INVL Baltic Real Estate

Earnings Release • Oct 31, 2022

Key information for 9 months 2022

Activity: operating since 1997, real estate investment company INVL Baltic Real Estate seeks to ensure the growth of leasing income and to profit on investments in commercial real estate.

Shares: listed on the Baltic Secondary List of Nasdaq Vilnius stock exchange since 2014.

Asset under management: about 28,000 sq. m. of real estate in Vilnius and Riga – offices and commercial premises, warehouse properties. These properties generate stable cash flows and most of them have high occupancy rates. In addition, some of them have further development potential.

Management of the company: INVL Baltic Real Estate enabling to engage in the closed-ended type investment company's activities under the Republic of Lithuania Collective investment undertakings act. The special closed-ended type real estate investment company will work 30 years from receiving the special closed-ended real estate investment company license, the term of company's activity may be further extended for a period of no longer than 20 years. Upon receipt of the license, the company's management was transferred to the Management company INVL Asset Management.

INVL Baltic Real Estate growth of net asset value, EUR/share and dividend allocation

Comment made by INVL Asset Management real estate fund manager Vytautas Bakšinskas

INVL Baltic Real Estate's consolidated net operating income from its own properties amounted to EUR 1.44 million in the three quarters of 2022, up 22% compared to the same period in 2021 (EUR 1.18 million). INVL Baltic Real Estate's consolidated revenues in the three quarters were EUR 2.55 million, or 30% more than in the corresponding period last year (EUR 1.96 million), including an increase in consolidated rental income from owned properties by 14% to EUR 1.44 million. The properties managed by INVL Baltic Real Estate continued to maintain high occupancy levels and increased rental income. Net profit for the three quarters came to €2.1 million, up 84% compared to the same period in 2021.

The revenue of the largest property managed by INVL Baltic Real Estate – the office building at Palangos str. 4, which houses the co-working space Talent Garden Vilnius – amounted to EUR 1.69 million in the three quarters of 2022, 35% more than in the same period in the previous year (EUR 1.25 million). At the end of the nine months, the occupancy rate was 91%. Talent Garden Vilnius continued to maintain a top occupancy rate of 100% at the end of the three quarters of 2022, having improved its performance significantly.

The revenues of the Žygio Verslo Centras office building amounted to EUR 0.35 million, a 49% increase from the corresponding period last year (EUR 0.23 million). At the end of the nine months, its occupancy rate was 100%.

Since the beginning of the year, we have made significant progress with the design of the reconstruction of the buildings at Palangos str. 4/ Vilniaus str. 33. At the beginning of the year, we presented to the public the design proposals for the reconstruction, which were subsequently approved by Vilnius City Municipality and the design conditions for the reconstruction were issued. We are currently working with the architectural firm Viltekta on the technical design for the reconstruction of the buildings.

The development of Vilniaus str. 37 has also achieved its planned objectives: we have completed building surveys, clarified the property's valuable characteristics and started to prepare reconstruction and management plans. Valuable wall and ceiling murals were discovered during the building's survey, so we started conservation work on the murals at the end of the summer. We plan to present to the public the design proposals for the reconstruction of the building at the end of this year.

Key information for 9 months 2022

Portfolio, thousand EUR	30.09.2020	30.09.2021* 30.09.2022
Operational Property investments	19,964	20,876	24,562
Property Investment redevelopment	-	-	3,146
Other investment properties	3,517	6,198	6,234
TOTAL PROPERTY VALUE	23,481	27,074	33,942
Rent Income from own properties during 9 months period	2,368	1,264	1,436
NOI (Net Operating Income) from own properties during 9 months period	1,840	1,179	1,440
NLA (Net Leasable Area), sq.m.	29,700	24,200	24,500
Balance sheet, million EUR	30.09.2020	30.09.2021* 30.09.2022
Investment properties	23.5	27.1	33.9
Cash	16.3	2.0	1.1
Other assets	6.0	1.5	1.4
TOTAL ASSETS	45.8	30.6	36.4
Borrowings from credit institutions	9.6	9.2	12.7
Other liabilities	7.9	3.4	2.3
TOTAL LIABILITIES	22.2	12.6	15.0
EQUITY	23.6	18.0	21.4
Equity per share	EUR 2.23	EUR 2.24	EUR 2.66
Profit (loss) statement, million EUR	01.01.2020- 30.09.2020	01.01.2021- 30.09.2021*	01.01.2022- 30.09.2022
Revenue	3.2	2.0	2.5
from own properties	2.4	1.3	1.4
other revenue	0.8	0.7	1.1
Investment property revaluation	4.3	0.5	1.7
Net profit	4.7	1.1	2.1
Earnings per share	EUR 0.36	EUR 0.12	EUR 0.26
Borrowings	30.09.2020	30.09.2021* 30.09.2022
Borrowings, thousand EUR	9,592	9,228	12,737
Borrowings to value of investment properties**	40.9	34.1	37.5
Gearing ratio**	-0.40	0.29	0.35
Interest coverage ratio**	3.00	3.81	3.87
Bank's Debt Service Coverage Ratio**	0.07	1.65	1.72

Office building Palangos str. 4/ Vilniaus str. 33

Vilnius

Building Vilniaus str. 37, Vilnius

"Žygis Business centre Žygio str. 97 Vilnius

"Dommo business park" Riga Latvia

Acquired	2006	2021 – 2022	2006	2015
Net leasable area	6,900 sq. m.	Total area 2,000 sq. m.	2,900 sq. m.	12,800 sq. m.
Property value	EUR 15.6 million	EUR 5.0 million	EUR 3.9 million	EUR 9.4 million
Occupancy	91%	100%***	100%	100%

* The decrease of the results was mainly influenced by sales transactions of IBC and Vilniaus Gate business centers implemented in 2020 ** https://bre.invl.com/en/for-investors/financial-information-and-reports/

*** The 257 sq. m. building area, which is suitable for rent is leased. The other building area is being reconstructed