EUROCASTLE INVESTMENT LIMITED
FOR IMMEDIATE RELEASE
Contact:
International Administration Group (Guernsey) Limited
Company Administrator
Attn: Mark Woodall
Eurocastle Releases First Quarter 2015 Financial Results
Guernsey. 21 May 2015 - Eurocastle Investment Limited (Euronext Amsterdam: ECT) today has released the financial results for the first quarter ended 31 March 2015.
FIRST QUARTER 2015 FINANCIAL HIGHLIGHTS
| | Q1 2015 | | Q1 2015 Pro Forma | | Q4 2014 |
| | € million | € per share | | € million | € per share | | € million | € per share |
| Normalised FFO | | 4.3 | 0.13 | | 4.3 | 0.06 | | 4.4 | 0.13 |
| Legacy Cashflow | | 29.3 | 0.90 | | 29.3 | 0.40 | | 2.9 | 0.09 |
| Adjusted NAV2 | | 250.3 | 7.67 | | 554.8 | 7.66 | | 258.4 | 7.92 |
FIRST QUARTER 2015 BUSINESS HIGHLIGHTS
New Investments - In the first quarter of 2015, Eurocastle invested or committed €255 million, of which €250 million represents the approximate commitment to acquire from UniCredit a portfolio of Italian NPLs with a gross book value ("GBV") of €2.4 billion along with UniCredit Credit Management Bank S.p.A. ("UCCMB"). The opportunity also includes:
In addition, the Company invested a further €4.5 million in a distressed bond at a 10% discount to its face value.
New Investment Performance - Realised €10.6 million of cash flow, including the first cash flow of €8.9 million from its real estate fund investment, UIU, following the sale in March 2015 of two assets at a slight premium to NAV.
Legacy Business Realisations - Realised €29.3 million primarily from the sale of three German retail portfolios and a loan position.
HIGHLIGHTS SUBSEQUENT TO 31 MARCH 2015
On 29 April 2015, the Company successfully completed its recent equity offering raising gross proceeds of €312.1 million through the issuance of 39.8 million shares at a price of €7.85 per share. Net proceeds of the offer are approximately €304.5 million or €7.66 per share and will be used by the Company to pursue new investment opportunities in the Italian debt and real estate markets in line with the Company's investment focus.
In March 2015, Eurocastle reached an agreement with its Manager, effective 1 January 2015, to reduce its annual management fee by an estimated initial €3 million and restructure how incentive compensation is calculated by focusing on the returns generated from its New Investments. The agreement was subsequently signed in April 2015.
On 24 April 2015, the Company agreed to sell all the assets in the Wave portfolio. The sale is expected to generate approximately €30 million of net proceeds to the Company before expected historic taxes in the range of €6 million to €8 million. The transaction, which is subject to customary closing conditions, is expected to close before the end of September 2015.
ADDITIONAL INFORMATION
For additional information that management believes to be useful for investors, please refer to the latest presentation posted on the Investor Relations section of the Company's website, www.eurocastleinv.com. For consolidated investment portfolio information, please refer to the Company's most recent Financial Report, which is available on the Company's website (www.eurocastleinv.com).
EARNINGS CALL INFORMATION
Eurocastle's management will host an earnings conference call on Thursday, 21 May 2015 at 2:00 P.M. London time (9:00 A.M. New York time). All interested parties are welcome to participate on the live call. You can access the conference call by dialing first +1-800-215-5243 (from within the U.S.) or +1-330-863-8154 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference "Eurocastle First Quarter 2015 Earnings Call or conference ID number 48032760."
A webcast of the conference call will be available to the public on a listen-only basis at www.eurocastleinv.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. A replay of the webcast will be available for three months following the call.
For those who are not available to listen to the live call, a replay will be available until 11:59 P.M. New York time on Sunday, 21 June 2015 by dialing +1-855-859-2056 (from within the U.S.) or +1-404-537-3406 (from outside of the U.S.); please reference access code "48032760"
NORMALISED FFO
Normalised FFO is a non-IFRS financial measure that, with respect to Eurocastle's Legacy Business, provides investors with additional information regarding the underlying performance of its Legacy Assets and their ability to service debt and make capital expenditure. The measure excludes realised gains and losses, sales related costs (including realised swap losses), impairment losses and foreign exchange movements. On the Company's New Investments, income is recognised on an expected yield basis allowing Eurocastle to report the run rate earnings from these investments in line with their projected annualised returns.
Eurocastle believes that, given the strategy of seeking to monetise the existing value of the Legacy Business, focusing on the Normalised FFO of the Company's New Investments will further enable the investor to understand current and future earnings given annualised returns achieved and the average net invested capital over the relevant period.
