RomReal Ltd.

Quarterly Report • Feb 25, 2022

Q4

RomReal Limited Fourth Quarter 2021 Report 24 February 2022

RomReal is a Company focusing on the Romanian Real Estate market. Established in 2005 and it owns premium properties in the Constanta region.

Highlights Fourth Quarter 2021

Net Asset Value (NAV)

• Net Asset value was EUR 0.41 (NOK 4.33, before any tax) per share, about 5.5% higher compared to the end of the third quarter 2021.
• The year-end 2021 valuation was concluded by Colliers in January 2022 and reflects the updated market conditions and the respective valuations of the Group's land bank. Of note, the valuation report reflects the Group's efforts in enhancing the value of its assets, in particular the development of the Lakeside and Oasis plots.

Operational highlights

• During the fourth quarter of 2021, the Company sold a further 14 plots from the Ovidiu Lake Side project for a total consideration of EUR 0.6m. Total infrastructure investments by end of 4th quarter 2021 was EUR 3.2m. This is well below record sales in third quarter 2021.
• Following the end of Q4 2021, the Company concluded 4 small sale transactions in total (3 on Lake Side) for a consideration of EUR 0.23m and binding agreements have been signed/paid.

Financial Results

• Net Result for the quarter was EUR 901,000, compared to a EUR 3.439,000 loss in 4Q 2020. Net change in cash flow for the quarter was a positive EUR 226,000 compared to negative of EUR 1,350,000 in the same period last year. This was mainly due to the ongoing sales realised during the quarter.
• At the end of the quarter, the Company had a cash position of EUR 3.8 million plus a total of EUR 4.1m in unsettled receivables related to binding sales agreements, totalling EUR 7.9m, or about EUR 0.19 per share.

Macro and real estate market highlights

• Romania is a NATO member since 2004 and has a border of about 600 kilometres with both Ukraine and Moldova. The situation on the ground in Romania is stable at present and it is "business as usual".
• Romania's GDP expanded by 5.6% during 2021, according to flash data from the National Statistics Institute. Generally, despite reaching a record number of infections during the Omicron wave, economic activity seemed rather disconnected from the medical situation, as modest harsh restrictions have been enforced. Data pointed to a relative flattening of economic activity in the last quarter of 2021, though most numbers remained mildly positive. The 12 month inflation rate up to January 2022 was 8,35%.
• Asking prices for apartments and houses in Romania continued to raise in the last quarter of 2021 compared the third quarter of 2021, up to EUR 1,593/m2 at the end of Q4 and EUR 1,596/ m2 at the end of January 2022. In Constanta, average prices increased by 3.5% during the fourth quarter of 2021 (EUR 1,408/m2 at the end of December 2021, compared to EUR 1,360/sqm at the end of September 2021), according to www.imobiliare.ro index.

Key Financial Figures

EUR '000	Q4 2021	Q4 2020
Operating Revenue	1,079	446
Operating Expenses	995	(1,994)
Other operating income/ (expense), net	(1,127)	(1,909)
Net financial income/(cost)	(1)	5
Pre-tax result	946	(3,453)
Result for the period	893	(3,439)
Total assets	18,037	15,340
Total liabilities	1,219	305
Total equity	16,819	15,035
Equity %	93.2%	98.0%
NAV per share (EUR)	0.41	0.36
Cash position	3,807	1,207

Movement in Net Asset Value

The Net Asset Value (NAV) slightly increased to EUR 16,819,000 at the end of Q4 2021 compared to EUR 15, 947,000 at the end of Q3 2021.

Asset base	Q4 2021			Q3 2021
	EUR '000	EUR/ share	NOK/share	EUR '000	EUR/ share	NOK/share
Investment property	4,997	0.12	1.29	2,768	0.07	0.71
Assets held for sale	2,480	0.06	0.64	2,254	0.05	0.58
Inventories	5,707	0.14	1.47	7,700	0.19	1.98
Cash	3,807	0.09	0.98	3,581	0.09	0.92
Other assets/(liabilities)	(173)	(0.00)	(0.04)	(356)	(0.01)	(0.09)
Net asset value	16,819			15,947
NAV/Share		0.41	4.10		0.39	4.10
Change in NAV vs previous quarter	5.5%			6.1%

The average number shares used in the NAV calculation above is 41,367,783 shares and unchanged from Q3 2021.

