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Creating homes in a
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2009


Arco Vara AS sold 100 per cent shares of Arco Vara Puukool OÜ (100% subsidiary of Arco Vara) with the share capital of 40 000 kroons (2556 euros). The purpose of the transaction was to separate ancillary activities from the principal
activities of the Group. Arco Vara Puukool OÜ was engaged in production of forestry plants.

The 100 per cent interest in Arco Vara Puukool OÜ was acquired by Metsamarket OÜ, whose director is Lehar Lindre. This transaction represents a transaction with a related person within the meaning of “Requirements for Issuers” of the
NASDAQ OMX Tallinn Rules. Lehar Lindre was a member of the management board of Arco Vara Puukool OÜ, a 100 per cent subsidiary of Arco Vara AS.

The value of the transaction was 600 000 kroons (38 347 euros), and the transaction was carried out as a hire-purchase with a payment period of 60 days. In order to secure payment of the transaction price the shares of Arco
Vara Puukool OÜ have been pledged for the benefit of Arco Vara AS.

The transaction does not have material economical effect on the activities of Arco Vara Group and does not qualify as an acquisition of significant holding.
The members of the supervisory board and the management board of Arco Vara AS have no other personal interest in the transaction.

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/


Arco Invest EOOD (100% Arco Vara development company in Bulgaria) concluded a 5-year lease agreement to lease out 4,700 m2 office space and 50 parking lots to a financial intermediary company in the Arco Vara Sofia project Boulevard
Residence Madrid starting from 1 August 2010. The square meter price per month is 172 kroons (11 euros); VAT, parking lot rental and all utility costs will be added to this price. The annual cost of the contract is 10.27 million kroons (656,398 euros).

The contract partner has no possibility to terminate the contract before 2.5 years, thereby the rent of three months shall be paid as rent penalty. The contract is confidential, therefore the name of the contract partner will not be published.

The property management service for the rental space will be provided by Arco Vara Bulgaaria Haldus.

As a result of conclusion of this agreement, 80% of office spaces in the Boulevard Residence Madrid project are covered with rental agreements. From living spaces, approximately 75% are sold. Visit the project page on the Arco
Vara investor relations site: http://www.arcorealestate.com/en/madrid

Arco Vara is a leading real estate developer in the Baltic's, established in 1992. The company 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.

1 EUR=15.6466 EEK

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/


On 21 October, Arco Vara transferred its holdings in Tallinna Olümpiapurjespordikeskuse AS, Floriston Grupp OÜ and Arco Ärikeskuse OÜ to enterprises related to Marcel Vichmann and Olav Miil for a total of 172 MEEK (11 MEUR), of which 55 MEEK (3.5 MEUR) is the amount paid for the sales and 117 MEEK (7.5 MEUR) are the payables of the three transferred companies.

From the point of view of the group internal liquidity management, the control of financial means of joint ventures is limited and does not allow the Group to fully control its working capital. Due to preparations for the increase in market demand related to the revival of economy, the Group needs finances for financing new residential building projects in Tallinn.

In the above joint ventures, neither the detailed plans have not been approved yet nor the building rights required for the development activity established. For a period of 10 years following the exercise of building rights proceeding from the detailed plans to be approved for the plots belonging to the companies, Arco Vara will maintain the right to receive additional returns.

As a result of the transaction, the liabilities of the Group decrease by 117 MEEK (7.5 MEUR), assets will be reduced due to transfer of holding by 306 MEEK (19.6 MEUR). The total loss on the transaction amounts to 150 MEEK (9.6 MEUR).

Arco Vara has management service agreements with Floriston Grupp OÜ and Arco Ärikeskuse OÜ, and a loan agreement with Snowden OÜ (a 100% subsidiary of Floriston Grupp OÜ).

According to article 7.12 of the Tallinn Stock Exchange Requirements for Issuers, it is a substantial transfer.

It is not a transaction with a related person for the purposes of the article 7.9 of the Tallinn Stock Exchange Requirements for Issuers, and the members of Arco Vara Management Board and Supervisory Board do not have any other interest in the transactions.

Transferred companies

Tallinna Olümpiapurjespordikeskuse AS is operating in the field of lease and operation of its own or leased property; owners of the company are 50% Arco Investeeringute AS (a 100% subsidiary of Arco Vara) and 50% Regati Valduse OÜ. Manager of the company is Urmas Lind, members of the Supervisory Board: Heigo Metsoja, Veiko Taevere, Ivar Lindpere, Urmas Uustal, Aivar Tuulberg and Andres Toome

Floriston Grupp OÜ is operating in the field of lease and operation of its own or leased property; owners of the company are 50% Arco Vara AS and 50% Ärimaja AS. Manager of the company is Urmas Lind, the company has no Supervisory Board.

Arco Ärikeskuse OÜ is operating in the field of lease and operation of its own or leased property; owners of the company are 50% Arco Investeeringute AS and 50% Aberdeen OÜ. Manager of the company is Urmas Lind, the company has no Supervisory Board.

Cost and conditions of transactions

Arco Vara transferred 100% of its holdings in Tallinna Olümpiapurjespordikeskuse AS and Arco Ärikeskuse OÜ, which made up 50% of the holding or share capital of both companies, and 75% of its holding in Floriston Grupp OÜ, which made up 37.5% of the holding of the company. Arco Vara will maintain a 12.5% holding in Floriston Grupp OÜ.

The cost of the 50% sales of Tallinna Olümpiapurjespordikeskuse AS is 37.5 MEEK (2.4 MEUR) and the payment due dates are 22.10.2009 and 19.12.2009.

The cost of the 37.5% sales of Floriston Grupp OÜ is 5.5 MEEK (0.35 MEUR) and the payment due date is 22.10.2009.

The cost of the 50% sales of Arco Ärikeskuse OÜ is 12 MEEK (0.77 MEUR) and the payment due date is 27.11.2009.

The 50% Arco Vara holding in Arco Ärikeskuse OÜ is transferred at the consent of AS DnB Nord Bank.

The Arco Vara claim against Snowden OÜ (a 100% subsidiary of Floriston Grupp) in the amount of 30 MEEK (1.9 MEUR) will remain valid and combined mortgages will be established to the plots in the ownership of Snowden OÜ to guarantee the claim.

