The group's central head office is located at Apotekergata 10 in Oslo, Norway.

The Group's Annual Financial Statements

Accounting Standard

The Group's consolidated annual financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS. Please refer to the financial statements' notes 1 and 2 for more detailed descriptions of the accounting principles applied under IFRS).

Profit & Loss

The Group's total operating income (excluding adjustments in asset valuations) saw an increase of NOK 21.3 million in 2023, reaching NOK 92.0 million, up from NOK 70.7 million in 2022. Furthermore, the fair value adjustment of investment properties for 2023 amounted to MNOK 4.0.

Of total operating income, NOK 91.3 million, previously NOK 69.5 million, was attributable to rental income. This uplift was partly due to the shopping centre income (Grandus was acquired in the second quarter of 2022), which contributed its first full year of rental income to the group in 2023. More significantly, the increase stemmed from new revenue generated by expansions and new developments completed in late 2022 and early 2023. Adjustments for CPI and currency fluctuations also influenced this outcome. Total operating income increased approximately 16% measured in EUR.

The Group's operating expenses increased by NOK 1.1 million in 2023 to NOK 26.2 million (NOK 25.1 million). Nevertheless, measured in EUR, the operating expenses decreased by EUR 190 thousand. The EUR decrease is almost entirely explained by 2022's provision for expected loss of deposit related to an investment (NOK 2 million / EUR 198 thousand). (See notes 7 and 8 for further specification).

The Group's net financial items for the year were a net cost of NOK 40.0 million, reduced from NOK 6.7 million in 2022, mainly due to a significant increase in the group's interest expenses. (Note 9).

Financial Position (Balance Sheet)

The Group's total assets at the end of the year 2023 were NOK 1 202 million. Of this, NOK 1 150 million were investment properties (including NOK 28.9 million in right-of-use assets). (Note 4).

The Group's equity on the balance sheet date was NOK 450.1 million.

Interest-bearing liabilities were NOK 654.4 million. (Notes 19 and 20).

Real estate portfolio

The Group made no divestments in 2023. The expansion of the Oribalt terminal was completed in March 2023. In August 2023, we reached an agreement with Rhenus Logistics for a 17,255 m2 expansion project and in March 2024, we entered into a new development and lease agreement with ESO (a subsidiary of Ignitis Group) for an office and part warehouse complex.

For investment properties owned at the end of the year, the total valuation was NOK 1,121 million. Valuations as of 31.12.2023 have, as usual, been obtained from Newsec Baltics and Ober-Haus Real Estate Advisors. The market value of the group's real estate portfolio was NOK 105 million higher than per 31.12.2022, mainly driven by property management on improved lease agreements, CPI on rent for 2024 in addition to the future interest rate curve reduced significantly during Q4. Consequently, the increase was; NOK 44.3 million from investments in development projects and capital expenditure/maintenance of the existing portfolio, and NOK 74.1 million fair value and currency adjustments.

Financing

The group holds a robust financing platform, with Luminor and SEB serving as its primary financing partners at SPV level. Additionally, we strategically leverage mezzanine facilities to improve our capacity for undertaking new projects.

Such as for the Grandus shopping centre acquisition in May 2022, the company has utilised seller credit from Baltic Equity Group UAB and other sellers. As of the 1st of January 2023, the ingoing balance stood at EUR 3.2 million. By the 28th of November, we had successfully repaid EUR 2.37 million (along with EUR 230 thousand in accumulated interest), resulting in an outgoing balance of EUR 830 thousand as of the 31st of December 2023. Originally set with a 12-month repayment period, maturing on the 23rd of May 2023, the maturity of the seller credit was extended through the end of 2024.

In parallel with the repayment of the seller credit in November 2023, the mezzanine loan was increased from NOK 20 million to NOK 50 million, representing the outstanding balance as of 31st of December 2023. This mezzanine loan has maturity in September 2024, with provisions for extension rights, enabling us to prolong the term of the loan, if deemed necessary, albeit at a fixed fee resulting in a 1% increase in the interest rate on the loan.

The Parent Company's Annual Financial Statements

Accounting Standard

The annual financial statements have been prepared in accordance with the accounting laws and follow Norwegian accounting standards and recommendations for good accounting practice, in compliance with the ongoing obligations for companies listed on Euronext Growth Oslo. (Note 1).

Summary

In 2023, the parent company had operating revenues of NOK 5.0 million, consisting of management fees from its own subsidiaries. The parent company's operating expenses for the year were NOK 7.5 million, with the largest item being salary costs of NOK 4.6 million (including board fees, national insurance contributions, pension expenses, etc).

The parent company's net financial items for the year were positive at NOK 16.5, of which interest income from subsidiaries and currency gains on group loans contributed the most.

The book value of the parent company's assets was NOK 202.2 as of 31.12.23, of which loans to subsidiaries amounted to NOK 184.7 million. Assets also included investments in subsidiaries of NOK 15.1 million, trade receivables from subsidiaries of NOK 0.7 million, and bank deposits of NOK 1.0 million. The increase in asset values from the year prior is by and large due to the NOK's weakening against EUR during the year, which increased the NOK value of loans to subsidiaries, as well as accumulated interest on these loans.

The parent company's equity was increased by NOK 3.5 million in 2023, despite the distribution of dividends (NOK 10.7 million), due to a positive result of NOK 14.0 million after taxes.

On the liabilities side, the parent company increased its total liabilities by NOK 28.8 million, mainly due to a NOK 30 million increase of the mezzanine loan. (Note 8)

Continued Operations

The annual financial statements have been prepared on a going concern basis. The Board's assessment is based on budgets and earnings forecasts for 2024 as well as the Group's strategy. The Group has equity of NOK 450.1 million, profit for the year of NOK 29.0 million after tax, and net cash flow from operating activities of NOK 66.8 million.

The Board and management consider the assumptions for continued operations to be sound, despite the ongoing market turbulence in the global economy and its inflationary pressure, rising interest rates, and downward pressure on fixed asset pricing.

Research and Development

The Group was not involved in research or development activities (R&D) in 2023.

Events after the balance sheet date

On the 4th of March 2024 we published a stock market announcement informing that we had entered into a new development and lease agreement with ESO, a subsidiary of the public listed energy company Ignitis Group. The agreement is for an office and part warehouse complex, comprising 4,340 m2 , also marking the first stage of our "Liepų Parkas" development project — a 16,000 m2 business and retail park in Klaipėda.

The agreement with ESO includes a 10-year lease term based on triple net principles. The property will be certified under the BREEAM sustainability rating scheme and designed to incorporate renewable energy production. The total estimated development cost of the first building with land and associated infrastructure is approximately € 8.5 million (around NOK 97 million).

Please refer to the stock market announcement published on the 4th of March 2024 (NewsWeb message ID 612596) for further details.

Financial Risk Management

The Group is exposed to financial risk through variations in interest rates and exchange rates. The Company is also dependent on access to financing in the banking and capital markets. The risk of losses on receivables is also closely monitored because of the market turbulence and its effect on the Baltic states and the global economy.

Capital Management

Capital management focuses on the optimal balance between equity and debt in a company's capital structure. It aims to maximize shareholder value and ensure longterm financial stability by minimizing the cost of capital and maintaining an appropriate level of financial flexibility for its operations.

Currently the board has set a target on its investment and company strategy to not go over 60 % loan-to-value and maintain a minimum 12-month interest coverage liquidity buffer. At the date of this report, the loan to value ratio for the group's real estate portfolio is 53.13 % and including the group leverage positions 58.43% (excluding cash reserves and financial derivates. 56.37 % including cash reserves). The group's total cash position was MNOK 40.9 per 31.12.2023, which is considered in line with the strategy on cash reserves of minimum 12-month interest coverage but also leaves room for new investments.

The Group is exposed to financial risk and has defined the following relevant risk areas:

Credit risk

Credit risk is assessed at group level and is mainly linked to the risk of incurring losses as a result of tenants not paying the agreed rent. Rent payment is normally secured with a rent deposit or payment guarantees from banks or guaranteed by parent companies, usually with a high credit rating. In recent years, the group has had relatively low losses on rental claims, and the risk that the group will incur significant losses because of bankruptcies among tenants, is considered moderate. Realised losses have not increased significantly since the Covid-19 pandemic or Russia's invasion of Ukraine, and the group considers that the rental income achieved in the financial year indicate that tenants' capacity to withhold its lease obligations will be maintained. In recent years, rental losses have accounted for less than 0.5 % of the group's rental income.

(Please refer to note 20 for maturity analysis related to the group's debt and other payables.)

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the financial liabilities when they are due. The liquidity risk is mitigated by having adequate cash/liquidity reserves, a moderate loan-to-value ratio and long-term loan agreements. The liquidity reserve consists of liquid current assets and unused long-term credit lines in larger financial institutions. The board has set targets for the group's liquidity reserves which will both ensure financial freedom of action to be able to exploit investment opportunities quickly, and to contribute to significantly reducing the financial risk. The liquidity risk linked to the refinancing of the group's debt is mitigated by balancing the refinancing need within the next period in relation to the group's liquidity reserve.

There are financial covenant requirements (loan conditions) in all of the group's bank loan agreements related to equity share, debt service cost coverage ratio and loan-tovalue ratio. The group has fulfilled all requirements in the loan agreements in the financial year. The group has a relatively good margin in relation to the defined covenant requirements, and the risk of breach of these requirements is considered to be moderate to low for the next 12 months. The group has assessed that there is a low probability that the current market turbulence will affect the group's ability to service its financial liabilities in the next 12 months.

Optimisation of the Company's short-term and longterm financing is a natural part of the Company's daily operations, and the Company makes ongoing strategic assessments in this connection, which may include the sale of assets, refinancing of existing loans, bond financing, M&A, and/or raising capital from the Company's shareholders or external investors to ensure continued operations.

Currency risk

The Group is also exposed to currency risk against NOK,

as the Group's investments, revenues, and the majority of costs are in euros. All properties are financed through debt in euros, collectively forming a natural hedge for part of the currency risk. The remaining exposure is not hedged by the Group, in line with the company's strategy to allow investments in Baltic Sea Properties to also include a euro exposure for the investor.

(Please refer to note 4 and 22 for currency sensitivity analyses.)

Interest rate risk

The board closely discuss targets for the share of fixed interest depending on the cost at the time. Interest positions and interest profiles are reported to the board on a regular basis.

The group currently holds fixed interest agreements for approximately 4.2 % of the loan portfolio. The remaining term was 1.34 years per 31.12. Interest hedging in the group is mainly carried out using financial instruments at portfolio level. The group does not apply hedge accounting in accounting for the swap and cap agreements.

(Please refer to note 22 for interest sensitivity analysis.)

Risk factors and risk management

Risk management is crucial in identifying, assessing, and mitigating potential risks associated with operations of the group. It ensures that risks are proactively addressed to safeguard the financial, legal, and operational wellbeing of the investment portfolio, the employees, the environment, shareholders, and stakeholders.

We are working on and updating our risk management policy continuously whereas we are focusing on a structured framework to manage risks across our organisation and in our project and property management. Below follows some of the most influential risks we are monitoring on a regular basis.

Risk Area	Risk Description	Risk level	Comments/Action
Political	Russia's 2022 Invasion and the Ukraine War - Geopolitical, security and trade implications. The sanctions imposed on Russia and Belarus which cause structural changes in trade and goods flow in the world, may affect some of our tenants.	High	BSP Group considers that geo-political security risks are mitigated by the Baltic membership of NATO and strong integration and alignment with EU partners. Some of BSP Group's logistics tenants whose transit business had impact from structural changes have been able to replace those business lines successfully. Management proactively maintains close contact with all BSP Group's tenants and monitors the impact of changes closely.
Economical	Macroeconomics and energy crisis - Inflationary pressure & lower economic growth potentially affecting our tenant's business, and high interest rates affecting our cost structure.	High	Consumer price index increase in the Baltics has been 30% approx. in past 2 years; however Inflationary pressure forecast is reduced compared to 1 year ago. Also, EURIBOR interest rate futures (Swaps) are lower than 1 year ago. BSP Group has a solid financial platform and a well-considered Investment Strategy and Finance Policy, whereby leverage rates are limited to 60% Loan to Value and interest rate hedging is established. BSP Group has a quite diversified and strong tenant mix with long average lease terms (9 years WAULT approx.) and market level rent levels.
Social	Demographics and social changes with rising cost of living - Implications on employees, people, business, and real estate requirements.	Moderate	The cost of living has increased dramatically in the past 2 years. BSP Group currently has 17 employees, with many others indirectly via suppliers and construction companies. BSP Group is continually developing and updating its Social Responsibility & Human Resources Policies - with a focus on long term stakeholder and employee relationships. Management monitors demographics and social changes and consider future real-estate demand requirements for each segment while making investment decisions.
Technological	Automation & new Technology - Changing consumer preferences and trade cause implications for real estate sectors, locations, and assets.	Moderate	AI and automation are increasing pace. BSP Group is continually developing its Research, Development, and Innovation Strategy to learn, understand, and harness the opportunities of the changes which effects our external environment and the commercial real estate sector. Management considers the long-term flexibility of BSP Group's projects and the sustainability of each of BSP Group's tenants' business, while making investment decisions.
Environmental	Sustainability Regulations & Expectations - Sustainability initiatives/expectations with increased regulations and associated costs. Changing tenant requirements and adaptability of real estate.	Moderate	Environmental related legislation is increasing. BSP Group is continually developing and updating its Environmental Responsibility Policy, while expanding and incorporating new reporting methods as well as implementing sustainability initiatives in existing and new projects. Existing projects have been or are being BREEAM rated, while all new projects are designed according to reaching BREEAM standards, also with renewable energy possibilities - depending on tenant's requirements.
Legal and Tax	Changing Legislation - External factors can create potential changes in laws and regulation. Disputes - Disputes, legal costs, and potential damages	Moderate	Environmental related initiatives drive new legislation. BSP Group considers and maintains awareness of potential changes in legislation. Engagement of professional partners helps develop mitigation measures. BSP Group focuses on having well prepared agreements (preferably with long term partners), while also proactively assessing and addressing
			agreement performance to reduce possible disputes and litigations.

Risk Area	Risk Description	Risk level	Comments/Action
Corporate Governance	Compliance, Responsibility and Transparency - Fundamental to ensure stakeholders interests are protected.	Moderate	Stakeholder requirements for good corporate governance is fundamental and increasing. BSP Group complies with all Norwegian Public Companies laws, the Securities Trading Act, EU Market abuse regulations (MAR), and Stock Listing Rules. BSP Group complies with all local subsidiary Company laws and all Articles of Association. BSP is continually developing its Corporate Governance Policy, also in adherence with NUES/NCCG (Norwegian Code of Practice for Corporate Governance). Responsibility is provided by multiple layers including the Shareholders (General Meeting), Committees, Board of Directors, CEO, Managing Directors, and Employees. Developing and monitoring internal control measures and updating internal policies is a continual process and are comprehensively detailed in the Risk Management Policy.
Insider Trading	Illegal Trading - Distorts prices, erodes confidence, and damages BSP Group's reputation	Moderate	BSP Group is a public company, subject to Norwegian Public Companies laws, the Securities Trading Act, MAR, and Stock Listing Rules, which provides legislation against Insider trading. BSP Group complies with its comprehensive Insider Trading Policy, which provides a framework for procedures to ensure that all Inside Information is treated correctly, communicated to the management, and made public when needed. The purpose of the Insider Trading Policy is also to ensure that Inside Information is not misused by Insiders and that these are made aware of the possible consequences of such misuse.
Real Estate Market	Market Sentiment/Uncertainty - External factors have implications on liquidity, valuations, and finance - creating challenges and opportunities.	Moderate	The Baltic Real estate market has shown considerable resilience and relative stability in the past 2 years, especially in comparison with the Nordics. BSP Group is a buyer and developer of assets with a long term grow and hold strategy and doesn't have sales requirements in the strategy. BSP group is actively expanding its portfolio with acquisitions, developments, and joint ventures. The medium-term market uncertainty is providing some value and expansion opportunities for long term investors.
Real Estate Portfolio	Segment Performance & Diversification - Real estate sectors affected by market changes - transit logistic refocus, Industrial regionalisation, E-commerce expansion & remote working trends.	Moderate	BSP Group has a long-term focus to sustain a growing, high-quality, and balanced investment portfolio with at least 2/3 industrial & Logistics portfolio - providing 1/3 allocation to other opportunities. By continually researching and developing its business and investment strategies, BSP Group balances its portfolio across sectors and harnesses opportunities in attractive sectors.
Real Estate Assets	Attractiveness and Sustainability - Importance of quality, long term functional flexibility, and sustainability in buildings/parks.	Moderate	Increased awareness from tenants on value of services, sustainability and not only space & price. BSP Group has a value & sustainability investing approach - acquiring quality assets, locations with sustainable income. BSP Group considers the life cycle sustainability, functionality, and flexibility of each investment & development project. Each project has an annual upgrade CAPEX or sinking fund budget, with a focus on balancing long-term depreciation upgrades and improving attractiveness.
Real Estate Valuations	Economic & Market Cycle - Rising discount rates, higher yields and rent inflation increases impacts valuations.	Moderate	Yield have increased by 0.50-1.00% in relevant segments in the past two years; however future expectation is for more stable yield dynamics. Annual increased inflation indexation on rent has offset a considerable part of the yield increases. BSP Group uses two independent valuers to establish own internal values, considering and communicating variations due to project specifics in a conservative approach. BSP Group valuations are also positively impacted by stable portfolio and long-term leases with strong tenants.
Real Estate Development	Project Management - Project procurement and partner risks for the entire project development scope, including controls on safety, cost, time, and quality of the projects.	Moderate	BSP Group develops projects based on preleased agreements and avoids unnecessary speculation projects. Construction activity has slowed in the Baltics; however, optimism remains, especially in certain sectors and works continue. BSP Group has an established Project Management Framework and clear responsibilities for management of each part of the project - concept/marketing & land; design & planning and construction/renovation stages. BSP generally engages general contractors for fixed price contracts, thus having fewer partners and risks to manage in the process. BSP Group is careful not to concentrate development risk, therefore the investment strategy limits that <35% of our equity is dedicated to development projects.
Suppliers/ Contractors	Inflation & Competition - Real and opportunistic inflationary pressure can potentially increase costs	Moderate	BSP suppliers include financial institutions, development contractors, professional consultants, real estate services and utility suppliers, etc. Inflationary pressure has driven up costs considerably in the past 2 years; however, the current economic environment has created more competition between certain suppliers/contractors and has lowered some supply chain costs. BSP Group has a long-term partnership and supply chain management policy. Maintaining and nurturing the long term, transparent, and win-win partnership approach is a key part to BSP Group's strategy. BSP Group is continuously developing its Supplier Relationship Policies including to ensure its partners follow solid operational procedures and safety policies.

