At the end of Q4 2017, the GAV increased by 31.8% from EUR 169.7 million to EUR 215.8 million as compared to the end of Q3 2017. During the quarter, the Group closed Vainodes I acquisition and raised additional gross equity of EUR 17 million through a secondary public offering in November.
In Q4 2017, the Fund NAV increased from EUR 86.7 million to EUR 107 million. The increase is related to new equity raised in November and the Group’s operational performance over the quarter. The Fund also made a EUR 1.3 million cash distribution to its unitholders (EUR 0.020 per unit).
In Q4 2017, the Fund earned a net profit of EUR 5,277 thousand (EUR 1,180 thousand during Q4 2016). During Q4 2017, the Fund’s performance was positively affected by year-end valuations. During the quarter, the Fund recorded a fair value gain of EUR 3,337 thousand. Last year, the Fund’s investment property valuations were mainly performed in Q3 2016. Starting from 2017 onwards properties are being revalued every 6 months, in June and December.
In Q4 2017, the Fund recorded a EUR 2.9 million NOI (EUR 2.3 million in Q4 2016). The increase is related to new acquisitions that were made following the capital raisings at the end of 2016 and the beginning of 2017. The Fund has completed the acquisition of Postimaja Shopping Centre on 13th of February 2018 and thus has deployed majority of the new capital raised in November 2017.
Quarterly Key Figures
| Euro ‘000 | Q4 2017 | Q4 2016 | Change (%) |
| Rental income | 3,217 | 2,540 | 26.7% |
| Service charge income | 1,029 | 784 | 31.3% |
| Cost of rental activities | (1,324) | (1,014) | 30.6% |
| Net rental income | 2,922 | 2,310 | 26.5% |
| Expenses related to public offerings | (203) | (313) | (35.1)% |
| Administrative expenses | (636) | (415) | 53.3% |
| Other operating income / (expenses) | (63) | 2 | (>100.0)% |
| Valuation gains / (loss) on investment properties | 3,337 | 376 | 787.5% |
| Operating profit | 5,357 | 1,960 | 173.3% |
| Financial income | 2 | 3 | (33.3)% |
| Financial expenses | (405) | (413) | (1.9)% |
| Net financing costs | (403) | (410) | (1.7)% |
| Profit before tax | 4,954 | 1,550 | 219.6% |
| Income tax charge | 323 | (370) | (187.3)% |
| Profit for the period | 5,277 | 1,180 | 347.2% |
| Weighted average number of units outstanding | 62,270,694 | 47,350,881 | 31.5% |
| Earnings per unit (EUR) | 0.08 | 0.02 | 300.0% |
| Euro ‘000 | 31.12.2017 | 31.12.2016 | Change (%) |
| Investment property in use | 189,317 | 141,740 | 33.6% |
| Gross asset value (GAV) | 215,785 | 154,938 | 39.3% |
| Interest bearing loans | 98,087 | 69,172 | 41.8% |
| Total liabilities | 108,809 | 78,129 | 39.3% |
| Net asset value (NAV) | 106,976 | 76,809 | 39.3% |
| Number of units outstanding | 77,440,638 | 57,264,743 | 35.2% |
| Net asset value (NAV) per unit (EUR) | 1.3814 | 1.3413 | 3.0% |
| Loan-to-Value ratio (LTV) | 51.8% | 48.8% | |
| Average effective interest rate | 1.7% | 1.8% |
Investment properties PERFORMANCE as of 31 DECEMBER 2017
During Q4 2017, the average actual occupancy of the portfolio was 96.6% (Q3 2017: 97.5%). When all rental guarantees are considered, the effective occupancy rate is 97.2% (Q3 2017: 98.0%). Average direct property yield during Q4 was 7.1% (Q3 2017: 7.2%). The net initial yield for the whole portfolio for Q4 2017 was 6.7% (Q3 2017: 6.9%).
| Property name | City | Country |
Market value1 Euro‘000 |
NLA | Direct property yield | Net initial yield | Occupancy rate for Q4 2017 |
| Duetto I | Vilnius | Lithuania | 16,210 | 8,327 | 6.5% | 6.4% | 100.0%2 |
| Pirita SC | Tallinn | Estonia | 11,630 | 5,436 | 7.4% | 7.8% | 100.0%2 |
| Upmalas Biroji BC | Riga | Latvia | 24,269 | 10,419 | 6.9% | 6.7% | 99.8% |
| G4S Headquarters | Tallinn | Estonia | 16,570 | 8,363 | 7.4% | 7.0% | 100.0% |
| Europa SC | Vilnius | Lithuania | 39,600 | 16,856 | 6.9% | 6.5% | 95.5% |
| Domus Pro Retail | Vilnius | Lithuania | 17,280 | 11,247 | 8.4% | 6.9% | 98.0% |
| Domus Pro Office | Vilnius | Lithuania | 7,150 | 4,759 | 3.9%3 | 2.8% | 73.4% |
| CC Plaza | Tallinn | Estonia | 13,240 | 8,664 | 8.3% | 7.5% | 100.0% |
| Sky SC | Riga | Latvia | 5,448 | 3,263 | 8.4% | 7.5% | 99.3% |
| Lincona | Tallinn | Estonia | 16,050 | 10,859 | 7.6% | 7.3% | 94.1% |
| Vainodes I | Riga | Latvia | 21,870 | 8,052 | 4.3%3 | 4.2% | 100.0% |
| Total portfolio | 189,317 | 96,245 | 7.1% | 6.7% | 97.2% |
- Based on the latest valuation as at 31 December 2017.
