Liven AS - Consolidated unaudited interim report for the I quarter of 2025
A webinar on the presentation of the results (in Estonian only) will take place
on 30 April at 13:00 (EEST), more information
(https://view.news.eu.nasdaq.com/view?id=1357258&lang=en).
The recovery from the market lows that started in the second half of last year
continued in the first quarter of 2025. During the quarter, we signed a total of
25 contracts under the law of obligation (sales contracts; 2024 Q1: 16). The
biggest contributions came from the sale of homes under construction in the
Iseära phase II project (both terraced houses and apartments) as well as from
the Regati development project. Among completed homes, the main contributions to
sales came from the Uus-Meremaa and Luuslangi projects.
The weekly sales ratio, which reflects the number of homes going out of supply
through either sales contracts or paid reservations, remained at a similar level
compared to the previous quarter. Over the period, the average was close to
1.9%, and even exceeded 2.5% during March. The long-term average is considered
to be 1.5-2.0%.
Contracts under the law of obligations concluded during the period, where homes
are not delivered under real right contracts within the same period, are treated
as presales. At the beginning of the quarter, the estimated monetary value of
presales was 35.6 million euros, all relating to projects scheduled for
completion during the last three quarters of 2025. During the quarter, we
concluded new contracts with a revenue value of 7.0 million euros, of which
presales accounted for 5.1 million euros. Together with earlier presales, we
enter the following quarters of 2025 with 104 contracts under the law of
obligations for homes in buildings scheduled for completion during the year,
with a total revenue value of 40.7 million euros.
There were no new construction completions during the first quarter of 2025, and
during the quarter we handed over a total of only 5 new homes and 1 commercial
space under real right contracts in previously completed developments (2024 Q4:
24; 2024 Q1: 12). Of these, 1 home and 1 commercial space were handed over in
phase II of the Uus-Meremaa development, 2 homes in phase I of the Luuslangi
development, 1 home in phase II of the Iseära development, and 1 home in the
Magdaleena development. In the same order, the projects also had an impact on
the sales revenue for the first quarter, which amounted to EUR 1,931 thousand
(2024 Q4: EUR 8,164 thousand; 2024 Q1: EUR 3,498 thousand), and the net loss for
the quarter was EUR 705 thousand (2024 Q4: EUR +78 thousand; 2024 Q1: EUR -150
thousand). The loss for the first quarter was primarily due to the low sales
volume and lower-than-average profitability of the homes sold.
The balance of cash and cash equivalents increased by EUR 4,011 thousand during
the quarter to EUR 9,916 thousand, and total assets grew by EUR 10,512 thousand
during the quarter, reaching EUR 88,810 thousand at the end of the period. The
main contributors to the increase were the green bond issue carried out at the
end of the quarter and the increase in inventories of the Regati and Iseära
projects under construction.
Total borrowings increased by EUR 10,427 thousand during the quarter to EUR
57,684 thousand. During the quarter, a total of EUR 6,808 thousand in bank loans
were disbursed to finance the construction of projects, and we raised additional
debt capital of EUR 6,200 thousand through a public offering of green bonds. The
balance of construction loans increased by EUR 3,535 thousand in the Regati
project and by EUR 1,713 thousand in the Iseära project. The balance of
construction loans will increase also in the next quarter at a similar rate to
the current quarter, primarily due to the financing of the construction of the
Regati project but will decrease very significantly by the end of the year,
following the completion of the construction and the delivery of the homes.
At the end of the quarter, we redeemed EUR 2,000 thousand bonds previously
issued to finance the Juhkentali 48 project and extended the maturity date for
the bonds issued for the Peakorter project development (previously 31.12.2025).
Current borrowings decreased by EUR 4,367 thousand during the quarter to EUR
2,039 thousand. The decrease in the current borrowings was also influenced by
the final repayments of the Uus-Meremaa project investor loan and the Luuslangi
project bank loan.
