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Pro Kapital Council approved Consolidated Interim Report for I Quarter and 3 Months of 2023 (Unaudited)



CEO summary

Q1 2023 marks as a start of new developments in AS Pro Kapital Grupp.

Real estate development

In Tallinn, we took the decision to start the final stage of development in Kalaranna 8. This last and final stage consists of 4 residential buildings with 146 apartments and 4 commercial units. What is different this time around is that we decided to proceed the construction without the general contractor. Due to several reasons stemming from the pandemic and the ongoing war, the general contractors’ market still seems to be on shaky ground and it is close to impossible to reach agreements for fixed price. Hence, we decided to split the construction agreement in smaller pieces and the contracting of which, we will manage in house with our highly skilled technical department.

At the end of Q1, we initiated a tender for the excavation and retaining walls contract and we started works in mid-April.

Kalaranna 1st stage construction is formally finished, all units delivered to clients and the main activity there is property management by our Pro Halduse OÜ and the management of warranty works, if any.

We also started the presales of Kalaranna final stage with 31 apartments and 4 business premises closed with notarial presale deeds.

As with the already completed stages of Kalaranna development, we are grateful to the local authorities and community to have been helpful and understanding also in this preliminary preparatory stage. The completion of this final stage will definitely close the circle and add to the beautiful neighbourhood of the city.

In Kindrali Houses in Kristiine City we have also completed the 3 residential buildings for a total of 195 apartments. The project is entirely sold out and by now the handovers of the last building are all done and final notarial deeds closed.

In Riga we continue the sales of our luxury product River Breeze Residence which has been awarded the Baltics Prestige Award for its outstanding architecture. During Q1, 2023 we signed 4 new sales. Overall, we see an upwards trend in the real estate segment in Riga as it pertains to our project.

We hold a building permit for City Oasis residential quarter, a project consisting of ca 330 apartments and 32.500 sqm GBA located in Tallinas iela– a tranquil and green living environment in the city centre. We will be ready to proceed with construction activities as soon as the market situation becomes fit for such an ambitious and vast project.

Out of the three capitals (Tallinn, Riga, Vilnius), Riga seems to have the most challenges in terms of overall market conditions. However, our long-term outlook for the Latvian real estate sector remains bullish.

In 2019 we completed five buildings in Šaltinių Namai Attico project in Vilnius with 115 apartments. Today we have only 2 apartments unsold, out of which one is a model unit. We are preparing for the following phase with city villas (43 units) and a commercial building and plan to start the construction this year.

Despite the geopolitical situation, Vilnius market is very active in the high-end segment and we look forward to the next stage of our high-end development.

The Company has also expanded its land portfolio in Vilnius, purchasing a school in Naugarduko street for the price of 6.25M euros. The school will be converted into a high-end residential property, consisting of circa 50 luxury apartments. An architectural competition was carried out for the purpose, the winning studio which is currently in the design process and ready to start the permitting process.

Hotel operations

After two difficult years, which clearly affected the global sector of tourism because of the pandemic, there seems to be a strong demand in the hotel industry.

In Bad Kreuznach we have reached a substantial operational break even, despite the fact that a large portion of the rooms were not available to the public due to ongoing renovations. A few years ago, we renovated half of the rooms and part of the common areas. The renovations of the remaining rooms were completed by the end of Q1 2023, and all the room count (116 units) are available. We are seeing an increase in Average Daily Rate already and also positive trends in outperforming against the budgeted proforma.

The Baltic real estate sector showed great resilience throughout the pandemic period as well as during the turbulent geopolitical period we live in, and we are confident that we will manage to develop our pipeline of projects in line with the market’s expectations, thus continuing to provide a stream of high-quality properties to the local population. We are aware of the challenging historical times we live in; we will need to be fast to adapt to an ever-changing and fast paced world (especially in regards of the construction works and the related challenges to the supply chain and cost of materials), but we still have a very positive outlook on the Baltic region and thus far the market has been supporting our sentiment.

The economic outlook for the Baltic region is generally positive. The Baltic countries of Estonia, Latvia, and Lithuania have experienced steady economic growth in recent years, driven by a combination of factors such as increasing foreign investment, a growing service sector, and export-oriented manufacturing. The region has also benefited from its proximity to Northern Europe and its membership in the European Union, which has helped to boost trade and investment.

