EfTEN Real Estate Fund AS unaudited results for 2nd quarter ja 1st half-year 2024
31 July 2024 - 6:00AM
UK Regulatory
EfTEN Real Estate Fund AS unaudited results for 2nd quarter ja 1st
half-year 2024
The performance of EfTEN Real Estate Fund for
the first half of 2024 meets the fund manager's expectations.
Vacancy rates remain below 3% of total leasable area, which is an
excellent result considering the overall business environment.
Excluding the payment difficulties related to the tenant in Hortese
properties, the payment behavior of clients is good, and the level
of arrears remains low. The fund manager considers the issues
related to Hortese properties as isolated cases specific to the
tenant and not indicative of a broader deterioration. The fund
manager has already begun to seek new solutions for both Hortes
stores.
Currently, the highest vacancy rates are in the
office sector, accounting for 76% of the total portfolio vacancy.
However, this is spread across ten different office buildings, and
new tenants are continually being added. The weaker demand for
office space is a clear trend globally and is noticeable in every
Baltic capital. More broadly, the downward trend in interest rates
in the second half of 2024 is expected to increase transaction
activity, which will help to grow the fair value of EfTEN Real
Estate Fund AS's conservatively priced portfolio.
EfTEN Real Estate Fund AS consolidated sales
income for the second quarter of 2024 was 7.957 million euros (2023
II quarter: 7.961 million euros). The consolidated sales revenue of
EfTEN Real Estate Fund AS for the first half of 2024 was 15.918
million euros (2023 first half: 15.749 million euros). The group's
net rental income totalled 14.781 million euros in the first half
of 2024 (2023: 14.704 million euros). The net profit of the group
in the same period was 6.250 million euros (2023: 2.445 million
euros).
The consolidated net rental income margin was
93% (2023: 93%), in the first half of 2024, so costs directly
related to property management (including land tax, insurance,
maintenance and improvement costs) and distribution costs
constituted 7% (2023: 7%) of sales revenue.
The volume of the Group's assets as at
30.06.2024 was 376.332 million euros (31.12.2023: 380.944 million
euros), including the fair value of real estate investments made up
96% of the volume of asset (31.12.2023: 94%).
Investment portfolio
As of the end of June 2024 the Group has 35
(31.12.2023: same) commercial investment properties with a fair
value as at the balance sheet date of 361.391 million euros
(31.12.2023: 357.916 million euros) and the acquisition cost of
359.405 million euros (31.12.2023: 354.408 million euros). In
addition, the Group's joint venture owns the Palace hotel in
Tallinn, the fair value of which as of 30.06.2024 was 8.540 million
euros (31.12.2023: 9.0 million euros).
In the first 6 months of 2024, the group earned
a total of 15.342 million euros in rental income, which is 1% more
than in the same period of 2023.
The vacancy of investment portfolio was 2.9% as of
30.06.2024 (31.12.2023: 2.6%). The highest vacancy is in the office
segment (12.4%), where it takes longer than before to fill vacant
rental premises.
EfTEN Real Estate Fund AS regularly evaluates
investment properties twice a year - in June and December. In June
2024, the fair value of the Fund's investment properties decreased
by 0.4% (by EUR 1.454 million) as a result of revaluations,
including the value of office sector assets decreased by 1.3%, the
value of logistics sector assets increased by 0.7%, and the value
of commercial sector assets decreased by 0.7%. The portfolio’s
downward valuation is largely related to a more conservative cash
flow forecast, especially in the office segment.
Financing
During the first 6 months of 2024, the Fund's
subsidiaries EfTEN Autokeskus OÜ and EfTEN Jurkalne SIA extended
their loan agreements. Within the next 12 months, the loan
agreement of one of the Group's subsidiaries will expire, the
balance of which is 2,196 thousand euros as of 30.06.2024. The LTV
of the expiring loan agreement is 30.6%, and the investment
property has a stable and strong rental cash flow, therefore,
according to the management of the Group, there will be no
obstacles to the extension of the loan agreement.
