29 November 2019, Road Town, Tortola, BVI
- In August 2019 the Company signed the agreement to acquire 100% of ownership interest in the currently under construction office and retail complexes QBC 1 & 2 as well as the parking garage QBC 7 located in Quartier Belvedere, Vienna, Austria. The closing of the transaction will occur after finalization of construction and is expected for Q1 2021 also subject to various other customary closing conditions. On 19 August 2019, the Company has paid EUR 20.00 million (US$ 22.5 million) as a down payment.
- The Company’s rental properties are performing well and generate sufficient cash to cover the Company’s operating expenses, service the debt and partially finance its new acquisitions.
- RUB and EUR, major currencies of the Group’s operations, continue to be volatile and affect the Company’s operating results and net asset value. RUB and EUR weakened against USD by approximately 3% and 4% since last reported date of 30 June 2019. In average, for 9 months 2019 RUB depreciated by 6% against USD and EUR – by 6.4% against USD in comparison to 9 months 2018.
The above key events led to the following main changes in the Company’s financial results for Q3 2019:
- During the 9 months of 2019 EPH rental properties generated $56 million of net rental income (9 months 2018: $51.6 million). The contribution to net rental income of each property is presented in the table below. The decrease of income in Polar Lights, Magistral’naya and City Gate is caused primarily by compression of USD translation of Ruble- and Euro-denominated rental revenues due to average Ruble and Euro depreciation in comparison to 9 months 2018. It was fully compensated by the increase of income in other properties as well as the additional income generated by new Austrian property QBC 4 acquired in February 2019;
- For 9 months of 2019 FX loss recognised in the Company’s income statement was partially overlapped by positive change in currency translation adjustment recognized directly in equity; so the overall negative impact of exchange rate fluctuations in the reporting period is $8.4 million;
- Slight compression in USD equivalent of fair values of European properties and debt denominated in EUR as compared to the published HY 2019’ results is caused by RUB and EUR depreciation against USD as mentioned above.
Significant Q3 2019 Income and Expense Items
|Net Rental Income, US$||30.09.2019||30.09.2018||Change YoY|
|YoY changes in Income/Expense Items, US$||30.09.2019||30.09.2018||Change YoY|
|Net foreign exchange gain/ (loss)||(19,913,817)||39,857,913||(59,771,730)|
Significant Q3 2019 changes in Financial Position
|Assets, US$||30.09.2019||30.06.2019||31.12.2018||Change to HY||Change to LY|
|Prepayment for aqcuisition of subsidiaries||22,504,000||0||0||22,504,000||22,504,000|
|Cash & cash equivalents||33,265,345||44,398,917||41,693,596||(11,133,572)||(8,428,251)|
|Liabilities, US$||30.09.2019||30.06.2019||31.12.2018||Change to HY||Change to LY|
* - Based on external appraisals as of 30.06.2019
Eastern Property Holdings Ltd. is an investment company listed on SIX Swiss Exchange which holds interest in office, residential and retail properties. EPH is managed by Valartis International Ltd. a wholly-owned subsidiary of Valartis Group AG.
Additional information on Eastern Property Holdings is available by contacting Anna Bernhart Tel: +41 44 503 5400.