Economic results of companies to be transferred

Tallinna Olümpiapurjespordikeskuse AS

in EEK (thousands)

in EUR (thousands)

2008

2007

2006

2008

2007

2006

Turnover

27 481

24 495

22 744

1 756

1 566

1 454

Net profit/loss

8 218

11 335

260 248

525

724

16 633

Dividends per share

0

0

0

0

0

0

Basic and diluted earnings/loss per share

0,22

0,3

0,55

0,014

0,019

0,035

Floriston Grupp OÜ

in EEK (thousands)

in EUR (thousands)

2008

2007

2006

2008

2007

2006

Turnover

6 772

5 530

11 266

433

353

720

Net profit/loss

44 322

-93 430

203 526

2 833

-5 971

13 008

Dividends per share

0

0

0

0

0

0

Basic and diluted earnings/loss per share

22161

-46715

101763

1 416,346

-2 985,633

6 503,841

Arco Ärikeskuse OÜ

in EEK (thousands)

in EUR (thousands)

Arco Ärikeskuse OÜ

2008

2007

2006

2008

2007

2006

Turnover

13 288

13 477

12 821

849

861

819

Net profit/loss

-13 558

44 333

14 341

-867

2 833

917

Dividends per share

1 080

1 600

0

69

102

0

Basic and diluted earnings/loss per share

-6779

22167

7170

-433

1 416

458

Annual reports of disposed companies

TALLINNA OLÜMPIAPURJESPORDIKESKUSE AS

EEK

EEK

EUR

EUR

BALANCE SHEET 31.12

2008

2007

2008

2007

ASSETS

Current assets

Cash

8548 063

5072 799

546 321

324 211

Receivables

3969 629

1467 565

253 706

93 794

Deferred income

718 921

75 775

45 947

4 843

Total current assets

13 23 613

6616 139

84 594

422 848

Non-current assets

Investment property1

511879 636

511879 636

32 715 071

32 715 071

Property, plant and equipment

250 980

321 073

16 041

20 520

Total non-current assets

512130 616

512200 709

32 731 112

32 735 592

TOTAL ASSETS

525367 229

518816 848

33 577 086

33 158 440

LIABILITIES AND EQUITY

Liabilities

Current liabilities

Loans and borrowings

4552 480

4456948

290 957

284 851

Liabilities

5605 586

2393 259

358 262

152 957

Deferred income

665 382

1032 707

42 526

66 002

Total current liabilities

10823 448

7882 914

691 744

503 810

Non-current liabilities

Long-term loan liabilities

65219 980

69772 460

4 168 316

4 459 273

Miscellaneous long-term liabilities

14 151

70 566

904

4 510

Total non-current liabilities

65243 131

69843 026

4 169 796

4 463 783

Total liabilities

76057 579

77725 940

4 860 965

4 967 593

Equity

Share capital

166192 000

166192 000

10 621 605

10 621 605

Own shares

-110000 000

-110000 000

-7 030 281

-7 030 281

Share premium

235

235

15

15

Statutory capital reserve

2842 529

2842 529

181 671

181 671

Retained earnings

390274 886

382056 144

24 943 111

24 417 838

Total equity

449309 650

441090 908

28 716 120

28 190 847

TOTAL LIABILITIES AND EQUITY

525367 229

518816 848

33 577 086

33 158 440

1Arco Vara has assessed investment property on a more conservative basis and the 100% value of the Tallinna Olümpiapurjespordikeskuse AS property as of 31.12.2008 is 298,212,000 EEK (19,059,220 EUR).

2 Supervisory Board signatures are missing on the Tallinna Olümpiapurjespordikeskuse AS 2008 annual report

TALLINNA OLÜMPIAPURJESPORDIKESKUSE AS

EEK

EEK

EUR

EUR

Income statement

2008

2007

2008

2007

(adjusted)

