Arco Vara (ARC1T) Q2 2026 earnings summary

Executive summary

• Focused on completing lili (Soodi) and Spordi projects, preparing Lutheri Quarter and Arcojärve, and implementing a new growth strategy centered on portfolio diversification.

• Sold 19 new homes in Q2 2026, marking one of the strongest quarterly sales in recent years.

• Supervisory Board approved a strategy to deliver at least 150 new homes annually, expanding into townhouses, detached houses, and build-to-rent properties.

• Market for new residential developments in Tallinn remains highly competitive, with supply up 12% year-over-year and average prices rising 5.6%.

• Q2 loss attributed to the cyclical nature of real estate development, with revenue and profit expected to improve significantly in Q4 2026.

Financial highlights

• Q2 2026 revenue: €3.93 million (Q2 2025: €1.26 million); H1 2026 revenue: €4.32 million (H1 2025: €3.09 million).

• Q2 2026 net loss: €0.58 million; H1 2026 net loss: €1.15 million (H1 2025 net loss: €0.04 million).

• Operating loss (EBIT) for H1 2026: €1.19 million (H1 2025: €0.27 million profit).

• Cash and cash equivalents at period end: €2.07 million (end 2025: €2.78 million).

• Net debt at period end: €45.22 million, up €11.96 million year-over-year, mainly due to development loan utilization.

Outlook and guidance

• Completion of Spordi and Kodulahe lili developments expected in Q4 2026, with significant revenue and profitability improvement anticipated.

• Construction at Lutheri Quarter to begin in Q4 2026; Arcojärve construction to start in H1 2027.

• Full-year 2026 and Q4 expected to be profitable, with tangible benefits from new strategy expected over the next 2–3 years.