EPH First Quarter 2015 Trading Update

Eastern Property Holdings Limited (EPH) / EPH First Quarter 2015 Trading Update . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

26 May 2015, Road Town, Tortola, BVI

FINANCIAL HIGHLIGHTS

      · Good performance of rental assets which overlaps moderate FX losses and increased finance costs.

      · As a result, NAV is higher than at 31 December 2014 (based on the real estate valuations done as of 31 December 2014).

SIGNIFICANT FINANCIAL CHANGES FOR Q1 2015

Income

      · Net Rental Income

During the first three months of 2015 our wholly-owned rental properties generated Net Rental Income of $17.89 million. The contribution of each property to Net Rental Income is presented in the table below.

The Net Rental Income increased almost nine times from $2.02 million in Q1 2014 to $17.89 million in Q1 2015. This substantial increase is caused by the acquisition of new income-generating properties in 2014.

      · Interest Income

Interest Income decreased from $ 1.95 million in Q1 2014 to $ 1.40 million in Q1 2015. The decrease is caused by the fact that part of the interest income in Q1 2014 was from EPH loans to Berlin House and Geneva House which were treated as investments in associate and were not consolidated for that period.  

 

Expenses

 ·         Net Foreign Exchange Loss

The functional currency of the Company's subsidiaries is RUB. If the subsidiaries have assets and liabilities which are denominated or valued in US$ the fluctuations of the US$ / RUB exchange rate create foreign exchange gain or loss.

All our properties are valued in US$. Therefore the strengthening of RUB against US$ during Q1 2015 is the main reason for Net Foreign Exchange Loss in the amount of $ 5.90 million.  

 

 ·         Finance Costs

The Company recognized $8.05 million of Finance Costs in the first three months of 2015 in comparison with $0.54 million for the same period in 2014. The main reasons for the increase are: the interest expense on bonds issued in August and September 2014, as well as the interest expense on third party loans granted to Berlin House, Geneva House and Hermitage Plaza which were acquired by EPH together with these properties.