Consolidated statement of financial position
(in thousands of euros) 31.03.2025 31.12.2024 31.03.2024
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Current assets
Cash and cash equivalents 9 916 5 905 3 002
Trade and other receivables 56 1 270 99
Prepayments 635 385 517
Inventories 75 349 67 902 62 789
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Total current assets 85 956 75 462 66 407
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Non-current assets
Prepayments 44 44 0
Investment property 1 350 1 350 0
Property, plant and equipment 406 423 429
Intangible assets 395 401 340
Right-of-use assets 659 618 375
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Total non-current assets 2 854 2 836 1 144
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TOTAL ASSETS 88 810 78 298 67 551
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Current liabilities
Borrowings 2 039 6 405 4 933
Trade and other payables 11 789 11 234 7 097
Provisions 50 99 2 384
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Total current liabilities 13 878 17 739 14 414
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Non-current liabilities
Borrowings 55 645 40 851 34 411
Trade and other payables 1 610 1 398 673
Provisions 89 72 29
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Total non-current liabilities 57 344 42 322 35 113
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Total liabilities 71 222 60 061 49 527
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Equity
Share capital 1 200 1 200 1 184
Share premium 9 575 9 562 9 354
Share option reserve 331 317 390
Own (treasury) shares -8 -9 0
Statutory capital reserve 118 118 115
Retained earnings (prior periods) 7 077 6 491 7 131
Profit/Loss for the year -705 558 -150
Total equity attributable to owners of the
parent 17 588 18 237 18 024
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Total equity 17 588 18 237 18 024
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TOTAL LIABILITIES AND EQUITY 88 810 78 298 67 551
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Consolidated statement of comprehensive income
(in thousands of euros) 2025 3 months 2024 3 months
(January-March) (January-March)
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Revenue 1 931 3 498
Cost of sales -1 698 -2 981
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Gross profit/loss 233 517
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Distribution costs -454 -275
Administrative expenses -461 -298
Other operating income 22 0
Other operating expenses -27 -4
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Operating profit/loss -687 -60
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Finance income 14 15
Finance costs -33 -105
Total finance income and finance costs -19 -90
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Profit/Loss before tax -705 -150
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Income tax expense 0 0
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Net profit/loss for the year -705 -150
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Attributable to owners of the parent -705 -150
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Comprehensive income for the year -705 -150
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Attributable to owners of the parent -705 -150
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Basic profit/loss per share -0.059 -0.013
Diluted profit/loss per share -0.058 -0.012
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The customer satisfaction score for the last 12 months, collected at different
stages of the customer journey, increased to 9.5 out of 10 by the end of the
year (2024 Q4: 9.2; 2024 Q1: 7.5).
Key events in development projects
In January, Liven AS issued a guarantee in favour of the Tallinn City Property
Department in the amount of EUR 1,249 thousand, effective until 29 January
2032, in connection with the Kadaka tee 88 development project, in the planning
phase, and the agreement between Liven Kodu 10 OÜ and the City of Tallinn for
the coverage of the costs related to the construction works at Tallinn Meelespea
kindergarten.
During the quarter, the final investor loan payments were made in the Uus-
Meremaa project, and at the end of the quarter, the last home in the development
remained to be sold. Likewise, at the end of the quarter, only the last home in
the Magdalena development remained to be sold.
In March, Liven Kodu 22 OÜ and Coop Pank AS entered into a long-term loan
agreement for 1,560 thousand euros to partially refinance the previous financing
of the Olemuse project. Liven AS also provided a guarantee to Coop Pank AS for
the loan amount. The presale of the first homes in the project started also in
March.
Public offering of the second series of green bonds
In March 2025, a public offering of series II green bonds was made under the
previous bond programme of Liven AS, in which Liven offered up to 4,000
unsecured bonds with a nominal value of 1,000 euros, a redemption date of 19
March 2029 and a fixed interest rate of 9.0% per annum, payable quarterly. The
871 investors who participated in the offering subscribed for a total of 8,301
bonds, resulting in an oversubscription of 2.1 times. As a result of the
oversubscription, Liven's management board decided to increase the size of the
offering to 6,200 bonds, i.e. to 6,200 thousand euros.
Events after the reporting period
In April, Liven AS entered into a cooperation agreement with Oma Grupp OÜ for
the realisation of a development project on the property located at Erika 6a and
6b in Põhja-Tallinn. The residential quarter, designed by PIN Arhitektid OÜ,
will comprise approximately 4,900 m² of sellable area and 68 homes, including
two six-storey residential buildings and a nine-storey building that combines a
reconstructed water tower with a new structure built on top of it. Sales of the
first homes are scheduled to begin in the summer of 2025, with construction set
to start at the end of the same year. The completion of construction works is
planned for 2027. The project will be implemented by a 50/50 joint venture
established by Liven AS and Oma Grupp OÜ, and the general contractor for the
construction is Oma Ehitaja AS.
In April, the Tallinn City Council decided to adopt the detailed plan for the
Peakotrer project at Erika 12 .
In April, we started pre-sales of homes in the Virmalise development project in
the Uus Maailm district in central Tallinn. The Virmalise project will consist
of 28 homes, with construction scheduled to start in the third quarter of 2025
and end in 2026.
The management board of Liven AS has convened an annual general meeting of
shareholders, which will be held on 14 May 2025 at 10.00 a.m. at the Liven salon
office at Telliskivi 60/5.The management board of Liven has proposed to pay a
dividend of EUR 180 thousand to the shareholders in accordance with the dividend
policy and to appoint KPMG Baltics OÜ as auditor for the years 2025-2026.
Information and documents related to the shareholders' annual general meeting
are available on the Liven AGM website https://liven.ee/investor/uldkoosolek.
Significant developments in the economic environment in the period under review
The downward trend in the 6-month Euribor (Euribor), observed throughout the
previous year, continued in the first quarter of 2025. By the end of the
quarter, the Euribor rate had fallen to 2.39% (31.12.2024: 2.63%).
