Published: 2020-04-30 15:25:07 CEST
UPP Olaines
Annual Financial Report

UPP Olaines OÜ Audited Annual Report 2019

MANAGEMENT REPORT

General information

UPP Olaines OÜ (hereinafter the Company and jointly with its subsidiaries the Group) was established for the purpose of financing, acquisition and management of the investment property Olaines Logistics Park (buildings and registered immovable). Olaines Logistics Park is located in Latvia, Šarlote, Olaines County, Olaines Municipality, cadastral reference 8080 003 0029, registered in the Olaine Land Cadastre under number 5439. The Company was established on 24 August 2017 and it had no economic activities until 15 December 2017, when the cold storage facility of Olaines Logistics Park was acquired.

The commercial activities of the Company are not affected by seasonal factors. The commercial activities of the Company have no social or environmental impact.

The Company has been established solely for the purpose of financing, acquisition and management of Olaines Logistics Park; therefore, no strategic changes in the commercial activities of the Company have been planned.

The management does not have any information concerning trends, uncertainties, claims, obligations or events that could likely have a significant impact on the prospects of the company in the period following the reporting period outside the regular commercial activities of the company.

UPP Olaines OÜ is acting based on going concern.

Impact of COVID-19 on the economic activities of the Company

The coronavirus, which started spreading all over the world in early 2020 and caused a global economic recession in March 2020, also reached the Baltic States, which led to the closure of borders to foreign nationals and schools, and panic buying of convenience goods. The scope of the consequences of the recession caused by the pandemic is unclear, but there is no doubt that they will be serious.

The virus outbreak has had no direct impact on the economic activities of the Company. The virus has had an impact on the economic activities of the companies that lease the property acquired by the Company, which may have an indirect impact on the Company’s performance results. Some signs of stabilisation of the COVID-19 outbreak could be seen at the time this report was prepared, but the scope and impact of the recession on the Group’s performance results is still difficult to assess. The best estimate of the management board is that if the virus outbreak and the resulting recession do not worsen significantly, the impact of these circumstances on the Group’s performance results will be moderate due to the area of activities of the companies that lease property from the Company.

Management report

General administrative expenses amounted to 71,123  euros, which comprise 2.7% of net lease income.

The company’s assets comprised 31,675,413 euros as at 31 December 2019, incl. the investment property at fair value, which comprised 97.6% of assets. The net debt of the company as at 31 December 2019 was 24,982,851 euros. The net debt was calculated as follows: cash and cash equivalents were subtracted from the Company’s total loan and the subordinated loan granted by United Partners Property OÜ was then subtracted from the result.

No significant events other than regular operating activities, including the timely receipt of rent and utility charges, took place from 1 January 2019 to 31 December 2019.

Financial overview of the year

The total net lease income of the Group in 2019 amounted to 2,589,379  euros. The total net lease income calculated in the Group from 24 August 2017 to 31 December 2018 amounted to 2,607,869  euros. The increase in the net lease flow in the financial year in comparison with other financial year was caused by indexation and more efficient business activities.

The total operating profit of the Group in 2019 amounted to 2,649,256  euros. The operating profit of the Group from 24 August 2017 to 31 December 2018 amounted to 2,651,520 euros. The increase in operating profit in comparison of financial years was caused by the lack of one-off transaction-related costs in 2019 and the Group being more efficient in its business activities.

The Group increased its net profit in 2019 to 1,399,103 euros in comparison with the net profit of 967,219 euros earned from 24 August 2017 to 31 December 2018. The increase in the net profit in 2019 was caused by the lack of large one-off expenses and income in 2019, the Group earned income from an interest rate swap for the first time, and was also more efficient in its business activities during the financial year.

The Group used the services of an independent attested assessor to recognise the property of Olaines Logistics Park at its fair value as of the reporting date and profit from revaluation of property in the amount of 147,000 euros was therefore recognised during the financial year.

There are no vacancies on the investment property as at 31 December 2019.

Key financial indicators of the financial year

(euros)  31.12.201924.08.2017-
31.12.2018
Net lease income2,589,3792,607,869
Operating profit2,649,2562,651,520
Profit for the period1,399,103967,219


(euros)  31.12.201931.12.2018
Investment property30,909,00030,762,000
Interest-bearing loans28,492,62529,656,633
Interest-bearing loans excluding owner’s loan25,544,32526,608,333


(euros)31.12.201924.08.2017-
31.12.2018
Net profit margin, % (Net profit / Net lease income)54.0%37.1%
ROA (Net profit / Average assets)4.4%6.1%
DSCR (Operating profit / Principal repayments and interest payments of interest-bearing loans, excl. principal and interest payments of owner’s loan)1.31.3
    

Compliance with bond rules

Pursuant to clauses 3.5.3 and 3.5.4 of the bond rules of UPP Olaines OÜ, the management confirmes that the DSCR of UPP Olaines OÜ from 1 January 2019 to 31 December 2019 is larger than or equal to 1.1 and that no early redemption events have occurred from 1 January 2019 to 31 December 2019.

Management board, supervisory board and audit committee

The management board of UPP Olaines OÜ has one member: Marko Tali, Chairman of the Management Board. The supervisory board of UPP Olaines OÜ has three members: Mart Tooming, Tarmo Rooteman, Hallar Loogma.

No remuneration or other benefits are provided to the members of the management board and the supervisory board.

Other than the management board and the supervisory board, the Company has no employees.

In 2020 UPP Olaines OÜ formed an audit committee, which has three members.

/digitally signed/

Marko Tali

Chairman of the Management Board of UPP Olaines OÜ

30 April 2020, Tallinn


CONSOLIDATED FINANCIAL STATEMENTS OF UPP OLAINES OÜ

Consolidated statement of comprehensive income

(euros)Note 31.12.201924.08.2017-
31.12.2018
Net lease income62,589,3792,607,869
Net lease income 2,589,3792,607,869
    
General administrative expenses7  (71,123)(221,480)
Profit / (loss) from revaluation of investment properties12147,000 362,000
Other income/(expenses)   (16,000)(96,869)
Operating profit   2,649,256 2,651,520
    
Financial income and expenses8  (1,250,103)(1,720,477)
Profit before income tax   1,399,153 931,043
Income tax9  (50) 36,176
Net profit for the financial year 1,399,103 967,219
    
Total comprehensive income for the period  1,399,103 967,219


Consolidated statement of financial position

(euros)Note31.12.201931.12.2018
Cash and cash equivalents10561,474426,691
Trade receivables and other receivables11204,939300,576
Total current assets 766,413727,267
    
Investment property1230,909,00030,762,000
Total non-current assets 30,909,00030,762,000
TOTAL ASSETS 31,675,41331,489,267
    
Trade creditors and other payables13358,762446,036
Derivatives16455,204416,879
Loans payable151,064,0001,064,004
Current liabilities 1,877,9661,926,919
    
Loans payable1527,428,62528,592,629
Total long-term liabilities 27,428,62528,592,629
TOTAL LIABILITIES 29,306,59130,519,548
    
Share capital142,5002,500
Retained earnings 967,2190
Profit for the financial year 1,399,103967,219
TOTAL EQUITY 2,368,822969,719
    
TOTAL LIABILITIES AND EQUITY 31,675,41331,489,267


More information:

Siim Sild

Managing Director

+372 5626 0107

siim.sild@unitedpartners.ee

UNITED PARTNERS

Attachment


UPPO 2019 consolidated report ENG.pdf