Valuation of Properties

The end of year 2021 independent valuation of the Company's property was executed by Colliers Romania. The property portfolio was evaluated in accordance with the ANEVAR Valuation Standards 2013, which include the International Valuation Standards, issued by the IVSC in 2011. The valuation also complies with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB); and it is performed in accordance with the RICS Valuation Standards, 8th edition.

	EUR '000 Y/E 2015	Y/E 2016	Y/E 2017	Y/E 2018	Y/E 2019	Y/E 2020	Q4 2021
Property value	28,736	32,787	23,419	14,962	15,435	13,420	13,184
NAV	18,089	19,369	19,930	19,603	18,501	15,035	16,819
Market cap	7,933	11,052	12,100	11,848	9,326	8,687	7,860
Market cap/NAV	44%	57%	61%	60%	50%	58%	47%

Cash Flow

EUR '000	Q4 2021	Q4 2020
Net cash flow from operating activities	(180)	(1,343)
Net cash flow used in investing activities	406	(4)
Net cash flows from financing activities	-	-
Net cash change during period	226	(1,347)

Operating cash flow for Q4 2021 was positive EUR 226,000 compared to a negative EUR 1,347,000 in the same quarter last year. The net positive change is mainly explained by the disposals made during the quarter. The net cash from investing activities includes the collections made in respect of the sold plots.

Market Facts – Macro

Gross Domestic Product of Romania has been preliminarily estimated to have grown 5.6% during 2021, according to flash data issued by the National Statistics Institute (INS). In the fourth quarter alone, Romania's gross domestic product (GDP) rose 2.2% year-on-year, following a 7.4% annual rise in the third quarter, INS unadjusted data showed. The 12 month inflation rate up to January 2022 was 8,35%.

The Romanian economy's recovery to pre-pandemic levels has been driven, amongst others, by consumption, which, in turn, was sustained by the resilient labour market.

The slowdown in the fourth quarter of 2021 may be explained by the rising energy prices. Such a re-alignment process undergone by the energy prices will most likely have a detectable permanent impact on the economic activity.

Real Estate market facts

Continuing the positive trend started in 2020, the real estate market remained quite active in the first half of 2021. It benefitted from a solid 2021 despite being another year marked by the uncertainty caused by the pandemic. The total investment volume in 2021 (estimated by Cushman & Wakefield at EUR 916 million), has been slightly outpaced the one in 2020 (EUR 914 million), while a consistent yield compression of around 50-75 basis points has been recorded in the second half of the year.

Offices: New office projects of 244,000 sqm have been completed in Bucharest in 2021, a 57% increase against the 2020 new supply, while the total take-up has also recorded a year-onyear growth of almost 60% by nearing the 300,000m2 mark. Considering the existing pipeline, and the absorption potential of the currently available office spaces, there is a strong indication that yearly take-up volumes in excess of the above-mentioned mark is expected to be the norm during the next 4-5 years, thus decreasing the current vacancy rate which stands at 14.9%.

Retail: The retail segment has also been active, as new projects totalling almost 100,000m2 were completed last year, mostly in secondary and tertiary locations, with a clear preference towards retail parks being observed, as these projects have been less impacted by the pandemic and the subsequent Government restrictions, a development trend which is expected to continue going forward.

Industrial: The industrial and logistics market continued on its upward trend, as more than 1 million sqm have been transacted for the first time in Romania in 2021, while 530,000m2 of new spaces have been delivered. The strong demand for industrial properties combined with low vacancy rates, encourages developers to continue their portfolios' expansion, with the pipeline revealing that almost 600,000m2 of new spaces are planned for delivery in the next 12 months.

