MANAGEMENT REPORT
Real Estate Development
Tallinn
In Kristiine City, the Group continued to progress the Uus-Kindrali development through ongoing sales and construction activities.
By year-end, 39 apartments in the white building (Talli 3 / Sammu 8) had already been handed over to customers, with further handovers completed during the first quarter of 2026. As of the publication date of this report, 15 of the 91 apartments remained available for sale.
At the same time, construction continued on a second seven-storey residential building with 90 units at Sammu 10/Seebi 24a (the black building), located next to the white building. By the end of the first quarter of 2026, construction completion had reached approximately 60% and is on schedule for substantial completion in October-November 2026. As of the publication date of this report, 36 units in the black building had been sold.
In addition, the Group launched another phase of residential development in Kristiine City. The new project, named Musketäri Majad, located at Sammu 7 / Talli 1 / Rivi 8, comprises two buildings of six and seven storeys with a total of 144 residential units. Reservations commenced during the first quarter and, as of the publication date of this report, slightly more than 15% of the total sales area was already reserved by buyers.
Looking ahead, the Group continued progressing the next stages of its Kristiine City development portfolio through ongoing design and permitting activities for four additional projects submitted to the Tallinn City Planning Department. These developments are expected to add approximately 35,000 square metres of gross building area (GBA), comprising around 350 units, predominantly residential (approximately 95% residential and 5% commercial), further strengthening our presence in this well-established urban area. As of the publication date of this report, the Tondi 53 project ("Dunte") has obtained a building permit and completed the design phase. The project will comprise approximately 160 apartments in a historic building located on Tondi Street. Building permits for the remaining projects are expected in the second quarter of 2026.
In Kalaranna District, construction works have been completed, and sales and marketing activities for the remaining inventory are ongoing. To date, approximately 66% of the total sellable area has been sold.
Riga
In Riga, the Blue Marine Residence project within the Kliversala Quarter continued to progress according to plan during the first quarter of 2026. By quarter-end, all retaining wall works for the construction pit had been completed and the foundation slab had been poured. In addition, the Group had concluded key construction contracts covering the in-situ reinforced concrete works, as well as the production and installation of precast reinforced concrete elements and windows for the above-ground structure.
At the same time, the Group continued active sales and marketing efforts to further enhance the visibility and attractiveness of the Kliversala Quarter.
Vilnius
In Vilnius, construction works at the City Villas development were nearing final completion by the end of the first quarter of 2026. The Attico building, comprising both residential and commercial units, was completed and delivered to the relevant authorities during the quarter. At the same time, the Group continued sales activities and entered into real rights agreements for five additional units. As of the publication date of this report, nearly 43% of the total sellable area within the City Villas and Attico developments had been sold.
The Group also continued preparations for its latest development project in Vilnius, Borgo, located on Naugarduko Street. The project will transform a former school building into a distinctive high-end residential complex comprising approximately 50 luxury apartments. As of the publication date of this report, the building permit has been obtained, and construction is expected to commence during the second half of 2026.
Hotel operations
The hotel's first quarter performance reflected the typical seasonal softness of the period, with lower occupancy levels resulting from weaker demand from both leisure and business segments. Overall activity levels remained broadly in line with the prior year. While revenue performance was below expectations, profitability improved compared to the same period last year.
Looking ahead, the outlook for the second quarter remains generally positive, supported by gradually strengthening demand from both leisure tourism and the MICE segment. While the operating environment continues to be affected by cost pressures, particularly related to energy prices, the Group remains focused on operational efficiency and is well positioned to benefit from the expected seasonal improvement in market activity.
Other operations
The Group's Italian operations, led by Preatoni Nuda Proprietà (PNP) and Preatoni Intermediazioni Immobiliari (PII), operated in a challenging market environment during the first quarter of 2026, reflecting the broader slowdown in the Italian real estate sector. At the same time, changes in market dynamics within the bare ownership segment continued to reshape client acquisition channels and competitive positioning.
In response, the Group continued refining its commercial model and initiated the implementation of new AI-supported tools aimed at strengthening cooperation with local real estate agencies and improving scalability of operations. While market conditions remain cautious, management believes these initiatives may support future growth opportunities in the medium term.
