Börsiteade

Pealkiri

Baltic Horizon Fund Consolidated Unaudited Results for Q1 2021

Teade

Management  Board  of  Northern  Horizon  Capital  AS has approved the unaudited
consolidated  interim financial statements of Baltic Horizon Fund (the Fund) for
the three months of 2021.

Property management tender
In  February  2021, the  Fund  started  an  international  tender  for  property
management and accounting services across the whole portfolio. The international
competition was announced in accordance with the Fund's operating policies which
states  that the property managers are selected  every three years. The Fund has
received  offers  from  top  international  and  local  companies and intends to
announce  the winner(s) of the tender and future service provider(s) in May this
year.

Europa SC reconstruction
At  the beginning of  2021, the Fund has  announced intentions to invest approx.
EUR  5 million in the  reconstruction of Europa  SC during 2021 with  the aim of
creating  a food court  and upgrading interior  design. The shopping centre will
remain open throughout the whole reconstruction period.

Postimaja and CC Plaza complex expansion
In  Q1 2021, the Fund announced intentions to invest up to EUR 20 million in the
Postimaja  and  CC  Plaza  complex  expansion  during  2021-2024 with the aim of
building new retail and office premises in the joined buildings.

S&P affirms credit rating
On  12 April 2021, S&P  Global Ratings  affirmed Baltic  Horizon Fund "MM3" mid-
market  rating  despite  the  pandemic.  The indicative corresponding rating for
"MM3" on the global rating scale is "BB+/ BB". The full report of the S&P Global
Ratings analysis can be found on the S&P Global Ratings website.

Impact of COVID-19 pandemic
At  the beginning  of 2020, a  new coronavirus  (COVID-19) started spreading all
over  the world,  which has  had a  strong impact  on businesses  and economies,
including  in the Baltics.  The virus outbreak  has caused significant shifts in
the Fund's operating environment, which has had a negative overall impact on the
Fund's performance in 2020 and 2021.

At  the end of 2020, the Baltic countries  entered the second round of lockdowns
and  heavy government  restrictions for  residents and  businesses to  fight the
spread  of  the  COVID-19 virus.  Shopping  centres  were  forced to close for a
limited period except for essential retail shops (groceries, pharmacies). At the
date of release of this report, the situation is slowly stabilizing in all three
countries.  As of 19 April 2021, Lithuania  has lifted restrictions for shopping
centres,  while Latvia and Estonia are expected  to follow during the first half
of Q2 2021.

The  operating results of Q1 2021 were affected by the COVID-19 lockdown effects
on the tenants' financial performance and the relief measures taken to deal with
the  pandemic. However, broad diversification of  the portfolio should allow the
Fund to limit the COVID-19 impacts and maintain healthy consolidated operational
performance  throughout the year. The Fund's operational performance is expected
to recover once heavy restrictions are lifted in all Baltic countries.

The  Fund has opted to retain approx. EUR 5.1 million of distributable cash flow
from  the  results  to  strengthen  the  its  financial position. The Management
Company  believes that it is in the best  interest of the investors and the Fund
to  reduce its quarterly  cash distributions during  the outbreak of COVID-19 in
order  to protect and  strengthen the Fund's  financial position. The management
team  will continue to actively monitor the  economic impact of the pandemic and
reassess future distribution levels depending on the upcoming operating results.

In  summary, the COVID virus induced lockdown in the Baltics has impacted mainly
Baltic  Horizon's  centrally  located  retail  and entertainment centres. Retail
assets located in the central business districts (Postimaja, Europa and Galerija
Centrs) accounted for 19.1% of total portfolio NOI in Q1 2021.

Distributions to unitholders for Q4 2020 and Q1 2021 Fund results
On   4 February  2021, due  to  introduced  restrictions  and  increased  market
uncertainty  the Fund applied  a more conservative  approach and declared a cash
distribution  of EUR 1,316 thousand (EUR 0.011 per unit) to the Fund unitholders
for  Q4 2020 results. This represents a  0.93% return on the weighted average Q4
2020 net asset value to its unitholders.

On   29 April   2021, due   to  introduced  restrictions  and  increased  market
uncertainty  the Fund applied  a more conservative  approach and declared a cash
distribution  of EUR 1,316 thousand (EUR 0.011 per unit) to the Fund unitholders
for  Q1 2021 results. This represents a  0.96% return on the weighted average Q1
2021 net asset value to its unitholders.

