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REG-Eurocastle Inv. Ltd 3rd Quarter Results - Part 2
EUROCASTLE INVESTMENT LIMITED AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
Notes Unaudited Unaudited Unaudited Unaudited
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
30 September 30 September 30 September 30 September
2005 2005 2004 2004
€'000 €'000 €'000 €'000
-------------------- ------ --------- --------- --------- ---------
Operating income
Interest income 16,970 47,408 9,020 11,784
Rental income 6,408 19,063 - -
Unrealised gain on
securities portfolio
contract - - 84 4,140
Real estate fund unit
interest income 3,607 3,607 - -
Realised gain
on disposal of
available-for-sale
securities 380 2,233 - -
Realised gain
on disposal of
investment properties 731 731 - -
Decrease)/Inc
rease in fair value of
investment properties (68) 445 - -
Increase in
fair value of
real estate
fund unit 7,122 7,122 - -
Increase in
fair value of
total return swap 428 428 - -
-------------------- ------ --------- --------- --------- ---------
Total
operating
income 35,578 81,037 9,104 15,924
-------------------- ------ --------- --------- --------- ---------
Operating expenses
Interest
expense 14,876 40,371 4,512 6,320
Losses on
foreign
currency 314 1,473 230 280
contracts/currency
translation
Property
expenses 917 2,120 - -
Other
operating
expenses 3 2,529 6,629 1,179 2,354
-------------------- ------ --------- --------- --------- ---------
Total
operating
expenses 18,636 50,593 5,921 8,954
-------------------- ------ --------- --------- --------- ---------
Profit on
ordinary
activities
before
taxation 16,942 30,444 3,183 6,970
Taxation
expense 4 590 877 - -
==================== ====== ========= ========= ========= =========
Net profit
after taxation 16,352 29,567 3,183 6,970
==================== ====== ========= ========= ========= =========
Earnings per
ordinary share
(adjusted for share
consolidation)
Basic 14 0.68 1.45 0.17 0.49
Diluted 14 0.65 1.39 0.17 0.49
Weighted average
ordinary shares
outstanding
(adjusted for share
consolidation)
Basic 15 24,209,670 20,443,707 18,463,670 14,140,801
Diluted 15 25,046,485 21,206,023 18,943,733 14,302,043
==================== ====== ========= ========= ========= =========
See notes to the consolidated interim financial statements
EUROCASTLE INVESTMENT LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Notes Unaudited
30 September 31 December
2005 2004
€'000 €'000
----------------------- ------ ------------- -------------
Assets
Cash and cash equivalents 17,500 10,293
Restricted cash 1,879 2,812
Asset backed securities, available-for-
sale (includes cash to be invested) 5 1,143,354 796,522
Asset backed securities pledged under
repurchase agreements 5 60,398 467,962
Real estate related loans 6 63,328 21,938
Real estate related loans pledged under
repurchase agreements 6 36,304 -
Real estate fund units 8 181,992 -
Investment property 9 398,042 318,514
Other assets 7 24,937 9,578
----------------------- ------ ------------- -------------
Total assets 1,927,734 1,627,619
======================= ====== ============= =============
Equity and Liabilities
Capital and Reserves
Issued capital, no par value, unlimited
number of shares authorised, 24,209,670
shares issued and outstanding at 30
September 2005 15 286,814 192,309
Net unrealised gain on
available-for-sale securities 5 7,070 6,604
Hedging reserve 5,16 (5,976) 713
Accumulated profit 17,309 6,394
Other reserves 15 1,020 400
----------------------- ------ ------------- -------------
Total equity 306,237 206,420
----------------------- ------ ------------- -------------
Minority Interests 2 2
Liabilities
CDO bonds payable 10 863,055 347,877
Bank borrowings 11 602,463 608,849
Repurchase agreements 12 84,763 197,584
Taxation payable 4 877 -
Trade and other payables 13 70,337 266,887
----------------------- ------ ------------- -------------
Total liabilities 1,621,495 1,421,197
----------------------- ------ ------------- -------------
Total equity and liabilities 1,927,734 1,627,619
======================= ====== ============= =============
See notes to the consolidated interim financial statements
EUROCASTLE INVESTMENT LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited
Nine Months to Nine Months to
30 September 30 September
2005 2004
€'000 €'000
--------------------------- ------------- ------------
Cash Flows From Operating Activities
Net profit before taxation 30,444 6,970
Adjustments for:
Gain on disposal of investment
properties (731) -
Unrealised (gain)/loss on foreign
currency contracts (106) (918)
Accretion of discounts on securities (3,561) (480)
Amortisation of borrowing costs (382) 121
Gain on disposal of available-for-sale
securities (2,233) -
Shares granted to Directors 108 72
Gain on revaluation of real estate
fund units (7,122) -
Revaluation (gain) on investment
properties (445) -
Net change in operating assets and liabilities:
Decrease/(Increase) in restricted cash 933 (2,273)
Increase in other assets (15,966) (5,591)
Increase in trade and other payables 51,525 10,930
--------------------------- ------------- ------------
Net cash flows used in operating
activities 52,464 8,831
--------------------------- ------------- ------------
Cash Flows From Investing Activities
Securities portfolio contract deposit - (59,000)
Repayment of securities portfolio
contract deposit - 119,388