Conclusion
The first quarter of 2026 marked another period of operational progress for the Group, with construction activities, sales execution and development planning advancing simultaneously across all our core markets. While the Baltic operations continued to perform steadily, the Group also continued refining its commercial approach and operational processes in Italy in response to changing market dynamics.
Alongside day-to-day operations, management remained focused not only on current deliveries, but also on preserving long-term value through disciplined project selection, controlled execution and careful capital allocation. Despite a macroeconomic environment that remains selective and, in certain segments, challenging, the Group continues to benefit from a geographically diversified portfolio, a recognised brand and a significant development pipeline with embedded future potential.
Looking ahead, management remains cautiously optimistic. The Group enters the remainder of 2026 with active construction sites, completed inventory available for monetisation, new developments approaching launch phase and a solid medium-term project pipeline across the Baltics and Italy.
On behalf of the Management Board, I would like to thank our employees, clients, investors and business partners for their continued trust and commitment.
Edoardo Preatoni
CEO
Key financials
The total revenue of the Group for the three months of 2026 was EUR 15.1 million, which increased by EUR 2.6 million (21%) compared to the same period in 2025 (2025 3M: EUR 12.5 million).
Revenue from real estate sales is recognised at the moment when the notarial sales agreement is signed and legal title to the property is transferred to the buyer. Therefore, revenue from real estate sales is closely linked to the construction cycle and the timing of project completions.
During the three months of 2026, the Group's revenue was mainly supported by the handover of completed apartments in the Kalaranna District and Uus-Kindrali developments in Tallinn, as well as in the City Villas project in Vilnius.
Gross profit for the first three months of 2026 amounted to EUR 5.7 million compared to EUR 4.2 million in the same period of 2025.
Operating profit reached EUR 4.0 million during the period (2025 3M: EUR 2.5 million).
The Group's net profit for the first three months of 2026 was EUR 2.8 million profit, compared to EUR 1.9 million profit in the reference period.
Cash generated from operating activities during the first three months of 2026 amounted to EUR 10.0 million, compared with EUR 1.3 million in the same period of 2025.
Net assets per share were EUR 1.17 as at 31 March 2026 (31 March 2025: EUR 0.94).
Key performance indicators
| 2026 3M | 2025 3M | 2025 12M | |
| Revenue, th, EUR | 15 054 | 12 450 | 53 162 |
| Gross profit, th. EUR | 5 659 | 4 207 | 18 795 |
| Gross profit, % | 38% | 34% | 35% |
| Operating result, th. EUR | 3 977 | 2 542 | 14 733 |
| Operating result, % | 26% | 20% | 28% |
| Net profit, th. EUR | 2 811 | 1 890 | 12 041 |
| Net profit, % | 19% | 15% | 23% |
| Earnings per share, EUR | 0.05 | 0.04 | 0.22 |
| 31.03.2026 | 31.03.2025 | 31.12.2025 | |
| Total Assets, th. EUR | 121 180 | 121 074 | 124 490 |
| Total Liabilities, th. EUR | 55 042 | 67 963 | 61 163 |
| Total Equity, th. EUR | 66 138 | 53 111 | 63 327 |
| Debt/ Equity * | 0.83 | 1.28 | 0.97 |
| Return on Assets, % ** | 2.3% | 1.7% | 9.9% |
| Return on Equity, % *** | 4.7% | 3.5% | 21.5% |
| Net asset value per share, EUR **** | 1.17 | 0.94 | 1.12 |
*debt / equity = total debt / total equity
**return on assets = net profit / total average assets
***return on equity = net profit / total average equity
****net asset value per share = net equity / number of shares
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated interim statement of financial position