With  reduced  payouts  over  2020 and  2021 in  the  light of prevailing market
uncertainty,  the Fund has opted to retain EUR 5.1 million of distributable cash
flow.  The Management Company of the Fund  will continue to actively monitor the
economic  impact  of  the  pandemic  and  reassess  future  distribution  levels
depending on the upcoming operating results.

Dividend capacity calculation

 EUR '000                               Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
-------------------------------------------------------------------------------
 (+) Net rental income                    5,772   4,618   4,799   4,745   4,173
-------------------------------------------------------------------------------
 (-) Fund administrative expenses         (889)   (634)   (682)   (713)   (745)
-------------------------------------------------------------------------------
 (-) External interest expenses         (1,331) (1,327) (1,327) (1,362) (1,346)
-------------------------------------------------------------------------------
 (-) CAPEX expenditure(1)                  (95)    (97)   (230)   (131)    (79)
-------------------------------------------------------------------------------
 (+) Added back listing related
 expenses                                    39      29     114      85       -
-------------------------------------------------------------------------------
 (+) Added back acquisition related
 expenses                                     -       -       -      26      31
-------------------------------------------------------------------------------
 Generated net cash flow (GNCF)           3,496   2,589   2,674   2,650   2,034
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 GNCF per weighted unit (EUR)             0.031   0.023   0.024   0.022   0.017
-------------------------------------------------------------------------------
 12-months rolling GNCF yield(2
 )(%)                                     11.5%    9.6%    9.4%    8.6%    7.4%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Dividends declared for the period        1,701   1,701   3,111   1,316   1,316
-------------------------------------------------------------------------------
 Dividends declared per unit(3
 )(EUR)                                   0.015   0.015   0.026   0.011   0.011
-------------------------------------------------------------------------------
 12-months rolling dividend
 yield(2 )(%)                              9.6%    7.2%    7.5%    5.8%    5.4%
-------------------------------------------------------------------------------


 1. The table provides actual capital expenditures for the quarter. Future
    dividend distributions to unitholders are aimed to be based on the annual
    budgeted capital expenditure plans equalised for each quarter. This will
    reduce the quarterly volatility of cash distributions to unitholders.
 2. 12-month rolling GNCF and dividend yields are based on the closing market
    price of the unit as at the end of the quarter (Q1 2021: closing market
    price of the unit as of 31 March 2021).
 3. Based on the number of units entitled to dividends.

Net profit and net rental income
Portfolio properties in the office segment contributed 65.3% (Q1 2020: 49.2%) of
net  rental  income  in  Q1  2021 followed  by the retail segment with 31.0% (Q1
2020: 46.2%) and  the leisure  segment with  3.7% (Q1 2020: 4.6%). Retail assets
located  in  the  central  business  districts  (Postimaja,  Europa and Galerija
Centrs)  accounted for 19.1% of  total portfolio net  rental income in Q1 2021.
Total  net  rental  income  attributable  to  neighbourhood shopping centres was
11.9% in Q1 2021.

In Q1 2021, the Group earned net rental income of EUR 4.2 million, a decrease of
27.7% compared  to the  net rental  income of  EUR 5.8 million  for Q1 2020. Net
rental income decreased due to the relief measures granted to tenants during the
pandemic.

The  Group recorded a  net profit of  EUR 1.9 million for  Q1 2021 against a net
profit  of  EUR  3.4 million  for  Q1  2020.  The  net  result was significantly
impacted  by the weaker  operational performance of  investment properties in Q1
2021. The  negative impact  of the  decrease in  net rental income was partially
offset  by a decrease in administrative expenses. Earnings per unit for Q1 2021
were EUR 0.02 (Q1 2020: EUR 0.03).

On  an EPRA like-for-like basis, portfolio net rental income decreased by 27.7%
year  on  year  mainly  due  to  weaker  performance  in  the retail and leisure
segments. The decrease was partially offset by the relatively stable performance
of  the office segment which remained largely  unaffected by the lockdown in the
Baltic states.

During Q1 2021, investment properties in Latvia and Lithuania contributed 34.8%
(Q1  2020: 39.9%) and 37.9% (Q1 2020: 34.6%) of  net rental income respectively,
while investment properties in Estonia contributed 27.3% (Q1 2020: 25.5%).

