Comment of the Chairman of the Board
The most important events in the 1st quarter of 2018 were the rental income increase from the extension of the DSV logistics center in Riga in March 2018, and the full start of operations of the grocery store ‘Selver’ after launching on December 14th, 2018. The development project will be considered complete in May of this year when the construction of additional parking spaces next to the “Circle K” fuel station will be finished. In the ordinary course of business, the first quarter met the expectations of management. In addition, vacancies were filled at the Ulonu office premises in Vilnius. Both of the Fund’s Lithuanian office buildings are 100% let at the end of the quarter.
The Fund's dividend policy determines a dividend payment of 80% from the Fund's annual cash flow. During the first quarter of 2018, the potential (net)dividend payout amounted to 625 thousand euros, which is 19 euros per share. The dividend payout from the 2018 profit will proceed after the general shareholders' meeting of spring 2019.
Financial overview
The consolidated sales revenue of EfTEN Real Estate Fund III AS for 1st quarter 2018 was EUR 2.000 million, which increased by 13% in a year. The Group's EBITDA totaled EUR 1.582 million (1st quarter 2017: EUR 1.409 million). The Group's net profit for the same period amounted to EUR 1.251 million, increasing by 14% compared to 1st quarter 2017.
The consolidated gross profit margin in 2018 was 98% (1st quarter 2017: the same). Therefore, expenses directly related to management of properties (incl. land tax, insurance, maintenance and improvement costs) accounted for only 2% of the revenue. The Group's expenses related to properties, marketing costs, general expenses, other income and expenses accounted for 21% of the revenue in 1st quarter 2018. The respective indicator was 20% in 1st quarter 2017.
As at 31.03.2018, the Group’s total assets were in the amount of EUR 97.548 million (31.12.2017: 97.291 million), including fair value of investment property, which accounted for EUR 89.789 million (31.12.2017: 88.390 million) of the total assets.
The net asset value of the share increased by 2.7% in 1st quarter 2018. The weighted average interest rate of Group’s loan agreements (incl. interest rate swap agreements) was 1.73% as at the end of 1st quarter (31.12.2017: same) and LTV (Loan to Value) was 51% (31.12.2017: 52%).
The dividend policy of EfTEN Real Estate Fund III AS provides that the Group will pay out 80% of the free cash flow to shareholders as (gross) dividends in each accounting year. In 2017. EfTEN Real Estate Fund III AS paid the shareholders (net) dividends in the amount of 1.5 million euros (63 cents per share). After the balance sheet date, on April 2018, the Fund’s general meeting decided to distribute (net)dividends from year 2017 profit 2.2 million euros (68 cents per share), which represents 6.1% of the share capital paid in by the end of 2017.
Marilin Hein
CFO
Phone 655 9515
E-mail: marilin.hein@eften.ee
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