Repayment of security principal - 9,106
Additions to investment property (79,542) -
Proceeds from disposal of investment
property 1,190 -
Acquisition of real estate fund units (174,870) -
Net purchase of available-for-sale
securities/loans (392,494) (866,044)
Proceeds from sale of
available-for-sale-securities 127,741 -
--------------------------- ------------- ------------
Net cash flows used in investing
activities (517,975) (796,550)
--------------------------- ------------- ------------
Cash Flows From Financing Activities
Proceeds of issuance of ordinary
shares 99,015 138,488
Costs related to issuance of ordinary
shares (3,998) (4,745)
Proceeds from issuance of bonds 520,083 351,000
Costs related to issuance of bonds (4,523) (3,342)
Borrowings under repurchase agreements (112,821) 146,683
Repayments under warehouse borrowing
facility (350,843) 159,564
Net movement of bank borrowings 344,457 -
Dividends paid to shareholders (18,652) -
--------------------------- ------------- ------------
Net cash flows from financing
activities 472,718 787,648
--------------------------- ------------- ------------
Net Increase/(Decrease) in Cash and
Cash Equivalents 7,207 (71)
Cash and Cash Equivalents, Beginning
of Period 10,293 1,690
Cash and Cash Equivalents, End of
Period 17,500 1,619
--------------------------- ------------- ------------
EUROCASTLE INVESTMENT LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary Shares Share Capital Other Reserves Net Unrealised Hedging Accumulated Total Equity
(adjusted for Gains/ Reserves Profit
share consolidation) (Losses) (Loss)
€'000 €'000 €'000 €'000 €'000 €'000
------------- --------- ------ ------ -------- ------ -------- -------
At 1 January
2004 (as
previously
reported) 11,857,670 59,027 - - - (98) 58,929
Effect of
adopting IFRS
2 - - 200 - - - 200
Costs related
to issuance - (200) - - - - (200)
of shares on
IPO
------------- --------- ------ ------ -------- ------ -------- -------
At 1 January
2004 11,857,670 58,827 200 - - (98) 58,929
(restated)
Second
capital
call on
existing - 59,288 - - - - 59,288
shares
Issuance of
ordinary
shares on IPO 6,600,000 79,200 - - - - 79,200
Effect of
adoption of
IFRS 2 - fair
value of
share - - 200 - - - 200
options
Costs related
to issuance
of
ordinary
shares on IPO
(including
€200k
relating - (4,945) - - - - (4,945)
to adoption
of
IFRS 2)
Issuance of
ordinary
shares to
Directors 6,000 72 - - - - 72
Net
unrealised
loss on
available for
sale - - - 3,601 - - 3,601
securities
Net profit - - - - - 6,970 6,970
------------- --------- ------ ------ -------- ------ -------- -------
At 30
September 18,463,670 192,442 400 3,601 - 6,872 203,315
2004
(restated)
(unaudited) --------- ------ ------ -------- ------ -------- -------
-------------
At 1 October
2004
(restated) 18,463,670 192,442 400 3,601 - 6,872 203,315
Costs related
to issuance
of
ordinary - (133) - - - - (133)
shares on IPO
Net
unrealised
gain on
available for
sale - - - 3,003 - - 3,003
securities
Net
unrealised
gain on hedge - - - - 713 - 713
instruments
------------- --------- ------ ------ -------- ------ -------- -------
Net gains not
recognised in
the income
statement - - 400 6,604 713 - 7,717
------------- --------- ------ ------ -------- ------ -------- -------
Net profit
for - - - - - 5,159 5,159
the period
------------- --------- ------ ------ -------- ------ -------- -------
Total income
and expense
for the year - - 400 6,604 713 12,031 19,748
------------- --------- ------ ------ -------- ------ -------- -------
Dividends - - - - - (5,539) (5,539)
paid
------------- --------- ------ ------ -------- ------ -------- -------
At 31
December 18,463,670 192,309 400 6,604 713 6,394 206,420
2004
(restated)
------------- --------- ------ ------ -------- ------ -------- -------
Ordinary Shares Share Capital Other Net Hedging Accumulated Total Equity
(adjusted for Reserves Unrealised Reserves Profit (Loss)
share consolidation) Gains/
(Losses)
€'000 €'000 €'000 €'000 €'000 €'000
At 1 January
2005 18,463,670 192,309 400 6,604 713 6,394 206,420
Net unrealised
gain on
available-for-
sale
securities - - - 2,247 - - 2,247
Issuance of
shares - June
2005 5,740,000 99,015 - - - - 99,015
Costs related
to issue of
shares - June
2005 - (3,998) - - - - (3,998)
Issuance of
ordinary
shares to
Directors 6,000 108 - - - - 108
Realised
losses
reclassified
to the income
statement - - - 2 - - 2
Realised gains
reclassified
to the income
statement - - - (1,783) - - (1,783)
Net unrealised
loss on hedge
instruments - - - - (6,689) - (6,689)
Cost related
to issue of
options on
follow on
share issue - (620) 620 - - - -
------------ --------- ------- ------ -------- ------- --------- -------
Net gains not
recognised in
the income
statement - - 1,020 7,070 (5,976) - 2,114
------------ --------- ------- ------ -------- ------- --------- -------
Net profit for
the period - - - - - 29,567 29,567
------------ --------- ------- ------ -------- ------- --------- -------
Total income
and expense
for the period - - - 466 (6,689) 29,567 23,344
------------ --------- ------- ------ -------- ------- --------- -------
Dividends paid
and declared - - - - - (18,652) (18,652)
------------ --------- ------- ------ -------- ------- --------- -------
At 30
September 2005
(unaudited) 24,209,670 286,814 1,020 7,070 (5,976) 17,309 306,237
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