Residential Market: In Q3 2021, the total number of real estate transactions in Romania soared 31% y-o-y, following growth of 11.6% during the whole year of 2020, according to the National Agency for Cadastre and Land Registration.

In Romania's biggest cities, demand for residential dwellings has been more or less steady. In Q3 2021, about 152,200 potential buyers searched for housing in the country's major regional centres, up 0.4% from the previous quarter but down 1% a year earlier, according to the real estate intelligence platform Analize Imobiliare.

Operational Overview

Lake Side (No.1 on the table) – The Company has on-going processes for plot sales in the area and sold 14 plots during fourth quarter and another 3 plots hitherto 2022. Street and utilities have been delivered to the City Hall for public use according to agreement.

Oasis (No. 3 on the table) – The Company has commenced the process to re-authorise the works to finalise the blocks erected on site. This in order to add value to the plot and authorise the works for constructing the utilities in the area, with required permits hopefully granted during first half 2022. The Company is close to finalising stage 1 of bringing gas to the project. In November 2021, the Board made a principal decision to finalise the two block structures and upgrade the four houses on the plot. This to hopefully improve profits and speed up exit.

Industrial Park (No. 4 on the table) – The Company is engaged in a process with an international company to sell parts of the plot, but no binding agreement is signed.

Balada Market (No. 6 on the table) - The project is for sale. In order to its increase income, a regulation process to utilise a larger part of the plot for parking has commenced and some progress has been made with the local authorities. About three quarters of the pedestrian walk on the property is upgraded.

Ovidiu Residence (former Badulescu plot (No. 2 on the table) – Based on the Lakeside plot experience, the Company has commenced a process to regulate this plot located nearby Lakeside for residential and commercial use. Regular meetings with local and road authorities are taking place.

Ovidiu Residence 2 (former 7,900 sqm)- The Company has commenced a process to regulate the plot located nearby Lakeside for residential use. This will include infrastructure investments.

Ovidiu Residence 3 (former 7,100 sqm)- The Company has commenced commence a process to regulate the plot located nearby the road between Ovidiu and Constanta for residential use. It is expected to include infrastructure investments.

Restitution claim, plot of 1,453 sqm, Constanta Court case no. 2567/118/2016

The piece of land is agreed sold to the buyer of the Company's previous Mamaia North plot and the agreed proceeds about EUR 390,000 is received in full 21 February 2022.

The Property Portfolio

The Company's land bank consists at the end of Q4 2021 of 6 plots with a total size of 235.833 m2:

Plot name	Location	Size (m2)
1 Ovidiu Lakeside	Constanta North/Ovidiu	18.288
2 Badulescu plot	Constanta North/Ovidiu	50,000
3 Ovidiu (Oasis)	Constanta North/Ovidiu	23,685
4 Centrepoint	Constanta North/Ovidiu	121,672
5 Gunaydin plot	Constanta North/Ovidiu	15,000
6 Balada Market	Central Constanta	7,188
Total		235.833

Shareholder Information

Rank Name Holding Stake SIX SIS AG 10,331,934 24.98% GRØNSKAG, KJETIL 5,752,914 13.90% THORKILDSEN, WENCHE 5,392,985 13.04% SAGA EIENDOM AS 3,311,526 8.01% AUSTBØ, EDVIN 2,108,500 5.10% Danske Bank A/S 1,507,924 3.65% ENERGI INVEST AS 1,253,611 2.66% ORAKEL AS 1,101,000 2.66% GRØNLAND, STEINAR 1,002,522 2.42% Bnp Paribas Securities Services 991,717 2.40% SPAR KAPITAL INVESTOR AS 940,236 2.27% THORKILDSEN INVEST AS 829,478 2.01% PERSSON, ARILD 718,000 1.74% HOEN, ANDERS MYSSEN 689,557 1.67% KVAAL INVEST AS 576,000 1.39% AKSEL MAGDAHL 457,403 1.11% NORDNET LIVSFORSIKRING AS 443,629 1.07% FRENICO AS 396,000 0.96% CITIBANK 220,000 0.53% NORDNET BANK AB 206,961 0.50% TOP 20 39,231,897 92.42%

Please see below the list of the top 20 shareholders in RomReal as of 21 February 2022:

(1) This is the Top 20 Shareholder list as per 21 Feb 2022

(2) The total issued number of shares issued at end Q4 2021 was 41,367,783.

