Management Board of Northern Horizon Capital AS has approved the audited financial results of Baltic Horizon Fund (the Fund) for the year 2017. The financial results remained unchanged compared to the preliminary disclosure on 15th of February 2018.

At the end of 2017, the GAV increased from EUR 154.9 million to EUR 215.8 million as compared to the end of 2016. The increase is mainly related to new acquisitions during the year and the increase in cash as a result of the latest secondary public offering in November. The Fund completed the acquisition of the Postimaja Shopping Centre on 13 February 2018 and thus has deployed most of the new capital raised in November 2017.

During 2017, the Fund NAV increased from EUR 76.8 million to EUR 107 million as compared to the end of 2016. The increase is related to new equity raised and the Group’s operational performance over the year. The Fund raised EUR 25.6 million net equity during the June and November public offerings and generated EUR 9.4 million in net profit. The Fund also made a EUR 5.1 million cash distribution to its investors.

In 2017, the net profit of the Group increased from EUR 5.8 million to EUR 9.4 million as compared to 2016. During the year, the Group recorded a EUR 3.7 million fair value gain (EUR 2.7 million during 2016).

In 2017, the Group recorded a EUR 10.8 million net rental income (EUR 7.2 million in 2016). The increase is related to new acquisitions that were made following the capital raisings at the end of 2016 and during 2017. 

Annual Key Figures

Euro ‘000 2017   2016   Change (%)
       
Rental income 11,839   7,874   50.4 %
Service charge income 3,692   2,594   42.3 %
Cost of rental activities (4,763 ) (3,315 ) 43.7 %
Net rental income 10,768   7,153   50.5 %
       
Expenses related to public offerings (637 ) (938 ) (32.1 )%
Administrative expenses (2,137 ) (1,252 ) 70.7 %
Other operating income / (expenses) 14   97   (85.6 )%
Valuation gain / (loss) on investment properties 3,676   2,737   34.3 %
Operating profit 11,684   7,797   49.9 %
       
Financial income 47   14   235.7 %
Financial expenses (1,528 ) (1,253 ) 21.9 %
Net financing costs (1,481 ) (1,239 ) 19.5 %
       
Profit before tax 10,203   6,558   55.6 %
Income tax charge (759 ) (798 ) (4.9 )%
Profit for the period 9,444   5,760   64.0 %
Weighted average number of units outstanding 62,270,694   47,350,881   31.5 %
Earnings per unit (EUR) 0.08   0.02   300.0 %

Weighted average number of units outstanding 62,270,694 47,350,881 31.5 %
Earnings per unit (EUR) 0.15 0.12 25.0 %
Euro ‘000 31.12.2017 31.12.2016 Change (%)
       
Investment property in use 189,317 141,740 33.6 %
Gross asset value (GAV) 215,785 154,938 39.3 %
       
Interest bearing loans 98,087 69,172 41.8 %
Total liabilities 108,809 78,129 39.3 %
       
Net asset value (NAV) 106,976 76,809 39.3 %

Number of units outstanding 77,440,638   57,264,743   35.2 %
Net asset value (NAV) per unit (EUR) 1.3814   1.3413   3.0 %
Loan-to-Value ratio (LTV) 51.8 % 48.8 %  
Average effective interest rate 1.7 % 1.8 %  

investment properties PERFORMANCE as of 31 DECEMBER 2017

During 2017, the average actual occupancy of the portfolio was 96.6% (2016: 97.1%). When all rental guarantees are considered, the effective occupancy rate is 97.8% (2016: 97.1%). Average direct property yield during 2017 was 7.2% (2016: 7.2%). The net initial yield for the whole portfolio for 2017 was 6.8% (2016: 6.8%).

