Remark of the fund supervisor
Crucial financial occasions of EfTEN Actual Property Fund III AS in 2019 have been the ABC Motors dealership purchase-leaseback transaction, profitable problem of shares in quantity of EUR 16 million and opening of Hortes Tähesaju Gardening Middle within the fourth quarter. After the steadiness sheet date, we introduced that within the first quarter of 2020 EfTEN Actual Property Fund III will purchase Latvian nationwide airline, airBaltic’s headquarters in Riga Airport and a manufacturing and warehouse facility within the Kekava close to Riga, thereby investing a major quantity of its fairness raised in 2019 into cash-generating actual property. As well as, the fund’s administration proposes to the 2020 normal assembly of shareholders to approve the merger with EfTEN Kinnisvarafond AS, which is able to lead to an actual property fund of roughly EUR 350 million.
The Group’s money steadiness permits dividends to be paid from the 2019 revenue to traders in a complete quantity of EUR 3,465 million (82 cents per share), which is 35% greater than decided by the dividend coverage of EfTEN Actual Property Fund III. The dividend pay-out from the 12 months 2019 revenue will proceed after the final shareholders’ assembly in spring 2020.
The consolidated gross sales income of EfTEN Actual Property Fund III AS for 12 months of 2019 was EUR 9,512 million (12 months of 2018: EUR 8,672 million), which elevated by 10% in a 12 months. The Group’s revenue earlier than revaluation of funding properties, price of efficiency charge, depreciation and monetary earnings/-costs and earnings tax expense in 2019 totalled EUR 7,571 million (2018: 6,822 million euros), which elevated by 11% in a 12 months. The Group’s web revenue for a similar interval amounted to EUR 7,737 million (12 months of 2018: EUR 6,299 million). The upper web revenue in 2019 is because of further property revenue and better funding property revaluation revenue, which within the present 12 months was EUR 3,101 million, however EUR 1,562 million final 12 months.
The consolidated gross revenue margin within the 12 months of 2019 was 97% (12 months of 2018: 96%). Subsequently, bills immediately associated to administration of properties (incl. land tax, insurance coverage, upkeep and enchancment prices) accounted for 3% (12 months of 2018: 4%) of the income. The Group’s bills associated to properties, advertising and marketing prices, normal bills, different earnings and bills accounted for 22% of the income in 2019. The respective indicator was 22.3% within the 12 months of 2018.
As at 31.12.2019, the Group’s whole belongings have been within the quantity of EUR 132,829 million (31.12.2018: 108,503 million), together with honest worth of funding property, which accounted for 85% (31.12.2018: 95%) of the whole belongings.
Throughout 2019, the web asset worth of the share of EfTEN Actual Property Fund III AS elevated by 7.6%. From the 2018 revenue, EUR 3,061 million (in spring 2018: EUR 2.191 million) was paid out in dividends in Might 2019. With out the dividend cost, the Fund’s NAV would have elevated by 12% in 2019. Return on invested capital (ROIC) was 17.1% within the 2019 monetary 12 months (12 months of 2018: 17.6%).
Entry to versatile financing situations will assist to extend the Group’s competitiveness. In 2019, the Group entered into new mortgage contracts within the whole quantity of EUR 6,768 million in reference to the acquisition of latest funding properties. As on the finish December, the common rate of interest on Group’s mortgage agreements (together with curiosity swap contracts) was 1.8% (31.12.2018: the identical) and the LTV (Mortgage to Worth) ratio was 52% (31.12.2018: the identical).
