Eurocastle Announces First Half 2016 Financial Results
(Thomson Reuters ONE) -
Guernsey, 3 August 2016 - Eurocastle Investment Limited (Euronext Amsterdam:
ECT) today has released its financial results for the first half year ended 30
June 2016.
Normalised FFO[1] of ?11.0 million, or ?0.15 per share for the second quarter of
2016 (?0.18 per share pro forma for the recent share repurchase that closed in
June) (H1 2016: ?21.5 million, or ?0.30 per share)[2].
Adjusted Net Asset Value[3] of ?462.7 million, or ?7.70 per share, an increase
of ?0.35 per share on the quarter (Q1 2016: ?532.2 million, or ?7.35 per share)
reflecting:
* ?0.25 per share NAV accretion following the ?75.1 million share repurchase.
* ?0.10 per share of valuation movements net of corporate expenses and Q2
dividend of ?0.125 per share.
Second Quarter 2016 Dividend of ?7.5 million, or ?0.125 per share paid in July.
Q2 2016 Q1 2016 H1 2016 H1 2015
---------------------- --------------- --------------- --------------
? ? per share ? ? per ? ? per ? ? per
million million share million share million share
------------ ---------------------- --------------- --------------- --------------
Normalised 11.0 0.15/0.18(2) 10.5 0.15 21.5 0.30 6.6 0.14
FFO(1)
Legacy
Business[4] 0.4 0.01 4.7 0.06 5.1 0.07 33.1 0.46
Cash Flow
Received
Adjusted 462.7 7.70 532.2 7.35 462.7 7.70 543.3 7.50
NAV(3)
------------ ---------------------- --------------- --------------- --------------
BUSINESS HIGHLIGHTS
Share Tender - On 23 May 2016, the Board announced a tender offer of up to ?75
million to return excess cash that had been received from the sale of the
Company's Legacy assets. The Company repurchased shares to provide existing
investors with liquidity and to take advantage of the discount the Company's
shares were trading at relative to the Company's then existing Adjusted Net
Asset Value. On 20 June 2016, Eurocastle repurchased 12.3 million, or 17.0%, of
ordinary shares in issue at a price of ?6.10 per share for a total cost of ?75.1
million. The repurchase has been accretive both to earnings as well as the
balance sheet, increasing Normalised FFO by 20%, or ?0.03 per share, and NAV by
3%, or ?0.25 per share.
New Italian Investments - On 10 May 2016, Eurocastle invested a further ?6.0
million into the real estate Fund Investment IV transaction bringing total
equity invested to ?7.0 million to acquire substantially all of the units of a
newly established unlisted Italian real estate fund set up to restructure and
monetise real estate properties owned by an over-levered real estate fund. The
portfolio owned by the fund consists of a retail portfolio in Northern Italy and
three office assets with a combined value of ?132.3 million. Additionally, on
16 and 25 May 2016, the Company invested an aggregate of ?5.0 million to acquire
an interest in two mezzanine tranches of the fund's debt at a 20% discount to
expected recovery.
Italian RE Fund Asset Sales - In May 2016, Eurocastle received ?6.8 million, or
63% of its original investment, from real estate Fund Investment III. The
distribution followed the sale of an asset which represented 26% of the fund's
total assets at a 5% premium to its previously reported market value. The units
in this fund were acquired by the Company at a 56% discount to the fund's
reported NAV at acquisition. In addition, in June 2016, one asset comprising
approximately 33% of real estate Fund Investment IV was sold at a ?7.0 million
premium to the fund's valuation with the proceeds being applied towards
amortising the fund's debt. The sale significantly improves the investment's
anticipated return and profitability once all fund assets are sold.
Italian Investment[5] Performance - During the second quarter, Italian
Investments in aggregate reported strong performance generating ?20.4 million of
gross cash flow compared to ?12.8 million expected at underwriting. This
includes ?6.8 million from the RE funds, ?1.5 million from the non-performing
loans ("NPLs"), ?3.8 million from the NPLs within doBank and ?8.3 million from
doBank's servicing business[6]. Total cash flow generated in the first half of
2016 amounted to ?31.3 million of which ?19.6 million related to doBank
alone[7].
HIGHLIGHTS SUBSEQUENT TO 30 JUNE 2016
* On 14 July 2016, the Company announced that doBank, 50% owned by Eurocastle,
has agreed to acquire Italfondiario, the second largest independent credit
management company in Italy specialising in servicing NPLs for approximately
?27 million from Fortress-managed funds and a third party. The acquisition
is part of doBank's broader plan to expand and streamline operations in
Italy and secure a leading position in the integrated credit management
sector. On completion of the acquisition (which is subject to Bank of Italy
approval), doBank and Italfondiario will form the largest independent group
in the sector and will benefit from significant synergies and economies of
scale, thereby making their operations even more efficient and effective,
and further enhancing the profile of the group as the major independent
servicer of the banking system.
