Eastnine (EAST) Q2 2019 earnings summary

Executive summary

• Jan–Jun rental income rose 41% YoY to €6.1m, while identical-portfolio rental income declined 15% to €2.9m; NOI increased 56% to €5.4m.

• Portfolio expansion continued, with €200m of real estate holdings and planned acquisitions expected to increase office area from 74,500 sq.m. to 105,000 sq.m.

Financial highlights

• Jan–Jun profit from property management rose 175% to €2.4m; unrealised value changes were €7.3m and realised changes/dividends were €1.6m.

• Q2 2019 pro forma rental income was €3.099m, NOI €2.712m, profit from property management €1.141m and net profit €5.664m.

• Q2 pro forma profit before tax was €6.239m, including €3.483m unrealised property value gains and €1.595m realised investment values and dividends.

Outlook and guidance

• Complete agreed S7-2 and S7-3 acquisitions in Vilnius during Q3 2019 and Q1 2020; portfolio area expected to reach 105,000 sq.m. after closing.

• Sign tenants and arrange financing for The Pine, a planned 15,000 sq.m. Riga office development; target LEED Platinum and WELL certifications.

• Priorities include raising occupancy and rental levels, divesting non-core holdings, and acquiring cash-flow-generating properties and future development projects.