Hepsor AS Consolidated Unaudited Interim Report For Q3 2026 And Nine Months

(MENAFN- GlobeNewsWire - Nasdaq) The first nine months of 2026 were characterised by active development and substantial investments for Hepsor. The Group has reached the most capital-intensive stage of its investment cycle, as reflected in the 44% year-on-year increase in total assets. The new and larger-scale investment cycle, which began in 2025, provides a solid foundation for the Group's future growth. The investments made are expected to be gradually reflected in the Group's financial results from the fourth quarter of 2026 onwards, as development projects enter the sales and handover phase.

The financial results for the reporting period were primarily affected by the limited inventory of completed apartments available for sale. The Group started the year with 28 completed apartments, of which only one remains unsold to date. By the publication date of this report, Hepsor had commenced the handover of apartments in the M12 development project in the Manufaktuuri Quarter, marking the end of a nearly two-year period during which no new residential buildings were completed by the Group in Estonia.

As at 30 September 2026, the potential sales revenue of Hepsor's development portfolio amounted to 535 million euros (30 September 2025: 385 million euros), of which residential real estate accounted for 86% (30 September 2025: 82%) and commercial real estate for 14% (30 September 2025: 18%).

The Group's sales revenue for the first nine months of 2026 was 7.6 million euros (9 months 2025: 30.9 million euros), and revenue for the third quarter of the reporting year was 1.3 million euros (Q3 2025: 8.8 million euros).

The Group's net loss for the first nine months of the reporting year was 3.2 million euros (9 months 2025: net profit of 1.5 million euros), of which the net loss attributable to the owners of the parent was 2.9 million euros (9 months 2025: net profit 0.9 million euros).

The Group's net loss for the third quarter amounted to 1.0 million euros (Q3 2025: net profit of 1.2 million euros), of which the loss attributable to owners of the parent company amounted to 1.0 million euros (Q3 2025: net profit of 1.1 million euros).

The Group's total assets increased by 44% year-on-year, reaching 116.0 million euros as at 30 September 2026 (30 September 2025: 80.7 million euros).

In September, Hepsor carried out its second public bond offering under its 20 million euro bond programme. A total of 974 investors subscribed for bonds worth 7.1 million euros. The initial offering was oversubscribed 2.4 times, and in response to strong investor demand, the issue size was increased from 3 million euros to 5 million euros.

Development projects under construction and on sale

During the first nine months of 2026, the Group concluded contracts under the law of obligations and real right contracts for the first-time sale of 175 apartments with a total value of 34.5 million euros, representing increases of 31% and 27%, respectively, compared with the same period of the previous year (9 months 2025: 134 apartments and 27.1 million euros).

At the end of the reporting quarter, the four-quarter average value of first-time sales reached 10.8 million euros (30 September 2025: 8.6 million euros), representing a year-on-year increase of 26%.

As at 30 September 2026, the Group had 7 residential development projects in pre-sale and sale (30 September 2025: 9 residential development projects), of which one had been completed and six were under construction.

The Group had 548 apartments under construction (30 September 2025: 374), comprising 289 apartments in Estonia (30 September 2025: 201) and 259 apartments in Latvia (30 September 2025: 173).

Commercial Real Estate

As at 30 September 2026, 92% of the leasable area in Hepsor's completed commercial real estate portfolio – comprising four projects with a total area of 16,678 m2 – is covered by lease agreements.

The shareholders of SIA“Riga Properties 4” decided not to proceed with the planned commercial real estate development project and to put the properties owned by the company up for sale. The decision was based on current demand in the commercial real estate market and the development prospects of the project.

Canadian development projects

The third quarter of 2026 was significant for Hepsor's Canadian development projects. Following decisions of Toronto City Council, building rights came into force for two development projects – Isabella and Elysium Glenavy.

The Isabella development project allows for the construction of a 70-storey rental apartment building with a gross building area of approximately 46,000 m2, and the Elysium Glenavy project a 36-storey rental apartment building with a gross building area of approximately 26,500 m2.

Together with the Weston Road project, which obtained building rights in 2025, the planned building volume has been achieved in three of Hepsor's five Canadian development projects.

Future outlook

The completion of two residential development projects is planned for the fourth quarter of 2026: the M12 development project at Manufaktuuri 12 in Tallinn, comprising 49 apartments, and the 360° Dzelzavas Residences development project in Riga, comprising 103 apartments. A total of 152 new apartments will be completed across the two projects, of which 75 had been sold under the law of obligations contracts as at 30 September 2026.

In the final quarter of the year, our primary focus will be on completing development projects currently under construction, selling apartments and preparing new projects.

