EfTEN Real Estate Fund III

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  • #311092 Reply

    Nauris Treigys
    Keymaster

    The financial results of EfTEN Real Estate Fund III met management expectations on November 2017. Fund’s sales income was 617 thousand euros (October: 609 thousand euros) and EBITDA 456 thousand euros (October: 457 thousand euros). As the most positive change in November, there is important to note that 614m2 has rented out to clothing store Lindex from 30th of November 2017 in Saules Miestas shopping center. The vacancy of investment properties portfolio fell to 0,5% after the change, calculated from total net leasable area.

    During the first 11 months 2017, EfTEN Real Estate Fund III is gained EBITDA for 5,13 million euros, of which interest expense and loan annuity payments are covered in the amount of 2,5 million euros. Considering the dividend policy of EfTEN Real Estate Fund III, the gross dividends from that amount would be 2,1 million euros (LY 11 months: 1,5 million euros), which is equal to 64 cents per share, based on the total shares of the Fund.

    The consolidated asset value of EfTEN Real Estate Fund III was 95 819 thousand euros and equity was 46 024 thousand euros as of 30.11.2017.

    The Fund’s Net Asset Value per share (NAV) as of 30.11.2017 is 14,28 euros. NAV is increased, compared to the end of October, by 0,9%.

    #311981 Reply

    Nauris Treigys
    Keymaster

    In addition to a prospectus of the fund, EfTEN Real Estate Fund III AS publishes key information in accordance with the Investment Funds Act. The key information has been prepared in accordance with the requirements of Commission Regulation (EU) No 583/2010
    Attachments:
    EREFIII_Investorile_esitatav_põhiteave_100118EST.pdf
    EREFIII_Key_Investor_Information_Document_100118ENG.pdf

    #312024 Reply

    Nauris Treigys
    Keymaster

    In December, EfTEN Real Estate Fund III AS made a sales income of 702 thousand euros, an increase of 85 thousand euros from November. This increase is mainly attributed to turnover rent in the Saules Miestas shopping center, additional rental income from Lindex, and the opening of Selver grocery store in Laagri. While sales expenses and distribution expenses did not deviate significantly from those of November, general expenses also include the 39 thousand euros related to the issuing of the fund’s shares publicly.

    Also in December, Colliers International conducted a regular valuation of the Fund’s investment properties, resulting in an increase of 0.6% in the investment property value of EfTEN Real Estate Fund III and returning a profit of 539 thousand euros from the fair value changes. The increase is mainly attributed to the opening of the Selver grocery store in Laagri and includes the actual rental agreements as input data to the valuation calculations.

    The Fund’s unaudited consolidated rental income in 2017 was 6.6 million euros, and EBITDA — 5.6 million euros. From EBITDA, the loan principal payments and interest payments is covered by 2.8 million euros. Considering the Fund’s dividend policy, the gross dividends for the year 2017 would amount to 2.3 million euros, which at the current share volume is 73 cents per share.

    The Fund’s consolidated unaudited asset value as of 31.12.2017 is 97.5 million euros, and equity is 47.2 million euros. The Fund’s 12-month return from the average paid-in share capital is 24.7%.

    The Net Asset Value of EfTEN Real Estate Fund III AS as of 31.12.2017 is 14.65 euros. NAV increased by 2.5% during the month of December.

    #312619 Reply

    Nauris Treigys
    Keymaster

    In January, EfTEN Real Estate Fund III AS made a sales income of 656 thousand euros, a decrease of 46 thousand euros from December. This decrease is mainly attributed to an extraordinarily high rent in the reference period due to the settlement of the annual turnover rent in the Saules Miestas shopping center. While sales expenses and distribution expenses did not deviate significantly during January, general expenses made up a total of 39 thousand euros, 64 thousand euros less than in December. The decrease in general expenses was made up mainly of the IPO expenses that occurred in December in the amount of 39 thousand euros.

    The Fund’s consolidated asset value as of 31.01.2018 is 97.7 million euros, and equity is 46.9 million euros. The Fund’s 12-month return from the average paid-in share capital is 21.6%.

    EfTEN Real Estate Fund III AS adjusted the accounting of deferred income tax during the audit procedures in the amount of 810 thousand euros in its Lithuanian subsidiaries. As a result, the Group’s deferred income tax assets decreased and deferred income tax liability and expense increased accordingly. The change was due to the adjustment in income tax calculation principles and it does not affect the Fund’s cash-flows. The adjusted NAV as of 31.12.2017 was 14,39 euros per share.

