Eurocastle Announces Financial Results for the Nine Months Ended 30 September 2016 (11/10/16)
Guernsey, 10 November 2016 - Eurocastle Investment Limited (Euronext Amsterdam: ECT) today has released its financial results for the nine months ended 30 September 2016.
Normalised FFO[1] of €11.9 million, or €0.20 per share[2] for the third quarter of 2016. €33.5 million or €0.49 per share for the nine months ended 30 September 2016.
Adjusted Net Asset Value[3] of €463.5 million, or €7.71 per share, an increase of €0.01 per share on the quarter (Q2 2016: €462.7 million, or €7.70 per share) reflecting €0.20 per share of valuation movements before Q3 dividend of €0.125 per share and corporate expenses.
Third Quarter 2016 Dividend of €7.5 million, or €0.125 per share paid in October.
[tables deleted]
BUSINESS HIGHLIGHTS SINCE 30 JUNE 2016
doBank - In October, following approval from the Bank of Italy, doBank (50% owned by Eurocastle) successfully completed the acquisition of Italfondiario S.p.A. ("Italfondiario"), the second largest independent non-performing loan servicer in Italy. Together, doBank and Italfondiario will represent the largest independent banking group in Italy, specialising in the credit management and collection of performing and non-performing loans with over €83 billion gross book value ("GBV") of loans under management, and over 4,000 employees and external consultants across 24 offices in Italy. This acquisition is a major milestone in doBank's expansion in the Italian market which significantly strengthens its position as a leading partner to the Italian banking system.
New Italian Investments - Eurocastle acquired a 25% interest in two portfolios of Italian non-performing loans ("NPLs") with an aggregate GBV of approximately €70 million. The first investment of €1.1 million was made on 23 September 2016, while the second acquisition where the Company invested a further €1.0 million closed on 9 November 2016. The two portfolios are predominantly secured by residential real estate.
Italian Investments5 Performance - During the third quarter, Italian Investments reported strong performance generating in aggregate €9.0 million of gross cash flow. Total cash flow generated for the nine months ended 30 September 2016 amounted to €40.3 million6 of which €26.6 million related to doBank's NPL portfolio and servicing business. Since acquisition, Italian Investments have generated €93.7 million, or €7.0 million more than underwriting expectations.
Legacy Business - In line with its strategy to accelerate recoveries from its legacy real estate assets in Germany, the Company agreed to sell Belfry and Truss, the two remaining Retail portfolios. The sale is expected to generate €2.3 million of net proceeds compared to a reported Adjusted NAV of zero. The majority of the assets sold are expected to close by year-end.
ADDITIONAL INFORMATION
For additional information that management believes to be useful for investors, please refer to the latest presentation posted on the Investor Relations section of the Company's website, www.eurocastleinv.com. For consolidated investment portfolio information, please refer to the Company's most recent Financial Report, which is available on the Company's website (www.eurocastleinv.com).
EARNINGS CALL INFORMATION
Eurocastle's management will host an earnings conference call at 2:00 P.M. London time (9:00 A.M. New York time) later today. All interested parties are welcome to participate on the live call. You can access the conference call by dialing first +1- 800-215-5243 (from within the U.S.) or +1-330-863-8154 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference "Eurocastle Third Quarter 2016 Earnings Call" or conference ID number "3334554".
A webcast of the conference call will be available to the public on a listen-only basis at www.eurocastleinv.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. A replay of the webcast will be available for three months following the call.
For those who are not available to listen to the live call, a replay will be available until 11:59 P.M. New York time on Saturday, 10 December 2016 by dialling +1-855-859-2056 (from within the U.S.) or +1-404- 537-3406 (from outside of the U.S.); please reference access code "3334554".
NORMALISED FFO
Normalised FFO is a non-IFRS financial measure that, with respect to the Company's Italian Investments, recognises income on an expected yield basis allowing Eurocastle to report the run rate earnings from these investments in line with their projected annualised returns. On Eurocastle's Legacy Business the measure excludes realised gains and losses, sales related costs (including realised swap losses), impairment losses, foreign exchange movements and any movements on portfolios with a negative NAV other than sales or asset management fees realised. Eurocastle believes that, given the strategy of seeking to monetise the residual value of the Legacy Business, focusing on the Normalised FFO of the Company's Italian Investments will enhance investor's understanding of current and future earnings given annualised returns achieved and the average net invested capital[4] over the relevant period.In the first nine months of 2016, Eurocastle generated Normalised FFO of €33.5 million, or €0.49 per share compared to a dividend of €24.1 million, or €0.375 per share. Before corporate costs Italian Investments generated €40.4 million, or €0.59 per share. Given the average net invested capital in the period was approximately €312 million, this equates to a yield of 17%.
In the third quarter of 2016, Eurocastle generated Normalised FFO of €11.9 million, or €0.20 per share. Before corporate costs Italian Investments generated €15.0 million, or €0.25 per share. Given the average net invested capital in the period was approximately €316 million, this equates to a yield of 19%.For the first nine months of 2016, the total net loss after taxation and non-controlling interests as reported under IFRS was €39.8 million. Within the Group's Italian Investments, where the majority of these assets are accounted for at fair value under a discounted cash flow approach, net income after taxation and non-controlling interest for the first nine months of 2016 was €33.6 million, or €0.49 per share.Excluding losses arising within those legacy portfolios that have a negative NAV, the Group generated a net profit after taxation of €31.6 million or €0.46 per share. As at 30 September 2016, the remaining Adjusted NAV of the legacy portfolios was €8.1 million, or €0.14 per share which represents under 2% of the Company's Adjusted NAV.
ABOUT EUROCASTLE
Eurocastle Investment Limited is a publicly traded closed-ended investment company that focuses on investing in Italian performing and non-performing loans, Italian NPL servicing platforms and other real estate related assets primarily in Italy. The Company is Euro denominated and is listed on Euronext Amsterdam under the symbol "ECT". Eurocastle is managed by an affiliate of Fortress Investment Group LLC, a leading global investment manager. For more information regarding Eurocastle Investment Limited and to be added to our email distribution list, please visit www.eurocastleinv.com.
News 
Market Data 
Discover 
