Hepsor AS: A Strong Finish to 2024 and a Promising Outlook for 2025

Hepsor AS, a leading real estate developer in Estonia and Latvia, has released its consolidated unaudited interim report for the fourth quarter of 2024 and the full year. The company's strong performance in the final quarter and throughout the year has set the stage for an exciting 2025. Let's delve into the key financial highlights and the company's strategic plans for the coming year.



Financial Performance in 2024

Hepsor AS's consolidated sales revenue for the fourth quarter of 2024 was €10.5 million, a significant increase from €5.1 million in the same quarter of 2023. The company's full-year revenue totaled €38.4 million, compared to €41.1 million in 2023. The net profit for the fourth quarter was €1 million, compared to a net loss of €1.3 million in the previous year's fourth quarter. The full-year net profit was €2.1 million, down from €3.5 million in 2023.

Key Drivers of Performance

Several factors contributed to Hepsor AS's strong performance in 2024:

1. Increased Sales: The company delivered 193 homes to customers in 2024, including 51 homes in the fourth quarter. This significant increase in sales contributed to the higher revenue.
2. New Projects: Hepsor AS began construction on several new projects, such as the commercial building StokOfiss 34 in Riga and the Manufaktuur Quarter development in Tallinn. These new projects contributed to the increased revenue.
3. Reduced Interest Costs: The sale of the Lembitu 4 property in Tallinn and the use of freed-up capital to reduce interest costs at the group level contributed to the improved net profit.
4. Improved Vacancy Rates: The signing of new rental contracts and the reduction of vacancy rates in commercial buildings, such as P113 Tervisemaja, contributed to the increased net profit.
5. Expansion into Canada: Hepsor AS made three new investments in Canada, acquiring development projects consisting of 7, 11, and 17 properties in Toronto. These investments contributed to the company's growth and revenue.

Strategic Plans for 2025

Hepsor AS has an ambitious growth plan for 2025, aiming to develop more homes and commercial premises than it has done in the past ten years. The company's outstanding development portfolio includes the Manufaktuur Quarter and a large residential development area around the proposed new hospital in Lasnamäe, Tallinn, office-warehouse type developments, and the Krasta City business district in Riga.

Innovation and green thinking are essential elements of Hepsor AS's work, and the company aspires to work in new ways, seeking and implementing innovative solutions while keeping one step ahead of overall market developments. In 2025, Hepsor AS plans to begin the construction and sale of up to five new development projects in Latvia, with a total of 147 new homes and a stock-office type development project in the Veidema Quarter. The company will also continue the next phase in the Manufaktuur Quarter – the sale and construction of the main building of the former Baltic Cotton Spinning and Weaving Factory.



In conclusion, Hepsor AS's strong finish to 2024 and promising outlook for 2025 make it an attractive investment opportunity for those seeking exposure to the real estate development sector. The company's strategic plans, focus on innovation, and commitment to green thinking position it well for continued growth and success in the coming years. As an investor, keeping an eye on Hepsor AS's progress and considering its stock as a potential addition to your portfolio could prove to be a wise decision.