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Creating homes in a
smart way

...directly tapping the market’s pulse

2009


The special general meeting of shareholders of Arco Vara AS was held today, on 27 August 2009 at Reval Hotel Central, Narva mnt 7c, in Tallinn.

The special general meeting of shareholders of Arco Vara AS started at 9.07 a.m. and ended at 9.15 a.m. and it was competent to pass decisions regarding the items on the agenda. The agenda of the special general meeting of shareholders of Arco Vara AS was published in the newspaper Postimees on 19 August 2009, in the information system of the Tallinn Stock Exchange and on the website of Arco Vara AS http://www.arcorealestate.com.

The following decision was passed at the special general meeting of shareholders of Arco Vara AS:
1.To enact clause 4.1. in the article of association as following “The Management Board of the Company consists of 1 (one) to 5 (five) members elected for three years. Repeated electing of the Members of the Management Board is allowed.“ In conjunction with the amendments in current clause the new wording of article of association should be adopted.

The number of the votes given in favor of the resolution was 54 208 055 which accounted for 70.80 % of the registered participants. The number of the votes given against the resolution was 22 358 584 which accounted for 29.20 % of the
registered participants. There were no impartial votes and every participant voted.

According to the clause 300 sub-clause 1 in the Commercial Code a resolution on amendment of the articles of association shall be adopted if at least two-thirds of the votes represented at a general meeting are in favor as well the articles of association of Arco Vara AS have not prescribe a greater majority requirement.

The special general meeting of shareholders of Arco Vara AS was held according to law and Article of Association of Arco Vara AS.

Lembit Tampere
CEO
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com/


Comments by the CEO

Within the first half-year of 2009, 25 apartments or plots were sold and 21 objects reserved in Arco Vara projects. In the Boulevard Residence Madrid project in Sofia, a 30-year rental agreement was concluded with the Austrian supermarket chain Billa, by which the supermarket will rent approx. 900 m2 of the ground floor sales space of the building. Within six months, 16 apartments have been sold in the Kodukolde project in Tallinn and 7 apartments in the BM-1 project in Latvia.

The strategy of Arco Vara development division is to finish the unfinished apartments in the Kodukolde project and the plots in the Merivälja2 projects in Tallinn, the apartments in the Bišumuiža-1 project in Riga, the apartments and business areas in the Boulevard Residence Madrid and Manastirski projects in Sofia with more favourable construction prices. The finished residential and business areas are to be sold by releasing invested equity and reducing the liabilities of the Group. In order to stay in competition and accelerate sales pace, we have reduced plot and apartment prices of Arco Vara projects in the 2nd quarter, too. As a result of this, we have written down the book value of some projects.


In the construction division, new agreements in the amount of 116.1 million kroons (7.4 million euros) were concluded during the six months, thereof 13.0 millions kroons (0.8 million euros) in the 2nd quarter. The result was by times lower than the target set for the 2nd quarter. Considering the great need for working capital, the cash flows of the division will be tense until autumn, when receivables will be due.

With the restructuring of the service division, we have considerably reduced administration costs of the division and reduced the loss by double. The number of employees has been reduced by 81 persons within six months and by 257 persons year-over-year. During the first half-year, the division has sold most of the real estate objects historically acquired for short-term investments, which has helped to break even the cash flows of the division.

During the first half-year, the work organisation of some smaller offices outside the capital city was changed, where we gave up the classical office-based work organisation and applied the home office system by maintaining our full service selection at the same time. In other offices, more cost effective work organisation solutions are being implemented in cooperation with employees.

The aim of the service division is to continue implementing the partially applied and in the current market situation justified work organisation also in foreign markets, which allows increasing service provision with unlimited means in these countries, with a future focus on Estonia, Latvia and Bulgaria.


