Arco Vara: Arco Vara unaudited consolidated interim report for Q1 of 2023


The thrombosis in the real estate market eased in the first quarter of the year, as evidenced by the increased number of inquiries and transactions compared to the fourth quarter of 2022. The market is showing encouraging sign of improvement, but the recovery is not yet sufficient to an active market. From the viewpoint of Arco Vara, it is positive to see the strengthening of consumer confidence and the banks’ flexible terms and conditions for new home loans.

Contrary to the cooling real estate market, our construction team is exceeding expectations in terms of the time schedule of the Kodulahe Rannakalda development. Based on the efficiency of Arco Tarc, we have updated the sales and profit forecast for 2023 and 2024, increasing the profit forecast for 2023 by approximately EUR 2 million. According to the sales forecast, EUR 13.1 million is already booked in home pre-sale contracts. We also updated the forecast for the next financial year, reflecting the expected extended sales period in Botanica Lozen Residences and Kuldlehe.

In the first quarter of 2023, we started construction works at Lehiku tee 11 on Kuldlehe boutique residences built in cooperation with the general contractor Combicon OÜ. Five premium-class homes should be completed within 12 months and the public sale started on April 21. More information about the development is available at

Botanica Lozen Residences is in the active phase focusing on the construction of foundations, retaining walls and utility lines. The main challenge for the Bulgarian team of Arco Vara and the general contractor is to stay on schedule as construction site is complex and located on the hillside. Arco Vara has learned from the development of Iztok Parkside, which is why a longer buffer period for the handover of buildings has been included in the contracts. By the time of publishing the report, in the first phase 1 out of 16 houses have been sold.

Key challenges in the sales process of Madrid BLVD have been overcome, instilling confidence that the planned completion will take place in the second quarter of this year. EUR 4.1 million from the transaction will be allocated for the development of residential real estate in Estonia and Bulgaria.

As a Group, we reached a new milestone in the first quarter of 2023, where we exceeded EUR 40 million in assets and we expect growth in the coming quarters.  With support by our team and financials, Arco Vara continues with the target to provide 200 homes each year.


In Q1 2023, the group’s revenue was 253 thousand euros, which is 16% less than the revenue of 302 thousand euros in Q1 2022.

In Q1 2023, the group’s operating loss (=EBIT) was 184 thousand euros and net loss 291 thousand euros. In Q1 2022, the group had operating profit of 103 thousand euros and net profit of 16 thousand euros.

In Q1 2023, one parking place was sold in projects developed by the group. In Q1 2022, one land plot was sold in Latvia.

In the 3 months of 2023, the group’s debt burden (net loans) increased by 3,077 thousand euros up to the level of 17,739 thousand euros as of 31 March 2023. As of 31 March 2023, the weighted average annual interest rate of interest-bearing liabilities was 5.7%. This is an decrease of 0.1 percentage points compared to 31 December 2022.


In the first quarter of 2023, no apartment buildings were completed, therefore, the group’s sales revenue was 253 thousand euros (the same in the first quarter of 2022, sales revenue of 302 thousand euros).

Most of the other revenue of the group consisted of rental and property management services income from commercial and office premises in Madrid Blvd building in Sofia, amounting to 196 thousand euros in Q1 2023 (Q1 2022: 203 thousand euros). By the time of publishing the present report, all ready for rent offices were rented out, as were all commercial spaces, together with parking places. 9% of the office area is in renovation.

The Madrid building is in an ongoing sales process, which is expected to be completed in Q2 of 2023. There is no profit or loss from the sale of the building in 2023 because the discounts were recognized in 2022. The transaction is not reflected in the sales revenue, as it is the sale of a real estate investment. The deal is expected to free up 4.1 million euros worth of equity capital.

Arco Vara’s own construction company Arco Tarc OÜ is the main contractor for the most premium stage of Kodulahe – Rannakalda. Under construction are a pavilion, 4 service areas and 108 apartments (in three separate apartment buildings), many of which have sea views. The apartment buildings will be ready in the Q4 2023. As at the date of publishing the interim report, 45 units out of the 113 have been presold.

A subsidiary of Arco Vara, Aktsiaselts Kolde, in 2021 signed an agreement for land acquisition beside Lake Harku, address Paldiski road 124b, Tallinn. More than 35,000 m2 of residential and commercial real estate (GBA) is planned for development. The project is called Arcojärve. The expected development period is 6 years with the start of construction planned for 2024.

Construction is underway in the Kuldlehe project. The plan is to build a spacious and exclusive cluster house with 5 homes in Pirita in 2023. The sale of the project has started.

The Botanica Lozen project foresees construction of 54 homes (houses) in three stages. Construction and sales of the first 16 buildings have begun. The construction time of the whole project is at least 2 years. By the date of publication of the quarterly report, 1 out of 16 houses has been pre-sold.


In thousands of euros Q1 2023 Q1 2022
Revenue from sale of own real estate 7 31
Revenue from rendering of services 246 271
Total revenue 253 302
Cost of sales -86 -109
Gross profit 167 193
Other income 22 194
Marketing and distribution expenses -57 -44
Administrative expenses -315 -239
Other expenses -1 -1
Operating profit/loss -184 103
Financial costs -107 -87
Profit/loss before tax -291 16
Net profit/loss for the period -291 16

Total comprehensive income/loss for the period

-291 16
Earnings per share (in euros)    
– basic -0.03 0.00
– diluted -0.03 0.00



 In thousands of euros 31 March 2023 31 December 2022
Cash and cash equivalents 2,213 3,427
Receivables and prepayments 4,165 4,387
Inventories 26,340 22,511
Investment property for sale 9,050 9,050
Total current assets 41,768 39,375
Receivables and prepayments 18 18
Investment property 2 82
Property, plant and equipment 271 284
Intangible assets 39 46
Total non-current assets 330 430
TOTAL ASSETS 42,098 39,805
Loans and borrowings 5,252 5,255
Payables and deferred income 4,402 3,681
Total current liabilities 9,654 8,936
Loans and borrowings 14,700 12,834
Total non-current liabilities 14,700 12,834
Share capital 7,272 7,272
Share premium 3,835 3,835
Statutory capital reserve 2,011 2,011
Retained earnings 4,626 4,917
Total equity attributable to owners of the parent 17,744 18,035
TOTAL EQUITY 17,744 18,035

Q1 2023 overview

Q1 2023 report unaudited

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