Gross Asset Value (GAV)
In Q1 2019, the GAV increased from EUR 260.9 million to EUR 269.5 million compared to the end of Q4 2018. The increase is mainly related to Duetto II acquisition in February.

Net Asset Value (NAV)
In Q1 2019, the Fund NAV decreased from EUR 109.8 million to EUR 109.3 million compared to the end of Q4 2018. The Fund NAV was positively affected by the Fund’s operational performance over the quarter. However, this was offset by a EUR 2.1 million cash distribution to unitholders (EUR 0.027 per unit) and a negative cash flow hedge reserve movement during the quarter.

Net Rental Income and Net Profit
In Q1 2019, the Fund earned a net profit of EUR 2,173 thousand (EUR 1,684 thousand during Q1 2018). In Q1 2019, the Fund recorded a EUR 3.9 million net rental income (EUR 3.4 million in Q1 2018). Growth in net rental income and net profit was positively affected by new property acquisitions at the end of 2018 and the beginning of 2019 (LNK Centre and Duetto II office building).

Cash Distributions (dividends)
On 17 May 2019, the Fund declared a EUR 2.45 million quarterly cash distribution to investors, which represents a EUR 0.025 distribution per unit for the Q1 2019 results (EUR 2,119 thousand or EUR 0.027 per unit for Q4 2018).

Quarterly key figures

Euro ‘000 Q1 2019 Q1 2018 Change (%)
       
Net rental income 3,916 3,409 14.9%
Operating profit 3,213 2,775 15.8%
Net financing costs (897) (487) 84.2%
Profit before tax 2,316 2,288 1.2%
Net profit for the period 2,173 1,684 29.0%
       
Weighted average number of units outstanding 78,496,8311 78,154,221 0.4%
Earnings per unit (EUR) 0.03 0.02 50.0%

Euro ‘000 31.03.2019 31.12.2018 Change (%)
       
Investment property in use 263,566 245,160 7.5%
Gross asset value (GAV) 269,488 260,878 3.3%
       
Interest bearing loans 149,159 140,507 6.2%
Total liabilities 160,149 151,073 6.0%
       
Net asset value (NAV) 109,339 109,805 (0.4%)
Number of units outstanding 78,496,831 78,496,8311 0.0%
Net asset value (NAV) per unit (EUR) 1.3929 1.3988 (0.4%)
Loan-to-Value ratio (LTV) 56.6% 57.3%  
Average effective interest rate 2.4% 2.4%  
  1. The number of units excludes 255,969 units acquired by the Fund and cancelled in February 2019 as part of the unit buy-back program.

Investment properties performance in Q1 2019

During Q1 2019, the average actual occupancy of the portfolio was 96.6% (Q4 2018: 98.2%). When all rental guarantees are considered, the effective occupancy rate is 97.3% (Q4 2018: 98.6%). The average direct property yield during Q1 2019 was 6.7% (Q4 2018: 6.8%). The net initial yield for the whole portfolio for Q1 2019 was 6.3% (Q4 2018: 6.5%).

Overview of the Fund’s investment properties as of 31.03.2019

Property name Sector Market value1
Euro ‘000
NLA Direct property yield2 Net initial yield3 Occupancy rate for Q1 2019
             
Vilnius, Lithuania            
Duetto I Office 16,320 8,498 7.9% 7.2% 100.0%4
Duetto II Office 18,338 8,636 7.1% 7.1% 100.0%4
Europa SC Retail 41,139 16,856 6.9% 6.3% 96.3%
Domus Pro Retail Park Retail 17,465 11,247 7.4% 6.6% 98.3%
Domus Pro Office Office 7,461 4,831 8.6% 7.5% 100.0%
Meraki Land   1,670
Total Vilnius   102,393 50,068 7.3% 6.7% 98.2%
             
Riga, Latvia            
Upmalas Biroji BC Office 25,734 10,458 7.0% 6.5% 100.0%
Vainodes I Office 21,243 8,052 6.8% 6.8% 100.0%
LNK Centre Office 17,450 7,453 6.1% 5.9% 100.0%
Sky SC Retail 5,390 3,254 5.0% 4.6% 99.4%
Total Riga   69,817 29,217 6.5% 6.3% 99.9%
             
Tallinn, Estonia            
Postimaja & CC Plaza Retail 32,450 9,145 4.3% 4.6% 90.9%
Postimaja & CC Plaza Leisure 14,470 8,664 8.5% 7.0% 100.0%
G4S Headquarters Office 17,240 9,179 7.3% 6.5% 90.2%
Lincona Office 17,176 10,871 8.5% 7.7% 100.0%
Pirita SC Retail 10,020 5,508 4.6% 5.6% 89.2%
Total Tallinn   91,356 43,367 6.1% 6.0% 94.6%
Total portfolio   263,566 122,652 6.7% 6.3% 97.3%
  1. Based on the latest valuation as at 28 December 2018.
  2. Direct property yield (DPY) is calculated by dividing NOI by the acquisition value and subsequent capital expenditure of the property.
  3. The net initial yield (NIY) is calculated by dividing NOI by the market value of the property.
  4. Effective occupancy rate is 100% due to a rental guarantee.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 

Euro ‘000   01.01.2019-31.03.2019 01.01.2018-31.03.2018
       
Rental income   4,151 3,606
Service charge income   763 585
Cost of rental activities   (998) (782)
Net rental income   3,916 3,409
       
Administrative expenses   (709) (640)
Other operating income   6 6
Operating profit   3,213 2,775
       
Financial income   2 2
Financial expenses   (899) (489)
Net financing costs   (897) (487)
       
Profit before tax   2,316 2,288
Income tax charge   (143) (604)
Profit for the period   2,173 1,684
       
Net gains (losses) on cash flow hedges   (556) (315)
Income tax relating to net gains (losses) on cash flow hedges   36 45
Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods   (520) (270)
       
Total comprehensive income for the period, net of tax   1,653 1,414
       
Basic and diluted earnings per unit (Euro)    0.03 0.02

 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 

Euro ‘000   31.03.2019 31.12.2018
       
Non-current assets      
Investment properties   263,566 245,160
Derivative financial instruments   7 9
Other non-current assets   96 596
Total non-current assets   263,669 245,765
       
Current assets      
Trade and other receivables   2,556 2,734
Prepayments   316 154
Cash and cash equivalents   2,947 12,225
Total current assets   5,819 15,113
Total assets   269,488 260,878
       
Equity      
Paid in capital   93,338 93,673
Own units   (335)
Cash flow hedge reserve   (1,525) (1,005)
Retained earnings   17,526 17,472
Total equity   109,339 109,805
       
Non-current liabilities      
Interest bearing loans and borrowings   148,771 140,401
Deferred tax liabilities   5,934 5,844
Derivative financial instruments   1,623 1,069
Other non-current liabilities   921 905
Total non-current liabilities   157,249 148,219
       
Current liabilities      
Interest bearing loans and borrowings   388 106
Trade and other payables   2,186 2,397
Income tax payable   3
Other current liabilities   323 351
Total current liabilities   2,900 2,854
Total liabilities   160,149 151,073
Total equity and liabilities   269,488 260,878

 
For additional information please contact:

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

Baltic Horizon Fund is a registered contractual public closed-end real estate fund managed by Alternative Investment Fund Manager license holder Northern Horizon Capital AS.
Distribution: Nasdaq Tallinn, Nasdaq Stockholm, 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 10:57 EET on 17 May 2019.

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