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

MANAGEMENT REPORT

Real Estate Development

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

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

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

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

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

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

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

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

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

Hotel operations

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

Other operations

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

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

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

Other matters

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

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

Conclusion

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

Edoardo Preatoni
CEO

Key financials

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

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

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

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

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

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

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

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

Key performance indicators

	2024 12M	2023 12M	2024 Q4	2023 Q4
Revenue, th EUR	18 158	23 021	7 554	3 052
Gross profit, th EUR	5 423	7 028	2 567	1 028
Gross profit, %	30%	31%	34%	34%
Operating result, th EUR	123	2 963	1 853	1 296
Operating result, %	1%	13%	25%	42%
Net result, th EUR	-2 804	-900	1 257	125
Net result, %	-15%	-4%	17%	4%
Earnings per share, EUR	-0.05	-0.02	0.02	0.00

	31.12.2024	31.12.2023
Total Assets, th EUR	118 758	107 237
Total Liabilities, th EUR	66 466	52 814
Total Equity, th EUR	52 292	54 423
Debt / Equity *	1.27	0.97
Return on Assets, % **	-2.5%	-0.08%
Return on Equity, % ***	-5.3%	-1.5%
Net asset value per share, EUR ****	0.92	0.96

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

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

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated interim statement of financial position

in thousands of euros	31.12.2024	31.12.2023
ASSETS
Current assets
Cash and cash equivalents	4 344	17 065
Current receivables	822	1 411
Prepaid expenses	422	268
Inventories	56 951	35 563
Total current assets	62 539	54 307
Non-current assets
Non-current receivables	317	2 010
Property, plant and equipment	7 595	7 763
Right-of-use assets	513	365
Investment property	44 210	40 361
Goodwill	863	0
Intangible assets	2 721	96
Total non-current assets	56 219	50 595
Assets held for sale	0	2 335
Total assets held for sale	0	2 335
TOTAL ASSETS	118 758	107 237
LIABILITIES AND EQUITY
Current liabilities
Current debt	15 427	30 141
Customer advances	9 618	3 657
Trade and other payables	6 685	4 911
Tax liabilities	833	161
Short-term provisions	24	11
Total current liabilities	32 587	38 881
Non-current liabilities
Long-term debt	31 660	12 695
Other long term liabilities	6	0
Deferred income tax liabilities	2 031	1 130
Long-term provisions	182	108
Total non-current liabilities	33 879	13 933
TOTAL LIABILITIES	66 466	52 814
Equity attributable to owners of the Company
Share capital in nominal value	11 338	11 338
Share premium	5 661	5 661
Statutory reserve	1 134	1 134
Revaluation reserve	1 977	2 092
Retained earnings	31 594	34 198
Total equity attributable to the owners of the Company	51 704	54 423
Non-controlling interest	588	0
TOTAL EQUITY	52 292	54 423
TOTAL LIABILITIES AND EQUITY	118 758	107 237

Consolidated interim statements of comprehensive income

in thousands of euros	2024 12M	2023 12M	2024 Q4	2023 Q4
CONTINUING OPERATIONS
Operating income
Revenue	18 158	23 021	7 554	3 052
Cost of goods sold	-12 735	-15 993	-4 987	-2 024
Gross profit	5 423	7 028	2 567	1 028
Marketing expenses	-1 136	-705	-363	-219
Administrative expenses	-5 293	-5 440	-1 474	-1 580
Other income	1 186	2 099	1 152	2 103
Other expenses	-57	-19	-29	-36
Operating profit/ loss	123	2 963	1 853	1 296
Financial income	123	254	25	80
Financial expense	-3 205	-4 115	-794	-1 257
Profit / loss before income tax	-2 959	-898	1 084	119
Income tax	155	-2	173	6
Net profit / loss for the period	-2 804	-900	1 257	125
Attributable to:
Equity holders of the parent	-2 604	-900	-1 406	125
Non-controlling interests	-200	0	-149	0
Other comprehensive income net of income tax:
Net change in asset revaluation reserve	-115	0	-115	0
Total comprehensive income / loss for the year	-2 919	-900	1 142	125
Attributable to:
Equity holders of the parent	-2 719	-900	1 291	125
Non-controlling interests	-200	0	-149	0
Earnings per share for the period €	-0.05	-0.02	0.02	0.00

The full report can be found in the file attached.

Ann-Kristin Kuusik
CFO
+372 614 4920
prokapital@prokapital.ee

Attachment

• PKG_Q4_2024_ENG