In summary, without revaluations and redeeming the extraordinary principal amounts, the company would have earned both net profit and positive cash flow. Apart from real estate revaluation, the group managed to earn 19.0 million kroons (1.2 million euros) gross profit in the first half-year (2008 HY1: 50.7 million kroons; 3.2 million euros) and 7.5 million kroons (0.5 million euros) net profit (2008 HY1: -27.8 million kroons; -1.8 million euros), whereof the net profit without revaluations made up 22.1 million kroons (1.4 million euros) in the 2nd quarter. The cost cutting programme has been more successful than expected and when comparing with the cost basis of the 1st quarter 2008, the cost level of the first half-year of the present year is approx. 65 million kroons (4.1 million euros) lower. Apart from principal amount redemptions to banks, the cash flows of the company would have been positive by approx. 10 million kroons (0.6 million euros). Irrespective of the successful cost cutting programme and net profit before revaluations, the biggest risk is the liquidity of the Group. To improve this, important projects have to be sold. After the balance sheet date, targeted auctions of several important projects are going on both to local and international investors.

MAIN INDICATORS OF THE 1ST HALF-YEAR

· Revenue and other income for the first half-year months totalled 277.0 million kroons (17.7 million euros), 19.7% down year-over-year

· EBIT amounted to -51.1 million kroons (-3.3 million euros), 3.9% up year-over-year.

· Net loss was -27.0 million kroons (-1.7 million euros), 40.0% down year-over-year.

· Equity ratio was 36.0% (2008 HY1: 56.1%). ROE was negative (2008 HY1: neg.). ROIC was negative (2008 HY1: 0.3%)

· In the construction division, new agreements in the amount of 116.1 million kroons (7.4 million euros) were concluded, 2008 HY1: 209.1 million kroons (13.4 million euros).

· At the end of 1st half-year, order backlog in the construction business stood at 142.6 million kroons (9.1 million euros) against 338.0 million kroons (21.6 million euros) in 2008 HY1.

· During the half-year, 25 apartments and plots were sold (2008 HY1: 47).

EEK

EUR

HY1 2009

HY1 2008

Q2 2009

Q2 2008

HY1 2009

HY1 2008

Q2 2009

Q2 2008

In millions

Revenue and other income

277,0

344,8

181,3

232,9

17,7

22,0

11,6

14,9

EBIT

-51,1

-49,2

-37,1

-19,5

-3,3

-3,1

-2,4

-1,2

incl. net revaluation of investment property and inventory

-34,5

-16,9

-34,5

-4,4

-2,2

-1,1

-2.2

-0,3

Profit / loss before tax

-26,2

-33,5

-11,6

-17,2

-1,7

-2,1

-0,7

-1,1

incl. profit or loss from transfer of financial assets

0,0

-19,5

0,0

-19,5

0,0

-1,2

0,0

-1,2

Net profit / loss

-27,0

-44,7

-12,4

-28,0

-1,7

-2,9

-0,8

-1,8

EPS (in kroons and euros)

-0,28

-0,54

-0,13

-0,38

-0,02

-0,03

-0,01

-0,02

Total assets at period end

1 896,7

3 267,0

121,2

208,8

Invested capital at period end

1676,7

3 019,0

107,2

192,9

Net debt at period end

875,4

815,4

55,9

52,1

Equity at period end

683,7

1 832,7

43,7

117,1

Average loan term (in years)

1,9

1,9

1,9

1,9

Average interest rate of loans (per year)

5,7%

7,2%

5,7%

7,2%

ROIC (rolling 4 quarters)

neg.

0,3%

neg.

0,3%

ROE (rolling 4 quarters)

neg.

neg.

neg.

neg.

