Guernsey, 18 May 2017 - Eurocastle Investment Limited (Euronext Amsterdam: ECT) today has released its financial results for the first quarter ended 31 March 2017.
Normalised FFOof €26.0 million, or €0.43 per share, for the first quarter of 2017 including one-off impacts from sales and the remaining realisations from the Legacy Business.
Adjusted Net Asset Value of €548.9 million, or €9.13 per share2, after the declaration of the regular quarterly dividend of €0.15 per share2.
First Quarter 2017 Dividend
€9.0 million, or €0.15 per share2, of regular quarterly dividend declared in March 2017 and to be paid on 31 May 2017.
In addition, and in line with the new distribution policy announced in March 2017, the Board of Directors has declared a supplemental dividend for the period of €8.4 million, or €0.14 per share2, also payable on 31 May 2017 to shareholders of record at close of business on 23 May 2017, with an ex-dividend date of 22 May 2017.
In aggregate, this has resulted in a total dividend of €17.4 million, or €0.29 per share, for the first quarter of 2017.
Q1 2017 Q4 2016
€ million € per share2 € million € per share2
FFO1 26.0 0.43 12.5 0.21
Dividends 17.4 0.29 9.0 0.15
Adjusted NAV3 548.9 9.13 550.6 9.16
Annual General Meeting
The Company further announces that it will hold its Annual General Meeting on Wednesday, 21 June 2017, at the Company's registered office at 2:00 pm London time (3:00 pm CET).
Investment Realisations - During the first quarter of 2017, Eurocastle sold its interest in the units of Real Estate Fund Investment III. The sale resulted in total proceeds of €20.9 million, or €0.35 per share, realising a total lifetime gross profit of €18.0 million, an IRR of 137% and 2.7x multiple on equity invested. The sale was achieved two years ahead of business plan. In addition, the Company realised a gross profit of €7.2 million from the resolution of a debt claim it had acquired in the period.
doBank - In March 2017, the board of doBank approved a dividend of €52.3 million (of which Eurocastle's share is €26.2 million) for the year ended 31 December 2016 which is expected to be paid by the end of May 2017. For the first quarter of 2017 the doBank Group reported EBITDA of €9.9 million; 44% higher than the same period last year on a like-for-like basis; a period that is typically the lowest in the year given the seasonality of NPL collections.
Legacy Business- In the first quarter of 2017, the Group received €2.4 million of cash flow upon completion of German real estate sales that were previously under binding contracts. In addition, the Company received €0.6 million from the resolution of a Legacy debt investment. The Company intends to unwind its remaining Legacy levered portfolio (CDO V) during the remainder of 2017.
BUSINESS HIGHLIGHTS SUBSEQUENT TO 31 MARCH 2017
Romeo NPL Portfolio Financing - on the 3rd of May 2017, the Company announced the successful completion of a €75 million financing on the secured portion of its Romeo NPL portfolio. As a result, Eurocastle received approximately €36 million or 50% of the net proceeds after costs and reserves. At the same time, Eurocastle received over €18 million of previously undistributed cash from the portfolio, resulting in total proceeds to the Company of approximately €54 million.
Italian Real Estate Fund Investment V- In April 2017 the Company closed on its previously committed investment in Real Estate Fund V, deploying an additional €4.0 million. This brings the total equity deployed to date to €4.4 million with an expected further €1.4 million to be deployed predominantly over the next 12 months.
Italian Real Estate Fund Investment I Realisation - In May 2017, the Company received a distribution of €4.8 million primarily from sales made by the fund in 2016.
Normalised FFO is a non-IFRS financial measure that, with respect to the Company's Italian Investments, recognises i) income on an expected yield basis updated periodically, allowing Eurocastle to report the run rate earnings from these investments in line with their expected annualised returns and ii) any additional gains or losses not previously recognised through NFFO at the point investments are fully realised. On Eurocastle's Legacy Business, the measure excludes realised gains and losses, sales related costs (including realised swap losses), impairment losses, foreign exchange movements and any movements on portfolios with a negative NAV other than sales or asset management fees realised.
Eurocastle believes that focusing on the Normalised FFO of the Company's Italian Investments will enhance investors' understanding of current and future earnings given annualised returns achieved and the average net invested capital over the relevant period.
For more information regarding Eurocastle Investment Limited and to be added to our email distribution list, please visit www.eurocastleinv.com