Gross Asset Value (GAV)
In Q2 2019, the GAV increased from EUR 269.5 million to EUR 344.9 million
compared to the end of Q1 2019. The increase is mainly related to a new
acquisition during the quarter and the increase in cash as a result of the
private placements. The Fund completed the acquisition of the Galerija Centrs
Shopping Centre on 13 June 2019 and thus has deployed most of the new capital
raised in April and May 2019. The value of investment properties increased to
EUR 336.3 million after the acquisition of the Galerija Centrs Shopping Centre
and mid-year valuations.
Net Asset Value (NAV)
In Q2 2019, the Fund NAV increased from EUR 109.3 million to EUR 131.1 million
compared to the end of Q1 2019. The Fund NAV was positively affected by the
Fund's operational performance over the quarter and capital raisings in the
amount of EUR 24.5 million (net equity) through private placements in April and
May. However, this was offset by a EUR 2.5 million cash distribution to
unitholders (EUR 0.025 per unit) and a negative cash flow hedge reserve movement
during the quarter.
Net Rental Income and Net Profit
In Q2 2019, the Fund earned a net profit of EUR 0.1 million (EUR 2.6 million
during Q2 2018). The decrease in the net result was mainly attributable to
investment property revaluation losses. The fair values of investment properties
in the Fund's portfolio dropped slightly due to downward adjustments in the EU
and Baltic consumer price index levels for the coming years, which are used in
valuation calculations. During the quarter, the Group recognised revaluation
losses of EUR 2.4 million. In Q2 2019, the Fund recorded a EUR 4.3 million net
rental income (EUR 3.6 million in Q2 2018). Growth in net rental income was
positively affected by new property acquisitions at the end of 2018 and the
beginning of 2019 (LNK Centre office building, Duetto II office building, and
Galerija Centrs shopping centre).
Cash Distributions (dividends)
On 2 August 2019, the Fund declared a EUR 2.62 million quarterly cash
distribution to investors, which represents a EUR 0.026 distribution per unit
for the Q2 2019 results (EUR 2.45 million or EUR 0.025 per unit for Q1 2019).
Key figures
Euro '000 Q2 2019 Q2 2018 Change (%)
-------------------------------------------------------------------------------
Net rental income 4,256 3,626 17.4%
Valuation gains (losses) on investment
properties (2,439) 480 (608.1%)
Operating profit 1,000 3,524 (71.6%)
Net financing costs (1,076) (714) 50.7%
Profit (loss) before tax (76) 2,810 (102.7%)
Net profit for the period 144 2,576 (94.4%)
Weighted average number of units outstanding 94,949,766 79,157,094 20.0%
-------------------------------------------------------------------------------
Earnings per unit (EUR) - 0.03 (100.0%)
-------------------------------------------------------------------------------
Euro '000 30.06.2019 31.12.2018 Change (%)
-------------------------------------------------------------------------
Investment property in use 336,310 245,160 37.2%
Gross asset value (GAV) 344,886 260,878 32.2%
Interest bearing loans 197,001 140,507 40.2%
Total liabilities 213,804 151,073 41.5%
Net asset value (NAV) 131,082 109,805 19.4%
-------------------------------------------------------------------------
Number of units outstanding 97,964,044 78,496,831(1) 24.8%
Net asset value (NAV) per unit (EUR) 1.3381 1.3988 (4.3%)
Loan-to-Value ratio (LTV) 58.6% 57.3% -
Average effective interest rate 2.6% 2.4% -
-------------------------------------------------------------------------
1. The number of units excludes 255,969 units acquired by the Fund and
cancelled in February 2019 as part of the unit buy-back program.
Investment properties PERFORMANCE in Q2 2019
During Q2 2019, the average actual occupancy of the portfolio was 95.4% (Q1
2019: 96.6%). When all rental guarantees are considered, the effective occupancy
rate is 96.7% (Q1 2019: 97.3%). The average direct property yield during Q2
2019 was 6.8% (Q1 2019: 6.7%). The net initial yield for the whole portfolio for
Q2 2019 was 6.5% (Q1 2019: 6.3%).
Overview of the Fund's investment properties as of 30.06.2019
-------------------------------------------------------------------------------
Market Direct Net Occupancy
Property name value(1) property initial rate for Q2
Sector Euro '000 NLA yield(2) yield(3) 2019
-------------------------------------------------------------------------------
Vilnius,
Lithuania
Duetto I Office 16,020 8,498 7.7% 7.1% 98.7%(4)
Duetto II Office 17,900 8,636 7.1% 7.2% 100.0%(4)
Europa SC Retail 40,360 16,856 6.8% 6.1% 95.1%
Domus Pro
Retail Park Retail 16,510 11,247 7.4% 6.7% 98.1%
Domus Pro
Office Office 7,530 4,831 8.7% 7.5% 100.0%
Meraki Land 1,700 - - - -
-------------------------------------------------------------------------------
Total Vilnius 100,020 50,068 7.2% 6.7% 97.7%
-------------------------------------------------------------------------------
Riga, Latvia
Upmalas Biroji
BC Office 25,220 10,458 7.2% 6.7% 100.0%
Vainodes I Office 21,490 8,052 6.9% 6.9% 100.0%
LNK Centre Office 16,830 7,453 6.3% 6.2% 100.0%
Sky SC Retail 5,370 3,254 8.4% 7.8% 99.4%
Galerija Centrs Retail 75,840 23,862 6.9% 6.8% 95.8%
-------------------------------------------------------------------------------
Total Riga 144,750 53,079 6.9% 6.7% 99.3%
-------------------------------------------------------------------------------
Tallinn,
Estonia
Postimaja & CC
Plaza Retail 32,140 9,145 4.2% 4.5% 90.6%
Postimaja & CC
Plaza Leisure 14,980 8,664 8.5% 6.9% 100.0%
G4S
Headquarters Office 17,130 9,179 6.4% 5.8% 87.0%
Lincona Office 17,480 10,871 8.1% 7.4% 98.3%
Pirita SC Retail 9,810 5,508 6.6%(5) 8.1%(5) 91.1%
-------------------------------------------------------------------------------
Total Tallinn 91,540 43,367 6.1% 6.0% 93.7%
-------------------------------------------------------------------------------
Total portfolio 336,310 146,514 6.8% 6.5% 96.7%
-------------------------------------------------------------------------------
1. Based on the latest valuation as at 30 June 2018.
2. Direct property yield (DPY) is calculated by dividing NOI by the acquisition
value and subsequent capital expenditure of the property.
