In the reporting period from 1 January 2024 to 30 June 2024, the Group’s net turnover was EUR 5 337 547. Compared to the corresponding period in 2023, it has increased by 5%. The largest impact was from an increase in the sales of goods by 29% and fleet rent by 12% in Latvia which was facilitated by high demand for the Group's products and good cooperation conditions with suppliers.

Similarly to previous years, the first two quarters of 2024 were completed with losses EUR 564 496. The beginning of the year (Winter) is a low season in the rental business and it is common to have low profit or losses in this period. However, the losses caused in the Winter were not recovered as quickly as planned.

As with most construction services companies, first half of the year earnings were negatively impacted by low activity in the construction market, rising sales force costs and higher interest payments. This reporting period ended with a net loss and a notably lower EBITDA than in the respective period last year.

As a result of the abovementioned factors, the Group has not fulfilled two financial covenants at the end of June 2024. The Net Debt Leverage Ratio reached 4.3x (exceeding covenant threshold of 4x) and the Interest Coverage Ratio reached 1.57x (below covenant threshold of 1.75x).

At the end of reporting period management of the company expects a better second half of the year. Already from the 2nd quarter the Group has been implementing cost reduction plan, which includes reducing the number of rental points, centralisation of operations, and workforce optimisation. Due to the low rental prices and the low market activity in the Estonian market, the company will concentrate more on equipment rental in its home market in Latvia and Lithuania. It takes several quarters of the implemented cost-reduction measures to reach full effect on the Group’s financial results.

Arsenal will initiate voting for bondholders with an offer to adjust the threshold of breached covenants - Interest Coverage Ratio and Net Debt Leverage Ratio. Together with the request of Noteholders’ consent regarding the amendments of covenants, Arsenal plans to come forward with a proposition on how the financial situation of the Group will be improved as result of the cost-reduction plan and the appropriate shift in focus of the business.