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% |
- 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% |
- Based on the latest valuation as at 28 December 2018.
- 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.
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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