Eurocastle Releases Fourth Quarter And Year End 2022 Financial Results

 
TIDMECT 
 

EUROCASTLE INVESTMENT LIMITED

Contact:

Oak Fund Services (Guernsey) Limited

Company Administrator

Attn: Hannah Crocker

Tel: [phone]

Eurocastle Releases Fourth Quarter and Year End 2022 Financial Results

Guernsey, 2 March 2023 -- Eurocastle Investment Limited (Euronext Amsterdam: ECT) today https://www.globenewswire.com/Tracker?data=RzS7OsGwnxginhGRcS7yNtjqYwi9qKMWBGXHduo6v1Ko9tYrrs-2yk3pM9GLG7hc will release its annual report for the year ended 31 December 2022.

   -- Adjusted Net Asset Value ("NAV") of EUR10.3 million1, or EUR10.33 per 
      share2, up EUR0.07 per share vs. Q3 2022 (up EUR0.54 per share vs. YE 
      2021) due to: 
   1. Valuation movements: 
 
          -- EUR0.05 per share, or 6%, increase in Q4 2022 (EUR0.28 per share 
             increase for FY 2022) on the real estate fund investments 
             following the sale of the final apartment units. 
 
          -- No movement in Q4 2022 (EUR0.12 per share increase for FY 2022) on 
             the NPL and other loan interests which were fully disposed of in 
             the year. 
 
   2. Reserve and other movements: EUR0.02 per share increase in Q4 2022 
      (EUR0.13 per share increase for FY 2022). 
   -- IFRS NAV of EUR22.4 million, or EUR22.45 per share (EUR32.9 million, or 
      EUR17.73 per share3, as at YE 2021). 

The tables below summarise the Adjusted NAV by segment:

 
 
                     YE 2022 NAV       Q3 2022 NAV       YE 2021 NAV 
                   ----------------  ----------------  ---------------- 
                   EUR'm   EUR p.s.  EUR'm   EUR p.s.  EUR'm   EUR p.s. 
Real Estate 
 Funds                0.6      0.63     0.8      0.76     2.8      1.49 
Italian NPLs & 
 Other Loans            -         -     1.0      1.01     1.3      0.72 
Net Corporate 
 Cash(4)             17.1     17.15    16.2     16.27    28.8     15.52 
Legacy German 
 Tax Asset            4.6      4.67     4.6      4.67       -         - 
----------------   ------  --------  ------  --------  ------  -------- 
IFRS NAV             22.4     22.45    22.6     22.72    32.9     17.73 
================   ======  ========  ======  ========  ======  ======== 
 
Additional 
 Reserves          (12.1)   (12.12)  (12.4)   (12.46)  (14.8)    (7.94) 
 
Adjusted NAV         10.3     10.33    10.2     10.26    18.2      9.79 
================   ======  ========  ======  ========  ======  ======== 
Ordinary shares 
 outstanding           995,555           995,555          1,857,535 
 
 
 

As at 31 December 2022, the Company's remaining assets mainly comprise:

   1. Two Real Estate Fund Investments with a Q4 2022 NAV of EUR0.6 million, or 
      EUR0.63 per share, where the underlying apartments are now all sold with 
      both funds currently in liquidation. 
 
   2. EUR17.1 million of net corporate cash. 

2022 BUSINESS HIGHLIGHTS

FY 2022 Overview

During 2022, the Company made significant progress on realising its remaining assets as part of its Realisation Plan, with 96% of its YE 2021 NAV relating to investments realised in the period. As at 31 December 2022, the Company had realised 106% of the NAV of the investments reported at the time of the announcement of the Realisation Plan in November 2019.

In particular, Eurocastle disposed of the two remaining loan pools that the Company had an interest in and all remaining apartment units in its two real estate fund investments were sold. As a result, Eurocastle's investment interests now comprise the residual net assets of its two RE Fund Investments with an NAV of EUR0.6 million, or 6% of the Company's total Adjusted NAV.

In July, the Company announced the conclusion of its strategic review and the decision to relaunch the Company's investment activity (the "Relaunch"). It also announced a tender offer to provide a liquidity opportunity for those shareholders who did not wish to participate in the Relaunch (the "Tender Offer"). The Tender Offer closed in August with 67% of eligible shares tendered, resulting in Eurocastle accepting 864,980 shares in exchange for EUR10.26 of cash per share, or EUR8.9 million in total.

Investment Realisations & Highlights

   -- During 2022, the Company realised EUR4.8 million from its investments, of 
      which EUR3.4 million came from its RE Fund Investments (91% of their YE 
      2021 NAV) and EUR1.5 million from its minority NPL and Other Loan 
      holdings (109% of their YE 2021 NAV). 
 
   -- RE Redevelopment Funds - REFI II & REFI V: Both funds are now in 
      liquidation with all apartment units sold. During 2022, Eurocastle 
      received EUR3.4 million comprising (i) EUR1.0 million from REFI II (70% 
      of its YE 2021 NAV) and (ii) EUR2.4 million from REFI V (103% of its YE 
      2021 NAV). 
 
   -- Italian NPLs & Other Loans: The Company disposed of its residual minority 
      interest in 2 loan pools, realising EUR1.3 million and a further EUR0.2 
      million in distributions during the year. 
 
   -- Additional Reserves: The Company reduced these reserves from EUR14.8 
      million to EUR12.1 million during the year. The reduction of EUR2.7 
      million reflects EUR1.4 million of reserves being utilised, in line with 
      anticipated costs, and a release of EUR1.3 million of the existing 
      reserves in the year. The majority of this release relates to the legacy 
      German tax matter following a revision to the estimated total liability. 
      As at 31 December 2022, of the total Additional Reserves of EUR12.1 
      million, EUR6.5 million related to the legacy German tax matter with the 
      balance of approximately EUR5.5 million in place to allow for an orderly 
      liquidation process. 