    The Net Asset Value of EfTEN Real Estate Fund III AS as of 31.01.2018 is 14.56 euros. This increased by 1.1%, compared to the adjusted NAV as of 31.12.2017.

    #312708 Reply

    Nauris Treigys
    Keymaster

    Comment of the Chairman of the Board

    For EfTEN Real Estate Fund III AS, the most significant event in 2017 and also the fourth quarter was the listing of the Fund’s shares in the Nasdaq Baltic main list. In total, the IPO process attracted 3.5 million euros in new equity capital, which was oversubscribed by 5.7 times by the investors. In 2017, the Fund made two new investments by acquiring Hortes gardening center and the company developing Laagri Selver grocery store. Laagri Selver was opened in December 2017 as initially planned.

    Last year, Saules Miestas, the Fund’s largest investment so far, celebrated its 10th year of operation. The Fund made an important investment in upgrading the exterior of Saules Miestas, investing a total of 500 thousand euros in the replacement of the Center’s exterior facade.

    Financial overview

    The consolidated sales revenue of EfTEN Real Estate Fund III AS for year 2017 was EUR 7.300 million, which increased by 37% in a year. In 2017 the Group’s profit before revaluation of investment properties (including change in the success fee reserve), depreciation and financial income/ -costs and income tax expense (EBITDA) totalled EUR 5.659 million (2016: EUR 3.925 million). The Group’s net profit for the same period amounted to EUR 6.574 million, increasing by 51% compared to 2016.

    The consolidated gross profit margin in 2017 was 98% (2016: 97%), therefore, expenses directly related to management of properties (incl. land tax, insurance, maintenance and improvement costs) accounted for only 2% (2016: 3%) of the revenue in 2017. The Group’s expenses related to properties, marketing costs, general expenses, other income and expenses accounted for 22.8% of the revenue in 2017. The respective indicator was 22.9% in 2016.

    As at 31.12.2017, the Group’s total assets were in the amount of EUR 97.291 million (31.12.2016: 77.233 million), including fair value of investment property, which accounted for EUR 88.390 million (31.12.2016: 73.539 million) of the total assets.

    In a year, the net asset value of the share of EfTEN Real Estate Fund III AS increased by 13%, attributable to the growth in operating profit, low interest rates and effective cost management. From the 2016 profit, EUR 1.503 thousand was paid out as dividends in 2017. Without the dividend payment, the Fund’s NAV would have increased by 17% compared to 2016. Return on invested capital (ROIC) was 21.6% in 2017 (2016: 22.5%). Access to flexible financing conditions will help to increase the Group’s competitiveness. In 2017, the Group entered into new loan contracts in the total amount of EUR 5.1 million in connection with the acquisition of new investment properties. One of the new loan agreements was concluded at a fixed interest rate of 1.82% and the other at the rate of 1 month EURIBOR plus a margin of 1.4%.

    As at the end of the year, the average interest rate on Group’s loan agreements (including interest swap contracts) was 1.73% (2016: 1.67%) and the LTV (loan to value) ratio was 52% (2016: 58%).

    The dividend policy of EfTEN Real Estate Fund III AS provides that the Group will pay out 80% of the free cash flow to shareholders as (gross) dividends in each accounting year. In 2017, EfTEN Real Estate Fund III AS paid the shareholders (net) dividends in the amount of 1.5 million euros (2016: 411 thousand euros) i.e. 6% (2016: 3%) of paid-in capital. In 2018, the Fund’s Management Board will propose to the shareholders to pay out EUR 2.2 million in (net) dividend from the 2017 net profit, which represents 6.1% of the share capital paid in by the end of 2017. Dividend per share would be 68 cents (2016: 63 cents).

    Real Estate Portfolio

    The Group invests in commercial real estate with a strong and long-term tenant base. At the end of 2017, the Group had 8 (2016: 6) commercial investment properties with a fair value as at the balance sheet date of EUR 88.4 million (31.12.2016: 73.5 million) and acquisition cost of EUR 81.7 million (31.12.2016: 69.7 million).

    Information on shares

    As at 31.12.2017, payments made to the share capital of EfTEN Real Estate Fund III AS total EUR 35.883 million (31.12.2016: 24.891 million) and the number of shares as at 31.12.2017 was 3,222,535 (31.12.2016: 2,385,263). EfTEN Real Estate Fund III AS listed its shares on NASDAQ Tallinn Stock Exchange in November 2017.

    As at 31.12.2017 EfTEN Real Estate Fund III AS had two shareholders with ownership interest in excess of 10% – Altius Energia OÜ, with an ownership interest of 14.1% and Järve Kaubanduskeskus OÜ, with an ownership interest of 10.2% of the company’s shares.