Number of staff at period end

257

569

257

569

REVENUE AND PROFIT

EEK

EUR

HY1 2009

HY1 2008

Q2 2009

Q2 2008

HY1 2009

HY1 2008

Q2 2009

Q2 2008

In millions

Revenue and other income

Services

20,2

65,5

9,5

32,8

71,0

116,6

-17,8

-26,8

Development

148,7

139,9

118,6

110,2

9,5

32,8

71,0

116,6

Construction

129,9

206,1

71,0

116,6

-17,8

-26,8

0,0

181,3

Eliminations

-21,9

-66,7

-17,8

-26,7

0,0

181,3

232,9

0,0

Total revenue and other income

276,9

344,8

181,3

232,9

17,7

22,0

11,6

14,9

EBIT

Services

-10,6

-18,0

-5,4

-9,8

-0,7

-1,2

-0,3

-0,6

Development

-36,9

-22,2

-36,6

-6,1

-2,4

-1,4

-2,3

-0,4

Construction

-4,7

3,9

-1,3

-0,3

-0,3

0,2

-0,1

0,0

Eliminations

0,4

-1,9

0,6

2,6

0,0

-0,1

0,0

0,2

Unallocated expenses

0,8

-11,0

5,7

-5,9

0,1

-0,7

0,4

-0,4

Total EBIT

-51,0

-49,2

-37,1

-19,5

-3,3

-3,2

-2,3

-1,2

Interest income and expense

-13,5

16,0

-8,5

11,0

-0,9

1,0

-0,5

0,7

Net other financial items

38,3

-0,4

34,0

-8,7

2,5

0,0

2,2

-0,6

Income tax expense

-0,8

-11,2

-0,8

-10,8

-0,1

-0,7

-0,1

-0,7

Net profit / loss

-27,0

-44,7

-12,3

-28,0

-1,8

-2,9

-0,7

-1,8

Due to the low low inventory balance an improvement in turnover can be expected in the 4th quarter 2009. In autumn, the project Boulevard Residence Madrid will be completed in Sofia. In Tallinn, more than 60 apartments add in the Kodukolde project, and in the Merivälja 2 project more than 50 plots with full infrastructure. The recent reservations and new sales will be reflected as turnover after the end of construction and getting authorisation for use.

The consolidated result of the half-year will most be affected by the weak results 1st quarter. When not considering the real estate revaluations, the 2nd quarter is considerably better than the first. After the balance sheet date, it is evident that the turnover at the beginning of the 3rd quarter has the same level as in the 2nd quarter. No considerable improvement in profitability in daily operations is forecasted for the 2nd half-year. Main cost cuttings have been made and the focus of the Group is now set on increasing the turnover and improving the liquidity through the sales of projects.

Apart from real estate revaluations, the net profit of the Group in the half-year was 7.5 million kroons (0.5 million euros) against a -27.8 million kroons (-1.8 million euros) net loss year-over-year. As of end of half year, the claim against AS Ühendatud Kapital with a book value of 66.5 million kroons (4.2 million euros) has not been additionally discounted. We except the Tallinn Arbitrage to take a decision by October at the latest. After the decision, the company management will weigh the likeliness of receiving the claim again. In the 2nd quarter, the write down of the claim related to the joint company Bisumuizas Nami SIA in 2008 in the amount of 34.1 million kroons (2.2 million euros) was cancelled, because the equity of Bisumuizas Nami SIA on 31.12.2008 was -16.2 million koons (- 1.0 million euros) and on 30.06.2009 45.9 million kroons ( 2.9 million euros).

In the 2nd quarter, considerable fair value adjustments were made as during the 2nd quarter, the company reduced sales prices in all residential projects on sale, which will reduce the revenues from the projects. The biggest write up was made in Latvia where the right of leasehold right recorded under inventory was reclassified to investment property as in the near future, no development activities are planned. It is a residential project on a land plot in size of 86 ha, located at the Mazais Baltezers lake near Riga. According to the detailed plan, a total of 189 plots for houses with a total gross enclosed area of 172,380 m2 can be built.

CASH FLOWS

EEK

EUR

HY1 2009

HY1 2008

HY1 2009

HY1 2008

In millions

Cash flows from operating activities

-8,2

-107,0

-0,5

-6,8

Cash flows from investing activities

21,7

-156,6

1,4

-10,0

Cash flows from financing activities

-68,2

-267,9

-4,4

-17,1

Net cash flow

-54,7

-531,5

-3,5

-34,0

Cash and cash equivalents at beginning of period

172,6

765,0

11,0

48,9

Effect of exchange rate fluctuations

-0,3

-0,3

0,0

0,0

Cash and cash equivalents at end of period

117,6

233,2

7,5

14,9

In January 2009, 40 million kroons from the loan principals related to the Tivoli and Laeva projects were paid back on an extraordinary basis, by releasing the Group from the obligation to keep liquid assets in an amount of 150 million kroons (9.6 million euros) in the SEB bank. On an extraordinary basis, smaller loans and principal amounts have been paid back, too. Apart from extraordinary loan redemptions, the cash flows of the Group would have been positive by approx. 10 million kroons (0.6 million euros) due to the successful cost cutting programme. These refunding transactions have decreased the general liquidity of the Group. The loans related to the Ahtri 3 project in the amount of 97.2 million kroons (6.2 million euros) in Sampo bank have been extended by paying back the principal in the amount of 3.0 million kroons (0.2 million euros) only. After the balance sheet date, a half of the commercial papers have been extended and restructured in the amount of 26 million kroons (1.6 million euros).