Risk Area	Risk Description	Risk level	Comments/Action
Clients/Tenants	1. Investment Projects Stability of Income - Tenant profitability stress due to inflation & possible global economic slowdown. 2. Development Projects Marketing - Demand & pricing of space in new projects.	Moderate	1. Investment Projects BSP Group tenants are currently performing all lease agreements well, with practically no delays in payments. The outlook is currently stable. There can be challenges in some sectors; however, it is expected that the tenants shall absorb these pressures. BSP Group has a long-term partnership and Tenant Relationship Policy. Maintaining and extending long-term leases with solid tenants and nurturing the transparent and win-win partnership approach is a key part to BSP Group's strategy. BSP Group assesses and closely monitors each tenant's business, while also developing leasing alternatives for each project - maintaining market rent levels and considering the attractiveness of each project and premises.
			2. Development Projects BSP Group projects are mainly built-to-suit projects, with exception of some predesigned flexible projects. BSP Group is careful to ensure that new project tenants and rent levels are sustainable in the long term (also considering the current higher input prices and yield requirements).
Vacancy	Income Sustainability - Vacancies created by tenant defaults or lease renewal can reduce the net operating income.	Moderate	BSP Group has practically no vacancy currently and forecasts a stable outlook in the portfolio with some contingency. BSP Group has a relatively long-term WAULT of over 9 years which protects from high tenant turnover and potential vacancies. Maintaining solid Tenant Relationship Management Policies and active project marketing is an important part of risk mitigation.
Finance	Capital Management - Importance of maintaining a prudent balance between equity and debt in a company's capital structure and maintaining long term finance agreements.	High	BSP Group maintains a Group loan-to-value ratio of less than 60% in compliance with its Investment Strategy. BSP Group also maintains a minimum 12-month interest coverage buffer. BSP Group has an established long-term partnership of over 20 years with its main banking partners - SEB & Luminor; however actively discusses co-operation with other players in the region and considers future finance trends and opportunities. BSP Group has developed solid relationships with Mezzanine finance providers mostly for development bridge finance. BSP is actively renewing and extending finance terms with partners.
Interest rates	Euribor - Elevated interest base rates can have a significant impact on financing costs for projects and thus reduce profitability and may affect finance agreement covenants and solvency. Interest Margins - Increasing bank margins on new loans affect financing cost.	High	Euribor BSP Group have all bank finance costs linked to Euribor base rates, with part fixed and the larger part variable. Elevated Euribor base rates (6m Euribor is currently at 3,90%) have lowered BSP Group profitability considerably; however, have not created significant bank covenant challenges to date. At the time of this assessment 1-year 6m EURIBOR futures/swaps are approximately 0.30% lower than 12 months prior. BSP Group is continually developing its Finance Policy including interest hedging policy, whereby management has established targets for the share of fixed interest depending on the cost at the time. Interest positions, profiles, covenant compliance are reported to the board on a regular basis.
			Margins BSP Group has term finance agreements with its financial partners and with fixed margins. While agreeing extensions of terms and discussing new projects finance, BSP Group has been able to maintain attractive interest rate margins. It is expected that with the current competitive and stable banking environment, the margin levels will be maintained for new loan agreements.
Liquidity & Solvency	Liquidity - Ability to pay short term obligations and capability to sell assets quickly to raise cash. Solvency - Ability to meet long term debts and continue operations.	Moderate	BSP Group Liquidity risk is mitigated by having adequate cash reserves and having liquid assets within the portfolio. BSP Group solvency risk is mitigated by having long term contractual income, and a moderate loan-to-value ratio with relatively long-term loan agreements. BSP management continually stress test budgeted income with respect to financial covenants and obligations.
Currency	EUR and NOK - Currency exchange fluctuations.	Moderate	BSP Group is predominately a Euro currency business with all income in Euro and most of the group costs in Euro (smaller overhead costs in Oslo are in NOK). BSP Group assets are based in Euro area, valued in Euro and financed through almost all debt in Euro, collectively forming a natural hedge for most of the currency risk. The return exposure in Euro is not hedged by BSP Group - in line with BSP Group's strategy to have a Euro exposure for the investor.
Human Resources	Competence & Responsibility - Board Members & Employees are responsible to respect the values of BSP Group and must have adequate competence to help create & execute its strategy in the interests of all stakeholders. Code of Conduct - BSP's reputation and business can be severely damaged by corruption, insider trading, bribery, gross negligence, and personnel acting irresponsibly.	Moderate	BSP Group core values include Commitment, Innovation, Respect, Accountability & Integrity. BSP Group is continually developing its Human Resources Policy to hire and retain good people, to provide effective organisation, to develop competences, to structure communications in order to protect the interests of the shareholders and other stakeholders. BSP Group as a responsible employer, ensuring that the company´s employees have an attractive and respectable remuneration package including investing in professional development, and rewarding excellence. BSP Group has strict Code of Conduct policy with high standard of integrity and a zero-tolerance policy for all breaches including corruption and financial crimes. Enhanced measures are detailed in the Risk Management Policy.
Crisis Management	Unpredictable Events - Such as accidents, terrorist attacks, acts of war, riots, civil unrest, pandemic diseases, and other similarly unpredictable events.	Moderate	Adequate crisis management planning can help mitigate the risks created by unpredictable events. BSP Group's experience to manage the Covid -19 Pandemic challenges have helped understand the challenges for crisis management planning and consideration. BSP Group is continually developing its general crisis management plans.

Environmental Reporting

The construction and real estate sector affect the environment and climate both directly and indirectly. The areas with the greatest direct impact are the development of the buildings themselves and energy consumption throughout the building's lifespan. In addition, the environment is indirectly affected by our tenants' water consumption and waste production, among other things. More than 60% of our tenants are involved in logistics operations, and goods are transported to and from warehouse buildings by road transport.

Throughout 2023, management has continued the process to certify the real estate portfolio according to the BREEAM environmental assessment and rating system. By the end of 2023, 40 % of our investment properties (measured in m2) had been certified, of which 94 % achieved a BREEAM In-Use certification of "Very good" or higher.

During 2023, we also completed the installation of solar panels at Klaipėda Business Park and in 2024, we will include renewable energy systems in our new developments, while also preparing to meet our responsibilities according to the EU taxonomy.

Corporate Strategy

Our vision: To be the preferred real estate partner and leading investment company in the region.

Our mission: To foster a great team, to provide high quality and sustainable solutions for our partners, thus creating superior long-term value and returns for our shareholders.

Our values:

• Commitment to our people and their professional development.
• Focusing on innovation and value creation.
• Respect for our social and physical environment.
• Accountability and fairness with our stakeholders.
• Reliability and integrity in all we do.

Working Environment, Personnel, and Equality

The Board of Directors consists of four people, all of whom are men. As of today, the group has 16 employees, consisting of 8 women and 8 men. The group strives to avoid discrimination based on ethnicity and orientation.

No injuries or accidents were reported in 2023.

Transactions with Related Parties

The seller credit from Baltic Equity Group UAB (and other sellers) as part of the acquisition of Grandus shopping center in May 2022, had an ingoing balance per 1st of January 2023 of EUR 3.2 million. On the 28th of November, BSP repaid EUR 2.37 million (plus EUR 230 thousand in accumulated interest), resulting in the outgoing balance per the 31st of December 2023 to be EUR 830 thousand.

The seller credit originally had a 12-months repayment period, maturing on the 23rd of May 2023, but its maturity was extended during the year, until the end of 2024.

Directors and Officers Insurance

Baltic Sea Properties AS has a Directors and Officers insurance policy with an annual total liability limit of NOK 50 million. The insurance covers the Board's legal liability for financial loss arising from the exercise of their directorial duties, as well as associated legal costs. The insurance also covers the boards of the group's subsidiary companies (where Baltic Sea Properties directly or indirectly owns at least 50% of the shares) and employees who represent Baltic Sea Properties in external directorial roles.

Future development

As of the date of the Board's annual report, it is expected that more than 82 % of the Group's rental income in 2024 will be from the logistics and industrial segment, according to the signed lease agreements.

With the introduction of new large-scale development projects, we are really excited about the immediate opportunity to continue providing quality facilities for our valued clients and expanding our portfolio with quality assets. Both the expansion for Rhenus and the development for ESO are key parts of our growth strategy. Moreover, the agreement for ESO (Ignitis) marks the beginning of our "Liepų Parkas" project — a 16,000 m2 business and retail park in Klaipėda — that we will be focusing on in the upcoming years.
Like most other companies, the Group's operations are affected by regional and macroeconomic conditions especially related to the current high interest rate environment. The Group's net LTV under IFRS as of 31.12.2023 was 56.4 % (including seller's credit and mezzanine financing), and the company thus has a robust capital structure that enables it to withstand current borrowing costs. Since the company's borrowing is exposed to floating interest rates in its loan structure, an interest rate hike would, in isolation, negatively impact the Group's profitability. However, the Group has a capital structure with relatively moderate debt levels, providing good solvency. Moreover, the Board continuously evaluates external financing options to optimise the capital structure and project execution according to its adopted and

communicated investment strategy.

Baltic Sea Properties continues to develop its sustainability strategy with the aim of turning increasing requirements into a competitive advantage, including by making significant investments that will reduce the portfolio's carbon footprint and assist our tenants in their green transition. As part of this strategy, the Group continuously evaluates investments in the existing property portfolio to maintain/increase the properties' attractiveness and/or strengthen tenants' prospects for stable and long-term operations. Investments in maintenance and standard upgrades are mainly borne by the tenant, either in the form of their contractual obligations or through increases in the agreed rental price. However, Baltic Sea Properties sees value in covering such expenses in certain cases to secure future cash flow and maintain a good relationship with the tenant. In addition to implementation of the EU Taxonomy/"Green Deal", real estate owners need to assess its need for improving energy efficiency in their buildings. As of the date of the Board's annual report, approximately EUR 0.6 million in upgrades are planned for the portfolio in 2024.
Our fundamental approach to real estate management and development, supported by a strong capital structure, positions us to navigate market cycles effectively. We remain a key player in our sector, and are optimistic about our future opportunities in development, new acquisitions, and asset management of our existing portfolio.

Transparency Act reporting

As part of our work on human rights and decent working conditions, we will carry out regular due diligence assessments to identify, prevent and limit actual and potential negative impacts on our operations and supply chain. These due diligence assessments are based on the OECD guidelines and will be carried out together with an external adviser in the Factlines system.

We have given priority to following up risks of negative consequences based on The Norwegian Agency for Public and Financial Management's high-risk list, which takes into account both the severity of the consequences for those affected and the likelihood of negative impact.

Information regarding the results of these due diligence assessments will be published on our website (balticsea. no/about/#responsibility) on an ongoing basis and the first statement is expected by 30th of June 2024.

Allocation of the result for the year – Parent Company (in accordance with Norwegian accounting standards)

The Board proposes the following allocation of the parent company's result for 2023:

Transfer to/from other equity:	NOK	14 042 737 1
Result for the year:	NOK	14 042 737

1 NOK 10 670 909 (NOK 1.60 per share) was distributed as dividend in June 2023, in accordance with the decision of the AGM held on the 3rd of May 2023.

Oslo, the 10th of April 2024

James Andrew Clarke Chairman of the Board

John Afseth Board Member

John David Mosvold Board Member

Bjørn Bjøro Board Member

Lars Christian Berger CEO

Declaration

The undersigned declare that to the best of their knowledge, the annual accounts for Baltic Sea Properties AS have been prepared in accordance with applicable accounting standards, and that the information in the accounts provides a true and fair view of the company's and the group's assets, liabilities, financial position, and overall result as of 31st December 2023.

The undersigned further declare that to the best of their knowledge, the annual report for Baltic Sea Properties AS provides a true and fair overview of the development, results, and position of the company and the group as of 31st December 2023.

Lars Christian Berger

CEO

+47 930 94 319 [email protected]

James Andrew Clarke Chairman & CIO

+370 612 37 515 [email protected]

John Afseth Board Member

John David Mosvold

Board Member

Bjørn Bjøro Board Member

The Port of Klaipėda | Klaipėda

Consolidated statement of profit or loss

For the year ended 31 December	Note	2023	2022

Rental income	3	91 286	69 521
Gain from sale of fixed assets	4	-	-
Change in fair value of investment properties	4	3 961	17 252
Other income	3	754	1 138
Total operating income		96 001	87 910

Payroll and related costs	5	15 487	13 056
Depreciation, amortisation and impairment	6	1 035	219
Other operating expenses	7, 8	9 639	11 789
Total operating expenses		26 162	25 063

Operating profit		69 840	62 847

Change in fair value of financial instruments	9, 10	-6 449	10 295
Financial income	9	311	456
Financial expenses	9	-33 892	-18 387
Net currency exchange diferences	9	58	981
Net financial income (cost)		-39 972	-6 654
Profit before income tax		29 868	56 193

Income tax expense	11	-2 013	1 181
Change in deferred tax liability/assets	11	2 913	8 032

Profit for the period		28 968	46 979
Earnings pershare	Note	2023	2022
Basic	12	4	7
Diluted	12	4	7

Profit is attributable to:		2023	2022
Owners of Baltic Sea Properties group		28 968	46 979
Non-controlling interests		-	-

Consolidated statement of comprehensive income

For the year ended 31 December	2023	2022

Profit for the period	28 968	46 979

Other comprehensive income not to be reclassified to profit and loss
Foreign currency translation differences	26 008	21 020
	26 008	21 020

Total comprehensive invome for the period	54 976	68 000

Total comprehensive income is attributable to:
- Owners of Baltic Sea Properties group	54 976	68 000
- Non-controlling interests	-	-
	54 976	68 000

Consolidated statement of financial position

Note	31 December 2023	31 December 2022



4	1 150 216	1 040 278
6	1 631	1 727
13	133	231
14	412	6 581
14, 15	2 391	134
	1 154 784	1 048 952

6	3 209	4 071
14	214	-
16	3 089	3 726
14, 17	40 888	44 083
	47 400	51 880

	-	-

	1 202 184	1 100 832

Consolidated statement of financial position

Amounts in NOK thousand

For the year ended 31 December	Note	31 December 2023	31 December 2022

Equity

Share capital	18	669	669
Share premium		118 788	118 788
Other paid-in equity		-1	-1
Total paid-in equity		119 456	119 456

Retained earnings		330 605	286 226
Total equity		450 061	405 682

Liabilities

Deferred tax liabilities	11	48 518	42 772
Interest-bearing liabilities	19, 20	616 955	541 659
Lease liabilities, non-current	13	29 051	23 919
Financial derivatives, non-current	14, 10	-	-
Other non-current provisions		-	134
Total non-current liabilities		694 523	608 483

Lease liabilities,current	13	232	220
Interest-bearing liabilities, current	19, 20	37 460	60 150
Trade payables	14	3 237	8 149
Income tax payable	11	-	2 132
Financial derivatives, current	14, 10	-	-
Other current liabilities	14, 21	16 671	16 014
Total current libilities		57 600	86 666

Total equity and liabilities 1 202 184 1 100 832

Oslo, the 10th of April 2024

James Andrew Clarke Chairman of the Board

Lars Christian Berger CEO

John Afseth Board Member

John David Mosvold Board Member

Bjørn Bjøro Board Member

Consolidated statement of changes in equity

Attributable to owners of Baltic Sea Properties AS

	Share capital	Share premium reserve	Other paid-in equity	Retained earnings	Total	Non controlling interests	Total equity

Equity at 1 January 2022	669	118 788	-2	228 029	347 485	-	347 485

Net profit forthe period	-	-	-	46 979	46 979	-	46 979
Capital increase	-	-	-	-	-	-	-
Share based payments	-	-	-	231	231	-	231
Other comprehensive income for the period	-	-	-	21 020	21 020	-	21 020
Total comprehensive income in the period	-	-	-	68 000	68 000	-	68 000