ADDITIONAL INFORMATION
For additional information that management believes to be useful for investors,
please refer to the latest presentation posted on the Investor Relations section
of the Company's website, www.eurocastleinv.com. For consolidated investment
portfolio information, please refer to the Company's most recent Financial
Report, which is available on the Company's website (www.eurocastleinv.com).
EARNINGS CALL INFORMATION
Eurocastle's management will host an earnings conference call at 2:00 P.M.
London time (9:00 A.M. New York time) later today. All interested parties are
welcome to participate on the live call. You can access the conference call by
dialing first +1- 800-215-5243 (from within the U.S.) or +1-330-863-8154 (from
outside of the U.S.) ten minutes prior to the scheduled start of the call;
please reference "Eurocastle First Half 2016 Earnings Call or conference ID
number 56353642"
A webcast of the conference call will be available to the public on a listen-
only basis at www.eurocastleinv.com. Please allow extra time prior to the call
to visit the site and download the necessary software required to listen to the
internet broadcast. A replay of the webcast will be available for three months
following the call.
For those who are not available to listen to the live call, a replay will be
available until 11:59 P.M. New York time on Saturday, 3 September 2016 by
dialing +1-855-859-2056 (from within the U.S.) or +1-404- 537-3406 (from outside
of the U.S.); please reference access code "56353642"
NORMALISED FFO
Normalised FFO is a non-IFRS financial measure that, with respect to the
Company's Italian Investments, recognises income on an expected yield basis
allowing Eurocastle to report the run rate earnings from these investments in
line with their projected annualised returns. On Eurocastle's Legacy Business
the measure excludes realised gains and losses, sales related costs (including
realised swap losses), impairment losses, foreign exchange movements and any
movements on portfolios with a negative NAV other than sales or asset management
fees realised.
Eurocastle believes that, given the strategy of seeking to monetise the existing
value of the Legacy Business, focusing on the Normalised FFO of the Company's
Italian Investments[8] will further enable investors to understand current and
future earnings given annualised returns achieved and the average net invested
capital(2) over the relevant period.
H1 2016 Average Net
Segmental Invested Italian
Normalised FFO Capital[9] Yield Investments Legacy Total
? Thousands ? Thousands ? Thousands
--------------------------------------- ----------------------------------------
NPLs 22,741 21% 2,345 - 2,345
RE Fund Units 41,941 28% 5,924 - 5,924
doBank (Servicer 246,031 14% 17,070 - 17,070
& NPL)
--------------------------------------- ----------------------------------------
Italian
Investments NFFO 310,712 16% 25,339 - 25,339
before expenses
Legacy
Portfolios NFFO - 6,148 6,148
before expenses
Manager Base & (5,541) (68) (5,609)
Incentive Fees
Other operating (1,730) (2,592) (4,322)
expenses
--------------------------------------- ----------------------------------------
Normalised FFO 18,068 3,488 21,556
Per Share 0.25 0.05 0.30
--------------------------------------- ----------------------------------------
Q2 2016 Average Net
Segmental Invested Italian
Normalised FFO Capital(2) Yield Investments Legacy Total
? Thousands ? Thousands ? Thousands
--------------------------------------- ----------------------------------------
NPLs 22,266 17% 936 - 936
RE Fund Units 43,502 36% 3,905 - 3,905
doBank (Servicer 246,031 14% 8,540 - 8,540
& NPL)
--------------------------------------- ----------------------------------------
Italian
Investments NFFO 311,799 17% 13,380 - 13,380
before expenses
Legacy
Portfolios NFFO - 2,640 2,640
before expenses
Manager Base & (2,988) (31) (3,019)
Incentive Fees
Other operating (802) (1,186) (1,988)
expenses
--------------------------------------- ----------------------------------------
Normalised FFO 9,590 1,423 11,013
Per Share[10] 0.16 0.02 0.18
--------------------------------------- ----------------------------------------
In the first half of 2016, Eurocastle generated Normalised FFO of ?21.6 million,
or ?0.30 per share compared to a dividend of ?16.6 million, or ?0.25 per share.
Before corporate costs Italian Investments generated ?25.3 million, or ?0.35 per
share. Given the average net invested capital in the period was approximately
?311 million, this equates to a yield of 16%.
In the second quarter of 2016, Eurocastle generated Normalised FFO of ?11.0
million, or ?0.15 per share (or ?0.18 per share calculated on the lower share
count of 60.1 million following the share repurchase completed in June 2016).
Before corporate costs Italian Investments generated ?13.4 million, or ?0.19 per
share. Given the average net invested capital in the period was approximately
?312 million, this equates to a yield of 17%.
