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2010


On 21 January 2010, Arco Vara AS was filed for bankruptcy at the Harju County Court. As the petition was submitted to the court and no copy has been sent to Arco Vara AS, the company has no information on the content and grounds of the
petition.

To the knowledge of Arco Vara AS, it has no debts, unpaid bills or outstanding liabilities, or any other solvency problems. Arco Vara AS is liquid and solvent which excludes any bankruptcy proceedings or their commencement according to
the Bankruptcy Act.

Therefore, Arco Vara AS considers the bankruptcy petition a malicious act aimed at discrediting the reputation of the company and influencing the share price.

Arco Vara is a leading real estate developer in the Baltic's, established in 1992. The operations involve real estate development, brokerage, valuation, construction and property maintenance arm. The company is located in 17 cities
in Estonia, Latvia, Ukraine and Bulgaria and employs ca 170 people.

Arco Vara AS is listed on Tallinn Stock Exchange.

1 EUR = 15.6466 EEK

Lembit Tampere
Member of Management Board
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.arcorealestate.com


By the decision No. 239 of 26 November of the Tallinn City Council, the detailed plan for the surroundings of the property at Paldiski Street 80 was approved. The property at Paldiski Street 80 belongs to Wilson Kinnisvara OÜ, a 100% subsidiary of Arco Investeeringute AS.

The intended purpose of the property of 8,200 m² is commercial land. The maximum gross enclosed area allowed by the detailed plan is: on ground – 24,000 m², underground – 6,300 m². The number of planned parking places is 257.

The only difference from the current comprehensive plan is an increase in the planned height of the building. The maximum height of the building will be 44 meters and up to 12 storeys, however, this will not apply for the whole building volume.
The detailed plan was approved more than 30 calendar days ago. During this period, the detailed plan has not been contested. Now the deadline for raising claims is expired and the detailed plan approved for the surroundings of the property at Paldiski Street 80 has entered into force.

Arco Vara is a leading real estate developer in the Baltic's, established in 1992. The operations involve real estate development, brokerage, valuation, construction and property maintenance arm. The company is located in 17 cities in Estonia, Latvia, Ukraine and Bulgaria and employs ca 170 people.

Arco Vara AS is listed on Tallinn Stock Exchange


1 EUR = 15,6466 EEK

Lembit Tampere
Juhatuse liige
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.arcorealestate.com


Arco Invest EOOD, a 100% subsidiary of Arco Vara Group, refinanced under favourable conditions for the Group the loan taken for the development of the Madrid project in Sofia. As a result of that loan amount enlarged from 242.5 mil kroons 258.1 mil kroons (from 15.5 mil euros – to 16.5 mil euros), base rate is 3-month EURIBOR and the annual margin 6.5%.

As a result of refinancing, the repayment term was extended for 3 years from 2012 to 2015 and the loan amount increased by 15.6 million kroons (1 mil euros).

According to the refinancing agreement between Piraeus Bank Bulgaria and Arco Group, the repayment of the principal starts in July 2010 and ends in June 2015. Extension of the repayment term is a proof of Arco Vara credibility among foreign major banks. Thanks to refinancing, the financial risks of the group have considerably decreased.

The Madrid’s residential and business building development project located in the city centre of Sofia and will be finished on first half of this year.

Detailed information about project: www.arcorealestate.com/?content=488

Arco Vara is a leading real estate developer in the Baltic's, established in 1992. The operations involve real estate development, brokerage, valuation, construction and property maintenance arm. The company is located in 17 cities in Estonia, Latvia, Ukraine and Bulgaria and employs ca 170 people.

Arco Vara AS is listed on Tallinn Stock Exchange

1 EUR = 15.6466 EEK

Lembit Tampere
CEO
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.arcorealestate.com


Comments by the CEO

Within 12 months 2009, 82 apartments or plots were sold in Arco Vara projects, thereby 41 of them in the fourth quarter. In Latvia, 12 Bišumuiža apartments and 11 residential plots in the project near the Mazais Baltezers lake. In Estonia, 44 Kodukolle apartments and 16 Merivälja apartments were sold. In the Boulevard Residence Madrid project in Sofia, a 30-year rental agreement was concluded with the Austrian supermarket chain Billa, by which the supermarket will rent approx. 900 m2 of the ground floor sales space of the building. A long-term lease agreement was concluded with a financial intermediary company that will lease 4 700 m2 office space.