Transactions with owners of the company:	-	-	-	-	-		-
Transactions with non-controlling interests	-	-	-	-	-	-	-
Dividends paid	-	-	-	-10 032	-10 032	-	-10 032
Equity at 1 January 2023	669	118 788	-1	286 227	405 683	-	405 683

	Share capital	Share premium reserve	Other paid-in equity	Retained earnings	Total	Non controlling interests	Total equity
Equity at 1 January 2023	669	118 788	-1	286 227	405 683	-	405 683
Net profit for the period	-	-	-	28 968	28 968	-	28 968
Capital increase	-	-	-	-	-	-	-
Share based payments	-	-	-	89	89	-	89
Other comprehensive income for the period	-	-	-	26 008	26 008	-	26 008
Total comprehensive income in the period	-	-	-	55 065	55 065	-	55 065

Transactions with owners of the company:	-	-	-	-	-		-
Transactions with non-controlling interests	-	-	-	-	-	-	-
Dividends paid	-	-	-	-10 687	-10 687	-	-10 687
Equity at 31 December 2023	669	118 788	-1	330 605	450 061	-	450 061

Consolidated statement of cash flows

Amounts in NOK thousand

For the year ended 31 December	Note	2023	2022

Profit for the period before tax		29 868	56 193
Adjustments for:

Changes in value of investment properties	4	-3 961	-17 252
Gain from sale of fixed assets	4	-	-
Depreciation, amortisation and impairment	4	1 035	219
Changes in fair value of derivatives	9, 10	6 449	-10 295
Financial income	9	-311	-456
Financial expenses	9	33 892	18 387
Net currency exchange differences	9	-	-981
Changes in trade recievables & payables	14, 21	-3 456	13 856
Changes in other accruals	14, 21	3 630	863
Taxes paid (net)	11	-362	1 332
Net cash flows from operating activities		66 785	61 864


Proceeds from property transactions	4	-	-
Investments in investment property	4	-29 280	-211 165
Investments in property, plant and equipment	4	-2 259	-
Proceeds from sale of shares and other equity instruments	14	-	-
Acquisition of other investments	6	-	-629
Interest received		311	162
Net cash flows from investing activities		-31 228	-211 632

Proceeds from interest-bearing debt	19, 20	64 260	244 603
Repayment of interest-bearing debt	19, 20	-53 993	-76 274
Repayments of lease liabilities	19, 20	-291	-207
Dividens paid to company's shareholders		-10 595	-10 032
Interest paid		-38 110	-15 929
Net cash flows from financing activities		-38 729	142 161

Net change in cash and cash equivalents		-3 173	-7 607
Effects of foreign exchange on cash and cash equivalents		-22	-1 100
Cash and cash equivalents at the beginning of the period		44 083	52 790

Cash and cash equivalents at the end of the period 40 888 44 083

Notes to the consolidated financial statements - Baltic Sea Properties Group

Note 1 Accounting Principles

General information Baltic Sea Properties AS is a Norwegian limited liability company listed on the market place Euronext Growth Oslo. The Company's head office is located at Apotekergata 10B, 0180 Oslo. The Company's consolidated financial statements for 2023 were approved by the board as at 15.05.2024. The Group's operations consist of acquisition, development and letting of investment properties in Lithuania as well as some related business.

Basis of preparation

The consolidated financial statements of Baltic Sea Properties AS have been prepared in accordance with international accounting principles (IFRS) as approved by the EU, with additional information as required by the Norwegian Accounting Act as per 31.12.2023.

New and amended accounting standards

Changes in accounting standards and interpretations effective as from 1 January 2023 have had no significant impact on the consolidated financial statements of Baltic Sea Properties AS.

Accounting principles

Basic principles

The consolidated financial statements have been prepared based on the historic cost principle with the following modifications:

• IInvestment properties are presented at fair value • Some financial instruments are presented at fair value through profit and loss

The consolidated financial statements have been presented on the assumption of the business being a going concern. The consolidated financial statements are prepared based on similar accounting principles for similar transactions and events.

Functional currency and presentation currency

The Group's presentation currency is NOK. This is also the functional currency of the parent company.

Financial statements of group entities with different functional currencies are translated to NOK using closing date currency rates for balance sheet items and transaction date curency rates for profit and loss items. Translation differences are presented as other comprehensive income.

Consolidation

The Consolidated financial statements consist of the parent company Baltic Sea Properties AS and subsidiaries (as listed in note 23) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method is used to account for purchases of subsidiaries that constitute a business. The consideration given is measured at the fair value of the transferred assets, the equity instruments that have been issued, liabilities assumed on the transfer of control and direct costs relating to the actual purchase. The cost of acquisition also includes the fair value of all assets or liabilities that are the result of an agreement on contingent consideration. Identifiable purchased assets, assumed liabilities and contingent liabilities are recognised at fair value on the date of acquisition. The costs associated with the business combination are expensed when they are incurred.

If the aggregate of the consideration, the carrying amount of non-controlling interests and the fair value on the acquisition date of any previously held ownership interests exceeds the fair value of the acquired entity's identifiable net assets, the difference is capitalised as goodwill. If the aggregate is less than the company's net assets, the difference is immediately recognised in profit or loss. Contingent consideration is recognised at fair value on the date of acquisition. Subsequent changes in the fair value of the contingent consideration are recognised in profit or loss or recognised as a change in other comprehensive income (OCI), if the contingent consideration is classified as an asset or a liability. Contingent consideration classified as equity is not remeasured, and subsequent settlement is recognised in equity. For accounting purposes, acquisitions of subsidiaries that do not constitute a business as defined in IFRS 3, such as subsidiaries that only consist of a property, are treated as asset acquisitions. The cost of acquisition is then attributed to the individual identifiable assets and liabilities based on their relative fair values on the acquisition date. Expenses associated with the transaction are capitalized under the investment property. In such cases no provision is made for deferred tax in accordance with the exceptions in IAS 12.

Intra-group transactions, balances and unrealised gains are eliminated. Unrealised losses are eliminated, but are considered evidence of impairment in terms of writing down the value of the transferred asset. If necessary, the accounting policies at subsidiaries are changed in order to bring them into line with the Group's accounting policies.

Segment information

Operating segments are reported in the same way as in internal reports to the Group's Chief Operating Decision Maker . The Group's highest decision-making authority, which is responsible for allocating resources and assessing the profitability of the operating segments, has been identified as the Board of Directors and the CEO.

Revenue recognition

Revenue from lease contracts

The Group enters into lease agreements as a lessor with respect to its investment properties. Lease contracts where a significant proportion of the risks and benefits of ownership remain with the Group are classified as operating leases. Revenue recognition under a lease commences at the inception of the lease. Rent payments for the leases are recognised in a straight line over the duration of the lease."

Rental income encompasses the fair value of the payments received for services that fall within the ordinary activities of the company. Rental income is presented net of VAT, rebates and discounts.

Costs for shared services provided to the tenants by external parties do not affect the result beyond an administrative premium recognised as rental income. Shared costs are charged to tenants and recognised in the balance sheet together with payments on account of tenants. Shared costs are settled after the balance sheet date.

Revenue from contracts with customers

In determining the basis for revenue recognition from contracts with customers, the Group identifies the distinct performance obligations under the contracts, allocate the transaction price to each identified performance obligation and account for revenue as each performance obligation is met.

Service income for additional services to tenants is recognised in the period the service is performed. Performance obligations are defined in the individual service agreements, either by standard terms or terms specifically agreed with the client. The performance obligation is considered satisfied when the agreed service(s) is/are delivered and/or the agreed time period for the client relationship expires.

Operating cost

Property related cost include cost associated with property management, cost related to letting of properties, marketing of properties, owners share of maintenance and day-to-day servicing and other cost. Other operating cost include cost related to activities in non-property related operations.

Investment property

Investment properties are owned with the aim of achieving a long term return from rental income and increase in value. Investment properties are recognised at fair value, based on market values estimated by independent appraisers adjusted for any circumstances not taken into account in the external valuation. Leased properties (right-of-use assets) are accounted for as investment property if the underlying asset meet the definition of an investment property as set out above.

Investment properties are measured initially at its cost, which includes direct transaction costs such as document duty and other public duties, legal fees and due diligence costs. Transaction costs associated with properties acquired through business combinations (as defined in IFRS 3) are expensed.

Subsequent expenditure is added to the investment property's carrying amount, if it is probable that future financial benefits associated with the expenditure will flow to the Group and the expense can be measured reliably. Other maintenance costs and the cost of day-to-day servicing are recorded through the income statement in the period in which they are incurred. Parts of investment property acquired through replacement are capitalised and included in the carrying amount of the investment property if the general asset recognition criteria are met as described above. The carrying amount of the part replaced is derecognised. When investment properties are disposed of, the difference between the net sales proceeds and carrying amount is recognised as change in value from investment properties.

Investment properties are valued at each reporting date based on valuations obtained from independent appraisers biannualy (half-year and year-end). The valuation is based on the individual property's assumed future cash flows, and property values are arrived at by discounting cash flows with an individual risk-adjusted required rate of return.

The required rate of return for each property is defined as being a long-term risk-free interest rate plus a property-specific risk supplement. The latter is defined on the basis of the property segment to which the property belongs, its location, standard, occupancy rate, tenants' financial reliability and remaining lease term. Known market transactions with similar properties in the same geographical area are also taken into consideration. The value of investment properties under construction is measured using the cost method when the fair value cannot be measured reliably. Investment property under construction is measured at its cost until either its fair value becomes reliably measurable or construction is completed (whichever is earlier). Once the entity becomes able to measure reliably the fair value of an investment property under construction that has previously been measured at cost, it measures that property at its fair value.

Changes in fair value, including gains and losses on sale of investment properties, are recognised as "Changes in value of investment properties".

Borrowing costs

Borrowing costs for capital used to finance investment properties under construction are capitalised under the asset in question. When calculating the capitalised borrowing costs, the average interest rate on the company's debt portfolio over the course of the year is used, unless there is separate financing for the specific project. In such cases the specific borrowing cost for the loan in question is used. When calculating the average interest rate to be used for the capitalisation of borrowing costs, loans taken out for specific projects are not included.

Other operating assets

Other operating assets are recognised at acquisition cost, less depreciation. The acquisition cost includes costs directly related to the acquisition of the asset. Other operating assets are depreciated in a straight line over their anticipated remaining useful life.

The assets' remaining useful life and residual value are reassessed on each balance sheet date and changed if necessary. If the carrying amount of an asset is higher than its recoverable amount, the value of the asset is written down to the recoverable amount.

Please refer to note 6 for a detailed presentation of the other operating assets in the balance sheet.

Lease contracts (the group as a lessee)

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease contracts in which it is the lessee, except for leases with a lease term of 12 months or less, and leases of low value assets (such as vehicles and technical and office equipment), for which the Group applies the "short-term lease" and "lease of low-value assets" recognition exemptions. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the lease term.

Only fixed payments are included in the initial measurement of the lease liability, and the lease term corresponds to the non-terminable period. The discount rate used to calculate the lease liability is determined, for each asset, based on the Group's incremental borrowing rate for leases. The lease liability is presented as part of other liabilities in the balance sheet.

For lease contracts where the leased properties meet the definition of investment properties in IAS 40, the Group applies the fair value model to the associated right-of-use assets. The right of use asset is measured on initial recognition at present value of the future lease payments, and on subsequent measurement under the fair value model. The discount rate used to calculate the right-of-use asset may be different from the discount rate used to calculate the lease liability. The right-of-use assets are presented as part of investment properties in the balance sheet.

Financial instruments

A financial instrument is defined as being any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity. Financial instruments are recognised on the transaction date, i.e. the date on which the Group commits to buying or selling the asset. The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them.

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through OCI, and FVTPL. For a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are "solely payments of principal and interest (SPPI)" on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Further, the financial assets shall be held within a business model whose objective is to hold the financial assets in order to collect contractual cash flows. The majority of the Group's financial assets are classified as measured at amortised cost.

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group's financial assets at amortised cost includes trade and other current receivables, cash and cash equivalents and other financial assets.

Financial assets at FVTPL include financial assets designated upon initial recognition at FVTPL and financial assets mandatorily required to be measured at fair value. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at FVTPL. The Group's financial assets at FVTPL includes financial derivates.

Financial liabilities are classified upon initial recognition as financial liabilities at FVTPL and financial liabilities at amortised cost. Financial liabilities at FVTPL comprise loans designated at fair value upon initial recognition and derivatives. Financial liabilities at amortised cost consist of liabilities that do not fall under the category at FVTPL.

Trade receivables and other financial assets

Trade receivables and other financial assets are classified as financial assets measured at amortised cost. Interest is ignored if it is insignificant. The Group applies the simplified approach in IFRS 9 to measure the loss allowance at lifetime expected credit losses. A provision for bad debt is determined by estimating expected credit losses with reference to past default experience of the debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date. There has been no change in the estimation techniques or significant assumptions made during the current reporting period. Any subsequent payments received against accounts for which a provision has previously been made are recognised in the income statement. Trade receivables, contract assets and other financial assets are classified as current assets, unless they are due more than twelve months after the balance sheet date. If so, they are classified as non-current assets.

Financial derivatives

The Group uses derivatives to manage its interest rate risk. Derivatives are initially recognised at fair value on the date on which the contract was signed, and subsequently at fair value. Gains or losses on remeasurement at fair value are recognised in the income statement. Regular payments are presented as interest and other finance expenses. Changes in the value of the derivatives are presented under "Change in value of financial instruments". The fair value of interest rate swaps is the estimated amount the Group would receive or pay to redeem the contracts on the balance sheet date. This amount will depend on interest rates and the contracts' remaining term to maturity. The derivatives are classified on the balance sheet as current or non-current, depending on whether they are expected to be redeemed under or over 12 months from the balance sheet date.

Trade payables and other non-interest bearing financial liabilities

Trade payables and other non-interest bearing liabilities are classified as financial liabilities at amortised cost, and are measured at fair value upon initial recognition, and subsequently at amortised cost using the effective interest rate method. Interest is ignored if it is insignificant.

Interest bearing liabilities

Interest bearing liabilities are classified as financial liabilities at amortised cost, and are measured at fair value upon initial recognition, and subsequently at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as net realised financials in the statement of profit or loss. The liabilities are measured at their nominal value when the effect of discounting is immaterial.

Interest bearing liabilities are classified as current liabilities where the debt is due for repayment less than 12 months from the balance sheet date.

Currency

Foreign currency transactions are translated at the exchange rate on the date of the transaction. Monetary foreign currency items are translated to NOK at the exchange rate on the balance sheet date. Non-monetary items that are measured at cost in a foreign currency are translated to NOK using the exchange rate on the transaction date. Non-monetary items that are measured at fair value in a foreign currency are translated to NOK using the exchange rate on the balance sheet date. Exchange rate fluctuations are recognised in profit or loss as they arise.

Statement of cash flows

The statement of cash flows is prepared using the indirect method. This means that the statement is based on the Group's profit before tax in order to present cash flows from operating, investing and financing activities respectively. Interest on leases and net interest and fees paid on loans are presented as operating cash flows. Dividends paid to shareholders are presented under financing activities.

Tax

The tax expense consists of tax payable and deferred tax. Tax is charged to the income statement, except where it relates to items that are recognised in OCI or directly in equity. In such cases, the tax is either recognised in OCI or directly in equity.

Deferred tax is calculated using the liability method for all temporary differences between the tax values and consolidated accounting values of assets and liabilities. Deferred tax liabilities are not calculated and recognised upon initial recognition of assets or liabilities obtained through an acquisition of a subsidiary not classified as a business combination. Deferred tax is defined using tax rates and laws which are enacted or likely to be enacted on the balance sheet date, and which are expected to be used when the deferred tax asset is realised or when the deferred tax is utilised.

Deferred tax is calculated and provided or reduced in the event of adjustments to the value of investment properties at a nominal tax rate of 15 per cent. A deferred tax asset is recognised to the extent that it is likely that future taxable profit will be available against which the temporary differences can be offset.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary difference will not reverse in the foreseeable future.

Events after the reporting period

Events after the reporting period related to the group's financial position at the end of the reporting period, are considered in the financial statements. Events after the reporting period that have no effect on the group's financial position at the end of the reporting period, but will have effect on future financial position, are disclosed if the future effect is material.

Treasury shares

When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.

Measurement of fair value

The company measures investment property and several financial assets and liabilities at fair value. For the classification of fair value, the company uses a system which reflects the significance of the input used to make the measurements:

Fair value is measured using quoted prices from active markets for identical assets or liabilities.

Level 2

Level 1

Fair value is determined from input based on other observable factors, either direct (price) or indirect (derived from prices), than the quoted price (used in level 1) for the asset or liability. This will be relevant for the financial instruments." Level 3

Fair value is measured using input which is not based on observable market data. This will be relevant for the investment property.

Note 2 Critical accounting estimates and subjective judgement

The preparation of the consolidated financial statements requires management to make jugdements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. When management makes estimates about the future, the resulting accounting estimates, by definition, will seldom equal the actual outcome.

Estimates and judgements are evaluated continuously and are based on historical experience and other factors. This includes expectations of future events that are belived to be reasonable under the circumstances. Revisions of reported estimates are recognised in the period which the estimates are revised and in any future period affected. The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next financial year are the fair value of investment properties and the fair value of financial derivatives.

