Eastnine — Interim / Quarterly Report 2017

Nov 9, 2017

Interim Report January - September

2017

"During the third quarter, NAV per share increased by 2.2%, on the back of positive development throughout the portfolio"

Kestutis Sasnauskas

Key events during the quarter

• Net Asset Value (NAV) per share was EUR 9.79, an increase of 2.2% from the second quarter¹.
• All segments increased in value; Real Estate direct by 1.4%, Real Estate funds by 5.0% and Other by 1.5%.
• Investments totalling EUR 8.0m were made in 3Burės development and East Capital Baltic Property Fund III. Divestments amounted to EUR 1.9m, referring to East Capital Deep Value Fund.
• 577,013 shares were repurchased for a total of EUR 4.1m.
• Decision on new dividend policy and financial targets to reflect the transformation into a real estate company, and continued repurchases of own shares in Q4 up to NAV/share

• Kestutis Sasnauskas was appointed new CEO on 3 July. 1 Adjusted for share buybacks

Key events after the quarter

• East Capital Baltic Property Fund II closed the sale of GO9 in Vilnius at IRR above 15%. Eastnine expects to receive its share of the proceeds, in excess of EUR 9m, during Q4.
• 343,214 shares were repurchased 1 Oct 7 Nov. Eastnine's holding represents 5.8% of all shares in the company.

Key figures

		30 SEP 2017	30 JUN 2017	31 DEC 2016	30 SEP 2016
NAV per share	EUR	9.79	9.59	9.67	8.73
NAV per share	SEK	94.5	92.2	92.6	84.1
Closing price per share	SEK	75.00	70.50	66.75	57.50
Total NAV	EURm	232.3	232.9	247.6	227.6
Market cap	EURm	193	182	196	168

		Q3 2017	Q3 2016	9M 2017	9M 2016	FY 2016
Net result	EURm	3.5	-2.0	0.8	-9.5	13.3
Earnings per share	EUR	0.15	-0.08	0.03	-0.35	0.49
NAV per share development	%	2.2	-0.1	1.3	-3.0	7.4
Investments	EURm	8.0	0.0	40.1	5.0	5.0
Divestments	EURm	1.9	19.7	11.8	26.8	117.4

1 EUR = 9.65 SEK on 30 Sep 2017. Source: Reuters

Transforming into a real estate company in the Baltics

Eastnine, formerly East Capital Explorer, was listed on Nasdaq Stockholm in 2007 by East Capital, its investment manager until 2016 when the investment agreement was terminated. This marked the strategic shift from a diversified Eastern European investment company into a Baltic real estate company. Under its new name and with an in-house investment team, Eastnine is continuing its transformation into a pure real estate company, divesting non-core assets and following the goal of generating predictable cash flows as a long-term owner of attractive commercial A-class properties in the Baltic capitals.

Long-term financial targets in Real Estate Direct

13-15% <65% >2.0x Return on equity, over 5-year period Loan-to-value ratio Interest service coverage ratio

Dividend

Dividend shall correspond to at least 50% of profit from property management. During the build-up phase until 2020, the annual dividend shall be at least 2.0% of the net asset value at the preceding year-end.

New strategy in place

"Once fully transformed to a real estate company, our return on equity target is 13-15% and more than half of our profit from property management shall be redistributed to shareholders."

The third quarter held few surprises, with a good growth in NAV per share.

In September, we took another important step in the transformation to a Baltic real estate company, by introducing new financial targets and a new dividend policy for our strategy, as well as setting goals for the implementtation. At the latest by 2020, we shall have transformed our portfolio to be concentrated on prime office properties in Vilnius, Riga and Tallinn. For this strategy, our target return on equity is 13-15% over a five-year period, with loan-tovalue below 65%. Depending on acquisition pace and leverage, ROE may, however, be lower during the build-up phase. In the long term, more than half of the profit from property management shall be distributed to our shareholders, providing shareholders with a good return, and at the same time enabling us to grow both the portfolio and the dividend. Until our profit from property management is fully built-up, we will propose an annual dividend of at least 2.0% of NAV. In addition, if our share trades below its NAV, we will continue buying back our

own shares, but now without the previous NAV discount limitation of 20%. Altogether, these guidelines represent the company we envisage for the coming years. Until then, we have a significant but rewarding task to, on the one hand, identify and carry out the right real estate acquisitions in line with our strategy – the pipeline is well-stocked – and on the other hand, continue to divest the other holdings in the most value creative way for each individual holding. Certain holdings are more liquid, while other divestments will require some time in order to be well executed.

NAV per share increased by 2.2% in the third quarter, with a stable development throughout all segments. No revaluations were made and the rouble, relevant for Melon Fashion Group, was close to unchanged. The real estate segment increased in value by 2.9% and Other by 1.5%. East Capital Baltic Property Fund II's sale of GO9 shopping centre contributed positively, and will realize more than EUR 9m to Eastnine in the fourth quarter. We are also happy to see MFG performing well, with 14.3% sales growth and a gross margin of 52.3% - up from 45.5% a year ago.

Kestutis Sasnauskas, CEO

NAV/share increased by 2.2% in Q3 2017. Fair value gains in the core real estate segments and buybacks contributed EUR 0.19/share. Fair value changes in the Other segment and dividends received from Melon Fashion group, contributed altogether EUR 0.05/share.

Performance

EASTNINE AB 4 Interim Report JAN-SEP 2017

Our Portfolio

Eastnine's focus for new investments is in the real estate direct segment, while other holdings will be gradually reduced through divestments and redemptions.

In Q2 2017, Eastnine changed its segment reporting to better reflect its ongoing strategic shift. The new segments are Real Estate Direct, Real Estate Funds and Other. Comparable numbers are reclassified per the new segment reporting.

						VALUE CHANGE	VALUE CHANGE
	VALUE	NAV/		VALUE	VALUE	JAN- SEP	JUL-SEP
	30 SEP 2017	SHARE	% OF	30 JUN 2017	31 DEC 2016	2017	2017
NET ASSET VALUE (NAV)	EURM	EUR	NAV	EURM	EURM	%¹	%¹
Real Estate Direct
Vertas	29.7	1.25	12.8	29.2	0.0	1.9	1.5
3Burės	27.6	1.16	11.9	27.0	25.4	8.4	2.2
3Burės development	10.0	0.42	4.3	8.1	5.0	-0.2	-1.0
Total Real Estate Direct	67.2	2.83	28.9	64.2	30.4	4.1	1.4
Real Estate Funds
East Capital Baltic Property Fund II	30.7	1.29	13.2	28.6	27.8	11.7	7.1
East Capital Baltic Property Fund III	15.5	0.65	6.7	9.2	8.8	4.0	1.2
Total Real Estate Funds	46.1	1.94	19.9	37.9	36.7	9.0	5.0
Total Real Estate	113.3	4.78	48.8	102.1	67.1	6.1	2.9
Other
Melon Fashion Group	39.6	1.67	17.0	40.8	42.9	-5.4	-0.6
East Capital Deep Value Fund	20.7	0.87	8.9	22.1	28.7	-6.7	2.5
East Capital Global Frontier Markets Fund	11.3	0.48	4.9	11.0	10.2	10.3	2.4
Komercijalna Banka Skopje	10.6	0.45	4.6	9.8	10.7	4.3	7.9
Other Investments²	1.3	0.06	0.6	1.4	7.2	-1.8	-2.3
Total Other	83.5	3.52	36.0	85.1	99.6	-2.8	1.5
Total Portfolio	196.8	8.30	84.7	187.2	166.7	1.8	2.3
Cash and cash equivalents	38.2	1.61	16.4	48.1	83.5
Other assets and liabilities net	-2.7	-0.12	-1.2	-2.4	-2.7
Net Asset Value (NAV)	232.3	9.79	100.0	232.9	247.6	1.33	2.23

1. The value change calculation is adjusted for investments, divestments and distributions during the relevant period. i.e. it is the percentage change between: the ending value plus any proceeds from dividends or divestments during the period, divided by the starting value plus any added investment during the period

2. Including East Capital Bering Ukraine Fund Class R. Trev-2 Group included on 31 Dec 2016 at fair value of EUR 5.7m

3. NAV per share development

The number of shares used in NAV/share 30 Sep 2017 is 23,723,020 and is adjusted for repurchased shares held by the company (Note 6).

