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Pealkiri

Baltic Horizon Fund Consolidated Unaudited Interim Results for Q4 2021

Teade

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

G4S office building disposal
On  8 November 2021, Baltic Horizon Fund signed a real right agreement with HITS
Investments  OÜ  to  sell  the  land  plot  located  at Paldiski mnt 80, Tallinn
together  with the  G4S Headquarters  office building.  The sales  price was EUR
15.35 million  (excluding  value  added  tax)  matching approximately the latest
valuation.  The  IRR  for  the  holding  period  of more than 5 years was around
11.2%, while  equity multiple was 1.7. The decision  to dispose of the asset was
made to avoid high re-leasing risk and potential capital expenditure of bringing
the asset to a high energy efficiency standard.  The proceeds of the transaction
will  be  used  for  new  and  more  energy efficient investments for the Fund's
portfolio in the Baltics.

Baltic Horizon Fund Meraki SPV bonds
On  15 November 2021, bonds issued by BH Meraki  UAB were admitted to the Nasdaq
Baltic  First North Market by Nasdaq Vilnius. The  size of the bond issue is EUR
4 million. The bonds have a nominal value of EUR 100 and an annual interest rate
of 5% with interest paid semi-annually.

Six buildings received BREEAM certification
Baltic  Horizon aimed to certify all  currently operational office assets by the
end  of  2021 using  the  BREEAM  In-Use environmental assessment method. During
2021, the Fund's North Star, Domus Pro Office, Upmalas Biroji BC, LNK Centre and
Vainodes I properties were awarded the BREEAM In-Use "Very Good" and Lincona was
awarded  the  BREEAM  In-Use  "Good"  environmental  certification.  All  office
properties are now BREEAM certified.

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). In
summer  2021, all  three  Baltics  countries  eased COVID-19 restrictions as new
virus cases dropped and the situation stabilised. However, COVID-19 cases in all
three  countries started to  spike in late  2021 and early 2022 once the omicron
variant became the dominant COVID variant. As a result of spiking cases, Latvian
government  decided to reimpose the lockdown for a period from 21 October to 15
November. Other Baltic countries also took restrictive actions, but without full
lockdowns.  While the omicron  variant led to  a drastically increased number of
COVID-19 cases,  hospitalization and death rates did not follow the same drastic
trend  due to the lower disease severity of  the omicron variant. At the date of
this  report,  Lithuania  has  already  started  lifting restrictions related to
COVID-19 with other countries expected to follow.

BHF's  operating results  of Q4  2021 continued to  be affected  by the pandemic
through  the support measures for weakened retail tenants, especially during the
latest  Latvian lockdown in November. It  is expected that broad diversification
of  the  portfolio  should  allow  the  Fund  to  limit the COVID-19 impacts and
maintain  healthy consolidated operational performance  throughout the next year
as  the  central  retail  sector  is  set  to  recover.  The  Fund's operational
performance  has largely recovered every time  heavy restrictions were lifted in
all Baltic countries.

Distributions to unitholders for Q3 and Q4 2021 Fund results
On  28 October 2021, the Fund declared a cash distribution of EUR 2,034 thousand
(EUR  0.017 per  unit)  to  the  Fund  unitholders  for  Q3  2021 results.  This
represents a 1.63% return on the weighted average Q3 2021 net asset value to its
unitholders.

On  3 February 2022, the Fund declared a cash distribution of EUR 2,273 thousand
(EUR  0.019 per  unit)  to  the  Fund  unitholders  for  Q4  2021 results.  This
represents a 1.79% return on the weighted average Q4 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 6.1 million of distributable cash
flow.  During 2021, the  Fund declared  for distribution  EUR 6.9 million out of
total generated distributable cash flow of EUR 8.7 million.