Major short-term liabilities:

· the Ahtri project loan of 97.2 million kroons (6.2 million euros),

· calculated principal redemptions in the amount of approx. 40 million kroons (2.6 million euros) from the sales of assets („Kodukolde”, „Merivälja2” and „Boulevard Residence Madrid”),

· „Tivoli” and „Laeva2” project loans in the total amount of 114.5 million kroons (7.3 million euros)

· „Kodukolde“ project loan in the amount of 73.4 million kroons (4.7 million euros).

On a current basis, loans have been redeemed in the „Kodukolde” project in Tallinn, Estonia and the „Bišumuiža-1” project in Riga, Latvia. In spring, the relevant loans have been refunded and the new loan service level will remain under sales prices by leaving the Group more disposable funds. Most of the liabilities of the Group are in euros.

SERVICE DIVISION

Cost and business model optimisation started a year ago has had good results but is still not sufficient for earning net profit. By cash flow, the revenues and expenses of the division are in balance in the 1st quarter and do not need any subsidy from parent company. Having the liquidity of the company as its priority, the division sold in the 1st quarter objects that were acquired earlier as short-term investments, due to the market situation, the prices have sometimes been under the cost price. The information after the balance sheet date is that in July, Service Division in Estonia (operator of real estate agencies) made the first positive net profit this year – approx. 0.4 million kroons (0.0 million euros), the Latvian and the Bulgarian agencies in total broke even.
Due to the situation in real estate the number of employees in the division has reduced by 82%, i.e. 257 persons during 12 months. The number of brokerage transactions of the Group in 12 months has decreased by 57%, the number of valuation reports has decreased by 60%.
The nonrecurring operating costs of the division amounted to more than 2.0 million kroons (0.1 million euros) and were related to redundancy payments and sales of assets under their cost price.
As at the end of half-year the division employed 58 persons (2008 HY1: 315 persons).

HY1 2009

HY1 2008

change, %

Q2 2009

Q2 2008

change, %

Number of brokered objects

449

913

-51%

241

430

-44%

Projects being sold, pcs.

60

270

-78%

60

293

-80%

Number of valuation reports

1 625

4 044

-60%

815

1 992

-59%

Number of appraisers*

32

46

-30%

Number of real estate brokers*

102

183

-44%

Average number of staff

58

315

-82%

* Includes authorisation agreements

DEVELOPMENT DIVISION

During the 1st half-year, 25 apartments or plots were sold and 21 objects were reserved. Under the Boulevard Residence Madrid project in Sofia, a long-term rental agreement with the Austrian supermarket chain Billa was concluded for approx. 900 m2. In May, Tallinn Administrative Court cancelled the Tivoli detailed plan (see Note 18). The Group has appealed.

The main risk factor for the development division is the refinancing of loans of land bank in Estonia.
Although the cash flow of the Group is tense, we consider it to be sensible to finish the unfinished projects with more favourable construction prices in order to satisfy the demand with ready to be sold stock. No new investments are planned at the moment.

In order to manage the liquidity risk, the prices in current projects in the Baltics as well as in Sofia have been decreased in order to improve sales, and during the year we aim at selling both development projects and cash flow generating projects. For some employees, salaries and working times have been reduced. As at the end of March the division employed 41 persons (2008 HY1: 49 persons).

Further information on the projects: www.arcorealestate.com/arendus

CONSTRUCTION DIVISION

The construction division has won tenders of environmental and infrastructure engineering. The average volume of the tenders has decreased and the contractor is the state or local governments.

In the 1st half-year, the major new construction agreements were the Emajõe-Võhandu drinking water project and the Kohtla-Järve-Kiviõli sewerage project.