- Effective occupancy rate is 100% due to a rental guarantee.
- Domus Pro stage III was opened in October, however, it was not fully occupied during Q4 2017. It is expected to be fully occupied by the end of Q1 2018. The property development yield and annualized direct property yield is 7.9%.
- Vainodes I acquisition was closed on 12 December 2017. The annualized direct property yield is 7.0%.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
| Euro ‘000 | Q4 2017 | Q4 2016 | 12M 2017 | 12M 2016 |
| Rental income | 3,217 | 2,540 | 11,839 | 7,874 |
| Service charge income | 1,029 | 784 | 3,692 | 2,594 |
| Cost of rental activities | (1,324) | (1,014) | (4,763) | (3,315) |
| Net rental income | 2,922 | 2,310 | 10,768 | 7,153 |
| Administrative expenses | (839) | (728) | (2,774) | (2,190) |
| Other operating income / (expenses) | (63) | 2 | 14 | 97 |
| Valuation gains / (loss) on investment properties | 3,337 | 376 | 3,676 | 2,737 |
| Operating profit | 5,357 | 1,960 | 11,684 | 7,797 |
| Financial income | 2 | 3 | 47 | 14 |
| Financial expenses | (405) | (413) | (1,528) | (1,253) |
| Net financing costs | (403) | (410) | (1,481) | (1,239) |
| Profit before tax | 4,954 | 1,550 | 10,203 | 6,558 |
| Income tax charge | 323 | (370) | (759) | (798) |
| Profit for the period | 5,277 | 1,180 | 9,444 | 5,760 |
| Net gains (losses) on cash flow hedges | 148 | (48) | 274 | (113) |
| Termination of interest rate swap agreement reclassified to profit or loss | – | – | 57 | – |
| Recognition of initial interest rate cap costs | (43) | – | (43) | – |
| Income tax relating to net gains (losses) on cash flow hedges | (18) | 19 | (50) | 18 |
| Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods | 87 | (29) | 238 | (95) |
| Total comprehensive income/ (expense) for the period, net of tax | 5,364 | 1,151 | 9,682 | 5,665 |
| Basic and diluted earnings per unit (Euro) | 0.08 | 0.02 | 0.15 | 0.12 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| Euro ‘000 | 31.12.2017 | 31.12.2016 |
| Non-current assets | ||
| Investment properties | 189,317 | 141,740 |
| Investment property under construction | – | 1,580 |
| Derivative financial instruments | 89 | – |
| Other non-current assets | 146 | 288 |
| Total non-current assets | 189,552 | 143,608 |
| Current assets | ||
| Trade and other receivables | 1,568 | 1,269 |
| Prepayments | 108 | 178 |
| Cash and cash equivalents | 24,557 | 9,883 |
| Total current assets | 26,233 | 11,330 |
| Total assets | 215,785 | 154,938 |
| Equity | ||
| Paid in capital | 91,848 | 66,224 |
| Own units | – | (8) |
| Cash flow hedge reserve | (56) | (294) |
| Retained earnings | 15,184 | 10,887 |
| Total equity | 106,976 | 76,809 |
| Non-current liabilities | ||
| Interest bearing loans and borrowings | 96,497 | 58,981 |
| Deferred tax liabilities | 5,206 | 4,383 |
| Derivative financial instruments | 88 | 345 |
| Other non-current liabilities | 859 | 935 |
| Total non-current liabilities | 102,650 | 64,644 |
| Current liabilities | ||
| Interest bearing loans and borrowings | 1,590 | 10,191 |
| Trade and other payables | 4,202 | 2,876 |
| Income tax payable | 14 | 46 |
| Derivative financial instruments | 15 | – |
| Other current liabilities | 338 | 372 |
| Total current liabilities | 6,159 | 13,485 |
| Total liabilities | 108,809 | 78,129 |
| Total equity and liabilities | 215,785 | 154,938 |
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 an 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 15:01 EET on 15 February 2018.