Relaunch Update

   -- As at 31 December 2022 the Company has EUR17.1 million of net corporate 
      cash and approximately EUR9.7 million of net available cash to commence 
      seeking new investments under the new investment strategy. The Company is 
      currently working with the Manager to finalise the structure and expects 
      to commence investing in the coming weeks. 

SUBSEQUENT EVENTS TO 31 DECEMBER 2022

As at 2 March 2023, there were no material subsequent events to disclose.

 
 
     Income Statement for the Full Year and Fourth Quarter 
      2022                                                    FY 2022              Q4 2022 
                                                                EUR 
                                                             Thousands          EUR Thousands 
-----------------------------------------------------------  ---------  ----------------------------- 
Portfolio Returns 
----------------------------------------------------------- 
  Italian NPLs & Other Loans realised gain                      116                               - 
  Real Estate Funds realised fair value movement                 -                                - 
  Real Estate Funds unrealised fair value movement                 282                             48 
-----------------------------------------------------------  ---------  ----------------------------- 
Fair value movement on Italian investments                         398                             48 
Fair value movements on residual Legacy entities                     9                              9 
Interest income                                                     68                             58 
Loss on foreign currency translation                               (7)                            (5) 
                                                             ---------  ----------------------------- 
Total income                                                       468                            109 
-----------------------------------------------------------  ---------  ----------------------------- 
 
Operating Expenses 
----------------------------------------------------------- 
Interest expense                                                    12                              - 
Manager base and incentive fees                                     92                             17 
Remaining operating expenses                                     1,247                            243 
-----------------------------------------------------------  ---------  ----------------------------- 
Other operating expenses                                         1,339                            260 
-----------------------------------------------------------  ---------  ----------------------------- 
Total expenses                                                   1,351                            260 
-----------------------------------------------------------  ---------  ----------------------------- 
 
Net loss for the period                                          (883)                          (152) 
EUR per share                                                   (0.58)                         (0.15) 
-----------------------------------------------------------  ---------  ----------------------------- 
 
 
                                                          Italian 
 Balance Sheet and Adjusted NAV Reconciliation as at     Investments      Corporate         Total 
  31 December 2022                                      EUR Thousands   EUR Thousands   EUR Thousands 
 ---------------------------------------------------- 
Assets 
 Cash and cash equivalents                                          -          17,721          17,721 
 Other assets                                                       -             109             109 
 Legacy German tax asset                                            -           4,645           4,645 
 Investments: 
   Real Estate Funds                                              628               -             628 
Total assets                                                      628          22,475          23,103 
Liabilities 
 Trade and other payables                                           -             736             736 
 Manager base and incentive fees                                    -              17              17 

 ----------------------------------------------------  --------------  --------------  -------------- 
Total liabilities                                                   -             753             753 
IFRS Net Asset Value                                              628          21,722          22,350 
-----------------------------------------------------  --------------  --------------  -------------- 
Liquidation cash reserve                                            -         (5,537)         (5,537) 
Legacy German tax cash reserve                                      -         (1,888)         (1,888) 
Legacy German tax asset                                             -         (4,645)         (4,645) 
Adjusted NAV                                                      628           9,652          10,280 
Adjusted NAV (EUR per Share)                                     0.63            9.69           10.33 
-----------------------------------------------------  --------------  --------------  -------------- 
 

NOTICE:

This announcement contains inside information for the purposes of the Market Abuse Regulation 596/2014.

ADDITIONAL INFORMATION

For investment portfolio information, please refer to the Company's most recent Financial Report, which will be available on the Company's website (www.eurocastleinv.com).

ABOUT EUROCASTLE

Eurocastle Investment Limited ("Eurocastle" or the "Company") is a publicly traded closed-ended investment company. On 18 November 2019, the Company announced a plan to realise the majority of its assets with the aim of accelerating the return of value to shareholders. On 8 July 2022, the Company announced the relaunch of its investment activity and is currently in the early stages of pursuing its new strategy by initially focusing on opportunistic real estate in Greece with a plan to expand across Southern Europe. For more information regarding Eurocastle Investment Limited and to be added to our email distribution list, please visit www.eurocastleinv.com.

FORWARD LOOKING STATEMENTS

This release contains statements that constitute forward-looking statements. Such forward-looking statements may relate to, among other things, future commitments to sell real estate and achievement of disposal targets, availability of investment and divestment opportunities, timing or certainty of completion of acquisitions and disposals, the operating performance of our investments and financing needs. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may", "will", "should", "potential", "intend", "expect", "endeavor", "seek", "anticipate", "estimate", "overestimate", "underestimate", "believe", "could", "project", "predict", "project", "continue", "plan", "forecast" or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. The Company's ability to predict results or the actual effect of future plans or strategies is limited. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, its actual results and performance may differ materially from those set forth in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause the Company's actual results in future periods to differ materially from forecasted results or stated expectations including the risks regarding Eurocastle's ability to declare dividends or achieve its targets regarding asset disposals or asset performance.

(1) In light of the Realisation Plan announced in November 2019, the Adjusted NAV as at 31 December 2022 reflects additional reserves for future costs and potential liabilities, which have not been accounted for under the IFRS NAV ("Additional Reserves"). No commitments for these future costs and potential liabilities existed as at 31 December 2022.

(2) Per share calculations for Eurocastle throughout this document are based on 995,555 shares, unless otherwise stated.

(3) Based on 1,857,535 shares outstanding at YE 2021.

(4) Reflects corporate cash net of accrued liabilities and other assets.

(END) Dow Jones Newswires

March 02, 2023 12:44 ET (17:44 GMT)

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