Gross Asset Value (GAV)
At  the end of Q1 2021, the Fund's GAV was EUR 356.0 million (31 December 2020:
EUR 355.6  million), 0.1% higher  than at  the end  of Q4  2020. The increase is
mainly  related to  the capital  investments made  in the Meraki office building
development  project. The  Fund aims  to carry  on with  the construction of the
Meraki  office building throughout 2021. 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)
By  the  end  of  Q1  2021, the  Fund's  NAV  increased to EUR 137.1 million (31
December  2020: EUR 136.3 million). The increase  in operational performance and
positive  cash flow hedge  reserve movement of  EUR 0.2 million over the quarter
was offset by a EUR 1.3 million dividend distribution to the unitholders. At 31
March  2021, IFRS  NAV  per  unit  stood  at  EUR  1.1460 (31 December 2020: EUR
1.1395), while  EPRA net tangible  assets and EPRA  net reinstatement value were
EUR  1.2284 per unit (31 December 2020: EUR 1.2219). EPRA net disposal value was
EUR 1.1492 per unit (31 December 2020: EUR 1.1435).

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 2021, the fair value of the Fund's portfolio
was  EUR 341.2 million (31 December  2020: EUR 340.0 million) and incorporated a
total net leasable area of 153,351 sq. m. During the quarter, the Group invested
EUR  0.2 million in the  existing property portfolio  and an additional EUR 1.1
million in the Meraki development project.

Interest bearing loans and bonds
Interest-bearing  loans and bonds (excluding  lease liabilities) were EUR 205.6
million,  remaining at a  level similar to  year-end 2020 (31 December 2020: EUR
205.6 million).  Outstanding bank loans  decreased slightly due  to regular bank
loan  amortisation.  Annual  loan  amortisation  accounts for 0.2% of total debt
outstanding.

Financial covenants for bonds

                           Ratio      Ratio      Ratio      Ratio      Ratio
 Covenant   Requirement  31.03.2020 30.06.2020 30.09.2020 31.12.2020 31.03.2021
-------------------------------------------------------------------------------
 Equity
 Ratio     >25%(1)/35.0%   42.4%      40.0%      40.2%      40.3%      40.3%
-------------------------------------------------------------------------------
 Debt
 Service
 Coverage
 Ratio        > 1.20        3.35       3.30       3.16       3.05       2.71
-------------------------------------------------------------------------------

 1. On 28 July, the bondholders adopted the decision by the way of written
    procedure to temporarily reduce the equity ratio bond covenant to 25% or
    greater, until 31 July 2021

Cash flow
Cash  inflow from  core operating  activities for  Q1 2021 amounted  to EUR 2.8
million  (Q1 2020:  cash inflow of EUR 4.3 million). Cash outflow from investing
activities was EUR 1.6 million (Q1 2020: cash outflow of EUR 0.1 million) due to
subsequent  capital expenditure on existing portfolio properties and investments
in  the Meraki development  project. Cash outflow  from financing activities was
EUR 2.8  million (Q1 2020: cash inflow of  EUR 4.6 million). During the quarter,
the  Fund made a cash distribution of  EUR 1.3 million and paid regular interest
on bank loans and bonds. At the end of Q1 2021, the Fund's consolidated cash and
cash  equivalents  amounted  to  EUR  11.8 million  (31 December 2020: EUR 13.3
million) which demonstrates sufficient liquidity and financial flexibility.

Key earnings figures

 EUR '000                                        Q1 2021     Q1 2020 Change (%)
-------------------------------------------------------------------------------
 Net rental
 income                                            4,173       5,772    (27.7%)

 Administrative
 expenses                                          (745)       (889)    (16.2%)

 Other operating
 income                                                -           8   (100.0%)

 Valuation (losses) on investment
 properties                                          (4)         (4)          -

 Operating
 profit                                            3,424       4,887    (29.9%)

 Net financing
 costs                                           (1,390)     (1,376)       1.0%

 Profit before
 tax                                               2,034       3,511    (42.1%)

 Income tax                                        (129)       (157)    (17.8%)
-------------------------------------------------------------------------------
 Net profit for the
 period                                            1,905       3,354    (43.2%)
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Weighted average number of units
 outstanding (units)                         119,635,429 113,387,525       5.5%

 Earnings per unit
 (EUR)                                              0.02        0.03    (33.3%)
-------------------------------------------------------------------------------