The weighted average interest rate of the
Group's loan agreements is 5.65% as of 30.06.2024 (31.12.2023:
5.91) and the LTV (Loan to Value) is 42% (31.12.2023: 42%). All
loan agreements of the fund's subsidiaries are linked to a floating
interest rate.
Information on shares
The net value of the share of EfTEN Real Estate
Fund AS as of 30.06.2024 was 19.79 euros (31.12.2023: 20.21 euros).
The net value of EfTEN Real Estate Fund AS shares decreased by 2%
in the first half of 2024. In April 2024, the fund distributed
dividends in the total amount of 10.82 million euros. Without
profit distribution, the net value of EfTEN Real Estate AS shares
would have increased by 3.5% in the first half of the year.
As of 30.06.2024, the Fund has 10,819,796
shares.
CONSOLIDATED STATEMEMT OF COMPREHENSIVE INCOME
|
II quarter |
1st half-year |
|
2024 |
2023 |
2024 |
2023 |
€ thousands |
|
|
|
|
Revenue |
7,957 |
7,961 |
15,918 |
15,749 |
Cost of services sold |
-341 |
-363 |
-759 |
-757 |
Gross profit |
7,616 |
7,598 |
15,159 |
14,992 |
|
|
|
|
|
Marketing costs |
-178 |
-192 |
-378 |
-288 |
General and administrative expenses |
-880 |
-860 |
-1,819 |
-1,727 |
Profit / loss from the change in the fair value of investment
property |
-1,454 |
-6,182 |
-1,454 |
-6,182 |
Other operating income and expense |
44 |
3 |
86 |
13 |
Operating profit |
5,148 |
367 |
11,594 |
6,808 |
|
|
|
|
|
Profit / loss from joint ventures |
-204 |
-100 |
-254 |
-109 |
Interest income |
64 |
14 |
165 |
20 |
Other finance income and expense |
-2,238 |
-1,987 |
-4,473 |
-3,537 |
Profit before income tax |
2,770 |
-1,706 |
7,032 |
3,182 |
|
|
|
|
|
Income tax expense |
-328 |
-483 |
-782 |
-737 |
Net profit for the reporting period |
2,442 |
-2,189 |
6,250 |
2,445 |
Total consolidated profit for the reporting
period |
2,442 |
-2,189 |
6,250 |
2,445 |
Earnings per share |
|
|
|
|
- basic |
0.23 |
-0.20 |
0.58 |
0.23 |
- diluted |
0.23 |
-0.20 |
0.58 |
0.23 |
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
|
30.06.2024 |
31.12.2023 |
€ thousands |
|
|
ASSETS |
|
|
Cash and cash equivalents |
10,772 |
14,712 |
Current deposits |
50 |
3,400 |
Receivables and accrued income |
1,555 |
2,360 |
Prepaid expenses |
133 |
106 |
Total current assets |
12,510 |
20,578 |
|
|
|
Long-term receivables |
409 |
214 |
Shares in joint ventures |
1,824 |
2,078 |
Investment property |
361,391 |
357,916 |
Property, plant, and equipment |
198 |
158 |
Total non-current assets |
363,822 |
360,366 |
TOTAL ASSETS |
376,332 |
380,944 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Borrowings |
8,758 |
16,907 |
Payables and prepayments |
2,255 |
3,417 |
Total current liabilities |
11,013 |
20,324 |
|
|
|
Borrowings |
140,618 |
130,849 |
Other non-current liabilities |
1,892 |
1,790 |
Deferred income tax liability |
8,681 |
9,283 |
Total non-current liabilities |
151,191 |
141,922 |
Total liabilities |
162,204 |
162,246 |
|
|
|
Share capital |
108,198 |
108,198 |
Share premium |
84,721 |
84,721 |
Statutory reserve capital |
2,799 |
2,749 |
Retained earnings |
18,410 |
23,030 |
TOTAL EQUITY |
214,128 |
218,698 |
TOTAL LIABILITIES AND EQUITY |
376,332 |
380,944 |
Marilin Hein
CFO
Phone +372 6559 515
E-mail: marilin.hein@eften.ee