15/03/2019 18:15:00

Baltic Horizon Fund Consolidated Audited Results for 2018

Management Board of Northern Horizon Capital AS has approved the audited financial results of Baltic Horizon Fund (the Fund) for the year 2018. The financial results remained unchanged compared to the preliminary disclosure on 15 February 2019.

Gross Asset Value (GAV)

In 2018, the GAV increased from EUR 215.8 million to EUR 260.9 million compared to the end of 2017. The increase is mainly related to new acquisitions during the year and the cash received from a subsequent bond issue in December. The Fund completed the acquisitions of the Postimaja Shopping Centre, LNK Centre and Meraki land plot and thus deployed most of the new capital raised in 2018.

Net Asset Value (NAV)

In 2018, the Fund NAV increased from EUR 107 million to EUR 109.8 million compared to the end of 2017. The increase is related to new equity raised and the Group’s operational performance over the year. The Fund raised EUR 2.4 million net equity during the February private placement and generated almost EUR 10.0 million in net profit. The Fund NAV increase was offset by a EUR 7.7 million dividend distribution to its unitholders and a EUR 0.9 million buy-back of own units.

Net Rental Income and Net Profit

In 2018, the net profit of the Group increased from EUR 9.4 million to EUR 10.0 million as compared to 2017. During the year, the Group recorded a EUR 2.0 million fair value gain (EUR 3.7 million during 2017).

Net rental income for 2018 rose 37.5% to EUR 14.8 million, as compared to EUR 10.8 million in 2017. The increase is related to new acquisitions (Vainodes I office building, Postimaja shopping centre and LNK Centre) that were made following the capital raisings at the end of 2017 and at the start of 2018 and bond subscriptions.

Annual Key Figures

Euro ‘000

2018

2017

Change (%)

 

 

 

 

Net rental income14,80410,76837.5%
Valuation gains/(loss) on investment properties2,0143,676(45.2%)
Operating profit14,07911,68420.5%
Net financing costs(2,781)(1,481)87.8%
Profit before tax11,29810,20310.7%

Net profit for the period

9,990

9,444

5.8%

    
Weighted average number of units outstanding78,764,895162,270,69426.5%

Earnings per unit (EUR)

0.13

0.15

(13.3%)

Euro ‘000

31.12.2018

31.12.2017

Change (%)

 

   
Investment property in use245,160189,31729.5%
Gross asset value (GAV)260,878215,78520.9%
    
Interest bearing loans140,50798,08743.2%
Total liabilities151,073108,80938.8%
    
Net asset value (NAV)109,805106,9762.6%
Number of units outstanding78,496,831177,440,6381.4%

Net asset value (NAV) per unit (EUR)

1.3988

1.3814

1.3%

Loan-to-Value ratio (LTV)

57.3%

51.8%

 

Average effective interest rate

2.4%

1.7%

 

  1. The number of units excludes 255,969 units acquired by the Fund as part of the unit buy-back program.

Investment Properties Performance

During 2018, the average actual occupancy of the portfolio was 97.6% (2017: 96.6%). When all rental guarantees are considered, the effective occupancy rate is 98.0% (2017: 97.8%). Average direct property yield during 2018 was 6.8% (2017: 7.2%). The net initial yield for the whole portfolio for 2018 was 6.5% (2017: 6.8%). The decrease is related to the acquisition of new properties with lower yields.  

Property name

City

Country

Market value1

Euro‘000

NLA

Direct property yield for 2018

Net initial yield for 2018

Occupancy rate for 2018

Duetto IVilniusLithuania16,3208,4987.3%6.7%100.0%2
Pirita SCTallinnEstonia10,0205,4277.3%8.1%100.0%2
Upmalas Biroji BCRigaLatvia25,73010,4587.2%7.0%100.0%
G4S HeadquartersTallinnEstonia17,2409,1797.7%7.1%100.0%
Europa SCVilniusLithuania41,10016,8566.3%5.8%94.8%
Domus Pro Retail ParkVilniusLithuania17,46011,2477.4%6.7%98.4%
Domus Pro OfficeVilniusLithuania7,4604,8317.7%6.9%95.9%
Meraki LandVilniusLithuania1,670----
Sky SCRigaLatvia5,3903,2548.2%7.5%99.3%
LinconaTallinnEstonia17,17010,8707.7%7.2%94.6%3
Vainodes IRigaLatvia21,2308,0526.9%6.7%100.0%
Postimaja & CC Plaza complexTallinnEstonia46,92017,8096.2%5.9%98.1%
LNK CentreRigaLatvia17,4507,4536.4%6.4%100.0%

Total portfolio

 

 

245,160

113,934

6.8%

6.5%

98.0%

  1. Based on the latest valuation as at 28 December 2018.
  2. Effective occupancy rate is 100% due to a rental guarantee. 
  3. Lincona Office Complex was fully occupied at the end of December 2018.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Euro ‘000

2018

2017

(restated)*

 

  
Rental income15,86011,839
Service charge income2,7601,921
Cost of rental activities(3,816)(2,992)

Net rental income

14,804

10,768

   
Administrative expenses(2,813)(2,774)
Other operating income/(expenses)7414
Valuation gains/(loss) on investment properties2,0143,676

Operating profit

14,079

11,684

   
Financial income847
Financial expenses(2,789)(1,528)

Net financing costs

(2,781)

(1,481)

   

Profit before tax

11,298

10,203

Income tax charge(1,308)(759)

Profit for the period

9,990

9,444

   

Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods

Net gains (losses) on cash flow hedges(1,013)273
Termination of interest rate swap agreement reclassified to profit or loss-57
Recognition of initial interest rate cap costs (33)(43)
Income tax relating to net gains (losses) on cash flow hedges97(49)

Other comprehensive income/(expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods

(949)

238

 

  

Total comprehensive income/(expense) for the period, net of tax

9,041

9,682

 

 

 

Basic and diluted earnings per unit (Euro)

 0.13

0.15

*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.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Euro ‘000

31.12.2018

31.12.2017

 

 

 

Non-current assets

 

 

Investment properties245,160189,317
Derivative financial instruments989
Other non-current assets596146

Total non-current assets

245,765

189,552

   

Current assets

  
Trade and other receivables2,7341,568
Prepayments154108
Cash and cash equivalents12,22524,557

Total current assets

15,113

26,233

Total assets

260,878

215,785

   

Equity

  
Paid in capital93,67391,848
Own units(335)-
Cash flow hedge reserve(1,005)(56)
Retained earnings17,47215,184

Total equity

109,805

106,976

   

Non-current liabilities

  
Interest bearing loans and borrowings140,40196,497
Deferred tax liabilities5,8445,206
Derivative financial instruments1,06988
Other non-current liabilities905859

Total non-current liabilities

148,219

102,650

   

Current liabilities

  
Interest bearing loans and borrowings1061,590
Trade and other payables2,3974,202
Income tax payable-14
Derivative financial instruments-15
Other current liabilities351338

Total current liabilities

2,854

6,159

Total liabilities

151,073

108,809

Total equity and liabilities

260,878

215,785

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 19:50 EET on 15 March 2019.

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