MANAGEMENT REPORT FOR 12 MONTHS 2019
Financial commentary for the fourth quarter and financial year of 2019
Net operating revenues were 654 287 euros for the fourth quarter of 2019, increased by 15% from 569 252 euros for the fourth quarter of 2018. Net operating revenues for the financial year 2019 were 2 588 257 euros, increased by 6% from 2 447 108 euros for the financial year 2018. The quarterly increase in net operating revenues is due to the accounting of the 2018 land tax in fourth quarter, where the land tax for the whole financial year was accounted for the fourth quarter of 2018, leading to unproportionally high land tax expense for the period and reducing the net operating revenue compared to fourth quarter of 2019. The annual increase in net operating revenues is due to indexation of rent and increased efficiency in operations.
Adjusted net operating income was 622 377 euros for the fourth quarter of 2019, increased by 17% from 532 126 euros for the fourth quarter of 2018. Adjusted net operating income for the financial year 2019 was 2 502 077 euros, increased by 10% from 2 277 771 euros for the financial year 2018. The quarterly increase in adjusted net operating income is due to the aforementioned accounting for the 2018 land tax. The annual increase in adjusted net operating income is due to indexation and increased efficiency in operations and management of the Company.
Net income attributable was 623 900 euros for the fourth quarter of 2019, increase by fourfold from 109 481 euros for the fourth quarter of 2018. Net income attributable for financial year 2019 was 1 391 660 euros, doubled from 712 082 euros for the financial year 2018. The quarterly increase in net income attributable is partly due to the aforementioned accounting for the 2018 land tax in the fourth quarter of 2018 and partly due to the 112 000 euros in financial income from the IRS agreement for the fourth quarter of 2019. The annual increase in net income attributable is due to the transaction costs which reduced the net income attributable for 2018, the increased efficiency in operations and management of the Company, and due to the IRS agreement creating financial income for the first time for the reporting period.
At the end of the reporting period the Company ordered the assessment of the fair value of the Investment property. The valuation was carried out by accredited real estate evaluators.
After the reporting period there was a change in the Group structure, where on January 22nd 2020 the subsidiaries SIA Olaines Logistics and SIA Olaines Logistics Parks were merged. The merger was planned and part of normal management of the business, referred to also in the note issue terms and conditions, where the target SIA Olaines Logistics Parks was merged into the acquirer SIA Olaines Logistics. The merger took somewhat longer compared to mergers in Estonia and Lithuania due to the peculiarities of the Latvian legislation. The merger will further increase the efficiency of the Company’s operations and management. Interim report at hand has the Group structure listed in its’ former form, future interim reports will include the updated Group structure.
Key indicators of financial performance and position for 12 months 2019
| (in EUR) | Q4 2019 | Q4 2018 | 12 months 2019 | 12 months 2018 |
| Net rental income | 654 287 | 569 252 | 2 588 257 | 2 447 108 |
| Operating profit | 769 377 | 532 126 | 2 649 077 | 2 277 771 |
| Profit for the period | 623 900 | 109 481 | 1 391 660 | 712 082 |
| (in EUR) | 31.12.2019 | 31.12.2018 |
| Investment property | 30 909 000 | 30 762 000 |
| Interest-bearing loans | 28 491 624 | 29 656 633 |
| Interest-bearing loans less shareholder loan | 25 543 324 | 26 608 333 |
| 12 months 2019 | |
| Net profit margin (Total comprehensive income for the period / Net rental income) | 54% |
| ROA (Net profit for the period / Average total assets for the period) | 4,4% |
| DSCR (Operating profit / Loan principal and interest payments on interest-bearing loans) | 1.1 |
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed consolidated interim statement of comprehensive income
| (in EUR) | Note | Q4 2019 | Q4 2018 | 12 months 2019 | 12 months 2018 |
| Net rental income | 5 | 654 287 | 569 252 | 2 588 257 | 2 447 108 |
| Net rental income | 654 287 | 569 252 | 2 588 257 | 2 447 108 | |
| General and administrative expenses | (31 910) | (37 126) | (86 180) | (169 337) | |
| Other income / (cost) | 147 000 | 0 | 147 000 | 0 | |
| Operating profit | 769 377 | 532 126 | 2 649 077 | 2 277 771 | |
| Financial income / (cost) | (145 477) | (422 645) | (1 257 417) | (1 565 689) | |
| Profit before income tax | 0 | 0 | 0 | 0 | |
| Profit for the period | |||||
| 623 900 | 109 481 | 1 391 660 | 712 082 | ||
| Total comprehensive income for the period | 623 900 | 109 481 | 1 391 660 | 712 082 |
Condensed consolidated interim statement of financial position
| (in EUR | Note | 31.12.2019 | 31.12.2018 |
| Cash and cash equivalents | 561 462 | 426 691 | |
| Trade and other receivables | 204 939 | 300 576 | |
| Total current assets | 766 401 | 727 267 | |
| Investment property | 30 909 000 | 30 762 000 | |
| Total non-current assets | 30 909 000 | 30 762 000 | |
| TOTAL ASSETS | 31 675 401 | 31 489 267 | |
| Trade and other payables | 366 189 | 446 036 | |
| Financial derivatives | 456 209 | 416 879 | |
| Loans and borrowings | 6 | 1 064 000 | 1 064 004 |
| Total current liabilities | 1 886 398 | 1 926 919 | |
| Loans and borrowings | 6 | 27 427 624 | 28 592 629 |
| Total non-current liabilities | 27 427 624 | 28 592 629 | |
| TOTAL LIABILITIES | 29 314 022 | 30 519 548 | |
| Share capital | 2 500 | 2 500 | |
| Retained earnings | 2 358 879 | 967 219 | |
| TOTAL EQUITY | 2 361 379 | 969 719 | |
| TOTAL EQUITY AND LIABILITIES | 31 675 401 | 31 489 267 |
Siim Sild
Director
+372 5626 0107
siim.sild@unitedpartners.ee
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