Signs of stabilization in the Eurozone interest markets and Baltic economies
were reflected in the consolidated results of EfTEN Real Estate Fund AS for the
first quarter of 2024. The fund's net rental income increased by 0.6% on an
annual basis, and the vacancy rate in the real estate portfolio remained low at
2.9%. Interest expenses in the first quarter were higher compared to the same
period last year but slightly lower than the fourth quarter of 2023.
Construction continued on the elderly home being built next to the Estonian
National Museum in Tartu. Completion of the works is scheduled for the upcoming
summer, and the new elderly home is set to open to clients in the fall.
The consolidated sales income of EfTEN Real Estate Fund AS for the first quarter
of 2024 was 7.961 million euros (2023 I quarter: 7.788 million euros). Sales
revenue increased mainly in the retail sector.
The Fund's net rental income (NOI) totalled 7.343 million euros in 2024 I
quarter (2023 I quarter: 7.298 million euros). The consolidated net rental
income margin was 92% (2023: 94%), so costs directly related to property
management (including land tax, insurance, maintenance and improvement costs)
and distribution costs were 8% (2023: 6%) of sales income.
The Fund's consolidated net profit was 3.808 million euros in the I quarter of
2024 (2023 I quarter: 4.634 million euros). The decrease in net profit compared
to the previous year is due to the increase in EURIBOR.
The volume of the Group's assets as of 31.03.2024 was 384.846 million euros
(31.12.2023: 380.944 million euros), including the fair value of investment
properties made up 94% of the volume of assets (31.12.2023: the same).
Investment portfolio
As of the end of March 2024, the Group has 35 (31.12.2023: 35) commercial
investment properties, the fair value of which on the balance sheet date is
360.327 million euros (31.12.2023: 357.916 million euros) and the acquisition
cost was 356.819 million euros (31.12.2023: 354.408 million euros). In addition,
the group's joint venture owns the Palace hotel in Tallinn, the fair value of
which as of 31.03.2024 was 9.0 million euros (31.12.2023: same).
In the first 3 months of 2024, the Group earned a total of 7.637 million euros
in rental income, which is 2% more than at the same time in 2023. As of
31.03.2024 the vacancy of investment properties belonging to the Group per
portfolio was 2.9% (31.12.2023: 2.6%). The largest vacancy is in the office
buildings segment (12%), where it takes longer than before to fill vacant rental
premises.
Financing
The increase in Eurozone interest rates has had a significant impact on the
Group's cash flows, bringing the interest coverage ratio (ICR) to a 2,9 instead
of 4,2 last year same time.
During the first 3 months of 2024, the fund's subsidiaries EfTEN Autokeskus OÜ
and EfTEN Jurkalne SIA extended their loan agreements. Within the next 12
months, the loan agreement of one of the Group's subsidiaries will expire, the
balance of which is 2,240 thousand euros as of 31.03.2024. The LTV of the
expiring loan agreement is 33%, and the investment properties a stable, strong
rental cash flow, so according to the Group's management, there are no obstacles
to extending the loan agreement.
The weighted average interest rate of the Group's loan agreements is 5.9% as of
31.03.2024 (31.12.2023: the same) and the LTV (Loan to Value) is 42%
(31.12.2023: the same). All loan agreements of the Fund's subsidiaries are
linked to a floating interest rate.
Share information
The net value of the share of EfTEN Real Estate Fund AS as of 31.03.2024 was
20.56 euros (31.12.2023: 20.21 euros). The net value of EfTEN Real Estate Fund
AS shares increased by 1.7% in the first three months of 2024.
CONSOLIDATED STATEMEMT OF COMPREHENSIVE INCOME
--------------------------------------------------------------
I quarter
--------------------------------------------------------------
2024 2023
--------------------------------------------------------------
EUR thousands
--------------------------------------------------------------
Sales income 7,961 7,788
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Cost of services sold -418 -394
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Gross profit 7,543 7,394
--------------------------------------------------------------
--------------------------------------------------------------
Marketing costs -200 -96
--------------------------------------------------------------
General and administrative expenses -939 -867
--------------------------------------------------------------
Other operating income and expense 42 10
--------------------------------------------------------------
Operating profit 6,446 6,441
--------------------------------------------------------------
--------------------------------------------------------------
Profit / loss from joint ventures -50 -9
--------------------------------------------------------------
Interest income 101 6
--------------------------------------------------------------
Other finance income and expense -2,235 -1,550
--------------------------------------------------------------
Profit before income tax 4,262 4,888
--------------------------------------------------------------
--------------------------------------------------------------
Income tax expense -454 -254
--------------------------------------------------------------
Net profit for the financial year 3,808 4,634
--------------------------------------------------------------
Total comprehensive income for the period 3,808 4,634
--------------------------------------------------------------
Earnings per share
--------------------------------------------------------------
- basic 0.35 0.43
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- diluted 0.35 0.43
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31.03.2024 31.12.2023
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EUR thousands
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ASSETS
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Cash and cash equivalents 16,868 14,712
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Short-term deposits 3,400 3,400
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Receivables and accrued income 1,741 2,360
-----------------------------------------------------------
Prepaid expenses 139 106
-----------------------------------------------------------
Total current assets 22,148 20,578
-----------------------------------------------------------
-----------------------------------------------------------
Long-term receivables 199 214
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Shares in joint ventures 2,028 2,078
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Investment property 360,327 357,916
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Property. plant and equipment 144 158
-----------------------------------------------------------
Total non-current assets 362,698 360,366
-----------------------------------------------------------
TOTAL ASSETS 384,846 380,944
-----------------------------------------------------------
-----------------------------------------------------------
LIABILITIES AND EQUITY
-----------------------------------------------------------
Borrowings 8,604 16,907
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Liabilities and prepayments 2,529 3,417
-----------------------------------------------------------
Total current liabilities 11,133 20,324
-----------------------------------------------------------
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Borrowings 139,644 130,849
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Other long-term liabilities 1,834 1,790
-----------------------------------------------------------
Deferred income tax liability 9,729 9,283
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Total non-current liabilities 151,207 141,922
-----------------------------------------------------------
TOTAL LIABILITIES 162,340 162,246
-----------------------------------------------------------
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Share capital 108,198 108,198
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Share premium 84,721 84,721
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Statutory reserve capital 2,749 2,749
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Retained earnings 26,838 23,030
-----------------------------------------------------------
TOTAL EQUITY 222,506 218,698
-----------------------------------------------------------
TOTAL LIABILITIES AND EQUITY 384,846 380,944
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Marilin Hein
CFO
Phone +372 6559 515
E-mail: marilin.hein@eften.ee (mailto:marilin.hein@eften.ee)
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