Italian Investments Legacy Total
H1 2016 Income Statement ? Thousands ? Thousands ? Thousands
--------------------------------------------------------------------------------
Operating income
Italian Investments
Fair value movements on Italian
Investments
doBank (Servicer & NPL) 16,561 - 16,561
NPLs[11] 3,659 - 3,659
Real estate fund units (Fund 1,348 - 1,348
Investment I)
Share of post-tax profits from
associate investment in RE fund 13,973 1,777 15,750
units (Fund Investments III,IV)
Share of post-tax loss from JV
investment in RE fund units (Fund (1,595) - (1,595)
Investment II)
Legacy Debt Investments
Interest income 126 648 774
Losses on foreign currency - (1,296) (1,296)
contracts, translation and swaps
Impairment losses - 107 107
Gain on pay-downs of loans and - 3,710 3,710
receivables
--------------------------------------------------------------------------------
Total operating income 34,072 4,946 39,018
Operating expenses
Interest expense - 1,493 1,493
Other operating expenses - 203 - 203
transaction costs
Other operating expenses - group 7,116 258 7,374
running costs
--------------------------------------------------------------------------------
Total operating expenses 7,319 1,751 9,070
--------------------------------------------------------------------------------
Net operating profit before taxation 26,753 3,195 29,948
--------------------------------------------------------------------------------
Total tax expense 18 - 18
--------------------------------------------------------------------------------
Net profit after taxation from 26,735 3,195 29,930
continuing operations
--------------------------------------------------------------------------------
Net loss after taxation from - (37,820) (37,820)
discontinued operations
--------------------------------------------------------------------------------
Profit / (loss) after taxation for 26,735 (34,625) (7,890)
the year
Per Share[12] 0.37 (0.48) (0.11)
--------------------------------------------------------------------------------
Attributable to:
Ordinary equity holders of the 26,484 (34,625) (8,141)
Company
Non-controlling interest 251 - 251
For the first six months of 2016, the total net loss after taxation and non-
controlling interests as reported under IFRS was ?8.1 million. Within the
Group's Italian Investments, where the majority of these assets are accounted
for at fair value under a discounted cash flow approach, net income after
taxation and non-controlling interest for the first half of 2016 was ?26.5
million, or ?0.37 per share.
Italian Investments Legacy Total
? Thousands ? Thousands ? Thousands
--------------------------------------------------------------------------------
Net profit / ( loss) attributable to 26,484 (34,625) (8,141)
ordinary shareholders after taxation
Reversal of Net loss attributed to - 30,946 30,946
negative NAV portfolios[13]
--------------------------------------------------------------------------------
Adjusted net profit / (loss) 26,484 (3,679) 22,805
Per Share(2) 0.37 (0.05) 0.32
--------------------------------------------------------------------------------
Excluding losses arising within those legacy portfolios that have a negative
NAV, the Group generated a net profit after taxation of ?22.8 million or ?0.32
per share. As at 30 June 2016, the remaining adjusted NAV of the legacy
portfolios was ?8.4 million, or ?0.14 per share which represents under 2% of the
Company's Adjusted NAV.
H1 2016 Balance Sheet
and Adjusted NAV Italian Investments Corporate Legacy Total
Reconciliation ? Thousands ? Thousands ? Thousands ? Thousands
--------------------------------------------------------------------------------
Assets
Cash and cash 3,037 121,549 23,789 148,375
equivalents
Investment properties - - 281,806 281,806
held for sale
Italian investments at
Fair Value
doBank (Servicer) 168,446 - - 168,446
doBank (NPL) 103,833 - - 103,833
NPLs 27,690 - - 27,690
Real estate fund units 14,196 - - 14,196
(Fund Investment I)
Associate investment in
real estate fund units 29,174 - 1,777 30,951
(Fund Investments
III,IV)
Joint venture investment
in real estate fund 10,565 - - 10,565
units (Fund Investment
II)
Loans and receivables - - 54,978 54,978
Assets available for 5,184 - - 5,184
sale
Derivative assets - - 5,409 5,409
Other assets 529 5,275 7,243 13,047
Intangible assets - - 2 2
--------------------------------------------------------------------------------
Total assets 362,654 126,824 375,004 864,482
Total liabilities
Trade and other payables 3,098 21,870 68,425 93,393
Current taxation payable 13 9,204 (37) 9,180
CDO bonds payable - - 74,332 74,332
Bank borrowings - - 331,500 331,500
Finance lease payable - - 16,643 16,643
--------------------------------------------------------------------------------
Total liabilities 3,111 31,074 490,863 525,048
--------------------------------------------------------------------------------
Net Asset Value 359,543 95,750 (115,859) 339,434
--------------------------------------------------------------------------------
Non-controlling interest (996) - - (996)
--------------------------------------------------------------------------------
Net Asset Value after 358,547 95,750 (115,859) 338,438
Non-controlling interest
--------------------------------------------------------------------------------
Negative NAV - - 124,268 124,268
Addbacks[14]
--------------------------------------------------------------------------------
Adjusted NAV 358,547 95,750 8,409 462,706
Adjusted NAV (? per 5.97 1.59 0.14 7.70
Share)[15]
--------------------------------------------------------------------------------
ABOUT EUROCASTLE
Eurocastle Investment Limited is a publicly traded closed-ended investment
company that focuses on investing in Italian performing and non-performing
loans, Italian NPL servicing platforms and other real estate related assets
primarily in Italy. The Company is Euro denominated and is listed on Euronext
Amsterdam under the symbol "ECT". Eurocastle is managed by an affiliate of
Fortress Investment Group LLC, a leading global investment manager. For more
information regarding Eurocastle Investment Limited and to be added to our email
distribution list, please visit www.eurocastleinv.com.