Dividend capacity calculation

 EUR '000                               Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
-------------------------------------------------------------------------------
 (+) Net rental income                  4,745   4,173   4,357   4,676   3,798
-------------------------------------------------------------------------------
 (-) Fund administrative expenses       (713)   (745)   (756)   (735)   (633)
-------------------------------------------------------------------------------
 (-) External interest expenses         (1,362) (1,346) (1,311) (1,407) (1,408)
-------------------------------------------------------------------------------
 (-) CAPEX expenditure(1)               (131)   (79)    (92)    (38)    (222)
-------------------------------------------------------------------------------
 (+) Extraordinary income related to
 investment properties(2)               -       -       -       -       440
-------------------------------------------------------------------------------
 (+) Added back listing related
 expenses                               85      -       -       -       -
-------------------------------------------------------------------------------
 (+) Added back acquisition related
 expenses                               26      31      5       9       32
-------------------------------------------------------------------------------
 Generated net cash flow (GNCF)         2,650   2,034   2,203   2,505    2,007
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 GNCF per weighted unit (EUR)           0.022   0.017   0.018   0.021   0.017
-------------------------------------------------------------------------------
 12-months rolling GNCF yield(3 )(%)    8.6%    7.4%    7.0%    7.0%    6.8%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Dividends declared for the period      1,316    1,316   1,316  2,034    2,273
-------------------------------------------------------------------------------
 Dividends declared per unit(4 )(EUR)   0.011    0.011   0.011  0.017    0.019
-------------------------------------------------------------------------------
 12-months rolling dividend yield(3
 )(%)                                   5.8%    5.4%    5.0%    4.5%    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. Latvian government COVID-19 grant related to decrease of net rental income
    in Galerija Centrs due to discounts to tenants. The grant is used to off-set
    property operating expenses.
 3. 12-month rolling GNCF and dividend yields are based on the closing market
    price of the unit as at the end of the quarter (Q4 2021: closing market
    price of the unit as of 31 December 2021).
 4. Based on the number of units entitled to dividends.

Net profit and net rental income
In  2021, the Group earned net rental income  of EUR 17.0 million, a decrease of
14.7% compared to the net rental income of EUR 19.9 million for 2020. Net rental
income  decreased due to  increased vacancies across  portfolio, relief measures
granted  to  tenants  during  the  pandemic  and disposal of G4S Headquarters in
November 2021.

Portfolio  properties in  the office  segment contributed 63.0% (2020: 55.8%) of
net  rental  income  in  2021 followed  by  the retail segment with 32.4% (2020:
40.1%) and the leisure segment with 4.6% (2020: 4.1%).  Retail assets located in
the central business districts (Postimaja, Europa and Galerija Centrs) accounted
for  20.5% of total portfolio net rental income in 2021. Total net rental income
attributable to neighbourhood shopping centres was 11.9% in 2021.

During  2021, investment properties  in Lithuania  and Latvia contributed 38.1%
(2020:  36.4%) and 36.0% (2020: 38.3%) of net rental income, respectively, while
investment properties in Estonia contributed 25.9% (2020: 25.3%).

In 2021, the Group recorded a net profit of EUR 1.4 million as compared to a net
loss of EUR 13.5 million in 2020. Even with hard COVID-19 restrictions in 2021,
the  Fund  managed  to  maintain  the  positive  operational  performance of its
investment  properties. Year-end valuations showed  recovery as the Fund brought
down overall yearly valuation losses by recognizing a valuation gain of EUR 7.1
million in Q4 2021. Excluding the valuation impact on the net result, net profit
for  2021 would  have  amounted  to  EUR  8.6 million  (2020: EUR 11.7 million).
Earnings  per unit  for 2021 were  positive at  EUR 0.01 (2020:  negative at EUR
0.12). Earnings  per unit  excluding valuation  losses on  investment properties
amounted to EUR 0.07 (2020: EUR 0.10).

Gross Asset Value (GAV)
At  the end of December 2021, the Fund's  GAV was EUR 346.3 million (31 December
2020: EUR 355.6 million), which was a drop of 2.6% over the period. The decrease
is  mainly related to  the negative property  revaluation of EUR 7.2 million and
the  disposal of G4S Headquarters. The  Group made capital investments (EUR 7.0
million) in the Meraki office building development project during 2021. The Fund
aims  to carry on with the construction of the Meraki office building throughout
2022/2023. An  additional EUR 2.1 million was  invested in other (re)development
projects.

Net Asset Value (NAV)
At  the end of  December 2021, the Fund's  NAV slightly decreased  to EUR 132.6
million  (31 December  2020: EUR 136.3 million)  due to  the results  of overall
investment property revaluation for the financial year. As at 31 December 2021,
IFRS NAV per unit stood at EUR 1.1082 (31 December 2020: EUR 1.1395), while EPRA
net  tangible assets and  EPRA net reinstatement  value were EUR 1.1884 per unit
(31  December 2020: EUR 1.2219). EPRA net disposal value was EUR 1.1086 per unit
(31 December 2020: EUR 1.1435).

