Eastern Property Holdings Limited (EPH) announces Third Quarter 2015 Trading Update
(Thomson Reuters ONE) -
Eastern Property Holdings Limited (EPH) /
Eastern Property Holdings Limited (EPH) announces Third Quarter 2015 Trading
Update
. Processed and transmitted by NASDAQ OMX Corporate Solutions.
The issuer is solely responsible for the content of this announcement.
26 November 2015, Road Town, Tortola, BVI
FINANCIAL HIGHLIGHTS
· The performance of the Company's income-generating properties is almost not
impacted by the overall decline in the Russian market and continues to
demonstrate high profitability.
· Rental income has become the most significant source of revenues for the
Company as compared to 2014.
· Substantial increase of the Company's finance costs resulted from the
interest expense on the bonds issued by the Company since August 2014. However,
this additional expense is fully covered by the net operating income from the
properties acquired by the Company: the increase in net rental income is more
than twice higher than the increase of finance costs.
· Ruble/dollar exchange rate continues to be volatile. At year-end
profits/losses arising from changed ruble values of dollar -valued assets are
likely to, again, be a factor for the volatility of our net operating results.
· The purchase prices for Berlin House and Geneva House were fully paid
resulting in a tangible decrease in the Company's accounts payable;
· Assuming unchanged values of investment properties, NAV as of 30 September
2015 would be approximately at the same level as at 30 June 2015.
SIGNIFICANT FINANCIAL CHANGES FOR Q3 2015
Income
· Net Rental Income
During nine months of 2015 our wholly-owned rental properties generated Net
Rental Income of $52.81 million. The contribution of each property to Net Rental
Income is presented in the table below.
The Net Rental Income increased almost six times from $8.99 million for 9 months
of 2014 to $52.81 million for 9 months of 2015. This substantial increase is
caused by the acquisition of new income-generating properties in the second half
of 2014.
· Interest Income
Interest Income decreased from $5.75 million during nine months of 2014 to $4.43
million for the comparable period of 2015. The decrease is caused by the fact
that part of the interest income in 2014 was generated by EPH loans to Berlin
House and Geneva House which were treated as investments in associate till their
acquisition. In 2015 this interest is eliminated during consolidation.
· Net Foreign Exchange Gain
The functional currency of the Company's asset-owning subsidiaries is Russian
ruble ("RUB"). If these subsidiaries have assets and liabilities which are
denominated or valued in US$, the fluctuations of the RUB / US$ exchange rate
create foreign exchange gain or loss.
Since 1January 2015, the RUB weakened by more than 10% against the US$. As the
Company's investment properties are valued in US$, the Company's income
statement for 9 months of 2015 reflects net foreign exchange gain in the amount
of $38.09 million. This gain, however, is mitigated by the negative change in
cumulative translation adjustment reflected in the Company's financials directly
in the equity and also resulted from the significant RUB depreciation.
Expenses
· Finance Costs
The Company recognized $24.20 million of finance costs during nine months of
2015 in comparison with $3.71 million for the same period in 2014. The main
reasons for the increase are: the interest expense on bonds issued in August and
September 2014 and in June 2015, as well as the interest expense on third party
loans granted to Berlin House, Geneva House and Hermitage Plaza which were
acquired by EPH together with these properties but were repaid in June 2015.
Assets
· Loans and Receivables
EPH's Loans and Receivables increased due to both: additional lending to Arbat
projects and accrual of additional interest on existing project loans. To the
extent that a borrower is partially owned by EPH, loans are eliminated in the
consolidation. This means that 60% of project financing for the Arbat Projects
is classified as investment in the projects, and 40% as lending.
Loans and Receivables increased from $75.42 million as of 31 December 2014 to
$80.69 million as of 30 September 2015.
· Cash and Cash Equivalents
The Company's cash position decreased from $26.46 million as of 31 December
2014 to $10.97 million as of 30 September 2015. This decrease in the Company's
cash position during the nine months of 2015 is a net effect of the following
main cash inflows and outflows:
- proceeds from the bond placement in June 2015
- net rental income from rental properties
- repayments of third party loans acquired together with Berlin House,
Geneva House and Hermitage Plaza
- payment of the remaining parts of the purchase prices for Berlin
House and Geneva House
- bonds interest payments
- granting financing for Arbat construction
Liabilities
· Borrowings (LT & ST)
As per 30 September 2015, EPH's debt consists of:
- 9 year bonds listed on Swiss Stock Exchange issued in August 2014,
September 2014 and June 2015;
- loan from Jilford Ltd. signed in September 2013 for the purpose of
financing Arbat construction;
The nominal value of the issued bonds increased from $270 million as of 31
December 2014 to $405 million as of end of September 2015 due to the bond
placement performed in June 2015.
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. The outstanding balance of the loan
increased from $15.09 million at 31 December 2014 to $16.29 million at 30
September 2015.
Third party loans acquired together with Berlin House, Geneva House and
Hermitage Plaza in 2014 were fully repaid in June 2015 using the funds received
from the latest bond placement.
· Accounts Payable and Accrued Expenses (LT & ST)
The amount of Accounts Payable decreased from $223.38 million as of 31 December
2014 to $186.53 million at 30 September 2015 primarily due to the repayment of
deferred parts of the purchase prices for Berlin House and Geneva House.
The most part of the remaining accounts payable represents the deferred parts of
the purchase prices with respect to the acquisitions of Polar Lights and
Hermitage Plaza.
Significant Income and Expense Items for 9 months of 2015
Net Rental Income 30.09.2015 30.09.2014 Change YoY
------------------------------------------------------------------
Berlin House 11,989,129 1,375,933 10,613,197
Geneva House 11,542,374 1,462,387 10,079,987
Polar Lights 10,405,425 - 10,405,425
Hermitage Plaza 18,421,671 - 18,421,671
Magistral'naya 456,382 707,761 (251,379)
Petrovsky Fort - 5,441,375 (5,441,375)
--------------------------------------------
Total 52,814,981 8,987,456 43,827,526
--------------------------------------------
Material YoY changes in Income/Expense 30.09.2015 30.09.2014 Change YoY
Items
-------------------------------------------------------------------------------
Interest income 4,427,550 5,745,736 (1,318,186)
Net foreign exchange gain/ (loss) 38,093,135 (8,970,706) 47,063,841
Finance costs (24,199,902) (3,714,480) (20,485,422)
Significant Q3 2015 changes in Financial Position
Assets 30.09.2015 31.12.2014 Change
-------------------------------------------------------------------------------
Loans and receivables (LT & 80,687,179 75,423,997 5,263,182
ST)
Cash & cash equivalents 10,974,872 26,460,024 (15,485,152)
Liabilities 30.09.2015 31.12.2014 Change
-------------------------------------------------------------------------------
Borrowings (LT & ST) 425,505,262 408,871,502 16,633,760
Accounts payable and accrued 186,527,769 223,376,505 (36,848,736)
expenses (LT & ST)
EPH Q3 Trading Update:
http://hugin.info/139905/R/1969541/719877.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
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#1969541]
Unternehmensinformation / Kurzprofil:
Datum: 26.11.2015 - 19:30 Uhr
Sprache: Deutsch
News-ID 435946
Anzahl Zeichen: 10522
contact information:
Town:
Geneva
Kategorie:
Business News
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