Gross Asset Value (GAV)
In Q4 2019, the GAV increased from EUR 345.3 million to EUR 371.7 million
compared to the end of Q3 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 North Star
Business Centre on 11 October 2019 and thus has deployed the new capital raised
in October 2019. The value of investment properties in use increased to EUR
356.6 million after the acquisition of the North Star Business Centre and year-
end valuations.
Net Asset Value (NAV)
In Q4 2019, the Fund NAV increased from EUR 135.2 million to EUR 152.5 million
compared to the end of Q3 2019. The Fund NAV was positively affected by the
Fund's operational performance and a positive cash flow hedge reserve movement
during the quarter. The Fund raised additional equity in the amount of EUR 16.2
million (net equity) through private placements in October. However, this was
offset by a EUR 3.06 million cash distribution to unitholders (EUR 0.027 per
unit).
Net Rental Income and Net Profit
In Q4 2019, the Fund earned a net profit of EUR 3.4 million (EUR 3.5 million
during Q4 2018). In Q4 2019, the Fund recorded a EUR 5.6 million net rental
income (EUR 3.9 million in Q4 2018). Growth in net rental income was positively
affected by new property acquisitions in 2019 (Duetto II office building,
Galerija Centrs shopping centre and North Star Business Centre). Compared to Q4
2018, the Fund's net profit slightly decreased mainly due to lower fair value
gain resulting from year-end valuations. During Q4 2019, the Fund recorded a
fair value gain of EUR 0.4 million whereas the fair value gain in Q4 2018 was
EUR 1.5 million.
Cash Distributions (dividends)
On 31 January 2020, the Fund declared a EUR 3.18 million quarterly cash
distribution to investors, which represents a EUR 0.028 distribution per unit
for the Q4 2019 results (EUR 3.06 million or EUR 0.027 per unit for Q3 2019). In
total, the Fund has paid out EUR 11.31 million from the operating results of
2019. The pay-out also represents a 8.0% rolling distribution yield based on the
closing unit price of the last day of Q4 2019 on Nasdaq Tallinn stock exchange.
Quarterly key figures
Euro '000 Q4 2019 Q4 2018 Change (%)
-------------------------------------------------------------------------------
Net rental income 5,635 3,929 43.4%
Valuations gains on investment properties 375 1,534 (75.6%)
Operating profit 5,167 4,685 10.3%
Net financing costs (1,401) (806) 73.8%
Profit before tax 3,766 3,879 (2.9%)
Net profit for the period 3,415 3,535 (3.4%)
Weighted average number of units
outstanding 112,686,139 78,637,645(1) 43.3%
-------------------------------------------------------------------------------
Earnings per unit (EUR) 0.03 0.04 (25.0%)
-------------------------------------------------------------------------------
Euro '000 31.12.2019 31.12.2018 Change (%)
--------------------------------------------------------------------------
Investment property in use 356,575 245,160 45.4%
Gross asset value (GAV) 371,734 260,878 42.5%
Interest bearing loans 205,827 140,507 46.5%
Total liabilities 219,216 151,073 45.1%
Net asset value (NAV) 152,518 109,805 38.9%
--------------------------------------------------------------------------
Number of units outstanding 113,387,525 78,496,831(1) 44.4%
Net asset value (NAV) per unit (EUR) 1.3451 1.3988 (3.8%)
Loan-to-Value ratio (LTV) 57.7% 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 Q4 2019
During Q4 2019, the average actual occupancy of the portfolio was 98.0% (Q3
2019: 97.3%). When all rental
guarantees are considered, the effective occupancy rate is 98.0% (Q3
2019: 97.7%). The average direct property yield during Q4 2019 was 6.6% (Q3
2019: 6.7%). The net initial yield for the whole portfolio for Q4 2019 was 6.4%
(Q3 2019: 6.5%).
Overview of the Fund's investment properties as of 31.12.2019
-------------------------------------------------------------------------------
Fair Direct Net Occupancy
Property name value(1) property initial rate for Q4
Sector Euro '000 NLA yield(2) yield(3) 2019
-------------------------------------------------------------------------------
Vilnius,
Lithuania
Duetto I Office 16,460 8,586 7.7% 7.1% 100.0%
Duetto II Office 18,935 8,674 7.1% 7.1% 100.0%
Europa SC Retail 40,711 16,856 6.2% 5.7% 96.7%
Domus Pro
Retail Park Retail 16,670 11,247 6.8% 6.4% 97.5%
Domus Pro
Office Office 7,740 4,831 8.7% 7.4% 100.0%
North Star Office 20,092 10,550 6.8% 6.9% 97.9%
Meraki Land 2,367 - - -
-------------------------------------------------------------------------------
Total Vilnius 122,975 60,744 6.9% 6.5% 98.3%
-------------------------------------------------------------------------------
Riga, Latvia
Upmalas Biroji
BC Office 24,198 10,458 7.6% 7.2% 100.0%
Vainodes I Office 20,890 8,052 6.8% 6.9% 100.0%
LNK Centre Office 17,000 7,453 6.4% 6.5% 100.0%
Sky SC Retail 4,850 3,254 8.2% 8.0% 99.4%
Galerija Centrs Retail 76,409 20,022 6.2% 6.1% 96.0%
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Total Riga 143,347 49,239 6.6% 6.5% 98.3%
-------------------------------------------------------------------------------
Tallinn,
Estonia
Postimaja & CC
Plaza Retail 32,250 9,145 4.2% 4.5% 92.4%
Postimaja & CC
Plaza Leisure 15,150 8,664 9.0% 7.1% 100.0%
G4S
Headquarters Office 17,550 9,179 7.7% 6.9% 100.0%
Lincona Office 17,820 10,871 8.0% 7.1% 100.0%
Pirita SC Retail 9,850 5,508 4.2% 5.3% 90.7%
-------------------------------------------------------------------------------
Total Tallinn 92,620 43,367 6.1% 6.0% 97.2%
-------------------------------------------------------------------------------
Total portfolio 358,942 153,350 6.6% 6.4% 98.0%
-------------------------------------------------------------------------------
1. Based on the latest valuation as at 31 December 2019 and recognised right-
of-use assets.