Investment properties
The Baltic Horizon Fund portfolio consists of 14 cash flow generating investment
properties  in the Baltic capitals and an investment property under construction
on  the Meraki land  plot. At the  end of Q4  2021, the fair value of the Fund's
portfolio  was  EUR  327.4 million  (31  December  2020: EUR  340.0 million) and
incorporated  a total  net leasable  area of  144,081 sq. m. During Q4 2021, the
Group  sold G4S Headquarters  for EUR 15.4 million,  invested EUR 0.2 million in
the  existing property portfolio, EUR 1.5 million in the reconstruction projects
and an additional EUR 3.0 million in the Meraki development project.

Interest bearing loans and bonds
During  2021, the Fund completed a private  placement of 18 months secured bonds
of  EUR 4.0 million.  The bonds  bear a  fixed-rate coupon of 5.0% payable semi-
annually.  The  net  proceeds  from  the  issuance  of  the  bonds were used for
financing the construction of the Meraki office building. Outstanding bank loans
also  decreased  slightly  due  to  regular  bank loan amortisation. Annual loan
amortisation  accounts  for  0.2% of  total  debt  outstanding.  After  the bond
subscription  and loan repayments interest-bearing  loans and bonds decreased to
EUR 198.6 million (31 December 2020: EUR 205.6 million).

Cash flow
Cash inflow from core operating activities for 2021 amounted to EUR 14.7 million
(2020:  cash inflow of EUR 16.1 million).  Cash inflow from investing activities
was  EUR 6.9 million (2020: cash outflow of  EUR 4.3 million) due to disposal of
G4S  Headquarters building in Q4 2021. Net proceeds from the sale were partially
used  to finance subsequent capital expenditure on existing portfolio properties
and  investments  in  the  Meraki,  Postimaja  and  CC  Plaza complex and Europa
development  projects.  Cash  outflow  from  financing  activities was EUR 18.7
million  (2020: cash outflow  of EUR 8.3 million).  During 2021, the Fund made a
cash  distribution of EUR  6.0 million, paid regular  interest on debt and fully
repaid  G4S Headquarters bank loan. In December 2021, the Fund also repaid early
EUR  3.0 million  of  Europa  SC  bank  loan.  At  the  end  of 2021, the Fund's
consolidated cash and cash equivalents amounted to EUR 16.1 million (31 December
2020: EUR  13.3 million) which  demonstrates sufficient  liquidity and financial
flexibility.  Available  cash  will  be  used  to  finance  new acquisitions and
continue with development projects.

Key earnings figures

 EUR '000                                   Q4 2021     Q4 2020      Change (%)
-------------------------------------------------------------------------------
 Net rental income                            3,798       4,745         (20.0%)

 Administrative expenses                      (633)       (713)         (11.2%)

 Other operating income                         440          18        2,344.4%

 Losses on disposal of
 investment properties                         (71)           -               -

 Valuation gains (losses) on
 investment properties                        7,103     (9,488)          174.9%

 Operating profit
 (loss)                                      10,637     (5,438)          295.6%

 Net financing costs                        (1,484)     (1,406)            5.5%

 Profit (loss)
 before tax                                   9,153     (6,844)          233.7%

 Income tax                                   (861)         166        (618.7%)
-------------------------------------------------------------------------------

 Net profit (loss) for the
 period
                                              8,292     (6,678)     224.2%
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Weighted average number of units
 outstanding (units)                    119,635,429 118,124,947            1.3%

 Earnings per unit (EUR)                       0.07      (0.06)          216.7%
-------------------------------------------------------------------------------


Key financial position figures

 EUR '000                                     31.12.2021  31.12.2020 Change (%)
-------------------------------------------------------------------------------
 Investment properties in use                    315,959     334,518     (5.5%)

 Investment property under
 construction                                     11,400       5,474     108.3%

 Gross asset value (GAV)                         346,338     355,602     (2.6%)



 Interest-bearing loans and bonds                198,571     205,604     (3.4%)

 Total
 liabilities                                     213,754     219,281     (2.5%)


-------------------------------------------------------------------------------
 IFRS Net asset value (IFRS NAV)                 132,584     136,321     (2.7%)

