UK Markets close in 59 mins

UPP Olaines OÜ Audited Annual Report 2020 (in English)

UPP Olaines OÜ
·9-min read

With its 30.04.2021 announcement, UPP Olaines OÜ forwarded the audited consolidated annual report for 2020, attested with the 30.04.2021 decision by Member of the Board Marko Tali.

It was mentioned in the announcement that the audited English version is in translation and it shall be forwarded to the Exchange latest by 04.05.2021.

With the present announcement we are releasing the UPP Olaines OÜ audited consolidated 2020 annual report in English.


MANAGEMENT REPORT

General information

UPP Olaines OÜ (hereinafter the Company and jointly with its subsidiaries the Group) was established for the purpose of the financing, acquisition and management of the investment property Olaines Logistics Park (buildings and registered immovable). Olaines Logistics Park is located in Šarlote, Olaines County, Olaines Municipality, Latvia, 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 was established solely for the purpose of the 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 are likely to 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.

The structure of UPP Olaines OÜ Group as at 31 December 2020 is as follows:

Bonds of UPP Olaines OÜ have been listed on the main list of the Nasdaq Tallinn Stock Exchange since 29 November 2018.

UPP Olaines OÜ is a going concern.

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

Coronavirus, which started spreading all over the world at the beginning of the financial year and caused a global recession in March 2020, also reached the Baltic States, which led to the closure of borders to foreign nationals and of 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 viral outbreak has had no direct impact on the economic activities of the Group. The virus has had an impact on the economic activities of companies that lease property to some extent, which may have an indirect impact on the Group’s performance results. The best estimate of the management board is that if the viral 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 Group.


Management report

The total general administrative expenses of the reporting period were 151,122 (2019: 71,123) euros, which make up 5.74% (2019: 2.75%) of net lease income.

As of 31 December 2020, the Group’s total assets comprised 32,121,185 (31 December 2019: 31,675,413) euros, incl. the investment property at fair value, which comprised 97.5% (31 December 2019: 97.6%) of assets. The net debt of the Group was 23,803,960 (31 December 2019: 24,982,851) euros. The net debt was calculated as follows: Cash and cash equivalents were subtracted from the Group’s total loan and the subordinated loan received from the parent company, 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 2020 to 31 December 2020.

Financial overview of the year

The Group’s net lease income in 2020 was 2,633,558 (2019: 2,589,379) euros. The increase in the net lease flow in the financial year in comparison with other financial years was caused by indexation and more efficient business activities.

The Group’s operating profit for the financial year was 2,916,384 (2019: 2,649,256) euros. The increase in operating profit in comparison with other financial years was caused by a lack of extraordinary, one-off costs in 2020, and the income from the increase in the value of investment property was significantly larger than in the reference period.

The net profit for the financial year was 1,735,650 (2019: 1,399,103) euros. The increase in the net profit was partially caused by the aforementioned reasons; in addition, during the financial year, the Group earned more income from interest rate swaps than in the previous period.

The services of an independent attested assessor are used to determine the fair value of investment property, and profit from the revaluation of property in the amount of 346,688 euros was therefore recognised during the financial year (2019: 147,000 euros).

There are no vacancies on the investment property as of the reporting date.


Events after the reporting date

Amendments to the Company’s leases

On 15 January 2021, the lease entered into with Plesko Real Estate SIA was terminated. This company leased a total of 1573 m2 of storage and administrative space in Olaines Logistics Park.

On 15 March 2021, the lease entered into with Premier Restaurants Latvija SIA was terminated. This company leased a total of 2382 m2 of storage and administrative space in Olaines Logistics Park.

On 18 January 2021, Olaines Logistics SIA entered into a five-year lease with the company NNL LV SIA. NNL LV SIA leased a total of 2663 m2 of storage and administrative space. This company offers 3PL services to renowned companies in the Baltic States, including Premia and Maxima.

On 16 April 2021, the lease entered into with Girtekos Logistika SIA was supplemented to provide them with an additional 1177 m2 of storage and administrative space.

These amendments to leases do not have a significant impact on the Group’s lease income in 2021 with the exception of the first quarter of 2021, in which the leased space was transferred and received.