    Attachments:
    EREF III_IV_kvartal_ vahearuanne_2017_ENG.pdf

    #313232 Reply

    Nauris Treigys
    Keymaster

    In February, EfTEN Real Estate Fund III AS made a sales income of 652 thousand euros, a decrease of 4 thousand euros from January. The sales expenses and distribution expenses were slightly lower on February, resulting the gross profit of 607 thousand euros (January: 598 thousand euros).

    The more significant difference in February came from interest swap fair value changes. Whilst in January the profit from the interest derivative agreement was 93 thousand euros, then in February there was a loss -28 thousand euros. The change in interest rate swap fair value is non-monetary and is based on the interest rate level expectations in financial markets.

    The Fund’s consolidated asset value as of 28.02.2018 is 97.8 million euros, and equity is 47.2 million euros. The Fund’s 12-month return from the average paid-in share capital is 21.3%.

    The Net Asset Value of EfTEN Real Estate Fund III AS as of 28.02.2018 is 14.67 euros. This increased by 0,8%, compared to the NAV as of 31.01.2018.

    #313233 Reply

    Nauris Treigys
    Keymaster

    The Management Board of EfTEN Real Estate Fund III AS (registry code 12864036, registered address A. Lauteri 5, Tallinn; hereinafter the “Fund”), convenes an annual general meeting of shareholders on 04 April 2018 at 10:00, in the Radisson Blu Sky Hotel Conference Center (2nd floor, Tallinn, Rävala pst 3).
    Registration of the participants begins on 04 April 2018 at 09.15. The list of shareholders entitled to participate in the general meeting will be determined as at seven days before holding the general meeting, i.e. as at 28 March 2018 at the end of the working day of the Nasdaq CSD Estonian Settlement System.

    Pursuant to the decision of the Supervisory Board of EfTEN Real Estate Fund III AS, the agenda of the Annual General Meeting of Shareholders and the proposals of the Supervisory Board and the Management Board shall be as follows:

    1. Overview of the activities of the fund
    The Management Board shall provide overview of the activities of the fund. This item is informative.

    2. Approval of the annual report 2017
    Proposal of the Management Board and the Supervisory Board: To approve the Annual Report 2017, as presented to the general meeting.

    3. Distribution of profit
    Proposal of the Management Board and the Supervisory Board: Distributable profit as at 31.12.2017 in amount of 10 209 000 euros distribute as follows:
    Transfers to the legal reserve in amount of 328 700 euros.
    A part of the profit of the fund shall be paid out as (net) dividends in amount of 2 191 324 euros (0.68 euros per share).
    After the allocations, retained earnings will amount to 7 688 976 euros.
    The list of shareholders with a right to receive dividends shall be fixed as at 18 April 2018 at the end of the working day of the Nasdaq CSD Estonian Settlement System.
    Dividends shall be paid to the bank accounts of shareholders via bank transfer on 20 April 2018.

    Additional information:
    All documents concerning the annual general meeting of the shareholders, including the annual report, draft of resolutions, the auditor’s report, the profit distribution proposal, the report of the supervisory board are made available on the homepage of EfTEN Real Estate Fund III AS at http://www.eref.ee, and from the publication of the notice of convening the general meeting until the day of the general meeting is held, at the office of EfTEN Real Estate Fund III AS in Tallinn, at A. Lauteri 5 (III floor) on business days from 10 AM to 4 PM.
    Questions about the topics included in the agenda of the general meeting can be sent to the following e-mail address: info@eften.ee or by post to the address of EfTEN Real Estate Fund III AS or by telephone 655 9515.
    Questions and answers, the proposals of the shareholders on the issues on the agenda and the minutes of the general meeting will be disclosed at the website of EfTEN Real Estate Fund III AS at http://www.eref.ee.

    For registration, we kindly ask participants to submit the following documents:
    – Shareholders who are natural persons must bring a passport or identity card. A representative must also submit a valid written authorization document.
    – Representatives of shareholders that are legal persons must bring an extract from the respective register where the legal person is registered which confirms the authority of the legal person’s representative to represent the legal person (legal representation). The representative must also bring a passport or identity card. If the legal person is represented by a person who is not the legal representative of the legal person, a written power of attorney is also required. The documents of a shareholder located abroad shall be legalized or certified with an apostille, unless a relevant international agreement stipulates otherwise.

    At the general meeting, the shareholder is entitled to receive information on the activities of the Fund from the Management Board. However, the management board may refuse to disclose the information if there are sufficient grounds to presume that the disclosure may adversely affect the interests of the company. If the Management Board of the Fund refuses to provide information, the shareholder may demand that the general meeting decide on the legitimacy of their demand, or submit, within two weeks, an application to court in proceedings on petition to require the Management Board to provide the information.