1 EUR = 9.65 SEK on 30 Sep 2017. Source: Reuters

Note that certain numerical information may not add up due to rounding

Group Performance

Geographic breakdown, %

The investment activities of Eastnine AB (publ) (the Company) are managed in the operating subsidiaries Humarito Ltd, East Capital Explorer Investments AB and ECEX Holdings SA (in liquidation). Transactions in the operating subsidiaries are referred to as the investment activities in this report. Presentation currency is euro (EUR).

Market

The European recovery continued to gain strength in the third quarter and forecasters again raised GDP estimates. 2017 could be the second consecutive year when the euro area outpaces the US economy. The recovery, and the growing discussion on the risk/potential for an ECB tightening, are drivers behind the stronger EUR. The biggest enigma remains inflation that stayed muted despite accelerating growth. This is even more pronounced in the US. Overall US growth was slightly disappointing as hopes about massive reflation from the Trump administration faded.

The Baltic economies continue to show strong GDP growth, Estonia grew by 5.7% and Lithuania by 4.1% in the second quarter, and Latvia repoted a GDP growth of 5.8% for the third quarter. Growth in all three countries was driven by exports thanks to the overall recovery in both Europe and Russia, by consumption due to real wage growth and decreased unemployment rates, as well as by increased EU investments in infrastructure. Inflation, affected by wage growth as well as food and energy prices, has risen to around 3%.

In the Baltic property markets, yields have decreased slightly, but still have a significant gap compared to Nordic capitals, to just below 7% for prime office properties. Demand remains high and vacancies are low, pushing up average rents. Construction is picking up and several development projects are expected to be completed in the near future, which could momentarily affect rent levels.

In Russia, real wage growth (+3.7% in Aug), improving consumer confidence, falling inflation, rebound in oil prices and recovering consumer traffic constituted the conditions in Q3. Food inflation, as an indicator, slowed to a record low 3.2% in Q3. These factors contributed to a continued recovery of retail sales, which accelerated in real terms to +1.9% in August from +1.2% in July. Official numbers for September retail sales are expected to accelerate further, boding well for the rest of the year. We remain cautiously optimistic about an improving retail environment in Russia and note retailers' greater focus on digitalization and ecommerce, supported by growing internet penetration.

EURM	Q3 2017	Q3 2016	9M 2017	9M 2016	FY 2016
Vertas			29.1
3Burės development	2.0		5.0	0.3	0.3
East Capital Baltic Property Fund III	6.0		6.0	4.8	4.8
Total investments	8.0	0.0	40.1	5.0	5.0
East Capital Deep Value Fund	1.9	7.2	6.1	7.2	12.2
Trev-2 Group			5.7
East Capital Global Frontier Markets Fund		12.5		19.6	21.6
Starman					83.6
Total divestments	1.9	19.7	11.8	26.8	117.4

Investments and divestments

Results for the third quarter 2017

The net result for the third quarter was EUR 3.5m (EUR -2.0m), including value changes of shares in subsidiaries of EUR 4.0m (EUR -1.7m), corresponding to earnings per share of EUR 0.15 (EUR -0.08).

Melon Fashion Group was impaired by EUR -0.3m due to translation from rouble to euro, while the underlying rouble valuation was unchanged. Also, fair value of Melon Fashion Group was adjusted by EUR -1.0m, corresponding to dividend received during the third quarter.

Together with fair value adjustments in Vertas of EUR 0.4m, 3Burės of EUR 0.6m, East Capital Baltic Property Fund II of EUR 2.0m, East Capital Baltic Property Fund III of EUR 0.2m, East Capital Deep Value Fund of EUR 0.6m, Komercijalna Banka Skopje of EUR 0.8m and in East Capital Global Frontier Markets Fund of EUR 0.3m, these were the main contributors to the change in value of shares in subsidiaries in the Income statement for the period.

In the investment activities, Eastnine invested EUR 6.0m in East Capital Baltic Property Fund III, EUR 2.0m in 3Burės development and sold EUR 1.9m of the holding in East Capital Deep Value Fund.

The result for the period includes other income of EUR 0.2m (EUR 0.4m) mainly from repayment of charged management fees in funds, and expenses of EUR 0.9m (EUR 0.7m), all of which refer to the Parent company. Net financial income and expenses was EUR +0.2m (EUR 0.0m).

Comparative numbers in parenthesis refer to the third quarter of 2016.

Results for the period Jan-Sep 2017

The net result for the first nine months of the year was EUR 0.8m (EUR -9.5m), including value changes of shares in subsidiaries of EUR 1.8m (EUR -6.5m), corresponding to earnings per share of EUR 0.03 (EUR -0.35).

Melon Fashion Group was impaired by EUR -2.3m due to translation from rouble to euro, while the underlying rouble valuation was unchanged. Also, fair value of Melon Fashion Group was adjusted by EUR -1.0m, corresponding to dividend received during the third quarter.

Together with fair value adjustments in Vertas of EUR 0.6m, 3Burės of EUR 2.1m, East Capital Baltic Property Fund II of EUR 2.8m, East Capital Baltic Property Fund III of EUR 0.6m, East Capital Global Frontier Markets Fund of EUR 1.1m and in East Capital Deep Value Fund of EUR -1.9m, these were the main contributors to the change in value of shares in subsidiaries in the Income statement for the period.

Furthermore, dividends were received from East Capital Baltic Property Fund II of EUR 0.4m, Komercijalna Banka Skopje of EUR 0.5m and from Melon Fashion Group of EUR 1.0m, as mentioned above. Eastnine acquired office property Vertas in Vilnius for EUR 29.1m and invested EUR 6.0m in East Capital Baltic Property Fund III and EUR 5.0m in 3Burės development. Trev-2 was sold for a total cash consideration of EUR 5.7m. Shares in East Capital Deep Value Fund were sold for a total amount of EUR 6.1m.

The result for the period includes dividend from East Capital Explorer Investments AB of EUR 0.5m (redistribution of dividend from Komercijalna Banka Skopje, as mentioned above), other income of EUR 0.7m (EUR 0.4m) mainly from repayment of charged management fees in funds, and expenses of EUR 2.6m (EUR 1.8m), all of which refer to the Parent company. Net financial income and expenses was EUR +0.5m (EUR -0.1m).

Comparative numbers in parenthesis refer to January-September 2016.

Financial Position and Cash Flow Jan-Sep 2017

The Parent Company's equity ratio was 99.2 percent (99.3 percent).

The cash flow presented below only relates to transactions in the Parent Company. In June, an ordinary dividend for 2016 of SEK 0.90 per share, corresponding to EUR 0.09 per share, was paid out to the shareholders. The total amount of the dividend was EUR 2.3m. Also in June, the Company received a dividend of EUR 0.5m (EUR 0.0m) from East Capital Explorer Investments AB. In

September, an add-on investment of EUR 2.0m was made in 3Burės development. During the period, Jan–Sep 2017, Eastnine repurchased a total of 1,881,443 shares for an amount equivalent to EUR 13.8m.

Cash and cash equivalent at the end of the period amounted to EUR 10.7m (EUR 30.3m), all of which refer to the Parent Company.

At the end of the period, cash and cash equivalents in the investment activities amounted to EUR 38.2m (EUR 83.5m). Please refer to the breakdown of values in subsidiaries on pages 19-21 for more details regarding the investment activities.

Comparative numbers in parenthesis refer to 31 December 2016.