The strategy of Arco Vara development division is to finish the unfinished apartments in the Bišumuiža-1 project in Riga, the apartments and business areas in the Boulevard Residence Madrid and Manastirski projects in Sofia with more favourable construction prices. In autumn, the construction of the Kodukolde and Merivälja projects in Tallinn was completed. The finished residential areas help to release invested equity and reduce the liabilities of the Group. In order to stay in competition and accelerate sales pace, we were forced to reduce plot and apartment prices in all Arco Vara projects in the first half-year.


The restructuring of the service division has considerably reduced its administration costs, and the operating loss of the quarter has reduced to 1.0 million kroons (0.063 million euros). Reduction of the number of employees has stopped and the staff makes up 47% on year-over-year basis. Within 12 months, the division has sold most of its real estate objects acquired for short-term investments. This has helped the division to manage by itself. The work organisation of some smaller offices outside the capital city was changed by giving up the classical office-based work organisation and applying the home office system by maintaining our full service selection and network at the same time. In other offices, more cost effective work organisation solutions are being implemented in cooperation with employees. The aim of the service division is to continue implementing the partially applied and in the current market situation justified work organisation also in foreign markets. This allows increasing service provision with unlimited means in these countries, with a future focus on Estonia, Latvia and Bulgaria.

In the construction division, new agreements in the amount of 171 million kroons (10.9 million euros) were concluded during the twelve months, thereof 34.0 millions kroons (2.2 million euros) in the 4th quarter. After the balance sheet date, Arco Ehitus OÜ has been announced as best tenderer either alone or in a consortium in tender with a total value of 129.9 million kroons (8.3 million euros).


In summary: The overall result of 12 months was most influenced by fair value adjustments. The gross profit without revaluation was 49.7 million kroons (3.2 million euros), whereof in the fourth quarter 14.3 million kroons (0.9 million euros). The net profit without revaluation of inventory, property investment, financial assets, and goodwill, and without the loss of transfer of holdings and assets amounted to -58.7 million kroons (-3.7 million euros), whereof the net profit of the fourth quarter made up -23.2 million kroons (-1.4 million euros).

The savings in fixed costs on the year-over-year basis have exceeded the original expectations of the management two times. The Group considers the relation between construction prices and sales perspective good enough to start the last stage of the Kodukolde (96 apartments) and Tivoli (approx. 150 apartments) developments. The Group is carrying on negotiations with potential partners and banks in order to find a favourable financing structure for both projects.

In order to improve liquidity, the Group has, on a current basis, sold smaller property investments and holdings in three joint ventures where the working capital was not under the full control of the Group. By selling the holdings, the company improved its liquidity position by 55 million kroons (3.5 million euros). Due to adapting the Arco Vara AS management structure to the reduced operations and cost saving policy, the number of Members of the Board was reduced and two Members of the Board were removed in the 3rd quarter. As Member of the Board of Arco Vara, Lembit Tampere continues his work.

MAIN INDICATORS OF THE 12 MONTHS

· Revenue and other income for the twelve months totalled 541.6 million kroons (34.6 million euros), 21.5% down year-over-year.

· Operating loss amounted to 271.6 million kroons (17.4 million euros), which is 74.1% less than last year

· Net loss amounted toto 324.4 million kroons (20.7 million euros), 72.0% less than last year

· Equity ratio was 27.8% (12 months 2008: 36.1%). ROE was negative (12 months 2008: negative). ROIC was negative (12 months 2008: negative).

· In the construction division, new agreements in the amount of 171.0 million kroons (10.9 million euros) were concluded, 12 months 2008: 299.0 million kroons (19.1 million euros).