Sales revenue

27481 299

24494 979

1 756 375

1 565 514

Other operating income

101 028

142 963

6 457

9 137

Goods, raw material, material and services

- 6203 161

-5328 498

-396 454

-340 553

Other operating costs

-780 261

-880 917

-49 868

-56 301

Personnel expenses

-3474986

-3404 273

-222 092

-217 573

Depreciation of fixed assets

-365 267

-310 573

-23 345

-19 849

Other operating expenses

-4431 030

-17 421

-283 194

-1 113

EBIT

12327 622

14696 260

787 879

939 262

Financial items

-4108 880

-3361 555

-262 605

-214 843

Profit / loss for the financial year

8218 742

11334 705

52 525

724 420

TALLINNA OLÜMPIAPURJESPORDIKESKUSE AS

EEK

EEK

EUR

EUR

Cash flow statement

2008

2007

2008

2007

Cash flows from operating activities

EBIT

12327 622

14696 260

787 879

939 262

Adjustment of EBIT

4716 173

310 573

301 418

19 849

Change in assets and prepayments

-3145 210

-264 569

-201 016

-16 909

Change in payables and prepayments

2788 587

53 687

178 223

3 431

Net cash used in operating activities

16687 172

14795 951

1 066 505

945 634

Cash flows from investing activity

Acquisition of intangible assets

-295 174

0

-18 865

0

Acquisition of investment property

- 4 354 504

-4679 636

-278 304

-299 083

Interest received

472 968

394 673

30 228

25 224

Net cash used in / from investing activities

- 4 176 710

- 4 284 963

-266 940

-273 859

Cash flow from financing activities

Proceeds from loans received

0

75000 000

0

4 793 374

Repayment of loans

- 4007 112

-2555 649

-256 101

-163 336

Repayment of financial lease principal

-451 474

-558 266

-28 854

-35 680

Purchase of own shares

0

-110000 000

0

-7 030 281

Interest paid

-4578 250

-3756 229

-292 604

-240 067

Net cash used in / from financing activities

-9036 836

-41870 144

-577 559

-2 675 990

NET CASH FLOW

3473 626

-31359 156

222 005

-2 004 215

Cash and cash equivalents at beginning of period

5072 799

36399 260

324 211

2 326 337

Decrease / increase in cash and cash equivalents

3473 626

-31359 156

222 005

-2 004 215

Effect of exchange rate fluctuations

1 638

33 695

105

2 154

Cash and cash equivalents at end of period

8548 063

5072 799

546 321

324 211

FLORISTON GRUPP OÜ

EEK

EEK

EUR

EUR

BALANCE SHEET 31.12

2008

2007

2008

2007

ASSETS

Current assets

Cash

7527 876

5814 964

481 119

371 644

Receivables

1350 012

1267 885

86 281

81 033

Deferred income

3 592

32 223

230

2 059

Inventories1

52680 019

50915 109

3 366 867

3 254 069

Total current assets

61561 499

58030 181

3 934 497

3 708 805

Non-current assets

Non-current receivables

50186 470

67350 195

3 207 500

4 304 462

Investment property2

244306 876

259640 000

15 614 055

16 594 020

Total non-current assets

294493 346

326990 195

18 821 555

20 898 482

TOTAL ASSETS

356054 845

385020 376

22 756 052

24 607 287

LIABILITIES AND EQUITY

Current liabilities

Loans and borrowings

39762 785

145370 360

2 541 306

9 290 859

Liabilities

9215 938

5587 349

589 006

357 097

Deferred income

69 139

56 400

4 419

3 605

Total current liabilities

49047 562

151014 109

3 134 711

9 651 561

Non-current liabilities

Long-term loan liabilities

55974 721

27300 000

3 577 436

1 744 788

Miscellaneous long-term liabilities

76 740

72 740

4 905

4 649

Total non-current liabilities

56051 461

27372 740

3 582 341

1 749 437

Total liabilities

105099 023

178386 849

6 717 052

11 400 998

Equity

Holding

40 000

40 000

2 556

2 556

Statutory capital reserve

4 000

4 000

256

256

Retained earnings

250911 822

206589 527

16 036 188

13 203 477

Total equity

250955 822

206633 527

16 039 000

13 206 289

TOTAL LIABILITIES AND EQUITY

356054 845

385020 376

22 756 052

24 607 287

1,2 Arco Vara has assessed inventories and investment property on a more conservative basis and the 100% value of Floriston Grupp OÜ inventories as of 31.12.2008 is 7,932,401 kroons (506,973 EUR), and the value of investment property 162,456,000 kroons (10,382,830 EUR).

Floriston Grupp OÜ

EEK

EEK

EUR

EUR

Income statement

2008

2007

2008

2007

Sales revenue

6771 844

5530 330

432 800

353 453

Cost of sales

-1133 965

-1484 788

-72 474

-94 895

Gross profit

5637 879

4045 542

360 326

258 557

0

0

Selling and distribution costs

0

0

0

Administrative expenses

-1277 572

-66 000

-81 652

-4 218

Other operating income

1 890

-1638 939

121

-104 747

Other operating expenses

-15924 227

749 461

-1 017 744

47 899

EBIT

-11526 030

-41874 480

-736 648

-2 676 267

Other financial items

55884 325

-54645 063

3 571 659

-3 492 456

Profit / loss before tax

44322 295

-93429 479

2 832 711

-5 971 232

Net profit of financial year

44322 295

-93429 479

2 832 711

-5 971 232

Floriston Grupp OÜ

EEK

EEK

EUR

EUR

Cash flow statement

2008

2007

2008

2007

Cash flows from operating activities

EBIT

44322 295

-93429 479

2 832 711

-5 971 232

Interest income and expense

-5198 069

11431 387

-332 217

730 599

Gains and losses from TEV sales

-668 503

-7312 172

-42 725

-467 333

Impairment of financial assets

-50516 783

15156 690

-3 228 611

968 689

Exchange gains and losses

5 895

9 065

377

579

Profit/loss from investment property revaluation

15333 124

41860 000

979 965

2 675 342

Change in assets and prepayments

-1891 255

32607 102

-120 873

2 083 974

Change in payables and prepayments

3482 685

423 505

222 584

27 067

Net cash used in operating activities

4869 389

746 098

311 211

47 684

0

0

Cash flows from investing activity

0

0

Sales of subsidiaries

700 000

7366 500

44 738

470 805

Cash in subsidiaries sold

0

-51 536

0

-3 294

Proceeds from sale of other financial assets

81673 621

0

5 219 896

0

Interest received

344 427

238 017

22 013

15 212

Net cash used in / from investing activities

82718 048

7552 981

5 286 647

482 723

0

0

Cash flow from financing activities

0

0

Proceeds from loans received

69325 471

1071 400

4 430 705

68 475

Repayment of loans and financial lease

-148849 440

-5154 691

-9 513 213

-329 445

Change in overdraft

0

- 7 173

0

-458

Interest paid

-6344 661

-8819 050

-405 498

-563 640

Net cash used in / from financing activities

-85868 630

-12909 514

-5 488 006

-825 068

0

0

NET CASH FLOW

1718 807

-4610 435

109 852

-294 661

0

0

Cash and cash equivalents at beginning of period

5814 964

10434 464

371 644

666 884

Decrease / increase in cash and cash equivalents

1718 807

-4 610 435

109 852

-294 661

Effect of exchange rate fluctuations

- 5 895

-9 065

-377

-579

Cash and cash equivalents at end of period

7527 876

5814 964

481 119

371 644

ARCO ÄRIKESKUSE OÜ

EEK

EEK

EUR

EUR

BALANCE SHEET 31.12

2008

2007

2008

2007

ASSETS

Current assets

Cash

216 682

473611

13 849

30 269

Receivables

557 219

659 516

35 613

42 151

Deferred income

9 655

8 831

617

564

Total current assets

783 556

1141 958

50 078

72 984

Non-current assets

Investment property1

170614 604

189200 000

10 904 261

12 092 084

Property, plant and equipment

45 082

77 951

2 881

4 982

Total non-current assets

170659 696

189277 951

10 907 143

12 097 066

TOTAL ASSETS

171443 252

190419 909

10 957 221

12 170 050

LIABILITIES AND EQUITY

Current liabilities

Loans and borrowings

3821 000

3644 990

244 206

232 957

Liabilities

1110 065

975 067

70 946

62 318

Deferred income

42 500

42 500

2 716

2 716

Total current liabilities

4973 565

4662 557

317 869

297 992

Non-current liabilities

Long-term loan liabilities

99307 436

102699 913

6 346 902

6 563 721

Miscellaneous long-term liabilities

526 446

703 683

33 646

44 974

Total non-current liabilities

99833 882

103403 596

6 380 548

6 608 694

Total liabilities

104807 447

108066 153

6 698 417

6 906 686

Equity

Holding

90 000

90 000

5 752

5 752

Share premium

16335 900

16335 900

1 044 054

1 044 054

Statutory capital reserve

10 000

10 000

639

639

Retained earnings

50199 905

65917 856

3 208 359

4 212 919

Total equity

66635 805

82353 756

4 258 804

5 263 364

TOTAL LIABILITIES AND EQUITY

171443 252

190419 909

10 957 221

12 170 050

1Arco Vara has assessed investment property on a more conservative basis and the 100% value of the Arco Ärikeskus property as of 31.12.2008 is 134,170,000 kroons (8,575,026 EUR).

