Oak Fund Services (Guernsey) Limited
Attn: Mark Woodall
Tel: +44 1481 723450
Eurocastle Releases Fourth Quarter and Year End 2020 Financial Results
Guernsey, 5 March 2021 – Eurocastle Investment Limited (Euronext Amsterdam: ECT) today has released its annual report for the year ended 31 December 2020.
Adjusted Net Asset Value (“NAV”) of €16.7 million1, or €9.00 per share2 up €1.54 per share vs. €7.46 per share at Q3 2020 (up €0.68 per share vs. €8.32 per share at YE 2019) due to:
IFRS NAV of €32.9 million, or €17.72 per share
2020 Capital Distribution of €1.0 million, or €0.54 per share declared on 4 March 2021 and to be paid on 30 March 2021 to shareholders of record at close of business on 11 March 2021 with an ex-dividend date of 10 March 2021. This distribution is being treated as a return of capital because there are no current year or carry-forward profits available at the Company. It will be reflected in the “Share Capital” column in the Statement of Changes in Equity in the Company’s financial statements.
The tables below summarise the Adjusted NAV by segment:
|YE 2020 NAV||YE 2019 NAV||Q3 2020 NAV|
|€ million||€ per share||€ million||€ per share||€ million||€ per share|
|Real Estate Funds||7.4||4.01||13.9||7.52||8.5||4.58|
|Italian NPLs & Other Loans||1.2||0.67||1.2||0.67||1.2||0.67|
|Net Corporate Cash4||8.0||4.32||0.3||0.13||4.1||2.21|
The Company’s current assets comprise:
2020 BUSINESS HIGHLIGHTS
Overview in light of COVID-19
The Company started 2020 having successfully executed on the first and largest part of its Realisation Plan by selling its NPL portfolio and tendering its stake in doValue, via a share for share tender. As part of this process the Company set aside Additional Reserves determined by the Board of Directors in order to take into account anticipated future costs and potential liabilities.
These steps left the Company well capitalised and in a strong position to weather the extraordinary circumstances that have followed the
outbreak of COVID-19. During the year, the Company reviewed its underlying cash flow models and adjusted them accordingly by applying haircuts and extending out the cash flows of its remaining investments to take into account the anticipated impact of COVID-19, with the resultant impact reflected in the valuation of the Company’s assets at the end of YE 2020.
Investment Realisations & Highlights
COVID-19 has had an extraordinary impact across all sectors of the economy. The Company’s move to realise the majority of its assets in YE 2019 and its prudent management of cash reserves have left the Company well placed to maximize the value of its remaining assets. This has been evidenced in their performance during 2020 where the Company achieved the following milestones:
SUBSEQUENT EVENTS TO 31 DECEMBER 2020
|Income Statement for the Full Year and Fourth Quarter 2020||FY 2020||Q4 2020|
|€ Thousands||€ Thousands|
|Italian NPLs & Other Loans||99||33|
|Real Estate Funds||(2,233)||371|
|Fair value movement on Italian investments||(2,134)||404|
|Fair value movements on residual Legacy entities||2,501||2,294|
|Gains on foreign currency translation||2||3|
|Manager base and incentive fees||111||37|
|Remaining operating expenses||1,749||316|
|Other Operating expenses||1,860||353|
|Net (loss) / profit for the period||(1,519)||2,348|
|€ per share||(0.82)||1.27|
Balance Sheet and Adjusted NAV Reconciliation as at 31 December 2020
|Italian Investments |
|Cash and cash equivalents||-||25,341||25,341|
|Italian NPLs & Other Loans||1,248||-||1,248|
|Real Estate Funds||7,435||-||7,435|
|Trade and other payables||-||1,170||1,170|
|Manager base and incentive fees||-||140||140|
|Adjusted NAV (€ per share)6||4.68||4.32||9.00|
This announcement contains inside information for the purposes of the Market Abuse Regulation 596/2014.
For investment portfolio information, please refer to the Company’s most recent Financial Report, which is available on the Company’s website (www.eurocastleinv.com).
Eurocastle Investment Limited (“Eurocastle” or the “Company”) is a publicly traded closed-ended investment company, focused on Italian performing and non-performing loans, Italian loan servicing platforms and other real estate related assets in Italy. On 18 November 2019, the Company announced a plan to realise the majority of its assets with the aim of accelerating the return of value to shareholders. The Company will not currently seek material new investments from the proceeds of the realisation but will continue to support its existing investments to the extent required in order to optimise returns and distribute cash to shareholders when available (the “Realisation Plan”). 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”, “endeavor”, “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 Company’s ability to predict results or the actual effect of future plans or strategies is limited. Although the Company 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 Company’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 or achieve its targets regarding asset disposals or asset performance.
1 In light of the Realisation Plan announced in November 2019, the Adjusted NAV as at 31 December 2020 reflects additional reserves for future costs and potential liabilities, which have not been accounted for under the IFRS NAV. No commitments for these future costs and potential liabilities existed as at 31 December 2020.
2 Per share calculations for Eurocastle throughout this document are based on 1.9 million shares.
3 FY 2020 decrease of €1.03 per share, includes fair value decrease on real estate fund investments of €1.21 per share net of a release of additional asset specific reserves of €0.18 per share.
4 Reflects corporate cash net of liabilities and additional reserves.
5 In light of the Realisation Plan, the Adjusted NAV as at 31 December 2020 reflects the additional reserves for future costs and potential liabilities of €16.2 million which have not been accounted for under the IFRS NAV.
6 Amounts per share calculated on 1.9 million outstanding ordinary shares.
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