· At the end of the reporting period, the construction business order backlog was 80 million kroons (5.1 million euros), 12 months 2008: 185.0 million kroons (11.8 million euros).

· Within 12 months, 82 apartments or plots were sold in Arco Vara projects (12 months 2008: 98).

EEK

EUR

12 months 2009

12 months 2008

Q4 2009

Q4 2008

12 months 2009

12 months 2008

Q4 2009

Q4 2008

In millions

Revenue and other income

541,6

690,4

156,6

150,4

34,6

44,1

10,0

9,6

EBIT

-271,6

-1 049,7

-43,4

-943,0

-17,4

-67,1

-2,8

-60,3

incl. revaluation of investment property and inventory

-232,1

-993,9

-25,7

-931,6

-14,8

-63,5

-1,6

-59,5

Profit / loss before tax

-325,3

-1 151,3

-96,6

-1 059,6

-20,8

-73,6

-6,2

-67,7

incl. profit or loss from transfer of financial assets

-3,6

-41,3

1,2

-4,7

-0,2

-2,6

0,1

-0,3

Net profit / loss

-324,4

-1 160,1

-94,9

-1 057,6

-20,7

-74,1

-6,1

-67,6

EPS 1 (in kroons and euros)

-3,42

-12,18

-1,00

-11,0

-0,22

-0,78

-0,06

-0,71

Total assets at period end

1 379,2

1 970,6

88,1

125,9

Invested capital at period end

1 188,7

1 760,7

76,0

112,5

Net loans at period end

734,4

842,0

46,9

53,8

Equity at period end

384,1

709,7

24,5

45,4

Average loan term (in years)

0,9

2,5

0,9

2,5

Average interest rate of loans (per year)

5,3%

7,0%

5,3%

7,0%

ROIC (rolling 4 quarters)

neg

Neg

neg

neg

ROE (rolling 4 quarters)

neg

Neg

neg

neg

Number of staff at period end

163

396

163

396

REVENUE AND PROFIT

The overall result of 12 months was most influenced by fair value adjustments. In the 4th quarter, the loss related to the transfer of holdings in three substantial joint ventures was reflected as fair value adjustment. As a result of the transaction, investment property was written down by 134.4 million kroons (8.6 million euros) and financial assets by 4.5 million kroons (0.3 million euros) as of end of 9 months The total net adjustments and losses on sale within 12 months amounted to 265.7 million kroons (-17.0 million euros). Main cost cuttings have been made and striving towards reduced costs has become a routine practice in all of our business units: we are aiming at saving fixed costs additionally by 15.0 million kroons (1.0 million euros) on an annual basis. The main focus is now set on increasing the turnover, completing the Madrid project, and improving the liquidity through the sales of projects and stock. In the fourth quarter, the claim against AS Ühendatud Kapital with the new book value of 32.6 million kroons (2.1 million euros) was additionally discounted. Construction division EBIT in the 4th quarter without asset and goodwill write down was 1.6 million kroons (0.1 million euros). Service division EBIT in the 4th quarter without asset write down was -1.0 million kroons (-0.1 million euros).

The biggest write up of the year was made in Latvia where the right of superficies under inventory was reclassified to investment property as in the near future, no development activities are planned and buyers for the development projects are searched for. It is a residential plot project with an area of 86 ha, located at the Mazais Baltezers lake near Riga. According to the detailed plan, a total of 189 plots for houses with a total gross enclosed area of 172 380 m2 can be built.In the fourth quarter, the claim against AS Ühendatud Kapital with the new book value of 32.6 million kroons (2.1 million euros) was additionally discounted.

