Arco Vara (ARC1T) Q1 2026 earnings summary

Executive summary

• Q1 2026 performance aligned with expectations, focusing on ongoing project development and portfolio expansion.

• CEO transition occurred, with Rait Riim assuming the role on April 1, 2026, aiming to diversify the product portfolio and pursue new land acquisitions.

• The Estonian real estate market showed seasonal calm, with stable transaction prices and volumes, but was impacted by high electricity prices, rising interest rates, and geopolitical tensions.

• Losses in the quarter reflect the cyclical nature of real estate development, with profits expected upon project completions later in the year.

Financial highlights

• Q1 2026 revenue was EUR 390 thousand, down EUR 1,316 thousand year-over-year.

• Operating loss (EBIT) was EUR 483 thousand, compared to a profit of EUR 260 thousand in Q1 2025.

• Net loss for Q1 2026 was EUR 578 thousand, versus a net profit of EUR 104 thousand in Q1 2025.

• Cash and cash equivalents at period end were EUR 3,065 thousand.

• Net debt increased to EUR 41,300 thousand, mainly due to the Luther Quarter acquisition and bond issuance.

Outlook and guidance

• 122 apartments and commercial units under construction in Tallinn are scheduled for completion in Q4 2026.

• Focus for Q2 2026 is on advancing construction and sales for Spordi 3a/3b and Soodi 6, and design work for Luther Quarter.

• Public sales for Luther Quarter to begin in spring 2026, with construction starting in summer.