TIDMECT
Contact:
Oak Fund Services (Guernsey) Limited
Company Administrator
Attn: Mark Woodall
Tel: +44 1481 723450
Eurocastle Releases First Half 2021 Financial Results
Guernsey, 4 August 2021 -- Eurocastle Investment Limited
(Euronext Amsterdam: ECT) today
https://www.globenewswire.com/Tracker?data=hoOiCKRCfyKlXVVbnFfWm7lATAhbldtpTLb61CYuHZCgjOke2PDlDtHgIhxUc2lK
has released its financial report for the six months ended 30 June
2021.
-- Adjusted Net Asset Value ("NAV") of EUR17.8 million1, or EUR9.60 per
share2, up EUR0.83 per share vs. EUR8.77 per share at Q1 2021 (up EUR1.14
per share3 since Q4 2020) due to:
1. Valuation movements:
-- EUR0.71 per share, or 26%, increase in Q2 2021 (EUR0.98 per share
increase in H1 2021) on its remaining real estate fund investments
as a result of realisations being ahead of expectations.
-- EUR0.19 per share, or 27%, increase in Q2 2021 (EUR0.23 per share
increase in H1 2021) on the remaining three NPL and other loan
interests.
2. Increase in existing reserves and other movements resulting in a decrease
of EUR(0.07) per share in Q2 2021 (EUR0.07 per share decrease in H1
2021).
The tables below summarise the Adjusted NAV by segment:
Q2 Cash
Q1 2021 NAV Movement Q2 FV Movement Q2 2021 NAV
-------------- --------------- --------------- --------------
EUR EUR EUR EUR
EUR per EUR per EUR per EUR per
million share million share million share million share
Real Estate
Funds 5.1 2.77 - - 1.3 0.71 6.4 3.47
Italian NPLs &
Other Loans 1.3 0.70 (0.0) (0.01) 0.4 0.19 1.6 0.88
Net Corporate
Cash(4) 9.8 5.30 0.0 0.01 (0.1) (0.07) 9.7 5.25
Adjusted NAV 16.3 8.77 - - 1.5 0.83 17.8 9.60
============== ======= ===== ======= ====== ======= ====== ======= =====
As at 30 June 2021, the Company's remaining assets comprise:
1. Interests in two fully developed, luxury residential real estate
redevelopment funds in Rome where all of the apartments in Real Estate
Fund Investment II ("REFI II") are now 100% sold or under contract to be
sold and less than 20% of the units in Real Estate Fund Investment V
("REFI V") remain to be sold.
2. Residual minority interests in three predominantly secured NPL & Other
Loan pools where the underlying assets of one pool are under binding
contract to be sold in Q3 and, as previously announced, the remaining two
NPL pools are under contract to be sold once the underlying portfolio
level financing of each is repaid.
3. Net corporate cash of EUR9.7 million, comprising corporate cash net of
liabilities and additional reserves.
H1 2021 BUSINESS HIGHLIGHTS
H1 2021 Overview
During the first half of 2021, the Company continued to make
significant progress on realising its remaining assets as part of
its Realisation Plan. Sales of residential units across both of its
real estate redevelopment funds have proved resilient despite the
ongoing challenges from COVID-19. This positive activity in the RE
Funds, where results were achieved above and ahead of what was
anticipated, after being adjusted in 2020 for the projected impact
of COVID-19, has been the primary driver for a 26% valuation
increase in the period for these investments.
In addition, Eurocastle received its last material distribution
from its publicly listed fund investment and agreed the sale of all
underlying assets in one of the three remaining loan pools the
Company has an interest in, comprising 19% of the segment's Q2 2021
NAV. This activity has left the Company well positioned while it
undertakes its strategic review, announced in March 2021. The
strategic options are under ongoing review by the Board, with the
outcome of the review anticipated to be announced to shareholders
before the end of 2021.
Investment Realisations & Highlights
-- During the first half of 2021, the Company realised EUR2.9 million from
its investments, of which EUR2.8 million came from its Real Estate Funds
(38% of their YE 2020 NAV) and EUR0.1 million from its minority NPL and
Other Loan holdings (4% of their YE 2020 NAV).
-- RE Redevelopment Funds - REFI II & REFI V:
-- Following sales activity during the period and assuming all units under
contract to be sold in REFI II and REFI V close, only 18% of units in
REFI V as at 30 June 2021 will remain to be sold.
-- Received EUR2.4 million in Q1 2021 comprising (i) EUR0.5 million from
REFI II (22% of its YE 2020 NAV) and (ii) EUR1.9 million from REFI V
(39% of its YE 2020 NAV). The remaining proceeds from closed sales
together with those under contract to be sold are expected to be
distributed to Eurocastle in H2 2021 (representing 62% of the Q2'21 NAV).
-- REFI I: Following the sale of all the assets in Real Estate Fund
Investment I in 2019, the Company received its last expected material
distribution of EUR0.4 million, or 143% of its YE 2020 NAV, in Q1 2021.
