Market announcement

Title

Baltic Horizon Fund Consolidated Unaudited Interim Results for Q1 2020

Message

Management  Board  of  Northern  Horizon  Capital  AS has approved the unaudited
consolidated  interim financial results of Baltic Horizon Fund (the Fund) for Q1
2020.

Impact of COVID-19 pandemic
At  the beginning of 2020 new  coronavirus (COVID-19) started spreading all over
the world, which has had an impact on businesses and economies, including in the
Baltics.  The  virus  outbreak  has  caused  significant  shifts  in  the Fund's
operating  environment, which will  likely lead to  a negative overall effect on
the Fund's expected 2020 performance.

As  the situation is uncertain  and developing fast the  Fund management team at
this  point is  not yet  able to  assess the  full financial consequences of the
virus  outbreak.  The  results  of  Q1  2020 remained  largely unaffected by the
pandemic  and indicated a  strong performance during  the quarter. A significant
impact  on the Fund's  operating performance will  be visible in  Q2 2020 as the
first effects of the pandemic emerged at the end of March 2020.

In   response  to  the  COVID-19 outbreak,  Northern  Horizon  Capital  AS,  the
Management  Company of the Fund, has taken  assertive action to manage the risks
arising  from the pandemic and to protect the long-term value for the investors.
The  Management Company is focusing on optimizing operating costs and continuing
active  communication with the tenants to  ensure long-term rent collection. The
Fund  has opted to retain approx. EUR 1.8 million of distributable cash flow for
Q1  2020 results  to  strengthen  the  Fund's financial position. The Management
Company  will continue to  actively monitor the  economic impact of the pandemic
and  reassess  future  distribution  levels  depending on the upcoming operating
results.

The  Fund is implementing a number  of relief initiatives focused on alleviating
the financial hardship of the most vulnerable group of tenants, whose operations
were mostly severely affected by the outbreak. The Fund has agreed to grant rent
payment  deferral for a period  of 90 days and waive  all penalties and interest
arising from the rent deferral for the most affected tenants.

Baltic  Horizon Fund  is having  active negotiations  with mainly retail tenants
regarding  rent reductions and waivers during  the quarantine period, which will
have a negative impact on the Fund's performance in Q2 2020. As of 15 May 2020,
the  Fund management has decided on  various discounts for the quarantine period
based on discussions with retail tenants. The Fund assessed the impact of COVID-
19 on  each  tenant's  operating  performance  during  the  lockdown and granted
discounts  to the most affected tenants.  For those affected, the discounts from
the  Fund  side  on  average  are  around 50% considering the government support
measures and may be applicable only up until July 2020.

Distributions to unitholders for Q4 2019 and Q1 2020 Fund results
On  31 January 2020, the Fund declared a cash distribution of EUR 3,175 thousand
(EUR  0.028 per  unit)  to  the  Fund  unitholders  for  Q4  2019 results.  This
represents a 2.16% return on the weighted average Q4 2019 net asset value to its
unitholders.

On 24 April 2020, the Fund declared a cash distribution of EUR 1,701 thousand
(EUR 0.015 per unit) to the Fund unitholders for Q1 2020 results. This
represents a 1.12% return on the weighted average Q1 2020 net asset value to its
unitholders.

Net profit and net rental income
In  Q1 2020, the Group recorded a net profit of EUR 3.4 million, which increased
by  54.3%, compared to a net  profit of EUR 2.2 million  for Q1 2019. Net profit
was  significantly impacted  by the  increase in  net rental  income due  to new
property  acquisitions during  2019. The positive  impact of  an increase in net
rental income was partially offset by an increase in administrative expenses and
net  financing costs. The  increase in net  financing costs arose  from a higher
average  cost of financing. Earnings per unit  for the quarter were EUR 0.03 (Q1
2019: EUR 0.03).

During  the quarter,  the Group  recorded net  rental income  of EUR 5.8 million
against  EUR  3.9 million  in  Q1  2019. The  increase  was achieved through new
acquisitions  that  were  made  following  the  capital  raisings  in  2019. The
acquisition  of the largest  asset in the  portfolio (Galerija Centrs) and North
Star  office building had a significant effect  on the Group's net rental income
growth  in  Q1  2020 as  compared  to  Q1  2019. On an EPRA like-for-like basis,
portfolio  net  rental  income  over  the  year  increased by 2.8% mainly due to
stronger  performance  in  the  Estonian  and  Latvia  markets. The increase was
partially  offset  by  the  weaker  performance  in the Lithuanian market due to
provisions related to the lockdown in the Baltic States.