Key financial position figures

 EUR '000                                     31.03.2021  31.12.2020 Change (%)
-------------------------------------------------------------------------------
 Investment properties in use                    334,699     334,518       0.1%

 Investment property under
 construction                                      6,537       5,474      19.4%

 Gross asset value (GAV)                         355,985     355,602       0.1%



 Interest-bearing loans and bonds                205,551     205,604       0.0%

 Total
 liabilities                                     218,880     219,281     (0.2%)


-------------------------------------------------------------------------------
 IFRS Net asset value (IFRS NAV)                 137,105     136,321       0.6%

 EPRA Net Reinstatement Value
 (EPRA NRV)                                      146,961     146,180       0.5%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Number of units outstanding
 (units)                                     119,635,429 119,635,429          -

 IFRS Net asset value (IFRS NAV) per unit
 (EUR)                                            1.1460      1.1395       0.6%

 EPRA Net Reinstatement Value (EPRA NRV) per
 unit (EUR)                                       1.2284      1.2219       0.5%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Loan-to-Value ratio (%)                           60.2%       60.5%          -

 Average effective interest rate
 (%)                                                2.6%        2.6%          -
-------------------------------------------------------------------------------

Property performance
During  Q1 2021, the  average actual  occupancy of  the portfolio  was 94.1% (Q4
2020: 94.5%). The  occupancy  rate  as  of  31 March 2021 was 94.1% (31 December
2020: 94.3%). Occupancy rates in the retail segment dipped due to some small new
vacancies  in Europa  SC, SKY  SC and  Galerija Centrs.  The change in occupancy
rates  was partially offset by take-up of  approx. 4% of the total NLA in Pirita
SC.  Occupancy rates in the office  segment remained strong and unchanged during
Q1   2021. The  average  direct  property  yield  during  Q1  2021 was  4.8% (Q4
2020: 5.5%). The net initial yield for the whole portfolio for Q1 2021 was 5.0%
(Q4  2020: 5.6%). The decrease  is mainly  attributable to  the COVID-19 related
restrictions  imposed on the  retail sector by  governments and rent concessions
granted   by  the  Fund  to  tenants  whose  operations  were  affected  by  the
restrictions.  The average rental  rate for the  whole portfolio for Q1 2021 was
EUR 10.6 per sq. m.

Overview of the Fund's investment properties as of 31 March 2021

                                                                Net
                                                   Direct   initial
 Property name   Sector         Fair             property     yield
                            value(1)      NLA       yield        Q1   Occupancy
                          (EUR '000) (sq. m.)  Q1 2021(2)   2021(3)    rate for
-------------------------------------------------------------------------------
 Vilnius,
 Lithuania

 Duetto I        Office       16,419    8,587        8.0%      7.3%      100.0%

 Duetto II       Office       18,765    8,674        7.4%      7.3%      100.0%

 Europa SC       Retail       38,852   16,856        3.0%      2.9%       88.8%

 Domus Pro       Retail
 Retail Park                  16,142   11,247        6.1%      5.9%       99.8%

 Domus Pro       Office
 Office                        7,590    4,831        7.6%      6.5%      100.0%

 North Star      Office       19,135   10,550        5.7%      6.2%       86.3%

 Meraki
 Development                   6,537        -           -                     -
-------------------------------------------------------------------------------
 Total Vilnius               123,440   60,745        5.6%      5.4%       94.5%
-------------------------------------------------------------------------------
 Riga, Latvia

 Upmalas Biroji  Office
 BC                           23,478   10,459        7.3%      7.4%      100.0%

 Vainodes I      Office       19,970    8,052        6.7%      7.2%      100.0%

 LNK Centre      Office       16,063    7,453        6.3%      6.7%      100.0%

 Sky SC          Retail        4,970    3,254        8.5%      8.6%       96.7%

 Galerija Centrs Retail       67,447   20,022        1.5%      1.7%       83.2%
-------------------------------------------------------------------------------
 Total Riga                  131,928   49,240        4.1%      4.4%       92.9%
-------------------------------------------------------------------------------
 Tallinn,
 Estonia

 Postimaja & CC  Retail
 Plaza complex                29,836    9,145        2.6%      3.1%       95.6%

 Postimaja & CC  Leisure
 Plaza complex                14,170    8,664        5.2%      4.3%      100.0%

 G4S             Office
 Headquarters                 16,161    9,179        8.0%      7.7%      100.0%

