Gross Asset Value (GAV)
As at 31 December 2018, the GAV was EUR 260.9 million (EUR 248.6 million as at 30 September 2018). During Q4 2018, the Group completed subsequent subscription for its 5-year unsecured notes (bonds) worth EUR 10 million.
Net Asset Value (NAV)
In Q4 2018, the Fund NAV increased from EUR 109.3 million to EUR 109.8 million. Equity was positively affected by the Fund’s operational performance over the quarter, however, this was offset by a EUR 2.04 million cash distribution to its unitholders (EUR 0.026 per unit) and a buy-back of own units.
Net Operating Income (NOI) and Net Profit
In Q4 2018, the Fund NOI was EUR 3.9 million (EUR 2.9 million in Q4 2017), net profit was EUR 3.5 million (EUR 5.3 million in Q4 2017). Growth in NOI was positively affected by the new property acquisitions (Vainodes I office building, Postimaja shopping centre and LNK Centre). During the quarter, the Fund recorded a fair value gain of EUR 1.5 million whereas the fair value gain in Q4 2017 was EUR 3.3 million.
Cash Distributions (dividends)
On 13 February 2019, the Fund declared a cash distribution of EUR 2,119 thousand (EUR 0.027 per unit) to the Fund unitholders for Q4 2018 results (EUR 2,044 thousand or EUR 0.026 per unit for Q3 2018). During Q4 2018, the Generated Net Cash Flow (GNCF) amounted to EUR 2,204 thousand or EUR 0.028 per unit (EUR 2,067 thousand or EUR 0.026 per unit for Q3 2018).
Quarterly Key Figures
| Euro ‘000 | Q4 2018 | Q4 2017 | Change (%) |
| Net rental income | 3,929 | 2,922 | 34.5% |
| Valuation gains / (loss) on investment properties | 1,534 | 3,337 | (54.0%) |
| Operating profit | 4,685 | 5,357 | (12.5%) |
| Net financing costs | (806) | (403) | 100% |
| Profit before tax | 3,879 | 4,954 | (21.7%) |
| Net profit for the period | 3,535 | 5,277 | (33.0%) |
| Weighted average number of units outstanding | 78,637,645* | 69,011,121 | 13.9% |
| Earnings per unit (EUR) | 0.04 | 0.08 | (50%) |
| Euro ‘000 | 31.12.2018 | 31.12.2017 | Change (%) |
| Investment property in use | 245,160 | 189,317 | 29.5% |
| Gross asset value (GAV) | 260,878 | 215,785 | 20.9% |
| Interest bearing loans | 140,507 | 98,087 | 43.2% |
| Total liabilities | 151,073 | 108,809 | 38.8% |
| Net asset value (NAV) | 109,805 | 106,976 | 2.6% |
| Number of units outstanding | 78,496,831* | 77,440,638 | 1.4% |
| 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% |
*The number of units excludes 255,969 units purchased by the Fund as part of the units buy-back program.
Investment properties PERFORMANCE in Q4 2018
During Q4 2018, the average actual occupancy of the portfolio was 98.2% (Q3 2018: 97.5%). When all rental guarantees are considered, the effective occupancy rate is 98.6% (Q3 2018: 97.8%). The average direct property yield during Q4 2018 was 6.8% (Q3 2018: 6.9%). The net initial yield for the whole portfolio for Q4 2018 was 6.5% (Q3 2018: 6.6%).
