UPP Olaines OÜ consolidated unaudited financial results for Q1 of 2021

MANAGEMENT REPORT FOR 3 MONTHS 2021

General information

UPP Olaines OÜ (hereafter ‘the Company’) was established for the purpose of funding, acquiring and managing the real estate investment of Olaines Logistics Park: (buildings and land) located at “Šarlotes”, Olaines county, Olaines parish, Latvia, cadastre number 8080 003 0029, registered in the Land Register compartment No.5439 of the city of Olaine parish. The Company was established on 24.08.2017 and had no economic activity until 15.12.2017, when it acquired the cold storage warehouse Olaines Logistics Park.

The management board is aware of no trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Company’s prospects for the period after the reporting period of these financial statements outside the course of its regular business activities.

UPP Olaines OÜ is operating based on going concern.

Financial commentary for the first quarter of 2021

Net rental income was 600 198 euros for the 3 months of 2021 (2020 3 months: 657 214). Operating profit was 562 109 euros for the 3 months of 2021 (2020 3 months: 619 887). Net income was 303 501 euros for the 3 months of 2021 (2020 3 months: 358 561).

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.

Changes in lease agreements

On 15th January 2021 the lease agreement expired with Plesko Real Estate SIA, who leased 1,573 sqm of warehousing and administrative premises.

On 15^th March 2021 the lease agreement expired with Premier Restaurants Latvia SIA, who leased 2,382 sqm of warehousing and administrative premises.

On 18^th January 2021 a new lease agreement was concluded with NNL LV SIA for 5 years. NNL LV SIA will lease 2,663 sqm of warehousing and administrative premises. The company is offering 3PL services to known Baltic clients such as Premia and Maxima.

On 16^th April 2021 the lease agreement with Girtekos Logistikos SIA was amended, SIA Girtekos Logistikos will lease additional 1,177 sqm of warehousing and administrative premises.

The changes in lease agreements will not impact the Group’s 2021 income noticeably, except for the 1^st quarter of 2021 when the handing over of the premses took place.

Changes in United Partners Group logistics investments structure

In March 2021 United Partners Group OÜ restructured its logistics investment holding structure. Previously the direct parent of the Company was United Partners Property OÜ, which also managed United Partners Group residential development investments. As of March 2021 United Partners Group OÜ logistics investment holding companies, including the Company, are now under the direct ownership of holding company UPP Logistics Properties OÜ, which in turn is under the ownership of United Partners Property OÜ. The goal of the restructuring was to create separate administration units for United Partners Goup logistics and residential investments.

Key indicators of financial performance and position for 3 months 2021

(in EUR)			Q1 2021	Q1 2020
Net rental income			600 198	657 214
Operating profit			562 109	619 887
Profit for the period			303 501	329 107

(in EUR)	31.03.2021	31.03.2020
Investment property	31 320 000	30 909 000
Interest-bearing loans	27 156 360	28 226 632
Interest-bearing loans less shareholder loan	24 214 332	25 278 332

(in EUR)	Q1 2021	Q1 2020
Net profit margin (Total comprehensive income for the period / Net rental income)	50,6%	49%
ROA (Net profit for the period / Average total assets for the period)	0,94%	1,04%
DSCR (Operating profit / Loan principal and interest payments on interest-bearing loans)	1,1	1,2

Management board and supervisory board

The management board of UPP Olaines OÜ has one member: Marko Tali, the 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 have been allotted to the members of the management board and supervisory board.

There are no employees in the company besides the members of the management and supervisory board.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Condensed consolidated interim statement of comprehensive income

(in EUR)	Note			Q1 2021	Q1 2020
Net rental income	5			600 198	657 214
Net rental income				600 198	657 214
General and administrative expenses				(38 089)	(37 327)
Operating profit				562 109	619 887
Financial income / (cost)				(258 608)	(290 780)
Profit before income tax				303 501	329 107
Income tax				0	0
Profit for the period				303 501	329 107
Total comprehensive income for the period				303 501	329 107

Condensed consolidated interim statement of financial position

(in EUR	Note	31.03.2021	31.03.2020
Cash and cash equivalents		671 494	534 344
Trade and other receivables		197 408	313 568
Total current assets		868 902	847 912
Investment property		31 320 000	30 909 000
Total non-current assets		31 320 000	30 909 000
TOTAL ASSETS		32 188 902	31 756 912
Trade and other payables		438 615	379 344
Financial derivatives		331 384	448 432
Loans and borrowings	6	1 064 004	1 064 004
Total current liabilities		1 834 003	1 891 780
Loans and borrowings	6	26 092 356	27 162 628
Total non-current liabilities		26 092 356	27 162 628
TOTAL LIABILITIES		27 926 359	29 054 408
Share capital		2 500	2 500
Retained earnings		4 260 043	2 700 004
TOTAL EQUITY		4 262 543	2 702 504
TOTAL EQUITY AND LIABILITIES		32 188 902	31 756 912

Siim Sild

+372 5626 0107

siim.sild@unitedpartners.ee

Attachment

• Olaines Q1 report 2021 ENG draft