 Lincona         Office       16,121   10,870        7.3%      7.1%       90.3%

 Pirita SC       Retail        9,580    5,508        4.9%      6.4%       85.8%
-------------------------------------------------------------------------------
 Total Tallinn                85,868   43,366        5.0%      5.3%       94.8%
-------------------------------------------------------------------------------
 Total portfolio             341,236  153,351        4.8%      5.0%       94.1%
-------------------------------------------------------------------------------

 1. Based on the latest valuation as at 31 December 2020, subsequent capital
    expenditure and recognised right-of-use assets.
 2. Direct property yield (DPY) is calculated by dividing annualized NOI by the
    acquisition value and subsequent capital expenditure of the property.
 3. The net initial yield (NIY) is calculated by dividing annualized NOI by the
    market value of the property.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

                                                 01.01.2021-        01.01.2020-
 EUR '000                                         03.31.2021         03.31.2020
-------------------------------------------------------------------------------


 Rental income                                         4,677              6,209

 Service charge income                                 1,217              1,356

 Cost     of    rental
 activities                                          (1,721)            (1,793)
-------------------------------------------------------------------------------
 Net rental income                                     4,173              5,772
-------------------------------------------------------------------------------


 Administrative
 expenses                                              (745)              (889)

 Other       operating
 income                                                    -                  8

 Valuation    (losses)
 gains  on  investment
 properties                                              (4)                (4)
-------------------------------------------------------------------------------
 Operating profit                                      3,424              4,887
-------------------------------------------------------------------------------


 Financial income                                          -                  1

 Financial expenses                                  (1,390)            (1,377)
-------------------------------------------------------------------------------
 Net financing costs                                 (1,390)            (1,376)


-------------------------------------------------------------------------------
 Profit before tax                                     2,034              3,511

 Income tax charge                                     (129)              (157)
-------------------------------------------------------------------------------
 Profit for the period                                 1,905              3,354
-------------------------------------------------------------------------------


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

 Net gains (losses) on
 cash flow hedges                                        210              (178)

 Income  tax  relating  to  net
 (losses)  gains  on  cash flow
 hedges                                                 (15)                 13
-------------------------------------------------------------------------------
 Other comprehensive income (expense),
 net of tax, that is or may be
 reclassified to profit or loss in
 subsequent periods                                      195              (165)
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Total   comprehensive   income  for  the
 period, net of tax                                    2,100              3,189
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Basic   and   diluted
 earnings   per   unit
 (EUR)                                                  0.02               0.03
-------------------------------------------------------------------------------


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

  EUR '000                                 31.03.2021   31.12.2020
-------------------------------------------------------------------


  Non-current assets

  Investment properties                       334,699      334,518

  Investment property under construction        6,537        5,474

  Property, plant and equipment                     3            2

  Other non-current assets                         23           22
-------------------------------------------------------------------
  Total non-current assets                    341,262      340,016
-------------------------------------------------------------------


  Current assets

  Trade and other receivables                   2,525        1,901

  Prepayments                                     408          352

  Cash and cash equivalents                    11,790       13,333
-------------------------------------------------------------------
  Total current assets                         14,723       15,586
-------------------------------------------------------------------
  Total assets                                355,985      355,602
-------------------------------------------------------------------


  Equity

  Paid in capital                             145,200      145,200

  Cash flow hedge reserve                     (1,466)      (1,661)

  Retained earnings                           (6,629)      (7,218)
-------------------------------------------------------------------
  Total equity                                137,105      136,321
-------------------------------------------------------------------


  Non-current liabilities

  Interest bearing loans and borrowings       169,816      195,670

  Deferred tax liabilities                      6,152        6,009

  Derivative financial instruments              1,493        1,736

  Other non-current liabilities                 1,040        1,026
-------------------------------------------------------------------
  Total non-current liabilities               178,501      204,441
-------------------------------------------------------------------


  Current liabilities

  Interest bearing loans and borrowings        36,019       10,222

  Trade and other payables                      3,335        3,640

  Income tax payable                                -            1

  Derivative financial instruments                 60           27

  Other current liabilities                       965          950
-------------------------------------------------------------------
  Total current liabilities                    40,379       14,840
-------------------------------------------------------------------
  Total liabilities                           218,880      219,281
-------------------------------------------------------------------
  Total equity and liabilities                355,985      355,602
-------------------------------------------------------------------

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
19:35 EET on 6 May 2021.