FORWARD LOOKING STATEMENTS
This release contains statements that constitute forward-looking statements.
Such forward-looking statements may relate to, among other things, future
commitments to sell real estate and achievement of disposal targets,
availability of investment and divestment opportunities, timing or certainty of
completion of acquisitions and disposals, the operating performance of our
investments and financing needs. Forward-looking statements are generally
identifiable by use of forward-looking terminology such as "may", "will",
"should", "potential", "intend", "expect", "endeavour", "seek", "anticipate",
"estimate", "overestimate", "underestimate", "believe", "could", "project",
"predict", "project", "continue", "plan", "forecast" or other similar words or
expressions. Forward-looking statements are based on certain assumptions,
discuss future expectations, describe future plans and strategies, contain
projections of results of operations or of financial condition or state other
forward-looking information. The Group's ability to predict results or the
actual effect of future plans or strategies is limited. Although the Group
believes that the expectations reflected in such forward-looking statements are
based on reasonable assumptions, its actual results and performance may differ
materially from those set forth in the forward-looking statements. These
forward-looking statements are subject to risks, uncertainties and other factors
that may cause the Group's actual results in future periods to differ materially
from forecasted results or stated expectations including the risks regarding
Eurocastle's ability to declare dividends, amortise the Group's debts,
renegotiate the Group's credit facilities, make new investments, or achieve its
targets regarding asset disposals or asset perfor
--------------------------------------------------------------------------------
[1] Normalised FFO ("NFFO") is a non-IFRS measure used to provide additional
information regarding the underlying performance of the Company, as outlined in
Note 24 of the H1 2016 consolidated financial statements.
[2] NFFO per share pro forma post share repurchase based on reduced share count
of 60.1 million. Actual NFFO per share for Q2 2016 calculated on weighted
average share count of 71.8 million shares during the period (72.1 million
shares for H1 2016).
[3] Throughout this report Adjusted NAV excludes the net asset value of those
Legacy portfolios with negative NAV (Belfry, Truss, Drive and CDO V) whose debt
is non-recourse to Eurocastle.
[4] All investments owned by the Group prior to April 2013.
[5] All investments acquired by the Group since the establishment of its new
strategy in April 2013, previously labelled as "New Investments".
[6] Unaudited management data of doBank.
[7] Total cash flow generated in 2016 includes ?21.3 million currently held at
the level of the investments in addition to ?4.3 million generated in the
previous year.
[8] All investments acquired by the Group since the establishment of its new
strategy in April 2013, previously labelled as "New Investments".
[9] Time weighted average of invested capital (net of any capital returned) over
the relevant period.
[10] NFFO per share pro forma post share repurchase based on reduced share count
of 60.1 million.
[11] The fair value movements on Italian NPL Investments includes ?1.3m from
subsidiaries, ?2.2m from the share of post-tax profits from associates and ?0.1m
from the share of post-tax profits from joint venture investments which are
disclosed separately in the Company's financial statements. These investments
are accounted for under the equity method but the underlying investments are
fair valued.
[12] Earnings per share based on 72.1 million weighted average ordinary shares
for the first half of 2016.
[13] Reverses losses arising from portfolios with a negative net asset value net
of any cash distributions or fees received by the Company.
[14] Adjusts to exclude those Legacy portfolios with negative NAV (Truss,
Belfry, Drive and CDO V) whose debt is non-recourse to Eurocastle.
[15] Adjusted NAV per share based in on 60.1 million ordinary shares in issue.
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: Eurocastle Investment Limited via GlobeNewswire
[HUG#2032766]
Unternehmensinformation / Kurzprofil:
Datum: 03.08.2016 - 08:00 Uhr
Sprache: Deutsch
News-ID 486974
Anzahl Zeichen: 27948
contact information:
Town:
St Peter Port
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 187 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Eurocastle Announces First Half 2016 Financial Results"
steht unter der journalistisch-redaktionellen Verantwortung von
Eurocastle Investment Limited (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