EEK

EUR

12 months 2009

12 months 2008

Q4 2009

Q4 2008

12 months 2009

12 months 2008

Q4 2009

Q4 2008

In millions

Revenue and other income

Services

38,0

104,7

9,4

14,2

2,4

6,7

0,6

0,9

Development

266,6

246,4

48,2

50,7

17,0

15,7

3,1

3,2

Construction

277,2

416,8

102,3

93,5

17,7

26,6

6,5

6,0

Eliminations

-40,3

-77,5

-3,2

-8,0

-2,6

-5,0

-0,2

-0,5

Total revenue and other income

541,5

690,4

156,7

150,4

34,6

44,1

10,0

9,6

EBIT

Services

-16,6

-47,9

-7,1

-17,2

-1,1

-3,1

-0,5

-1,1

Development

-260,1

-985,1

-87,3

-917,2

-16,6

-63,0

-5,6

-58,6

Construction

-10,1

6,3

-7,3

-1,4

-0,6

0,4

-0,5

-0,1

Eliminations

33,7

-2,6

60,0

-2,4

2,2

-0,2

3,8

-0,2

Unallocated expenses

-18,5

-20,4

-1,7

-4,8

-1,3

-1,1

0,0

-0,3

Total EBIT

-271,6

-1 049,7

-43,4

-943,0

-17,4

-67,0

-2,8

-60,3

Interest income and expense

-33,5

5,1

-9,5

-17,5

-2,1

0,3

-0,6

-1,1

Net other financial items

-20,2

-106,7

-43,7

-99,1

-1,3

-6,8

-2,8

-6,3

Income tax expense

0,9

-8,8

1,7

2,0

0,1

-0,6

0,1

0,1

Net profit / loss

-324,4

-1 160,1

-94,9

-1 057,6

-20,7

-74,1

-6,1

-67,6


CASH FLOWS

EEK

EUR

12 months 2009

12 months 2008

Q4 2009

Q4 2008

12 months 2009

12 months 2008

Q4 2009

Q4 2008

In millions

Cash flows from operating activities

-23,6

-127,6

26,2

-26,2

-1,5

-8,2

1,7

-1,7

Cash flows from investing activities

95,5

-62,6

50,0

66,1

6,1

-4,0

3,2

4,2

Cash flows from financing activities

-173,4

-402,2

-68,0

-78,8

-11,1

-25,7

-4,3

-5,0

Net cash flow

-101,5

-592,4

8,2

-38,9

-6,5

-37,9

0,5

-2,5

Cash and cash equivalents at beginning of period

172,6

765,0

62,6

211,5

11,0

48,9

4,0

13,5

Effect of exchange rate fluctuations

0,3

0,0

0,6

0,0

0,0

0,0

0,0

0,0

Cash and cash equivalents at end of period

71,4

172,6

71,4

172,6

4,5

11,0

4,5

11,0

In January 2009, 40 million kroons from the loan principals related to the Tivoli and Laeva projects were paid back on an extraordinary basis, by releasing the Group from the obligation to keep liquid assets in an amount of 150 million kroons (9.6 million euros) in the SEB bank. On an extraordinary basis, smaller loans and principal amounts have been paid back, too. Holdings in three joint ventures were sold, as a result of which the Group improved its liquidity by 55 million kroons (3.5 million euros).

We have extended and restructured a half of our commercial papers in the amount of 26 million kroons (1.6 million euros), whereof approx. 8 million kroons (0.5 million euros) have been paid as a result of the sales of security assets.

Major short-term liabilities during the next 12 months:

· the Ahtri project loan of 94.3 million kroons (6.0 million euros),

  • „Tivoli” and „Laeva2” project loans in the total amount of 105.5 million kroons (6.7 million euros)
  • „Kodukolde“ project loan in the amount of 46.0 million kroons (2.9 million euros).
  • The loan for the Bišumuiža-1 (BM-1) development project in Riga in the amount of 48.2 million kroons (3.1 million euros),
  • Calculated principal returns from the sales of booked spaces in the „Boulevard Residance Madrid“ project on Sofia as the house will be finished by the 1st half-year 2010 at the latest, in an amount of 120.7 million kroons (7.7 million euros),
  • Commercial papers in the amount of 18 million kroons (1.2 million euros).

On a current basis, loans have been redeemed in the „Kodukolde” and Merivälja 2 projects in Tallinn and the „Bišumuiža-1” in Riga as well as in projects creating cash flow. Most of the liabilities of the Group are in euros.