Commitments

On 10 July 2015, the Company announced a commitment to invest EUR 20m in total in East Capital Baltic Property Fund III. Of this, EUR 14.1m has been drawn down by the fund and the outstanding commitment on 30 September 2017 amounted to EUR 5.9m.

Real Estate Direct

Segment development

• The fair value of the segment increased by 1.4% July-September, and by 4.1% year-to-date, to EUR 67.2m. Total property value was EUR 99.6m, with no revaluations. The segment's combined annual average return is 10.9%, affected by the development project and the fact that Vertas is 100% equity financed.
• The fair value increase is attributable to positive operating cash flows in 3Burės and Vertas, while 3Burės development had a marginal value decrease.
• Combined vacancy remains low at 1.9% in Q3, a decrease from 2.4% in Q2, while average rent increased to EUR 13.8 per sqm and month in Q3, up from EUR 13.5 in Q2.
• The segment's combined LTV was 32.7%. Vertas, acquired in Q2 2017, has no bank financing due to Eastnine's current cash surplus.
• Please see p. 26 for more detailed consolidated property data.

EURm	Q3 2017	Q3 2016	9M 2017	9M 2016	FY 2016
Value change1 , %	1.4	3.5	4.1	8.0	9.1
NAV	67.2	30.1	67.2	30.1	30.4
% of Eastnine's NAV	28.9	13.2	28.9	13.2	12.3
Investments	2.0	-	34.1	0.3	0.3
Divestments	-	-	-	-	-

The value change calculation is adjusted for investments, divestments and distributions during the relevant period

3Burės

3Burės development

3Burės

Eastnines holding in the property, %	100
Fair value, EURm	27.6
% of NAV	11.9
Value change Jul-Sep, %	2.2

The fair value of the investment in the office property 3Burės, with a leasable area of 28,400 sqm in Vilnius, increased by 2.2% during the third quarter, attributable to positive operating cash flows. A slight negative value change of an interest rate derivate (swap) is included in the result. The property value was held unchanged at EUR 60.9m and loan-to-value amounted to 53% of the property value. An external valuation will be made at year-end. Eastnine's average annual return in 3Burės since investment is 14.9%.

Rental income was flat quarter-on-quarter but increased by approximately 2% year-on-year on the back of rent increases. During the third quarter, the vacancy rate in 3Burės decreased from 3.3% to 1.7% after the rental agreements signed during the previous quarter came into effect, which also increased average rent by 2.7%. During the quarter, further investments in energy efficient measures were made, including in a new building management system and in the building's roof, which was painted white to reflect sunlight and reduce the need of cooling during summer.

Learn more about 3Burės at www.3bures.lt

3Burės development

Eastnines holding in the property, %	100
Fair value, EURm	10.0
% of NAV	4.3
Value change Jul-Sep, %	-1.0

The quarterly fair value change (excluding equity investment during the quarter) of the development of the third tower in 3Burės was -1.0%, mainly due to a negative swap revaluation. Eastnine invested EUR 2.0m in the project during Q3. The

property value increased to EUR 10.2m because of investments, with no change in the underlying valuation. An external valuation of the development project will be made at year-end. The development, which thus far is equity financed, will as of 2018 use bank financing.

The construction continued according to schedule and by the quarter-end, eleven of twenty-three floors had been risen. The property, which is expected to be completed by the end of 2018 with a leasable area of 12,800 sqm, is 98% pre-let to Swedbank and Visma.

Vertas

100
29.7
12.8
1.5

The fair value of the investment in Vertas, the office property in central Vilnius acquired in June 2017, increased by 1.5% during the third quarter due to positive operating cash flows. The property value is unchanged since acquisition. Vertas will be valued by an external appraiser when it has been owned 12 months.

The property, with a leasable area of 9,400 sqm, reported a vacancy of 2.7% for the end of September. Vertas is short-term financed without bank loans due to Eastnine's strong cash position.

Learn more about Vertas at www.vertas.lt

Real Estate Funds

Segment development

• The fair value of the segment increased by 5.0% in July-September, driven by East Capital Baltic Property Fund II's successful sale of GO9 shopping centre in Vilnius which was completed in October, and by 9.0% year-to-date, to EUR 46.1m. Combined annual average return is 10.2%.
• In August, Eastnine invested EUR 6.0m in East Capital Baltic Property Fund III, as a drawdown on committed capital, in conjunction with the fund's acquisition of Tallinn based Nehatu logistics centre.
• Eastnine expects to receive an amount in excess of EUR 9m from East Capital Baltic Property Fund II during Q4, corresponding to the pro rata proceed from the sale of GO9.
• There are in total eight commercial properties in the two funds, seven of which are in Tallinn and one in Riga.

EURm	Q3 2017	Q3 2016	9M 2017	9M 2016	FY 2016
Value change1 , %	5.0	1.6	9.0	6.0	7.6
NAV	46.1	36.1	46.1	36.1	36.7
% of Eastnine's NAV	19.9	15.8	19.9	15.8	14.8
Investments	6.0	-	6.0	-	4.8
Divestments	-	-	-	-	-

The value change calculation is adjusted for investments, divestments and distributions during the relevant period

East Capital Baltic Propery Fund II

East Capital Baltic Propery Fund III

East Capital Baltic Property Fund II

Eastnines share of the fund, %	47
Fair value, EURm	30.7
% of NAV	13.2
Value change Jul-Sep, %	7.1

The fair value of Eastnine's holding in East Capital Baltic Property Fund II increased by 7.1% during the third quarter and 11.7% year-to-date. The Fund's Net Asset Value includes the unrealized gain in GO9 shopping centre based on the signed share sale agreement.

The successful exit of GO9 corresponds to an equity IRR of 15% and the net proceeds from the transaction will be distributed to investors after closing, which was at end-October, including to Eastnine.

The Deglava property in Riga remained closed during the quarter and negotiations with potential tenants continued. In August 2017, a settlement was agreed with formed tenant, with no significant NAV implication.

The duration of East Capital Baltic Property Fund II is until 2019 with possible extension up to three years.

East Capital Baltic Property Fund III

Eastnines share of the fund, %	27
Fair value, EURm	15.5
% of NAV	6.7
Value change Jul-Sep, %	1.2

The fair value of Eastnine's holding in East Capital Baltic Property Fund III increased by 1.2% during the third quarter and by 4.0% year-to-date.

A share purchase agreement for VGP Nehatu logistics complex in Tallinn, with a leasable area of roughly 75,000 sqm, was signed in June. The transaction was closed in September and operational take-over of the property is ongoing.

The parking lot of Vesse Retail Centre was upgraded, and the Hilton hotel continued its strong performance.

The duration of East Capital Baltic Property Fund III is until 2023 with a possible two-year extension.

Other

Segment development

• The fair value of the segment increased by 1.5% in July-September, but decreased by 2.8% year-to-date, to EUR 83.5m. Combined average annual return is 0.6%.
• The public equity holdings, East Capital Deep Value Fund, East Capital Global Frontier Markets Fund and Komercijalna Banka Skopje, gained in value while Melon Fashion Group decreased marginally due to currency translation.
• Quarterly redemptions of Eastnine's holding in East Capital Deep Value Fund continue as planned. East Capital Global Frontier Markets Fund remains in the portfolio as a liquid holding.

EURm	Q3 2017	Q3 2016	9M 2017	9M 2016	FY 2016
Value change1 , %	1.5	-0.1	-2.8	4.7	17.4
NAV	83.5	167.0	83.5	167.0	99.6
% of Eastnine's NAV	36.0	73.4	36.0	73.4	40.2
Investments	-	-	-	-	-
Divestments	1.9	19.7	11.8	26.8	117.4

The value change calculation is adjusted for investments, divestments and distributions during the relevant period

Melon Fashion Group

• East Capital Deep Value Fund
• East Capital Global Frontier Markets Fund
• Komercijalna Banka Skopje

Other investments

Melon Fashion Group

Eastnines share of the fund, %	36
Fair value, EURm	39.6
% of NAV	17.0
Value change Jul-Sep, %	-0.6

The fair value of Eastnine's holding in Melon Fashion Group (MFG) decreased by 0.6% in Q3 as a result of translation from RUB to EUR, while the underlying RUB based valuation was kept unchanged.