In the first quarter of 2015, Eurocastle generated Normalised FFO of €4.3 million, or €0.13 per share, of which €3.7 million (€0.11 per share) related to New Investments before corporate costs. Given the average net invested capital in the first quarter of 2015 was approximately €58 million, this equates to a yield of 25%.
A reconciliation of Normalised FFO to the IFRS based net profit or loss after tax for the quarter ended 31 March 2015 can be found below after taking into account the impact of the revised Management Agreement (€0.2 million) and reallocations to the IFRS disclosure:
INCOME STATEMENT RECONCILIATION
| | New
Investments
€ million | Corporate
€ million | Legacy
€ million | | Total
€ million |
Net gain / (loss) after taxation
attributable to ordinary equity holders | 3.4 | (4.1) | 2.2 | | 1.5 |
| Net Income / (loss) (€ per Share) | 0.10 | (0.13) | 0.07 | | 0.04 |
| | | | | |
| Mars Floating Portfolio Losses | - | - | 0.3 | | 0.3 |
| Fair Value to Effective Yield Adjustments | 0.3 | - | - | | 0.3 |
| Legacy Real Estate Revaluations | - | - | 8.7 | | 8.7 |
| Legacy Portfolio Deconsolidation Loss | - | - | (4.7) | | (4.7) |
| Legacy Debt Impairments | - | - | (0.3) | | (0.3) |
| Impact from Revised Management Agreement | - | 0.2 | - | | 0.2 |
| Transaction Costs, G/L on FX & Other Adjustments | - | 0.8 | (2.5) | | (1.7) |
| Normalised FFO | 3.7 | (3.1) | 3.7 | | 4.3 |
| Normalised FFO (€ per Share) | 0.11 | (0.09) | 0.11 | | 0.13 |
| Proforma for April 2015 Capital Raise | 0.05 | (0.04) | 0.05 | | 0.06 |
ADJUSTED NAV RECONCILIATION
| New
Investments
€ million | Corporate1
€ million | Legacy
€ million | | Total
€ million |
| Assets | 61.4 | 123.6 | 992.3 | | 1,177.3 |
| Liabilities | 2.5 | 7.7 | 961.2 | | 971.4 |
| Total Equity | 58.9 | 115.9 | 31.1 | | 205.9 |
| Non-controlling interest | (2.5) | - | - | | (2.5) |
| Total Shareholders' Equity (NAV) | 56.4 | 115.9 | 31.1 | | 203.4 |
| | | | | |
| New Investments Commitment Reallocations | 13.2 | (13.2) | - | | - |
| Legacy Debt Business Reallocation | 9.0 | - | (9.0) | | - |
| Mars Floating Negative NAV Add-back | - | - | 46.9 | | 46.9 |
| Wave Portfolio Sale CAD Reallocation | - | 24.4 | (24.4) | | - |
| Adjusted NAV | 78.6 | 127.1 | 44.6 | | 250.3 |
| Adjusted NAV (€ per Share) | 2.41 | 3.89 | 1.37 | | 7.67 |
| | | | | | |
| Net Equity Raise Proceeds | 250.0 | 54.5 | - | | 304.5 |
| Pro forma for April 2015 Capital Raise | 328.6 | 181.6 | 44.6 | | 554.8 |
| Proforma NAV (€ per share) | 4.54 | 2.50 | 0.62 | | 7.66 |
ABOUT EUROCASTLE
Eurocastle Investment Limited is a closed-ended investment company that owns Italian loans and real estate related assets, German commercial real estate and European real estate securities and loans. The Company is Euro denominated and is listed on Euronext Amsterdam under the symbol "ECT". Eurocastle is managed by an affiliate of Fortress Investment Group LLC, a leading global investment manager. 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", "endeavour", "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 Group's ability to predict results or the actual effect of future plans or strategies is limited. Although the Group 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 Group'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, amortise the Group's debts, renegotiate the Group's credit facilities, make new investments, or achieve its targets regarding asset disposals or asset performance.
Time weighted average of investments made (net of any capital returned) over the relevant period.
Adjusted NAV excludes the negative net asset value of the Mars Floating portfolio and, for Q4 2014, reflects the impact of the sale of 3 retail portfolios in Q1 2015.
Pro forma for April 2015 offering - €304.5 million of net proceeds raised resulting in total outstanding shares of 72.4 million.
Please refer to page 7 of the Business and Financial Review of the 2015 Financial Reports for the three months ended 31 March 2015 for further details of this amendment.
Corporate includes uninvested cash and fees payable to the Manager.
Reflects €304.5 million of net proceeds raised resulting in total outstanding shares of 72.4 million and the reallocation of €250 million from Net Corporate Cash to New Investments representing the approximate commitment in UCCMB.
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Eurocastle Investment Limited via Globenewswire
HUG#1923058