In the 1st half-year new construction contracts worth 116.1million kroons (7.4 million euros) were concluded, thereof 13.0 millions kroons (0.8 million euros) in the 2nd quarter. As at end of half-year, the residual cost of building contracts is 143 million kroons (9.1 million euros). As at the end of first half-year the division employed 143 persons (2008 HY1: 181 persons).

Condensed consolidated interim financial statements

Condensed consolidated income statement

Note

HY1 2009

HY1 2008

Q2 2009

Q2 2008

in EEK, thousands

Rendering of services

151 756

222 890

75 842

134 199

Sale of goods

33 034

90 589

14 626

71 759

Total revenue

2

184 790

313 479

90 468

205 958

Cost of sales

3

-274 865

-262 733

-187 273

-176 406

Gross profit

-90 075

50 746

-96 805

29 552

Other income

2,4

92 165

31 342

90 857

26 948

Selling and distribution costs

5

-1 999

-9 238

-1 120

-4 566

Administrative expenses

6

-37 979

-72 913

-17 377

-38 840

Other expenses

4

-13 171

-49 105

-12 696

-32 592

EBIT

-51 059

-49 168

-37 141

-19 498

Finance income

7

15 141

31 569

7 369

17 558

Finance expenses

7

9 692

-15 929

18 221

-15 228

Profit / loss before tax

-26 226

-33 528

-11 551

-17 168

Income tax expense

-809

-11 155

-809

-10 788

Profit / loss for the period

-27 035

-44 683

-12 360

-27 956

Other aggregated loss

Exchange rate differences in converting foreign company

125

64

8

4

Aggregate profit / loss for the period

-26 910

-44 619

-12 352

-27 952

Profit distribution for the period:

Parent company’s participation in loss

-26 259

-51 865

-12 561

-36 640

Minority interest in loss

-651

7 246

209

8 688

-26 910

-44 619

-12 352

-27 952

Aggregate profit distribution for the period:

Parent company participation in aggregate loss

-26 259

-51 865

-12 561

-36 640

Minority interest in aggregate loss

-651

7 246

209

8 688

-26 910

-44 619

-12 352

-27 952

Earning per share

8

- basic

-0,28

-0,54

-0,13

0,38

- diluted

-0,28

-0,54

-0,13

0,38

Note

HY1 2009

HY1 2008

Q2 2009

Q2 2008

in EUR, thousands

Rendering of services

9 699

14 245

4 847

8 577

Sale of goods

2 111

5 790

935

4 586

Total revenue

2

11 810

20 035

5 782

13 163

Cost of sales

3

-17 567

-16 792

-11 969

-11 274

Gross profit

-5 757

3 243

-6 187

1 889

Other income

2,4

5 890

2 003

5 807

1 722

Selling and distribution costs

5

-128

-590

-72

-292

Administrative expenses

6

-2 427

-4 660

-1 111

-2 482

Other expenses

4

-842

-3 138

-811

-2 083

EBIT

-3 264

-3 142

-2 374

-1 246

Finance income

7

968

2 018

471

1 122

Finance expenses

7

619

-1 018

1 165

-973

Profit / loss before tax

-1 677

-2 142

-738

-1 097

Income tax expense

-52

-713

-52

-689

Profit / loss for the period

-1 729

-2 855

-790

-1 786

Other aggregated loss

Exchange rate differences in converting foreign company

8

4

1

0

Aggregate profit / loss for the period

-1 721

-2 851

-789

-1 786

Profit distribution for the period:

Parent company’s participation in loss

-1 678

-3 315

-803

-2 342

Minority interest in loss

-42

463

13

555

-1 720

-2 852

-790

-1 787

Aggregate profit distribution for the period:

Parent company participation in aggregate loss

-1 678

-3 315

-803

-2 342

Minority interest in aggregate loss

-42

463

13

555

-1 720

-2 852

-790

-1 787

Earning per share

8

- basic

-0,02

-0,03

-0,01

0,02

- diluted

-0,02

-0,03

-0,01

0,02

Statement of financial position

EEK

EUR

Note

30.06.2009

31.12.2008

30.06.2009

31.12.2008

in thousands

Cash and cash equivalents

117 580

172 574

7 515

11 029

Financial assets

32

40 416

2

2 583

Receivables

9

245 808

294 352

15 710

18 813

Prepayments

6 204

6 165

397

394

Inventories

10

815 692

849 440

52 132

54 289

Biological assets

1 299

3 679

83

235

Total current assets

1 186 615

1 366 626

75 839

87 343

Financial assets

295

255

19

16

Receivables

9

10 213

6 671

653

427

Investment property

12

656 436

542 753

41 954

34 688

Property, plant and equipment

13

30 836

41 812

1 971

2 672

Intangible assets

14

12 336

12 475

788

797

Total non-current assets

710 116

603 966

45 385

38 600

TOTAL ASSETS

1 896 731

1 970 592

121 224

125 943

Loans and borrowings

15

501 282

353 417

32 038

22 587

Liabilities

16

118 709

132 677

7 587

8 480

Deferred income

89 619

65 174

5 728

4 165

Provisions

11 703

5 917

748

378

Total current liabilities

721 313

557 185

46 101

35 610

Loans and borrowings

15

485 059

692 919

31 001

44 286

Liabilities

16

5 535

4 404

354

281

Deferred income tax liability

20

20

1

1

Provisions

1 100

4 291

70

274

Total non-current liabilities

491 714

701 634

31 426

44 842

TOTAL LIABILITIES

1 213 027

1 258 819

77 527

80 452

Share capital

952 842

952 842

60 898

60 898

Share premium

0

712 514

0

45 538

Statutory capital reserve

31 463

31 463

2 011

2 011

Other reserves

0

0

0

0

Retained earnings

-298 413

-984 668

-19 072

-62 932

Own shares

-3 992

-3 992

-255

-255

Total equity attributable to equity holders of the parent

681 900

708 159

43 582

45 260

Minority interests

1 804

3 614

115

231

Total equity

683 704

711 773

43 697

45 491

TOTAL LIABILITIES AND EQUITY

1 896 731

1 970 592

121 224

125 943

Condensed consolidated interim cash flow statement

EEK

EUR

Note

HY1 2009

HY1 2008

HY1 2009

HY1 2008

in thousands

Net profit / loss

-27 035

-44 683

-1 729

-2 855

Interest income and expense

7

13 480

-16 004

862

-1 023

Gains and losses on disposal of subsidiaries and interests in jointly controlled entities

0

19 476

0

1 245

Gains and losses on other financial assets

7

-2 667

1 465

-170

94

Impairment losses on financial assets

7

-31 634

-25 248

-2 022

-1 614

Depreciation, amortisation and impairment losses on property, plant and equipment and intangible assets

3,4,6

2 382

3 700

152

235

Gain / loss on the sale of property, plant and equipment and intangible assets

3,4,6

-1 056

-38

-68

-1

Gain / loss on the sale of investment property

4

1 761

0

114

0

Change in the fair value of investment property and biological assets

4

-74 420

16 855

-4 756

1 077

Profit/loss from property and inventory revaluation

3

108 924

0

6 962

0

Exchange gains and losses

7

-4 012

4 671

-256

299

Corporate income tax expense

651

11 731

42

750

Operating cash flow before working capital changes

-13 626

-28 075

-869

-1 793

Change in receivables and prepayments

19 179

-48 687

1 226

-3 111

Change in inventories

-42 996

-47 214

-2 748

-3 018

Change in biological assets

2 190

474

140

30

Change in payables and deferred income

27 082

16 454

1 731

1 052

NET CASH USED IN OPERATING ACTIVITIES

-8 171

-107 048

-520

-6 840

Acquisition of property, plant and equipment and intangible assets

-7 599

-12 885

-486

-824

Proceeds from sale of property, plant and equipment and intangible assets

3 600

313

230

20

Acquisition of investment property

-5 100

-900

-326

-58

Proceeds from sale of investment property

205

29 000

13

1 853

Acquisition of subsidiaries and interests in jointly controlled entities

0

-126 299

0

-8 072

Proceeds from disposal of subsidiaries and interests in jointly controlled entities