 EPRA Net Reinstatement Value
 (EPRA NRV)                                      142,176     146,180     (2.7%)
-------------------------------------------------------------------------------

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

 IFRS Net asset value (IFRS NAV) per unit
 (EUR)                                            1.1082      1.1395     (2.7%)

 EPRA Net Reinstatement Value (EPRA NRV) per
 unit (EUR)                                       1.1884      1.2219     (2.7%)
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Loan-to-Value ratio (%)                           60.7%       60.5%          -

 Average effective interest rate
 (%)                                                2.7%        2.6%          -
-------------------------------------------------------------------------------

Property performance
During  Q4 2021, the  average actual  occupancy of  the portfolio  was 92.4% (Q3
2021: 93.1%). The  occupancy rate as of 31 December 2021 was 92.1% (30 September
2021: 92.9%). Occupancy  rates in the  retail segment dipped,  mostly due to the
Europa  SC reconstruction as part of the premises were temporarily vacated to be
reconstructed in upcoming months. Occupancy rates in the office segment remained
strong,  but slightly  decreased resulting  from a  temporary vacancy in Lincona
Office. Domus PRO Office building occupancy increased compared with the previous
quarter,  and the building was once  again fully occupied starting from November
as  a new tenant moved to the vacant premises. The average direct property yield
during  Q4 2021 was  4.5% (Q3 2021: 5.4%). The  net initial  yield for the whole
portfolio  for  Q4  2021 was  4.8% (Q3  2021: 5.8%). Property  yields  decreased
compared   to   Q3   2021 due  to  vacancies  and  relief  measures  for  mostly
leisure/retail  tenants with restricted activities.  The average rental rate for
the  whole portfolio for Q4  2021 was EUR 11.1 per sq.  m (Q3 2021: EUR 12.2 per
sq. m).

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

                                                  Direct        Net
 Property name  Sector         Fair             property    initial
                           value(1)      NLA       yield      yield   Occupancy
                         (EUR '000) (sq. m.)  Q4 2021(2) Q4 2021(3)        rate
-------------------------------------------------------------------------------
 Vilnius,
 Lithuania

 Duetto I       Office       17,345    8,587        8.3%       7.4%      100.0%

 Duetto II      Office       19,683    8,674        7.5%       7.1%      100.0%

 Europa SC      Retail       36,737   16,856        2.0%       2.1%       78.8%

 Domus Pro      Retail
 Retail Park                 16,255   11,226        7.6%       7.4%       99.4%

 Domus Pro      Office
 Office                       7,820    4,831        8.5%       7.1%      100.0%

 North Star     Office       19,869   10,550        5.5%       6.0%       89.7%

 Meraki
 Development                 11,400        -           -          -           -
-------------------------------------------------------------------------------
 Total Vilnius              129,109   60,724        5.5%       5.4%       92.2%
-------------------------------------------------------------------------------
 Riga, Latvia

 Upmalas Biroji Office
 BC                          21,944   10,459        7.2%       8.0%      100.0%

 Vainodes I     Office       18,150    8,052        6.5%       7.7%      100.0%

 LNK Centre     Office       16,840    7,452        6.2%       6.5%      100.0%

 Sky SC         Retail        5,096    3,249        7.6%       7.7%       97.6%

 Galerija       Retail
 Centrs                      65,544   20,022        0.8%       0.9%       79.2%
-------------------------------------------------------------------------------
 Total Riga                 127,574   49,234        3.6%       4.1%       91.4%
-------------------------------------------------------------------------------
 Tallinn,
 Estonia

 Postimaja & CC Retail
 Plaza complex               29,772    9,145        3.0%       3.5%       93.9%

 Postimaja & CC Leisure
 Plaza complex               14,442    8,664        5.8%       4.8%      100.0%

 Lincona        Office       16,990   10,870        6.8%       6.6%       89.1%

 Pirita SC      Retail        9,472    5,444        4.8%       6.2%       89.2%
-------------------------------------------------------------------------------
 Total Tallinn               70,676   34,123        4.6%       4.9%       93.2%
-------------------------------------------------------------------------------
 Total
 portfolio                  327,359  144,081        4.5%       4.8%       92.1%
-------------------------------------------------------------------------------