Fair value of investment properties

Investment properties are measured at their fair value based on valuations performed by external, independent appraisers. The valuations at 31st December 2023 were obtained from Newsec and Ober-Haus. The valuations are mainly based on a discounted cash flow method, which involves discounting future cash flows over a specified period using an estimated discount rate and adding a residual value at the end of the period. Future cash flows are calculated on the basis of cash flows from signed leases, as well as future cash flows based on an expected market rent at the end of the lease terms. Both contractual and expected cash flows are included in the calculations. Fair-value assessment of investment properties, therefore, depends largely on assumptions related to market rents, discount rates, and inflation. The market rent for each property takes into account the property's situation, standard and leases signed for comparable properties in the area. Updated macroeconomic assumptions are applied in the calculations. Based on an assessment of the properties, tenants, and macroeconomic conditions at the balance sheet date, cash flows are discounted using discount rates based on individual assessments of each property.

The appraisers perform their valuations on the basis of the information they have received, and estimate future market rents, yields, inflation and other relevant parameters. Each individual property is assessed in terms of its market position, rental income and ownership costs, with estimates being made for anticipated vacancy levels and the need for alterations and upgrades. The remaining term of the leases is also assessed for risk, along with any special clauses in the contracts. Each property is also compared with recently sold properties in the same segment (location, type of property, mix of tenants, etc.). The sensitivity of the fair-value assessment of investment properties depends to a considerable extent on assumptions related to yield, interest rates, market rents and operating costs for the properties. Reference is made to note 4 Investment property.

Acquisition of investment property

In April 2021, BSP acquired 100% of the shares in the companies BNTP UAB, Klaipedos Verslo Parkas UAB (KVP), Liepu Parkas UAB and Pastatu Vystymas UAB (PV) which all hold investment properties in Klaipeda except BNTP UAB which
is a real estate and asset management company.
In May 2022, BSP acquired 100% of the shares in UAB Prekybos Centras Grandus, a shopping centre in Klaipeda. The company holds investment property. • There were no aquisitions of investment properties in 2023

The management has assessed whether these acquisitions is to be treated as a business combination according to the definition in IFRS 3 or an acquisition of assets/group of assets. Based on the assessments performed, management has concluded that the acquired assets do not constitute a business, and thus it is not a "business combination". The abovementioned acquisitions in April 2021 and May 2022 are concluded to be acquisitions of investment properties, and as such are accounted for in accordance with IAS 40 Investment Property.

Fair value of financial derivatives

The Group uses interest rate derivatives and fixed rate loans to manage the interest rate risk. The financial derivatives are valued at fair value in the Group's balance sheet. See note 13 for further information on the valuation of the Group's financial derivatives.

Note 3 Operating income from contract customers

Below is a breakdown of the group's income from contracts with customers.

Property-related income	2023	2022
Rental income from investment properties	91 286 411	69 521 275
Total	91 286 411	69 521 275

Other operating income	2023	2022
Administration income from management services to external clients	555 403	1 137 541
Other operating income	198 863	-
Total	754 265	1 137 541

Delivery Terms

Below is a description of the group's revenue recognition terms and associated accounting:

Property-related income

Common costs, tenants:

The rental contracts for the tenants regulate service deliveries which are paid via the common costs (eg cleaning, caretaker and service and maintenance). The group's assessment is that the services/elements covered by common costs are included as an overall delivery of an operating service as agreed in the contract. The service is considered to be a series of independent services to the tenant that have the same characteristics and transmission pattern. Income from forward charge of common costs is invoiced to an a-account per tenant based on an estimate/ settlement from the previous year. The transaction price is variable. Income recognition is based on the a-account invoicing as this is considered to be the best estimate of the variable remuneration, and it is unlikely that there will be a significant reversal of the a-account invoicing. The income is recognized over time since the tenant receives the services in ongoing delivery obligations, and consumes them simultaneously, in that the services directly touch the rented premises and associated common areas."

Income from common costs which is forward-charged to tenants is netted against the common costs expense in the profit and loss statement and is therefore not reflected in the group's specification of income. In 2023, the BSP group reinvoiced NOK 483,039 to its tenants.

Other operating Income

Other operating income mainly consists of management fees and other operating income. The services and goods that are included are assessed as separate delivery obligations, and revenue is recognized over time since the customer receives and consumes these simultaneously.

Note 4 Investment property

Bi-annually, per 30 June and 31 December, Baltic Sea Properties collects valuations of its properties from two independent valuators (Oberhaus and Newsec). When determining property values for accounting and NAV purposes, the valuation method is based on the average of the two valuations for each property/portfolio. However, the company also conducts its own value assessments, and in certain instances, where there are reasons for applying an amended value estimate than the average of the external valuations, the company will use its own best estimate to reflect the correct market value per balance date. In these instances, the reasoning behind the chosen value must be explained. The valuation is carried out by the company's own employees and approved by the company's board.

Key factors are current income and expenses for the property, market rent and yield. A set of macroeconomic assumptions is used as a basis, but beyond this, each individual property and area is measured separately. To determine the yield, the property's location, attractiveness, quality, the general property market and credit market, the tenant's assumed solvency and the lease agreement structure are assessed. This model uses a number of significant unobservable parameters and is included at level 3 in the valuation hierarchy. These parameters include the following:

Future rental payments

These are estimated based on the actual location, type and condition of the building. The estimates are supported by existing lease agreements, as well as recently concluded lease agreements for similar properties in the same area.

Required rate of return (Yield)

Yield refers to the annual rate of return on an investment property, expressed as a percentage of the property's purchase price or current market value. It is a key metric used by investors to evaluate the performance of a property and compare it to other investment opportunities.Yield is typically calculated by dividing the property's annual net income (rental income minus expenses) by its purchase price or current market value. This provides an indication of the investment's profitability and potential cash flow.There are two primary types of yield in commercial real estate:

Gross Yield = (Annual Rental Income / Property Purchase Price or Market Value) x 100.

This is the annual rental income generated by a property as a percentage of its purchase price or current market value, without accounting for expenses like maintenance, property management fees, and vacancy rates. 2. Net Yield = (Annual Net Income / Property Purchase Price or Market Value) x 100.

This is a more accurate representation of the actual return on investment as it factors in expenses like maintenance, property management fees, and vacancy rates. It is the annual net income generated by a property as a percentage of its purchase price or current market value.

Yield is just one of the many factors investors consider when evaluating commercial real estate investments. Other important factors include location, property type, tenant quality, and market conditions.

Estimated vacancy

This is determined based on actual market conditions and expected market conditions at the end of existing lease agreements.

Ownership expenses

Ownership expenses are estimated based on lease agreement, estimated maintenance costs to maintain the building's capacity over its economic life.

Investment properties in balance sheet 31 December 2023 31 December 2022

Sum	1 150 216 008	1 040 277 981
Right-of-use asset, investment property (cf. note 18/IFRS 16)	28 876 498	23 909 386
Investment properties excl. right-of-use asset, investment property	1 121 339 510	1 016 368 594
Investment properties under construction measured at cost	741 078	13 614 919
Investment properties measured at fair value	1 120 598 432	1 002 753 675

Investment properties measured at fair value	31 December 2023	31 December 2022
Opening balance	1 002 753 675	751 914 664
Purchase of investment property	-	195 839 578
Sale of investment property	-	-
Capital expenditure on investment properties	43 572 937	1 710 182
Net gains/losses from fair value adjustments in the period	3 960 754	5 133 302
Currency effects	70 166 493	48 155 949
Fair value per 31.12	1 120 453 859	1 002 753 675

Investment properties held for continued investment, measured at fair value	1 120 453 859	1 002 753 675
Investment properties held for sale, measured at fair value	-	-
Closing balance investment properties measured at fair value	1 120 453 859	1 002 753 675

Overview of inputs for valuation	31 December 2023	31 December 2022
Valuation Level	3	3
Valuation model	DCF	DCF
Fair Value	1 120 453 859	1 002 753 675
Number of square meters (including developments under construction)	124 201	124 064
WAULT	9.14	9.1
Contracted rent at 31.12.2022 measured in NOK	93 563 292	84 573 522
Actual vacancy	100%	99%
Net Yield (interval)	7.05%-10.25%	7.00%-9.75%

Currency 11.2405 10.5138

Sensitivity analysis

		31/12/2023		31/12/2022
Sensitivity - Valuations (market value)	Value change (+)	Value change (-)	Value change (+)	Value change (-)

Exit yield:
+/- 0.25 percentage points	-30 423 526	32 277 073	-14 824 458	15 665 562
+/- 0.50 percentage points	-59 150 625	66 585 103	-26 915 328	32 487 642
+/- 1.00 percentage points	-112 059 051	142 126 591	-53 620 380	69 706 494

Currency risk

The group has financial risk linked to the conversion of subsidiaries in Lithuania (EUR) to the presentation currency (NOK).

Sensitivity - Net Asset Value		Value change (+)	Value change (-)	Value change (+)	Value change (-)
Increase/decrease NOK/EUR - balance date (EURNOK 11.2405)	+/-2.5%	-12 772 088	12 772 088	-10 301 997	10 301 997
Increase/decrease NOK/EUR - balance date (EURNOK 11.2405)	+/-5.0%	-25 544 176	25 544 176	-20 603 995	20 603 995

Adjusted valuations for the purpose of the financial statements

The average fair value of investment properties estimated by external valuators have been adjusted by a total of MNOK -10.4 to arrive at the fair value booked. The adjustments have been made to reflect the uncertainties related to future capital expenditure requirements and assumed risk related to contract renewals. See reconciliation of adjustments below.

	Asset 1	Asset 2	Asset 3	Asset 4	Asset 5	Asset 6	Asset 7
Average fair value estimated by external valuers	111 842 975	137 358 910	188 727 995	148 992 828	9 161 008	195 584 700	14 387 840
Adjustment 1	(2 360 505)
Adjustment 2		(899 240)
Adjustment 3			(1 507 022)
Adjustment 4				(2 585 315)
Adjustment 5					(393 418)
Adjustment 6						(2 862 906)
Adjustment 7							168 608
Fair value booked per 31.12.23	109 482 470	136 459 670	187 220 973	146 407 513	8 767 590	192 721 794	14 556 448

Investment properties under construction measured at cost

BSP assess that the fair value of their properties under construction cannot be measured reliably and as such measure these at cost until completion. The cost is considered to better reflect the underlying value of the investment property as the uncertainty related to the estimation of the fair value is deemed to be substantial. The properties under construction will be measured at fair value when its fair value is reliably measurable or construction is completed, whichever is earlier.

Investment properties under construction measured at cost	31 December 2023	31 December 2022
Opening balance	0	0
Capital expenditure on investment properties under construction	741 078	13 614 919
Book value investment properties under construction measured at cost	741 078	13 614 919

Book value of investment property pledged as security for debt	1 119 857 355	989 138 304

Information regarding leased investment properties:

As of 31/12/2023 the BSP portfolio includes 7 leased land plots. All leased land plots are on long-term leases. The leases are accounted for in line with IFRS 16 and IAS 40. Refer to note 13 for further information. The land leases are regulated annually in accordance with municipal decisions.

Note 5 Employee benefit expenses

Group's employee benefit expenses	2023	2022
Salaries (incl. holiday pay)	13 166 570	11 191 995
Employer's national insurance contributions	797 439	573 517
Pension expenses	180 015	154 259
Other payments / benefits	1 342 883	69 252
Total	15 486 907	11 989 023

Remuneration to executive management	2023	2022
Salaries (incl. holiday pay)	3 232 704	2 777 910
Bonus	404 143	662 228
Pension expenses	83 692	80 263
Other payments / benefits	65 128	72 652
Total	3 785 667	3 896 618

Remuneration to CEO	2023	2022
Salaries (incl. holiday pay)	1 567 832	1 523 747
Bonus	188 162	423 738
Pension expenses	83 692	77 452
Other payments / benefits	61 759	18 101
Total	1 901 445	2 320 185

Average number of full-time equivalents	16	16

The company is subject to the defined contribution plan and meets the requirements of the law.

The group has not granted loans or provided security for shareholders, board members or employees in 2023 or 2022.

The CEO is entitled to 6 months salary upon termination of employment.

The aim is to create the right conditions for recruiting and keeping members of the management who possess the qualities required to manage the operations of the company profitably and with correct set of values and principles aligned with the company´s. The individual employee's remuneration must be competitive and reflect the person's area of responsibility and performance of the work. The remuneration may consist of a combination of fixed and ongoing performance and other remuneration, including:

• Benefits in kind that appear in employment agreements (for example telephone/ICT solutions, car maintenance and insurance schemes).

• Collective and individual pension schemes.

The remuneration can include share and share value-based schemes based on the company´s owned shares. However, the company cannot offer such incentives beyond existing owned shares without being approved in advance by the company's annual general meeting. For the financial year, executive personnel have received a total of 1,000 shares. The company distributed a total of 1,984 shares during the financial year to its employees.

Remuneration provided to the board of directors (ex. employer's national insurance contributions) 950 000 935 000

2023 2022

Note 6 Other operating assets

2023	Cars & vehicles	Machinery & equipment	Software & other fixed assets	Total
Opening balance at 01.01.	1 428 419	630 160	972 031	3 030 610
Additions during the year	383 917	57 106	112 500	553 523
Disposals during the year	-175 649	-409 160	0	-584 809
Currency differences	98 730	39 797	0	138 527
Closing balance as of 31.12.	1 735 417	317 903	1 084 531	3 137 852

Accumulated depreciation and amortisation as of 01.01.	-783 102	-377 546	-142 930	-1 303 578
This year's depreciation	-249 675	-59 662	-187 807	-497 144
This year's amortisation	111 532	260 786		372 318
Currency adjustment of accumulated depreciation and amortisations	-51 949	-27 666	1 306	-78 310
Accumulated depreciation and amortisations of 31.12.	-973 193	-204 089	-329 431	-1 506 713

Carrying amount at 31.12.2023	762 224	113 814	755 100	1 631 138

Estimated useful life	6-10 years	5 years	3-5 years
Depreciation plan	Straight-line	Straight-line	Straight-line

2022	Cars & vehicles	Machinery & equipment	Software & other fixed assets	Total
Opening balance at 01.01.	1 357 092	486 953	109 477	1 953 522
Additions during the year	-	119 163	856 800	975 963
Disposals during the year	-	-	-	0
Currency differences	71 327	24 044	5 754	101 125
Closing balance as of 31.12.	1 428 419	630 160	972 031	3 030 610

Accumulated depreciation and amortisation as of 01.01.	-532 361	-264 555	-58 599	-855 515
This year's depreciation	-214 038	-96 472	-79 747	-390 257
Currency adjustment of accumulated depreciation and amortisations	-36 703	-16 519	-4 584	-57 806
Accumulated depreciation and amortisations of 31.12.			-142 930	-1 303 578
	-783 102	-377 546

Carrying amount at 31.12.2022	645 317	252 614	829 101	1 727 032

Estimated useful life	6-10 years	5 years	3-5 years

Note 7 Operating costs

	2023	2022
Real estate tax and land tax	2 427 888	1 524 672
Maintenance and fit-out	378 924	339 953
Insurance	525 998	469 195
Other direct ownership costs (excl. salaries)	0	114 357
Total	3 332 810	2 448 177

Note 8 Other administrative costs

	2023	2022
Audit fee (see information in the table below)	895 993	880 880
Fees for accounting & financial assistance	542 902	879 173
Legal assistance	262 917	1 437 694
Agent fees	570 961	582 385
Provision for expected loss on receivables	0	2 000 000
Other operating expenses	4 033 836	3 560 331

Total	6 306 609	9 340 462

Audit fee (ex. VAT)	2023	2022
Statutory Audit	692 971	771 414
Tax advisory	26 445	53 404
Other attestation and advisory services	176 577	56 062

Note 9 Finance income and expenses

Finance income	2023	2022
Interest income	311 398	161 598
Currency gains (net)	57 692	981 286
Gain interest hedge agreements	-	10 295 104
Other financial income	-	294 106
Total	369 089	11 732 094

Finance expenses	2023	2022
Interest expenses	38 199 310	17 020 806
Loss interest hedge agreements	-5 939 299	-
Interest expenses, lease liabilities	755 664	623 272
Other financial expenses	876 057	742 503
Total	33 891 732	18 386 582

Currency items	2023	2022
Exchange rate effects bank	68 376	978 924
Other currency items	-10 684	2 362
Sum	57 692	981 286

Note 10 Interest rate swap agreements

In order to adapt the debt portfolio to the group's target interest rate profile, the following financial instruments are used:

Interest rate swap agreement

Agreement to exchange interest terms for a specific nominal amount over a specific number of periods.

The financial instruments are measured at fair value on the reporting date. Changes in value during the accounting period are booked in profit or loss.

