Important events
Extension of loan agreement with Luminor
On 30 March 2023, the Group extended its loan term with Luminor Bank AS to February 2025. The principal of the loan is also increased in order to finance the acquisition of a planned 2 MW solar park including the land for it. The bank’s interest rate margin is increased by 35 basis points to 2.75% plus three-month Euribor. The Group has various strategies under consideration for the mitigation of Euribor-dependent interest rate risk.
SIA Olaines Logistics bought the land for the solar park
On 19.05.2023, SIA Olaines Logistics was entered in the land register as the owner of property 8080 003 0664. Construction work of the solar park in the property starts in the coming weeks. The panels and inverters have already arrived, the connection contracts have been concluded. Park is planned to be handed over at the beginning of August.
The transaction was financed by a temporary short-term working capital loan from the Immediate parent company (UPP Logistics Properties OÜ). The short-term working capital loan will be repaid to the Immediate parent company after the principal of Luminor's bank loan has been increased.
Recall of the council and amendment of the articles of association
Immediate parent company decided on 26.04.2023 to recall the supervisory board of UPP Olaines OÜ and in connection with this to amend the articles of association of UPP Olaines OÜ. The decision and statute were published with the according company announcement in Nasdaq Baltic stock exchange on 26.04.2023.
Immediate parent company decided to recall the council because the council had no function. Already in 2020, United Partners consolidated its commercial real estate investments under the Immediate parent company, and decisions regarding business activities of UPP Olaines OÜ are made at the Immediate parent company level. In addition to the council of UPP Olaines OÜ, the councils of all other sister companies of UPP Olaines OÜ were also recalled.
Extension of the lease agreement of NNL Latvija SIA
On 21 April 2023, SIA Olaines Logistics extended the lease with NNL LV SIA to February 2031. NNL LV needed additional cold storage space, therefore we terminated the lease with Girtekos Logistika SIA subtenant and provided an additional 864m2 of freezer space to NNL LV. The lease agreement also provided for a new rate of base rent, which is 8% lower than at the end of 2022. However, the new base rent is higher than the rent earned previously by Olaines Logistics on the 864m2 subleased space and overall the impact on total rent is low.
Financial commentary for the first quarter of 2023
Sales revenue was 689,937 euros in 1Q 2023 (669,660 euros in 1Q 2022). Operating income was 601,570 euros in 1Q 2023 (2,036,349 euros in 1Q 2022). Net income was 269,758 euros in 1Q 2023 (1,767,269 euros in 1Q 2022).
The lower operating and net profit of the reporting period is due to the higher reference base in 1Q 2022 caused by the real estate revaluation that took place in February 2022.
| Financial ratios of the Group | 2023 3 months | 2022 3 months |
| Net profit margin % | 39.10% | 263.91% |
| ROA % | 0.80% | 5.34% |
| LTV % | 67.26% | 70.28% |
| DSCR | 1.2 | 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.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
| EUR | 31.03.2023 | 31.03.2022 | |
| Cash and cash equivalents | 578,021 | 702,517 | |
| Trade and ohter receivables | 107,985 | 179,422 | |
| Total current assets | 686,006 | 881,939 | |
| Investment property | 32,870,000 | 32,939,000 | |
| Investment property improvements | 62,016 | 136,814 | |
| Land (acquisition cost) | 284,248 | 0 | |
| Total non-current assets | 33,216,264 | 33,075,814 | |
| TOTAL ASSETS | 33,902,270 | 33,957,753 | |
| Trade and ohter payables | 786,091 | 734,552 | |
| Financial derivatives | 0 | 113,286 | |
| Loans and borrowings | 1,364,000 | 16,935,333 | |
| Total current liabilities | 2,150,091 | 17,783,171 | |
| Loans and borrowings | 24,012,349 | 9,157,028 | |
| Total non-current liabilities | 24,012,349 | 9,157,028 | |
| TOTAL LIABILITIES | 26,162,440 | 26,940,199 | |
| Share capital | 2,500 | 2,500 | |
| Retained earnings | 7,737,330 | 7,015,054 | |
| TOTAL EQUITY | 7,739,830 | 7,017,554 | |
| TOTAL EQUITY AND LIABILITIES | 33,902,270 | 33,957,753 |
CONSOLIDATED INCOME STATEMENT
| EUR | IQ 2023 | IQ 2022 | |
| Sales revenue | 689,937 | 669,660 | |
| Cost of goods sold | (32,230) | (32,812) | |
| Gross profit | 657,707 | 636,848 | |
| General and administrative expenses | (50,012) | (33,042) | |
| Real estate investment revaluation | 0 | 1,434,393 | |
| Other operating expenses | (6,125) | (1,850) | |
| Operating income | 601,570 | 2,036,349 | |
| Financial income / (cost) | (331,812) | (269,079) | |
| Profit before income tax | 269,758 | 1,767,269 | |
| Income tax | 0 | 0 | |
| Net income | 269,758 | 1,767,269 | |
| Total comprehensive income for the period | 269,758 | 1,767,269 |