EPH Group expects a profit for the year ended 2019 and announces the issuance of subordinated notes in the amount of EUR 204.7 million to its major shareholders
23 March 2020, Road Town, Tortola, BVI
Profit for the year ended 2019
Eastern Property Holdings (“EPH” or the “Company”) would like to announce that the Company expects a net profit in the range of US$ 35-45 million for the year ended 31 December 2019, compared to a profit of US$ 30.2 million for the year ended 31 December 2018.
The main factors contributing to such a result are:
Performance of newly acquired properties
In February 2019, the Company acquired fully let office building QBC 4 in Vienna, Austria. The contribution of the property to the net rental income of the Group is expected at the level of US$ 3 million.
Sales of residential properties
The Company expects to achieve a profit on the sale of apartments and parking lots in Arbat properties (Russia, Moscow) in the amount of about US$ 3 million.
Fair value adjustments on Investment Properties
The Company expects a substantial gain from fair value adjustments of its investment properties in USD equivalent (2018: loss of US$ 36 million). It reflects the signs of economic stabilisation observed in Russia and in the industry by the end of 2019, as well as successful management efforts to improve operational efficiency and tenant portfolio of the properties in Russia and Western Europe. Also, RUB appreciation during the reporting period positively affects the USD value of the current rental stream denominated in RUB and a higher estimated rental value (ERV) applied by the appraiser after the expiration of the existing leases. It should be noted, however, that the valuation process is not finalised yet, therefore, further changes are still possible.
Strengthening of RUB by the end of 2019 (about 11%) negatively affected RUB values of Russian investment properties, resulting in recognition of foreign exchange loss. The negative effect was half offset by gain realised on revaluation of the net US$ financial liabilities by the entities with RUB functional currency and on revaluation of the net EUR financial liabilities caused by weakening of EUR/US$ rate.
The opposite change in RUB/US$ rate by the end of 2018 (about 21%) resulted in a significant net foreign exchange gain.
We expect, however, that the negative currency impact on the Company’s financial results will be for the most part eliminated by the positive change in Cumulative Translation Adjustment (CTA), so that the overall negative effect on the Company’s net assets will not be significant. The CTA reflects gains and losses from currency translation which have accumulated over the period of ownership of the subsidiaries. The strengthening of RUB against USD in 2019 has a positive effect on CTA.
The Company would like to emphasise that from an operating standpoint, the Company’s income-generating properties continue to demonstrate stable profitability and generate sufficient cash to cover the Company’s operating expenses, including payment of interest on the bonds issued by the Company.
The above stated figures in relation to 2019 are preliminary and are still subject to finalisation of the Company’s financials. The audited results for the year ended 31 December 2019 will be published by 30 April 2020. No further information on the Group’s business performance will be released until then.
Issuance of subordinated notes to the Company’s shareholders
As of today, Eastern Property Holdings Ltd. has received EUR 204.7 million by issuance of subordinated notes to its two largest shareholders at an interest rate of 3.5% p.a. Unless previously redeemed, EPH undertakes to repay all outstanding notes at par of their aggregate principal amount, without further notice on 23 March 2023. At any time on or after 15 March 2020, the Issuer may redeem all but not only some of the Notes for the time being outstanding at par with interest accrued to the day of redemption.
Eastern Property Holdings Ltd. intends to use the funds for the acquisition of properties in Western Europe in order to further strengthen the Group’s business and follow its strategy to invest in premium quality income producing commercial property assets in Europe.
Possible Effects of COVID-19
Starting from early 2020, a new coronavirus disease (COVID-19) has begun rapidly spreading all over the world, resulting in the announcement of pandemic status by the World Health Organization in March 2020. Responses put in place by many countries to contain the spread of COVID-19 are resulting in significant operational disruption for many companies and are having a significant impact on global financial markets. As the situation is rapidly evolving, it may have a significant effect on the business of many companies across a wide range of sectors, including, but not limited to such impacts as disruption of business operations as a result of interruption of production or closure of facilities, supply chain disruptions, quarantines of personnel, reduced demand and difficulties in raising financing. In addition, the Group may face the increasingly broad effects of COVID-19 as a result of its negative impact on the global economy and major financial markets. The significance of the effect of COVID-19 on the Group’s business largely depends on the duration and the incidence of the pandemic effects on the global economy.
The Company would like to underline that COVID-19 effects are considered as being non-adjusting event per the accounting standards and do not affect Company’s financial results, including valuation adjustment of Investment property, for the year ended 31 December 2019.
Eastern Property Holdings Ltd. is an investment company listed on SIX Swiss Exchange which holds interest in office, residential and retail properties. EPH is managed by Valartis International Ltd. a wholly-owned subsidiary of Valartis Group AG.
Additional information on Eastern Property Holdings is available by contacting:
Anna Bernhart Tel: +41 44 503 5400.
One Liberty Plaza - 165 Broadway
NY 10006 New York
GlobeNewswire is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.
