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 |