Change in the structure of the logistics investments of United Partners Group OÜ

In March 2021, United Partners Group OÜ was internally restructured into a logistics investment group. The direct parent company of the Company had previously been United Partners Property OÜ, which included the housing development investments of United Partners Group OÜ. The logistics investments of United Partners Group OÜ, incl. the Company, now belong to UPP Logistics Properties OÜ, a management company completely owned by United Partners Property OÜ. The aim of restructuring was to create separate administrative units for the logistics property and housing property investments of United Partners Group OÜ.


Key financial reporting indicators of the financial year

(euros)

2020

2019

Net lease income

2,633,558

2,589,379

Operating profit

2,916,384

2,649,256

Profit for period

1,735,650

1,399,103


(euros)

31.12.2020

31.12.2019

Investment property

31,320,000

30,909,000

Interest-bearing loans

27,428,633

28,492,625

Interest-bearing loans excluding owner’s loan

24,480,333

25,544,325


(euros)

2020

2019

Net profit margin, % (Net profit/Net lease income)

65.9%

54.0%

ROA, % (Net profit/Average assets)

5.44%

4.4%

ROE, % (Net profit/Average equity)

54.9%

59.1%

Liquidity ratio, times ((Current assets-supplies)/Current liabilities))

0.45

0.41

DSCR (Operating profit/Principal repayments and interest payments of interest-bearing loans, excl. principal and interest payments of owner’s loan)

1.3

1.3


Compliance with bond rules

Pursuant to clauses 3.5.3 and 3.5.4 of the bond rules of UPP Olaines OÜ, the management represents and warrants that the DSCR of UPP Olaines OÜ from 1 January 2020 to 31 December 2020 is larger than or equal to 1.1 and that no early redemption events have occurred from 1 January 2020 to 31 December 2020.


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 and Hallar Loogma. No remuneration or other benefits are provided to the members of the management or supervisory boards of the Group’s parent company. However, remuneration has been calculated for the member of the subsidiary’s management board. This amounted to 4466 euros with taxes in the reporting period and to 5340 euros in the previous financial year.

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

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

/digitally signed/

Marko Tali

Chairman of the Management Board of UPP Olaines OÜ

30 April 2021, Tallinn


CONSOLIDATED FINANCIAL STATEMENTS OF UPP OLAINES OÜ

Consolidated statement of comprehensive income

(euros)

Note

2020

2019

Net lease income

6

2,633,558

2,589,379

Net lease income

2,633,558

2,589,379

General administrative expenses

7

(151,122)

(71,123)

Profit/(loss) from revaluation of investment properties

12

364,688

147,000

Other income/expenses

69,260

(16,000)

Operating profit

2,916,384

2,649,256

Financial income and expenses

8

(1,180,734)

(1,250,103)

Profit before tax

1,735,650

1,399,153

Income tax

9

0

(50)

Profit for financial year

1,735,650

1,399,103

Comprehensive income for period under review

1,735,650

1,399,103


Consolidated statement of financial position

(euros)

Note

31.12.2020

31.12.2019

Cash and cash equivalents

10

676,373

561,474

Trade receivables and other receivables

11

124,812

204,939

Total current assets

801,185

766,413

Investment property

12

31,320,000

30,909,000

Total fixed assets

31,320,000

30,909,000

TOTAL ASSETS

32,121,185

31,675,413

Trade creditors and other payables

13

369,491

358,762

Derivatives

16

363,979

455,204

Loans payable

15

1,064,004

1,064,000

Current liabilities

1,797,474

1,877,966

Loans payable

15

26,364,629

27,428,625

Total long-term liabilities

26,364,629

27,428,625

TOTAL LIABILITIES

28,162,103

29,306,591

Share capital

14

2500

2500

Retained earnings

2,220,932

967,219

Profit (loss) for financial year

1,735,650

1,399,103

TOTAL EQUITY

3,959,082

2,368,822

TOTAL LIABILITIES AND EQUITY

32,121,185

31,675,413


Information:

Siim Sild

Managing Director

+372 5626 0107

siim.sild@unitedpartners.ee

UNITED PARTNERS

Attachment