| Property name | City | Country | Book value1 Euro‘000 |
NLA | Direct property yield2 | Net initial yield3 | Occupancy rate for Q4 2018 |
| Duetto I | Vilnius | Lithuania | 16,320 | 8,498 | 6.7% | 6.1% | 100.0%4 |
| Pirita SC | Tallinn | Estonia | 10,020 | 5,427 | 7.4% | 9.0% | 100.0%4 |
| Upmalas Biroji BC | Riga | Latvia | 25,730 | 10,458 | 7.3% | 6.7% | 100.0% |
| G4S Headquarters | Tallinn | Estonia | 17,240 | 9,179 | 7.7% | 6.9% | 100.0% |
| Europa SC | Vilnius | Lithuania | 41,100 | 16,856 | 6.3% | 5.7% | 95.6% |
| Domus Pro Retail Park | Vilnius | Lithuania | 17,460 | 11,247 | 7.2% | 6.5% | 98.4% |
| Domus Pro Office | Vilnius | Lithuania | 7,460 | 4,831 | 8.2% | 7.1% | 98.4% |
| Meraki | Vilnius | Lithuania | 1,670 | – | – | – | – |
| Sky SC | Riga | Latvia | 5,390 | 3,254 | 8.1% | 7.5% | 99.4% |
| Lincona | Tallinn | Estonia | 17,170 | 10,870 | 8.1% | 7.4% | 98.5% |
| Vainodes I | Riga | Latvia | 21,230 | 8,052 | 6.8% | 6.8% | 100.0% |
| Postimaja & CC Plaza complex | Tallinn | Estonia | 46,920 | 17,809 | 5.9% | 5.8% | 97.9% |
| LNK Centre | Riga | Latvia | 17,450 | 7,453 | 6.3% | 6.3% | 100.0% |
| Total portfolio | 245,160 | 113,934 | 6.8% | 6.5% | 98.6% |
- 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 | 01.10.2018-31.12.2018 | 01.10.2017-31.12.2017 (restated)* |
01.01.2018-31.12.2018 | 01.01.2017-31.12.2017 (restated)* |
| Rental income | 4,284 | 3,217 | 15,860 | 11,839 |
| Service charge income | 948 | 756 | 2,760 | 1,921 |
| Cost of rental activities | (1,303) | (1,051) | (3,816) | (2,992) |
| Net rental income | 3,929 | 2,922 | 14,804 | 10,768 |
| Administrative expenses | (804) | (839) | (2,813) | (2,774) |
| Other operating income / (expenses) | 26 | (63) | 74 | 14 |
| Valuation gains / (loss) on investment properties | 1,534 | 3,337 | 2,014 | 3,676 |
| Operating profit | 4,685 | 5,357 | 14,079 | 11,684 |
| Financial income | 2 | 2 | 8 | 47 |
| Financial expenses | (808) | (405) | (2,789) | (1,528) |
| Net financing costs | (806) | (403) | (2,781) | (1,481) |
| Profit before tax | 3,879 | 4,954 | 11,298 | 10,203 |
| Income tax charge | (344) | 323 | (1,308) | (759) |
| Profit for the period | 3,535 | 5,277 | 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 | (588) | 147 | (1,013) | 273 |
| Termination of interest rate swap agreement | – | – | – | 57 |
| Recognition of initial interest rate cap costs | – | (43) | (33) | (43) |
| Income tax relating to net gains (losses) on cash flow hedges | 55 | (17) | 97 | (49) |
| Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods | (533) | 87 | (949) | 238 |
| Total comprehensive income for the period, net of tax | 3,002 | 5,364 | 9,041 | 9,682 |
| Basic and diluted earnings per unit (Euro) | 0.04 | 0.08 | 0.13 | 0.15 |
*In 2018, the Group adopted IFRS 15 Revenue from Contracts with Customers, effective 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 | 31.12.2018 | 31.12.2017 |
| Non-current assets | ||
| Investment properties | 245,160 | 189,317 |
| Derivative financial instruments | 9 | 89 |
| Other non-current assets | 596 | 146 |
| Total non-current assets | 245,765 | 189,552 |
| Current assets | ||
| Trade and other receivables | 2,734 | 1,568 |
| Prepayments | 154 | 108 |
| Cash and cash equivalents | 12,225 | 24,557 |
| Total current assets | 15,113 | 26,233 |
| Total assets | 260,878 | 215,785 |
| Equity | ||
| Paid in capital | 93,673 | 91,848 |
| Own units | (335) | – |
| Cash flow hedge reserve | (1,005) | (56) |
| Retained earnings | 17,472 | 15,184 |
| Total equity | 109,805 | 106,976 |
| Non-current liabilities | ||
| Interest bearing loans and borrowings | 140,401 | 96,497 |
| Deferred tax liabilities | 5,844 | 5,206 |
| Derivative financial instruments | 1,069 | 88 |
| Other non-current liabilities | 905 | 859 |
| Total non-current liabilities | 148,219 | 102,650 |
| Current liabilities | ||
| Interest bearing loans and borrowings | 106 | 1,590 |
| Trade and other payables | 2,397 | 4,202 |
| Income tax payable | – | 14 |
| Derivative financial instruments | – | 15 |
| Other current liabilities | 351 | 338 |
| 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 14:23 EET on 15 February 2019.
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