Development of the Company and results of financial operations in the reporting year

The main type of activity of the Company is related to provision of all the companies of the Storent group with financial resources, region differentiated sales strategies and activities, marketing initiatives and support of Storent brand, information technology systems, as well as provision of management services to related companies. In the reporting year, the Company’s turnover decreased by 12% reaching 4.9 million euro, which was affected by Covid-19 and revised transaction terms with related parties. The reporting year closed with a profit of EUR 2 141 469.    

Development of the Group and results of financial operations in the reporting year

Although 2021 was much more successful than 2020, Storent Group’s performance in the reporting year still was negatively affected by Covid-19 pandemic in all countries. Rental revenues increased by 5%, the consolidated turnover increased by 2% reaching 42.9 million euros. Construction markets in Baltic countries increase even if in Latvia it ir decreased by 6.2%. Rental market still faces strong price competition and rental equipment overcapacity, rental prices started to rise slowly. During the reporting year there were significant changes in the Group’s rental fleet structure, with own equipment proportion decreasing from 57% in December prior year to 39% in December current year. The Covid-19 pandemic in 2021 did not directly affect the construction sector, as there were no restrictions on construction sites, but it continued to affect overall economic activity.

Baltic region rental operations increased by 9% with almost identically increasing trends in all Baltic countries. The Baltic region accounts for approximately 69% of the Group’s rental income.

Nordic operations have decreased by 5% compared to 2020. Due to the constraints of the Covid-19 pandemic, construction volumes have declined in 2021, and no rapid growth is expected in the near future. 

Operations of subsidiary Storent OOO in Kaliningrad have seen a significant revenue increase, reaching 21% increase compared to 2020, while the construction market shrank by 48.2% in 2021, mainly due to the Covid-19 pandemic.

In 2021, the Group continues cooperation with split-rent and re-rent platform PreferRent, and at the end of 2021 56% of the total rental fleet was supplied from PreferRent. It allowed to increase the Group’s efficiency since PreferRent took over a part of the fleet management function and provided increased rental fleet capacity without the Group incurring additional financial liabilities.

In 2021, the Company continued to develop online rental service. Online ordering is a stable sales channel and it makes up almost 40% of the total income of Storent in the Baltic states for the year 2021. Historically the highest numbers have been reached for digital authorizations and electronically signed documents of 80% of all rental deliveries.

The future development of the Group

The Group management plans further development of all subsidiaries. The main focus in 2022 will be to continue online sales development, digital transformation and efficiency increase. The Group will continue to transform its IT strategy to comply with the scalability needs. In early 2022, Storent entities in the Baltics joined online logistics platform Cargopint that allows to organize transportation in a more efficient manner and will give opportunity to serve a wider range of customers with a more competitive price.

The Group plans to continue selling own rental fleet and increase split-rent share in the total rental income from current 58% in 2021 to 66% during 2022. Management estimates that the construction industry will fully recover after Covid-19 pandemic in the spring 2022, and construction volumes will start to grow further and will return to before Covid-19 pandemic level in 2023. It is expected that Rail Baltica project will give a significant positive impact on the construction industry in the Baltics.

Baiba Onkele

AS Storent Investments CFO

Mobile: + 371 29340012

E-mail: baiba.onkele@storent.com

www.storent.com