As the first listed Estonian company to pay quarterly dividends, the supervisory board of Arco Vara proposed shareholders pay a dividend of 6 cents per share, similarly to the previous financial year. According to the CEO of the company, Arco Vara can continue both maintaining the dividend and growing in the predicted volume.
With the supervisory board’s proposal, the first dividend of 2 cents per share will be paid out to shareholders this year in June. Then, 1 cent per share in September, 2 cents again in December, and 1 cent per share in March 2024. If the general meeting approves the proposal, Arco Vara will pay a total dividend of 6 cents per share.
Although the dividend policy approved in 2021 foresees a minimum of 1 cent per share in each quarter, the company wants to keep the dividend payment principle similar to the one in the previous financial year. “Arco Vara is a growing real estate company and one of our biggest goals is to offer investors an attractive investment opportunity. When it comes to growth, we consider the dividend yield also important. In today’s projection, we see that by continuing to keep the dividend at six cents per share, at the same time, we are also able to grow the business at the planned pace,” explained Miko Niinemäe, the CEO of Arco Vara.
Apart from a few exceptional companies, in Niinemäe’s opinion, the stock markets are quite passive. “Meanwhile, I have also noticed some anomalies when comparing the book value and market value of different companies. Although turnovers are low on the Nasdaq Baltic stock market, there are companies that trade below their market value, while making regular profits. And at the same time, there are companies that trade significantly above their book value, whereas the growth potential of both types of companies is similar,” commented Niinemäe the current situation on the stock exchange. “For investors, I suggest doing research before investing their money – even if the P/B ratio looks attractive, other financial results should be analyzed as well.”
Niinemäe confirmed that Arco Vara’s shareholders are assured by a stable dividend and continuous profit. “In our schedule, there are development projects with a potential sales revenue of almost 250 million euros, which we plan to realize within the next five years. This shows a significant increase in development volumes and is a sign of growth in the following years.”
Miko Niinemäe expressed his hope that Arco Vara will continue paying dividends quarterly. “I have received only positive feedback about the quarterly dividend. With this, we give the opportunity to reinvest their income four times a year instead of once. At the same time, we also show our retail investors that each one of their contributions is important to us.” Arco Vara will decide about continuing the quarterly dividend payment in the 2024 year general meeting.
The supervisory board of Arco Vara also submitted the 2022 year financial report to the general meeting of shareholders, taking place on May 17, for approval. According to Arco Vara’s audited annual report, the real estate developer earned 13.5 million euros of sales revenue last year. The business profit of the group was 1,062,000 euros and the net profit was 695,000 euros.