As inflation in the euro area has moved closer to the European Central Bank's
long-term target, and to support economic growth in the European Union amid the
negative impact of U.S.-imposed tariffs, the Governing Council of the European
Central Bank continued to ease monetary policy. In the first four months of
2025, it cut key interest rates three times, by a total of 75 basis points.
According to economic analysts, interest rate cuts are expected to continue
during the year, which should lead to a further decline in the Euribor.
In Estonia, the annual growth rate of consumer prices in Q1 2025 was faster than
in the euro area, with prices rising by 4.4% compared to the same period in the
previous year (Q4 2024: 3.9%). According to forecasts by Eesti Pank, inflation
in 2025 is expected to reach 6.6%, driven by tax increases and continued wage
growth.
According to the latest data from Statistics Estonia, the estimated annual
increase in average gross wages in the first quarter-between 8.0% and
8.5%-outpaced price growth. Nevertheless, consumer confidence remained
persistently low. Consumers tend to view the purchase of durable goods as more
favourable over the next 12 months than at present, which has led to a continued
sentiment of caution and postponement of purchasing decisions. Based on the
latest data from the Institute of Economic Research, the consumer confidence
indicator in the first quarter remains at a level similar to the end of the
previous year (Q1 2025 average: -37; 12-month 2024 average: -33; 2023 average:
-30).
As typical for the first quarter, the number of apartment transactions in
Tallinn decreased according to purchase-sale statistics from the Land Board,
falling by 15.8% compared to the previous quarter (Q1 2025: 2,127 transactions;
Q4 2024: 2,464 transactions). Still, there were still signs of increased
activity among home buyers, as the number of transactions in Q1 2025 showed a
18.3% increase compared to the same period a year earlier and was comparable to
the result of Q3 2024. However, transaction activity has mainly increased in the
secondary market, while sales in new developments have remained relatively
subdued.
Compared to the fourth quarter of 2024, offer prices for new developments
increased moderately by 2.6% in the first quarter of 2025. Based on data
collected from the market, the number of transactions decreased by 26% compared
to the previous quarter (Q1 2025: 414 transactions; Q4 2024: 559 transactions),
remaining at a level similar to that of Q1 2024 (368 transactions).
Throughout the first quarter, the stock of unsold ready-to-move-in apartments
showed a slight downward trend but remained relatively high, reaching an
estimated 1,040 apartments by the end of the quarter (Q4 2024: 1,110; Q1
2024: 1,020). This means that homebuyers continue to have a wide range of
options, and market competition remains elevated.
Outlook for the future
Similar to Q1 2025, we expect continued recovery in the economic environment and
demand for new residential real estate in the coming months. However, market
activity remains largely dependent on external factors, particularly interest
rates, geopolitics, the tax environment, and consumer confidence. Expectations
for 2025 suggest a continued decline in interest rates and growth in real wages,
supporting improved affordability. Still, higher income tax rates and the VAT
increase from July, combined with persistently high inflation, are expected to
slow the pace of improvement. If demand rises, we are ready to bring new supply
to the market quickly.
We are still waiting for the drawn-out processes for adoption of the detailed
spatial plans for Kadaka tee 88, Juhkentali 48 and Erika 12 to finalised in
2025. As there were no new completions in Q1 and we were only able to hand over
previously completed homes, also with below average profitability, the financial
results for Q1 were in line with expectations. In 2025, we can still deliver up
to 194 residential and commercial units, with a maximum potential revenue of up
to 75 million euros.
If sales remain at the same level as in the last nine months, we continue to
expect revenue to reach around 55 million euros in 2025 and assume that this
will be sufficient to achieve the 20% return on equity target. No buildings
under construction will be completed in the first quarter and most of the
planned revenue and profit will be generated in the second half of the year.
During the second quarter of the year, we plan to hand over homes in the
apartment buildings in the Iseära project, and in the second half of the year in
the terraced houses in the Iseära project and in Regati project. Hence, most of
the planned revenue and profit for 2025 will be generated in the second half of
the year. For the projects to be completed during 2025 we had 104 apartments
with a revenue value of 41 million euros sold under contracts under the law of
obligations by the end of the first quarter (31.12.2024: 86 and 36 million
euros)
With construction completions and home deliveries, we expect the balance of
borrowings to fall to a lower level by the end of the year than at the beginning
of this year.
Real estate development is characterised by a long time lag in results and
higher marketing costs in the periods before sales volumes start to grow. In
addition to the ongoing constructions, we are working hard on pre-sales and
construction starts of new projects and phases that will have an impact on 2026
results. Including the Erika 6a and 6b projects added in April.
Liven's development portfolio has sufficient volume for the next 4-5 years.
However, we continue to seek new sites and actively negotiate acquisitions or
joint developments with landowners to expand the portfolio.
Joonas Joost
Liven AS CFO
E-mail: [email protected]