SERVICE DIVISION

Cost and business model optimisation has had good results but is still not sufficient for earning net profit on a current basis. By cash flow, the revenues and expenses of the division are in balance during the 12-month period and do not need any subsidy from parent company. Having the liquidity of the company as its priority, the division sold during the 12 months objects that were acquired earlier as short-term investments, due to the market situation, the prices have sometimes been under the book value. Division total EBIT was amounted to -7.1 million kroons (-0.4 million euros), whereof year-end investment property adjustments made up -6.1 million kroons (-0.4 million euros). Thus, quarter EBIT from the main activities -1.0 million kroons (-0.1 million euros) which is historically one of the best results. Optimisation of the cost structure and preparation of the business model and processes for the further improvement of the market situation is going on in the division.

The number of brokerage transactions of the Group in 12 months has decreased by 41%, but the fall has stabilized recently. The number of valuation reports has decreased on year-over-year basis by 51%, but has demonstrated a slight increase during the last three quarters. As at the end of the 12-month period, the division employed 66 persons (12 months 2008: 139 persons).

12 months 2009

12 months 2008

change, %

2009 Q4

2008 Q4

change, %

Number of brokered objects

986

1 674

-41%

259

503

-49%

Projects being sold, pcs.

151

282

-47%

171

272

-37%

Number of valuation reports

3 350

6 816

-51%

898

1 637

-45%

Number of appraisers*

34

38

-11%

Number of real estate brokers*

79

114

-31%

Average number of staff

66

139

-53%

* Includes authorisation agreements

DEVELOPMENT DIVISION

Within 12 months, 82 apartments or plots were sold in Arco Vara projects, thereby 41 of them in the fourth quarter. By the time of publishing the report, 18 units have been sold within two first months of the year and 4 additional transactions are in process. Under the Boulevard Residence Madrid project in Sofia, a long-term rental agreement with the Austrian supermarket chain Billa was concluded for approx. 900 m2, and a long-term lease agreement with a financial intermediary company for 4 700 m2 office space. Additionally, the trial on the establishment of the detailed plan of the Tivoli project was disposed and the Tallinn Administrative Court decision annulled. Based on the decision, the original detailed plan will remain into force without changes.

The main risk factor for the development division is the refinancing of land bank loans in Estonia. Although the cash flow of the Group is tense, we consider it to be sensible to finish the unfinished projects thanks to more favourable construction prices in order to satisfy the demand with ready to be sold stock as well as improve the security assets of loans. Top priority for 2010 is completion of Madrid project where after the balancing date corresponding loans were prolonged. On a current basis, preparations are made in the Kodukolde and Tivoli projects in Tallinn, and negotiations held with banks on refinancing the construction. In the near future, the faster sales pace will bring the inventory to a minimum and in order to create turnover, building of new apartments has to be started.

In order to manage the liquidity risk, the prices have been decreased in the ongoing projects in the Baltics and Sofia to improve sales, and holdings in three substantial joint ventures sold. For some employees, salaries and working times have been reduced. As at the end of the 12-month period, the division employed 23 persons (12 months 2008: 44 persons).

Further information on the projects: www.arcorealestate.com/development

CONSTRUCTION DIVISION

The construction division has won tenders of environmental and infrastructure engineering. The average volume of the tenders has decreased and the contractor is the state institutions or local governments.

During twelve months, the major new construction agreements were the Emajõe-Võhandu drinking water project and the Kohtla-Järve-Kiviõli sewerage project. After the balance sheet date, Arco Ehitus OÜ has been announced as best tenderer either alone or in a consortium or as subcontractor in tenders with a total value of 129.9 million kroons (8.3 million euros) (Kose pumping stations, Järvamaa Vocational Education Centre, Tartu Aviation College, Jõgeva city and parish pipework, Türi pipework).

