Eastern Property Holdings Limited (EPH) : Third Quarter 2014 Trading Update
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Eastern Property Holdings Limited (EPH) /
Eastern Property Holdings Limited (EPH) : Third Quarter 2014 Trading Update
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The issuer is solely responsible for the content of this announcement.
28 November 2014, Road Town, Tortola, BVI
MAIN EVENTS
* Acquisition of 90% of Geneva House and Berlin House office and retail
properties, as a result the Company became a 100% owner of both properties;
* Acquisition of 100% of Polar Lights business center in Northern part of the
center of Moscow;
* Two successful bond placements for total amount of $270 million;
* Sale of Petrovsky Fort business center;
* Sale of almost 25% of Scandinavia land plot.
FINANCIAL HIGHLIGHTS
* Strong performance of rental assets;
* Significant RUB weakening against US$ during first 9 months 2014 led to FX
loss;
* Decrease in valuations of St. Petersburg investment properties before the
sale led to revaluation loss;
* Gain on acquisition of Berlin House, Geneva House and Polar Lights
properties due to the agreed price discount to the fair value of the assets;
* No material gain or loss from the sale of Petrovsky Fort, as the property
was sold at the price close to its NAV.
SIGNIFICANT FINANCIAL CHANGES FOR Q3 2014
Income
Net Rental Income
During 9 months ended 30 September 2014, our wholly-owned rental properties
generated Net Rental Income of $8.99 million. Berlin House and Geneva House
properties, which were acquired at the end of August, have contributed $1.38 and
$1.47 million of Net Rental Income respectively since the acquisition date. The
acquisition of Polar Lights had no impact on Net Rental Income because it was
acquired on 30 September 2014.
Interest Income
The Company generated $5.75 million of interest income in the first nine months
of 2014 which is approximately at the same level as for the comparable period of
2013 ($5.84 million).
Gain from acquisition of subsidiaries
The transaction price for 90% of Geneva House and Berlin House properties
amounts to $148.5 million and the price for 100% of Polar Lights amounts to
$152.8. As the net assets values of the acquired companies were higher than the
purchase price, the Company recognized gain on all three acquisitions in amount
of $41.75 million. This gain is calculated based on the preliminary agreed
purchase prices which are subject to certain final adjustments. Anyhow, we do
not expect any significant change of purchase prices.
Expenses
Professional and administration fees
The Company recognized $1.82 million of Professional and administration expenses
in the nine months of 2014 in comparison with $0.95 million for the same period
in 2013. The increase is primarily caused by the expenses related to bonds issue
($0.60 million) and expenses related to Unicredit loan extension ($0.12
million).
Net fair value adjustment on investment properties loss
During nine months 2014 the Company recognised loss of $11.44 million primarily
caused by decrease in Petrovsky Fort and Scandinavia land plots valuations in
the amount of $9.37 million and $1.50 million respectively.
Finance costs
The Company recognized $3.71 million of finance costs in the first nine months
of 2014 in comparison with $2.15 million for the same period in 2013. The main
reason of increase are: the interest expense on Jilford loan which was arranged
in September 2013 and further increased during 9 months 2014, as well as the
interest expense for the period starting from 25 August 2014 on third party
loans provided to Berlin House and Geneva House.
Assets
Investment properties
The value of the Investment properties significantly increased from $100.14
million as of 31 December 2013 to $506.87 million as of 30 September 2014. This
increase is the net result of Berlin House, Geneva House and Polar Lights
acquisitions and the sale of Petrovsky Fort and part of Scandinavia land plot.
Also the remaining part of Scandinavia land plot was reclassified on balance
sheet from Investment properties to Investment property held for sale.
Loans and Receivables
EPH's loans and receivables decreased from $81.0 million as of 31 December 2013
to $74.94 million as of 30 September 2014. The decrease is primarily
attributable to the fact that Berlin House and Geneva House have repaid the most
part of the loans due to the Company before their acquisitions and the remaining
outstanding balances are now eliminated during consolidation. No new loans were
provided during 9 months of 2014.
Cash and Cash Equivalents
The $74.27 million increase in the Company's cash position in the first nine
months of 2014 is the net effect of cash inflows from two bond placements for
the total amount of $270 million, proceeds from sale of Petrovsky Fort in amount
of $21.58 million and proceeds from the sale of a part of Scandinavia land plot
in the amount of $1.99 million, decreased by consideration paid for the
acquisitions of three properties for the total amount of $224.67 million.
