Arco Vara wants to continue paying a higher dividend than foreseen

The Supervisory Board of Arco Vara, the first Estonian listed company to start paying quarterly dividends, has proposed to shareholders to pay a dividend of 6 cents per share, similar to the previous financial year. According to the company’s CEO, Arco Vara will continue to be able to maintain the dividend and grow as planned.

The Board’s proposal will make the first dividend payment to shareholders in June this year of 2 cents per share. Thereafter, 1 cent per share in September, 2 cents again in December and 1 cent per share in March 2024. If the proposal is approved by the General Assembly, Arco Vara will pay a total dividend of 6 cents per share. While the dividend policy approved in 2021 will provide for a minimum of 1 cent per share per quarter, the company wishes to keep the dividend policy similar to that of 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. As we grow, we also attach importance to dividend yields, and in today’s projection we see that by continuing to maintain a dividend of six cents per share, we will be able to simultaneously grow at the planned pace,” explains Miko Niinemäe, CEO of Arco Vara. Excluding a few individual companies, stock markets are quite passive, according to Niinemäe. “I have also noticed a number of anomalies when comparing the book and market values of different companies. Even though the turnover on the Nasdaq Baltic market is low, there are companies trading below market value, but still earning regular profits, and there are companies trading well above book value, but with similar growth potential,” Niinemäe said. “Investors are advised to do their homework when considering their money. Even if the P/B ratio looks attractive, it is important to work through other financial results.” Niinemäe assured that Arco Vara shareholders will be reassured by the steady dividend and continued profits. “We have development projects on the pipeline with potential sales of almost EUR 250 million, which are planned to be realised in the next five years. This shows a significant increase in development volumes and is a sign of growth in the coming years.” Miko Niinemäe expressed his hope that Arco Vara will continue to pay dividends on a quarterly basis. “I have received only positive feedback on the quarterly dividend. This will give us the opportunity to invest additional income four times a year instead of once a year, while also showing every small shareholder that their contribution is important to us.” Arco Vara will decide on the continuation of the quarterly dividend at the Annual General Meeting in 2024. Arco Vara’s Board of Directors has also sent the annual report for 2022 to the General Meeting of Shareholders on 17 May for adoption. According to Arco Vara’s audited annual report, the real estate developer generated sales revenues of EUR 13.5 million last year. The group’s operating profit was EUR 1 062 000 and net profit EUR 695 000.