Published: 2019-11-26 11:36:18 CET
UPP Olaines
Quarterly report

UPP Olaines OÜ consolidated unaudited financial results for Q3 and 9 months of 2019

Management commentary for the third quarter of 2019 (‘Q3 2019’)

During Q3 2019 the company made 634,901 EUR in operating income and during the first 9 months of 2019 the operating income amounted to 1,879,700 EUR in total. Compared to Q3 2018 the operating income has increased by 6.3% and compared to first 9 months of 2018 the operating income has increased by 7.6%. The difference in operating income on quarterly basis is mainly due to adjustment made in Q3 2018 to correct mistakes of the previous quarters of 2018. 9 month results outperform comparative period of 2018 mainly due to rent indexation and decrease in administrative costs.

During Q3 2019 the company's financial costs amounted to 323,574 EUR and during 9 months of 2019 the financial costs amounted to 1,111,940 EUR in total. Compared to Q3 2019 the financial expenses have increased by 60% and compared to 9 months of 2018 the financial expenses have decreased by 6.6%. The increase of nearly 60% YoY in financial costs in Q3 is caused by the abnormally low financial costs in Q3 2018 which were affected by significant changes in the current value of the interest rate swap agreement. Since the financial cost takes into account the current balance of the interest rate swap agreement, it can affect the quarterly financial income and expenses significantly. Comparing longer periods gives a better indication for trends in company’s cost of financing.

The company’s sole business activity is to collect rental revenue, manage the Olaine property and service its liabilities to lenders and investors. Liabilities include the subordinated bonds with a fixed interest rate and the investment loan which’ rate is also fixed with an interest rate swap agreement. On the revenue side the company earns stable triple-net rental income from reputable tenants, which is fixed with medium-term agreements but is subject to indexation. Due to the economically fixed nature of the company, there needs to be major event in the overall economy or in the company's business activities for them to have significant effect on the company’s financial results.

As of reporting date all regular business operations of the company are running smoothly, including duly and timely collection of rental and utilities payments from the tenants.

As of the end of Q3 2019, there is no vacancy in the premises.

Key indicators of financial performance and position for 9 months 2019

(in EUR)Q3 2019Q3 20189 months 20199 months 2018
Net rental income642,452 599,759 1,933,9701,877,856
Operating profit634,901 596,731 1,879,700 1,745,645
Profit for the period311,327  392,785767,760 557,274
(in EUR)30.09.201931.12.2018
Investment property  30,762,000   30,762,000
Interest-bearing loans   28,958,633   29,656,633
Interest-bearing loans less shareholder loan  25,910,333   26,608,333
 9 months 2019
Net profit margin (Total comprehensive income for the period / Net rental income)40%
ROA (Net profit for the period / Average total assets for the period)2.4%
DSCR (Operating profit / Loan principal and interest payments on interest-bearing loans)  1.3


CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Condensed consolidated interim statement of comprehensive income

(in EUR)NoteQ3 2019Q3 20189 months 20199 months 2018
Net rental income5642,452599,7591,933,9701,877,856
Net rental income 642,452599,7591,933,9701,877,856
      
General and administrative expenses  (7,551)(3,028)(39,270)(132,211)
Other income / (cost)  00  (15,000)0
Operating profit 634,901596,7311,879,7001,745,645
      
Financial income / (cost) (323,574)(203,946) (1,111,940) (1,188,371)
Profit before income tax 311,327 392,785767,760557,274
Profit for the period 311,327392,785767,760557,274
      
Total comprehensive income for the period 311,327392,785767,760557,274


Condensed consolidated interim statement of financial position

(in EURNote30.09.201931.12.2018
Cash and cash equivalents 719,578426,691
Trade and other receivables 206,490300,576
Total current assets 926,068727,267
    
Investment property 30,762,00030,762,000
Total non-current assets 30,762,00030,762,000
TOTAL ASSETS 31,688,06831,489,267
    
Trade and other payables 376,757446,036
Financial derivatives 615,204416,879
Loans and borrowings61,064,0041,064,004
Total current liabilities 2,055,9611,926,919
    
Loans and borrowings627,894,62928,592,629
Total non-current liabilities 27,894,62928,592,629
TOTAL LIABILITIES 29,950,59030,519,548
    
Share capital 2,5002,500
Retained earnings 1,734,979967,219
TOTAL EQUITY 1,737,479969,719
    
TOTAL EQUITY AND LIABILITIES 31,688,06831,489,267


Siim Sild

Director

+372 5626 0107

siim.sild@unitedpartners.ee

Attachment


K53 cons. vahearuanne 30.09.19_ENG.pdf