Gross Asset Value (GAV)

As of 30 June 2018, the GAV increased to EUR 248.2 million (EUR 234.5 million as at 31 March 2018). During Q2 2018, the Group completed acquisition of land next to the Domus Pro complex for a purchase price of EUR 1.7 million. Increase is also related to the issuing of EUR 30 million worth of bonds.

Net Asset Value (NAV)

In Q2 2018, the Fund NAV increased from EUR 109.0 million to EUR 109.3 million. The increase is related to the Group’s operational performance over the quarter. The Fund also made a EUR 1.9 million cash distribution to its unitholders (EUR 0.024 per unit). 

Net Profit

In Q2 2018, the Fund earned a net profit of EUR 2,262 thousand (EUR 1,542 thousand during Q2 2017). The net result was positively affected by revaluation gains and the operational performance of the properties. During the quarter, the Group recognised a EUR 480 thousand revaluation gain.

Net Operating Income (NOI)

In Q2 2018, the Fund recorded a EUR 3.6 million NOI (EUR 2.7 million in Q2 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).

Cash Distributions (dividends)

The Fund declared a cash distribution of EUR 1,979 thousand (EUR 0.025 per unit) to the Fund unitholders for Q2 2018 results (EUR 1,900 thousand or EUR 0.024 per unit for Q1 2018). During Q2 2018, the Generated Net Cash Flow (GNCF) increased to EUR 2,267 thousand or EUR 0.029 per unit (EUR 2,125 thousand or EUR 0.027 per unit for Q1 2018).

Quarterly Key Figures  

Euro ‘000 Q2 2018 Q2 2017 (restated)* Change (%)
Rental income 3,958 2,940 34.6%
Service charge income 608 382 59.2%
Cost of rental activities (940) (640) 46.9%
Net rental income 3,626 2,682 35.2%
       
Expenses related to public offerings - (171) (100.0)%
Administrative expenses (621) (499) 24.4%
Other operating income / (expenses) 39 - n/a
Valuation gains / (loss) on investment properties 480 339 41.6%
Operating profit 3,524 2,351 49.9%
Financial income 2 2 -%
Financial expenses (716) (443) 61.6%
Net financing costs (714) (441) 61.9%
       
Profit before tax 2,810 1,910 47.1%
Income tax charge (234) (368) (36.4)%
Profit for the period 2,576 1,542 67.1%
       
Weighted average number of units outstanding  79,157,094  58,004,446 36.5%
Earnings per unit (EUR) 0.03 0.03 -%

*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.

Euro ‘000 30.06.2018 31.12.2017 Change (%)
       
Investment property in use 226,160 189,317 19.5%
Gross asset value (GAV) 248,241 215,785 15.0%
       
Interest bearing loans 129,900 98,087 32.4%
Total liabilities 138,920 108,809 27.7%
       
Net asset value (NAV) 109,321 106,976 2.2%
Number of units outstanding 79,157,094 77,440,638 2.2%
Net asset value (NAV) per unit (EUR) 1.3811 1.3814 (0.02)%
Loan-to-Value ratio (LTV) 57.4% 51.8%  
Average effective interest rate 2.3% 1.7%  

 

Investment properties PERFORMANCE as of 30 JUNE 2018

During Q2 2018, the average actual occupancy of the portfolio was 97.3% (Q1 2018: 97.4%). When all rental guarantees are considered, the effective occupancy rate is 97.6% (Q1 2018: 97.7%). Due to temporary vacancies the average direct property yield during Q2 2018 was 6.8% (Q1 2018: 6.9%). The net initial yield for the whole portfolio for Q2 2018 was 6.5% (Q1 2018: 6.4%). 