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.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Euro '000 01.10.2019-31.12.2019 01.10.2018-31.12.2018 01.01.2019-31.12.2019 01.01.2018-31.12.2018
-------------------------------------------------------------------------------------------------------
Rental income 6,197 4,284 20,776 15,860
Service charge
income 1,397 948 4,525 2,760
Cost of rental
activities (1,959) (1,303) (6,082) (3,816)
-------------------------------------------------------------------------------------------------------
Net rental
income 5,635 3,929 19,219 14,804
-------------------------------------------------------------------------------------------------------
Administrative
expenses (846) (804) (3,251) (2,813)
Other
operating
income 3 26 26 74
Valuation
gains (losses)
on investment
properties 375 1,534 (2,064) 2,014
-------------------------------------------------------------------------------------------------------
Operating
profit 5,167 4,685 13,930 14,079
-------------------------------------------------------------------------------------------------------
Financial
income 1 2 5 8
Financial
expenses (1,402) (808) (4,718) (2,789)
-------------------------------------------------------------------------------------------------------
Net financing
costs (1,401) (806) (4,713) (2,781)
-------------------------------------------------------------------------------------------------------
Profit before
tax 3,766 3,879 9,217 11,298
Income tax
charge (351) (344) (426) (1,308)
-------------------------------------------------------------------------------------------------------
Profit for the
period 3,415 3,535 8,791 9,990
-------------------------------------------------------------------------------------------------------
Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods
Net gains
(losses) on
cash flow
hedges 802 (588) (595) (1,013)
Recognition of
initial
interest rate
cap costs - - (33)
Income tax
relating to
net gains
(losses) on
cash flow
hedges (48) 55 44 97
-------------------------------------------------------------------------------------------------------
Other
comprehensive
income
(expense), net
of tax, that
is or may be
reclassified
to profit or
loss in
subsequent
periods 754 (533) (551) (949)
-------------------------------------------------------------------------------------------------------
Total
comprehensive
income for the
period, net of
tax 4,169 3,002 8,240 9,041
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Basic and
diluted
earnings per
unit (Euro) 0.03 0.04 0.09 0.13
-------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Euro '000 31.12.2019 31.12.2018
-------------------------------------------------------------------
Non-current assets
Investment properties 356,575 245,160
Investment property under construction 2,367 -
Derivative financial instruments 73 9
Other non-current assets 54 596
-------------------------------------------------------------------
Total non-current assets 359,069 245,765
-------------------------------------------------------------------
Current assets
Trade and other receivables 1,794 2,229
Prepayments 301 154
Other current assets 734 505
Cash and cash equivalents 9,836 12,225
-------------------------------------------------------------------
Total current assets 12,665 15,113
-------------------------------------------------------------------
Total assets 371,734 260,878
-------------------------------------------------------------------
Equity
Paid in capital 138,064 93,673
Own units - (335)
Cash flow hedge reserve (1,556) (1,005)
Retained earnings 16,010 17,472
-------------------------------------------------------------------
Total equity 152,518 109,805
-------------------------------------------------------------------
Non-current liabilities
Interest bearing loans and borrowings 205,718 140,401
Deferred tax liabilities 6,199 5,844
Derivative financial instruments 1,728 1,069
Other non-current liabilities 1,298 905
-------------------------------------------------------------------
Total non-current liabilities 214,943 148,219
-------------------------------------------------------------------
Current liabilities
Interest bearing loans and borrowings 414 106
Trade and other payables 3,171 2,397
Income tax payable 8 -
Other current liabilities 680 351
-------------------------------------------------------------------
Total current liabilities 4,273 2,854
-------------------------------------------------------------------
Total liabilities 219,216 151,073
-------------------------------------------------------------------
Total equity and liabilities 371,734 260,878
-------------------------------------------------------------------
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
15:20 EET on 14 February 2020.
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