In Q1 2018, the GAV increased from EUR 215.8 million to EUR 234.5 million. During the quarter, the Group closed the Postimaja shopping centre acquisition and raised additional gross equity of EUR 2.35 million, which was part of the Postimaja transaction.
In Q1 2018, the Fund NAV increased from EUR 107 million to EUR 109 million. The increase is related to new equity raised in February and the Group’s operational performance over the quarter. The Fund also made a EUR 1.8 million cash distribution to its unitholders (EUR 0.023 per unit).
In Q1 2018, the Fund earned a net profit of EUR 1,684 thousand (EUR 950 thousand during Q1 2017). During Q1 2018, the Fund’s performance was negatively affected by a EUR 467 thousand one-off tax charge in Latvia in relation to the structuring of the Vainodes I investment property transaction.
In Q1 2018, the Fund recorded a EUR 3.4 million NOI (EUR 2.5 million in Q1 2017). The increase is related to new acquisitions that were made following the capital raisings at the end of 2017 and the beginning of 2018 (Vainodes I and Postimaja shopping centre). The Fund completed the acquisition of Postimaja Shopping Centre on 13 February 2018 and thus has deployed most of the new capital raised in November 2017.
Quarterly Key Figures
| Euro ‘000 | Q1 2018 | Q1 2017 (restated)* |
Change (%) |
| Rental income | 3,606 | 2,727 | 32.2% |
| Service charge income | 585 | 358 | 63.4% |
| Cost of rental activities | (782) | (559) | 39.9% |
| Net rental income | 3,409 | 2,526 | 35.0% |
| Expenses related to public offerings | – | (202) | (100.0)% |
| Administrative expenses | (640) | (528) | 21.2% |
| Other operating income / (expenses) | 6 | 13 | (53.8)% |
| Operating profit | 2,775 | 1,809 | 53.4% |
| Financial income | 2 | 41 | (95.1)% |
| Financial expenses | (489) | (332) | 47.3% |
| Net financing costs | (487) | (291) | 67.4% |
| Profit before tax | 2,288 | 1,518 | 50.7% |
| Income tax charge | (604) | (568) | 6.3% |
| Profit for the period | 1,684 | 950 | 77.3% |
*In 2018, the Group adopted IFRS 15 Revenue from Contracts with Customers, effective from 1 January 2018. As a result, the comparative figures for “service charge income” and “cost of rental activities” were adjusted. The adjustment did not have an impact on the Group’s equity. The impact is related to presentation changes in accordance with IFRS 15.
| Weighted average number of units outstanding | 78,154,221 | 57,262,887 | 36.5% |
| Earnings per unit (EUR) | 0.02 | 0.02 | -% |
| Euro ‘000 | 31.03.2018 | 31.12.2017 | Change (%) |
| Investment property in use | 223,961 | 189,317 | 18.3% |
| Gross asset value (GAV) | 234,486 | 215,785 | 8.7% |
| Interest bearing loans | 116,198 | 98,087 | 18.5% |
| Total liabilities | 125,531 | 108,809 | 15.4% |
| Net asset value (NAV) | 108,959 | 106,976 | 1.9% |
| Number of units outstanding | 79,157,094 | 77,440,638 | 2.2% |
| Net asset value (NAV) per unit (EUR) | 1.3765 | 1.3814 | (0.4)% |
| Loan-to-Value ratio (LTV) | 51.9% | 51.8% | |
| Average effective interest rate | 1.8% | 1.7% |
investment properties PERFORMANCE as of 31 MARCH 2018
During Q1 2018, the average actual occupancy of the portfolio was 97.4% (Q4 2017: 96.6%). When all rental guarantees are considered, the effective occupancy rate is 97.7% (Q4 2017: 97.2%). Average direct property yield during Q1 2018 was 6.9% (Q4 2017: 7.1%). The net initial yield for the whole portfolio for Q1 2018 was 6.4% (Q4 2017: 6.7%).