Within twelve months, new agreements in the amount of 171 million kroons (10.9 million euros) were concluded, thereof 34 millions kroons (2.2 million euros) in the 4th quarter. The backlog volume at the end of the year is 80.0 million kroons (5.1 million euros). At the year-end the division employed 59 persons (12 months 2008: 191 persons). On 29.12.2009, the holding in Arco Construction SIA was sold, as a result the number of employees in the Construction Division reduced by about 80 persons.

Condensed consolidated interim financial statements
Condensed consolidated income statement

Note

12 months 2009

12 months 2008

Q4 2009

Q4 2008

in EEK, thousands

Rendering of services

309 449

487 478

84 637

118 650

Sale of goods

95 274

172 301

43 908

33 482

Total revenue

404 723

659 779

128 545

152 132

Cost of sales

3

-497 126

-1 010 810

-121 327

-580 097

Gross profit

-92 403

-351 031

7 218

-427 965

Other operating income

4

136 865

30 644

28 087

-1 720

Selling and distribution costs

5

-4 417

-12 344

-1 097

-568

Administrative expenses

6

-87 455

-125 584

-30 064

-15 639

Other operating expenses

4

-224 150

-591 402

-47 529

-497 092

EBIT

-271 560

-1 049 717

-43 385

-942 984

Finance income

7

8 946

76 089

-6 615

19 948

Finance expenses

7

-62 666

-177 702

-46 568

-136 534

Profit / loss before tax

-325 280

-1 151 330

-96 568

-1 059 570

,

Income tax expense

868

-8 811

1 677

1 976

Profit / loss for the period

-324 412

-1 160 141

-94 891

-1 057 594

Profit distribution for the period:

8

Parent company’s participation in loss

-324 412

-1 154 959

-95 001

-1 047 882

Minority interest in loss

0

-5 182

110

-9 712

-324 412

-1 160 141

-94 891

-1 057 594

Other aggregated loss

Exchange rate differences in converting foreign company

303

47

19

-581

Aggregate profit / loss for the period

-324 109

-1 160 094

-94 872

-1 058 175

Parent company participation in aggregate loss

-324 109

-1 154 912

-94 982

-1 048 463

Minority interest in aggregate loss

8

0

-5 182

110

-9 712

Earning per share

- basic

-3,42

-12,18

-1,00

-11,05

- diluted

-3,42

-12,18

-1,00

Note

12 months 2009

12 months 2008

Q4 2009

Q4 2008

in EUR, thousands

Rendering of services

19 777

31 156

5 409

7 583

Sale of goods

6 089

11 012

2 806

2 140

Total revenue

25 866

42 168

8 215

9 723

Cost of sales

3

-31 772

-64 603

-7 754

-37 075

Gross profit

-5 906

-22 435

461

-27 352

Other operating income

4

8 747

1 959

1 795

-110

Selling and distribution costs

5

-282

-789

-70

-36

Administrative expenses

6

-5 589

-8 026

-1 921

-1 000

Other operating expenses

4

-14 326

-37 797

-3 038

-31 770

EBIT

-17 356

-67 088

-2 773

-60 268

Finance income

7

572

4 863

-423

1 275

Finance expenses

7

-4 005

-11 357

-2 976

-8 726

Profit / loss before tax

-20 789

-73 582

-6 172

-67 719

Income tax expense

55

-563

107

126

Profit / loss for the period

8

-20 734

-74 145

-6 065

-67 593

Profit distribution for the period:

Parent company’s participation in loss

-20 734

-73 815

-6 072

-66 972

Minority interest in loss

0

-331

7

-621

Other aggregated loss

Exchange rate differences in converting foreign company

19

3

1

-37

Aggregate profit / loss for the period

-20 715

-74 142

-6 064

-67 630

Parent company participation in aggregate loss

-20 714

-73 812

-6 070

-67 009

Minority interest in aggregate loss

0

-331

7

-621

Earning per share

8

- basic

-0,22

-0,78

-0,06

-0,71

- diluted

-0,22

-0,78

-0,06

-0,71

Consolidated statement of finacial position

EEK

EUR

Note

31.12.2009

31.12.2008

31.12.2009

31.12.2008

in thousands

Cash and cash equivalents

71 392

172 574

71 392

11 029

Financial assets

0

40 416

0

2 583

Receivables

9

164 075

294 352

164 075

18 813

Prepayments

4 889

6 165

4 889

394

Inventories

10

776 601

849 440

776 601

54 289

Biological assets

0

3 679

0

235

Total current assets

1 016 957

1 366 626

1 016 957

87 343

Financial assets

15 613

255

15 613

16

Receivables

9

6 304

6 671

6 304

427

Investment property

12

328 988

542 753

328 988

34 688

Property, plant and equipment

13

10 545

41 812

10 545

2 672

Intangible assets

14

812

12 475

812

797

Total non-current assets

362 262

603 966

362 262

38 600

TOTAL ASSETS

1 379 219

1 970 592

1 379 219

125 943

Loans and borrowings

15

601 443

353 417

601 443

22 587

Liabilities

16

94 550

132 677

94 550

8 480

Deferred income

82 164

65 174

82 164

4 165

Provisions

12 650

5 917

12 650

378

Total current liabilities

790 807

557 185

790 807

35 610

Loans and borrowings

15

198 099

692 919

198 099

44 286

Liabilities

16

5 163

4 404

5 163

281

Deferred income tax liability

0

20

0

1

Provisions

1 100

4 291

1 100

274

Total non-current liabilities

204 362

701 634

204 362

44 842

TOTAL LIABILITIES

995 169

1 258 819

995 169

80 452

Share capital

952 842

952 842

952 842

60 898

Share premium

0

712 514

0

45 538

Statutory capital reserve

31 463

31 463

31 463

2 011

Retained earnings

-596 263

-984 668

-596 263

-62 932

Own shares

-3 992

-3 992

-3 992

-255

Total equity attributable to equity holders of the parent

17

384 050

708 159

384 050

45 260

Minority interests

0

3 614

0

231

Total equity

384 050

711 773

384 050

45 491

TOTAL LIABILITIES AND EQUITY

1 379 219

1 970 592

1 379 219

125 943

Condensed consolidated interim cash flow statement

EEK

EUR

Note

12 months 2009

12 months 2008

12 months 2009

12 months 2008

in thousands

Net profit / loss

-324 412

-1 160 141

-20 734

-74 145

Interest income and expense

7

33 505

-5 080

2 141

-325

Gains and losses on disposal of subsidiaries and interests in jointly controlled entities

3 617

41 295

231

2 639

Gains and losses on other financial assets

7

-2 032

-2 429

-130

-155

Impairment losses on financial assets

7

15 685

72 435

1 002

4 629

Depreciation, amortisation and impairment losses on property, plant and equipment and intangible assets

3,4,6

6 831

7 412

437

474

Goodwill adjustments and recognition of negative goodwill as revenues

10 896

8 720

696

557

Gain / loss on the sale of property, plant and equipment and intangible assets

3,4,6

1 550

-248

99

-16

Gain / loss on the sale of investment property

4

-1 088

-1 535

-70

-98

Change in the fair value of investment property and biological assets

4

89 941

555 629

5 748

35 511

Profit/loss from property and inventory revaluation

3

142 148

434 272

9 085

27 755

Exchange gains and losses

7

2 945

-4 608

188

-295

Corporate income tax expense

0

12 744

0

814

Operating cash flow before working capital changes

-20 414

-41 534

-1 307

-2 655

Change in receivables and prepayments

59 543

-12 481

3 805

-798

Change in inventories

-103 439

-99 831

-6 611

-6 380

Change in biological assets

2 190

0

140

0

Change in payables and deferred income

38 513

26 273

2 461

1 679

NET CASH USED IN OPERATING ACTIVITIES

-23 607

-127 573

-1 512

-8 154

Acquisition of property, plant and equipment and intangible assets

-1 961

-39 108

-125

-2 499

Proceeds from sale of property, plant and equipment and intangible assets

5 729

729

366

47

Acquisition of investment property

-3 132

-4 222

-200

-270

Proceeds from sale of investment property

8 581

32 218

548

2 059

Acquisition of subsidiaries and interests in jointly controlled entities

-585

-45 875

-37

-2 932

Proceeds from disposal of subsidiaries and interests in jointly controlled entities

