During the 9 months of 2017, the net operating income earned by Baltic Horizon Fund (the Fund) amounted to EUR 7.8 million (EUR 4.8 million during 9 months of 2016). During Q3 2017, the Fund recorded a net operating income of EUR 2.6 million (EUR 1.9 million during Q3 2016). The increase is related to new acquisitions that were made following the capital raisings at the end of 2016 and the beginning of 2017.

During Q3 2017, the Fund earned a net profit of EUR 1,675 thousand (EUR 3,708 thousand during Q3 2016). Last year during the same quarter, the Fund’s performance was affected by extraordinary investment property valuations, which had a significant impact on its quarterly net profit. During Q3 2017, the Fund did not perform any new investment property valuations as from 2017 onwards, valuation of properties will be performed in June and December.

As at end of Q3 2017, the GAV of the Fund decreased from EUR 170.9 million to 169.7 million compared to Q2 2017. A slight decrease in GAV was due to active capital management activities over the quarter. During Q3 2017, the Fund successfully refinanced Europa Shopping centre bank loan by repaying EUR 2.1 million and made a cash distribution of EUR 1.2 million to its unitholders.

As at 30 September 2017, the Fund NAV has increased from EUR 86.2 million to EUR 86.7 million, compared to the end of Q2 2017.

Quarterly Key Figures

Euro ‘000 Q3 2017 Q3 2016 Change (%)
       
Rental income 2,955 2,058 43.6%
Service charge income 820 617 32.9%
Cost of rental activities (1,137) (747) 52.2%
Net rental income 2,638 1,928 36.8%
       
Expenses related to public offerings (61) (125) (51.2)%
Administrative expenses (474) (357) 32.8%
Other operating income / (expenses) 64 17 >100.0%
Valuation gains / (loss) on investment properties 2,802 (>100.0)%
Operating profit 2,167 4,265 (49.2)%
       
Financial income 2 3 (33.3)%
Financial expenses (348) (307) 13.4%
Net financing costs (346) (304) 13.8%
       
Profit before tax 1,821 3,961 (54.0)%
Income tax charge (146) (253) (42.3)%
Profit for the period 1,675 3,708 (54.8)%

 

Weighted average number of units outstanding 60,006,856 39,163,520 53.2%
Earnings per unit (EUR) 0.03 0.09 (66.7)%

 

Euro ‘000 30.09.2017 31.12.2016 Change (%)
       
Investment property in use 157,822 141,740 11.3%
Gross asset value (GAV) 169,738 154,938 9.6%
       
Interest bearing loans 72,569 69,172 4.9%
Total liabilities 83,085 78,129 6.3%
       
Net asset value (NAV) 86,653 76,809 12.8%

 

Number of units outstanding 64,655,870 57,264,743 12.9%
Net asset value (NAV) per unit (EUR) 1.3402 1.3413 (0.1)%
Loan-to-Value ratio (LTV) 46.0% 48.8%  
Average effective interest rate 1.7% 1.8%  

 

Investment properties PERFORMANCE as of 30 September 2017

During Q3 2017, the average actual occupancy of the portfolio increased from 95.4% in Q2 2017 to 97.5% in Q3 2017. When all rental guarantees are considered, the effective occupancy rate is 98.0% (98.1% during Q2 2017). Average direct property yield during Q3 was 7.2% (Q2 2017: 7.2%). The net initial yield for the whole portfolio for Q3 2017 was 6.9%.

Property name City Country Market value
Euro‘000
NLA Direct property yield Net initial yield Occupancy rate for Q3 2017
Duetto I Vilnius Lithuania 14,890 8,327 7.2% 7.1% 100.0%*
Pirita SC Tallinn Estonia 11,590 5,436 7.5% 7.8% 100.0%*
Upmalas Biroji BC Riga Latvia 24,052 10,419 7.1% 7.0% 99.8%
G4S Headquarters Tallinn Estonia 16,080 8,363 7.5% 7.2% 100.0%
Europa SC Vilnius Lithuania 38,800 16,856 6.0% 5.7% 94.2%
Domus Pro Retail Park Vilnius Lithuania 17,180 11,247 7.7% 6.8% 98.2%
CC Plaza Tallinn Estonia 13,180 8,664 8.3% 7.5% 100.0%
Sky SC Riga Latvia 5,582 3,263 8.4% 7.2% 98.2%
Lincona Tallinn Estonia 15,920 10,859 7.4% 7.1% 96.6%
Total portfolio     157,274 83,621 7.2% 6.9% 98.0%

*Effective occupancy rate is 100% due to a rental guarantee provided by the seller.

 

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Euro ‘000 01.07.2017-30.09.2017 01.07.2016-30.09.2016 01.01.2017-30.09.2017 01.01.2016-30.09.2016
         
Rental income 2,955 2,058 8,622 5,334
Service charge income 820 617 2,663 1,810
Cost of rental activities (1,137) (747) (3,439) (2,301)
Net rental income 2,638 1,928 7,846 4,843
         
Administrative expenses (535) (482) (1,935) (1,462)
Other operating income / (expenses) 64 17 77 95
Valuation gains / (loss) on investment properties 2,802 339 2,361
Operating profit 2,167 4,265 6,327 5,837
         
Financial income 2 3 45 11
Financial expenses (348) (307) (1,123) (840)
Net financing costs (346) (304) (1,078) (829)
         
Profit before tax 1,821 3,961 5,249 5,008
Income tax charge (146) (253) (1,082) (428)
Profit for the period 1,675 3,708 4,167 4,580
         
Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods
Net gains (losses) on cash flow hedges (94) (36) 126 (65)
Termination of interest rate swap agreement reclassified to profit or loss 57
Income tax relating to net gains (losses) on cash flow hedges 8 (7) (32) (1)
Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods (86) (43) 151 (66)
         
Total comprehensive income/ (expense) for the period, net of tax 1,589 3,665 4,318 4,514
         
Basic and diluted earnings per unit (Euro) 0.03 0.09 0.07 0.12

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Euro ‘000 30.09.2017 31.12.2016
     
Non-current assets    
Investment properties 157,822 141,740
Investment property under construction 5,725 1,580
Derivative financial instruments 9
Other non-current assets 72 288
Total non-current assets 163,628 143,608
     
Current assets    
Trade and other receivables 1,569 1,269
Prepayments 135 178
Cash and cash equivalents 4,406 9,883
Total current assets 6,110 11,330
Total assets 169,738 154,938
     
Equity    
Paid in capital 75,597 66,224
Own units (8)
Cash flow hedge reserve (143) (294)
Retained earnings 11,199 10,887
Total equity 86,653 76,809
     
Non-current liabilities    
Interest bearing loans and borrowings 63,601 58,981
Deferred tax liabilities 5,513 4,383
Derivative financial instruments 172 345
Other non-current liabilities 891 935
Total non-current liabilities 70,177 64,644
     
Current liabilities    
Interest bearing loans and borrowings 8,968 10,191
Trade and other payables 3,496 2,876
Income tax payable 29 46
Other current liabilities 415 372
Total current liabilities 12,908 13,485
Total liabilities 83,085 78,129
Total equity and liabilities 169,738 154,938

Additional information:

Tarmo Karotam
Baltic Horizon Fund manager
E-mail 
tarmo.karotam@nh-cap.com
www.baltichorizon.com

The Fund is a registered contractual public closed-end real estate fund that is managed by an alternative investment fund manager license holder Northern Horizon Capital AS.

Distribution: Nasdaq, 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 7:15 EET on 22 November 2017.