All the positive indicators above will not disappear despite the challenges that are posed to the real estate sector by the global macroeconomic outlook and the geopolitical turmoil caused by the war in Ukraine.

As the CEO of a successful development company, I see the future of real estate being heavily impacted by technology and changing consumer preferences. Smart home technology, virtual and augmented reality, and online marketplaces are becoming increasingly popular and will continue to shape the way we buy, sell, and experience real estate. Additionally, there is a growing demand for sustainable and energy-efficient homes, as well as for flexible living spaces that can adapt to the changing needs of residents. Overall, the future of real estate is exciting and dynamic, and we are constantly looking for innovative ways to stay ahead of the curve and meet the evolving needs of our customers.

Edoardo Preatoni

Key financials

The total revenue of the Company in first three months of 2023 was 13.4 million euros compared to 7.9 million euros in the reference period.

The gross profit for three months of 2023 has increased by 43% amounting to 3.7 million euros compared to 2.6 million euros in 2022.

The operating result in three months of 2023 has increased to 2.2 million euros profit comparing to 1 million euros profit during the same period in 2022.

The net result for the three months of 2023 was 1.3 million euros profit, comparing to 251 thousand euros loss in the reference period.

Cash generated in operating activities during first three months of 2023 was 10.3 million euros comparing to 3.2 million euros used during the same period in 2022.

Net assets per share on 31 March 2023 totalled to 1.00 euro compared to 0.75 euros on 31 March 2022.

Key performance indicators

2023 3M2022 3M2022 12M
Revenue, th EUR13 4157 91665 654
Gross profit, th EUR3 6662 55816 965
Gross profit, %27%32%26%
Operating result, th EUR 2 16098917 657
Operating result, %16%12%27%
Net result, th EUR1 303-25113 452
Net result, %10%-3%20%
Earnings per share, EUR0.020.000.24

Total Assets, th EUR101 587117 371101 256
Total Liabilities, th EUR 44 96174 77945 933
Total Equity, th EUR56 62642 59255 323
Debt / Equity *0.791.760.83
Return on Assets, % **1.2%-0.2%12.4%
Return on Equity, % ***2.6%-0.6%27.4%
Net asset value per share, EUR ****1.000.750.98

*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 interim statement of financial position

in thousands of euros31.03.202331.03.202231.12.2022
Current assets
Cash and cash equivalents18 7737 65010 589
Current receivables2 3311 546955
Prepaid expenses39552564
Inventories26 11359 36034 224
Total current assets47 61269 08145 832
Non-current assets
Non-current receivables15202 016
Property, plant and equipment7 7336 8667 294
Right-of-use assets268173195
Investment property45 61540 87145 575
Intangible assets829882
Total non-current assets53 97548 29055 424
TOTAL ASSETS101 587117 371101 256
Current liabilities
Current debt28 42216 131173
Customer advances1 27011 4771 659
Current payables3 1567 9614 626
Tax liabilities816116111
Short-term provisions1965
Total current liabilities33 68335 6916 574
Non-current liabilities
Long-term debt 10 08637 90938 184
Other non-current payables0200
Deferred income tax liabilities1 1321 1341 130
Long-term provisions602545
Total non-current liabilities11 27839 08839 359
TOTAL LIABILITIES44 96174 77945 933
Equity attributable to owners of the Company
Share capital in nominal value11 33811 33811 338
Share premium5 6611 7485 661
Statutory reserve1 13401 134
Revaluation reserve2 0122 9842 012
Retained earnings36 48126 52235 178
TOTAL EQUITY56 62642 59255 323

Consolidated interim statements of comprehensive income

in thousands of euros2023 3M2022 3M2022 12M
Operating income
Revenue13 4157 91665 654
Cost of goods sold-9 749-5 358-48 689
Gross profit3 6662 55816 965
Marketing expenses-133-114-498
Administrative expenses-1 374-1 449-4 946
Other income106 278
Other expenses0-6-142
Operating profit/ loss2 16098917 657
Financial income2013
Financial expense-874-1 226-4 211
Profit / loss before income tax1 306-23613 449
Income tax-3-153
Net profit / loss for the period1 303-25113 452
Other comprehensive income net of income tax:
Net change in asset revaluation reserve 00-972
Total comprehensive income / loss for the year1 303-25112 480
Earnings per share (continuing operations) €
Earnings per share for the period €

The full report can be found in the file attached.

Angelika Annus
+372 614 4920


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