 1. Based on the latest valuation as at 31 December 2021 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       01.10.2021- 31.12.2021 01.10.2020- 31.12.2020  31.12.2021  31.12.2020
-------------------------------------------------------------------------------------
 Rental income                   4,651                  5,148      19,495      21,697

 Service charge
 income                          1,204                  1,241       4,901       4,990

 Cost of rental
 activities                    (2,057)                (1,644)     (7,392)     (6,753)
-------------------------------------------------------------------------------------
 Net     rental
 income                          3,798                  4,745      17,004      19,934
-------------------------------------------------------------------------------------


 Administrative
 expenses                        (633)                  (713)     (2,869)     (2,918)

 Other
 operating
 income                            440                     18         444         204

 Losses      on
 disposal    of
 investment
 properties                       (71)                      -        (71)           -

 Valuation
 gains (losses)
 on  investment
 properties                      7,103                (9,488)     (7,161)    (25,245)
-------------------------------------------------------------------------------------
 Operating
 profit (loss)                  10,637                (5,438)       7,347     (8,025)
-------------------------------------------------------------------------------------


 Financial
 income                              -                      -           1           3

 Financial
 expenses                      (1,484)                (1,406)     (5,706)     (5,524)
-------------------------------------------------------------------------------------
 Net  financing
 costs                         (1,484)                (1,406)     (5,705)     (5,521)
-------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------
 Profit  (loss)
 before tax                      9,153                (6,844)       1,642    (13,546)
-------------------------------------------------------------------------------------
 Income     tax
 charge                          (861)                    166       (229)           5
-------------------------------------------------------------------------------------
 Profit  (loss)
 for the period                  8,292                (6,678)       1,413    (13,541)
-------------------------------------------------------------------------------------


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

 Net       gain
 (loss) on cash
 flow hedges                       279                    119         898       (108)

 Income     tax
 relating    to
 net     (loss)
 gain  on  cash
 flow hedges                      (32)                   (10)        (66)           3
-------------------------------------------------------------------------------------
 Other
 comprehensive
 income
 (expense), net
 of  tax,  that
 is  or  may be
 reclassified
 to  profit  or
 loss        in
 subsequent
 periods                           247                    109         832       (105)
-------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------
 Total
 comprehensive
 income
 (expense)  for
 the    period,
 net of tax                      8,539                (6,569)       2,245    (13,646)
-------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------
 Basic      and
 diluted
 earnings   per
 unit (EUR)                       0.07                 (0.06)        0.01      (0.12)
-------------------------------------------------------------------------------------

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

  EUR '000                                 31.12.2021   31.12.2020
-------------------------------------------------------------------
  Non-current assets

  Investment properties                       315,959      334,518

  Investment property under construction       11,400        5,474

  Intangible assets                                 9            -

  Property, plant and equipment                     2            2

  Other non-current assets                         23           22
-------------------------------------------------------------------
  Total non-current assets                    327,393      340,016
-------------------------------------------------------------------


  Current assets

  Trade and other receivables                   2,708        1,901

  Prepayments                                     137          352

  Cash and cash equivalents                    16,100       13,333
-------------------------------------------------------------------
  Total current assets                         18,945       15,586
-------------------------------------------------------------------
  Total assets                                346,338      355,602
-------------------------------------------------------------------


  Equity

  Paid in capital                             145,200      145,200

  Cash flow hedge reserve                       (829)      (1,661)

  Retained earnings                          (11,787)      (7,218)
-------------------------------------------------------------------
  Total equity                                132,584      136,321
-------------------------------------------------------------------


  Non-current liabilities

  Interest-bearing loans and borrowings       157,471      195,670

  Deferred tax liabilities                      6,297        6,009

  Derivative financial instruments                756        1,736

  Other non-current liabilities                 1,103        1,026
-------------------------------------------------------------------
  Total non-current liabilities               165,627      204,441
-------------------------------------------------------------------


  Current liabilities

  Interest-bearing loans and borrowings        41,676       10,222

  Trade and other payables                      5,223        3,640

  Income tax payable                                5            1

  Derivative financial instruments                109           27

  Other current liabilities                     1,114          950
-------------------------------------------------------------------
  Total current liabilities                    48,127       14,840
-------------------------------------------------------------------
  Total liabilities                           213,754      219,281
-------------------------------------------------------------------
  Total equity and liabilities                346,338      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
23:00 EET on 15 February 2022.