Based on the preliminary management report, MFG's total sales in the third quarter increased by 14.3% supported by high single digit like-for-like sales growth on the back of significant increase in store traffic, and continuous positive development of online sales, growing year-on-year by 70%. All three brands showed a healthy high single digit to low double digit like-for-like growth. The restructuring efforts within the brands, undertaken last year, has brought pay-off, supported by the strengthened local currency and recovery in store traffic. 9M sales grew by 5.3% year-on-year.

The third quarter gross margin increased to 52.3% from 45.5% in Q3 2016, supported by stronger local currency and lower reduction rates. 9M 2017 gross margin increased to 51.1% from 44.7% in 9M 2016.

The improved gross margin translated into an uplift of operating profitability compared to the corresponding period last year; Q3 EBITDA reached RUB 505m from RUB 148m in the previous year, corresponding to a 13.2% EBITDA margin. FX impact in Q3 2017 was insignificant. 9M 2017 EBITDA reached RUB 840m compared to RUB 51m in 9M 2016, corresponding to EBITDA margins of 8.6% and 0.5% respectively. Adjusted for FX impact, Q3 2017 EBITDA amounted to RUB 852m vs RUB 248 m in Q3 2016.

The total number of stores decreased to 537 from 558 as of end of 2016. During this period, 15 retail stores were opened while 40 were closed, along with 4 stores net increase in franchise stores.

Management's focus in the past quarter remained on the upgrade of existing selling space through relocation and new store openings as well as roll-out of IT investments.

Learn more about Melon Fashion Group at www.melonfashion.ru/en

East Capital Deep Value Fund

Eastnines share of the fund, %	72
Fair value, EURm	20.7
% of NAV	8.9
Value change Jul-Sep, %	2.5

The fair value of Eastnine's investment in the fund increased by 2.5% during the third quarter, and Eastnine divested fund shares corresponding to EUR 1.9m during the same period. In general, macro is improving throughout Eastern Europe, with several countries showing strong recovery and GDP growth among the highest in Europe, including Russia and the Balkan countries. The biggest movers were Romanian real estate developer Impact +47.9%, Slovenian insurance company Sava Re +7.9%, Serbian media company B92 -24.7%, and Serbian Putevi -18.1%.

The fund's focus going forward will be on small and mid-cap Eastern European companies with slightly higher liquidity. Following this change in investment strategy, the fund's name will change to East Capital Eastern Europe Small Cap, effective 1 December 2017.

East Capital Global Frontier Markets Fund

Eastnines share of the fund, %	28
Fair value, EURm	11.3
% of NAV	4.9
Value change Jul-Sep, %	2.4

The value of Eastnine's holding in East Capital Global Frontier Markets Fund gained 2.4% and 10.3% year-to-date, while the MSCI Frontier Markets index increased by 4.2% during the third quarter. The fund underperformed its index primarily due to a large underweight in Kuwait, a large weight of the index performing strong during the period.

Argentina had a strong quarter, where Grupo Supervielle was a strong positive contributor, gaining 29.5%. The Nigerian economy is turning around and showing positive GDP growth in Q3, for the first time in over a year. The Pakistan market lost another 14%, as Prime Minister Nawaz Sharif was disqualified by the Supreme Court and fear of Rupee depreciation intensified.

Komercijalna Banka Skopje

Eastnines holding in the company, %	10
Fair value, EURm	10.6
% of NAV1	4.6
Value change Jul-Sep, %	7.9

1. Direct investment and through East Capital Deep Value Fund

Komercijalna Banka Skopje's (KBS) shares increased by 7.9% (in EUR) on the Macedonian exchange during the quarter. Macedonia shows a strong economic recovery, with an expected GDP growth of 3% in 2017 and KBS continues to benefit from the strong macroeconomic environment.

However, KBS reported a nine-month net profit of MKD 106m compared to MKD 526m for the same period the previous year. The result was held down mainly due to an increase of the provisioning of the corporate loans, which was above expectations in the reporting period.

Learn more about Komercijalna Banka Skopje at www.kb.com.mk

Other information

Risks and uncertainties

The dominant risk in Eastnine's operations is commercial risk in the form of exposure to specific sectors, geographic regions or individual holdings and financial risk in the form of market risk, equity price risk, foreign exchange risk and interest rate risk. A more detailed description of Eastnine's material risks and uncertainties is provided in the Company's Annual Report 2016 on pages 60-61. An assessment for the coming months is provided in the Market comment on page 6.

In addition, through the business activities of the holdings, i.e. their offerings of products and services, within the respective sectors, the investments are also exposed to legal/regulatory risk and political risk, for example political decisions on public sector expenditures and industry regulations.

Organisational and investment structure

Eastnine AB (publ) is a Swedish investment company listed on Nasdaq Stockholm. Eastnine's business concept is to maximise risk-adjusted shareholder return by offering shareholders exposure to a portfolio of primarily real estate investments in the Baltic countries, mainly through direct ownership. Eastnine also holds other private equity and fund investments in Eastern Europe, that are expected to be divested within the next few years.

The Company is currently transitioning into a pure Baltic real estate company, with an aim to generate predictable cash flows by being a long-term owner of attractive commercial properties with stable tenants in prime locations in the Baltic capitals.

Eastnine has seven full-time employees in its Stockholm headquarters. For further information about the organizational and investment structure of the Company, please see the Company's latest Annual Report, under the section 'Corporate Governance'.

The CEO certifies that the interim report presents a true and fair view of the Company's and the Group's operations, financial position and profits and describes the significant risks and uncertainties facing the Company and the Group.

Stockholm, 9 November 2017

Kestutis Sasnauskas Chief Executive Officer

Review Report

To the Board of Eastnine AB (publ) Corporate identity number 556693-7404

Introduction

We have reviewed the summary interim financial information (interim report) of Eastnine AB (publ) as of 30 September 2017 and the nine-month period then ended except for the investment portfolio reporting on pages 9-13 and 26. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of the Review

We conducted our review in accordance with the Standard on review engagements (ISRE) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, 9 November 2017 KPMG AB

Anders Malmeby Authorised Public Accountant

This review report is a translation of the original review report in Swedish.

Financial Statements

EASTNINE AB 16 Interim Report JAN-SEP 2017

Income Statement

EUR Thousands
		2017	2016	2017	2016
	Note	Jan-Sep	Jan-Sep	Jul-Sep	Jul-Sep
Changes in fair value of subsidiaries	2	1,754	-6,469	4,012	-1,650
Dividend received		500	-	-	-
Other income		709	360	233	360
Staff expenses		-1,546	-1,100	-606	-461
Other operating expenses		-1,074	-664	-338	-233
Items affecting comparability1		-	-1,604	-	-
Operating profit/loss		343 343	-9,478 -9,478	3,301	-1,984
Financial income		551	22	188	22
Financial expenses		-62	-73	12	-62
Profit/loss before tax		832 832	-9,528 -9,528	3,501	-2,024
Tax		-	-	-	-
NET PROFIT/LOSS FOR THE PERIOD2		832 832	-9,528 -9,528	3,501	-2,024
Earnings per share, EUR
- Attributable to shareholders of the Parent Company		0.03	-0.35	0.15	-0.08

No dilutive effects during the periods

Advisory costs related to the termination of the Investment Agreement with East Capital