3. The net initial yield (NIY) is calculated by dividing NOI by the market
value of the property.
4. Duetto II effective occupancy rate is 100% due to a rental guarantee. The
rental guarantee provided to Duetto I expired in March.
5. In Q2 2019, the actual annualized average direct property yield of the
Pirita SC was negative at 1.4%. The actual net initial yield during Q2 2019
was negative at 1.8%. Actual yields were negative due to a partial write-off
of a rental guarantee accrual (EUR 153 thousand) and impairment of trade
receivables (EUR 91 thousand) during Q2 2019. The impairment and write-off
were excluded from yield calculations as they are considered a one-off
event.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Euro '000 01.04.2019-30.06.2019 01.04.2018-30.06.2018 01.01.2019-30.06.2019 01.01.2018-30.06.2018
-------------------------------------------------------------------------------------------------------
Rental income 4,646 3,958 8,797 7,564
Service charge
income 889 608 1,652 1,193
Cost of rental
activities (1,279) (940) (2,277) (1,722)
-------------------------------------------------------------------------------------------------------
Net rental
income 4,256 3,626 8,172 7,035
-------------------------------------------------------------------------------------------------------
Administrative
expenses (817) (621) (1,526) (1,261)
Other
operating
income - 39 6 45
Valuation
gains (losses)
on investment
properties (2,439) 480 (2,439) 480
-------------------------------------------------------------------------------------------------------
Operating
profit 1,000 3,524 4,213 6,299
-------------------------------------------------------------------------------------------------------
Financial
income 1 2 3 4
Financial
expenses (1,077) (716) (1,976) (1,205)
-------------------------------------------------------------------------------------------------------
Net financing
costs (1,076) (714) (1,973) (1,201)
-------------------------------------------------------------------------------------------------------
Profit (loss)
before tax (76) 2,810 2,240 5,098
Income tax
charge 220 (234) 77 (838)
-------------------------------------------------------------------------------------------------------
Profit for the
period 144 2,576 2,317 4,260
-------------------------------------------------------------------------------------------------------
Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods
Net gains
(losses) on
cash flow
hedges (536) (315) (1,092) (630)
Recognition of
initial
interest rate
cap costs - (33) - (33)
Income tax
relating to
net gains
(losses) on
cash flow
hedges 39 34 75 79
-------------------------------------------------------------------------------------------------------
Other
comprehensive
income
(expense), net
of tax, that
is or may be
reclassified
to profit or
loss in
subsequent
periods (497) (314) (1,017) (584)
-------------------------------------------------------------------------------------------------------
Total
comprehensive
income
(expense) for
the period,
net of tax (353) 2,262 1,300 3,676
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Basic and
diluted
earnings per
unit (Euro) 0.00 0.03 0.03 0.05
-------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Euro '000 30.06.2019 31.12.2018
------------------------------------------------------------------
Non-current assets
Investment properties 336,310 245,160
Derivative financial instruments 33 9
Other non-current assets 95 596
------------------------------------------------------------------
Total non-current assets 336,438 245,765
------------------------------------------------------------------
Current assets
Trade and other receivables 2,301 2,229
Prepayments 339 154
Other current assets 856 505
Cash and cash equivalents 4,952 12,225
------------------------------------------------------------------
Total current assets 8,448 15,113
------------------------------------------------------------------
Total assets 344,886 260,878
------------------------------------------------------------------
Equity
Paid in capital 117,883 93,673
Own units - (335)
Cash flow hedge reserve (2,022) (1,005)
Retained earnings 15,221 17,472
------------------------------------------------------------------
Total equity 131,082 109,805
------------------------------------------------------------------
Non-current liabilities
Interest bearing loans and borrowings 196,613 140,401
Deferred tax liabilities 5,674 5,844
Derivative financial instruments 2,186 1,069
Other non-current liabilities 1,271 905
------------------------------------------------------------------
Total non-current liabilities 205,744 148,219
------------------------------------------------------------------
Current liabilities
Interest bearing loans and borrowings 388 106
Trade and other payables 6,710 2,397
Income tax payable 1 -
Other current liabilities 961 351
------------------------------------------------------------------
Total current liabilities 8,060 2,854
------------------------------------------------------------------
Total liabilities 213,804 151,073
------------------------------------------------------------------
Total equity and liabilities 344,886 260,878
------------------------------------------------------------------
For additional information please contact:
Tarmo Karotam
Baltic Horizon Fund manager
E-mail tarmo.karotam@nh-cap.com
www.baltichorizon.com
Baltic Horizon Fund is a registered contractual public closed-end real estate
fund managed by Alternative Investment Fund Manager license holder Northern
Horizon Capital AS.
Distribution: Nasdaq Tallinn, Nasdaq Stockholm, GlobeNewswire,
www.baltichorizon.com
This announcement contains information that the Management Company is obliged to
disclose pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the above distributors, at
14:00 EET on 16 August 2019.
|