Portfolio properties in the office segment contributed 49.2% (Q1 2019: 55.1%) of
net  rental  income  in  Q1  2020 followed  by the retail segment with 46.2% (Q1
2019: 38.4%) and the leisure segment with 4.6% (Q1 2019: 6.5%).

Retail  assets located in the central  business districts (Postimaja, Europa and
Galerija  Centrs) accounted for 36.1% of total portfolio net rental income in Q1
2020. Total  net rental  income attributable  to neighbourhood  shopping centres
accounted for 10.1% in Q1 2020.

During  the quarter, investment  properties in Latvia  and Lithuania contributed
39.9% (Q1   2019: 28.0%) and   34.6% (Q1   2019: 36.8%) of   net  rental  income
respectively,  while  investment  properties  in  Estonia  contributed 25.5% (Q1
2019: 35.2%).

Gross Asset Value (GAV)
At  the end  of Q1  2020, the GAV  increased to  EUR 373.3 million  (31 December
2019: EUR 371.7 million) which was a rise of 0.4% over the quarter. The increase
is  mainly  related  to  the  capital  investments  made  into the Meraki office
building  development project. The Fund aims to continue the construction of the
Meraki  office building throughout 2020 once the  extent of the potential impact
of  the COVID-19 pandemic becomes clearer.  The Management Company will continue
to  actively monitor the  economic impact of  the pandemic and ensure sufficient
liquidity levels during the construction period.

Net Asset Value (NAV)
At  the end of Q1 2020, the Fund NAV was EUR 152.5, remaining stable as compared
to  the end of  2019. The increase in  operational performance over the quarter
was  offset by a EUR 3.2 million dividend  distribution to the unitholders and a
negative cash flow hedge reserve movement of EUR 0.2 million. At 31 March 2020,
NAV  per unit stood at EUR  1.3452 (31 December 2019: EUR 1.3451), while NAV per
unit based on EPRA standards was EUR 1.4349 (31 December 2019: EUR 1.4333).

Investment properties
The Baltic Horizon Fund portfolio consists of 15 cash flow investment properties
in  the Baltic  capitals and  an investment  property under  construction on the
Meraki  land plot.  At the  end of  Q1 2020, the  appraised value  of the Fund's
portfolio  was EUR  360.3 million (31  December 2019: EUR 358.9 million). During
the  quarter,  the  Group  invested  EUR  0.1 million  in  the existing property
portfolio and an additional EUR 1.3 million in the Meraki development project.

Interest bearing loans and bonds
Interest  bearing loans and bonds remained at  a similar level as at 31 December
2019 amounting  to EUR 205.8 million. Outstanding  bank loans decreased slightly
due  to regular bank  loan amortization. Annual  loan amortization forms 0.2% of
total debt outstanding.

Cash flow
Cash  inflow from  core operating  activities for  Q1 2020 amounted  to EUR 4.3
million  (Q1 2019:  cash inflow of EUR 3.0 million). Cash outflow from investing
activities  was EUR 0.1 million (Q1 2019: cash  outflow of EUR 17.9 million) due
to subsequent capital expenditure on existing portfolio properties. Cash outflow
from  financing activities was EUR 4.6 million (Q1 2019: cash inflow of EUR 5.6
million).  During the  quarter, the  Fund made  a cash  distribution of EUR 3.2
million  and paid  regular interest  on bank  loans and  bonds. At the end of Q1
2020, the  Fund had a sufficient  amount of cash (EUR  9.4 million) to cover its
liquidity needs amid the COVID-19 pandemic.

Key earnings figures

 EUR '000                                      Q1 2020       Q1 2019 Change (%)
-------------------------------------------------------------------------------
 Net rental income                               5,772         3,916      47.4%
-------------------------------------------------------------------------------
 Administrative
 expenses                                        (889)         (709)      25.4%
-------------------------------------------------------------------------------
 Other operating income                              8             6      33.3%
-------------------------------------------------------------------------------
 Valuation gains (losses) on investment
 properties                                        (4)             -          -
-------------------------------------------------------------------------------
 Operating profit                                4,887         3,213      52.1%
-------------------------------------------------------------------------------
 Net financing
 costs                                         (1,376)         (897)      53.4%
-------------------------------------------------------------------------------
 Profit before tax                               3,511         2,316      51.6%
-------------------------------------------------------------------------------
 Income tax                                      (157)         (143)       9.8%
-------------------------------------------------------------------------------
 Net profit for the
 period                                          3,354         2,173      54.3%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Weighted average number of units
 outstanding (units)                       113,387,525 78,496,831(1)      44.4%
-------------------------------------------------------------------------------
 Earnings per unit
 (EUR)                                            0.03          0.03          -
-------------------------------------------------------------------------------

