Estonia · Delayed Price · Currency is EUR Baltic Horizon Fund Earnings Call Transcripts
Fiscal Year 2025
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Q4 2025 saw improved occupancy and stable NOI, but a EUR 20 million portfolio write-down led to a significant annual loss. Liquidity remains tight, prompting a pro rata equity offering to existing investors to address covenant compliance and operational needs.
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A resolution to issue up to 169 million new units at EUR 0.1478 per unit was approved by 93% of votes present, with only current unitholders eligible to subscribe pro rata. The offering period is expected in the first quarter of next year.
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The meeting focused on a proposal to raise €25 million from existing investors to repay expensive bond debt, with a minimum threshold of €7.5 million. Due to lack of quorum, no vote was held, and a repeat meeting is scheduled for December 16.
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Occupancy and gross rental income improved, but net income was hit by a EUR 500,000 bad debt provision. Management proposes a EUR 25 million equity raise at a 30% discount to repay expensive bonds, as property sales remain challenging in an illiquid market.
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The meeting reviewed gradual progress in occupancy and rent levels amid a tough market, highlighted ongoing cash flow and debt challenges, and outlined plans to dispose of non-strategic assets and raise equity. Management transition to GreenVest and a focus on converting S27 into a school were also discussed.
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Q2 saw stable NOI and gradual occupancy improvement, with ongoing leasing activity and cost reductions. Debt remains high, but steps are being taken to reduce leverage through asset disposals and potential equity increase. Market conditions remain challenging, especially in the office segment.
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Occupancy improved to 83% in Q1, with further gains expected as new tenants move in. Net rental income rose 6% year-on-year, and deleveraging efforts continued with the sale of Meraki. Cost-saving initiatives and active tenant management support a positive outlook.
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The meeting focused on electing new Supervisory Board members and setting their remuneration, but no decisions were made due to lack of quorum. A second meeting will be scheduled to address the same agenda.
Fiscal Year 2024
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NOI is recovering with new tenants expected to boost occupancy above 90% by year-end 2024. Debt reduction and a private placement are underway to strengthen the balance sheet, while property valuations remain pressured by a shallow market and tenant transitions.
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The meeting approved the issuance of new units via private placement to strengthen the balance sheet, with proceeds aimed at property investments and debt reduction. The fund targets improved occupancy and NOI growth, despite a challenging market.
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Plans include a private placement to raise up to €10 million, asset sales, and debt refinancing to stabilize the fund and target a 50% LTV. Management and anchor investors will participate, aiming for 90% occupancy in 2024 and a return to dividends in 2025.
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The meeting reviewed 2023's financial challenges, including lower NOI from asset disposals and vacancies, and outlined strategies to boost occupancy, refinance debt, and dispose of non-strategic assets. Plans include returning to dividend payments in 2025 and further property development as market conditions improve.