The reporting year was good for the company. The consolidated turnover increased by 17.3% reaching 45.6 million euros.

Growing construction market in all Baltic and Nordic countries has been one of factors that accelerated company growth. Rent incomes increased for both, own and vendor equipment rentals. Incomes from services and repair & maintenance increased as well.

Baltic region operations increased rental incomes by 13% with highest growth rate in Latvia, where Storent is equipment rental market leader. Baltic region accounts for approximately 70% of group rent incomes.

In 2018 construction market in Estonia grew by 21% with increase in all segments – residential, non-residential and civil engineering. Market is expected to demonstrate modest growth in 2019, although there’s wide pipeline of various construction projects to be realized through the year.

Latvian construction market increased by 22% in 2018. Highest growth rate was achieved in specialized construction works with almost 28% and in building construction with almost 26%. There is a number of large and medium scale projects including ones financed under EU programs to be started in 2019, which provide confidence in further construction market positive trend. Labour shortage drives up wage level making construction industry more attractive for jobseekers.

Lithuanian construction market grew by 17% in 2018. Largest increase was in civil engineering segment with 21% growth. Residential and non-residential segments had grown by 16% and 15% respectively. There are many EU financed construction related projects to be realized in 2019.

Favorable construction markets caused emerging of new rental market players in the region, which have been luring customers with low pricing strategy. This fact slowed down our pace in Lithuania, where customers especially appreciate an opportunity of low-price offerings.

Nordic operations have increased by 25% compared to 2017. There’s been decrease of residential construction in Sweden, but growth in non-residential and civil engineering construction. Swedish construction market expected to decline by 3,8% in 2019 with highest decline in residential sector. Finnish market showed growth of 3,5% in 2018 and it’s expected to decline by 1,2% in 2019.

Finnish operation (Leinolift Oy) showed good growth dynamics and Swedish one continued with rapid rate through the year. We have started to evaluate geographical expansion opportunities in both countries. Our main focus has been on structuring sales process, enlarging sales teams and shipping additional fleet as these are important factors in order to continue to grow and enter new market segments.

Kaliningrad operation has seen revenues decrease. Official sources report construction market growth of 15% with construction activities ensured mostly by state financed projects. Customers insolvencies remains to be one of key factors for reduced rent incomes. We see number of large construction projects started in December, which should serve as driver for rent incomes growth in 2019.

Investment plan for rental assets for 2018 in amount of 7 million euros has been realized and new machines have been delivered to designated countries. Flexible approach to fleet rotation among Storent group companies ensured quicker response to construction market changes and overall more efficient fleet usage.

The balance sheet structure of the Group continues to be strong enough. Non-current assets constitute 87% of the total assets. Long-term liabilities constitute 42% of the total balance sheet. Security for creditors ensured by registered and paid stock capital in value of 33.3 million euros, as well as 4.2 million euros bank account balance at the end of the accounting period. The Group finalized the year 2018 with profit of 142 727 EUR.

The future development of the Group

The Group management plans to continue investing in the development of all subsidiaries. In Baltics with an objective to acquire bigger part of market share and to become the market leader as well as continue to strengthen its position in Nordic market. In 2019 management will continue to optimize internal processes and upgrade IT systems in order to decrease decision making time and increase reaction time to changes dictated by market conditions and customers preferences. Group will continue with started activities in order to increase Nordic share of overall Storent business. The Group management expects that active acquisition of EU funds will continue through 2019, which will give a positive effect on the development of construction industry. Rental pricing increase expected to continue through the year. Currently easily available bank financing represents an additional driver for stable economic growth in the Baltic and Nordic countries, and this brings extra incentive to the construction sector. Taking into consideration the above-mentioned circumstances, the management of the Group plans to increase net sales in 2019 and to increase group’s profitability.

The net profit for the year ended 31 December 2018 differs from the result previously reported for the 4th quarter of 2018, mainly due to deferred tax calculation correction in the Group's Finnish entity.

Baiba Onkele

AS Storent Investments CFO

Mobile: + 371 29340012

E-mail: baiba.onkele@storent.com

www.storent.com