Key financial position figures

 EUR '000                                  31.03.2020  31.12.2019 Change (%)
----------------------------------------------------------------------------
 Investment properties in use                 356,666     356,575       0.0%
----------------------------------------------------------------------------
 Investment property under
 construction                                   3,669       2,367      55.0%
----------------------------------------------------------------------------
 Gross asset value (GAV)                      373,345     371,734       0.4%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
 Interest bearing loans and
 bonds                                        205,765     205,827     (0.0%)
----------------------------------------------------------------------------
 Total
 liabilities                                  220,813     219,216       0.7%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
 Net asset value (NAV)                        152,532     152,518       0.0%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
 Number of units outstanding
 (units)                                  113,387,525 113,387,525          -
----------------------------------------------------------------------------
 IFRS Net asset value (IFRS NAV) per
 unit (EUR)                                    1.3452      1.3451       0.0%
----------------------------------------------------------------------------
 EPRA Net asset value (EPRA NAV) per
 unit (EUR)                                    1.4349      1.4333       0.1%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
 Loan-to-Value ratio (%)                        57.1%       57.3%          -
----------------------------------------------------------------------------
 Average effective interest rate
 (%)                                             2.6%        2.6%          -
----------------------------------------------------------------------------

 1. The number of units excludes 255,969 units acquired by the Fund as part of
    the unit buy-back program.

Property performance

During Q1 2020, the average actual occupancy of the portfolio was 97.6% (Q4
2019: 98.0%). Taking into account all rental guarantees, the effective occupancy
rate was 97.6% (Q4 2019: 98.0%). The occupancy rate as of 31 March 2020 was
97.4% (31 December 2019: 98.3%). The average direct property yield during Q1
2020 was 6.7% (Q4 2019: 6.6%). The net initial yield for the whole portfolio for
Q1 2020 was 6.5% (Q4 2019: 6.4%). The increase in property yields is mainly
related to the stronger like-for-like performance of the Estonian properties.
The average rental rate for the whole portfolio for Q1 2020 was EUR 13.5 per sq.
m.

                                Fair              Direct        Net   Occupancy
 Property name   Sector     value(1)      NLA   property    initial    rate for
                          (EUR '000) (sq. m.)   yield(2)   yield(3)     Q1 2020
-------------------------------------------------------------------------------
 Vilnius,
 Lithuania
-------------------------------------------------------------------------------
 Duetto I        Office       16,460    8,587       7.5%       6.8%   100.0%(4)
-------------------------------------------------------------------------------
 Duetto II       Office       18,935    8,674       7.3%       7.1%   100.0%(4)
-------------------------------------------------------------------------------
 Europa SC       Retail       40,721   16,856       6.2%       5.7%       95.1%
-------------------------------------------------------------------------------
 Domus Pro       Retail
 Retail Park                  16,670   11,247       7.7%       7.2%       97.5%
-------------------------------------------------------------------------------
 Domus Pro       Office
 Office                        7,740    4,831       8.7%       7.3%      100.0%
-------------------------------------------------------------------------------
 North Star      Office       20,104   10,550       7.0%       7.3%      100.0%
-------------------------------------------------------------------------------
 Meraki
 Development                   3,669        -          -         -            -
-------------------------------------------------------------------------------
 Total Vilnius               124,299   60,745       7.1%       6.6%       98.2%
-------------------------------------------------------------------------------
 Riga, Latvia
-------------------------------------------------------------------------------
 Upmalas Biroji  Office
 BC                           24,209   10,458       7.5%       7.4%      100.0%
-------------------------------------------------------------------------------
 Vainodes I      Office       20,902    8,052       6.8%       6.9%      100.0%
-------------------------------------------------------------------------------
 LNK Centre      Office       17,007    7,453       6.4%       6.5%      100.0%
-------------------------------------------------------------------------------
 Sky SC          Retail        4,851    3,254       7.7%       8.0%       98.4%
-------------------------------------------------------------------------------
 Galerija Centrs Retail       76,408   20,022       6.0%       5.9%       93.0%
-------------------------------------------------------------------------------
 Total Riga                  143,377   49,239       6.5%       6.4%       97.0%
-------------------------------------------------------------------------------
 Tallinn,
 Estonia
-------------------------------------------------------------------------------
 Postimaja & CC  Retail
 Plaza complex                32,250    9,145       4.5%       4.8%       95.6%
-------------------------------------------------------------------------------
 Postimaja & CC  Leisure
 Plaza complex                15,150    8,664       9.0%       7.1%      100.0%
-------------------------------------------------------------------------------
 G4S             Office
 Headquarters                 17,550    9,179       7.8%       6.9%      100.0%
-------------------------------------------------------------------------------
 Lincona         Office       17,820   10,871       8.2%       7.3%      100.0%
-------------------------------------------------------------------------------
 Pirita SC       Retail        9,889    5,508       6.0%       7.5%       86.5%
-------------------------------------------------------------------------------
 Total Tallinn                92,659   43,367       6.5%       6.3%       97.3%
-------------------------------------------------------------------------------
 Total portfolio             360,335  153,351       6.7%       6.5%       97.6%
-------------------------------------------------------------------------------