Net Profit/Loss for the period corresponds to Total Comprehensive income

Balance Sheet

	EUR Thousands
--	---------------	--

		2017	2016	2016
	Note	30 Sep	31 Dec	30 Sep
Assets
Shares in subsidiaries	3, 4	197,747	195,993	204,594
Loans to group companies	4	22,900	20,900	20,900
Total non-current assets		220,647 220,647	216,893 216,893	225,494
Other short-term receivables		5	2	-
Accrued interest income	4	2,231	1,680	1,499
Accrued income and prepaid expenses		465	427	369
Cash and cash equivalent		10,740	30,338	1,581
Total current assets		13,442 13,442	32,447 32,447	3,450
Total assets		234,088 234,088	249,340 249,340	228,943
Equity
Share capital1		3,658	3,655	3,655
Other contributed capital/Share premium reserve2		283,513	299,613	302,532
Retained earnings2		-55,711	-69,014	-69,014
Net profit/loss for the period2		832	13,303	-9,528
Total equity		232,292 232,292	247,558 247,558	227,646
Current liabilities
Other liabilities		378	334	94
Accrued expenses and prepaid income		1,418	1,449	1,203
Total current liabilities		1,797 1,797	1,783 1,783	1,297
Total equity and liabilities		234,088 234,088	249,340249,340 249,340	228,943 228,943

Restricted capital

Statement of Changes in Equity

EUR Thousands		Other contributed capital/Share premium	Retained earnings incl. profit/loss for	Total equity shareholders in Parent
	Share capital	reserve	the year	company
Opening equity 1 January 2017	3,655 3,655	299,613 299,613 299,613	-55,711 -55,711 -55,711	247,558
Net profit/loss for the period	-	-	832	832
Total comprehensive income	-	-	832	832
Bonus issue	3	-3	-	-
Dividend to shareholders	-	-2,267	-	-2,267
Share buy-back	-	-13,832	-	-13,832
Closing equity 30 September 2017	3,658 3,658	283,513 283,513 283,513	-54,879 -54,879-54,879	232,292 232,292

EUR Thousands		Other contributed capital/Share premium	Retained earnings incl. profit/loss for	Total equity shareholders in Parent
	Share capital	reserve	the year	company
Opening equity 1 January 2016	3,654 3,654	318,920 318,920 318,920	-69,014 -69,014-69,014	253,561
Net profit/loss for the period	-	-	-9,528	-9,528
Total comprehensive income	-	-	-9,528	-9,528
Bonus issue	1	-1	-	-
Dividend to shareholders	-	-2,335	-	-2,335
Share buy-back	-	-14,052	-	-14,052
Closing equity 30 September 2016	3,655 3,655	302,532 302,532 302,532	-78,542 -78,542-78,542	227,646

Statement of Cash Flow

EUR Thousands

	2017	2016	2017	2016
	Jan-Sep	Jan-Sep	Jul-Sep	Jul-Sep
Operating activities
Operating profit/loss	343	-9,478	3,301	-1,984
Changes in fair value of subsidiaries	-1,754	6,469	-4,012	1,650
Cash flow from current operations before changes in working capital	-1,411 -1,411	-3,009 -3,009	-711	-334
Cash flow from changes in working capital
Increase (-)/decrease(+) in other current receivables	-42	-355	-33	-363
Increase (+)/decrease(-) in other current payables	15	787	211	698
Cash flow from operating activities	-1,437 -1,437	-2,578 -2,578	-533	1
Investing activities
Repayment of shareholder contributions	-	20,700	-	6,700
Aquisition of remaining shares in ECEX Holding SA	-	-2,000	-	-2,000
Loan to group company	-2,000		-2,000	-
Cash flow from investing activities	-2,000 -2,000	18,700 18,700	-2,000	4,700
Financing activities
Dividend to shareholders	-2,267	-2,335	0	-
Share buy-back	-13,832	-14,052	-4,138	-5,926
Cash flow from financing activities	-16,099 -16,099	-16,387 -16,387 -16,387	-4,138	-5,926
Cash flow for the period	-19,537 -19,537	-264 -264	-6,671	-1,226
Cash and cash equivalent at the beginning of the period	30,338	1,918	17,398	2,868
Exchange rate differences in cash and cash equivalents	-62	-73	12	-62
Cash and cash equivalent at the end of the period	10,740 10,740	1,581 1,581	10,740	1,581

Note 1 Accounting Principles

This interim report has been prepared in accordance with International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) 34 Interim Financial Reporting and applicable provisions in the Swedish Annual Accounts Act (Årsredovisningslagen). The interim report for the Parent company has been prepared in accordance with the Swedish Financial Reporting Board's standard RFR 2 and the Swedish Annual Accounts Act Chapter 9, Interim report. The parts of IFRSs and RFR 2 that are currently relevant for Eastnine AB lead to the same accounting. The two sets of financial statements are therefore presented together as a common single set of accounts.

As of 1 January 2014, Eastnine AB applies the investment entity consolidation exception in IFRS 10, which implies that all holdings are recognised at fair value through profit or loss. In assessing Eastnine AB, it has been concluded that the Company falls within the classification of an investment entity.

As of Q2 2017, Eastnine has changed its segment reporting to reflect the ongoing strategic shift. The new segments are Real Estate Direct, Real Estate Funds and Other. Comparable numbers for 2016 are restated according to the new segment reporting, see Note 2 Segment reporting. All other accounting principles applied in these interim financial statements are the same as those applied in the financial statements as at and for the year ended 31 December 2016.

Note 2 Segment Reporting

Eastnine AB classifies the Company's various segments based on the nature of the investments. Management monitors the holdings on the basis of fair value, and all holdings are reported at fair value through profit or loss. The value change of holdings held by the subsidiaries has been allocated to value changes, dividends received and other operating expenses that are directly attributable to the underlying investments in Real Estate Direct, Real Estate Funds and Other. All other revenues and expenses are classified as unallocated in the table below. As of Q2 2017, Eastnine has changed its segment reporting to reflect the ongoing strategic shift. Previously, the segment reporting was classified as Private Equity, Real Estate, Public Equity and Short-term Investment. Comparable numbers for 2016 are restated according to the new segment reporting.

EUR thousands	Real Estate	Real Estate
1 Jan – 30 Sep 2017	Direct	Funds	Other	Unallocated	Total
Changes in value of portfolio	2,111	3,430	-4,321	-	1,221
Dividends received	-	427	990	-	1,417
Other operating expenses	-	-	-	-884	-884
Changes in value of subsidiaries	2,111 2,111	3,857 3,857	-3,330	-884	1,754
Dividends received	-	-	500	-	500
Other income	-	33	501	175	709
Staff expenses	-	-	-	-1,546	-1,546
Other operating expenses	-	-	-	-1,074	-1,074
Operating profit/loss	2,111 2,111	3,890 3,890	-2,329	-3,329	343
Financial income	551	-	-	-	551
Financial expense	-	-	-	-62	-62
Profit/loss before tax	2,662 2,662	3,890 3,890	-2,329	-3,391	832

Assets 67,181 46,119 67,181 46,119 83,526 37,262 234,088

EUR thousands	Real Estate	Real Estate
1 Jan – 30 Sep 2016	Direct	Funds	Other	Unallocated	Total
Changes in value of portfolio	2,214	1,230	7,843	-	11,287
Dividends received	-	854	889	-	1,743
Other operating expenses (incl. management fees)	-172	-	-2,136	-344	-2,652
Items affecting comparability1	-935	-	-6,513	-9,400	-16,848
Changes in value of subsidiaries	1,107 1,107	2,084 2,084	84	-9,744	-6,469
Staff expenses	-	-	-	-1,100	-1,100
Other operating expenses	-	-	-	-664	-664
Items affecting comparability2	-	-	-	-1,604	-1,604
Operating profit/loss	1,107 1,107	2,100 2,100	427	-13,113 -13,113-13,113	-9,478
Financial income	-	22	-	-	22
Financial expense	-	-	-	-73	-73
Profit/loss before tax	1,107 1,107	2,122 2,122	427	-13,185 -13,185-13,185	-9,529
Assets	30,127 30,127	36,077 36,077	167,011 167,011 167,011	-4,271	228,943

Costs related to the transition and termination agreement with East Capital (Real Estate Direct and Unallocated), and carried interest related to the sale of Starman (Other).