-- Italian NPLs & Other Loans: During the year the pools generated and
distributed EUR0.1 million, or 4% of its YE 2020 NAV. In June the
underlying assets of one of these 3 pools went under contract to be sold
with closing expected in Q3 2021. The H1 2021 fair value reflects the
impact of this offer which is expected to generate EUR0.3 million to
the Company (19% of Q2'21 NAV).
-- Additional Reserves: The Company reduced these reserves from EUR16.2
million to EUR15.4 million during the first half of the financial year.
The reduction of EUR0.8 million reflects EUR0.9 million of reserves being
utilised, in line with anticipated costs, and an increase of EUR0.1
million in the existing reserves in H1 2021.
SUBSEQUENT EVENT TO 30 JUNE 2021
REFI V signed an additional 8% of units under contract and fully
repaid the financing facility, leaving 10% of units remaining with
closings expected by the end of the year.
Income Statement for the Six and Three Months ended
30 June 2021 (unaudited) H1 2021 Q2 2021
EUR EUR
Thousands Thousands
---------------------------------------------------- ----------- -----------
Portfolio Returns
----------------------------------------------------
Italian NPLs & Other Loans 437 354
Real Estate Funds 1,809 1,316
---------------------------------------------------- ----------- -----------
Fair value movement on Italian investments 2,246 1,670
Fair value movements on residual Legacy entities 28 -
Gain / (loss) on foreign currency translation - (1)
-----------
Total gain 2,274 1,669
---------------------------------------------------- ----------- -----------
Operating Expenses
----------------------------------------------------
Manager base and incentive fees 96 50
Remaining operating expenses 867 501
---------------------------------------------------- ----------- -----------
Other Operating expenses 963 551
---------------------------------------------------- ----------- -----------
Total expenses 963 551
---------------------------------------------------- ----------- -----------
Net profit for the period 1,311 1,118
EUR per share 0.71 0.60
---------------------------------------------------- ----------- -----------
Balance Sheet and Adjusted NAV Reconciliation as at Italian Investments Corporate Total
30 June 2021 (unaudited) EUR Thousands EUR Thousands EUR Thousands
----------------------------------------------------- ------------------- -------------- --------------
Assets
Cash and cash equivalents - 26,324 26,324
Other assets - 48 48
Investments:
Italian NPLs & Other Loans 1,630 - 1,630
Real Estate Funds 6,444 - 6,444
Total assets 8,074 26,372 34,446
Liabilities
Trade and other payables - 1,212 1,212
Manager base and incentive fees - 55 55
Total liabilities - 1,267 1,267
IFRS NAV 8,074 25,105 33,179
------------------------------------------------------ ------------------- -------------- --------------
Additional Reserves(5) - (15,356) (15,356)
------------------------------------------------------ ------------------- -------------- --------------
Adjusted NAV 8,074 9,749 17,824
Adjusted NAV (EUR per share)(6) 4.35 5.25 9.60
------------------------------------------------------ ------------------- -------------- --------------
(1) In light of the Realisation Plan announced in November 2019,
the Adjusted NAV as at 30 June 2021 reflects additional reserves
for future costs and potential liabilities, which have not been
accounted for under the IFRS NAV. No commitments for these future
costs and potential liabilities existed as at 30 June 2021.The IFRS
NAV, as at 30 June 2021, is EUR33.2 million, or EUR17.86 per
share.
(2) Per share calculations for Eurocastle throughout this
document are based on 1.9 million shares.
(3) After taking into account payment in Q1 2021 of EUR0.54 per
share of 2020 capital distribution.
(4) Reflects corporate cash net of liabilities and additional
reserves.
(5) In light of the Realisation Plan, the Adjusted NAV as at 30
June 2021 reflects the additional reserves for future costs and
potential liabilities of EUR15.4 million which have not been
accounted for under the IFRS NAV.
(6) Amounts per share calculated on 1.9 million outstanding
ordinary shares.
NOTICE:
This announcement contains inside information for the purposes
of the Market Abuse Regulation 596/2014.
ADDITIONAL INFORMATION
For investment portfolio information, please refer to the
Company's most recent Financial Report, which is available on the
Company's website (www.eurocastleinv.com).
ABOUT EUROCASTLE
Eurocastle Investment Limited ("Eurocastle" or the "Company") is
a publicly traded closed-ended investment company, focused on
Italian performing and non-performing loans, Italian loan servicing
platforms and other real estate related assets in Italy. On 18
November 2019, the Company announced a plan to realise the majority
of its assets with the aim of accelerating the return of value to
shareholders. The Company will not currently seek material new
investments from the proceeds of the realisation but will continue
to support its existing investments to the extent required in order
to optimise returns and distribute cash to shareholders when
available (the "Realisation Plan"). 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",
"endeavor", "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
Company's ability to predict results or the actual effect of future
plans or strategies is limited. Although the Company 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 Company'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 or achieve its targets
regarding asset disposals or asset performance.
(END) Dow Jones Newswires
August 04, 2021 02:00 ET (06:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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