0

1 005

0

64

Acquisition of other financial assets

0

-126 500

0

-8 085

Proceeds from sale of other financial assets

45 739

107 502

2 923

6 871

Loans granted

-23 480

-49 739

-1 501

-3 179

Repayment of loans granted

5 429

3 426

347

219

Interest received

2 921

18 460

187

1 180

NET CASH USED IN / FROM INVESTING ACTIVITIES

21 715

-156 617

1 387

-10 011

Proceeds from loans received

74 601

41 754

4 768

2 669

Repayment of loans and payment of finance lease liabilities

-120 987

-227 687

-7 732

-14 552

Change in overdraft

0

-14

0

-1

Change in group account liability

0

-798

0

-51

Interest paid

-21 819

-35 917

-1 394

-2 296

Dividends paid

0

-42 274

0

-2 702

Income tax paid on dividends

0

-2 916

0

-186

NET CASH USED IN / FROM FINANCING ACTIVITIES

-68 205

-267 852

-4 358

-17 119

NET CASH FLOW

-54 661

-531 517

-3 491

-33 970

Cash and cash equivalents at beginning of period

172 574

765 008

11 029

48 893

Decrease / increase in cash and cash equivalents

-54 661

-531 517

-3 493

-33 970

Effect of exchange rate fluctuations

-333

-333

-22

-21

Cash and cash equivalents at end of period

117 580

233 158

7 515

14 901

Whole report


The Member of Management Board, Mr. Tarmo Loog, of Arco Vara Group key subsidiary (as defined by Tallinn Stock Exchange regulations) Arco Investeeringute AS (100 % subsidiary of Arco Vara AS) was recalled. As a Member of Management Board of Arco Investeeringute AS will continue Mr. Veiko Taevere. In order to adapt the management structure to the decreased business volume was the Member of Management Board recalled.

Arco Vara is one of the leading real estate developer in the Baltic's, operating also in Ukraine and Bulgaria. Core business is real estate development supported by brokerage network, construction arm and property management. The company has offices in 17 cities and employs ca 250 people.
Arco Vara AS is listed on Tallinn Stock Exchange.


Lembit Tampere
CEO
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com/


Today, on 4 September 2009, Members of Board of Arco Vara Mr. Heigo Metsoja and Mr. Veiko Taevere were deleted from Commercial Register. Both of them will continue working at Arco Vara Group. As a Member of Management Board of Arco
Vara AS will continue Mr. Lembit Tampere. The company announced changes in the Management Board of Arco Vara on 19 August 2009.

Arco Vara is one of the leading real estate developer in the Baltic's, operating also in Ukraine and Bulgaria. Core business is real estate development supported by brokerage network, construction arm and property management. The company has offices in 17 cities and employs ca 250 people.
Arco Vara AS is listed on Tallinn Stock Exchange.

Lembit Tampere
CEO
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com/


Pursuant to the Securities Market Act, manager of OÜ Gamma Holding Mr. Arvo Nõges notified Arco Vara AS that after the share transaction on 16 September 2009 the aggregate holding of OÜ Gamma Holding exceeded the 5 % of the voting
stock in Arco Vara AS.

Arco Vara is one of the leading real estate developer in the Baltic's, operating also in Ukraine and Bulgaria. Core business is real estate development supported by brokerage network, construction arm and property management. The company has offices in 17 cities and employs ca 250 people.
Arco Vara AS is listed on Tallinn Stock Exchange.

Lembit Tampere
CEO
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com/


National Court of Estonia dissatisfied Arco Investeeringute AS (100 % subsidiary of Arco Vara AS) appeal against Tallinn District Court ruling from 22nd of June 2009. With prior mentioned district court ruling came into force, wherewith clause 2.2 from Harju Country Court ruling from 12th of March 2009, whereby AS Ühendatud Kapital pecuniary means in all banks of Estonia were sized, was annulled.

Rest of the Harju Country Court ruling was not amended and prohibition of any shares and stocks of AS Ühendatud Kapital subsidiary Companies as well judicial mortgage on registered immovable property shall remain.

Arco Vara is a leading real estate developer in the Baltic's, established in 1992. The operations involve real estate development, brokerage, valuation, construction and property maintenance arm. The company is located in 17 cities
in Estonia, Latvia, Ukraine and Bulgaria and employs ca 250 people.
Arco Vara AS is listed on Tallinn Stock Exchange.

Lembit Tampere
CEO
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com/