Instruments as of 31.12.2023	Type	Expiration year	Contract amount (principal)	Average interest rate
Interest rate swap	Pays fixed and receives floating	10/01/2024	12 699 000	0.58%
Interest rate swap	Pays fixed and receives floating	10/01/2024	4 125 740	0.58%
Interest rate swap	Pays fixed and receives floating	28/07/2025	254 405	0.72%
Interest rate swap	Pays fixed and receives floating	28/07/2025	1 006 739	0.72%

Instruments as of 31.12.2022	Type	Expiration year	Contract amount (principal)	Average interest rate
Interest rate swap	Pays fixed and receives floating	10/01/2024	13 898 000	0.58%
Interest rate swap	Pays fixed and receives floating	10/01/2024	4 515 000	0.58%
Interest cap rate	Pays fixed	10/01/2025	1 251 247
Interest rate swap	Pays fixed and receives floating	28/07/2025	1 591 567	0.72%

Note 11 Tax

Amounts in NOK thousand

Income tax expense	2023	2022
Tax payable	-2 013	1181
Change in deferred tax	2 913	8 032
Income tax expense	900	9 213

Income tax payable is calculated as follows:	2023	2022
Profit before tax	29 868	56 193
Permanent differences	-17 920	-67 557
Change temporary differences	-37 863	7887
Change in loss carry-forward	15 137	10 811
Adjustment for tax asset not booked		612
Taxable income	-10 778	7 946

Tax payable on the year's profit	-1 617	1 199
Previous year tax adjustment	-396	-17
Payable tax on the year's profit after previous year tax adjustment	-2 013	1181
Tax payable as of 01.01.	2 132	3 065
Currency effect on tax payable as of 01.01	-217	199
Taxes paid/settled during the year	-298	-2313
Tax payable in the balance sheet as of 31.12	-	2 132

Specification of basis for deferred tax:	31 December 2023	31 December 2022
Loss carried forward (TLCF)	110 617	157 301
Investment property	-513 490	-432 944
Finance items	23 112	-8 535
Other differences	3 620	-967
Total	-376 141	-285 145
Deferred tax assets not booked in balance sheet	52 691
Basis of deferred tax liability (-) / deferred tax asset (+)	-323 451	-285 145

Deferred tax liability (-) / deferred tax asset (+)	-48 518	-42 772
Applicable tax rate	15%	15%

As it is uncertain whether the parent company will be able to make use of its deferred tax advantage, this is not included in the calculation of the group's tax advantage.

Lithuania's tax rate of 15% has been used in the group's calculation of deferred tax.

Reconciliation between nominal and actual tax expense rate	2023	2022
Profit before tax	29 868	56 193
Financial profit multiplied by nominal tax rate (22%)	6 571	12 362
Adjustment tax rate Lithuania (15 %)	-1 108	-3 933
Tax effect of permanent differences (15 %)	-2 688	-10 134
Tax effect of other differences (15 %)	-1 479	10 935
Previous year tax adjustment (15 %)	-396	-17
Income tax expenses	900	9 213

Effective tax rate	3.0 %	16.4%

Note 12 Earnings per share

The calculation of basic earnings per share has been based on profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding during the year.

The company has not issued options or other financial instruments which have a dilutive effect on outstanding shares.

Earnings per share	2023	2022
Profit after tax attributable to shareholders	28 968 347	46 979 484
Average number of outstanding shares	6 677 837	6 677 837
Earnings per share	4.34	7.04

Note 13 Lease agreements where the group is the lessee

Lease agreements where the group is the lessee

The group has lease agreements relating to the lease of land in several subsidiaries. The group applies the fair value model to right-of-use assets associated with the property lease contracts. Leased assets included in investment properties at 31 December 2023 was NOK 28.6 million (NOK 23.9 million per 31/12/22). Changes in the value of right-of-use assets measured according to IAS 40 are included in the consolidated statement of profit and loss, and amount to NOK 3.9 million (2022: NOK 1.1 million).

Overview of changes to right of use assets and lease liabilities	Right-of-use assets	Lease liabilities
Opening balance 1 January 2023	24 140 852	24 139 006
Payments		-1 050 421
Depreciation	-162 192
Additions	1 562 360	1 562 360
Other / exchange differences	3 149 749	4 632 013
Balance per 31 December 2023	28 690 768	29 282 958

Opening balance 1 January 2022	21 483 518	21 487 818
Payments	-	-206 594
Depreciation	-127 110	-
Additions	1 668 901	1 668 901
Other / exchange differences	1 115 542	1 188 881
Balance per 31 December 2022	24 140 852	24 139 006

Maturity analysis: Contractual, undiscounted cashflows	31 December 2023	31 December 2022
Current liabilities
- Less than one year	1 006 002	871 265
Non-current liabilities
- One to five years	3 466 930	2 976 888
- More than five years	72 399 950	59 685 192
Total	76 872 882	63 533 345

Amounts recognized in the consolidated statement of income	2023	2022
Depreciation	-162 192	-127 110
Interest expense	-755 664	-623 272
Total	-917 856	-750 382

Amounts recognized in statement of cashflows	2023	2022
Interest payments	-755 664	-623 272

Payments of principal	-294 757	-206 594
Total lease payments	-1 050 421	-829 866

Balance per 31 December 2023	28 557 739	133 029	28 690 768
Other / exchange differences	3 085 994	63 755	3 149 749
Additions	1 562 360	0	1 562 360
Depreciation	0	-162 192	-162 192
Opening balance 1 January 2023	23 909 386	231 466	24 140 852
Right-of-use assets specified by type	Land	Cars	Total

Balance per 31 December 2022	23 909 386	231 466	24 140 852
Other / exchange differences	1 102 353	13 189	1 115 542
Additions	1 668 901	0	1 668 901
Depreciation	0	-127 110	-127 110
Opening balance 1 January 2022	21 138 132	345 386	21 483 518

Note 14 Classification and measurement of financial assets and liabilities

The table below provides an overview of the classification of the group's financial assets and liabilities, and shows the valuation hierarchy for financial instruments that are measured at fair value. The table also shows the balance sheet values and fair value for the group's financial instruments.

31 December 2023	Valuation hierarchy level	Financial instruments at fair value over profit and loss	Financial instruments at amortized cost	Total book value	Total fair value
Assets
Financial fixed assets	2		2 391 434	2 391 434	2 391 434
Accounts receivable and other receivables	2		6 298 097	6 298 097	6 298 097
Bank deposits and cash	1		40 887 760	40 887 760	40 887 760
Interest rate swap	2	626 685		626 685	626 685
Total financial assets		626 685	49 577 292	50 203 977	50 203 977
Liabilities
Debt to credit institutions	2		-579 495 243	-579 495 243	-579 495 243
Accounts payable and other debts	2		-19 908 298	-19 908 298	-19 908 298
Interest rate swap	2
Total financial liabilities		0	-599 403 541	-599 403 541	-599 403 541

Valuation level 1 (net)			40 887 760	40 887 760	40 887 760
Valuation level 2 (net)		626 685	-590 714 009	-590 087 324	-590 087 324
Valuation level 3 (net)		-	-	-	-

31 December 2022	Valuation hierarchy level	Financial instruments at fair value over profit and loss	Financial instruments at amortized cost	Total book value	Total fair value
Assets
Financial fixed assets	2	-	134 068	134 068	134 068
Accounts receivable and other receivables	2	-	7 796 744	7 796 744	7 796 744
Bank deposits and cash	1	-	44 083 195	44 083 195	44 083 195
Interest rate swap	2	6 581 187	-	6 581 187	6 581 187
Total financial assets		6 581 187	52 014 007	58 595 194	58 595 194

Liabilities
Debt to credit institutions	2	-	-601 809 445	-601 809 445	-601 809 445
Accounts payable and other debts	2	-	-24 297 383	-24 297 383	-24 297 383
Interest rate swap	2	-	-	-	-
Total financial liabilities		-	-626 106 828	-626 106 828	-626 106 828

Valuation level 1 (net)		-	44 083 195	44 083 195	44 083 195
Valuation level 2 (net)		6 581 187	-618 176 016	-611 594 829	-611 594 829
Valuation level 3 (net)		-	-	-	-

Fair value hierarchy

The Group uses the following hierarchy to classify assets and liabilities, based on the input to the valuation methods used to measure and disclose their fair value.

Level 1: Use of quoted prices in active markets for identical assets and liabilities.

Level 2: Use of valuation methods with observable market data as input.

Level 3: Use of valuation methods where input is based on a significant degree of unobservable market data.

Valuation of financial instruments is performed by the group's finance department, in consultation with an external advisor. The valuation methods used are adapted to each financial instrument, and aim to make the most of the information available in the market.

Fair value of financial instruments measured at fair value in the balance sheet

Measurement of the fair value of the group's interest rate swaps and hedging instruments is valued based on inputs classified at level 2. The fair value of interest rate swaps and hedging instruments is estimated based on observable forward rates and yield curves, and confirmed by the financial institution with which the company has entered into the agreements.

Fair value of financial instruments measured at amortized cost in the balance sheet

In addition to the above-mentioned financial assets and liabilities which are carried in the balance sheet at fair value, the group's other financial assets and liabilities (financial instruments) are carried on the balance sheet at amortized cost. The fair value of these financial instruments as shown in the table above is expected to be approximately equal to the book value (amortized cost). The carrying value of bank deposits and cash is approximately equal to fair value due to the fact that these instruments have a short maturity. Correspondingly, the book value of receivables and trade payables is approximately equal to fair value as they are entered into under normal conditions and discounting is not assumed to have a significant effect. Bank loans are measured at the fair value of future cash flows, where account is taken of the assumed difference between the current margin and market conditions.

Note 15 Long-term receivables

	31 December 2023	31 December 2022
Share investments		-
Long-term receivables	2 391	134 068
Total	2 391	134 068

Receivables are valued at its recoverable value.

Note 16 Other receivables and other current assets

Other short term receivables as of 31.12:	31. December 2023	31 December 2022	31 December 2021
VAT receivable	1 698 386	966 834	409 472
Prepaid tax and duties	1 210 220	230 220	663 356
Prepaid payments to suppliers	516 142	2 531 697	713 091
Other	291 199	-2 577	1 544
Total	3 715 947	3 726 173	1 787 463

Note 17 Cash and bank deposits

	31 December 2023	31 December 2022
Bank deposits	40 887 760	44 083 195
Total Bank deposits in the statement of financial position	40 887 760	44 083 195

Restricted deposits related to employee tax deduction	137 152	129 130

Note 18 Share capital and shareholder information

As at 31.12 the share capital was divided as follows:

	Amount	Per value	Share capital
Ordinary shares	6 688 232	0,10	668 823
Own shares	8 611	0,10	861

As per 31.12 the 20 largest shareholders were:

Shareholders	Ordinary shares	Shareholding in %
UAB BALTIC EQUITY	1 832 721	27.4 %
CENTRALKIRKEN	1 098 260	16.4 %
CARPE DIEM AFSETH AS	376 434	5.6 %
PIPPI INVEST AS	225 000	3.4 %
TRIVON AS	225 000	3.4 %
GAMBIT AS	173 000	2.6 %
EIENDOMSKAPITAL NORGE V AS	143 060	2.1 %
PASCAL HOLDING AS	103 703	1.6 %
LILLEBY, DAG HAAKON	100 000	1.5 %
OLAV HJORTESET AS	91 481	1.4 %
RIEVE KAPITAL AS	86 838	1.3 %
ANDERSEN-GOTT, TORE	59 139	0.9 %
HJORTESET, OLAV	58 519	0.9 %
DUPUY, PASCAL FREDERIC	57 658	0.9 %
DUPUY, BERIT MYHRE	57 657	0.9 %
BONAVISTA AS	52 628	0.8 %
BRØDRENE HJORTESET AS	52 578	0.8 %
JED INVEST AS	46 000	0.7 %
EGER, NICOLAI ANDREAS	45 600	0.7 %
OPPØYEN, ALF	40 000	0.6 %
Total of the 20 largest shareholders	4 925 276	73.6 %

Shares held by board of directors and senior executives as of 31.12:

Shareholders	Role	Ordinary shares 2023	Ordinary shares 2022
UAB BALTIC EQUITY	Chairman	1 832 721	1 829 721
CENTRALKIRKEN	Board member	1 098 260	1 098 260
CARPE DIEM AFSETH AS	Board member	376 434	376 434
EIENDOMSKAPITAL NORGE V AS	Board member	143 060	115 796
HOLSTEIN INVEST AS	Board member	32 861	32 861
MOSVOLD, JOHN DAVID	Board member	22 276	22 276
HAGEN, BERGER & AAS AS	CEO	13 334	13 334
ARTHEN INVEST AS	CEO	3 709	2 673

Note 19 Interest bearing liabilities

	31 December 2023	31 December 2022
Interest-bearing debt	579 495 243	601 809 445
Bank deposits	-40 887 760	-44 083 195
Financial derivatives	-626 685	-6 581 187
Net interest-bearing debt	537 980 797	551 145 063
Investment properties (excl. additions related to IFRS 16)	1 121 339 510	1 016 368 594
Group Net LTV	48.0 %	54.2 %

Covenant requirements

All bank loans, except for UAB Grandus, are financed by Luminor Bank while UAB Grandus is financed by SEB. The group was not in breach of covenants at the end of the year 2023

Luminor: - LTV*: Max 70 % (consolidated) - DSCR**: Minimum 1.20 (consolidated) - Cash buffer: 12 month interest in cash reserves in accounts

SEB: - LTV*: Max 60 % - DSCR**: Minimum 1.10

Abbreviations explained: LTV = Loan-to-value.*

** DSCR = The coverage ratio of EBITDA *** over total debt payment per year. In the BSP Group, this is only applied for the real estate SPV's holding assets with Mortgage. Hence, central administration and company costs in management companies and Holding companies are not part of EBITDA calculation for bank covenants. *** EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization.

Note 20 Debt to credit institutions

	Non-current			Current
Interest-bearing liabilities	31 December 2023	31 December 2022	31 December 2023	31 December 2022
Borrowings from credit institutions	616 954 774	523 424 243	27 918 014	24 810 505
Other interest-bearing liabilities	0	19 450 427	9 541 517	35 339 658
Total interest-bearing liabilities	616 954 774	542 874 671	37 459 531	60 150 163

	31 December 2023		31 December 2022
Interest bearing liabilities specified per currency	Currency amount	NOK amount	Currency amount	NOK amount
EUR	53 866 065	605 481 577	55 374 182	581 317 427
NOK	48 932 728	48 932 728	21 707 480	21 707 480
Total interest-bearing liabilities		654 414 305		603 024 907

Concept visualisation | Liepų Street, Klaipėda Liepų Parkas (3.6 hectare) | Retail and business park

Interest-bearing liabilities - maturity 31 December 2023	2024	2025	2026	2027	2028	2029 and later	Total
Total interest-bearing liabilities amount 1.1	612 970 521	575 892 070	498 213 604	470 532 918	446 002 473	423 702 349
Yearly amortisation of borrowings from credit institutions and other IBD*	27 680 687	27 680 687	27 680 687	24 530 445	22 300 124	-	129 872 629
Matured repayments of loans	9 397 764	49 997 779		446 002 473	0		505 398 016
Total interest-bearing liabilities excl. prepaid borrowing expenses	37 078 451	77 678 466	27 680 687	470 532 918	22 300 124	-	635 270 645

Interest to be paid on interest-bearing liabilities (margin) - 2.19% average	18 138 381	15 906 064	10 607 774	10 036 063	9 523 268		64 211 550
3-month Euribor (4.0%)	23 282 952	22 482 069	19 374 930	18 330 708	17 394 096		100 864 756
Interest rate SWAP (0.58%) - income (estimate)	-480 038	-480 038	-480 038				-1 440 114
Total interest payments	40 941 295	37 908 095	29 502 667	28 366 770	26 917 364	0	163 636 192

New borrowings (development loan, investment loan, re-leverage etc.)	0	0	0	446 002 473	0

Total future payments on interest-bearing liabilities	78 019 746	115 586 561	57 183 354	498 899 688	49 217 488	-	798 906 836

Total future payments exluding re-finance of whole portfolio							291 277 260


Interest-bearing liabilities - maturity 31 December 2022	2023	2024	2025	2026	2027	2028 and later	Total
Total interest-bearing liabilities amount 1.1	603 024 907	563 139 132	516 901 206	492 370 761	467 840 316	467 840 316
Yearly amortisation of borrowings from credit institutions and other IBD*	24 530 445	24 530 445	24 530 445	24 530 445		-	98 121 780
Matured repayments of loans	33 747 831	21 707 480			467 840 316		523 295 627
Total interest-bearing liabilities excl. prepaid borrowing expenses	58 278 276	46 237 925	24 530 445	24 530 445	467 840 316	-	621 417 407

Interest to be paid on interest-bearing liabilities (margin) - 2.14% average	12 313 653	11 324 162	10 799 210	10 274 259	10 011 783		54 723 066
3-month Euribor (3.5%)	20 139 152	18 520 825	17 662 259	16 803 694	16 374 411		89 500 342
Interest rate SWAP (0.58%) - income (estimate)	-6 523 239						-6 523 239
Total interest payments	25 929 566	29 844 987	28 461 469	27 077 952	26 386 194	-	137 700 169

New borrowings (development loan, investment loan, re-leverage etc.)	18 392 500				467 840 316

Total future payments on interest-bearing liabilities	84 207 842	76 082 912	52 991 915	51 608 397	494 226 510	-	759 117 576

Total future payments exluding re-finance of whole portfolio 291 277 260

* IBD = Interest-Bearing Debt

Note 21 Other short-term debt

Other short-term liabilities in the group as of 31/12:

	31 December 2023	31 December 2022
Prepaid payments from tenants	9 089 542	8 801 636
Unpaid dividends	422 920	347 119
Accrued holiday pay	1 002 453	993 882
Other salary provisions	1 600 169	1 404 261
Payable dues and other taxes	3 812 022	2 803 534
Other	743 747	1 663 620
Total	16 670 853	16 014 052

Mezzanine loan and seller's credit is classified as interest-bearing debt in the balance sheet and are therefore specified under note 20.