Accounts Receivable
The $2.65 million decrease in accounts receivable is primarily caused by the
payment received for the Arbat apartments sold in December 2013.
Assets Under Development (at cost)
Assets under development have decreased from $101.83 million at 31 December
2013 to $94.88 million at 30 September 2014. The $6.95 million net decrease is
primarily caused by significant weakening of the RUB against the US$. Assets
under development are carrying at cost which is nominated in RUB, thus the
weakening of RUB against USD leads to decrease in Assets under development
presented in USD.
Liabilities
Loans from Banks and Others (LT & ST)
EPH's debt consists of 9 year bonds listed on Swiss Stock Exchange issued in
August and September 2014, a loan from Jilford Ltd. signed in September 2013 for
the purpose of financing Arbat construction, the third party loans to EPH Real
Estate and to Connecta KG and a loan from Valartis Bank (Liechtenstein) AG
signed in December 2013.
The outstanding balance of listed bonds at reporting date was $270 million. The
proceeds from the bonds were used to finance the acquisition of Berlin House,
Geneva House and Polar Lights properties.
The loan from Jilford is received through Vakhtangov Place Limited, the
Company's 60% joint operation company, therefore only 60% of the loan received
is reflected on EPH's balance sheet. During the first nine months of 2014 the
outstanding balance of the loan increased from $9.51 million at 31 December
2013 to $15.09 million at 30 September 2014.
EPH Real Estate and Connecta KG have the RUB nominated loans from the third
party on their balance sheets. The outstanding balance of the loans amounted to
$96.08 million as of 30 September 2014.
The loan from Valartis Bank (Liechtenstein) AG was received to fully repay
performance fees liability. During the first nine months of 2014 the outstanding
balance of the loan remained unchanged at $8.52 million.
Before 30 September 2014 the Company had a loan from UniCredit Bank Austria
which was disposed at 30 September 2014 due to the sale of Petrovsky Fort. The
outstanding balance of the loan as of end 2013 was $32.65 million.
Accounts payable and accrued expenses
The most part of accounts payable in the amount of US$ 76.63 million represents
the deferred part of the purchase price with respect to acquisition of Berlin
House, Geneva House and Polar Lights, which is payable in 3Q 2015.
Significant Q3 2014 Income and Expense Items
Net Rental Income 30.09.2014 30.09.2013 Change YoY
------------------------------------------------------------
Petrovsky Fort 5,441,374 5,004,609 436,765
Magistral'naya 707,761 714,666 (6,905)
Berlin House 1,375,933 0 1,375,933
Geneva House 1,462,387 0 1,462,387
---------------------------------------
Total 8,987,455 5,719,275 429,860
---------------------------------------
Material YoY changes in Income/Expense 30.09.2014 30.09.2013 Change YoY
Items
-------------------------------------------------------------------------------
Interest income 5,745,736 5,841,181 (95,445)
Professional and administration fees (1,818,025) (944,362) (873,663)
Net (loss)/ gain from fair value (11,440,045) 85,030 (11,525,075)
adjustment on investment properties
Finance costs (3,714,480) (2,149,833) (1,564,647)
Net gain from acquisition of 41,745,068 0 41,745,068
subsidiaries
Significant Q3 2014 Changes in Financial Position
Assets 30.09.2014 31.12.2013 Change
-------------------------------------------------------------------------------
Investment properties 506,871,878 100,140,472 406,731,406
Investment property held for 7,352,483 0 7,352,483
sale
Loans and receivables (LT & 74,942,870 80,995,725 (6,052,855)
ST)
Cash & cash equivalents 80,918,430 6,648,367 74,270,063
Assets under development 94,879,691 101,833,883 (6,954,192)
Accounts receivable 1,151,496 3,807,038 (2,655,542)
Liabilities
-------------------------------------------------------------------------------
Loans from banks and others 392,608,819 51,210,613 341,398,206
(LT & ST)
Accounts payable and accrued 87,228,262 7,091,474 80,136,788
expenses
EPH - Q3 Trading Update:
http://hugin.info/139905/R/1874914/660617.pdf
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other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Eastern Property Holdings Limited (EPH) via GlobeNewswire
[HUG#1874914]
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Datum: 28.11.2014 - 07:00 Uhr
Sprache: Deutsch
News-ID 355870
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