= Advisory costs related to the termination of the Investment Agreement with East Capital

Note 3 Entities with ownership interests over 50 percent

The following entities, in which the ownership interest is over 50%, are not consolidated due to the consolidation exception for investment entities.

		Number of	Book value,	Ownership
Non consolidated entities 30 September 2017	Country	shares	EURt	capital
ECEX Holding SA	Bertrange, Luxembourg	100,000	11,156	100%
East Capital Explorer Investments AB	Stockholm, Sweden	11,000	10,738	100%
Humarito Limited	Nicosia, Cyprus	2,000	175,853	100%
Baltic Cable Holding OÜ	Tallinn, Estonia	2,502	60,950	100%
UAB Portarera	Vilnius, Lithuania	300	67,181	100%
UAB Kendrita (Vertas)	Vilnius, Lithuania	100	29,654	100%
UAB Verslina (3Burės)	Vilnius, Lithuania	100	27,570	100%
UAB Solverta (3Burės development)	Vilnius, Lithuania	100	9,958	100%

Note 4 Financial instruments

For a better understanding of the business, the information regarding financial instruments below is presented on a see-through basis as the fair value of the holdings in the subsidiaries. Shares and participations in the investment activities as well as the Company's holdings in subsidiaries are all valued at fair value.

Financial instruments not measured at fair value through profit and loss

For receivables and payables, the carrying amount is assessed to reflect fair value since the remaining maturity is generally short. This is also the case for cash and cash equivalent.

Calculation of fair value

The following summarises the main methods and assumptions applied in determining the fair values of the financial instruments in the balance sheet. Please refer to the Annual Report 2016 for more details on valuation policies used by Eastnine AB.

Loans to Group Companies, which are a part of 3Burės valuation, are monitored by management on a fair value basis. Changes in credit risk has not led to any significant fair value changes of the loans.

Fair value hierarchy

The fair value hierarchy has the following levels:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

• Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level of input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs requiring significant adjustment based on unobservable inputs, such measurement is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the financial asset or liability.

Shares in subsidiaries/financial instruments

In the Parent company, financial instruments consist of shares in subsidiaries of EUR 197.7m, loans to group companies of EUR 22.9m and cash and cash equivalent of EUR 10.7m. The carrying amount of these assets constitutes the fair value on the balance sheet date.

		Book value, EURt	Share of capital, %
Shares in subsidiaries including loans to group companies	Country	30 Sep 2017	31 Dec 2016	30 Sep 2017	31 Dec 2016
ECEX Holding SA	Bertrange, Luxembourg	11,156	11,864	100	100
East Capital Explorer Investments AB	Stockholm, Sweden	10,738	10,808	100	100
Humarito Limited	Nicosia, Cyprus	175,853	173,321	100	100
UAB Portarera (loan)	Vilnius, Lithuania	22,900	20,900	100	100

As the holdings in the subsidiaries are presented on a see-through basis, the tables below reflect the fair value hierarchy in the investment activities. The values of the shares in subsidiaries, including loans to group companies, are directly and indirectly made up by the following assets:

EUR Thousands
30 September 2017 Breakdown of values in subsidiaries					Other assets
including loans to group companies	Real Estate Direct	Real Estate Funds		Other Cash and bank	and liabilities, net	Total
Opening balance 1 January 2017	28,739 28,739	36,656 36,656	99,631	53,201	-1,334	216,893
Purchases/additions	34,100	6,033	-	-38,133	-	2,000
Divestments/Reductions	-	-	-11,784	11,784	-	0
Other	-	-	-	-800	-84	-884
Dividend received	-	-	-	1,917	-	1,917
Dividend paid to parent company	-	-	-	-500	-	-500
Changes in fair value recognised net in profit/loss	2,111	3,430	-4,321	-	-	1,221
Closing balance 30 September 2017	64,950 64,950	46,119 46,119	83,526	27,470	-1,418	220,647 220,647

EUR Thousands

31 December 2016					Other assets
Breakdown of values in subsidiaries	Real Estate	Real Estate			and liabilities,
including loans to group companies	Direct	Funds	Other	Cash and bank	net	Total
Opening balance 1 January 2016	27,641	30,077	185,927	8,593	-98	252,140
Movement of acrrued interest income to Parent company	-1,477	-	-	-	-	-1,477
Purchases/additions	250	4,770	-	-5,020	-	0
Divestments/Reductions	-	-	-117,416	117,416	-	0
Other	-	-	-	-17,116	-1,236	-18,352
Repaid shareholders contributions	-	-	-	-52,700	-	-52,700
Dividend received	-	-	-	2,029	-	2,029
Changes in fair value recognised net in profit/loss	2,326	1,808	31,119	-	-	35,254
Closing balance 31 December 2016	28,739 28,739	36,656 36,656	99,631	53,201	-1,334	216,893 216,893

Real Estate Direct consists of holdings in 3Burės, 3Burės development and Vertas. Real Estate Funds consists of holdings in East Capital Baltic Property Fund II and East Capital Baltic Property Fund III. These holdings are valued internally or externally normally at year-end, and the fair value of the holdings is assessed on a quarterly basis.

Other consists of the holdings in Melon Fashion Group (MFG), the fair value of which is assessed on a quarterly basis, East Capital Deep Value Fund with a majority of public holdings managed by East Capital, East Capital Global Frontier Markets Fund, Komercijalna Banka Skopje, which are publicly traded, and East Capital Bering Ukraine Fund R. These holdings are valued at fair value according to the valuation principles described on the previous page.

Holding	Class	Valuation method	Valuation assumptions
3Burės	Real Estate Direct	DCF	WACC 8%, Exit yield 7%
3Burės development	Real Estate Direct	DCF	WACC 7%, Exit yield 7%
Vertas	Real Estate Direct	Acquisition value
East Capital Baltic Property Fund II	Real Estate Funds	DCF	WACC 8-10%, Exit yield 7-8%
East Capital Baltic Property Fund III	Real Estate Funds	DCF	WACC 9%, Exit yield 8%
			Long-term growth 5%, Long term operating margin 12%, WACC
Melon Fashion Group	Other	DCF	17%. A 25% minority and liquidity discount is applied

Discounted Cash Flow model (DCF), weighted average cost of capital (WACC)

For the fair values of Real Estate Direct (3Burės and 3Burės development), Real Estate Funds and Other - reasonably possible changes at the reporting date to one of the significant unobservable inputs, provided other inputs constant, would have the following effects:

Effect in EUR thousands	Real Estate Direct			Real Estate Funds
30 September 2017	Profit or loss		Profit or loss
Sensitivity analysis	Increase	Decrease	Increase	Decrease
Weighted average cost of capital (WACC) (0.5% movement)	-1,499	1,568	-659	677
Exit yield (0.5% movement)	-2,561	2,958	-1,468	1,682

Effect in EUR thousands 30 September 2017	Other Profit or loss
Sensitivity analysis	Increase	Decrease
Long term growth rate (0.5% movement)	1,594	-1,465
Weighted average cost of capital (WACC) (0.5% movement)	-2,194	2,400
Long term operating margin (0.5% movement)	1,501	-1,505

The Eastnine's portfolio is presented on page 5 in this report, including information on fair value changes during the period. More information on the portfolio holdings can be found on pages 9 to 13 in this report.