(3) Thorkildsen Invest AS is a Company controlled by RomReal Kay Thorkildsen family.

(4) Chairman Kjetil Grønskag owns directly and indirectly 5,752,914 shares corresponding to 13.90%.

(5) The above list is the 20 largest shareholders according to the VPS print out; please note that shareholders might use different accounts and account names, adding to their total holding.

Outlook

Romania is a NATO member since 2004 and has a border of about 600 kilometres with both Ukraine and Moldova. The situation on the ground in Romania is stable at present and it is "business as usual", but an influx of Ukrainian refugees could happen.

In order to speed up an exit and target a higher profitability on the attractive located Oasis project, the Board of Directors have decided to provide the financial resources to complete the two apartment structures and upgrade the four houses on the property. This in addition to the infrastructure required on the Oasis project is both increasing the risk and project upside.

INFORMATION ON FINANCIAL CONDITION AND OPERATING RESULTS

Accounting Principles

The condensed consolidated interim financial statements for the fourth quarter of 2021, which have been prepared in accordance with IFRS as adopted by EU and IAS 34 Interim Financial Reporting, give a true and fair view of the Company's consolidated assets, liabilities, financial position and results of operations. The accounting policies applied in the preparation of the quarterly result are consistent with the principles applied in the financial statements for the year to 31 December 2021. The financial statements have been prepared on a going concern basis.

To information presented in the interim report for the fourth quarter of 2021 includes a fair review of important events that have occurred during the period and their impact on the condensed financial statements, the principal risks and uncertainties for the remaining of 2021, and major related party transactions.

Comparative data for Q4 2021 and Q4 2020

The interpretations below refer to comparable financial information for Q4 2021 and Q4 2020. They are prepared for RomReal on a consolidated basis and use consistent accounting policies and treatments.

Operating Revenue

The operating revenue during Q4 2021 was EUR 1,079,000 compared to a total of EUR 446,000 reported in Q4 2020. This consists of the revenue resulting mainly from the disposals made during the quarter as well as the rent earned by the company in respect of some of the plots.

Operating Expenses

Total operating expenses amounted to a positive EUR 995,000 in Q4 2021 compared to a total negative EUR 1,994,000 in Q4 2020. The main elements of cost relate to the EUR administrative expenses (EUR 263,000) and the payroll costs (EUR 64,000). The unrealised gains in respect of the inventories portfolio represented EUR 1,346,000 unrealised gains.

Other operating income/ (expense), net

The other operating income/ (expense) during the quarter were a loss of EUR 1,127,000, compared to a loss of EUR 1,909,000 during the same period of the previous year.

Profit/ (loss) from operations

During Q4 2021, RomReal generated an operating profit of EUR 947,000, compared to a loss of EUR 3,457,000 in Q4 2020.

Financial Income and expense

Foreign exchange result for Q4 2021 was a net loss of EUR 1,000 compared to a net foreign exchange gain of EUR 5,000 in Q4 2020. During the quarter the RON lost 1.59% to the EUR. The Company's policy is to hedge these effects by retaining most of its cash in Euros and also by denominating all receivables in Euros. Although not reflected from an accounting

perspective, practice in real estate is that transactions are denominated in EUR and payments made at the exchange rate ruling at the date of payment, hence reducing the risk of cash losses due to exchange rate movements.

Result before tax

The result before tax in Q4 2021 was a gain of EUR 946,000 compared to a loss before tax of EUR 3,439,000 in Q4 2020.