ARCO ÄRIKESKUSE OÜ

EEK

EEK

EUR

EUR

Income statement

2008

2007

2008

2007

Sales revenue

13287 970

13477 139

849 256

861 346

Cost of sales

-869 582

-1505 520

-55 576

-96 220

Gross profit

12418 388

11971 619

793 680

765 126

Selling and distribution costs

-56 665

-107 400

-3 622

-6 864

Administrative expenses

-890 683

-466 481

-56 925

-29 814

Other operating income

458 081

39313 370

29 277

2 512 582

Other operating expenses

-18935 029

-17 919

-1 210 169

-1 145

EBIT

-7005 908

50693 189

-447 759

3 239 885

Other financial items

-5977 867

-5457 390

-382 055

-348 791

Profit / loss before tax

-12983 775

45235 799

-829 814

2 891 094

Income tax on dividends

-574 176

-902 564

-36 697

-57 684

Net profit of financial year

-13557 951

44333 235

-866 511

2 833 410

ARCO ÄRIKESKUSE OÜ

EEK

EEK

EUR

EUR

Cash flow statement

2008

2007

2008

2007

Cash flows from operating activities

EBIT

-7005 908

50693 189

-447 759

3 239 885

Adjustment of EBIT

18618 255

-39142 527

1 189 923

-2 501 663

Change in assets and prepayments

82 836

-89 828

5 294

-5 741

Change in payables and prepayments

-153 831

53 489

-9 832

3 419

Net cash used in operating activities

11541 352

11514 323

737 627

735 899

Cash flows from investing activity

Interest received

7 284

34 817

466

2 225

Net cash used in / from investing activities

7 284

34 817

466

2 225

Cash flow from financing activities

Repayment of loans and financial lease

-3216 467

-3339 018

-205 570

-213 402

Interest paid

-5993 474

-5461 451

-383 053

-349 050

Dividends paid

-2160 000

-3200 000

-138 049

-204 517

Income tax paid

-430 632

-902 564

-27 522

-57 684

Net cash used in / from financing activities

-11800 573

-12903 033

-754 194

-824 654

NET CASH FLOW

-251 937

-1353 893

-16 102

-86 530

0

0

Cash and cash equivalents at beginning of period

473 611

1844 460

30 269

117 882

Decrease / increase in cash and cash equivalents

-251 937

-1 353 893

-16 102

-86 530

Effect of exchange rate fluctuations

-4 992

-16 956

-319

-1 084

Cash and cash equivalents at end of period

216 682

473 611

13 849

30 269

Extract of substantial loans taken by transferred companies

Company

Creditor

Due date

Amount as of 30.06.09

Floriston Grupp OÜ

Arco Vara AS

31.05.2012

10 384 000

Floriston Grupp OÜ

Arco Vara AS

23.05.2011

11 500 000

Floriston Grupp OÜ

Ärimaja AS

31.05.2012

10 384 000

Floriston Grupp OÜ

Ärimaja AS

23.05.2011

11 500 000

Floriston Grupp OÜ

Swedbank

26.06.2013

31 293 170

AS Tallinna Olümpiapurjespordikeskus

Swedbank

25.11.2015

66 404 784

Arco Ärikeskuse OÜ

DnB Nord Pank

25.10.2016

101 204 210


By the decision of the Tallinn Circuit Court, the litigation about the detailed plan of the Narva mnt 67 property (the so-called Tivoli project) was settled. According to the decision entered into force on 30 October 2009, the trial was disposed and the Tallinn Administrative Court decision on annulment of the establishment of detailed plan of Narva mnt 67 was annulled. 
Based on the decision, the detailed plan approved by the Tallinn City Council in 2008 will remain into force without changes.

Arco Vara plans to build a modern residential environment with up to 605 apartments on the property.

Arco Vara is a leading real estate developer in the Baltic's, established in 1992. The company 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/

Information about the project Tivoli you can find here.

 

 

Answers to the additional questions of journalists you can find here.

Dear Shareholder of Arco Vara AS

The management board of Arco Vara AS (registry code 10261718, located at Jõe 2B, Tallinn 10151) hereby calls an extraordinary general meeting of shareholders to be held on December 11, 2009 at 9.00 a.m. in Tallinn at Reval Hotel Central, Narva mnt 7C, conference room Studio II.

The agenda of the extraordinary general meeting of shareholders:

1. Extension of the term of office of the members of the supervisory board
The supervisory board proposes to the shareholders to extend the term of office of the current members of the supervisory board until December 11, 2014, i.e. to decide to extend the term of office for five years.

2. Remuneration of supervisory board members
The supervisory board proposes to the shareholders that the monthly net remuneration to be paid to the members of the supervisory board is EEK 15,000 (fifteen thousand) (959 EUR).

3. Amendments of the articles of association
In connection with the planned share capital reduction and the amendments of the Commercial Code that entered into force on November 15, 2009, the supervisory board proposes to the shareholders to amend the articles of association of Arco Vara AS and to adopt the new wording of the articles of association as follows:

3.1. to amend clause 2.1 and formulate it as follows: „2.1 The minimum amount of the Company’s share capital shall be 45,000,000 Estonian kroons and the maximum amount of the share capital shall be 180,000,000 Estonian kroons.”
3.2. to amend clause 3.3 and formulate it as follows: „3.3. An extraordinary general meeting of shareholders shall be called if the management board of the Company considers it to be necessary or if this is demanded by the Company’s supervisory board, auditor or shareholders whose shares represent at least one-twentieth of the share capital as well as in other events prescribed by law. The request for calling an extraordinary general meeting of shareholders shall be sent to the management board of the Company in writing, by showing the reason for calling. The shareholders shall be given at least three week’s notice of an extraordinary general meeting of shareholders.”
3.3. to amend clause 3.6 and formulate it as follows: „3.6. The circle of shareholders entitled to participate in the general meeting of shareholders shall be determined as of seven days prior to the date of holding the meeting.“

4. Reduction of share capital
In order to decrease volatility the price of shares of Arco Vara AS, to provide an opportunity for more efficient pricing of the shares of Arco Vara AS on the stock exchange and to provide an opportunity for further strengthening the capital structure, the supervisory board proposes to reduce the share capital of Arco Vara AS as follows:

4.1. first to reduce the share capital by cancellation of 10 shares so that 5 shares owned by Toletum OÜ (registry code 11011219) and 5 shares owned by HM Investeeringud OÜ (registry code 10963165) (hereinafter together the “Stabilizing shareholders”) shall be cancelled; and
4.2. thereafter to reduce the share capital by cancellation of 19/20 of all shares, whereas:
4.2.1. 19/20 of all shares owned by each shareholder shall be cancelled; and
4.2.2. if the number of shares owned by a shareholder (hereinafter the “Stabilized shareholder”) does not enable to cancel whole number of shares, whole number of shares owned by Stabilized shareholder shall be cancelled (rounded downwards) and additionally a number of shares (hereinafter the “Compensation shares”), that the Stabilized shareholder should have owned in order to enable cancellation of whole number of shares without rounding, shall be cancelled from the shares owned by the Stabilizing shareholders (e.g. if the Stabilized shareholder has 30 shares, 28 thereof shall be cancelled (i.e. the Stabilized shareholder will have 2 shares after the reduction of the share capital) and additionally 10 Compensation shares owned by the Stabilizing shareholders shall be cancelled);
4.2.3. Compensation shares shall be cancelled in equal parts from the shares owned by the Stabilizing shareholders. If the Compensation shares cannot be cancelled in equal parts from the shares owned by the Stabilizing shareholders, then more shares belonging to HM Investeeringud OÜ shall be cancelled.