Throughout 2019, the Group earned a free money movement of EUR 3,381 million (12 months of 2018: EUR 3,197 million). Following the deduction of Lithuanian earnings tax expense and the calculation of the dividend earnings tax expense in Estonian and Latvian corporations, EfTEN Actual Property Fund III would be capable of pay web dividends to the shareholders within the whole quantity of EUR 2,545 million (60 cents per share) from the revenue earned on this 12 months. Nonetheless, the Group’s money steadiness on the finish of 2018 permits to pay extra dividends than the dividend coverage establishes, which is why the Administration Board of the Fund proposes to the Council within the spring of 2019 to pay a dividend of EUR 3,465 million (82 cents per share). For the whole earlier 12 months, the fund paid the shareholders a web dividend of 95 cents per share.
Actual property portfolio
The Group invests in industrial actual property with a robust and long-term tenant base. On the finish of 2019, the Group had 11 (31.12.2018: 10) industrial funding properties with a good worth as on the steadiness sheet date of EUR 113.011 million (31.12.2018: EUR 102.787 million) and acquisition price of EUR 101.746 million (31.12.2018: EUR 94.627 million).
On the sixth of February 2019, the Group’s subsidiary EfTEN Autokeskus OÜ acquired the properties of ABC Motor’s gross sales and repair middle on Paldiski freeway. The acquisition price of the properties was EUR 3,018 million and a mortgage settlement was entered into within the quantity of EUR 1.Eight million for the acquisition. The maturity of the mortgage is 25.02.2024 and the rate of interest is 2.95% + 6 month Euribor. A 0% flooring is about for the Euribor charge. The anticipated annual rental earnings from the funding property is EUR 258 thousand.
In november of 2019 the subsidiary of the Group, EfTEN Tähesaju tee OÜ, accomplished the development of Tähesaju Hortses in Tallinn. Tähesaju Hortes was opened to guests in early November. The acquisition price of the horticultural middle totaled EUR 5,458 million and the honest worth of the funding property as at 31.12.2019 was EUR 6,180 thousand. For the development of Tähesaju Hortes, the Group subsidiary took a financial institution mortgage in quantity of of EUR 3.29 million at an rate of interest of 1.95% + 1 month EURIBOR. The maturity of the mortgage is 11.01.2024.
After the steadiness sheet date, on January 13, 2020, a subsidiary of the Group signed debt-purchase agreements for the acquisition of two industrial buildings in Latvia to accumulate the airBaltic headquarters workplace constructing at Riga Airport and a manufacturing and warehouse facility in Ķekava, Riga. AirBaltic’s major constructing was utterly renovated in 2016 and the present lease settlement expires in 2026. The most important tenants of the manufacturing and warehouse constructing in Ķekava are Fristads Kansas Manufacturing SIA and Forans SIA. The acquisition of the 2 buildings totals to EUR 15.Eight million, of which EUR 7.2 million is financed by Swedbank and Luminor.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|4th quarter||12 months|
|Value of providers bought||-100||-135||-329||-319|
|Advertising and marketing prices||-126||-103||-429||-435|
|Basic and administrative bills||-870||-389||-1,847||-1,225|
|Achieve / loss from revaluation of funding properties||1, 641||600||3,101||1,562|
|Different working earnings and expense||38||-4||37||3|
|Revenue earlier than earnings tax||2,934||1,918||8,862||7,162|
|Earnings tax expense||-333||-167||-1,125||-863|
|Whole complete earnings for the monetary interval||2,601||1,751||7,737||6,299|
Earnings per share
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|Money and money equivalents||12,986||4,859|
|Quick – time period deposits||6,000||0|
|Receivables and accrued earnings||667||673|
|Pay as you go bills||51||46|
|Whole present belongings||19,704||5,578|
|Property, plant and gear||114||114|
|Whole non-current belongings||113,125||102,925|
|LIABILITIES AND EQUITY|
|Payables and prepayments||1,132||1,019|
|Whole present liabilities||22,550||9,313|
|Different long-term liabilities||609||457|
|Deferred earnings tax legal responsibility||4,274||3,496|
|Whole non-current liabilities||39,108||48,696|
|Statutory reserve capital||936||621|
|TOTAL LIABILITIES AND EQUITY||132,829||108,503|
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