Published: 2019-05-17 10:45:00 CEST
Baltic Horizon Fund / Northern Horizon Capital
Quarterly report

Baltic Horizon Fund Consolidated Un-Audited Results for Q1 2019

Gross Asset Value (GAV)
In Q1 2019, the GAV increased from EUR 260.9 million to EUR 269.5 million compared to the end of Q4 2018. The increase is mainly related to Duetto II acquisition in February.

Net Asset Value (NAV)
In Q1 2019, the Fund NAV decreased from EUR 109.8 million to EUR 109.3 million compared to the end of Q4 2018. The Fund NAV was positively affected by the Fund’s operational performance over the quarter. However, this was offset by a EUR 2.1 million cash distribution to unitholders (EUR 0.027 per unit) and a negative cash flow hedge reserve movement during the quarter.

Net Rental Income and Net Profit
In Q1 2019, the Fund earned a net profit of EUR 2,173 thousand (EUR 1,684 thousand during Q1 2018). In Q1 2019, the Fund recorded a EUR 3.9 million net rental income (EUR 3.4 million in Q1 2018). Growth in net rental income and net profit was positively affected by new property acquisitions at the end of 2018 and the beginning of 2019 (LNK Centre and Duetto II office building).

Cash Distributions (dividends)
On 17 May 2019, the Fund declared a EUR 2.45 million quarterly cash distribution to investors, which represents a EUR 0.025 distribution per unit for the Q1 2019 results (EUR 2,119 thousand or EUR 0.027 per unit for Q4 2018).

Quarterly key figures

Euro ‘000Q1 2019Q1 2018Change (%)
    
Net rental income3,916 3,409 14.9%
Operating profit3,213 2,775 15.8%
Net financing costs(897)(487)84.2%
Profit before tax2,316 2,288 1.2%
Net profit for the period2,173 1,684 29.0%
    
Weighted average number of units outstanding78,496,8311 78,154,221 0.4%
Earnings per unit (EUR)0.03 0.02 50.0%


Euro ‘00031.03.201931.12.2018Change (%)
    
Investment property in use263,566 245,160 7.5%
Gross asset value (GAV)269,488 260,878 3.3%
    
Interest bearing loans149,159 140,507 6.2%
Total liabilities160,149 151,073 6.0%
    
Net asset value (NAV)109,339 109,805 (0.4%)
Number of units outstanding78,496,831 78,496,8311 0.0%
Net asset value (NAV) per unit (EUR)1.3929 1.3988 (0.4%)
Loan-to-Value ratio (LTV)56.6%57.3% 
Average effective interest rate2.4%2.4% 
  1. The number of units excludes 255,969 units acquired by the Fund and cancelled in February 2019 as part of the unit buy-back program.

Investment properties performance in Q1 2019

During Q1 2019, the average actual occupancy of the portfolio was 96.6% (Q4 2018: 98.2%). When all rental guarantees are considered, the effective occupancy rate is 97.3% (Q4 2018: 98.6%). The average direct property yield during Q1 2019 was 6.7% (Q4 2018: 6.8%). The net initial yield for the whole portfolio for Q1 2019 was 6.3% (Q4 2018: 6.5%).

Overview of the Fund’s investment properties as of 31.03.2019

Property nameSectorMarket value1
Euro ‘000
NLADirect property yield2Net initial yield3Occupancy rate for Q1 2019
       
Vilnius, Lithuania      
Duetto IOffice16,3208,4987.9%7.2%100.0%4
Duetto IIOffice18,3388,6367.1%7.1%100.0%4
Europa SCRetail41,13916,8566.9%6.3%96.3%
Domus Pro Retail ParkRetail17,46511,2477.4%6.6%98.3%
Domus Pro OfficeOffice7,4614,8318.6%7.5%100.0%
Meraki Land 1,670----
Total Vilnius 102,39350,0687.3%6.7%98.2%
       
Riga, Latvia      
Upmalas Biroji BCOffice25,73410,4587.0%6.5%100.0%
Vainodes IOffice21,2438,0526.8%6.8%100.0%
LNK CentreOffice17,4507,4536.1%5.9%100.0%
Sky SCRetail5,3903,2545.0%4.6%99.4%
Total Riga 69,81729,2176.5%6.3%99.9%
       
Tallinn, Estonia      
Postimaja & CC PlazaRetail32,4509,1454.3%4.6%90.9%
Postimaja & CC PlazaLeisure14,4708,6648.5%7.0%100.0%
G4S HeadquartersOffice17,2409,1797.3%6.5%90.2%
LinconaOffice17,17610,8718.5%7.7%100.0%
Pirita SCRetail10,0205,5084.6%5.6%89.2%
Total Tallinn 91,35643,3676.1%6.0%94.6%
Total portfolio 263,566122,6526.7%6.3%97.3%
  1. Based on the latest valuation as at 28 December 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 ‘000 01.01.2019-31.03.201901.01.2018-31.03.2018
    
Rental income 4,151 3,606
Service charge income 763 585
Cost of rental activities (998)(782)
Net rental income 3,9163,409
    
Administrative expenses (709)(640)
Other operating income 6 6
Operating profit 3,213 2,775
    
Financial income 2 2
Financial expenses (899)(489)
Net financing costs (897)(487)
    
Profit before tax 2,316 2,288
Income tax charge (143)(604)
Profit for the period 2,173 1,684
    
Net gains (losses) on cash flow hedges (556)(315)
Income tax relating to net gains (losses) on cash flow hedges 36 45
Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods (520)(270)
    
Total comprehensive income for the period, net of tax 1,653 1,414
    
Basic and diluted earnings per unit (Euro)  0.03 0.02


 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 

Euro ‘000 31.03.201931.12.2018
    
Non-current assets   
Investment properties 263,566245,160
Derivative financial instruments 79
Other non-current assets 96596
Total non-current assets 263,669245,765
    
Current assets   
Trade and other receivables 2,5562,734
Prepayments 316154
Cash and cash equivalents 2,94712,225
Total current assets 5,81915,113
Total assets 269,488260,878
    
Equity   
Paid in capital 93,33893,673
Own units -(335)
Cash flow hedge reserve (1,525)(1,005)
Retained earnings 17,52617,472
Total equity 109,339109,805
    
Non-current liabilities   
Interest bearing loans and borrowings 148,771140,401
Deferred tax liabilities 5,9345,844
Derivative financial instruments 1,6231,069
Other non-current liabilities 921905
Total non-current liabilities 157,249148,219
    
Current liabilities   
Interest bearing loans and borrowings 388106
Trade and other payables 2,1862,397
Income tax payable 3-
Other current liabilities 323351
Total current liabilities 2,9002,854
Total liabilities 160,149151,073
Total equity and liabilities 269,488260,878

 
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 10:57 EET on 17 May 2019.

Attachments


BHF I kvartali vahearuanne 2019.pdf
BHF quarterly report Q1 2019.pdf