    The shareholders whose shares represent at least 1/20 of the share capital may request for additional items to be added to the agenda of the general meeting, if the respective request is submitted in writing at least 15 days prior to the general meeting. The shareholders whose shares represent at least 1/20 of the share capital may submit their draft resolutions to each agenda item, incl. additional agenda items in writing up to 3 days before the general meeting.

    A shareholder may inform of the appointment of a representative or withdrawal of an authorization given to a representative before the general meeting by e-mail: info@eften.ee or by submitting the mentioned document(s) on business days from 9 AM to 4 PM no later than by 02 April 2018 to the seat of EfTEN Real Estate Fund III AS.

    #313861 Reply

    Nauris Treigys
    Keymaster

    The annual general meeting of shareholders of EfTEN Real Estate Fund III AS was held on 04 April 2018 in in the Radisson Blu Sky Hotel Conference Center (2nd floor, Tallinn, Rävala pst 3). 111 shareholders attended the meeting representing 64,10 % of the total votes represented by the all shares. Therefore, the meeting was eligible to adopt decisions.

    The decisions of the annual general meetoing were as follows:

    Approval of the annual report of EfTEN Real Estate Fund III AS for 2017

    With 2 065 556, i.e. 100 % votes in favour, the shareholders decided to approve the annual report of EfTEN Real Estate Fund III AS for the financial year 2017 in the form submitted to the Annual General Meeting.

    Distribution of profit

    With 2 065 556, i.e. 100 % votes in favour, the shareholders decided to distribute the distributable profit as at 31.12.2017 in amount of 10 209 000 euros as follows:
    Transfers to the legal reserve in amount of 328 700 euros.
    A part of the profit of the fund shall be paid out as (net) dividends in amount of 2 191 324 euros (0.68 euros per share).
    After the allocations, retained earnings will amount to 7 688 976 euros.
    The list of shareholders with a right to receive dividends shall be fixed as at 18 April 2018 at the end of the working day of the Nasdaq CSD Estonian Settlement System.
    Dividends shall be paid to the bank accounts of shareholders via bank transfer on 20 April 2018.

    Proceeding from the above, EfTEN Real Estate Fund III AS informs that the dividend payment ex-date is 17.04.2018.

    #314058 Reply

    Nauris Treigys
    Keymaster

    In March, EfTEN Real Estate Fund III made 692 thousand euros of sales income, which, after the rent increase in DSV Latvia following an expansion, the vacancy decrease in Ulonu, and the turnover increase for the Saules Miestas shopping center playground, is an increase of 40 thousand euros compared to February. The sales expenses and distribution expenses remained the same, resulting in a gross profit of 645 thousand euros (in February: 607 thousand euros). Due to the negative change in interest rate swap fair value, the Fund’s consolidated net profit remained the same, amounting to 363 thousand euros (in February 2018: 366 thousand euros).

    During the 1st quarter of 2018, EfTEN Real Estate Fund III have made a sales income of 2,000 thousand euros with an EBITDA of 1.592 thousand euros (the EBITDA margin is 80%). The year before, in the 1st quarter of 2017, the Fund made a sales income of 1.764 thousand euros with an EBITDA of 1.424 thousand euros (EBITDA margin was 81%). The Fund’s net profit for the 1st quarter of 2018 is 1.250 thousand euros (1st quarter of 2017: 1.102 thousand euros).

    The Fund’s consolidated asset value as of 31.03.2018 is 97.5 million euros (31.12.2017: 97.3 million euros), and equity is 47.6 million euros (31.12.2017: 46.4 million euros). The Fund’s 12-month return for the average paid-in share capital is 20.6%.

    The Net Asset Value of EfTEN Real Estate Fund III AS as of 31.03.2018 is 14.78 euros. This increased by 0,8%, compared to the NAV as of 28.02.2018. Without interest rate fair value changes, the NAV as of 31.03.2018 would be 14,80 euros per share and would have increased by 0,9%, compared to February.

    #314132 Reply

    Nauris Treigys
    Keymaster

    EfTEN Real Estate Fund III AS (trading code EFT1T, ISIN kood EE3100127242) will close the list of shareholders for dividend payment on 18.04.2018 at the end of the working day of the settlement system.

    Proceeding from the above, the ex-date is 17.04.2018. From that date the new owner of the shares is not entitled to dividends for the year 2017.

    EfTEN Real Estate Fund III AS will pay dividend 0,68 euros per share on 20.04.2018.

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