Eurocastle Investment Limited Eurocastle Releases First Half 2018 Financial Results and Announces Second Quarter Dividend of €0.15 per share
EUROCASTLE INVESTMENT LIMITED
International Administration Group (Guernsey) Limited
Attn: Mark Woodall
Tel: +44 1481 723450
Eurocastle Releases First Half 2018 Financial Results and
Announces Second Quarter Dividend of €0.15 per share
Guernsey, 10 August 2018 - Eurocastle Investment Limited (Euronext Amsterdam: ECT) today has released its financial results for the first half year ended 30 June 2018.
Normalised FFO of €7.3 million, or €0.14 per share2, for the second quarter of 2018 (€0.15 per share pro forma post share tender).
Second Quarter 2018 Dividend of €0.15 per share declared on 9 August 2018 and to be paid on 31 August 2018 to shareholders of record at close of business on 17 August 2018, with an ex-dividend date of 16 August 2018.
|Q2 2018||Q1 2018||H1 2018||H1 2017|
|€ million||€ per share||€ million||€ per share2||€ million||€ per share||€ million||€ per share2|
SECOND QUARTER 2018 BUSINESS HIGHLIGHTS
doBank Financial Performance
For the first half of 2018, the doBank Group reported EBITDA of €34.1 million, up 13% over the same period last year (H1 2017: €30.3 million) following an increase in its EBITDA margin by 3% from 29% to 32%.
doBank's net profit for the first six months of 2018 was €21.0 million, up 7% over the same period last year (H1 2017: €19.7 million).
doBank Business Update
In June 2018, doBank's Board of Directors approved a project to restructure doBank into a listed servicing company, allowing for a better use of capital to support the group's growth. As part of this restructuring, doBank's banking activity will be transferred to a newly established banking entity wholly owned by the parent company. doBank views the new group structure, which it expects to come into effect in 2019 (subject to regulatory approvals), as a means to align itself with its European peers by removing significant limits to the use of its capital whilst optimising the group's financial structure.
On 1 August 2018, doBank announced that it has reached final agreement with four of the main Greek banks to manage on an exclusive basis a €1.8 billion GBV portfolio of non-performing exposures ("NPEs").
In May 2018, the Company closed on a €7.7 million investment to acquire an interest, alongside other Fortress affiliates, in a portfolio of Italian distressed loans to a single borrower with a GBV of ~€81 million. The loans are secured by 1st lien ship mortgages.
BUSINESS HIGHLIGHTS SUBSEQUENT TO 30 JUNE 2018
On 2 July 2018, the Company announced a tender offer for the repurchase of up to €40 million of ordinary shares in the Company for a fixed price of €8.00 per share. The share tender, which closed on 6 August 2018, was fully subscribed and resulted in the repurchase of 5 million shares, or 9.48% of the ordinary voting shares in issue, returning capital of €40 million.
The tender was NAV and earnings accretive, increasing pro forma Q2 NFFO per share by approximately 10.5% and Q2 NAV per share by approximately 1.5%.
Share Buy-back Programme
On 2 July 2018, the Company further announced its first open market share buy-back programme, which commenced following the settlement of the share tender on 6 August 2018. Under the share buy-back programme, the Company is seeking to buy back shares up to an aggregate market value equivalent to €3.0 million. The share buy-back programme will end no later than 15 November 2018, at which point the Board will review the success of the programme and determine whether to renew the programme for a further period.
Normalised FFO ("NFFO") is a non-IFRS financial measure that, with respect to all of the Company's Italian Investments other than the doBank Group, 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 realised. Cash flow receipts are therefore allocated by the Company between income and capital in accordance with this expected yield methodology. With respect to the doBank Group, following the IPO, the Company now recognises NFFO based on its share of doBank's reported annual net income after tax together with any gains or losses arising from the sale of its shares. The income cash flow profile of each of the Company's investments may not exactly equal the NFFO recognised by the Company each period but will do so over the life of each investment.
|Normalised FFO for the Six Months Ended 30 June 2018||Average Net Invested Capital||Annualised||H1 2018|
|€ Thousands||Yield||€ Thousands|
|Real Estate Fund Investments||31,971||4%||662|
|Italian Investments NFFO before expenses||208,637||20%||21,219|
|Manager base & incentive fees||(5,415)|
|Other operating expenses||(2,405)|