Published: 2018-08-31 16:30:00 CEST
Baltic Horizon Fund / Northern Horizon Capital
Half Year financial report

Baltic Horizon Fund Consolidated Un-Audited Results for H1 2018

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 ‘000Q2 2018Q2 2017
(restated)*
Change (%)
Rental income3,9582,94034.6%
Service charge income60838259.2%
Cost of rental activities(940)(640)46.9%
Net rental income3,6262,68235.2%
    
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 properties48033941.6%
Operating profit3,5242,35149.9%
Financial income22-%
Financial expenses(716)(443)61.6%
Net financing costs(714)(441)61.9%
    
Profit before tax2,8101,91047.1%
Income tax charge(234)(368)(36.4)%
Profit for the period2,5761,54267.1%
    
Weighted average number of units outstanding 79,157,094 58,004,44636.5%
Earnings per unit (EUR)0.030.03-%

*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 ‘00030.06.201831.12.2017Change (%)
    
Investment property in use226,160189,31719.5%
Gross asset value (GAV)248,241215,78515.0%
    
Interest bearing loans129,90098,08732.4%
Total liabilities138,920108,80927.7%
    
Net asset value (NAV)109,321106,9762.2%
Number of units outstanding79,157,09477,440,6382.2%
Net asset value (NAV) per unit (EUR)1.38111.3814(0.02)%
Loan-to-Value ratio (LTV)57.4%51.8% 
Average effective interest rate2.3%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 nameCityCountryMarket value1
Euro‘000
NLADirect property yield2Net initial yield3Occupancy rate for Q2 2018
Duetto IVilniusLithuania16,2408,3277.5%6.9%100.0%4
Pirita SCTallinnEstonia10,9505,4007.4%8.2%100.0%4
Upmalas Biroji BCRigaLatvia24,66010,6007.3%7.1%99.8%
G4S HeadquartersTallinnEstonia16,9008,3637.7%7.0%100.0%
Europa SCVilniusLithuania40,31016,9006.2%5.7%94.1%
Domus Pro Retail ParkVilniusLithuania17,35011,2477.4%6.7%98.4%
Domus Pro OfficeVilniusLithuania7,2904,7597.9%6.9%94.1%
Domus Pro LandVilniusLithuania1,670----
CC PlazaTallinnEstonia13,1908,6648.4%7.6%100.0%
Sky SCRigaLatvia5,3603,2638.3%7.7%99.3%
LinconaTallinnEstonia16,65010,8597.3%6.8%91.8%
Vainodes IRigaLatvia21,6108,0527.0%6.9%100.0%
PostimajaTallinnEstonia33,9809,1414.6%4.7%96.0%
Total portfolio  226,160105,5756.8%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 ‘000Q2 2018Q2 2017
(restated)*
H1 2018H1 2017
(restated)*
     
Rental income3,9582,9407,5645,667
Service charge income6083821,193740
Cost of rental activities(940)(640)(1,722)(1,199)
Net rental income3,6262,6827,0355,208
     
Administrative expenses(621)(670)(1,261)(1,400)
Other operating income / (expenses)39-4513
Valuation gains / (loss) on investment properties480339480339
Operating profit3,5242,3516,2994,160
     
Financial income22443
Financial expenses(716)(443)(1,205)(775)
Net financing costs(714)(441)(1,201)(732)
     
Profit before tax2,8101,9105,0983,428
Income tax charge(234)(368)(838)(936)
Profit for the period2,5761,5424,2602,492
      
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 hedges34(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 tax2,2621,6583,6762,729
     
Basic and diluted earnings per unit (Euro)0.030.030.050.04

*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 ‘00030.06.201831.12.2017
   
Non-current assets  
Investment properties226,160189,317
Derivative financial instruments5289
Other non-current assets138146
Total non-current assets226,350189,552
   
Current assets  
Trade and other receivables1,8201,568
Prepayments224108
Cash and cash equivalents19,84724,557
Total current assets21,89126,233
Total assets248,241215,785
   
Equity  
Paid in capital94,19891,848
Cash flow hedge reserve(640)(56)
Retained earnings15,76315,184
Total equity109,321106,976
   
Non-current liabilities  
Interest bearing loans and borrowings129,79496,497
Deferred tax liabilities5,4935,206
Derivative financial instruments72988
Other non-current liabilities846859
Total non-current liabilities136,862102,650
   
Current liabilities  
Interest bearing loans and borrowings1061,590
Trade and other payables1,6584,202
Income tax payable-14
Derivative financial instruments-15
Other current liabilities294338
Total current liabilities2,0586,159
Total liabilities138,920108,809
Total equity and liabilities248,241215,785


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.

Attachment


BHF semi-annual report H1 2018.pdf