EfTEN Real Estate Fund AS unaudited results for 1st quarter 2024

Signs of stabilization in the Eurozone interest markets and Baltic economies were reflected in the consolidated results of EfTEN Real Estate Fund AS for the first quarter of 2024. The fund's net rental income increased by 0.6% on an annual basis, and the vacancy rate in the real estate portfolio remained low at 2.9%. Interest expenses in the first quarter were higher compared to the same period last year but slightly lower than the fourth quarter of 2023. Construction continued on the elderly home being built next to the Estonian National Museum in Tartu. Completion of the works is scheduled for the upcoming summer, and the new elderly home is set to open to clients in the fall.

The consolidated sales income of EfTEN Real Estate Fund AS for the first quarter of 2024 was 7.961 million euros (2023 I quarter: 7.788 million euros). Sales revenue increased mainly in the retail sector.

The Fund's net rental income (NOI) totalled 7.343 million euros in 2024 I quarter (2023 I quarter: 7.298 million euros). The consolidated net rental income margin was 92% (2023: 94%), so costs directly related to property management (including land tax, insurance, maintenance and improvement costs) and distribution costs were 8% (2023: 6%) of sales income.

The Fund's consolidated net profit was 3.808 million euros in the I quarter of 2024 (2023 I quarter: 4.634 million euros). The decrease in net profit compared to the previous year is due to the increase in EURIBOR.

The volume of the Group's assets as of 31.03.2024 was 384.846 million euros (31.12.2023: 380.944 million euros), including the fair value of investment properties made up 94% of the volume of assets (31.12.2023: the same). 

*Investment portfolio*

As of the end of March 2024, the Group has 35 (31.12.2023: 35) commercial investment properties, the fair value of which on the balance sheet date is 360.327 million euros (31.12.2023: 357.916 million euros) and the acquisition cost was 356.819 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 31.03.2024 was 9.0 million euros (31.12.2023: same).

In the first 3 months of 2024, the Group earned a total of 7.637 million euros in rental income, which is 2% more than at the same time in 2023. As of 31.03.2024 the vacancy of investment properties belonging to the Group per portfolio was 2.9% (31.12.2023: 2.6%). The largest vacancy is in the office buildings segment (12%), where it takes longer than before to fill vacant rental premises.

*Financing*

The increase in Eurozone interest rates has had a significant impact on the Group's cash flows, bringing the interest coverage ratio (ICR) to a 2,9 instead of 4,2 last year same time.

During the first 3 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 2,240 thousand euros as of 31.03.2024. The LTV of the expiring loan agreement is 33%, and the investment properties a stable, strong rental cash flow, so according to the Group's management, there are no obstacles to extending the loan agreement.

The weighted average interest rate of the Group's loan agreements is 5.9% as of 31.03.2024 (31.12.2023: the same) and the LTV (Loan to Value) is 42% (31.12.2023: the same). All loan agreements of the Fund's subsidiaries are linked to a floating interest rate.  

*Share information*

The net value of the share of EfTEN Real Estate Fund AS as of 31.03.2024 was 20.56 euros (31.12.2023: 20.21 euros). The net value of EfTEN Real Estate Fund AS shares increased by 1.7% in the first three months of 2024.

*CONSOLIDATED STATEMEMT OF COMPREHENSIVE INCOME

*
I quarter
* * *2024* *2023*
€ thousands    
Sales income 7,961 7,788
Cost of services sold -418 -394
*Gross profit* *7,543* *7,394*    
Marketing costs -200 -96
General and administrative expenses -939 -867
Other operating income and expense 42 10
*Operating profit* *6,446* *6,441*    
Profit / loss from joint ventures -50 -9
Interest income 101 6
Other finance income and expense -2,235 -1,550
*Profit before income tax* *4,262* *4,888*    
Income tax expense -454 -254
*Net profit for the financial year* *3,808* *4,634*
*Total comprehensive income for the period* *3,808* *4,634*
Earnings per share    
- basic 0.35 0.43
- diluted 0.35 0.43

*
CONSOLIDATED STATEMENT OF FINANCIAL POSITION **        * *        *

* * *31.03.2024* *31.12.2023*
€ thousands    
*ASSETS*    
Cash and cash equivalents 16,868 14,712
Short-term deposits 3,400 3,400
Receivables and accrued income 1,741 2,360
Prepaid expenses 139 106
*Total current assets* *22,148* *20,578*    
Long-term receivables 199 214
Shares in joint ventures 2,028 2,078
Investment property 360,327 357,916
Property. plant and equipment 144 158
*Total non-current assets* *362,698* *360,366*
*TOTAL ASSETS* *384,846* *380,944*    
*LIABILITIES AND EQUITY*    
Borrowings 8,604 16,907
Liabilities and prepayments 2,529 3,417
*Total current liabilities* *11,133* *20,324*    
Borrowings 139,644 130,849
Other long-term liabilities 1,834 1,790
Deferred income tax liability 9,729 9,283
*Total non-current liabilities* *151,207* *141,922*
*TOTAL LIABILITIES* *162,340* *162,246*    
Share capital 108,198 108,198
Share premium 84,721 84,721
Statutory reserve capital 2,749 2,749
Retained earnings 26,838 23,030
*TOTAL EQUITY* *222,506* *218,698*
*TOTAL LIABILITIES AND EQUITY* *384,846* *380,944*

Marilin Hein
CFO
Phone +372 6559 515
E-mail: marilin.hein@eften.ee

*Attachment*

· EREF_1st quarter_2024_ENG