Subscribe to releases from GlobeNewswire
Subscribe to all the latest releases from GlobeNewswire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from GlobeNewswire
Nordisk næringsliv fokuserer på innovasjon og forbedring av kundeopplevelsen27.1.2020 10:00:00 CET | Pressemelding
Rapporten ISG Provider Lens™ viser at selskaper i regionen henvender seg til leverandører av digitale forretningstjenester for hjelp med analyse, kunstig intelligens og andre teknologier STOCKHOLM i Sverige, Jan. 27, 2020 (GLOBE NEWSWIRE) -- Næringslivet i de nordiske landene fokuserer på å forbedre kundeopplevelsen og innovasjonen, og kontakter leverandører av digitale forretningstjenester for å nå målene sine. Dette viser en ny rapport som ble publisert i dag av Information Services Group ( ISG ) (Nasdaq: III ), et verdensledende teknologisk forsknings- og rådgivningsselskap. Rapporten 2019-2020 ISG Provider Lens™ Digital Business – Solutions and Service Partners for Norden viser at bedrifter i regionen omfavner teknologier som dataanalyse, kunstig intelligens, tingenes internett og blokkjeder for å levere kvalitetstjenester til kundene sine og for å skille ut seg fra konkurrenter. «Nordiske bedrifter søker transformasjonstjenester fra IT-leverandører for ikke bare å bli veiledet gje
UPM commits to UN Business Ambition for 1.5°C to mitigate climate change27.1.2020 10:00:00 CET | Press release
(UPM, Helsinki, 27 January 2020 at 11:00 EET) – UPM commits to the United Nations Global Compact’s Business Ambition for 1.5°C, joining leading companies in a promise to pursue science-based measures to limit global temperature rise to 1.5°C. UPM will strive to mitigate climate change and drive value creation through innovating novel products, committing to a 65% CO2 emission reduction and by practicing sustainable forestry. The 1.5°C ambition is a response to increasing concern about the severe consequences of a failure to stop global warming. UPM is among the first global forest industry companies making this commitment. “UPM has a unique opportunity to make a positive impact and contribute to mitigating climate change by tangible actions. We innovate climate-positive products and turn them into growing businesses. At the same time, we limit risks from climate mitigation policies and physical impacts of changing climate. This is important for the long-term value of the company,” says
Valmet to supply a board machine rebuild to Umka in Serbia27.1.2020 10:00:00 CET | Press release
Valmet Oyj’s press release on January 27, 2020 at 11:00 a.m . EET Valmet will supply a board machine rebuild to Umka Cardboard Mill in Serbia. The main target of the rebuild is to increase the customer’s production capacity. The start-up of the rebuilt paper machine PM 1 is scheduled for the second half of 2021. The order is included in Valmet's orders received of the fourth quarter 2019. The value of the order will not be disclosed. The total value of an order of this type is typically around EUR 15-20 million. "This rebuild is one of the most important strategic decisions we have made in the course of 80 years long history of the mill. We are pleased that this project is going to be completed by Valmet, a global leader in the supply of process technology in the paper industry. I strongly believe in the success and bright future of Umka Cardboard Mill, with planned capacity of over 200,000 tonnes, further quality improvements and wider product portfolio,” says Milos Ljusic, Managing D
Nordic Enterprises Focus on Innovation and Improving Customer Experience27.1.2020 10:00:00 CET | Press release
ISG Provider Lens™ report finds companies in the region turning to digital business services providers for help with analytics, artificial intelligence and other technologies STOCKHOLM, Sweden, Jan. 27, 2020 (GLOBE NEWSWIRE) -- Enterprises in the Nordic countries are focused on improving customer experience and enhancing innovation, and they are turning to digital business service providers to achieve their goals, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm. The 2019-2020 ISG Provider Lens™ Digital Business – Solutions and Service Partners Report for the Nordics finds enterprises in the region embracing technologies such as data analytics, artificial intelligence, the Internet of Things and blockchain to deliver quality services to their customers and to differentiate themselves from competitors. “Nordic enterprises are seeking transformation services from IT providers to not only ta
Nordiska företag fokuserar på innovation och förbättrar kundupplevelsen27.1.2020 10:00:00 CET | Pressemelding
Rapport från ISG Provider Lens™ visar att företag i regionen vänder sig till leverantörer av digitala företagstjänster för hjälp med analys, artificiell intelligens och annan teknik STOCKHOLM, Sverige, Jan. 27, 2020 (GLOBE NEWSWIRE) -- Företag i Norden är inriktade på att förbättra kundupplevelse och innovation, och de vänder sig till leverantörer av digitala företagstjänster för att uppnå sina mål, enligt en ny rapport publicerad idag av Information Services Group ( ISG ) (Nasdaq: III ), ett ledande företag inom global teknikforskning och -rådgivning. Rapporten Digital verksamhet – lösningar och servicepartners2019–2020 från ISG Provider Lens™ för Norden visar att företag i regionen anammar teknik som dataanalys, artificiell intelligens, sakernas internet och blockkedja för att leverera kvalitetstjänster till sina kunder och för att utmärka sig bland konkurrenterna. ”De nordiska företagen söker transformationstjänster från IT-leverantörer för att inte bara ta dem genom sina digitala r
Roche submits supplemental Biologics License Application to the FDA for Tecentriq in combination with Avastin for the most common form of liver cancer27.1.2020 07:00:00 CET | Press release
·Application is being reviewed under FDA’s Real-Time Oncology Review pilot programme Basel, 27 January 2020 – Roche (SIX: RO, ROG; OTCQX: RHHBY) today announced the completion of a supplemental Biologics License Application (sBLA) submission to the US Food and Drug Administration (FDA) for Tecentriq® (atezolizumab) in combination with Avastin® (bevacizumab), for the treatment of people with unresectable hepatocellular carcinoma (HCC) who have not received prior systemic therapy. The FDA is reviewing the application under the Real-Time Oncology Review pilot programme, which aims to explore a more efficient review process to ensure safe and effective treatments are available to patients as early as possible. In July 2018, the FDA granted Breakthrough Therapy Designation for Tecentriq in combination with Avastin in HCC based on data from an ongoing Phase Ib trial. “Liver cancer is the most rapidly increasing cause of cancer-related death in the United States. In the IMbrave150 study, Tece