As a result of the reduction of share capital, the number of all shares will be 4,764,207, i.e. 90,519,943 shares will be cancelled. The extent of the reduction of share capital will be EEK 905,199,430 (57,852,788 EUR).

The list of shareholders, whose shares will be cancelled, will be determined at 11.59 p.m. on March 1, 2010.

Materials of the extraordinary general meeting of shareholders of Arco Vara AS, including draft articles of association, annual report of the previous financial year and draft resolutions of the meeting are available through internet website of Arco Vara AS http://www.arcorealestate.com/ (menu ‘Investor Relations’, submenu ‘General meeting of Arco Vara AS’) and on workdays from 9.00 a.m. till 5.00 p.m. at the office of Arco Vara AS in Tallinn, Jõe 2B.

Questions about the items on the agenda can be sent by e-mail to This email address is being protected from spambots. You need JavaScript enabled to view it..

Shareholders representing at least 1/20 of the share capital may propose draft resolutions with respect to each item on the agenda. Proposals must be sent in writing to Arco Vara AS, Jõe 2B, 10151 Tallinn, by December 8, 2009. Proposals together with other materials of the extraordinary general meeting will be published on the internet website of Arco Vara AS http://www.arcorealestate.com/ (menu ‘Investor Relations’, submenu ‘General meeting of Arco Vara AS’) and on workdays from 9.00 a.m. till 5.00 p.m. at the office of Arco Vara AS in Tallinn, Jõe 2B.

The list of shareholders entitled to participate at the extraordinary general meeting of shareholders shall be determined at 11.59 p.m. on December 4, 2009, i.e. seven days prior to the meeting.

Registration to the extraordinary general meeting of shareholders will begin at 8.45 a.m. on December 11, 2009. A representative of a shareholder, being a legal person, must present an extract from the respective (commercial) register, where the legal person is registered (for an Estonian legal person, a copy of the Commercial Register's card B, which is not older than 15 days), proving the right of the person to represent the shareholder (legal authorisation), and the representative's identity document; if the person is not a legal representative, a duly executed power of attorney (authorisation by transaction) in writing and the representative's identity document must be produced in addition to the extract from the register. A shareholder, being a natural person, must present a passport or identity card; a representative must also present a duly executed power of attorney in writing. Shareholders may notify Arco Vara AS of giving a proxy or cancelling the proxy by e-mail to This email address is being protected from spambots. You need JavaScript enabled to view it. or by fax +372 6144631 by 5.00 p.m. on December 9, 2009, by using forms published on the internet website of Arco Vara AS.

Documents (except for the power of attorney) of a legal person registered in a foreign country must be legalised by the Ministry of Foreign Affairs of the Republic of Estonia or by a foreign representation of the Republic of Estonia, or confirmed with apostille.

1 EUR = 15.6466 EEK

Kind regards,
Management Board of Arco Vara


Additional information you can find here.

 

 


Comments by the CEO

Within the first 9 months of 2009, 41 apartments or plots were sold. 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. Furthermore, after the balance sheet date, a long-term rental agreement was concluded with a financial intermediary under the same project for a 4.700 m2 office space. Within nine months, 24 apartments have been sold in the Kodukolde project in Tallinn and 10 apartments in the BM-1 project in Latvia, as well as 6 plots in the Merivälja project in Tallinn.

The strategy of Arco Vara development division is to finish the unfinished 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. In autumn, the construction of the Kodukolde and Merivälja projects in Tallinn was completed. The finished residential areas help to release invested equity and reduce the liabilities of the Group. In order to maintain our competitiveness and speed up the sales, we have reduced the plot and apartment prices in all of our projects during the 9 months.


The restructuring of the service division has considerably reduced our administration costs, and the 9-month operating loss has decreased by more than 3 times, compared to 2008. Reduction of the number of employees has stopped and the staff makes up one fifth of the number of employees in the 9 months of the previous year. Within 9 months, the division has sold most of its real estate objects acquired for short-term investments, which have helped the division to manage by itself. The work organisation of some smaller offices outside the capital city was changed by giving up the classical office-based work organisation and applying 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 limited means in these countries, with a future focus on Estonia, Latvia and Bulgaria.

In the construction division, new agreements in the amount of 137 million kroons (8.7 million euros) were concluded during the nine months, thereof 21 millions kroons (1.3 million euros) in the 3rd quarter.


In short, the overall result of 9 months was most influenced by fair value adjustments. Gross profit without revaluation of inventory amounted to 35.5 million kroons (2.3 million euros) and the net loss without property investment- and financial assets revaluation -51.1 million kroons (-3.3 million euros). As a result of refinancing, the extraordinary interest bearing liabilities had to pay back around 102 million kroons (6.5 million euros). Without extraordinary debt service, the cash flow of 9 months was -7.6 million kroons (0.5 million euros).

9 months cost level is approx. 132 million kroons (8.4 million euros) lower compared to last year. To improve the liquidity position the Group has sold smaller investment properties. After the balance sheet date holdings in three major joint ventures where the Group was not able fully to control working capital. By the holdings sales company improved its liquidity position by 55 million kroons (3.5 million euros). Due to reduced operating volumes and cost saving policy, the number of Members of the Board was reduced and two Members of the Board were recalled in the 3rd quarter. Lembit Tampere continues as a sole member of the management board of Arco Vara AS.

KEY FINANCALS OF 9 MONTHS

· Revenue and other income for the nine months totalled 385.0 million kroons (24.6 million euros), 28.7% down year-over-year.

· EBIT amounted to -228.2 million kroons (-14.6 million euros) without revaluation of investment property and inventory -21.8 million kroons (-1.4 million euros).

· Net loss amounted to -229.9 million kroons (-14.7 million euros) without revaluation of investment property and inventory and impairment losses on financial assets -51.1 million kroons (-3.3 million euros).

· Equity ratio was 28.7% (9 months 2008: 55.5%) of the balance sheet total. ROE was negative (9 months 2008: negative). ROIC was negative (9 months 2008: negative).

· In the construction division, new agreements in the amount of 136.8 million kroons (8.7 million euros) were concluded, 9 months 2008: 229.8 million kroons (14.7 million euros).