In Estonia, key priorities include continuing the development of the Manufaktuuri Quarter and the construction of the first phase of the Paevälja Quarter. Construction of the Veski Keskus development project at Vana-Tartu mnt 49 in Rae Municipality is scheduled to commence in the fourth quarter. Veski Keskus will provide 3,551 m2 of lettable area, of which 96% is already covered by lease agreements.

In Latvia, we continue to prepare and implement several new residential development projects. Construction of the first phase of the development project at Starta 17 in Riga, comprising 84 apartments, is scheduled to commence in 2026.

Consolidated statement of financial position

in thousands of euros	30 September 2026	31 December 2025	30 September 2025
Assets
Current assets
Cash and cash equivalents	7,410	3,821	1,867
Current financial investments	50	0	0
Trade and other receivables	1,879	1,807	1,796
Current loan receivables	425	0	0
Inventories	76,628	58,938	53,994
Total current assets	86,392	64,566	57,657
Non-current assets
Property, plant and equipment	208	260	274
Intangible assets	0	0	1
Investment properties	11,820	11,820	7,980
Financial investments	9,078	7,837	7,550
Investments in joint ventures	451	26	1
Non-current loan receivables	6,651	6,521	6,572
Other non-current receivables	1,351	805	631
Total non-current assets	29,559	27,269	23,009
Total assets	115,951	91,835	80,666
Liabilities and equity
Current liabilities
Loans and borrowings	1,617	5,687	8,192
Current lease liabilities	12	50	13
Prepayments from customers	4,530	1,544	1,211
Trade and other payables	7,973	6,832	5,255
Total current liabilities	14,132	14,113	14,671
Non-current liabilities
Loans and borrowings	67,917	42,060	36,720
Non-current lease liabilities	112	112	162
Other non-current liabilities	9,213	8,472	7,500
Total non-current liabilities	77,242	50,644	44,382
Total liabilities	91,374	64,757	59,053
Equity
Share capital	3,913	3,913	3,913
Share premium	8,917	8,917	8,917
Reserves	385	385	385
Retained earnings	11,362	13,863	8,398
Total equity	24,577	27,078	21,613
incl. total equity attributable to owners of the parent	16,999	20,858	21,323
incl. non-controlling interest	7,578	6,220	290
Total liabilities and equity	115,951	91,835	80,666

Consolidated statement of profit and loss and other comprehensive income

in thousands of euros	9 months 2026	9 months 2025	Q3 2026	Q3 2025
Revenue	7,568	30,888	1,344	8,825
Cost of sales (-)	-6,766	-25,946	-958	-6,743
Gross profit	802	4,942	386	2,082
Marketing expenses (-)	-799	-676	-303	-228
Administrative expenses (-)	-1,420	-1,356	-559	-438
Other operating income	44	314	27	232
Other operating expenses (-)	-50	-211	-15	-45
Operating profit (-loss) of the year	-1,423	3,013	-464	1,603
Financial income	616	322	248	165
Financial expenses (-)	-2,048	-1,527	-751	-525
Profit before tax	-2,855	1,808	-967	1,243
Corporate income tax	-323	-283	-1	0
Net profit (-loss) for the year	-3,178	1,525	-968	1,243
Attributable to owners of the parent	-2,878	937	-962	1,133
Non-controlling interest	-300	588	-6	110
Other comprehensive income (-loss)
Changes related to change of ownership	-137	-81	-353	-81
Change in value of embedded derivatives with minority shareholders	-98	-534	-59	-106
The effects of changes in foreign exchange rates	-12	-375	29	-83
Other comprehensive income (-loss) for the period	-247	-990	-383	-270
Attributable to owners of the parent	75	418	65	759
Non-controlling interest	-322	-1,408	-448	-1,029
Comprehensive income (-loss) for the period	-3,425	535	-1,351	973
Attributable to owners of the parent	-2,803	1,355	-897	1,892
Non-controlling interest	-622	-820	-454	-919
Earnings per share
Basic (euros per share)	-0.74	0.24	-0.25	0.29
Diluted (euros per share)	-0.74	0.24	-0.25	0.29

The full unaudited consolidated interim report for Q3 and nine months of 2026 is available on Hepsor's website:

Martti Krass
Member of the Management Board
Phone: +372 5692 4919
e-mail: ...

Hepsor AS ( ) is a developer of residential and commercial real estate. The Group operates in Estonia, Latvia and Canada. During our fifteen years of operation, we have created 2000 homes and nearly 44 000 m² of commercial space. Hepsor is the first developer in the Baltic states to implement a number of innovative engineering solutions that make the buildings it constructs more energy efficient, and thus more environmentally friendly. The company's portfolio includes a total of 28 development projects with a total area of 195 800 m². In addition, the Group is active in five projects in Canada, where the main activity is the preparation of detailed spatial plans for land, thereby achieving greater building rights.

Attachment

• Hepsor Q3_2026_ENG

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