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EfTEN Real Estate Fund III AS unaudited results for 3rd quarter and nine months 2021

·6-min read

EfTEN Real Estate Fund III AS's consolidated sales revenue for the third quarter of 2021 totalled 3.458 million euros (3rd quarter of 2020: 2.833 million euros), increasing by 22% year-on-year. The increase in sales revenue is 68% due to new acquisitions (Ramygalos logistics building, Rutkausko office building, Pirita care home) and 32% increase in sales revenue due to the end of Covid-19 temporary discounts granted to tenants last year and also renting out vacant premises. The rental income of no real estate investment is lower in the third quarter of this year than in the third quarter of the previous year.

EfTEN Real Estate Fund III AS's consolidated sales revenue for the first 9 months of 2021 was 9.413 million euros (9 months of 2020: 7.698 million euros), increasing by 22% year-on-year. The Group's profit before revaluations of investment properties, changes in the fair value of interest rate swaps and income tax expense totalled 6.439 million euros in the first 9 months of 2021 (9 months of 2020: 5.142 million euros).

During the 9 months of 2021, the fund earned consolidated EBITDA of 7.8 million euros (9 months of 2020: 6.1 million euros), thus the fund's EBITDA has increased by a total of 1.7 million euros (27%). The increase in EBITDA, in turn, is 56% of the operating profit from the addition of new acquisitions.

This year, EfTEN Real Estate Fund III AS has earned a total of 3,630 thousand euros (70 cents per share) of free cash flow to be as base of dividends, which is 35% more than in the same period last year. As of 30.09.2021, the consolidated cash balance of the fund was 11.9 million euros, including free funds in the amount of 6.4 million euros in the parent company's account.

The volume of the Group's assets as of 30.09.2021 was 170.446 million euros (31.12.2020: 151.632 million euros), including the fair value of investment properties accounted for 92% of the volume of assets (31.12.2020: 95%).
Over the next 12 months, the loan agreements of several group subsidiaries will mature. Most of the Group's loans are concluded with a 5-year term, which is refinanced upon termination of the loan agreement. Over the next 12 months, 8.888 million euros of the Group's loan liabilities will be refinanced, i.e. 12% of the total loan portfolio. As of 30.09.2021, the average interest rate of the Group's loan agreements (incl. taking into account interest rate swap agreements) is 2.2% (31.12.2020: 2.3%) and LTV (Loan to Value) 46% (31.12.2020: 50%).

Real estate portfolio

In mid-June 2021. the Group acquired a new investment property in Panevežys. Lithuania. The cost of the investment property. including transaction costs. totalled 10.011 million euros and the annual rental income of the building is 799 thousand euros.

As of the end of September, 2021, the Group has 16 (31.12.2020: 15) commercial real estate investments with a fair value of 157.402 million euros (31.12.2020: 144.235 million euros) and an acquisition cost of 147.964 million euros (31.12.2020: 136.349 million euros) at the balance sheet date.

Information on shares

The net asset value of the share of EfTEN Real Estate Fund III as of 30.09.2021 was 18.05 euros (31.12.2020: 16.93 euros). The net asset value of EfTEN Real Estate Fund III AS increased by 6.6% during the first 9 months of 2021.

In April, 2021, the general meeting of the fund decided to distribute a total of 2.798 thousand euros (66.3 eurocents per share) in net dividends from the net profit for 2020. Without dividends. the net asset value of the fund's share would have increased by 10.1% during the first 9 months of 2021.

In May 2021, EfTEN Real Estate Fund III AS conducted a public offering of shares, as a result of which the share capital of the fund increased by 8,500 thousand euros. Payments were made to the share capital of the Fund in the total amount of 15,130 thousand euros.

In addition to the net asset value per share calculated in accordance with the above IFRS. EfTEN Real Estate Fund III AS also calculates the net asset value recommended by EPRA (European Public Real Estate Association) to provide investors with the most appropriate net asset value, EPRA's indicative guidance presupposes a long-term economic strategy for real estate companies, so that temporary differences in a situation where assets are not likely to be sold in the near future will obscure the transparency of the fair value of the fund's net assets. Therefore, deferred income tax expense on investment property and the fair value of financial instruments (interest rate swaps) are eliminated from the net asset value calculated in accordance with IFRS from the net asset value of EPRA.

As of 30.09.2021, EfTEN Real Estate Fund III AS had 5,935 shareholders. of which 17% were legal entities. Legal entities owned a total of 78.31% of the total share capital of the fund.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

3rd quarter

9 months

€ thousands

2021

2020¹

2021

2020¹

Revenue

3,458

2,833

9,413

7,698

Cost of sales

-54

-75

-193

-222

Gross profit

3,404

2,758

9,220

7,476

Marketing costs

-54

-70

-144

-206

General and administrative expenses

-426

-394

-1,302

-1,166

Gain / loss from revaluation of investment properties

0

0

2,020

-3,986

Other operating income and expense

12

4

18

4

Operating profit

2,936

2,298

9,812

2,122

Other finance income and expense

-419

-289

-1,258

-967

Profit before income tax

2,517

2,009

8,554

1,155

Income tax expense

-243

63

-810

-148

Net profit for the financial year

2,274

2,072

7,744

1,007

Earnings per share

- Basic

0.45

0.49

1.69

0.24

- Diluted

0.45

0.49

1.69

0.24

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30.09.2021

31.12.2020

€ thousands

ASSETS

Cash and cash equivalents

11,888

5,128

Receivables and accrued income

955

2,018

Prepaid expenses

17

128

Inventory

28

0

Total current assets

12,888

7,274

Long-term receivables

3

18

Investment property

157,402

144,235

Property. plant and equipment

150

101

Intangible assets

3

4

Total non-current assets

157,558

144,358

TOTAL ASSETS

170,446

151,632

LIABILITIES AND EQUITY

Borrowings

11,985

28,781

Derivative instruments

151

246

Payables and prepayments

683

1,995

Total current liabilities

12,819

31,022

Borrowings

59,995

43,587

Other long-term debt

1,010

957

Deferred income tax liability

5,063

4,583

Total non-current liabilities

66,068

49,127

Total liabilities

78,887

80,149

Share capital

50,725

42,225

Share premium

16,288

9,658

Statutory reserve capital

1,489

1,323

Retained earnings

23,057

18,277

Total equity

91,559

71,483

TOTAL LIABILITIES AND EQUITY

170,446

151,632

Marilin Hein
CFO
Phone 655 9515
E-mail: marilin.hein@eften.ee

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