Key events during the reporting period
Increase of Luminor Bank AS loan
In March 2023 SIA Olaines Logistics and Luminor Bank AS signed a loan agreement amendment under which the maturity of the loan was prolonged with the right to increase the principal of the loan up to the amount equal to the initital principal of the loan (21.28mEUR). The purpose of the agreement was to prolong the loan maturity, finance the construction of 2MW solar park and consolidate loans inside the logistics portfolio with the intention to decrease interest expense at the consolidate portfolio level. In Q3 2023 SIA Olaines Logistics issued a long term loan to UPP Liepkalnio UAB, a fully owned subsidiary of UPP Logistics Properties OÜ – the ultimate parent company of United Partners’ logistics real estate portfolio, for repayment of its’ financial obligations. UPP Liepkalnio UAB owns the DPD logistics centre in Vilnius, Lithuania. Assets of UPP Liepkalnio UAB in the amount of 6mEUR were also pledged in favor of Luminor Bank AS. The restructuring was a business-as-usual procedure, executed with the intention to reduce financing cost at the consolidate portfolio level.
Financial commentary for the third quarter and nine months of 2023
Sales revenue was 681 kEUR in 3Q 2023 (665 kEUR in 3Q 2022) and 2.05 mEUR for the nine months of 2023 (2 mEUR for 9 months of 2022).
Operating profit amounted to 607 kEUR in 3Q 2023 (602 kEUR in 3Q 2022) and 1.82 mEUR for the nine months of 2023 (3.21 mEUR for 9 months of 2022). EBITDA was 607 kEUR in 3Q 2023 (602 kEUR in 3Q 2022) and EBITDA for the nine months of 2023 was 1.82 mEUR (1.78 mEUR for 9 months of 2022).
Net income was 316 kEUR in 3Q 2023 (356 kEUR in 3Q 2022) and 824 kEUR for the nine months of 2023 (2.40 mEUR for 9 months 2022).
The lower operating and net profit for the nine months is primarily attributed to a higher comparison base in 2022 due to the revaluation of real estate on that year and increased interest expenses, which have increased by ~38% during the current reporting period. It is worth noting that ~44% of interest cost (435 kEUR for 9 months of 2023) is fixed and not influenced by changes in 3-month EURIBOR.
To compensate the rise in interest cost we have improved in operating efficiency, resulting in a slight increase in EBITDA compared to last year.
| Financial ratios of the Group | 9 months 2023 | 9 months 2022 |
| Net profit margin % | 40.22% | 126.04% |
| ROA % | 2.17% | 7.06% |
| LTV % | 77.25% | 68.67% |
| DSCR | 1.1 | 1.1 |
Management board
The management board of UPP Olaines OÜ has one member: Marko Tali, the chairman of the board. The management board of Olaines Logistics SIA has also one member: Siim Sild, chairman of the board.
No remuneration or other benefits have been allotted to the member of the management board of UPP Olaines OÜ. The member of board of Olaines Logistics SIA receives remuneration according to Latvian legislation. There are no employees in the company besides the members of the management board.
CONSOLIDATED INTERIM ANNUAL ACCOUNTS
CONSOLIDATED BALANCE SHEET
| (EUR) | 30.09.2023 | 30.09.2022 | |
| Cash and cash equivalents | 595,310 | 467,257 | |
| Trade and ohter receivables | 553,683 | 262,480 | |
| Total current assets | 1,148,993 | 729,737 | |
| Investment property | 32,870,000 | 32,939,000 | |
| Investment property improvements | 69,727 | 371,423 | |
| Other fixed assets | 312,157 | 0 | |
| Long-term loans | 3,599,889 | 0 | |
| Total non-current assets | 36,851,773 | 33,310,423 | |
| TOTAL ASSETS | 38,000,766 | 34,040,160 | |
| Trade and ohter payables | 1,342,135 | 780,053 | |
| Financial derivatives | 0 | 44,569 | |
| Loans and borrowings | 1,064,000 | 16,403,333 | |
| Total current liabilities | 2,406,135 | 17,227,955 | |
| Loans and borrowings | 27,300,068 | 9,157,028 | |
| Total non-current liabilities | 27,300,068 | 9,157,028 | |
| TOTAL LIABILITIES | 29,706,203 | 26,384,983 | |
| Share capital | 2,500 | 2,500 | |
| Retained earnings | 8,292,063 | 7,652,677 | |
| TOTAL EQUITY | 8,294,563 | 7,655,177 | |
| TOTAL EQUITY AND LIABILITIES | 38,000,766 | 34,040,160 |
CONSOLIDATED INCOME STATEMENT
| (EUR) | 3Q 2023 | 3Q 2022 | 9 months 2023 | 9 months 2022 | |||
| Sales revenue | 681,465 | 665,391 | 2,049,836 | 1,996,598 | |||
| Cost of goods sold | -20,415 | -25,966 | -73,176 | -93,333 | |||
| Gross profit | 661,050 | 639,425 | 1,976,660 | 1,903,265 | |||
| General and administrative expenses | -54,447 | -29,765 | -147,911 | -115,025 | |||
| Real estate investment revaluation | 0 | 0 | 0 | 1,434,393 | |||
| Other operating expenses | 0 | -7,245 | -6,125 | -9,176 | |||
| Operating income | 606,603 | 602,415 | 1,822,624 | 3,213,457 | |||
| Financial income / (cost) | -290,452 | -246,399 | -998,133 | -808,562 | |||
| Profit before income tax | 316,151 | 356,016 | 824,491 | 2,404,895 | |||
| Net income | 316,151 | 356,016 | 824,491 | 2,404,895 | |||
| Total comprehensive income for the period | 316,151 | 356,016 | 824,491 | 2,404,895 |