Note 22 Financial risk management

The Group is exposed to financial risk through variations in interest rates and exchange rates. The Company is also dependent on access to financing in the banking and capital markets. The risk of losses on receivables is also closely monitored because of the market turbulence and the Russian invasion of Ukraine and its effect on the Baltic states and the global economy.

Capital Management

Capital management focuses on the optimal balance between equity and debt in a company's capital structure. It aims to maximize shareholder value and ensure long-term financial stability by minimizing the cost of capital and maintaining an appropriate level of financial flexibility for its operations.

Currently the board has set a target in its investment and company strategy to not go over 65 % loan-to-value and maintain a minimum 12-month interest coverage liquidity buffer. At the date of this report, the loan to value ratio for the Group´s RE portfolio is 53 % and including the group leverage positions 58.43 % (excluding cash reserves). The group's total cash position was MNOK 41 per 31.12.2023, which is considered in line with the strategy on cash reserves of minimum 12 month interest coverage. The net LTC inc cash reserves was at 31.12.2023 56.37%.

The Group is exposed to financial risk and has defined the following relevant risk areas:

Credit risk

Credit risk is assessed at group level and is mainly linked to the risk of incurring losses as a result of tenants not paying the agreed rent. Rent payment is normally secured with a rent deposit or payment guarantees from banks or guaranteed by parent companies, with a high credit rating. In recent years, the group has had relatively low losses on rental claims, and the risk that the group will incur significant losses because of bankruptcies among tenants, is considered moderate. Realised losses have not increased significantly during the covid pandemic or the economic downturn in 2023, and the group considers that the rental income achieved in the financial year and the development of the pandemic and market uncertainties indicate that the paying capacity of the tenants will be maintained overall. In recent years, rental losses have accounted for less than 0.5 % of the group's rental income.

Please refer to note 20 for maturity analysis related to the group's debt and other payables.

Liquidity risk

There are financial covenant requirements (loan conditions) in all of the group's bank loan agreements related to equity share, debt service cost coverage ratio and loan-to-value ratio. The group has fulfilled all requirements in the loan agreements in the financial year. The group has a decent to good margin in relation to the defined covenant requirements, and the risk of breach of these requirements is considered to be low for the next 12 months. The group has assessed that there is a low probability that the covid pandemic or current market turbulence will affect the group's ability to service its financial liabilities in the next 12 months.

Optimisation of the Company's short-term and long-term financing is a natural part of the Company's daily operations, and the Company makes ongoing strategic assessments in this connection, which may include the sale of assets, refinancing of existing loans, bond financing, M&A, and/or raising capital from the Company's shareholders or external investors to ensure continued operations.

Please refer to note 20 for maturity analysis related to the group's debt and other payables.

Currency risk

The Group is also exposed to currency risk against NOK, as the Group's investments, revenues, and the majority of costs are in euros. All properties are financed through debt in euros, collectively forming a natural hedge for part of the currency risk. The remaining exposure is not hedged by the Group, in line with the company's strategy to allow investments in Baltic Sea Properties to also include a euro exposure for the investor.

Sensivitity

EURNOK 31/12/2023	11.24
-10%	10.12
+10%	12.36
Effect of +/- 10% change in exchange rate onthe group's equity in NOK:	32 356 358

Interest rate risk

Changes in interest rates can have a significant impact on the value of real estate assets, the cost of financing, and the ability of real estate companies to generate income. The risk associated with unpredictable cost of financing, can be mitigated by having a portion of long-term fixed interest rates in the financing mix. The board closely discuss targets for the share of fixed interest depending on the cost at the time. Interest positions and interest profiles are reported to the board on a regular basis. The Group has currently no direct policy of ensuring fixed interest hedges however has regular discussions on the features of floating vs fixed interest measures in the financing mix.

The group currently holds fixed interest agreements for approximately 4.3 % of the loan portfolio. The remaining term was 1.34 years per 31.12. Interest hedging in the group is mainly carried out using financial instruments at portfolio level. The group does not apply hedge accounting in accounting for the swap and cap agreements.

Sensivitity

31/12/2023
Euribor interest rate - sensitivity (effect of interest swaps not included)	Interest cost p.a (bank margin)	EURIBOR cost p.a	Full interest + Euribor cost p.a	Effective interest margin
2.0 %	NOK 12 737 330	NOK 11 641 994	NOK 24 379 324	4.19%
2.5 %	NOK 12 737 330	NOK 14 552 493	NOK 27 289 823	4.69%
3.0 %	NOK 12 737 330	NOK 17 462 991	NOK 30 200 321	5.19%
3.5 %	NOK 12 737 330	NOK 20 373 490	NOK 33 110 820	5.69%
4.0 %	NOK 12 737 330	NOK 23 283 988	NOK 36 021 318	6.19%

Shows cost at 3-month EURIBOR at respective rates.

31/12/2022
Euribor interest rate - sensitivity (effect of interest swaps not included)	Interest cost p.a (bank margin)	EURIBOR cost p.a	Full interest + Euribor cost p.a	Effective interest margin
2.0 %	NOK 11 037 724	NOK 10 303 365	NOK 21 341 090	4.14%
2.5 %	NOK 11 037 724	NOK 12 879 207	NOK 23 916 931	4.64%
3.0 %	NOK 11 037 724	NOK 15 455 048	NOK 26 492 773	5.14%
3.5 %	NOK 11 037 724	NOK 18 030 889	NOK 29 068 614	5.64%
4.0 %	NOK 11 037 724	NOK 20 606 731	NOK 31 644 455	6.14%

Shows cost at 3-month EURIBOR at respective rates.

31/12/2021
Euribor interest rate - sensitivity (effect of interest swaps not included)	Interest cost p.a (bank margin)	EURIBOR cost p.a	Full interest + Euribor cost p.a	Effective interest margin
2.0 %	NOK 8 711 416	NOK 8 056 777	NOK 16 768 193	4.16%
2.5 %	NOK 8 711 416	NOK 10 070 971	NOK 18 782 387	4.66%
3.0 %	NOK 8 711 416	NOK 12 085 166	NOK 20 796 581	5.16%
3.5 %	NOK 8 711 416	NOK 14 099 360	NOK 22 810 775	5.66%
4.0 %	NOK 8 711 416	NOK 16 113 554	NOK 24 824 970	6.16%

Shows cost at 3-month EURIBOR at respective rates.

The table shows the sensitivity and effect of budgeted interest cost (fixed bank margin) plus a 3-month EURIBOR assumption on a range between 2% - 4% in the respective period.

Euribor at the end of 2021 was -0.570 %. Euribor at the end of 2022 was 2.162 %. Euribor at the end of 2023 was 3.905 %.

The sensitivity table presented above does not consider Group financing options like mezzanine facilities, as they do not include a Euribor component. It should be noted that the margins for the mezzanine facilities are 9% for Ambolt mezzanine and 8% for seller credit, respectively.

Further refrence is made to finance table overview in note 20.

Note 23 Subsidiaries

The following companies are part of the group and therefore consolidated in the Consolidated financial statement

Company	Ownership	Office	Percentage ownership

Direct ownership:

BSP Asset Management Klaipėda UAB	Direct	Klaipėda, Lithuania	100%
BSP Holding LT UAB	Direct	Vilnius, Lithuania	100%
BSP Asset Management UAB	Direct	Vilnius, Lithuania	100%

Indirect ownership (owned via BSP Holding LT UAB):

BSP Logistic Property UAB	Indirect	Vilnius, Lithuania	100%
BSP Logistic Property II UAB	Indirect	Vilnius, Lithuania	100%
BSP Logistic Property IV UAB	Indirect	Vilnius, Lithuania	100%
BSP Logistic Property V UAB	Indirect	Vilnius, Lithuania	100%
BSP Logistic Property VI UAB	Indirect	Vilnius, Lithuania	100%
BSP Logistic Property VII UAB	Indirect	Vilnius, Lithuania	100%
BSP Logistic Property VIII UAB	Indirect	Vilnius, Lithuania	100%
BSP Logistic Property IX UAB	Indirect	Vilnius, Lithuania	100%
BSP Industrial Property III UAB	Indirect	Vilnius, Lithuania	100%
BSP Industrial Property IV UAB	Indirect	Vilnius, Lithuania	100%
BSP Retail Properties I UAB	Indirect	Vilnius, Lithuania	100%
BSP Retail Properties V UAB	Indirect	Vilnius, Lithuania	100%
Klaipėdos Verslo Parkas UAB	Indirect	Klaipėda, Lithuania	100%
Liepų Parkas UAB	Indirect	Klaipėda, Lithuania	100%
Pastatų Vystymas UAB	Indirect	Klaipėda, Lithuania	100%
Prekybos Centras Grandus UAB	Indirect	Klaipėda, Lithuania	100%

Note 24 Segment information and rental income

The group has one operational segment as there are no material differences in risk and returns in the economic environments in which the company operates. The property portfolio consists of properties in Lithuania and internal reporting is consolidated into one reporting segment.

Rental income	Segment	Geography	2023	2022
Income from tenants	Investment property	Lithuania	91 286 411	69 521 275
Total rental income			91 286 411	69 521 275

Customers that aggregate 10 % or more of the Group's total revenues are disclosed in the table below
			2023	2022
Logistics tenant 1			13 264 013	11 273 980
Logistics tenant 2			12 907 721	11 120 223
Logistics tenant 3			11 397 331	9 912 584

Lease management

The group mainly enters into long-term lease contracts with solid counterparties. The lease contracts mainly has fixed rent and include CPI increases.

The group's future accumulated rent from operational lease contracts per 31.12.23

The following table specifies contractual annual rent. Contracts at maturity are assumed not renewed or replaced by market rent (this to illustrate contractual revenue streams as per balance sheet date).

Please also refer to maturity analysis in the tables below.

Amounts in NOK thousand	2023	2022
Less than 1 year	NOK 93 559	NOK 84 543
Between 1 and 2 years	NOK 93 559	NOK 84 543
Between 2 and 3 years	NOK 81 069	NOK 84 543
Between 3 and 4 years	NOK 81 069	NOK 57 476
Between 4 and 5 years	NOK 63 434	NOK 46 561
Between 5 and 6 years	NOK 63 434	NOK 46 561
Total (<6 years)	NOK 476 124	NOK 404 227

The group's lease contracts per 31.12.2023 have the following maturity structure measured in annual rent*

Amounts in EUR thousand	No of contracts	Contract rent (EUR)	Contract rent, %
Less than 1 year
Between 1 and 5 years	4	€ 3 788	45.5%
Between 5 and 10 years
Over 10 years	7	€ 4 536	54.5%
Total	11	€ 8 324	100%

The group's lease contracts per 31.12.2022 have the following maturity structure measured in annual rent*

Amounts in EUR thousand	No of contracts	Contract rent (EUR)	Contract rent, %
Less than 1 year
Between 1 and 5 years	4	€ 3 614	44.9%
Between 5 and 10 years
Over 10 years	7	€ 4 430	55.1%
Total	10	€ 6 539	100%

The group's lease contracts per 31.12.2021 have the following maturity structure measured in annual rent*

Amounts in EUR thousand	No of contracts	Contract rent (EUR)	Contract rent, %
Less than 1 year
Between 1 and 5 years	3	€ 2 481	37.9%
Between 5 and 10 years
Over 10 years	7	€ 4 058	62.1%
Total	10	€ 6 539	100%

* Grandus Shopping centre, the retail portfolio in BSP Retail Properties I UAB and Klaipeda Business Park are multi-tenant, but here presented as having one contract party.

Note 25 Reconciliation of liabilities from financing activitites

Amounts in NOK thousand	2023			2022
	Interest-bearing debt	Lease obligations	Interest-bearing debt	Lease obligations
Liabilities as of 01.01	600 094	24 139	404 794	21 488
New interest-bearing debt	64 260	-	244 603	-
Down-payment on interest bearing debt	-53 993	-	-76 274	-
Increase lease liabilities	-	1 562	-	1 669
Down-payment lease liabilities	-	-1 050	-	-207
Reclassification from long-term to short-term debt	-	-	-	-
Exchange rate effects	44 054	4 632	26 971	1189
Liabilities as of 31.12	654 414	29 283	600 094	24 139

Note 26 Uncertain liabilities

In 2011, the tax authorities requested information from the parent company regarding previously deducted issue costs related to the balance sheet for 2006. The parent company was then able to reduce its carry forward loss by NOK 23,688,757. This was part of the issue/facilitation fee that was considered to be part of the investment and therefore not gave a tax deduction. Furthermore, the decision states that additional tax of 30% of the tax of NOK 23,688,757, a total of NOK 1,989,856, will be effected in the first year the company makes a tax profit. There is thus a contingent liability of NOK 1,989,856 for which there is no provision in the accounts as the company considers it less than 50% likely that it will make a tax profit. This assessment is based on the fact that the company's main source of income is dividends from subsidiaries, which are not subject to taxation.

Per 31.12.2023, the parent company had a deferred tax asset of MNOK 11.6 which the company has chosen to not book in its balance sheet as it not expects to come in a position of taxation where it will be able to make use of the tax asset.

Note 27 Transactions with related parties

The seller credit originally had a 12-months repayment period, maturing on the 23rd of May 2023, but its maturity was extended during the year, until the end of 2024.

Note 28 Russia's invasion of Ukraine

Russia's invasion of Ukraine in 2022 has markedly escalated geopolitical tensions at both regional and international levels. However, the direct impact on our operations and the wider Lithuanian economy has, thus far, been modest. The expansion project for Rhenus Logistics, which faced delays in March 2022, secured a binding agreement on 22nd August 2023. Meanwhile, Vinges Logistics, initially indirectly impacted by sanctions on Russia and Belarus, has adeptly restructured and pivoted towards alternative markets.

Overall, the Lithuanian economy has rapidly bounced back from the initial shock and sustained its vibrancy. Market confidence appears to be bolstered primarily by Lithuania's membership in the EU and NATO. This sentiment is likely reinforced by the strategic shift of many Lithuanian businesses away from Russian markets following the annexation of Crimea in 2014.

In line with predictions from last year's report, the prevailing challenges over the past year have stemmed more from inflation and rising interest rates than from other direct fallout of the conflict. Despite these headwinds, we continue to operate robustly, underpinned by a solid financial foundation that enables us to seize current market opportunities. This includes the initiation of our new development project, "Liepų Parkas," which was announced to the stock market on the 4th of March 2024.

Note 29 Events after reporting date

Please refer to the stock market announcement published on the 4th of March 2024 (NewsWeb message ID 612596) for further details.

Old town | Vilnius

Amounts in NOK

Income Statement	Note	31 December 2023	31 December 2022

Operating income
Other operating income	2	5 007 788	4 707 374
Sum operating income		5 007 788	4 707 374
Operating expenses
Wages and social costs	3	4 613 828	4 565 285
Depreciations on fixed assets	4	191 507	54 820
Other operating expenses	3,5	2 703 916	2 726 292
Sum operating expenses		7 509 252	7 346 397

Profit from operations		-2 501 464	-2 639 022
Financial income & expenses
Dividends received from subsidiaries	6	2 892 143	-
Interest income from subsidiaries	6	7 410 803	4 208 469
Other interest income		305 355	161 598
Profit from sale of shares		-	-
Currency gain (+) / loss (-)	7	8 471 084	9 723 510
Interest expenses to subsidiaries	6	-	619 061
Other interest expenses	8	2 513 583	2 519 826
Impairment of non-current financial assets (+) / Reversal of previous years' impairment of non-current financial assets (-)	6	-	-
Other financial expenses	8, 7	21 600	1 390 550

Net profit from financial items		16 544 200	9 564 141
Profit before taxes		14 042 737	6 925 119
Corporate income tax	9	-	-
Change in deferred taxes	9	-	-
Taxes on profit		-	-
PROFIT AFTER TAXES		14 042 737	6 925 119
Allocation of profit
Transferred to/from retained earnings 1	10	14 042 737	6 925 119
Sum allocation		14 042 737	6 925 119

1 NOK 10 670 909 (NOK 1.60 per share) was distributed as dividend in June 2023, in accordance with the decision of the AGM held on the 3rd of May 2023. NOK 10 032 348 (NOK 1.50 per share) was distributed as dividend in August 2022, in accordance with the decision of the AGM held on the 1st of June 2022.