The following table analyses, within the fair value hierarchy, the investments in the investment activities measured at fair value:

EUR thousands

30 September 2017			Total
Shares and participations in investment activities at fair value through profit or loss1	Level 1	Level 3	balance
Real Estate Direct	-	67,181	67,181
Real Estate Funds	-	46,119	46,119
Other	42,612	40,914	83,526
Total	42,612 42,612	154,215 154,215 154,215	196,826 196,826

EUR thousands

31 December 2016			Total
Shares and participations in investment activities at fair value through profit or loss	Level 1	Level 3	balance
Real Estate Direct	-	30,419	30,419
Real Estate Funds	-	36,656	36,656
Other	49,592	50,039	99,631
Total	49,592 49,592	117,114117,114 117,114	166,706 166,706

1 Following investments are classified in:

Level 1 - East Capital Deep Value Fund, East Capital Global Frontier Markets Fund and Komercijalna Banka Skopje

Level 3 - East Capital Baltic Property Fund II, East Capital Baltic Property Fund III, East Capital Bering Ukraine Fund Class R, 3Burės, 3Burės development, Vertas and MFG

EUR thousands
30 September 2017	Real Estate	Real Estate
Changes in financial assets and liabilities in Level 3	Direct	Funds	Other	Total
Opening balance 2017	30,419 30,419	36,656 36,656	50,039	117,114
Purchases/additions	34,100	6,033	-	40,133
Divestments/Reductions	-	-	-5,702	-5,702
Changes in fair value recognised net in profit/loss	2,662	3,430	-3,423	2,669
Closing balance 30 September 2017	67,181 67,181	46,119 46,119	40,914	154,215 154,215

EUR thousands

31 December 2016	Real Estate	Real Estate
Changes in financial assets and liabilities in Level 3	Direct	Funds	Other	Total
Opening balance 2016	27,641 27,641	30,077 30,077	105,957 105,957105,957	163,675 163,675
Transfers out of level 31	-	-	-71,839	-71,839
Purchase/additions	250	4,770	-	5,020
Changes in fair value recognised net in profit/loss	2,529	1,808	15,921	20,258
Closing balance 31 December 2016	30,419 30,419	36,656 36,656	50,039	117,114 117,114

Starman was moved from level 3 to level 2 before the divestment was finalised; the unobservable input was not a significant part of the value of the holding.

EUR 2,669 thousands (EUR 20,258 thousands) of changes in fair value recognised net in profit/loss relate to investments still held at the end of the period.

Risks and uncertainties

For information about risks, uncertainties and information about the business environments and markets in which Eastnine invests, please see page 6 and 14. For a summary of the methods and assumptions used to determine fair value of the portfolio holdings please see Note 4 and in more detail on page 60 in the Annual Report of 2016. The effect of fluctuations in the major parameters on the value of the portfolio holdings is presented in the table below:

Sensitivity analysis for market risks (EUR Thousands)
-------------------------------------------------------	--

30 September 2017		Effect on net
Risk factors	Change	profit/loss for the period
Fx EUR/RUB	+/- 10%	3,959
Fx EUR/USD	+/- 5%	1,666
Equity price	+/- 10%	19,460

Note 5 Related parties

On 30 September 2017, Eastnine AB had a related party relationship with its subsidiaries, Board members and employees.

Eastnine AB's management, Board members and their close relatives and related companies control 25.5 percent of voting rights in the Company.

Following the termination of the Investment Agreement between Eastnine and East Capital on 9 May 2016, all management fee payments to East Capital were halted, with the exception of the real estate funds East Capital Baltic Property Fund II and East Capital Baltic Property Fund III. As a consequence, during the period Jan-Sep 2017, the Company received repayments of EUR 0.5m (EUR 0.0m) regarding management fees originated in the other East Capital funds. Management fees originated in the real estate funds during the period Jan-Sep 2017 amounted to EUR 0.4m (EUR 0.3m).

The management fee for East Capital Baltic Property Fund II is 1.75 percent and the rebated management fee for East Capital Baltic Property Fund III is 1.25 percent. The carried interest for these funds is 20 percent, on the premise that a threshold value increase of 7 and 8 percent, respectively, per year has been achieved.

According to decision by the Board of Directors, the resigned CEO Mia Jurke received a compensation corresponding to six monthly salaries.

There have been no other material related party transaction during the year.

Note 6 Repurchase of shares and dividend

On 20 May 2016, the Company launched a buyback program. As announced on 26 September 2017, buybacks may be carried out as long as the Eastnine share trades at a discount to its most recently reported Net Asset Value (NAV) per share in EUR. This is an alteration of the original program carried out since May 2016, whereby buybacks could not be made at a price higher than 80% of NAV per share. The Company has a mandate to repurchase up to 10 percent of outstanding shares, until the AGM 2018.

At an Extraordinary General Meeting on 23 January 2017, the Meeting approved the Board of Directors' proposal to reduce the share capital by cancelling of 2,500,000 previously repurchased shares and to increase the share capital by way of a bonus issue. On 31 January 2017, the cancelling of 2,500,000 repurchased shares was executed. Further, in accordance with the decision at the Annual General Meeting on 15 May 2017, concerning cancellation of repurchased share and to carry out a bonus issue without issuing new shares, 845,530 shares were cancelled.

The Company repurchased a total of 1,881,443 shares during the period 1 January through 30 September 2017, corresponding to 7.6 percent of the Company's outstanding shares, at an average price of SEK 70,35 per share. After cancellation of shares, the Company has a total of 1,093,013 repurchased shares held in treasury.

The total number of shares outstanding in Eastnine as of 30 September 2017 amounted to 24,816,033. Adjusted for repurchased shares held in treasury, the number of shares outstanding amounted to 23,723,020. The weighted average number of shares outstanding for the reporting period was 24,669,783 adjusted for the repurchased shares.

Eastnine is transforming from a diversified Eastern European investment company, into a Baltic real estate company. The transformation is expected to be finalised by the end of 2020. Eastnine's dividend policy states that dividend shall correspond to at least 50% of profit from property management. During the build-up phase, the annual dividend shall be at least 2.0% of the net asset value at the preceding year-end.

At the Annual General Meeting 2017, it was resolved to pay an ordinary dividend for 2016 of SEK 0.90 per share, corresponding to EUR 0.09 per share and an increase of 12.5% from the previous year. Payment to shareholders was made in June 2017.

Note 7 Events occurring after the end of the quarter

The Company repurchased a total of 343,214 shares during the period 1 October - 7 November 2017, corresponding to 1.4 percent of the Company's outstanding shares, at an average price of SEK 76,93 per share.

Shares in East Capital Deep Value Fund were sold for an amount equivalent to EUR 2.0m.

Note 8 Key Figures

Key figures	9m	6m	3m	12m	9m	6m	3m	12m
	2017	2017	2017	2016	2016	2016	2016	2015
Net asset value (NAV), EUR m	232	233	246	248	228	236	253	254
Equity ratio, %	99.2	99.3	99.2	99.3	99.4	99.7	99.8	99.8
Market capitalisation, SEK m	1,861	1,750	1,854	1,880	1,619	1,669	1,545	1,445
Market capitalisation, EUR m	193	182	193	196	168	177	169	158
Number of outstanding shares, m	23.7	24.3	25.0	25.6	26.1	27.0	28.2	28.2
Number of outstanding shares including
repurchased shares, m	24.8	24.8	25.7	28.2	28.2	28.2	28.5	28.5
Weighted average number of shares, m	24.7	25.0	25.4	27.0	27.4	28.0	28.2	29.3
Number of employees	7	8	8	9	9	5	4	4
Key figures per share	9m	6m	3m	12m	9m	6m	3m	12m
	2017	2017	2017	2016	2016	2016	2016	2015
Earnings per share, EUR	0.03	-0.11	0.11	0.49	-0.35	-0.27	-0.01	0.25
Dividend per share, EUR	-	-	-	0.09	-	-	-	0.09
NAV, SEK	94	92	94	93	84	82	83	82
NAV, EUR	9.79	9.59	9.83	9.67	8.73	8.74	9.00	9.00
Share price, SEK1	75.00	70.50	72.25	66.75	57.50	59.25	54.25	50.75
Share price, EUR1	7.77	7.33	7.57	6.97	5.97	6.29	5.87	5.54
SEK/EUR	9.65	9.62	9.55	9.58	9.63	9.41	9.24	9.16

