UPP Olaines OÜ consolidated unaudited financial results for Q3 and 9 months 2021

0

MANAGEMENT REPORT FOR 9 MONTHS 2021

general information

UPP Olaines OÜ (hereinafter referred to as “the company” and “the group” together with subsidiaries) was established in “Šarlotes” for the purpose of financing, acquiring and managing the real estate investment of Olaines Logistics Park (buildings and land). , Olaines County, Olaines Municipality, Latvia, cadastral number 8080 003 0029, entered in Olaine Municipality’s Land Register No. 5439. The company was founded on 08/24/2017 and was not engaged in any economic activity until 12/15/2017 when it acquired the cold store Olaines Logistics Park.

The Management Board is not aware of any trends, uncertainties, requirements, obligations or events that with a sufficient degree of probability will have a material impact on the Company’s prospects for the period after the close of these annual financial statements outside of the ordinary course of business.

UPP Olaines OÜ operates on a going concern basis.

Financial commentary for the second quarter and nine months of 2021

The net operating result was EUR 626,923 in the 3rd quarter of 2021 (EUR 670,298 in the 3rd quarter of 2020) and EUR 1,864,577 for the nine months of 2021 (EUR 1,979,158 for nine months of 2020). The operating result amounted to 542,929 euros in the third quarter of 2021 (635 253 euros in the third quarter of 2020) and 1,693,421 euros for the nine months of 2021 (1,863 48 euros for nine months of 2020). The net profit was 297,664 euros in the 3rd quarter of 2021 (408,988 euros in the 3rd quarter of 2020) and 950,756 euros for the nine months of 2021 (1,119,547 euros for 9 months of 2020).

The decline in net operating income for 9 months of 2021 is due to the changes in the rental agreements, which management also took into account in the comment on the first quarter of 2021. In the third quarter of 2021, the group performed repairs in Olaine LC, which additionally impacted the net operating income for the third quarter and nine months.

The group paid a fine of 49,715 euros issued by Būvniecības valsts kontroles birojs (Latvian State Building Inspectorate), which had a noticeable impact on net income in the third quarter and nine months.

Group received the fine because the company’s subsidiary, SIA Olaines Logistics, failed to report its 2020 energy balance to the office in a timely manner. In Latvia, companies that consume more than 500,000 kWh of energy in two consecutive years are considered large energy consumers and have to make energy efficiency investments or pay an energy efficiency penalty calculated on the basis of electricity consumption. For companies like SIA Olaines Logistics that do not use the electricity but pass on (sell) purchased electricity to other customers, there is an obligation to keep a balance sheet of the kWh-s bought and sold and to add the annual balance. forward the bureau before a due date. SIA Olaines Logistics was unable to submit the required 2020 balance in a timely manner due to changes that were taking place in the Group’s asset management team at the time. Additionally, due to COVID travel restrictions, we were unable to access the SIA Olaines Logistics physical mailbox, to which the office sent notices and reminders regarding the obligation to forward the balance. As a result, the group was required to pay an energy efficiency fee for the full ~ 8,000 MWh of electricity consumed in Olaines LC by SIA Olaines Logistics customers. SIA Olaines Logistics appealed to the office several times and also applied to the Latvian Ministry of Economic Affairs to reduce the fine, as this is completely out of proportion to the nature of the offense and the fact that SIA Olaines Logistics consumes 0 kWh of electricity. However, none of the appeals were taken into account by either institution as the deadline for the appeal was exceeded and the fine remained in full force.

In the 3rd quarter of 2021, the group initiated investments to convert all lighting in Olaine LC to LED luminaires, including outdoor lighting.

The company’s sole business is collecting rental income, managing the Olaine property, and servicing its liabilities to lenders and investors. The liabilities include the subordinated bonds with a fixed interest rate and the investment loan, the interest rate of which is also fixed by an interest rate swap agreement. On the sales side, the company generates stable triple net rental income from well-known tenants, which are fixed in the medium term, but indexed. Due to the company’s economic fixation, a significant event in the overall economy or in the company’s business operations is required in order to have a significant impact on the company’s financial results.

Key figures on financial performance and situation for 9 months 2021

(in EUR)

3rd quarter 2021

3rd quarter 2020

9 months 2021

9 months 2020

Net operating income

626 923

670 298

1,864,577

1 979 158

EBIT

542 929

635 253

1,693,421

1,863,489

Profit for the period

297 664

408 988

950 756

1 119 547

(in EUR)

09/30/2021

09/30/2020

Investment property

31 320 000

30 909 000

Interest-bearing loans

26 624 362

27 694 631

Interest-bearing loans minus shareholder loans

23 682 334

24 746 331

9 months 2021

9 months 2020

Net Profit Margin,% (Total result / net operating result)

50.1%

56.6%

ROA (Net profit / average fixed assets)

4.05%

4.83%

LTV (Interest-bearing loans less shareholder loans / investment properties)

75.6%

80.1%

DSCR (Operating profit / loan amount and interest payments on interest-bearing loans)

1.1

1.2

Board of Directors and Supervisory Board

The board of UPP Olaines OÜ consists of one member: Marko Tali, the chairman of the board. The board of directors of Olaines Logistics SIA also consists of one member: Siim Sild, chairman of the board.

UPP Olaines OÜ’s board of directors consists of three members: Mart Tooming, Tarmo Rooteman, Hallar Loogma.

The members of the Management Board and the Supervisory Board of UPP Olaines OÜ were not granted any remuneration or other benefits. The board member of Olaines Logistics SIA receives remuneration according to Latvian legislation.

Apart from the members of the Management Board and the Supervisory Board, there are no employees in the company.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Abridged consolidated interim financial statements of the statement of comprehensive income

(in EUR)

note

3rd quarter 2021

3rd quarter 2020

9 months 2021

9 months 2020

Net rental income

4th

626 923

670 298

1 865 121

1 979 158

Net rental income

626 923

670 298

1 865 121

1 979 158

General and administrative expenses

(34 279)

(35 045)

(121 985)

(115 669)

Other operating expenses

(49 715)

0

(49 715)

0

Operating profit

542 929

635 253

1,693,421

1,863,489

Financial income / (costs)

(245 265)

(232 265)

(742 665)

(743 942)

Profit before income tax

297 664

402 988

950 756

1 119 547

Income tax

0

0

0

0

Profit for the period

297 664

402 988

950 756

1 119 547

Total result for the period

297 664

402 988

950 756

1 119 547

Condensed consolidated interim balance sheet

(in EUR)

note

09/30/2021

09/30/2020

Cash and cash equivalents

712 869

752 089

Trade accounts receivable and other receivables

231 037

317 024

Total current assets

943 906

1 069 113

Investment property

31 320 000

30 909 000

Total long-term assets

31 320 000

30 909 000

TOTAL ASSETS

32 263 906

31 978 113

Trade payables and other liabilities

505 591

383 036

Financial derivatives

224 155

407 502

Loans and bonds

5

1 064 004

1 064 004

Total short-term liabilities

1,793,750

1,854,542

Loans and bonds

5

25 560 358

26 630 627

Total long-term liabilities

25 560 358

26 630 627

TOTAL LIABILITIES

27 354 108

28 485 169

Share capital

2,500

2,500

Retained earnings

4 907 298

3,490,444

TOTAL CAPITAL

4 909 798

3,492,944

TOTAL EQUITY AND LIABILITIES

32 263 906

31 978 113

UNITED PARTNERS

Siim Sild

Managing Director

+372 5626 0107

[email protected]

attachment

Share.

Leave A Reply