· At the end of the reporting period, the construction business order backlog was 105.8 million kroons (6.8 million euros), 9 months 2008: 233.4 million kroons (14.9 million euros)..

· Within 9 months, 41 apartments or plots were sold under Arco Vara projects (9 months 2008: 72)

EEK

EUR

In millions

9 months 2009

9 months 2008

Q3 2009

Q3 2008

9 months 2009

9 months 2008

Q3 2009

Q3 2008

Revenue and other income

385.0

540.0

108.0

195.2

24.6

34.5

6.9

12.5

EBIT

-228.2

-106.7

-177.1

-57.6

-14.6

-6.8

-11.3

-3.7

incl. revaluation of investment property and inventory

-206.4

-61.2

-171.9

-44.4

-13.2

-3.9

-11.0

-2.8

Profit / loss before tax

-228.7

-91.8

-202.5

-58.2

-14.6

-5.9

-12.9

-3.7

incl. profit or loss from transfer of financial assets

-4.8

-36.6

-4.8

-17.1

-0.3

-2.3

-0.3

-1.1

Net profit / loss

-229.9

-102.5

-202.9

-57.9

-14.7

-6.6

-13.0

-3.7

EPS (in kroons and euros)

-2.41

-1.15

-2.15

-0.6

-0.15

-0.07

-0.14

-0.04

Total assets at period end

1675.7

3192.0

107.1

204.0

Invested capital at period end

1459.5

2945.5

93.3

188.3

Net loans at period end

915.6

855.8

58.5

54.7

Equity at period end

481.3

1770.2

30.8

113.1

Average loan term (in years)

1.7

2.2

1.7

2.2

Average interest rate of loans (per year)

5.3%

7.2%

5.3%

7.2%

ROIC (rolling 4 quarters)

neg

neg.

neg

neg.

ROE (rolling 4 quarters)

neg

neg.

neg

neg.

Number of staff at period end

260

546

260

546

REVENUE AND PROFIT

Due to low stock-in-trade an improvement in turnover can be expected in the 4th quarter this year or in the 1st quarter 2010. In autumn, the project Boulevard Residence Madrid will be completed in Sofia and a certificate of occupancy will be obtained in the 1st quarter of 2010. More than 60 apartments were added in the Kodukolle project, and in the Merivälja 2 project more than 50 plots with full infrastructure.

The overall result of 9 months was most influenced by fair value adjustments. In the 3rd quarter, the loss related to the transfer of holdings in three substantial joint ventures after the balance sheet date was reflected as fair value adjustment in the third quarter. This transaction alone accounted from all revaluations as investment property write-downs by 134.4 million kroons (8.6 million euros) and financial assets write-down by 4.5 million kroons (0.3 million euros). Revaluations in total were -206.4 million kroons (-13.2 million euros).

After the balance sheet date, it is evident that the turnover at the beginning of the 4th quarter is higher than the one in the 3rd quarter. The consolidated turnover of the Group in October made up 48% of the Group’s total turnover in the 3rd quarter. In October and November the Group has already sold 9 apartments and 10 land plots. No considerable improvement in profitability in daily operations is forecasted for the 4th quarter. Main cost cuttings have been made and striving towards reduced costs has become a routine practice in all of our business units: we are aiming at saving fixed costs additionally by 15.0 million kroons (1.0 million euros) on an annual basis. The main focus is now set on increasing the turnover and improving the liquidity through the sales of projects and stock-in-trade.

In the 3rd quarter, the service and construction division produced a positive EBIT. Apart from revaluation of investment property and inventory, the 9 month operating loss of the Group was -21.8 million kroons (1.4 million euros).

As of end of nine months, the claim against AS Ühendatud Kapital with a book value of 64.1 million kroons (4.1 million euros) has not been additionally discounted. On 20.11.2009, the 1st session of the Tallinn Court of arbitration was held the decision of which is expected to be published to parties on 21.12.2009. After the decision, the management of the Group will weigh the likeliness of receiving the money once again. Already 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 30.09.2009 45.5 million kroons (2.9 million euros).

The biggest write-up was made in Latvia where the right of superficies under inventory was reclassified to investment property as in the near future, no development activities are planned and buyers for the development projects are searched for. It is a plot project with an area 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.

EEK

EUR

9 months 2009

9 months 2008

Q3 2009

Q3 2008

9 months 2009

9 months 2008

Q3 2009

Q3 2008

In millions

Revenue and other income

Services

28.7

90.5

8.5

25.1

45.0

117.2

-15.1

-2.8

Development

218.4

195.7

69.7

55.7

8.5

25.1

45.0

117.2

Construction

174.9

323.3

45.0

117.2

-15.1

-2.8

0.0

108.0

Eliminations

-37.1

-69.5

-15.1

-2.7

0.0

108.0

195.2

0.0

Total revenue and other income

384.9

540.0

108.1

195.3

24.6

34.5

6.9

12.5

EBIT

Service1

-9.5

-30.71

1.3

-12.7

-0.6

-2.0

0.1

-0.8

Development

-172.8

-67.9

-135.9

-45.7

-11.0

-4.3

-8.7

-2.9

Construction

-2.9

7.7

1.8

3.7

-0.2

0.5

0.1

0.2

Eliminations

-26.3

-0.2

-26.8

1.7

-1.7

0.0

-1.7

0.1

Unallocated expenses

-16.7

-15.6

-17.5

-4.7

-1.1

-1.0

-1.1

-0.3

Total EBIT

-228.2

-106.7

-177.1

-57.7

-14.6

-6.8

-11.3

-3.7

Interest income and expense

-24.0

22.6

-10.6

6.6

-1.5

1.4

-0.7

0.4

Net other financial items

23.5

-7.6

-14.8

-7.2

1.5

-0.5

-0.9

-0.5

Income tax expense

-1.2

-10.8

-0.4

0.4

-0.1

-0.7

0.0

0.0

Net profit / loss

-229.9

-102.5

-202.9

-57.9

-14.7

-6.6

-12.9

-3.8

1 Starting from 2008 Q2, the service division has been separated from the asset management and as the asset management of the company was sold in 2008, the asset management is reflected as a part of the service division in 2008.