Property name City Country Market value1
Euro‘000		 NLA Direct property yield for 2017 Net initial yield for 2017 Occupancy rate for2017
Duetto I Vilnius Lithuania 16,210 8,327 6.5 % 6.4 % 100.0%2
Pirita SC Tallinn Estonia 11,630 5,436 7.5 % 7.6 % 100.0%2
Upmalas Biroji BC Riga Latvia 24,269 10,419 7.2 % 6.7 % 99.8 %
G4S Headquarters Tallinn Estonia 16,570 8,363 7.4 % 7.0 % 100.0 %
Europa SC Vilnius Lithuania 39,600 16,856 6.5 % 6.5 % 95.5 %
Domus Pro Retail Park Vilnius Lithuania 17,280 11,247 7.8 % 6.9 % 98.0 %
Domus Pro Office Vilnius Lithuania 7,150 4,759 3.9%3 2.8 % 73.4 %
CC Plaza Tallinn Estonia 13,240 8,664 8.2 % 7.5 % 100.0 %
Sky SC Riga Latvia 5,448 3,263 8.6 % 7.5 % 99.3 %
Lincona Tallinn Estonia 16,050 10,859 7.7 % 7.4 % 94.1 %
Vainodes I Riga Latvia 21,870 8,052 4.3%4 4.2 % 100.0 %
Total portfolio     189,317 96,245 7.2 % 6.8 % 97.2 %
  1. Based on the latest valuation as at 31 December 2017.
  2. Effective occupancy rate is 100% due to a rental guarantee. 
  3. Domus Pro stage III was opened in October, however, it was not fully occupied during Q4 2017. It is expected to be fully occupied by the end of Q1 2018. The property development yield and annualized direct property yield is 7.9%.
  4. Vainodes I acquisition was closed on 12 December 2017. The annualized direct property yield is 7.0%.  

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Euro ‘000 2017   2016  
     
Rental income 11,839   7,874  
Service charge income 3,692   2,594  
Cost of rental activities (4,763 ) (3,315 )
Net rental income 10,768   7,153  
     
Administrative expenses (2,774 ) (2,190 )
Other operating income / (expenses) 14   97  
Valuation gains / (loss) on investment properties 3,676   2,737  
Operating profit 11,684   7,797  
     
Financial income 47   14  
Financial expenses (1,528 ) (1,253 )
Net financing costs (1,481 ) (1,239 )
     
Profit before tax 10,203   6,558  
Income tax charge (759 ) (798 )
Profit for the period 9,444   5,760  
     
Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods
Net gains (losses) on cash flow hedges 273   (113 )
Termination of interest rate swap agreement reclassified to profit or loss 57   –  
Recognition of initial interest rate cap costs (43 ) –  
Income tax relating to net gains (losses) on cash flow hedges (49 ) 18  
Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods 238   (95 )
     
Total comprehensive income/ (expense) for the period, net of tax 9,682   5,665  
     
Basic and diluted earnings per unit (Euro) 0.15   0.12  

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Euro ‘000 31.12.2017   31.12.2016  
     
Non-current assets    
Investment properties 189,317   141,740  
Investment property under construction –   1,580  
Derivative financial instruments 89   –  
Other non-current assets 146   288  
Total non-current assets 189,552   143,608  
     
Current assets    
Trade and other receivables 1,568   1,269  
Prepayments 108   178  
Cash and cash equivalents 24,557   9,883  
Total current assets 26,233   11,330  
Total assets 215,785   154,938  
     
Equity    
Paid in capital 91,848   66,224  
Own units –   (8 )
Cash flow hedge reserve (56 ) (294 )
Retained earnings 15,184   10,887  
Total equity 106,976   76,809  
     
Non-current liabilities    
Interest bearing loans and borrowings 96,497   58,981  
Deferred tax liabilities 5,206   4,383  
Derivative financial instruments 88   345  
Other non-current liabilities 859   935  
Total non-current liabilities 102,650   64,644  
     
Current liabilities    
Interest bearing loans and borrowings 1,590   10,191  
Trade and other payables 4,202   2,876  
Income tax payable 14   46  
Derivative financial instruments 15   –  
Other current liabilities 338   372  
Total current liabilities 6,159   13,485  
Total liabilities 108,809   78,129  
Total equity and liabilities 215,785   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 18:00 EET on 16 March 2018.

BHF annual report 2017

BHF annual report 2017

Attachment