Amounts in NOK

Balance Sheet	Note	31 December 2023	31 December 2022
ASSETS
NON-CURRENT ASSETS
Fixed assets
Other fixed assets	4	775 151	840 587
Sum fixed assets		775 151	840 587
Non-current financial assets
Investments in subsidiaries	6	15 061 917	12 723 177
Loans to subsidiaries	6	184 691 669	140 069 000
Sum non-current financial assets		199 753 586	152 792 177
Sum fixed assets		200 528 736	153 632 764
CURRENT ASSETS
Accounts receivable
Trade receivables		719 524	724 801
Other accounts receivable	11	-	-
Sum accounts receivable		719 524	724 801
Cash and cash equivalents
Cash and cash equivalents	12	996 401	15 626 155
Sum current assets		1 715 925	16 350 956
SUM ASSETS		202 244 661	169 983 720

Amounts in NOK

Balance Sheet	Note	31 December 2023	31 December 2022
EQUITY

Paid-in equity
Share capital	10, 7	668 823	668 823
Own shares	10	-861	-1 040
Share premium	10	118 788 021	118 788 021
Sum paid-in equity		119 455 983	119 455 805
Retained earnings
Retained earnings	10	31 148 840	27 687 991
Sum retained earnings		31 148 840	27 687 991
Sum equity		150 604 824	147 143 796
LIABILITIES
Non-current liabilities
Non-current borrowings from subsidiaries	6	117 745	116 152
Other non-current liabilities	8	50 000 000	21 715 333
Sum non-current liabilities		50 117 745	21 831 485
Current liabilities
Trade payables		406 966	191 432
Payable dues and other taxes		178 286	202 532
Current borrowings from subsidiaries	6	8 091	7 177
Other current liabilities	8, 14	928 750	607 298
Sum current liabilities		1 522 093	1 008 438
Sum liabilities		51 639 838	22 839 923
SUM EQUITY & LIABILITIES		202 244 661	169 983 720

Oslo, the 10th of April 2024

James Andrew Clarke Chairman of the Board

Lars Christian Berger CEO

John Afseth Board Member

John David Mosvold

Board Member

Bjørn Bjøro Board Member

Amounts in NOK

	Cash Flow Statement	31 December 2023	31 December 2022

	Cash flows from operating activities
	Profit before tax	14 042 737	6 925 119
+/-	Paid taxes	-	20 580
+/-	Depreciations	191 507	54 820
-	Gains from sale of shares	89 200	-
+/-	Change in trade receivables and other receivables	5 277	-501 172
+/-	Change in trade payables	215 535	-39 749
+/-	Change in other borrowings	221 405	1 249 167
+/-	Change in non-current liabilities	-	-
+/-	Items classified as financial items	-16 260 445	-
+/-	Change in other provisions	-	20 493
=	Net cash flows from operating activities	-1 494 786	7 729 258
	Cash flows from investment activities
-	Purchases of fixed assets (incl. reclassifications)	-126 071	-826 872
-	Purchases of shares	-2 338 740	-10 554 800
+	Received dividend from subisdiaries	2 892 143	-
+	Proceeds from sale of shares and other fixed assets	-	-
=	Net cash flows from investment activities	427 331	-11 381 672

	Cash flows from financing activities
+/-	Net changes in current financial debts	-	-15 404 724
+/-	Net changes in non-current financial debts	25 771 083	18 750 000
+/-	Net changes in non-current loans to/from subsidiaries	-28 795 958	23 373 467
-	Distribution of dividends	-10 595 108	-10 032 348
=	Net cash flows from financing activities	-13 619 983	16 686 395
+/-	Effects from currency differences on cash and cash
	equivalents	57 683	-978 924
=	Net change in cash and cash equivalents	-14 629 754	12 055 058
+	Cash and cash equivalents at beginning of period	15 626 155	3 571 097

=	Cash and cash equivalents at end of period	996 401	15 626 155
	Restricted deposits per 31.12 related to employee tax deduction	137 152	129 130

Notes to the annual financial statements 2023 for the Parent Company

Note 1 Accounting Principles

The annual accounts have been drawn up in accordance with the Accounting Act (""regnskapsloven"") and prepared according to Norwegian accounting standards and recommendations for good accounting practice (""God regnskapsskikk (GRS)""). The annual accounts have been prepared with the assumption of continued operations, cf. Section 3-3a of the Accounting Act (regnskapsloven).

Sales revenue and operating costs

The parent company's operating income derives from the sale of management services to its own subsidiaries. The parent company's operating income is recognized in the income statement when it is earned (""opptjeningsprinsippet""), while operating expenses are recognized in the income statement in the same period as the income is earned (""sammenstillingsprinsippet""). Operating income related to reinvoicing is netted against the operating cost that is reinvoiced.

Cash flow statement

The parent company's cash flow statement has been prepared using the indirect method.

Pension

The parent company is obliged to have an occupational pension scheme in accordance with the Mandatory Occupational Pensions Act (""lov om obligatorisk tjenestepensjon""). The pension schemes in the Norwegian company satisfy the requirements of this act. Defined contribution pension schemes mean that no promise is made of a future pension of a given amount, but an annual contribution is paid to the employees' collective pension savings. The future pension will depend on the size of the subsidy and the annual return on the pension savings. The company has no further obligations related to the work input after the annual deposit has been paid. There is no provision for accrued pension obligations in such schemes. Defined contribution pension schemes are expensed directly and include all employees in the Norwegian company.

Main principles for assessment and classification of assets and liabilities

Fixed assets with a limited economic life are entered in the balance sheet at acquisition cost and are subject to scheduled depreciation. Share investments are classified as financial fixed assets and are booked at the lower of acquisition cost and fair value. Dividends received and other profit distributions from the subsidiaries are recognized as other financial income. Current assets are valued at the lower of acquisition cost and fair value.

Assets intended for permanent ownership or use are classified as fixed assets. Other assets are classified as current assets. Fixed assets are assessed at acquisition cost but written down to fair value when the decline in value is not expected to be temporary. Fixed assets with a limited economic life are depreciated linearly over their expected economic life. As of 31/12/2023, all assets were permanent property.

Accounts receivable and other receivables are entered at face value after deduction for provisions for expected losses. The provision for losses is made on the basis of an individual assessment of the individual claims.

The company's long-term and short-term liabilities are entered in the balance sheet at the nominal amount received at the time of establishment. The debt is not subject to upward/downward assessments as a result of interest rate changes. 1st year installments are classified as short-term debt.

Long-term shares

Long-term shares where Baltic Sea Properties does not have significant influence are entered in the balance sheet at acquisition cost. The investments are written down to fair value if the decline in value is not temporary. Received dividends and other profit distributions are recognized as other financial income.

Tax

Tax is expensed when it is incurred, i.e. the tax cost is linked to the accounting profit before tax. The tax cost consists of payable tax and changes in deferred tax. Deferred tax in the balance sheet is calculated on the basis of temporary differences between accounting and tax values. The reason for deferred tax is different accruals of the accounting and tax results.

Conversion of foreign currency

Assets and liabilities in foreign currency are converted to NOK at the exchange rate on the balance sheet date, while income and costs in foreign currency are converted to NOK at average exchange rate.

Transactions in foreign currency are converted to NOK using the transaction rate. Currency gains and losses arising from the payment of such transactions, and from the conversion of monetary items (assets and liabilities) in foreign currency at the end of the year at the exchange rate on the balance sheet date, is recognized in profit and loss.

The following exchange rates (NOK/EUR) have been used in the preparation of the accounts:

Exchange rate on balance sheet date 11.2405 10.5138

Investment in subsidiaries

Investment in subsidiaries Investments in subsidiaries are assessed in the company's financial statement according to the cost method. Investments are assessed at acquisition cost for the shares, unless impairments are founds necessary. Impairments to fair value are made when the decline in value is due to reasons that cannot be assumed to be temporary and must be considered necessary according to good accounting practice. Impairments are reversed when the basis for the impairment is no longer present. Dividends received from the subsidiaries are recognized as other financial income.

Note 2 Other operating income

The parent company booked other operating income consisting of invoices for management services issued to:

	2023	2022
External clients	-	-
BSP Logistic Property UAB	809 206	717 319
BSP Logistic Property II UAB	1 109 736	1 196 847
BSP Logistic Property IV UAB	1 155 998	1 139 566
BSP Logistic Property V UAB	878 564	682 179
BSP Logistic Property VI UAB	430 023	573 909
BSP Logistic Property VII UAB	86 698	6 975
BSP Logistic Property VIII UAB	173 396	45 944
BSP Retail Properties I UAB	179 188	181 162
UAB Retail Properties V UAB	184 979	163 474
Sum	5 007 788	4 707 374

In 2023, the parent company invoiced subsidiaries for services according to set guidelines for the group and the arm's lenght principle.

Operating income from reinvoicing of expenses have been netted against their operating expense reinvoiced.

Note 3 Wages and social costs

The parent company's wages and social costs for the year were:

Wages/allowances	2023	2022

Wages	2 509 497	2 401 991
Bonuses	322 067	565 892
Board remuneration	950 000	935 000
Employer's tax ("Arbeidsgiveravgift")	628 220	566 549
Other social costs	204 044	95 853
Sum	4 613 828	4 565 285

Distribution of wages/allowances (excl. Employer's tax)	2023	2022
CEO of parent company (excl. bonus)	1 629 591	1 614 900
Bonuses (incl. CEO's bonus)	322 067	565 892
Chairman of the Board	300 000	300 000
Other board members	650 000	600 000
Other employees and contractors	1 083 950	917 944
Sum	3 985 608	3 998 736

Full-time equivalents employed:	2.0	2.0

No loans have been given to employees as of 31.12.23 or 31.12.22. No guarantees have been given on behalf of employees or members of the board.In 2023, the CEO received a total remuneration of NOK 1.9 million (ex. employer's tax) including bonus, of which NOK 83,692 are pension costs and NOK 61,759 other benefits. The CEO is entitled to 6 months' salary upon termination of employment.

The company is subject to the rules on mandatory occupational pensions ("obligatorisk tjenestepensjon").

Auditor	2023	2022
Statutory audit	748 371	465 523
Tax advisory	26 445	53 404
Other services	104 046	56 062
Sum audit fees (ex. VAT reclaimed)	878 862	574 989

Note 4 Fixed assets

	Office machines	Other fixed assets	Sum
Book value 1.1.2023	26 627	813 960	840 587
Acquisitions	13 571	112 500	126 071
Disposals	-	-	0
This year's depreciation	-20 147	-171 360	-191 507
Book value 31.12.2023	20 051	755 100	775 151

Note 5 Operating expenses

Sum other operating expenses	2 703 916	2 726 293
Other operating expenses	292 015	402 965
Insurance	173 601	254 279
Travel expenses, etc.	262 628	316 739
Shareholder registry, etc.	111 655	58 275
IT expenses	271 658	256 950
Office rent*	324 251	208 786
Financial and legal assistance	519 738	653 310
Audit fees	748 371	574 989
	2023	2022

* Operating income from office sublease is netted against office rent expenses (2023: NOK 8429, 2022: NOK 69 036).

Delamode | BSP Park – Vilnius West

Note 6 Subsidiaries

The main purpose of Baltic Sea Properties AS is to invest in companies in the Baltics which in turn invest in and develop properties for sale and rental, as well as management services for these.

Entity	Ownership	Office location	Stake	Booked equity 31.12	"Profit/Loss 31.12"	Loan to sub sidiary 31.12	Year's interest income	Debt to sub sidiary 31.12	Year's interest expense

Direct ownership:
BSP Asset Management Klaipėda UAB	Direct	Klaipėda, Lithuania	100%	863 129	-1 656 170
BSP Holding LT UAB	Direct	Vilnius, Lithuania	100%	18 452 336	-13 958 732	184 691 669	7 410 803
BSP Asset Management UAB	Direct	Vilnius, Lithuania	100%	4 647 152	-786 592
Indirect ownership (owned via BSP Holding LT UAB):
BSP Logistic Property UAB	Indirect	Vilnius, Lithuania	100%	16 499 155	4 648 111
BSP Logistic Property II UAB	Indirect	Vilnius, Lithuania	100%	97 637 029	6 530 605
BSP Logistic Property IV UAB	Indirect	Vilnius, Lithuania	100%	113 137 321	9 901 657			-8 091
BSP Logistic Property V UAB	Indirect	Vilnius, Lithuania	100%	23 682 077	6 969 909
BSP Logistic Property VI UAB	Indirect	Vilnius, Lithuania	100%	17 002 312	-997 014
BSP Logistic Property VII UAB	Indirect	Vilnius, Lithuania	100%	-2 472 442	463 550
BSP Logistic Property VIII UAB	Indirect	Vilnius, Lithuania	100%	54 295 939	3 171 528			-117 745
BSP Logistic Property IX UAB	Indirect	Vilnius, Lithuania	100%	-163 244	-57 500
BSP Industrial Property III UAB	Indirect	Vilnius, Lithuania	100%	-458 499	-166 255
BSP Industrial Property IV UAB	Indirect	Vilnius, Lithuania	100%	2 509 793	-70 353
BSP Retail Properties I UAB	Indirect	Vilnius, Lithuania	100%	87 720 752	4 062 322
BSP Retail Properties V UAB	Indirect	Vilnius, Lithuania	100%	21 845 867	1 380 961
Klaipėdos Verslo Parkas UAB	Indirect	Klaipėda, Lithuania	100%	28 244 087	3 155 174
Liepų Parkas UAB	Indirect	Klaipėda, Lithuania	100%	7 558 468	-2 954 760
Pastatų Vystymas UAB	Indirect	Klaipėda, Lithuania	100%	92 617 572	13 553 878
Prekybos Centras Grandus UAB	Indirect	Klaipėda, Lithuania	100%	48 884 106	62 048
SUM				632 502 912	33 252 367	184 691 669	7 410 803	-125 836	-

Book value in parent company of shares owned directly:

	Acquisition cost 01.01	Book value 01.01	Disposal	Acquisition	Year's im pairment (-)/ reversal prev. imp. (+)	Book value 31.12
BSP Asset Management Klaipėda UAB (tidl. BNTP UAB)	2 114 011	2 114 011	-	2 338 740	-	4 452 751
BSP Holding LT UAB	10 584 721	10 584 721	-	-	-	10 584 721
BSP Asset Management UAB	24 445	24 445	-	-	-	24 445
SUM	12 723 177	12 723 177	-	2 338 740	-	15 061 917

Note 7 Share capital, shareholder information and ownership structure

The share capital per 31.12 consisted of the following share classes:

	Number of shares	Nominal value per share	Book value
Ordinary shares	6 688 232	0.10	668 823
Own shares	8 611	0.10	861

Ownership structure:

The 20 largest shareholders in the parent company per 31.12 were:

	Ordinary shares	Voting/ ownership stake
UAB BALTIC EQUITY	1 832 721	27.4 %
CENTRALKIRKEN	1 098 260	16.4 %
CARPE DIEM AFSETH AS	376 434	5.6 %
PIPPI INVEST AS	225 000	3.4 %
TRIVON AS	225 000	3.4 %
GAMBIT AS	173 000	2.6 %
EIENDOMSKAPITAL NORGE V AS	143 060	2.1 %
PASCAL HOLDING AS	103 703	1.6 %
LILLEBY, DAG HAAKON	100 000	1.5 %
OLAV HJORTESET AS	91 481	1.4 %
RIEVE KAPITAL AS	86 838	1.3 %
ANDERSEN-GOTT, TORE	59 139	0.9 %
HJORTESET, OLAV	58 519	0.9 %
DUPUY, PASCAL FREDERIC	57 658	0.9 %
DUPUY, BERIT MYHRE	57 657	0.9 %
BONAVISTA AS	52 628	0.8 %
BRØDRENE HJORTESET AS	52 578	0.8 %
JED INVEST AS	46 000	0.7 %
EGER, NICOLAI ANDREAS	45 600	0.7 %
OPPØYEN, ALF	40 000	0.6 %
Total number of shares held by the 20 largest shareholders	4 925 276	74%

The following shareholders are represented in the board/top management

The following shareholders are represented in the board/top management of Baltic Sea Properties AS:	Represented by	Role	Number of ordinary shares
UAB BALTIC EQUITY	James Clarke	Chairman	1 832 721
CENTRALKIRKEN	Bjørn Bjøro	Board member	1 098 260
CARPE DIEM AFSETH AS	John Afseth	Board member	376 434
EIENDOMSKAPITAL NORGE V AS	Bjørn Bjøro	Board member	143 060
HOLSTEIN INVEST AS	John D. Mosvold	Board member	32 861
MOSVOLD, JOHN DAVID	John D. Mosvold	Board member	"22 276
HAGEN, BERGER & AAS AS	Lars C. Berger	CEO	13 334
ARTHEN INVEST AS	Lars C. Berger	CEO	3 709

Note 8 Financial debt

	Other non-current liabilities	Market value interest hedging contracts	Total	This year's interest expenses	Maturity	Interest rate p.a.
Mezzanine loan from Ambolt Mezzanine Sub-Fund	50 000 000	-	50 000 000	2 513 583	15/09/2024	9.30%
SUM	50 000 000	-	50 000 000	2 513 583

Mezzanine loan in 2023:

In conjunction with the partial repayment (EUR 2.6 incl. accumulated interest) of the seller's credit on the 28th of November 2023, Baltic Sea Properties increased the mezzanine loan from Ambolt Mezzanine Sub-fund by NOK 30 million. The increase was within the original frame of the loan taken in July 2022.

