Eurocastle Releases Fourth Quarter and Year End 2022 Financial Results
02/03/2023 17:44
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EUROCASTLE INVESTMENT LIMITED
Contact:
Oak Fund Services (Guernsey) Limited
Company Administrator
Attn: Hannah Crocker
Tel: +44 1481 723450
Eurocastle Releases Fourth Quarter and Year End 2022 Financial Results
Guernsey, 2 March 2023 – Eurocastle Investment Limited (Euronext Amsterdam:
ECT) today
(https://www.globenewswire.com/Tracker?data=RzS7OsGwnxginhGRcS7yNtjqYwi9qKMWBGXHduo6v1Ko9tYrrs-2yk3pM9GLG7hc)
will release its annual report for the year ended 31 December 2022.
* Adjusted Net Asset Value (“NAV”) of €10.3 million(1), or €10.33 per
share(2), up €0.07 per share vs. Q3 2022 (up €0.54 per share vs. YE 2021)
due to:
1. Valuation movements: * €0.05 per share, or 6%, increase in Q4 2022
(€0.28 per share increase for FY 2022) on the real estate fund investments
following the sale of the final apartment units.
* No movement in Q4 2022 (€0.12 per share increase for FY 2022) on the NPL
and other loan interests which were fully disposed of in the year.
2. Reserve and other movements: €0.02 per share increase in Q4 2022 (€0.13
per share increase for FY 2022).
* IFRS NAV of €22.4 million, or €22.45 per share (€32.9 million, or
€17.73 per share(3), as at YE 2021).
The tables below summarise the Adjusted NAV by segment:
YE 2022 NAV Q 3 2022 NAV YE 202 1 NAV
€’m € p.s. €’m € p.s. €’m € p.s.
Real Estate Funds 0.6 0.63 0.8 0.76 2.8 1.49
Italian NPLs & Other Loans - - 1.0 1.01 1.3 0.72
Net Corporate Cash (4) 17.1 17.15 16.2 16.27 28.8 15.52
Legacy German Tax Asset 4.6 4.67 4.6 4.67 - -
IFRS NAV 22. 4 22. 45 22 . 6 22 . 7 2 32.9 17 .7 3
Additional Reserves (12.1) (12.12) (12.4) (12.46) (14.8) (7.94)
Adjusted NAV 10. 3 10. 33 1 0.2 1 0. 26 1 8 .2 9.79
Ordinary shares outstanding 995,555 995,555 1,857,535
As at 31 December 2022, the Company’s remaining assets mainly
comprise:
1. Two Real Estate Fund Investments with a Q4 2022 NAV of €0.6 million, or
€0.63 per share, where the underlying apartments are now all sold with both
funds currently in liquidation.
2. €17.1 million of net corporate cash.
2022 BUSINESS HIGHLIGHTS
FY 2022 Overview
During 2022, the Company made significant progress on realising its remaining
assets as part of its Realisation Plan, with 96% of its YE 2021 NAV relating
to investments realised in the period. As at 31 December 2022, the Company had
realised 106% of the NAV of the investments reported at the time of the
announcement of the Realisation Plan in November 2019.
In particular, Eurocastle disposed of the two remaining loan pools that the
Company had an interest in and all remaining apartment units in its two real
estate fund investments were sold. As a result, Eurocastle’s investment
interests now comprise the residual net assets of its two RE Fund Investments
with an NAV of €0.6 million, or 6% of the Company’s total Adjusted NAV.
In July, the Company announced the conclusion of its strategic review and the
decision to relaunch the Company’s investment activity (the “Relaunch”).
It also announced a tender offer to provide a liquidity opportunity for those
shareholders who did not wish to participate in the Relaunch (the “Tender
Offer”). The Tender Offer closed in August with 67% of eligible shares
tendered, resulting in Eurocastle accepting 864,980 shares in exchange for
€10.26 of cash per share, or €8.9 million in total.