38 105

-2 912

2 435

-186

Acquisition of other financial assets

0

-202 665

0

-12 953

Proceeds from sale of other financial assets

40 416

294 621

2 583

18 830

Loans granted

-2 111

-130 158

-135

-8 319

Repayment of loans granted

5 878

2 422

376

155

Interest received

4 618

32 328

295

2 066

NET CASH USED IN / FROM INVESTING ACTIVITIES

95 538

-62 622

6 106

-4 002

Proceeds from loans received

120 998

312 739

7 733

19 988

Repayment of loans and payment of finance lease liabilities

-241 699

-570 911

-15 447

-36 488

Change in overdraft

0

-14

0

-1

Repurchase of own shares

0

-3 992

0

-255

Interest paid

-47 261

-82 271

-3 021

-5 258

Dividends paid

-5 454

-42 274

-349

-2 702

Income tax paid on dividends

0

-15 516

0

-992

NET CASH USED IN / FROM FINANCING ACTIVITIES

-173 416

-402 239

-11 084

-25 708

NET CASH FLOW

-101 485

-592 434

-6 490

-37 864

Cash and cash equivalents at beginning of period

172 574

765 008

11 029

48 893

Decrease / increase in cash and cash equivalents

-101 485

-592 434

-6 486

-37 864

Effect of exchange rate fluctuations

303

19

0

Cash and cash equivalents at end of period

71 392

172 574

4 562

11 029

The whole report you can download here


On 1 March 2010 AS Kolde, a 100% subsidiary of the Arco Vara AS Group, and AS Merko Ehitus concluded a contracting contract for building and financing of the construction of 4 apartment buildings of the next stage of Arco Vara's Kodukolde property development project.

The estimated aggregate value of the contract is 80 million kroons (5.2 million euros), and the contract is financed by AS Merko Ehitus thorough providing a credit limit of up to 40 million kroons (2.6 million euros). The maturity date
of the loan for financing the construction is February 2013.

The residential complex consists of 96 apartments with the closed net area of 6370 m2, and of thirty-two underground garage units. Construction work will start within three months from the signing of the contract and will last for up
to 20 months. According to the contracting contract the first two buildings will be completed in the spring of 2011.

Additional information:
http://www.kodukolde.ee
http://www.arcorealestate.com

Founded in 1992 Arco Vara is one of the leading property developers in the Baltic States. The main business of the company is property development, which is supported by the group's own property brokering, valuation, construction and
property management units. The company has representative offices in 17 towns across Estonia, Latvia, Ukraine and Bulgaria. The Group has a staff of ca 170.

1 EUR=15.6466 EEK

Lembit Tampere
Member of the management board
Arco Vara AS
Tel: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com


Arco Vara AS 100-percent subsidiary Arco Investeeringute AS sold its shares of Arco Vara Saare Kinnistute OÜ (50% related company of Arco Investeeringute AS) with the share capital of 200 000 kroons (12 782 euros). The transaction is following strategic approach to exit from operations and activities which are not under full control and management of the Company. The value of the transaction was 6 000 000 kroons (383 470 euros).

This transaction is not considered as a transaction with a related person within the meaning of “Requirements for Issuers” of the NASDAQ OMX Tallinn Rules. The transaction does not have material economical effect on the activities of Arco Vara Group and does not qualify as an acquisition of significant holding. The members of the supervisory board and the management board of Arco Vara AS have no other personal interest in the transaction.

Founded in 1992 Arco Vara is one of the leading property developers in the Baltic States. The main business of the company is property development, which is supported by the group's own property brokering, valuation, construction and property management units. The company has representative offices in 17 towns across Estonia, Latvia, Ukraine and Bulgaria. The Group has a staff of ca 170.

1 EUR=15.6466 EEK

Lembit Tampere
Member of the management board
Arco Vara AS
Phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com/