Eastnine (EAST) Q3 2019 earnings summary

Executive summary

• Positive Q3 net letting of €853k; lower vacancies drove €2.810m in value gains on directly owned real estate.

• Portfolio expansion continued with acquisitions in Riga and Vilnius; the East Capital Baltic Property Fund III holding was sold at NAV in October.

Financial highlights

• Q3 rental income was €3.142m versus €2.339m in Q3 2018; net operating income was €2.795m versus €2.104m.

• Q3 profit from property management was €1.370m versus €1.217m in Q3 2018; net profit was €5.069m versus €3.451m.

• Q3 profit before tax was €5.673m, including €2.810m in unrealised property gains and €1.782m in unrealised investment gains.

Outlook and guidance

• Signed Vilnius leases not yet commenced were expected to lift occupancy further in Q4.

• Complete the agreed S7-3 acquisition in Vilnius in Q1 2020, divest remaining non-core holdings, and acquire cash-flow-generating properties and future development projects.

• Proceed with plans to develop The Pine in Riga; the planned five-floor office building is ~15,000 sq.m. with LEED Platinum and WELL certifications targeted.