Cash and cash equivalents

The Company's cash and cash equivalents position at end of Q4 2021 was EUR 3,807,000 compared to EUR 3,581,000 as at end of Q3 2021.

Romreal portfolio / sale transactions to be completed in 2021-2024
No Plot name	Location	Agreed sale value (EUR)	Installments received@ 21/02/2022	To cash 2022	To cash 2023	To cash 2024
1 Alexandriei plot	Bucharest sector 5	1,850,000	1,850,000
2 Ovidiu Lakeside plot 15	Ovidiu Constanta	58,000	54,249	3,751
3 Ovidiu Lakeside plot 16	Ovidiu Constanta	163,210	163,210
4 Ovidiu Lakeside 10 plots	Ovidiu Constanta	387,540	387,540
5 Ovidiu Oasis plot	Ovidiu Constanta	88,000	51,600	36,400
6 Ovidiu Lakeside 6 blocks	Ovidiu Constanta	2,658,500	695,390	736,170	736,158	490,782
7 Ovidiu Lakeside 28 plots	Ovidiu Constanta	1,318,400	164,800	659,200	494,400
8 Ovidiu Lakeside 10 plots	Ovidiu Constanta	452,600	144,075	161,608	146,918
9 Ovidiu Lakeside plot 13	Ovidiu Constanta	42,200	21,100	21,100
10 Ovidiu Lakeside plot 14	Ovidiu Constanta	42,200	21,100	21,100
11 Navodari plot	Navodari Constanta	400,984	400,984
Total		7,461,634	3,954,048		1,639,329 1,377,476	490,782

RomReal portfolio / sale transactions to be completed in 2021/2024.

Taxation

The Company is required to calculate its current income tax at a flat rate of 16%. Starting 2013, based on turnover thresholds, some companies in the Group are subject to 16% taxable profits, while some are subject to 1% tax calculated on total revenue. This is the case for 4 of the Group companies (2 pays 1% tax and 2 of them 3% tax) while 1 company is subject to 16% on taxable profits.

The Company accounts for deferred tax on all movements in the fair values of its investment properties at a flat rate of 16%. Any change in the deferred tax liability or change in the

deferred tax asset is reflected as an element of income tax in the profit and loss statement. The Company recognises deferred tax asset for the amount of carried forward unused tax losses to the extent that it is probable that future taxable profits will be available against which the unused tax losses can be utilised.

Provisions

The Company has during 2020 accepted the tax claim of EUR 1.05 million and discontinued disputing it in the courts. This amount is similar to the amount provisioned in September 2020.

CONSOLIDATED INCOME STATEMENT (UNAUDITED)

Figures in thousand EUR

	Q4 2021	Q4 2020	YTD 2021	YTD 2020
Rent revenue	44	34	172	253
Revenue from sale of assets	1,035	412	3,539	1,388
Operating revenue	1,079	446	3,711	1,641
Payroll expenses	(64)	(72)	(243)	(214)
Management fees	(24)	6	(95)	(95)
Inventory (write off)/reversal	1,346	(1,734)	2,173	(1,688)
General and administrative expenses	(263)	(194)	(754)	(493)
Operating expenses	995	(1,994)	1,081	(2,491)
Profit/ (loss) before other operating items	2,074	(1,548)	4,792	(849)
Other operating income/(expense), net	(1,127)	(1,909)	(2,682)	(2,472)
Profit from operations	947	(3,457)	2,110	(3,321)
Financial income	3	(8)	7	5
Financial costs	(5)	(0)	(512)	(10)
Foreign exchange, net	1	13	(50)	(637)
Result before tax	946	(3,453)	1,555	(3,962)
Tax expense	(52)	14	(61)	4
Result of the period	893	(3,439)	1,494	(3,958)

CONSOLIDATED BALANCE SHEET (UNAUDITED)

