MANAGEMENT REPORT

Real Estate Development

Tallinn

During the third quarter of 2025, construction works continued at the Uus-Kindrali project, located in Kristiine City, Tallinn.

The White Building (91 residential units) at Talli Street 3 / Sammu Street 8 has progressed well. As at the date of this report, most apartments have received their final finishes, including tiling and painting. The first client inspections are scheduled to begin shortly, followed by the signing of final notarial deeds in mid-November. As at the end of the third quarter, the project has reached approximately 73.1% sell-out.

At the same time, construction is ongoing for another seven-storey residential building with    90 units, located next to the White Building at Sammu Street 10 / Seebi Street 24a, Tallinn.         As at this report, the installation of prefabricated concrete elements has reached the top floor, and the final roof elements are expected to be installed in early November. The completion of this building is targeted for October–November 2026.

Within Kristiine City, we are also advancing the design and building permit processes for four additional projects submitted to the Tallinn City Planning Department. These developments will add approximately 35,000 sqm of GBA, comprising around 350 predominantly residential units (about 95% residential and 5% commercial), further strengthening our presence in this well-established urban area.

As at Q3 2025, construction of the final phase of the Kalaranna development (comprising four buildings and 146 units) has been completed, with only a few contractors remaining on site to finalize punch list items. At the same time, we are implementing additional improvements to selected marketing units to further support sales. As at the date of this report, the project has reached approximately 60.9% sell-out.

Riga

At the beginning of 2025, after all units in River Breeze Residence had been successfully sold, the Group commenced preparations for the next development phase in Kliversala – the Blue Marine project (96 residential units).
Construction works started in the third quarter of 2025 and the project has since progressed with retaining wall piles completed and excavation works underway.
At the same time, we are actively engaged in sales activities and negotiating the terms of a construction loan agreement with a local bank.

In Vilnius

During Q3 we continued the construction of the final stage of Šaltinių Namai Attico with city villas and a commercial building. We are currently at almost 43% sellout in the villas and slightly above 21% in the commercial building while achieving record prices in Vilnius real estate market. Regarding construction we are on schedule to achieve substantial completion by the end of 2025.
Our latest investment on Naugarduko Street in Vilnius involves transforming a former school into a high-end residential complex. Located on a hill with breathtaking views of Vilnius’ Old Town, the development will feature approximately 50 luxury apartments. The building permit process is still ongoing, with approval expected by the end of the year.

Hotel operations

Overall performance in the third quarter was broadly in line with expectations, although slightly below the initial budgeted targets. Demand was mainly driven by the individual leisure segment during July and August, when the hotel exceeded expectations, while September performance fell short due to weaker than expected demand from the Corporate and MICE segments. The outlook for the remainder of the year remains positive, albeit with some current softness observed in corporate demand.

Other operations

Our Italian operations, led by Preatoni Nuda Proprietà (PNP) and Preatoni Intermediazioni Immobiliari (PII), continued to perform steadily despite the broader market slowdown in 2024. The rise in interest rates has temporarily affected transaction volumes, but the fundamentals of the bare ownership model remain very strong — and we see increasing recognition of this innovative investment concept among both private and institutional investors.
Over the past months, PNP has strengthened its market position, built new partnerships, and demonstrated resilience in a changing environment. Confidence in the Italian real estate sector is gradually returning, and as conditions normalize through 2025, we expect PNP to emerge stronger, with even greater brand visibility and deal flow.

Conclusion

The first nine months of 2025 have been a period of stabilization and quiet determination across all our markets. Despite the usual bureaucratic hurdles and seasonal slowdowns, our teams have continued to move forward — delivering progress, not promises.

In Tallinn, construction and new planning milestones within Kristiine City show how consistent effort translates into lasting value. In Riga, the Blue Marine project is taking shape, reflecting our belief in building with our own hands and know-how. And in Vilnius, achieving record sales prices in our flagship project reaffirms our reputation for quality and trust.
I am proud of how far we have come — often in complex circumstances — and even more confident in what lies ahead. With a focused team, a solid pipeline, and improving market sentiment, we are turning stability into momentum. The foundations are strong, and I am convinced that the remainder of 2025 will confirm our capacity to grow with discipline, creativity, and purpose.

I would like to thank all our colleagues, partners, and shareholders for their continued trust and dedication. Every step forward — no matter how small — is the result of shared commitment and belief in our long-term vision.

Edoardo Preatoni
CEO

Key financials

The total revenue of the Group in first nine months of 2025 was EUR 34.3 million compared with EUR 10.6 million in first nine months of 2024. The total revenue of the third quarter was EUR 5.7 million compared with EUR 3.7 million in 2024.

The real estate sales revenues are recorded at the point of time when legal title is transferred to the buyer. Therefore, the revenues from sales of real estate depend on the construction cycle and the completion of the residential developments.

Revenue from the sale of real estate increased compared with the previous year, as we continued handing over completed apartments in the Kalaranna District, Tallinn, following the initial deliveries that began in December 2024. The lower revenue during the first nine months of 2024 reflects the development cycle, as construction was ongoing and only a limited number of remaining inventory units were available for sale in Riga and Vilnius.

The gross profit for the first nine months of 2025 increased to EUR 11.9 million compared with EUR 2.9 million in the same period of 2024. The gross profit of the third quarter was EUR 1.7 million compared with EUR 0.4 million in 2024.

The operating result in the first nine months was EUR 7.7 million profit compared with EUR 1.7 million loss during the same period in 2024. The operating result of the third quarter was EUR 0.2 million profit compared with EUR 0.9 million loss in the third quarter of 2024.

The net result for the first nine months of 2025 was EUR 6.0 million profit, compared with EUR 4.1 million loss in the reference period. The net result of the third quarter was EUR 0.2 million loss compared with EUR 1.0 million loss in the same period of 2024.

Cash generated in operating activities during first nine months of 2025 was EUR 6.8 million compared with EUR 10.0 million used during the same period in 2024. Cash used in operating activities during third quarter was EUR 1.8 million compared with EUR 5.5 million used in the third quarter of 2024.

Net assets per share were EUR 1.00 as at 30 September 2025, compared with EUR 0.91 a year earlier.

Key performance indicators

   *debt / equity = total debt / total equity
   **return on assets = net profit/loss / total average assets
   ***return on equity = net profit/loss / total average equity

   ****net asset value per share = net equity / number of shares

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated interim statement of financial position

Consolidated interim statements of comprehensive income

The full report can be found in the file attached.

Ann-Kristin Kuusik
CFO
+372 614 4920
prokapital@prokapital.ee

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