Property name City Country Market value 1 Euro‘000 NLA Direct property yield 2 Net initial yield 3 Occupancy rate for Q2 2018
Duetto I Vilnius Lithuania 16,240 8,327 7.5% 6.9% 100.0% 4
Pirita SC Tallinn Estonia 10,950 5,400 7.4% 8.2% 100.0% 4
Upmalas Biroji BC Riga Latvia 24,660 10,600 7.3% 7.1% 99.8%
G4S Headquarters Tallinn Estonia 16,900 8,363 7.7% 7.0% 100.0%
Europa SC Vilnius Lithuania 40,310 16,900 6.2% 5.7% 94.1%
Domus Pro Retail Park Vilnius Lithuania 17,350 11,247 7.4% 6.7% 98.4%
Domus Pro Office Vilnius Lithuania 7,290 4,759 7.9% 6.9% 94.1%
Domus Pro Land Vilnius Lithuania 1,670 - - - -
CC Plaza Tallinn Estonia 13,190 8,664 8.4% 7.6% 100.0%
Sky SC Riga Latvia 5,360 3,263 8.3% 7.7% 99.3%
Lincona Tallinn Estonia 16,650 10,859 7.3% 6.8% 91.8%
Vainodes I Riga Latvia 21,610 8,052 7.0% 6.9% 100.0%
Postimaja Tallinn Estonia 33,980 9,141 4.6% 4.7% 96.0%
Total portfolio     226,160 105,575 6.8% 6.5% 97.6%

 

  1. Based on the latest valuation as at 30 June 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 Q2 2018 Q2 2017 (restated)* H1 2018 H1 2017 (restated)*
         
Rental income 3,958 2,940 7,564 5,667
Service charge income 608 382 1,193 740
Cost of rental activities (940) (640) (1,722) (1,199)
Net rental income 3,626 2,682 7,035 5,208
         
Administrative expenses (621) (670) (1,261) (1,400)
Other operating income / (expenses) 39 - 45 13
Valuation gains / (loss) on investment properties 480 339 480 339
Operating profit 3,524 2,351 6,299 4,160
         
Financial income 2 2 4 43
Financial expenses (716) (443) (1,205) (775)
Net financing costs (714) (441) (1,201) (732)
         
Profit before tax 2,810 1,910 5,098 3,428
Income tax charge (234) (368) (838) (936)
Profit for the period 2,576 1,542 4,260 2,492
           
Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods
Net gains (losses) on cash flow hedges (315) 82 (630) 220
Termination of interest rate swap agreement - 57 - 57
Recognition of initial interest rate cap costs (33) - (33) -
Income tax relating to net gains (losses) on cash flow hedges 34 (23) 79 (40)
Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods (314) 116 (584) 237
         
Total comprehensive income for the period, net of tax 2,262 1,658 3,676 2,729
         
Basic and diluted earnings per unit (Euro) 0.03 0.03 0.05 0.04

*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 30.06.2018 31.12.2017
     
Non-current assets    
Investment properties 226,160 189,317
Derivative financial instruments 52 89
Other non-current assets 138 146
Total non-current assets 226,350 189,552
     
Current assets    
Trade and other receivables 1,820 1,568
Prepayments 224 108
Cash and cash equivalents 19,847 24,557
Total current assets 21,891 26,233
Total assets 248,241 215,785
     
Equity    
Paid in capital 94,198 91,848
Cash flow hedge reserve (640) (56)
Retained earnings 15,763 15,184
Total equity 109,321 106,976
     
Non-current liabilities    
Interest bearing loans and borrowings 129,794 96,497
Deferred tax liabilities 5,493 5,206
Derivative financial instruments 729 88
Other non-current liabilities 846 859
Total non-current liabilities 136,862 102,650
     
Current liabilities    
Interest bearing loans and borrowings 106 1,590
Trade and other payables 1,658 4,202
Income tax payable - 14
Derivative financial instruments - 15
Other current liabilities 294 338
Total current liabilities 2,058 6,159
Total liabilities 138,920 108,809
Total equity and liabilities 248,241 215,785

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 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 16:40 EET on 31 August 2018.

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