Baltic Horizon Fund (NHCBHFFT) Q2 2024 earnings summary

Executive summary

• Strategic focus on increasing occupancy above 90% by end of 2024, improving NOI, and reducing LTV towards 50% through debt reduction and improved valuations.

• Action plan includes new lease signings, private placement of €7 million in autumn 2024, refinancing, and selective asset disposals.

• Portfolio consists of 12 certified, centrally located, multi-functional properties in the Baltic capitals, with no single tenant exceeding 8.6% of rental concentration.

• Net loss for H1 2024 was €12.9 million, mainly due to property valuation losses, improved from €15.0 million in H1 2023.

• Sustainability remains a priority, with 100% portfolio certification and a 4-star GRESB rating.

Financial highlights

• Q2 2024 rental income was €3.8 million, down 20.7% year-over-year; H1 2024 net rental income was €6.0 million, 29.6% lower than H1 2023.

• NOI has recovered to around €1.1 million monthly, with a target of €1.4–1.5 million as new tenants move in.

• LTV increased to 61.3% in Q2 2024 (31 Dec 2023: 57.3%), and average cost of debt rose to 6.4% (31 Dec 2023: 5.2%).

• Gross asset value at 30 June 2024 was €250.1 million, down from €261.1 million at year-end 2023, mainly due to property revaluations.

• €20 million of a €42 million bond has been repaid; €22 million remains outstanding.

Outlook and guidance

• Targeting occupancy above 90% by end of 2024, with actual occupancy at 84.7% as of August 2024 including new leases and LOIs.

• Aims to achieve NOI of €18 million by 2027 through ESG initiatives and refurbishment.

• Private placement planned for autumn 2024 to strengthen the balance sheet and fund fit-outs.

• Long-term LTV target is 50%, with rental yield goal of at least 7% and 3% annual value growth.