CASH FLOWS

EEK

EUR

In millions

9 months 2009

9 months 2008

Q3 2009

Q3 2008

9 months 2009

9 months 2008

Q3 2009

Q3 2008

Cash flows from operating activities

-49.8

-101.4

-41.6

5.6

-3.2

-6.5

-2.7

0.4

Cash flows from investing activities

45.5

-128.7

23,8

27.9

2.9

-8.2

1.5

1.8

Cash flows from financing activities

-105.4

-323.4

-37,2

-55.5

-6.7

-20.7

-2.4

-3.5

Net cash flow

-109.7

-553.6

-55.0

-22.1

-7.0

-35.4

-3.5

-1.4

Cash and cash equivalents at beginning of period

172.6

765.0

117.6

233.2

11.0

48.9

7.5

14.9

Effect of exchange rate fluctuations

-0.3

0.1

0.0

0.4

0.0

0.0

0.0

0.0

Cash and cash equivalents at end of period

62.6

211.5

62.6

211.5

4.0

13.5

4.0

13.5

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 nine-month cash flows of the Group would have been negative by 7.6 million kroons (0.5 million euros). These refunding transactions have decreased the liquidity of the Group by 102 million kroons (6.5 million euros) and have forced the Group to sell its assets. After the balance sheet date, holdings on three joint ventures were sold, as a result of which the Group will earn 55 million kroons (3.5 million euros) by the end of the year.

We have extended and restructured a half of our commercial papers in the amount of 26 million kroons (1.6 million euros), whereof approx. 8 million kroons (0.5 million euros) have been paid after the balance sheet date as a result of the sales of underlying pledged assets.

Major short-term liabilities during the next 12 months:

· the Ahtri project loan of 95.3 million kroons (6.1 million euros),

· „Tivoli” and „Laeva2” project loans in the total amount of 110.0 million kroons (7.0 million euros)

· „Kodukolde“ project loan in the amount of 65.3 million kroons (4.2 million euros).

· The loan for the Bišumuiža-1 (BM-1) development project in Riga in the amount of 49.8 million kroons (3.2 million euros),

· Calculated principal returns from the sales of booked spaces in the „Madrid“ project on Sofia as the house will be finished by the 1st quarter 2010 at the latest, in an amount of 38.2 million kroons (2.4 million euros),

· Commercial papers in the amount of 18 million kroons (1.2 million euros).

On a current basis, loans have been redeemed in the „Kodukolde” and Merivälja 2 projects in Tallinn and the „Bišumuiža-1” in Riga. 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 during the 9-month period and do not need any subsidy from parent company. Having the liquidity of the company as its priority, the division sold during the 9 months 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 addition to July, Service Division in Estonia (operator of real estate agencies) made the second positive net profit this year in October, also the Latvian and the Bulgarian agencies made their first positive net profit in October.
The number of brokerage transactions of the Group in 12 months has decreased by 49%, but increased during the last two quarters. The number of valuation reports has decreased on year-over-year basis by 57%, but has demonstrated a slight increase during the last two quarters. As at the end of the 9-month period, the division employed 62 persons (9 months 2008: 305 persons).

9 months 2009

9 months 2008

change, %

Q3 2008

Q3 2008

change, %

Number of brokered objects

727

1 416

-49%

278

503

-45%

Projects being sold, pcs.

144

271

-47%

186

272

-32%

Number of valuation reports

2 452

5 681

-57%

827

1 637

-49%

Number of appraisers*

34

44

-23%

Number of real estate brokers*

109

177

-38%

Average number of staff

62

305

-80%

* Includes authorisation agreements

DEVELOPMENT DIVISION

Within 9 months, 41 apartments or plots were sold under Arco Vara projects. After the balance sheet date already 19 units of residential properties are sold. 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. Furthermore, after the balance sheet date, a long-term rental agreement was concluded with a financial intermediary under the same project for a 4.700 m2 office space. After the balance sheet date, the trial on the establishment of the detailed plan of the Tivoli project was disposed and the Tallinn Administrative Court decision annulled. Based on the decision, the original detailed plan will remain into force without changes.

The main risk factor for the development division is and will be for the whole year the refinancing of loans of empty plots in Estonia. Although the cash flow of the Group is tense, we consider potential finishing of the unfinished projects with more favourable construction prices in order to satisfy the demand with ready to be sold stock as well as improve the security assets of loans. On a current basis, preparations are made in the Kodukolde next phase and Tivoli projects in Tallinn, and negotiations held with banks on financing the construction.

In order to manage the liquidity risk, the prices have been decreased in the ongoing projects in the Baltics and Sofia in order to improve sales, and after the balance sheet date, holdings in three substantial joint ventures sold. For some employees, salaries and working times have been reduced. As at the end of the 9-month period, the division employed 38 persons (9 months 2008: 48 persons).

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

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.

During nine months, the major new construction agreements were the Emajõe-Võhandu drinking water project and the Kohtla-Järve-Kiviõli sewerage project.

Within nine months, new agreements in the amount of 137 million kroons (8.8 million euros) were concluded, thereof 21 millions kroons (1.3 million euros) in the 3rd quarter. The residual cost of building contracts as of end of nine months is 9 million kroons (6.8 million euros). As at the end of the 9-month period, the division employed 145 persons (9 months 2008: 171 persons).

Condensed consolidated interim financial statements

Condensed consolidated income statement

Note

9 months 2009

9 months 2008

Q3 2009

Q3 2008

in EEK, thousands

Rendering of services

224 812

368 828

73 056

145 938

Sale of goods

51 366

138 819

18 332

48 230

Total revenue

276 178

507 647

91 388

194 168

Cost of sales

3

-375 799

-430 713

-100 934

-167 980

Gross profit

-99 621

76 934

-9 546

26 188

Other operating income

4

108 778

32 364

16 613

1 022

Selling and distribution costs

5

-3 320

-11 776

-1 321

-2 538

Administrative expenses

6

-57 391

-109 945

-19 412

-37 032

Other operating expenses

4

-176 621

-94 310

-163 450

-45 205

EBIT

-228 175

-106 733

-177 116

-57 565

Finance income

7

15 561

56 141

420

24 572

Finance expenses

7

-16 098

-41 168

-25 790

-25 239

Profit / loss before tax

-228 712

-91 760

-202 486

-58 232

Income tax expense

-1 235

-10 787

-426

368

Profit / loss for the period

-229 947

-102 547

-202 912

-57 864

Profit distribution for the period:

8

Parent company’s participation in loss

-228 602

-109 743

-203 453

-57 814

Minority interest in loss

-110

7 196

541

-50

Other aggregated loss

Exchange rate differences in converting foreign company

617

-628

39

-624

Aggregate profit / loss for the period

-229 330

-103 175

-202 873

-58 488

Parent company participation in aggregate loss

-229 186

-110 371

-203 380

-58 438

Minority interest in aggregate loss

-144

7 196

507

-50

Earning per share

8

- basic

-2.41

-1.15

-2.15

-0.61

- diluted

-2.41

-1.15

-2.15

-0.61

Note

9 months 2009

9 months 2008

Q3 2009

Q3 2008

in EUR, thousands

Rendering of services

14 368

23 572

4 669

9 327

Sale of goods

3 283

8 872

1 172

3 082

Total revenue

17 651

32 444

5 841

12 409

Cost of sales

-24 018

-27 528

-6 451

-10 736

Gross profit

3

-6 367

4 916

-610

1 673

Other operating income

6 952

2 068

1 062

65

Selling and distribution costs

4

-212

-753

-84

-162

Administrative expenses

5

-3 668

-7 027

-1 241

-2 367

Other operating expenses

6

-11 288

-6 028

-10 446

-2 889

EBIT

4

-14 583

-6 824

-11 319

-3 680

Finance income

995

3 588

27

1 570

Finance expenses

7

-1 029

-2 631

-1 648

-1 613

Profit / loss before tax

7

-14 617

-5 867

-12 940

-3 723

Income tax expense

-79

-689

-27

24

Profit / loss for the period

-14 696

-6 556

-12 967

-3 699

Profit distribution for the period:

Parent company’s participation in loss

8

-14 689

-7 014

-13 003

-3 695

Minority interest in loss

-7

460

35

-3

Other aggregated loss

Exchange rate differences in converting foreign company

39

-40

2

-40

Aggregate profit / loss for the period

-14 657

-6 596

-12 965

-3 739

Parent company participation in aggregate loss

-14 648

-7 054

-12 998

-3 735

Minority interest in aggregate loss

-9

460

32

-3

Earning per share

- basic

-0,15

-0,07

-0,14

-0,04

- diluted

8

-0,15

-0,07

-0,14

-0,04

Statement of financial position

EEK

EUR

Note

30.09.2009

31.12.2008

30.09.2009

31.12.2008

in thousands

Cash and cash equivalents

62 577

172 574

3 999

11 029

Financial assets

0

40 416

0

2 583

Receivables

9

247 596

294 352

15 824

18 813

Prepayments

6 094

6 165

389

394

Inventories

10

787 226

849 440

50 313

54 289

Biological assets

0

3 679

0

235

Total current assets

1 103 493

1 366 626

70 525

87 343

Financial assets

255

255

16

16

Receivables

9

7 402

6 671

473

427

Investment property

12

532 930

542 753

34 060

34 688

Property, plant and equipment

13

23 269

41 812

1 487

2 672

Intangible assets

14

8 382

12 475

536

797

Total non-current assets

572 238

603 966

36 572

38 600

TOTAL ASSETS

1 675 731

1 970 592

107 097

125 943

Loans and borrowings

15

461 862

353 417

29 518

22 587

Liabilities

16

118 185

132 677

7 553

8 480

Deferred income

86 745

65 174

5 544

4 165

Provisions

11 318

5 917

723

378

Total current liabilities

678 110

557 185

43 338

35 610

Loans and borrowings

15

509 799

692 919

32 582

44 286

Liabilities

16

5 384

4 404

344

281

Deferred income tax liability

20

20

1

1

Provisions

1 100

4 291

69

274

Total non-current liabilities

516 303

701 634

32 996

44 842

TOTAL LIABILITIES

1 194 413

1 258 819

76 334

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

Retained earnings

-501 340

-984 668

-32 041

-62 932

Own shares

-3 992

-3 992

-255

-255

Total equity attributable to equity holders of the parent

478 973

708 159

30 613

45 260

Minority interests

2 345

3 614

150

231

Total equity

481 318

711 773

30 763

45 491

TOTAL LIABILITIES AND EQUITY

1 675 731

1 970 592

107 097

125 943

Condensed consolidated interim cash flow statement

EEK

EUR

in thousands

Note

9 months 2009

9 months 2008

9 months 2009

9 months 2008

Net profit / loss

-229 947

-102 547

-14 696

-6 556

Interest income and expense

7

24 032

-22 592

1 536

-1 444

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

4 771

36 643

305

2 342

Gains and losses on other financial assets

7

-3 136

1 477

-200

94

Impairment losses on financial assets

7

-27 556

-25 258

-1 761

-1 614

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

3,4,6

3 406

5 352

218

341

Goodwill adjustments and recognition of negative goodwill as revenues

0

5 171

329

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

3,4,6

1 055

38

66

3

Gain / loss on the sale of investment property

4

-1 001

-617

-63

-39

Change in the fair value of investment property and biological assets

4

71 321

61 223

4 558

3 913

Profit/loss from property and inventory revaluation

3

135 067

0

8 632

0

Exchange gains and losses

7

2 426

-5 243

155

-335

Corporate income tax expense

0

10 787

0

689

Operating cash flow before working capital changes

-19 562

-35 566

-1 250

-2 277

Change in receivables and prepayments

-42 901

-3 052

-2 742

-194

Change in inventories

-15 074

-83 918

-963

-5 363

Change in biological assets

2 190

0

140

0

Change in payables and deferred income

25 585

21 120

1 635

1 350

NET CASH USED IN OPERATING ACTIVITIES

-49 762

-101 416

-3 180

-6 484

Acquisition of property, plant and equipment and intangible assets

-1 638

-21 775

-105

-1 392

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

2 010

443

128

28

Acquisition of investment property

-5 898

-1 173

-377

-75

Proceeds from sale of investment property

4 984

29 000

319

1 853

Acquisition of subsidiaries and interests in jointly controlled entities

-502

-126 312

-32

-8 073

Proceeds from disposal of subsidiaries and interests in jointly controlled entities

600

1 002

38

64

Acquisition of other financial assets

0

-202 665

0

-12 953

Proceeds from sale of other financial assets

40 416

214 161

2 583

13 687

Loans granted

-696

-50 546

-44

-3 230

Repayment of loans granted

4 218

3 784

270

242

Interest received

1 993

25 339

127

1 619

NET CASH USED IN / FROM INVESTING ACTIVITIES

45 487

-128 742

2 907

-8 230

Proceeds from loans received

107 095

235 961

6 845

15 081

Repayment of loans and payment of finance lease liabilities

-175 432

-435 147

-11 212

-27 811

Change in overdraft

0

-14

0

-1

Repurchase of own shares

0

-3 992

0

-255

Interest paid

-37 052

-62 525

-2 368

-3 996

Dividends paid

0

-42 274

0

-2 702

Income tax paid on dividends

0

-15 444

0

-987

NET CASH USED IN / FROM FINANCING ACTIVITIES

-105 389

-323 435

-6 735

-20 671

NET CASH FLOW

-109 664

-553 593

-7 008

-35 385

Cash and cash equivalents at beginning of period

172 574

765 008

11 029

48 893

Decrease / increase in cash and cash equivalents

-109 664

-553 593

-7 009

-35 385

Effect of exchange rate fluctuations

-333

52

-22

3

Cash and cash equivalents at end of period

62 577

211 467

3 999

13 510


The whole interim report you can download here.