Eastern Property Holdings Limited (EPH)

Third Quarter 2014 Trading Update

Eastern Property Holdings Limited (EPH) / Eastern Property Holdings Limited (EPH) : Third Quarter 2014 Trading Update . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

28 November 2014, Road Town, Tortola, BVI

MAIN EVENTS

• Acquisition of 90% of Geneva House and Berlin House office and retail properties, as a result the Company became a 100% owner of both properties;
• Acquisition of 100% of Polar Lights business center in Northern part of the center of Moscow;
• Two successful bond placements for total amount of $270 million;
• Sale of Petrovsky Fort business center;
• Sale of almost 25% of Scandinavia land plot.

FINANCIAL HIGHLIGHTS

• Strong performance of rental assets;
• Significant RUB weakening against US$ during first 9 months 2014 led to FX loss;
• Decrease in valuations of St. Petersburg investment properties before the sale led to revaluation loss;
• Gain on acquisition of Berlin House, Geneva House and Polar Lights properties due to the agreed price discount to the fair value of the assets;
• No material gain or loss from the sale of Petrovsky Fort, as the property was sold at the price close to its NAV.

SIGNIFICANT FINANCIAL CHANGES FOR Q3 2014

Income

Net Rental Income

During 9 months ended 30 September 2014, our wholly-owned rental properties generated Net Rental Income of $8.99 million. Berlin House and Geneva House properties, which were acquired at the end of August, have contributed $1.38 and $1.47 million of Net Rental Income respectively since the acquisition date. The acquisition of Polar Lights had no impact on Net Rental Income because it was acquired on 30 September 2014. 

Interest Income

The Company generated $5.75 million of interest income in the first nine months of 2014 which is approximately at the same level as for the comparable period of 2013 ($5.84 million).

Gain from acquisition of subsidiaries

The transaction price for 90% of Geneva House and Berlin House properties amounts to $148.5 million and the price for 100% of Polar Lights amounts to $152.8. As the net assets values of the acquired companies were higher than the purchase price, the Company recognized gain on all three acquisitions in amount of $41.75 million. This gain is calculated based on the preliminary agreed purchase prices which are subject to certain final adjustments. Anyhow, we do not expect any significant change of purchase prices.