| in thousands of euros | 31.03.2026 | 31.03.2025 | 31.12.2025 | |
| ASSETS | ||||
| Current assets | ||||
| Cash | 4 768 | 3 949 | 5 143 | |
| Current receivables | 5 165 | 3 181 | 5 645 | |
| Prepayments | 508 | 397 | 287 | |
| Inventories | 63 501 | 57 634 | 57 503 | |
| Total current assets | 73 942 | 65 161 | 68 578 | |
| Non-current assets | ||||
| Non-current receivables | 13 | 315 | 324 | |
| Property, plant and equipment | 8 364 | 7 520 | 7 836 | |
| Right-of-use-assets | 836 | 449 | 781 | |
| Investment property | 34 855 | 44 335 | 43 516 | |
| Goodwill | 0 | 863 | 0 | |
| Intangible assets | 1 270 | 2 431 | 1 555 | |
| Total non-current assets | 45 338 | 55 913 | 54 012 | |
| Assets held for sale | 1 900 | 0 | 1 900 | |
| Total assets held for sale | 1 900 | 0 | 1 900 | |
| TOTAL ASSETS | 121 180 | 121 074 | 124 490 | |
| LIABILITIES AND EQUITY | ||||
| Current liabilities | ||||
| Current debt | 12 016 | 17 354 | 30 046 | |
| Customer advances | 5 861 | 8 616 | 5 888 | |
| Trade and other payables | 6 694 | 7 202 | 5 447 | |
| Tax payables | 1 150 | 1 171 | 2 562 | |
| Short-term provisions | 116 | 5 | 116 | |
| Total current liabilities | 25 837 | 34 348 | 44 059 | |
| Non-current liabilities | ||||
| Non-current debt | 27 324 | 31 466 | 15 053 | |
| Other non-current payables | 8 | 6 | 8 | |
| Deferred income tax liabilities | 1 641 | 1 950 | 1 813 | |
| Long-term provisions | 232 | 193 | 230 | |
| Total non-current liabilities | 29 205 | 33 615 | 17 104 | |
| TOTAL LIABILITIES | 55 042 | 67 963 | 61 163 | |
| Equity attributable to equity holders of the parent | ||||
| Share capital in nominal value | 11 338 | 11 338 | 11 338 | |
| Share premium | 5 661 | 5 661 | 5 661 | |
| Statutory reserve | 1 134 | 1 134 | 1 134 | |
| Revaluation surplus | 2 322 | 1 977 | 2 322 | |
| Retained earnings | 45 558 | 32 518 | 42 691 | |
| 66 013 | 52 628 | 63 146 | ||
| Non-controlling interest | 125 | 483 | 181 | |
| TOTAL EQUITY | 66 138 | 53 111 | 63 327 | |
| TOTAL LIABILITIES AND EQUITY | 121 180 | 121 074 | 124 490 | |
Consolidated interim statements of comprehensive income
| in thousands of euros | 2026 3M | 2025 3M | 2025 12M | ||||
| CONTINUING OPERATIONS | |||||||
| Operating income | |||||||
| Revenue | 15 054 | 12 450 | 53 162 | ||||
| Cost of sales | -9 395 | -8 243 | -34 367 | ||||
| Gross profit | 5 659 | 4 207 | 18 795 | ||||
| Marketing expenses | -294 | -286 | -1 213 | ||||
| Administrative expenses | -1 419 | -1 326 | -5 659 | ||||
| Other operating income | 44 | 12 | 3 824 | ||||
| Other operating expenses | -13 | -65 | -1 014 | ||||
| Operating profit | 3 977 | 2 542 | 14 733 | ||||
| Finance income | 10 | 13 | 40 | ||||
| Finance cost | -639 | -745 | -2 615 | ||||
| Profit before income tax | 3 348 | 1 810 | 12 158 | ||||
| Income tax | -537 | 80 | -117 | ||||
| Profit for the period | 2 811 | 1 890 | 12 041 | ||||
| Attributable to: | |||||||
| Equity holders of the parent | 2 867 | 1 995 | 12 314 | ||||
| Non-controlling interest | -56 | -105 | -273 | ||||
| Other comprehensive income | |||||||
| Items that will not be reclassified subsequently to profit | |||||||
| Net change in asset revaluation reserve | 0 | 0 | 345 | ||||
| Other comprehensive income for the period | |||||||
| Total comprehensive income for the period | 2 811 | 1 890 | 12 386 | ||||
| Attributable to: | |||||||
| Equity holders of the parent | 2 867 | 1 995 | 12 659 | ||||
| Non-controlling interest | -56 | -105 | -273 | ||||
| Earnings per share (Basic) EUR | 0.05 | 0.04 | 0.22 | ||||
The full report can be found in the file attached.
Ann-Kristin Kuusik
CFO
+372 614 4920
prokapital@prokapital.ee
