The net value of EfTEN Real Estate Fund III AS shares as of 31.01.2023

In December 2022, the general meetings of EfTEN Real Estate Fund III AS and EfTEN Kinnisvarafond AS decided to approve the merger of the funds with a balance sheet date of 01.01.2023. Although the final legal merger is expected to take place in March 2023, the consolidated reports of EfTEN Real Estate Fund III AS starting from 01.01.2023 also include the income, expenses, assets, liabilities and equity of EfTEN Kinnisvarafond AS, it’s subsidiaries and affiliate, due to the balance sheet date of the merger and international financial reporting standards (IFRS).

In order to correctly calculate the net asset value per share of EfTEN Real Estate Fund III AS as of 31.01.2023, the number of shares of EfTEN Real Estate Fund III AS has been for reporting purposes increased, which presumably corresponds to the number of shares to be issued to the shareholders of EfTEN Kinnisvarafond AS in order to carry out the merger. According to unaudited reports, a total of 5,747,261 shares will be issued to EfTEN Kinnisvarafond AS in connection with the merger, and the number of shares of EfTEN Real Estate III AS after the merger is a total of 10,819,796 shares.

Financial results of EfTEN Real Estate Fund III AS, January 2023

The consolidated rental income of EfTEN Real Estate Fund III AS was 2,495 thousand euros in January, i.e. 1.93 times (1,201 thousand euros) more than in December. From this increase, 1,335 thousand euros is the consolidated rental income from EfTEN Kinnisvarafond AS properties, and -169 thousand is related to the December turnover rent of the Saules Miestas shopping center, which is not included in the January results. The rest of the increase in rental income is mainly related to rent indexations.

In January, the consolidated property management expenses totaled 125 thousand euros, including 82 thousand euros of the consolidated expenses of EfTEN Kinnisvarafond AS properties. The general expenses of both funds were below the usual January level. General expenses totaled 295 thousand euros in January, i.e. 73 thousand euros more than in December.

The fund's consolidated EBITDA was 2,136 thousand euros in January (1,044 thousand euros more than in December). For properties that have been on the fund's balance sheet for at least two consecutive years (Like-for-like) EBITDA has increased by 4.1% as compared to January last year.

The consolidated adjusted cash flow of EfTEN Real Estate Fund III AS totaled 954 thousand euros in January, i.e. 316 thousand euros more than in December. The relatively small increase, considering the proportions of the two funds’ finances, is related to December loan amortization payments, which in several Lithuanian subsidiaries fell to January 2, i.e. in January, the fund paid loan amortization of approx. 100 thousand euros more than usual. Additionally, as mentioned above, the December results of EfTEN Real Estate Fund III AS included the turnover rent of the Saules Miestas shopping center. Without taking into account the turnover rent and larger loan payments, the adjusted cash flow for January would be 1,054 thousand euros and the adjusted cash flow for December would be 502 thousand euros, i.e. in a usual situation, the adjusted cash flow would increase by 2.1 times.

The fund's consolidated cash balance was 23,893 thousand euros as of 31.01.2023, and the cash balance increased by 12,563 thousand euros. Of this 11,621 thousand is the consolidated cash balance of EfTEN Kinnisvarafond AS as of 31.12.2022.

The weighted average interest rate of the two funds was 4.07% as of the end of January (31.12.22: 3.69%). LTV increased from 40% to 41% after the balance sheet date of the merger.

Considering the dividend policy and dividend capacity of EfTEN Real Estate Fund III AS (including the share of EfTEN Kinnisvarafond AS),  the fund could distribute a total of 12,471 thousand euros in net dividends from last year's results. Considering the number of shares to be increased during the merger, it is 1.15 euros per share. Last year, EfTEN Real Estate Fund III AS distributed a total of 4,058 thousand euros in net dividends (80 cents per share).

The net asset value per share (NAV) of EfTEN Real Estate Fund III AS was 21.4187 euros as of 31.01.2023, and the NAV increased by 4.2% as compared to December. Such an extraordinary increase in NAV comes from the fact that the targeted issue related to merger is based on EPRA's NRV. EPRA NRV was 22.0596 euros as of 31.01.2023, and it increased by the “usual” of 0.7% in January.

Marilin Hein

CFO

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