Specification of movements in mezzanine loans from Ambolt Mezzanine Sub-Fund (principal amount balance ex. accrued interest):

(Amounts in NOK)
	2022	2023	2024e
Ingoing balance per 1.1.	14 289 360	20 000 000	50 000 000
Gearing/new project debt	50 000 000	30 000 000	-
Downpayments	14 289 360	-	-
Extraordinary downpayments	30 000 000	-	-
Outgoing balance per 31.12	20 000 000	50 000 000	50 000 000
Interest expenses	2 465 524	2 513 583	4 650 000
Interest hedging ("swaps")
Total interest expenses	2 465 524	2 513 583	4 650 000

Note 9 Taxes

This year's tax expenses appear as follows:	2023	2022
Payable tax on year's profit	-	-
Change in deferred tax	-	-
Tax expenses on ordinary profit	-	-

Payable tax in the year's tax expenses appear as follows:
Ordinary profit before tax	14 042 737	6 925 119
Permanent differences	-2 865 773	160 536
Change in temporary differences	-8 063 932	-7 703 760
Use of tax loss carry forward	-3 113 032	-
Basis of payable tax	-	-618 105
Tax	-	-
Payable tax on the year's profit	-	-

Payable tax in the balance sheet appears as follows:

Payable tax on the year's profit	-	-
Sum payable tax	-	-

Specification of basis for deferred tax:

Differences that are settled:	Change	2023	2022
Difference between accounting and tax value of receivables	-8 071 989	16 364 336	8 292 347
Difference between accounting and tax value of other fixed assets	8 057	206 040	214 097
Accounting provisions for liabilities	-	-	-
Tax loss carry forward	-3 113 032	-69 260 878	-72 373 910
Sum	-11 176 964	-52 690 502	-63 867 466
Deferred tax (+) / Deferred tax asset (-)		-11 591 910	-14 050 843
Current tax rate		22%	22%

As it is uncertain whether the company will be able to make use of the deferred tax asset, the company has chosen not to book this.

Note 10 Equity

	Share capital	Own shares	Share Premium	Retained earnings	Sum
Equity 1.1.2023	668 823	-1 040	118 788 021	27 687 991	147 143 795
Dividend (distributed during the accounting year)	-	-	-	-10 670 909	-10 670 909
Disposal of own shares	-	179	-	89 022	89 201
This year's profit/loss	-	-	-	14 042 737	14 042 737
Equity 31.12.2023	668 823	-861	118 788 021	31 148 841	150 604 824

Note 11 Other accounts receivable

The parent company's other accounts receivable consisted of:

	2023	2022
Prepayments to suppliers	-	-
Sum	-	-

Note 12 Cash and cash equivalents

	2023	2022
Total bank deposit per 31.12	996 401	15 626 155
Of which restricted deposits related to employee tax deduction	137 152	129 130

Note 13 Financial income & expenses

The parent company booked currency gains/losses consisting of:
----------------------------------------------------------------	--

	2023	2022
Currency gains (+)/losses (-) from invoices and bank accounts in foreign currencies:	57 683	978 924
Currency gains (+)/losses (-) from loans in foreign currencies to/from subsidiaries:	8 413 401	8 744 586
Sum	8 471 084	9 723 510

The parent company received dividends from the following subsidiaries:

	2023	2022
BSP Holding LT UAB	2 892 143	-
Sum	2 892 143	-

The parent company booked other financial expenses consisting of:

	2023	2022
Refinancing fee to Ambolt Mezzanine Sub-Fund	0	1 250 000
Other financial expenses	21 600	140 550
Sum	21 600	1 390 550

Note 14 Other current borrowings

The parent company's other current borrowings consisted of:

	2023	2022
Payable dividends	422 920	347 119
Accrued holiday pay	255 830	260 179
Other accruals	250 000	0
Sum	928 750	607 298

Note 15 Transactions with related parties

The seller credit originally had a 12-months repayment period, maturing on the 23rd of May 2023, but its maturity was extended during the year, until the end of 2024.

Note 16 Uncertain liabilities

Note 17 Russia's invasion of Ukraine

Russia's invasion of Ukraine in 2022 has markedly escalated geopolitical tensions at both regional and international levels. However, the direct impact on our operations and the wider Lithuanian economy has, thus far, been modest. The expansion project for Rhenus Logistics, which faced delays in March 2022, secured a binding agreement on 22 August 2023. Meanwhile, Vinges Logistics, initially indirectly impacted by sanctions on Russia and Belarus, has adeptly restructured and pivoted towards alternative markets.

-

Property portfolio Year-end 2023

Client mix
Investment strategy
Our development approach
Sustainability in development
BREEAM certification status
Investment projects
Development projects

Client mix

Distribution of rent income

Investment strategy

Investing in Baltic Sea Properties gives an investor exposure to highyielding, quality commercial real estate assets in the Baltic region.

We have a clear strategy for sustainable growth, ambitions to achieve economy of scale and believe the attractive yield spread to the Nordics will still enable both high cash yield returns and value growth potential.

Our overall goals and objectives are to:

01

Target an average annual net IRR (internal rate of return) of 10-15 %

02

Continually integrate leading sustainability & ESG principles

03

Monitor and investigate strategic M&A opportunities

04

Sustain a growing, high quality and balanced investment portfolio

05

Continually identify, balance, mitigate and manage risks

Our development approach

Sustainability in development

Building for the future — a holistic approach to new developments.

We are working actively with both building- and system-optimising solutions to improve the sustainability and reduce the carbon emission footprint of our operations.

We focus on the long-term longevity of our buildings and optimising our strategic locations. That is why we always design the buildings in our new developments to be durable for the long-term, focusing on high-quality material and solutions which offer building flexibility and adaptability for business and operational changes, different clients, and lease cycles over its lifespan.

We believe transition of the sustainability and quality in the operations should be imbedded in the development of buildings, also for industrial and logistics. Hence, at an early stage in the process in our built-to-suit developments, we offer a variety of sustainability solutions to our clients, including but not limited to:

BREEAM In-Use "Very Good" certification as a minimum

Efficiency-focused designs, emphasising longevity and flexibility for future adaptions

Solar panels, geothermal heating and heat pumps

Waste, recycling and smart water systems

Internal and external LED-lighting in all buildings

BREEAM is an environmental assessment and rating system that measures a building's sustainability performance across categories like energy use, water consumption, materials, and waste, aiming to promote sustainable building practices and reduce environmental impact. The resulting rating indicates the building's sustainability performance and can be used to demonstrate a commitment to sustainability and improve longterm building performance.

BSP Park - Vilnius A4 | Logistics

Client: Rhenus Logistics GLA: 18 226 m2 Expansion project: 17 255 m2

Location: Highway A4, Vilnius, Lithuania

The property was finalised in June 2017 and further expanded in 2020. It is currently leased by UAB Rhenus Logistics, a subsidiary of the Rhenus Group. In August 2023, we agreed on an expansion project of 17 255 m2 with expected handover in 20261 . Upon completion the logistics terminal will be approx. 35 600 m2 .

The Rhenus Group is one of Europe's biggest transportation groups, and UAB Rhenus Logistics covers the group's operations in the Baltics and part of the East European network.

1 Originally Q2/Q3 2025.

BSP Park - Vilnius A3 | Logistics

GLA: 21 929 m2

Client: Vingės Terminalas Location: Highway A3, Vilnius, Lithuania

The property is strategically located along the highway between Vilnius og Minsk in Belarus.

Vingės Terminalas is a local logistics company within the the Vingės Logistics Group, operating within export, transit, order processing and goods transport. The company has a wide spectre of clients in Europe and CEE.

BSP Park - Vilnius East | Logistics

GLA: 17 149 m2

Client: Girteka Logistics Location: Highway A3, Vilnius, Lithuania

The property is leased by Girteka Logistics, one of Europe's leading transportation companies, strategically located by Vilnius International Airport.

The property has a land area of 42 907 m2 with 11 458 m2 storage, 2 014 m2 frozen storage, 3 348 m2 cold storage and 1 134 m2 office.

BSP Park - Vilnius West | Logistics

Client:	Delamode Baltics

GLA:	13 205 m2

Client: Delamode Baltics Location: Highway A1, Vilnius, Lithuania

The property was finalised in August 2020 and is currently leased by Delamode Baltics, a dynamic supplier of freight forwarding-solutions to the global market.

In July 2021, BSP signed an agreement with Delamode to expand the facility. The expansion project (apx. 4 780 m2 ) was completed in September 2022.

BSP Park - Vilnius A1 | Logistics

Client: Oribalt GLA: 9 625 m2

Location: Highway A1, Vilnius, Lithuania

The property was finalised in August 2020 and is currently leased by Oribalt. An expansion area of apx. 2 800 m2 was handed over to the client in 2023.

Oribalt offers a wide spectre of logistics solutions for pharmaceutical producers, including storage, distribution, transportation and direct delivery.

Small frame | Terminal after expansion

Klaipėda Business Park (KVP) | Business park

Clients:	Multiple (27)
Location:	Klaipėda, Lithuania
GLA:	23 990 m2

Clients: Multiple (27) Location: Klaipėda, Lithuania

Klaipėda Business Park (KVP) offers its tenants industrial, commercial and office spaces within the Free Economic Zone of Klaipėda.

BSP Retail I & II | Commercial

Location: Lithuania GLA: 4 358 m2

Main clients: Maxima/Multi-tenant

BSP Park Šiauliai FEZ & BSP Park Telšiai | Logistics

Client: DPD GLA: 4 141 m2

Location: BSP Park Šiauliai FEZ & BSP Park Telšiai

In October 2022 we delivered two new terminals to DPD, one of the world's largest distribution operators, and the official opening ceremony was held on the 18th of November.

Grandus Shopping Center | Commercial

Clients: Multiple GLA: 11 437 m2

Location: Klaipėda, Lithuania

Grandus is a neighborhood shopping center located along one of the main access road to the center of Klaipėda. The center is located in the immediate vicinity of a larger residential area that ensures good access to visitors every day.

Development projects | In progress

BSP Park – Vilnius A4

GLA: 17 255 m2 Handover (est.): 2026

Client: Rhenus Logistics Type: Expansion project Location: Metelių str. 12, Vilnius

Liepų Parkas

Clients: TBA Size: 3.6 hectare

Type: Retail/business park Location: Liepų str. 80, Klaipėda Handover (est.): Q4 2024/Q1 2025

On the 4th of March 2024, we announced that we had entered into a new development and lease agreement with ESO, a subsidiary of the public listed energy company Ignitis Group.

Available land | For development

Project: BSP Park – Vilnius A1 Type: Land plot for development Location: Maišinės vil. 1C, LT-21401 Trakai region Size: 6.9 hectare Zoning: Commercial

6.9 hectare strategically located by the A1 Highway to Vilnius, next to our Oribalt terminal.

Small frame | Concept visualisation

Available land | For development

Project: Klaipėda Business Park – Stage 4 Type: Land plot for development Location: Pramones str. 8A, Klaipėda Size: 2.2 hectare Zoning: Commercial

2.2 hectare development land adjacent to our existing business park in Klaipėda, within the Free Economic Zone. The expansion of the business park can be up to 16,000 m2 GLA.

Contact

Lars Christian Berger

CEO +47 930 94 319 [email protected]

Sigitas Jautakis

Director, Vilnius +370 652 47 287 [email protected]

James Andrew Clarke

Chairman & CIO +370 612 37 515 [email protected]

Rolandas Jonuška

Director, Klaipėda +370 618 87 270 [email protected]

www.balticsea.no

Oslo Apotekergata 10 0180 Oslo Norway

Klaipėda Pramones str. 8A LT-94102 Klaipėda Lithuania

Vilnius Didzioiji str. 10A-29 LT-01128 Vilnius Lithuania

Visit BalticSea.no for our latest news & updates

Euronext Growth Oslo

Baltic Sea Properties AS has since 2017 been listed for trading on Merkur Market/Euronext Growth Oslo, a MTF under Oslo Stock Exchange.

Since Euronext's acquisition of Oslo Stock Exchange in June 2019, trading at Euronext Growth Oslo has been migrated to Euronext's trading system Optiq. The trading system gives all trading on Euronext marketplaces in Europe access to trading on the marketplaces under Oslo Stock Exchange. Pricing data is available on live.euronext.com were trades are updateed in real-time.

Euronext Growth Oslo is subject to Euronext's rulebook regime.

For more information, please refer to the following links:

English: https://www.oslobors.no/ob_eng/Oslo-Boers/ About-Oslo-Boers/Web-pages-has-been-moved-to-Euronext

Norwegian: https://www.oslobors.no/Oslo-Boers/Om-Oslo-Boers/Nettsider-flyttes-til-Euronext

Useful info:

As Baltic Sea Properties (ticker: BALT) is listed for trading on Euronext Growth Oslo, the share may be traded through different channels. You may for instance place purchase or sales orders on different online trading platforms.

Contact your custodian, stock broker or bank for more information.

Appendix 1 Reconciliation of APM's*

* Alternative Performance Measures

IFPM & EBITDA
Loan-to-Value ratio (LTV)
Net Asset Value (NAV)
Interest Coverage Ratio (ICR)

IFPM & EBITDA

Reconciliation with IFRS figures
(TNOK)	31/12/2023	31/12/2022	Page	Source
Rental income	91 286	69 521	30	Consolidated Profit/Loss Statement
Other income	754	1 138	30	Consolidated Profit/Loss Statement
Payroll and related costs	-15 487	-13 056	30	Consolidated Profit/Loss Statement
Other operating expenses	-9 639	-11 789	30	Consolidated Profit/Loss Statement
Reclassification of provision for expected loss on receivables	-	2 000	43	Note 8
EBITDA	66 918	47 815	14

Financial income	311	456	30	Consolidated Profit/Loss Statement
Financial expenses	-33 892	18 387	30	Consolidated Profit/Loss Statement
IFPM	33 336	29 884	9, 14

Loan-to-Value ratio (LTV)

Reconciliation with IFRS figures
(TNOK)	31/12/2023	31/12/2022	Page	Source

Interest-bearing liabilities (non-current)	616 955	541 659	32	Consolidated statement of financial position
Interest-bearing liabilities (current)	37 460	60 150	32	Consolidated statement of financial position
+ IFRS 9-adjustments (periodisation & amortisation of fees)	923	2 099
Net nominal interest-bearing debt	655 338	603 908

Investment property	1 150 216	1 040 278	32	Consolidated statement of financial position
- Right-of-use assets	(28 876)	(23 909)	39	Note 4
Fair value of investment property	1 121 340	1 016 369

Cash	40 888	44 083	32	Consolidated statement of financial position
Fair value of investment property + Cash	1 162 228	1 060 452

LTV	58.4%	59.4%	9, 10, 12
Net LTV	56.4%	56.9%	9, 10, 12

Net Asset Value (NAV)

Reconciliation with IFRS figures
	31/12/2023	31/12/2022	Page	Source
Total equity (TNOK)	450 061	405 682	33	Consolidated statement of financial position
+ Deferred tax liabilities (TNOK)	48 518	42 772	33	Consolidated statement of financial position
- Deferred tax according to BSP original NAV definition (TNOK)	(38 109)	(33 678)	15	(See description on cited page)
Net Asset Value (TNOK)	460 470	414 776	14

Number of issued shares (excl. own shares)	6 679 622	6 677 838	48	Note 18
NAV per share	68.95	62.11	9, 14, 15

Interest Coverage Ratio (ICR)

Reconciliation with IFRS figures
(TNOK)	31/12/2023	31/12/2022	Page	Source

EBITDA (Group)	66 918	47 815	14, 96	Own calculaltions

Interest income	-311	-162	43	Note 9
Interest expenses (incl. hedge effect)	32 260	17 021	43	Note 9
Other adjustments	0	158	43	Note 9
Net interest expenses	31 949	17 017	43	Note 9

ICR (Group)	2.09	2.81	10, 11

AI Terminal

Baltic Sea Properties

3552_10-k_2024-04-11_78ab1528-d8d5-4e35-8044-bba52e14c687.pdf

About us

Contents

Disclaimer:

Our Vision

Our Mission

Our Values

Highlights

Resilience and Strategic Growth

Outlook and Core Principles

Financial overview

Year-end 2023

Key figures group

Financing

Financial Expenses Overview

Specification

Terms/abbreviations used above:

Loan-to-Value (LTV)

Specification

Income From Property Management

Specification

Net Asset Value (NAV)

Market Update

2024 begins with a more positive outlook

The office segment and its lead in the investment market

Resilience on the office market

Growth in sustainability and proactive strategies for the industrial segment

Annual Statements 2023

Table of contents

6. Notes to the consolidated financial statements

7. Annual financial statement 2023 for the parent company

8. Independent auditor's report

The Board of Directors & CEO's

Annual report 2023

Year summary

Nature of business and location

The Group's Annual Financial Statements

Accounting Standard

Profit & Loss

Financial Position (Balance Sheet)

Real estate portfolio

Financing

The Parent Company's Annual Financial Statements

Accounting Standard

Summary

Continued Operations

Research and Development

Events after the balance sheet date

Financial Risk Management

Capital Management

Credit risk

Liquidity risk

Currency risk

Interest rate risk

Risk factors and risk management

Environmental Reporting

Corporate Strategy

Working Environment, Personnel, and Equality

Transactions with Related Parties

Directors and Officers Insurance

Future development

Transparency Act reporting

Allocation of the result for the year – Parent Company (in accordance with Norwegian accounting standards)

Declaration

Consolidated statement of profit or loss

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of financial position

Total equity and liabilities 1 202 184 1 100 832

Oslo, the 10th of April 2024

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the consolidated financial statements - Baltic Sea Properties Group

Note 1 Accounting Principles

Basis of preparation

New and amended accounting standards

Accounting principles

Functional currency and presentation currency

Abbreviations explained: LTV = Loan-to-value.*