Not adjusted for share redemptions or dividend

Key Performance Data Real Estate Direct

EASTNINE AB 25 Interim Report JAN-SEP 2017

Property data

Consolidated data of the Real Estate Direct segment

		2017			2016
SEGMENT RESULTS, EURM	Q3	Q2	Q1	Q4	Q3	Q2
Rental income	1.7	1.3	1.1	1.0	1.1	1.1
Property costs	(0.2)	(0.1)	(0.2)	(0.2)	(0.1)	(0.1)
Management and administrative expenses	(0.1)	(0.2)	(0.1)	(0.3)	(0.0)	(0.0)
Other income and expenses	0.0	0.0	0.0	0.0	0.2	0.0
Net operating income	1.3	1.0	0.8	0.6	1.2	1.0
Surplus ratio, %	80	78	72	58	103	91
Net interest	(0.2)	(0.2)	(0.3)	(0.3)	(0.3)	(0.3)
Profit from property management	1.1	0.8	0.5	0.3	0.9	0.8
Changes in value of properties	0.0	0.0	0.0	1.1	0.0	0.0
Profit before tax	1.1	0.8	0.5	1.4	0.9	0.8
Income tax	0.0	0.0	0.0	0.0	0.0	0.0
Deferred tax	(0.1)	(0.1)	(0.1)	(1.4)	0.0	0.0
Net profit	1.0	0.7	0.5	(0.0)	0.9	0.8
SEGMENT KEY FIGURES	Q3	Q2	Q1	Q4	Q3	Q2
Property-related
Number of properties	3	3	2	2	1	1
Income-producing properties	2	2	1	1	1	1
Development properties	1	1	1	1	0	0
Leasable floor space, k sq.m	50.6	50.6	41.2	41.2	28.4	28.4
Income-producing properties	37.8	37.8	28.4	28.4	28.4	28.4
Development properties	12.8	12.8	12.8	12.8	0.0	0.0
Floor space vacancy level1 , %	1.9	2.4	3.9	4.9	2.2	1.5
Average rent1 , EUR/ sq.m/ month	13.8	13.5	12.7	12.6	12.5	12.7
WAULT1 , years	2.4	2.6	2.3	2.3	2.1	2.3
Rental value, offices1 , EURm	6.3	6.1	4.3	4.3	4.3	4.3
Property value, EURm	99.6	98.1	68.3	66.8	64.8	64.6
Income-producing properties	89.4	89.4	60.9	60.9	59.7	59.7
Development properties	10.2	8.7	7.4	5.9	0.0	0.0
Land plots	0.0	0.0	0.0	0.0	5.1	4.9
Yield requirement1,2, %	5.8	6.1	6.1	6.4	6.6	6.4
Financial
Return on equity, 12-month rolling3 , %	8.6	10.8	11.2	12.0	13.6	12.2
Equity ratio, %	64.5	63.5	47.2	44.4	45.1	43.8
Interest coverage ratio, multiple	6.1	4.7	3.1	2.3	4.4	3.8
Loan-to-value ratio, %	32.7	34.1	49.6	51.4	53.7	54.6
Average interest, %	2.6	2.6	3.0	2.9	3.0	3.0
Average capital tie-up period, years	6.1	6.3	6.6	6.8	2.6	2.9
Gross debt, EURm	32.5	33.5	33.9	34.4	34.8	35.3
Long-term equity4 (EPRA), EURm	69.2	66.1	36.1	32.6	31.1	30.2
Equity, EURm	67.2	64.2	33.8	30.4	30.1	29.1

1 Income-producing properties

2 Net operating income for the last twelve months divided by property value

3 Proforma return on equity with part of the Q4 2016 deferred tax expense appropriately allocated to Q4 2015

4 Excluding deferred taxes on property value surpluses and the fair value of financial derivates

	SQM
Telia	9,100
Citco	3,000
Visma	2,400
European Social Fund	2,100
Swedbank	1,400
Cobalt	1,400
Under development
Swedbank	8,900
Visma	3,600

Property value Largest tenants Lease term structure

Rental value, EURm

Income-producing properties Developments

Definitions

Property related Key Figures

Average interest

Interest expense divided by average interest-bearing debt for the period.

Average capital tie-up period

Average maturity of gross debt at end of period.

Average rent, EUR per sq.m Rental income in relation to average leasable floor space.

Floor space vacancy level

Unlet floor space in relation to total floor space.

Gross debt

Total interest-bearing debt at end of period.

Leasable floor space

Total floor space available for leasing.

Long-term equity (EPRA)

Reported equity including deferred taxes on property value surpluses and excluding the fair value of financial derivates.

Net operating income

Total revenues less property costs.

Profit from property management

Operating net, administration costs and net financial items.

Rental income

Charged rents, rent surcharges and rental guarantees less rent discount.

Rental value

Rental income and estimated market rent for vacant units.

Surplus ratio

Operating net in relation to total revenues.

WAULT

Average remaining lease term to maturity of the portfolio, weighted according to contracted rental income (Weighted average unexpired lease term).

Financial Key Figures

Debt/ equity ratio

Interest-bearing net debt in relation to equity.

EBIT

Operating profit after amortisation of goodwill/ acquisition-related surplus value and depreciation/ amortisation of noncurrent assets (Earnings before Interest and Tax).

EBITDA

Profit before depreciation, amortisation and impairment (Earnings before Interest, Tax, Depreciation and Amortisation).

Equity ratio Total equity as a percentage of total assets.

Fair value See market value.

Interest coverage ratio

Operating profit excluding financial expenses, in relation to financial expenses.

IRR (internal rate of return)

Annual average return on the invested amount calculated from the original investment, final selling amount and other capital flows, considering when in time these payments were made to or from Eastnine.

Loan-to-value ratio

Interest-bearing liabilities less cash in relation to fair value of the holdings.

Market value

The value of which a holding is assumed to be able to be sold for at a given time. Listed holdings at the bid quote on the balance sheet date. To establish the market value of unlisted holdings, various valuation methods are used as applicable.

NAV

The value of the Company's net assets, i.e. total assets less net debt.

NAV discount

The difference between net asset value (NAV) and market capitalisation in relation to NAV. If market cap is lower than NAV the shares are traded with a NAV discount; if market cap is higher, they are traded with a premium.

Net debt

Interest-bearing liabilities including pension liabilities, less cash, short-term investments and interest-bearing receivables.

Operating expenses

Expenses directly related to Eastnine's business.

Return on equity

Profit/ loss for the year as a percentage of average shareholders' equity.

Share-related Key Figures

Average number of outstanding shares

Registered number of shares less shares held by the Company.

Earnings per share

Net profit for the period attributable to equity holders of the Parent Company, divided by average number of shares outstanding during the year.

Equity per share

Shareholders' equity, attributable to equity holders of the Parent Company, divided by number of outstanding shares at the end of the period.

NAV per share

Net asset value per share in relation to the total number of registered shares on the balance sheet date (excluding repurchased shares).

Share buy-back

Purchasing of own shares on the stock market. Swedish companies have the option to own up to 10 percent of their own outstanding shares conditioned AGM approval.

Contact information

Kestutis Sasnauskas, CEO, +46 8 505 977 00 Lena Krauss, CFO, +46 8 505 885 94

Eastnine AB

Kungsgatan 35, Box 7214 SE-103 88 Stockholm, Sweden Tel: +46 8 505 977 00

www.eastnine.com

Financial information and calendar

EASTNINE AB 28 Interim Report JAN-SEP 2017

Year-end report Q4 2017 – 16 February 2018 Subscribe to financial reports and press releases directly to your e-mail on: www.eastnine.com or by sending an email to info@eastnine.com.

The information in this interim report is the information which Eastnine AB is required to disclose under the EU Market Abuse Regulation and the Securities Markets Act. It was released for publication at 08.00 a.m. on 9 November 2017