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 value1 Euro‘000 |
NLA | Direct property yield2 | Net initial yield3 | 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% |
- Based on the latest valuation as at 30 June 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 | 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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