 1. Based on the latest valuation as at 31 December 2019, subsequent capital
    expenditure 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.
 4. Effective occupancy rate is 100% due to a rental guarantee.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

 EUR '000                           01.01.2020-31.03.2020 01.01.2019-31.03.2019
-------------------------------------------------------------------------------


 Rental income                                      6,209                 4,151

 Service charge income                              1,356                   763

 Cost of rental activities                        (1,793)                 (998)
-------------------------------------------------------------------------------
 Net rental income                                  5,772                 3,916
-------------------------------------------------------------------------------


 Administrative expenses                            (889)                 (709)

 Other operating income                                 8                     6

 Valuation   losses  on  investment
 properties                                           (4)                     -
-------------------------------------------------------------------------------
 Operating profit                                   4,887                 3,213
-------------------------------------------------------------------------------


 Financial income                                       1                     2

 Financial expenses                               (1,377)                 (899)
-------------------------------------------------------------------------------
 Net financing costs                              (1,376)                 (897)


-------------------------------------------------------------------------------
 Profit before tax                                  3,511                 2,316

 Income tax charge                                  (157)                 (143)
-------------------------------------------------------------------------------
 Profit for the period                              3,354                 2,173
-------------------------------------------------------------------------------


 Other comprehensive income that is
 or  may be  reclassified to profit
 or loss in subsequent periods

 Net  gains  (losses)  on cash flow
 hedges                                             (178)                 (556)

 Income  tax relating  to net gains
 (losses) on cash flow hedges                          13                    36
-------------------------------------------------------------------------------
 Other     comprehensive     income
 (expense),  net of tax, that is or
 may  be reclassified  to profit or
 loss in subsequent periods                         (165)                 (520)


-------------------------------------------------------------------------------
 Total comprehensive income for the
 period, net of tax                                 3,189                 1,653
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Basic  and  diluted  earnings  per
 unit (EUR)                                          0.03                  0.03
-------------------------------------------------------------------------------

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

  EUR '000                                 31.03.2020   31.12.2019
-------------------------------------------------------------------


  Non-current assets

  Investment properties                       356,666      356,575

  Investment property under construction        3,669        2,367

  Derivative financial instruments                 29           73

  Other non-current assets                         55           54
-------------------------------------------------------------------
  Total non-current assets                    360,419      359,069
-------------------------------------------------------------------


  Current assets

  Trade and other receivables                   2,291        1,794

  Prepayments                                     358          301

  Other current assets                            893          734

  Cash and cash equivalents                     9,384        9,836
-------------------------------------------------------------------
  Total current assets                         12,926       12,665
-------------------------------------------------------------------
  Total assets                                373,345      371,734
-------------------------------------------------------------------


  Equity

  Paid in capital                             138,064      138,064

  Cash flow hedge reserve                     (1,721)      (1,556)

  Retained earnings                            16,189       16,010
-------------------------------------------------------------------
  Total equity                                152,532      152,518
-------------------------------------------------------------------


  Non-current liabilities

  Interest bearing loans and borrowings       205,661      205,718

  Deferred tax liabilities                      6,343        6,199

  Derivative financial instruments              1,862        1,728

  Other non-current liabilities                 1,327        1,298
-------------------------------------------------------------------
  Total non-current liabilities               215,193      214,943
-------------------------------------------------------------------


  Current liabilities

  Interest bearing loans and borrowings           405          414

  Trade and other payables                      4,546        3,171

  Income tax payable                                -            8

  Other current liabilities                       669          680
-------------------------------------------------------------------
  Total current liabilities                     5,620        4,273
-------------------------------------------------------------------
  Total liabilities                           220,813      219,216
-------------------------------------------------------------------
  Total equity and liabilities                373,345      371,734
-------------------------------------------------------------------

For more information, please contact:

Tarmo Karotam
Baltic Horizon Fund manager
E-mail [email protected]
www.baltichorizon.com

The  Fund is a registered contractual public closed-end real estate fund that is
managed  by Alternative Investment Fund  Manager license holder Northern Horizon
Capital  AS. Both  the Fund  and the  Management Company  are supervised  by the
Estonian Financial Supervision Authority.

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
23:05 EET on 15 May 2020.