| Property name | City | Country | Market value1 Euro‘000 |
NLA | Direct property yield2 | Net initial yield3 | Occupancy rate for Q1 2018 |
| Duetto I | Vilnius | Lithuania | 16,210 | 8,327 | 7.5% | 6.9% | 100.0%4 |
| Pirita SC | Tallinn | Estonia | 11,630 | 5,436 | 7.4% | 7.7% | 100.0%4 |
| Upmalas Biroji BC | Riga | Latvia | 24,269 | 10,419 | 7.0% | 6.8% | 99.8% |
| G4S Headquarters | Tallinn | Estonia | 16,570 | 8,363 | 7.6% | 7.1% | 100.0% |
| Europa SC | Vilnius | Lithuania | 39,600 | 16,856 | 6.3% | 5.8% | 95.8% |
| Domus Pro Retail Park | Vilnius | Lithuania | 17,280 | 11,247 | 7.7% | 7.0% | 98.4% |
| Domus Pro Office | Vilnius | Lithuania | 7,150 | 4,759 | 6.8% | 6.1% | 89.5% |
| CC Plaza | Tallinn | Estonia | 13,240 | 8,664 | 8.3% | 7.5% | 100.0% |
| Sky SC | Riga | Latvia | 5,448 | 3,263 | 8.3% | 7.6% | 99.3% |
| Lincona | Tallinn | Estonia | 16,050 | 10,859 | 7.6% | 7.4% | 94.1% |
| Vainodes I | Riga | Latvia | 21,870 | 8,052 | 6.8% | 6.6% | 100.0% |
| Postimaja | Tallinn | Estonia | 34,400 | 9,141 | 4.7%5 | 5.0% | 95.6% |
| Total portfolio | 223,717 | 105,386 | 6.9% | 6.4% | 97.4% |
- Based on the latest valuation as at 31 December 2017.
- Direct property yield (DPY) is calculated by dividing NOI by the acquisition value and subsequent capital expenditure of the property.
- The net initial yield (NIY) is calculated by dividing NOI by the market value of the property.
- Effective occupancy rate is 100% due to a rental guarantee.
- Postimaja acquisition was closed on 13 February 2018. The annualized direct property yield is 5.4%.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
| Euro ‘000 | Q1 2018 | Q1 2017 (restated)* |
| Rental income | 3,606 | 2,727 |
| Service charge income | 585 | 358 |
| Cost of rental activities | (782) | (559) |
| Net rental income | 3,409 | 2,526 |
| Administrative expenses | (640) | (730) |
| Other operating income / (expenses) | 6 | 13 |
| Operating profit | 2,775 | 1,809 |
| Financial income | 2 | 41 |
| Financial expenses | (489) | (332) |
| Net financing costs | (487) | (291) |
| Profit before tax | 2,288 | 1,518 |
| Income tax charge | (604) | (568) |
| Profit for the period | 1,684 | 950 |
| Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods | ||
| Net gains (losses) on cash flow hedges | (315) | 138 |
| Income tax relating to net gains (losses) on cash flow hedges | 45 | (17) |
| Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods | (270) | 121 |
| Total comprehensive income for the period, net of tax | 1,414 | 1,071 |
| Basic and diluted earnings per unit (Euro) | 0.02 | 0.02 |
*In 2018, the Group adopted IFRS 15 Revenue from Contracts with Customers, effective from 1 January 2018. As a result, the comparative figures for “service charge income” and “cost of rental activities” were adjusted. The adjustment did not have an impact on the Group’s equity. The impact is related to presentation changes in accordance with IFRS 15.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| Euro ‘000 | 31.03.2018 | 31.12.2017 |
| Non-current assets | ||
| Investment properties | 223,961 | 189,317 |
| Derivative financial instruments | 94 | 89 |
| Other non-current assets | 140 | 146 |
| Total non-current assets | 224,195 | 189,552 |
| Current assets | ||
| Trade and other receivables | 1,720 | 1,568 |
| Prepayments | 281 | 108 |
| Cash and cash equivalents | 8,290 | 24,557 |
| Total current assets | 10,291 | 26,233 |
| Total assets | 234,486 | 215,785 |
| Equity | ||
| Paid in capital | 94,198 | 91,848 |
| Cash flow hedge reserve | (326) | (56) |
| Retained earnings | 15,087 | 15,184 |
| Total equity | 108,959 | 106,976 |
| Non-current liabilities | ||
| Interest bearing loans and borrowings | 114,225 | 96,497 |
| Deferred tax liabilities | 5,295 | 5,206 |
| Derivative financial instruments | 423 | 88 |
| Other non-current liabilities | 874 | 859 |
| Total non-current liabilities | 120,817 | 102,650 |
| Current liabilities | ||
| Interest bearing loans and borrowings | 1,973 | 1,590 |
| Trade and other payables | 1,944 | 4,202 |
| Income tax payable | 467 | 14 |
| Derivative financial instruments | – | 15 |
| Other current liabilities | 326 | 338 |
| Total current liabilities | 4,710 | 6,159 |
| Total liabilities | 125,527 | 108,809 |
| Total equity and liabilities | 234,486 | 215,785 |
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 11:50 EET on 4th of May 2018.
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