Entra

Effects on business operations as a result of COVID-19

6.4.2020 09:00:01 CEST | Entra ASA | Additional regulated information required

to be disclosed under the laws of a member state

In light of the current volatile market environment, we wanted to provide a

short up-date and assessment of the key drivers that impact Entra. In this

situation the top priority is to ensure that we safeguard life and health and

take responsibility for helping to reduce the spread of infection by following

the advice of national and local authorities. At the same time, there is little

doubt that this will have financial consequences for the society that we do not

yet see the extent of.

The Norwegian government acted swiftly at the outset of the crisis and

implemented actions to safeguard the population and to ensure the survival of

businesses through extensive support packages. With a strong public funding,

including the Government Pension Fund Global, Norway has the fundamentals in

place for a recovery post-crisis.

Health and Safety

We have been monitoring and evaluating the situation around COVID-19 to ensure

we are taking the necessary measures to protect the health and safety of our

community, our tenants and other users of our buildings, as well as our

employees. All employees that can, are working from home as we have the

necessary technological solutions in place for remote work. We have contingency

plans, procedures, routines and staff in place that continue to deliver our

services and management without interruption. Making our tenants feel safe in

our properties is always a top priority, and we follow the authorities' advice

and recommendations and act accordingly.

Operations

Our tenant base is strong with a solid backbone of public tenants comprising

around 60 % of our revenues. Around 10 % of our rental income stems from

industries that are most affected by the current situation. These include

companies within retail and restaurants, tourism, co-working, training centres,

companies with less than 15 employees, parking as well as companies within the

oil and gas sector. As of 31 December 2019, our portfolio was 97 % let with an

average lease length of seven years.

In addition to various stimulus packages introduced during the recent weeks to

support businesses, the Norwegian Government proposed, subject to final

approval, on 2 April a cash support package for companies affected by the

COVID-19 situation intending to cover fixed costs, hereunder office rent. The

cash support given will correspond to: (Turnover decline in percent) x (fixed

costs minus any deductible) x (an adjustment factor). The adjustment factor is

0.9 for companies that have been shut down by the government and 0.8 for other

companies.

We follow up companies that are affected by the authorities' closure decisions

and the COVID-19 situation individually. Even after the additional, new support

package just introduced by the Norwegian Government, Entra will seek to find

solutions that give tenants that struggle room to return to normal operation

when we are through this demanding period. In the first instance, we will help

tenants who are affected by changing payment schemes from upfront, quarterly to

monthly invoices or giving monthly postponements on rent. If the situation

persists, our ambition is to facilitate targeted support to customers

particularly affected by the COVID-19 situation and thus help them to return to

normal operations after this demanding period.

As of date we only have three ongoing development projects, and we do expect to

see some delays in completion of these projects due to delays in the supply

chain. As our construction contracts are fixed price, the effect for Entra might

be delayed cash flow from future rental income. We may also see a delayed

start-up of some of our planned projects.

Rental income for Q1 2020 has to a limited extent been impacted by the COVID-19

situation. The Outlook Statement from Q4 2019 will be reviewed and revised

before the presentation of Q1 2020 on 30 April to reflect the current situation.

Depending on the length of the lock-down and the effect of the government

interventions, the COVID-19 situation may affect future occupancy, rental growth

expectations and yield levels.

Financing

Our financial position is strong. Currently, we have available cash and

unutilized credit facilities amounting to NOK 6.8 billion, amounting to around

2.5x of all debt falling due next 12 months, spread between five of the six top

Nordic banks. With a well staggered debt profile and a good financing mix, we

are as comfortable as we can be in this situation. The bank market is still open

to us, and we have constructive dialogues with all our banks regarding the

existing capital commitment and possible refinancing plans going forward.

Entra has ample headroom to financial covenants, which are Loan-to-value of 75 %

(40.2% as of Q4) and Interest coverage ratio of 1.4 (3.4 as of Q4). The below

table shows our debt maturities and financing status as of 31 December 2019.

Maturity profile and composition interest bearing debt:

Maturity profile | 0-1 yrs | 1-2 yrs | 2-3 yrs | 3-4 yrs | 4+ yrs | Total | %

| | | | | | |

Commercial | 1 800 | 0 | 0 | 0 | 0 | 1 800 | 9

Bonds (NOKm) | 700 | 1 300 | 2 500 | 2 800 | 4 300 | 11 600 | 58

Bank loans | 0 | 728 | 0 | 3 560 | 2 214 | 6 501 | 33

Total (NOKm) | 2 500 | 2 028 | 2 500 | 6 360 | 6 514 | 19 901 | 100

| | | | | | |

Unutilised | 0 | 750 | 1 000 | 2 440 | 2 000 | 6 190 |

Unutilised | 0 | 12 | 16 | 39 | 32 | 100 |

Financing policy and status:

All amounts in NOK millions | 31.12.2019 | Target

Loan-to-value (LTV) | 40.2% | Below 50 per cent over time

Interest coverage ratio (ICR) | 3.4 | Min. 1.8x

Debt maturities <12 months | 13% | Max 30%

Maturity of hedges <12 months | 41% | Max 60%

Average time to maturity (hedges) | 3.0 | 2-6 years

Back-stop of short-term interest | 248% | Min. 100%

bearing debt | |

Average time to maturity (debt) | 4.9 | Min. 3 years

Please let us know should you want to discuss any of the above in more detail.

We hope you stay safe and send our sympathy to all that are affected by

COVID-19.

Kind regards, the Entra team

DISCLAIMER

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

CONTACTS

* Sonja Horn, CEO, +47 90568456, [email protected]

* Anders Olstad, CFO, +47 90022559, [email protected]

ABOUT ENTRA ASA

Entra is a leading owner, manager and developer of office properties in Norway.

Entra owns and manages around 90 buildings totalling approximately 1.3 million

square meters, located in Oslo and the surrounding region, Bergen, Stavanger and

Trondheim. Entra has a solid customer portfolio with a high proportion of public

tenants. The company's strategy is focused on delivering profitable growth, high

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Effects on business operations as a result of COVID-19

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