Interim report for the fourth quarter of 2025 (unaudited)

AR C O

Interim report for

4 2025

unaudited)

INTERIM REPORT FOR THE FOURTH QUARTER OF 2025 (UNAUDITED)

Company name Registry number Address Telephone

E-mail

Corporate website Financial year Reporting period

Supervisory board

Arco Vara AS 10261718

Rotermanni 10, 10111 Tallinn, Republic of Estonia

+372 614 4630

info@arcovara.com https://www.arcovara.com

1 January 2025 - 31 December 2025

1 January 2025 - 31 December 2025

Kert Keskpaik, Tarmo Sild, Steven Yaroslav Gorelik, Hillar-Peeter Luitsalu, Allar Niinepuu

Chief executive officer Auditor

Kristina Mustonen KPMG Baltics OÜ

Contents

Management Report 3

Group CEO's Review 3

Arco Vara's Active Projects as of 31.12.2025 6

General Information 9

Activities of the group 9

Arco Vara vision and mission 9

Group structure 9

Key Performance Indicators 10

People 14

Description of Main Risks 15

Shares and shareholders 16

Share price 16

Shareholder structure 17

CEO's Confirmation on Directors' Report 18

Consolidated Statement of Comprehensive Income 19

Consolidated Statement of Financial Position 20

Consolidated Statement of Cash Flows 21

Consolidated Statement of Changes in Equity 22

Notes to the Condensed Interim Financial Statements 23

1. Significant accounting policies 23

2. Segment information 23

3. Revenue 25

4. Cost of sales 25

5. Marketing and distribution expenses 25

6. Administrative expenses 25

7. Financial income and expenses 26

8. Earnings per share 26

9. Receivables and prepayments 27

10. Inventories 28

11. Investment property 28

12. Interest bearing liabilities 29

13. Payables and deferred income 30

14. Transactions and Balances with Related Parties 30

Statement by the CEO/ Member of the Management Board 32

‌Group CEO's Review

The fourth quarter of 2025 in the Estonian real estate market was overall stable, but fell short of the expectations set at the beginning of the year. The market was no longer in a downturn phase; however, a clear growth cycle had not yet begun either. Rather, it was a period of stabilization, during which both buyers and sellers were adapting to the new economic environment and waiting for clearer signals regarding interest rates and the overall improvement of economic conditions.

The fourth quarter did not bring the anticipated stronger seasonal recovery. Buyers remained cautious, and decision-making processes became longer, which was reflected in extended sales periods and more modest transaction volumes. Increased price sensitivity was noticeable in the market, and buyers compared offers more thoroughly than before.

The sales pace and the number of interested buyers were weaker than forecasted. Although prices did not decline significantly, the sales pace remained slow, and purchase decisions were often postponed. In order to remain competitive, more flexible payment terms, campaigns, or additional value-added benefits had to be offered to maintain buyer interest and conclude transactions.

For Arco Vara, the fourth quarter was an active and development-rich period, during which we focused both on launching new projects and on the consistent advancement of existing developments. We also invested considerable effort in preparing the pre-sales of the Luther project, developing its concept, and preparing it for the construction phase.

As the sales targets set for the fourth quarter were not achieved, the quarterly results were more modest than expected and remained below the same period last year.

Rannakalda development: Four homes were sold in the fourth quarter. By the end of 2025, 105 out of 113 apartments and commercial units in the project had been sold. The goal was to sell all remaining units by the end of 2025; however, some apartments remained unsold, and their sales will continue in 2026.

Soodi 6 development: Construction began on 30 June 2025. In the fourth quarter, five preliminary purchase agreements were signed. By the end of 2025, a total of 22 out of 66 apartments and commercial units had been sold under preliminary agreements. The project is attractive to young families, investors, and more demanding clients, primarily due to its good location and well-designed, functional layouts.

Spordi development: Construction also commenced in June. In the fourth quarter, four preliminary purchase agreements were signed. By the end of 2025, 16 out of 56 homes had been sold under preliminary agreements. The Spordi development enhances Arco Vara's portfolio with an excellent location in the Kristiine residential district, an area with limited new developments but strong demand for housing. The project incorporates modern and smart solutions.

Arcojärve development: The detailed spatial plan was adopted on 15 October. This is a strategically important project that creates a foundation for further investments in new inner-city developments.

Bulgaria development: Negotiations regarding the Bulgarian subsidiary are ongoing, and relevant decisions are planned in the near future.

Kuldlehe development: In December, the fourth apartment in the building was sold. Only the last apartment remains available in the project, whose exclusive character and limited availability maintain the development's strong position in Tallinn's premium segment.

Luther development: Pre-sales of the first phase commenced in December. Design works and preparations for the start of construction are ongoing.

Arco Vara remains focused on developing high-quality and sustainable living environments and on providing the best home-buying experience. Our mission is to create modern, sustainable, and desirable living environments where clients can shape their dream homes, and our vision is to be the first choice for homebuyers.

Development volumes

(gross m²)

60 000

Total 157 318 m²

+72 590 m² compared to 31.12.2024

50 000

48 932

40 000

30 000

29 567

26 155

22 990

20 000

16 967

10 000

3 903

3 675

263

1 858

0

0

Detail plan in progress Detail plan issued

Building permit available

Construction

In stock

Residential (m²) Commercial (m²)