Figures in thousand EUR

ASSETS	December 31, 2021	December 31, 2020
Non-current assets
Investment properties	3,272	3,329
Property, plant and equipment	52	74
Deferred tax asset	114	116
Total non current assets	3,438	3,520
Current assets
Inventories	7,441	7,850
Other short term receivables	880	523
Cash and cash equivalents	3,807	1,207
Total current assets	12,128	9,581
Assets held for sale	2,480	2,240
TOTAL ASSETS	18,045	15,340

EQUITY AND LIABILITIES	December 31, 2021	December 31, 2020
Equity
Share capital	103	103
Contributed surplus	87,117	87,117
Other reserves	160	160
Retained earnings	(75,658)	(71,700)
Result of current period	1,502	(3,958)
FX reserve	3,618	3,313
Total equity	16,826	15,035
Non current liabilities
Deferred income tax	158	117
Total non current liabilities	158	117
Current Liabilities
Other payables	963	93
Deferred income	25	36
Tax payable	73	60
Total current liabilities	1,061	189
TOTAL EQUITY AND LIABILITIES	18,045	15,340

STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

Figures in thousand EUR
-------------------------	--	--	--	--

	December 31, 2021	December 31, 2020
Profit for the year	1,494	(3,958)
Other comprehensive income
Exchange differences on translation of foreign operations	305	693
Other comprehensive income for the year, net of tax	305	693
Total comprehensive income for the year, net of tax	1,799	(3,265)

CASH FLOW STATEMENT (UNAUDITED)

Figures in thousand EUR

	December 31, 2021	December 31, 2020
Net cash flow from operating activities	(725)	(1,891)
Net cash flow from investing activities	3,325	728
Net cash flows from financing activities	-	-
Net cash change during period	2,600	(1,164)
Cash at beginning of period	1,207	2,371
Cash and cash equivalents at end of the period	3,807	1,207

STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

Figures in thousand EUR

	December 31, 2021	December 31, 2020
Equity at the beginning of the period	15,035	18,501
Result for the period	1,494	(3,958)
Other changes	289	493
Equity at the end of the period	16,819	15,035

Responsibility Statement

We confirm that, to the best of our knowledge, the condensed consolidated interim financial statements for the fourth quarter of 2021, which have been prepared in accordance with IFRS as adopted by EU and IAS 34 Interim Financial Reporting, give a true and fair view of the Company's consolidated assets, liabilities, financial position and results of operations. To the best of our knowledge, the interim report for the fourth quarter of 2021 includes a fair review of important events that have occurred during the period and their impact on the condensed financial statements, the principal risks and uncertainties for the remaining period of 202, and major related party transactions.

February 24, 2022

The Board of Directors RomReal Limited Hamilton, Bermuda:

Kjetil Grønskag (Chairman & CEO), Bendt Thorkildsen (Director), Heidi Sørensen Austbø (Director)and Lacramioara Isarescu (Director)

Questions should be directed to: Kjetil Grønskag: Chairman & CEO, +44 776 775 4119

CONTACT INFORMATION

RomReal Limited Postal address: Burnaby Building, 16 Burnaby street, Hamilton HM11, Bermuda Telephone: Tel- +1-441-293-6268 Fax +1-441-296-3048 | www.RomReal.com

Visiting address: 54 Cuza Voda street, Constanța, Romania Tel: +40-241-551488 Fax: +40-241-551322

IR

Kjetil Gronskag +44 776 775 4119| investors@RomReal.com

For further information on RomReal, including presentation material relating to this interim report and financial information, please visit www.RomReal.com.

DISCLAIMER

The information included in this Report contains certain forward-looking statements that address activities, events or developments that RomReal Limited ("the Company") expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to economic and market conditions in the geographic areas and markets in which RomReal is or will be operating, counterparty risk, interest rates, access to financing, fluctuations in currency exchange rates, and changes in governmental regulations. For a further description of other relevant risk factors, we refer to RomReal's Annual Report for 2020. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and RomReal disclaims any and all liability in this respect.