Investment Realisations & Highlights
* During 2022, the Company realised €4.8 million from its investments, of
which €3.4 million came from its RE Fund Investments (~91% of their YE 2021
NAV) and €1.5 million from its minority NPL and Other Loan holdings (~109%
of their YE 2021 NAV).
* RE Redevelopment Funds - REFI II & REFI V: Both funds are now in liquidation
with all apartment units sold. During 2022, Eurocastle received €3.4 million
comprising (i) €1.0 million from REFI II (~70% of its YE 2021 NAV) and (ii)
€2.4 million from REFI V (~103% of its YE 2021 NAV).
* Italian NPLs & Other Loans: The Company disposed of its residual minority
interest in 2 loan pools, realising €1.3 million and a further €0.2
million in distributions during the year.
* Additional Reserves: The Company reduced these reserves from €14.8 million
to €12.1 million during the year. The reduction of €2.7 million reflects
€1.4 million of reserves being utilised, in line with anticipated costs, and
a release of €1.3 million of the existing reserves in the year. The majority
of this release relates to the legacy German tax matter following a revision
to the estimated total liability. As at 31 December 2022, of the total
Additional Reserves of €12.1 million, €6.5 million related to the legacy
German tax matter with the balance of approximately €5.5 million in place to
allow for an orderly liquidation process.
Relaunch Update
* As at 31 December 2022 the Company has €17.1 million of net corporate cash
and approximately €9.7 million of net available cash to commence seeking new
investments under the new investment strategy. The Company is currently
working with the Manager to finalise the structure and expects to commence
investing in the coming weeks.
SUBSEQUENT EVENTS TO 31 DECEMBER 2022
As at 2 March 2023, there were no material subsequent events to disclose.
Income Statement for the Full Year and Fourth Quarter 2022 FY 2022 Q4 202 2
€ Thousands € Thousands
Portfolio Returns
Italian NPLs & Other Loans realised gain 116 -
Real Estate Funds realised fair value movement - -
Real Estate Funds unrealised fair value movement 282 48
Fair value movement on Italian investments 398 48
Fair value movements on residual Legacy entities 9 9
Interest income 68 58
Loss on foreign currency translation (7) (5)
Total income 468 109
Operating Expenses
Interest expense 12 -
Manager base and incentive fees 92 17
Remaining operating expenses 1,247 243
Other operating expenses 1,339 260
Total expenses 1,351 260
Net l oss for the period (883) (152)
€ per share (0.58) ( 0. 15)
Balance Sheet and Adjusted NAV Reconciliation as at 31 December 2022 Italian Investments € Thousands Corporate € Thousands Total € Thousands
Assets
Cash and cash equivalents - 17,721 17,721
Other assets - 109 109
Legacy German tax asset - 4,645 4,645
Investments:
Real Estate Funds 628 - 628
Total assets 628 22,475 23,103
Liabilities
Trade and other payables - 736 736
Manager base and incentive fees - 17 17
Total liabilities - 753 753
IFRS Net Asset Value 628 2 1 , 722 2 2 , 350
Liquidation cash reserve - (5,537) (5,537)
Legacy German tax cash reserve - (1,888) (1,888)
Legacy German tax asset - (4,645) (4,645)
Adjusted NAV 62 8 9,652 10,280
Adjusted NAV (€ per Share) 0.63 9. 69 10.33
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 will be 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. 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. On 8 July 2022, the Company
announced the relaunch of its investment activity and is currently in the
early stages of pursuing its new strategy by initially focusing on
opportunistic real estate in Greece with a plan to expand across Southern
Europe. 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.
(1) In light of the Realisation Plan announced in November 2019, the Adjusted
NAV as at 31 December 2022 reflects additional reserves for future costs and
potential liabilities, which have not been accounted for under the IFRS NAV
(“Additional Reserves”). No commitments for these future costs and
potential liabilities existed as at 31 December 2022.
(2) Per share calculations for Eurocastle throughout this document are based
on 995,555 shares, unless otherwise stated.
(3) Based on 1,857,535 shares outstanding at YE 2021.
(4) Reflects corporate cash net of accrued liabilities and other assets
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