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Arco Vara unaudited consolidated interim report for Q1 of 2024
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The beginning of the year was dominated by the European Central Bank's benchmark rate cut, aimed at bringing about economic revival. However, instead of relying on factors that are outside of our control, we should continue to realize completed and planned developments, assessing them realistically.
In the first quarter, we were mainly engaged in the preparation of the sale of completed apartments of the Kodulahe development and the sale of Soodi 6 development. In addition, we have continued the construction works in Bulgaria and the detailed planning procedure at Arcojärve. In the last three months, the pace of sales has slowed down a little, which is why the sales revenue and profit of Arco Vara Group are slightly lower than the plan.
Despite the lower-than-planned sales revenue, the Company's capitalisation remains very good, as the equity to assets ratio is almost 60%. The Company's current 4-quarter return on equity is also close to our target of 20%.
Arco Tarc's team continues construction works on the padel centre that is being built at Helme 18, which is likely to benefit also from the predicted slight decrease in the final construction price. The padel center is 100% covered by a lease agreement and will be open for sports in the final quarter of the year.
Our Bulgarian team is also on track to continue with the construction and development of the Botanica Lozen Residences. Approximately 40% of the development which is expected to be completed in 9 months have been sold. In the second quarter, we expect to be granted a building permit for the Stage 2 of the Botanica Lozen development, which will enable us to start sale and construction of the buildings, provided that the market situation is favourable.
Looking at the next quarter, our main challenge is the sale of already completed homes in the Kodulahe and Kuldlehe buildings, which would provide confidence for starting new construction activities. We also consider it critically important to acquire a new property for development, which is extremely important in the Company's view of the next five years in terms of the long-term nature of the real estate business.
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KEY PERFORMANCE INDICATORS
In Q1 2024, the group's sales revenue was 990 thousand euros, which is about four times more than the sales revenue of the Q1 2023 of 253 thousand euros. The sales revenue of Q1 2023 consisted mainly of the operation of the commercial building in Madrid. In 2024, the Madrid commercial building is no longer part of the group - in the Q1 2024 own real estate property was sold.
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