EfTEN Real Estate Fund AS: Q1 2025 Financial Results and Net Asset Value Analysis

EfTEN Real Estate Fund AS has released its financial results for the first quarter of 2025, providing a comprehensive overview of its performance and strategic investments. The fund's consolidated rental income for Q1 2025 amounted to EUR 7.678 million, marking a 0.5% increase compared to the same period last year. This modest growth, while not as robust as the 1.4% increase in consolidated rental income for the full year of 2024, reflects the fund's ongoing efforts to expand its portfolio and optimize its existing assets.

One of the key factors contributing to this growth is the addition of new properties to the portfolio. For instance, the acquisition of the Hiiu care home property in Tallinn for EUR 4,016 thousand and investments in the Paemurru logistics center and Valkla elderly home have bolstered the fund's rental income. Additionally, the weighted average interest rate on the loans of the Fund’s subsidiaries fell to 4.37% by the end of March, decreasing by 0.527 percentage points compared to the end of the previous year. This reduction in interest rates has helped in lowering interest expenses, thereby increasing the adjusted cash flow.

However, the fund's consolidated EBITDA for Q1 2025 amounted to EUR 6.181 million, which is 4.3% less than in the same period a year ago. This decrease, while concerning, is mitigated by the fact that the fund still generated EUR 2.758 million in adjusted cash flow, which is EUR 139 thousand more than in the same period last year. The increase in adjusted cash flow is primarily due to lower interest expenses, which decreased by 22% to EUR 1.675 million.

The decrease in EBITDA can be attributed to several factors, including higher rental income-related expenses in March, which increased exceptionally by EUR 111 thousand. This increase was mainly due to the one-off recognition of a provision for receivables in the amount of EUR 89 thousand related to the bankrupt company Aktsiaselts Hortes. This provision reflects the Fund's conservative accounting principles and is not connected to the legal treatment of the claim.

Despite the decrease in EBITDA, the fund's overall financial health remains robust. The fund's net asset value (NAV) per share was EUR 20.7371 as of 31 March 2025, and EPRA NRV was EUR 21.5985. The NAV per share increased by a typical 0.6% in March. Additionally, the fund's consolidated cash balance decreased due to additional property investments by EUR 3,350 thousand in March, reaching EUR 19,038 thousand by the end of the month. This indicates that the fund is actively investing in new properties and development projects, which could potentially increase its rental income and EBITDA in the future.

The fund's future investment strategies are likely to focus on expanding its portfolio with new logistics properties and growing in the care home segment. The fund's management has proposed to distribute (net) dividends of 1.11 euros per share, reflecting the fund's strong financial performance and commitment to returning value to shareholders. The fund's dividend policy aims to distribute dividends to shareholders while maintaining its financial stability. In 2024, the fund set a goal to distribute dividends of €1.10 per share, which corresponds to 5.7% of yesterday’s closing share price. The fund's management planned to propose to shareholders to pay dividends of 1 euro per share from the fund’s 2024 profit in the spring of 2025. This dividend payment required the refinancing of certain low-leverage subsidiaries' loans, for which the management had already initiated negotiations.



In conclusion, EfTEN Real Estate Fund AS's financial results for Q1 2025 reflect a mixed performance, with modest growth in rental income and a decrease in EBITDA. However, the fund's strong cash flow, conservative accounting principles, and strategic investments position it well for future growth. Investors can expect a stable and attractive return on their investment, with the fund's commitment to distributing dividends and maintaining financial stability. As the fund continues to expand its portfolio and optimize its existing assets, it is well-positioned to navigate the challenges of the real estate market and deliver value to its shareholders.