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2015-03-25

Eurocastle Investment Limited: Eurocastle Releases Fourth Quarter and Year End 2014 Financial Results and Announces Dividend of €0.125 per share

Tel: +44 1481 723450 EUROCASTLE INVESTMENT LIMITED

FOR IMMEDIATE
RELEASE

International Administration Group (Guernsey) Limited
Company Administrator
Attn: Mark Woodall

Eurocastle Releases Fourth Quarter and Year End 2014 Financial Results

Announces Dividend of €0.125 per share
Guernsey. 25 March 2015 - Eurocastle Investment Limited (Euronext Amsterdam:
ECT) today has released the annual report for the twelve months ended 31
December 2014.

FOURTH QUARTER&FULL YEAR 2014 FINANCIAL HIGHLIGHTS

* Normalised FFO - €9.4 million, or €0.29 per share, for the full year of
which €4.4 million, or €0.13 per share, was generated in the fourth
quarter.

* New Investments alone generated €8.6 million, or €0.26 per share of
Normalised FFO for the full year, resulting in a return on average net
invested capital[1]of 24%.

* Adjusted Net Asset Value [2]- € 258.4 million, or €7.92 per share, decrease
of €70 million, or €2.14 per share for the full year (€30.3 million, or
€0.93 per share for the fourth quarter), primarily due to revaluations of
Legacy Assets.
* Annual Dividend - In 2014 Eurocastle paid an annual dividend of €16.3
million, or €0.50 per share.

* In addition, the Board of Directors has since declared a first quarter
dividend of €0.125 per share payable on 30 April 2015 to shareholders of
record at close of business on 2 April 2015, with ex-dividend date of 1
April 2015.

-------------------------------------------------------------------------------------------------------------------------------------
| FY 2014 FY 2013 Q4 2014 Q4 2013 |
| € million € per share € million € per share € million € per share € million € per share |
| Normalised FFO 9.4 0.29 15.8 0.48 4.4 0.13 1.1 0.03 |
| Legacy Cash Flow Realised 39.8 1.22 37.0 1.13 2.9 0.09 6.3 0.19 |
| Adjusted NAV2 258.4 7.92 328.4 10.06 258.4 7.92 354.4 10.86 |
-------------------------------------------------------------------------------------------------------------------------------------
FOURTH QUARTER&FULL YEAR 2014 BUSINESS HIGHLIGHTS

* New Investments - In 2014 invested or committed €67.6 million at an average
targeted yield of 18% in Italian non-performing loans ("NPLs") and real
estate fund units, including €9 million in three new NPL transactions in
the fourth quarter of 2014.
* Legacy Business Realisations - During 2014 received €39.8 million of cash
flow from the Legacy Business with €22.5 million primarily from the sale of
the remaining CDO IV securities in January 2014. This includes €2.9 million
realised in the fourth quarter of 2014.

HIGHLIGHTS SUBSEQUENT TO YEAR END 2014

* In February 2015, together with Fortress affiliates, the Company reached an
agreement with UniCredit to acquire a portfolio of Italian NPLs with gross
book value ("GBV") of €2.4 billion along with UniCredit Credit Management
Bank S.p.A. ("UCCMB"). The opportunity also includes:

* A servicing contract on €34.1 billion GBV of existing NPLs.
* A contract to service all UniCredit's future NPLs with balances below €1
million generated in the next 10 years.

The acquisition is expected to result in an investment by Eurocastle of
approximately €200 million.

* In the first quarter of 2015, Eurocastle realised approximately a further
€29 million from its Legacy Business following the sale of three of its
German retail portfolios and the sale of a loan position.
* In March 2015, Eurocastle reached an agreement with its Manager, effective
1 January 2015, to reduce its annual management fee by an estimated initial
€3 million and restructure how incentive compensation is calculated by
focusing on the returns generated from its New Investments.[3]

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 Annual Report, which is available on the Company's website
(www.eurocastleinv.com).

EARNINGS CALL INFORMATION

Eurocastle's management will host an earnings conference call on Wednesday, 25
March 2015 at 2:00 P.M. London time (10:00 A.M. New York time). 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 Fourth Quarter 2014
Earnings Call or conference ID number 10249700."

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, 25 April 2015 by
dialing +1-855-859-2056 (from within the U.S.) or +1-404-537-3406 (from
outside of the U.S.); please reference access code "10249700"

NORMALISED FFO

Normalised FFO is a non-IFRS financial measure that, with respect to
Eurocastle's Legacy Business, provides investors with additional information
regarding the underlying performance of its Legacy Assets and their ability
to service debt and make capital expenditure. The measure excludes realised
gains and losses, sales related costs (including realised swap losses),
impairment losses and foreign exchange movements. On the Company's New
Investments income is recognised on an expected yield basis allowing
Eurocastle to report the run rate earnings from these investments in line
with their projected annualised returns.

Eurocastle believes that, given the strategy of seeking to monetise the
existing value of the Legacy Business, focusing on the Normalised FFO of the
Company's New Investments will further enable the investor to understand
current and future earnings given annualised returns achieved and the average
net invested capital over the relevant period.

Looking back at 2014, Eurocastle generated Normalised FFO of €9.4 million, or
€0.29 per share, of which €8.6 million, or €0.26 per share related to New
Investments before corporate costs. Given the average net invested capital in
2014 was approximately €36 million, this equates to a yield of 24%.

In March 2015, in line with the Company's strategy and the related metric,
Eurocastle's Board of Directors reached an agreement with the Manager to
amend the terms of its Management Agreement with effect from 1 January 2015.
These amendments include (i) resetting the capital base upon which the
management fee is calculated from the current amount of €404 million to the
Group's Adjusted NAV reported quarterly, (ii) reducing the fee upon which the
management fee is paid from 1.5% to 0.75% on the share of Adjusted NAV
relating to net corporate cash, and (iii) resetting the base upon which the
Manager's entitlement to receive incentive compensation is calculated so that
it is equal to the net invested capital in its New Investments and calculated
against the Normalised FFO for New Investments after allocated corporate
costs.

The Directors believe the new fee structure better incentivises the Manager to
monetise the Legacy Business and deploy the resulting capital at higher
returns, along with any additional available cash. Applying these amendments
to the Groups's Adjusted NAV of €258.4 million as at 31 December 2014, the
new terms will initially reduce the annual management fee by approximately €3
million with potential additional fees should the Manager exceed the required
8% return hurdle on the net invested capital in each calendar year.
A reconciliation of Normalised FFO to the IFRS based net profit or loss after
tax for the year ended 31 December 2014 can be found below:

INCOME STATEMENT RECONCILIATION

-------------------------------------------------------------------------------------------------------
| New Corporate Legacy Total |
| [4] |
| Investments € million € million |
| € million |
| € million |
| Net Income / (loss) after tax&Non-controlling interest 2.3 (14.1) (97.5) (109.3) |
| Net Income / (loss) (€ per Share) 0.07 (0.43) (2.99) (3.35) |
| |
| Mars Floating Portfolio Losses - - 15.4 15.4 |
| Non-controlling interest 0.4 - - 0.4 |
| Fair Value to Effective Adjustments 5.9 - - 5.9 |
| Legacy Real Estate Revaluations - - 50.3 50.3 |
| Legacy Bridge Ptf Deconsolidation Loss - - 26.1 26.1 |
| Legacy Debt Impairments - - 20.4 20.4 |
| Transaction Costs, G/L on FX&Other Adjustments - 0.4 (0.2) 0.2 |
| Normalised FFO 8.6 (13.7) 14.5 9.4 |
| Normalised FFO (€ per Share) 0.26 (0.42) 0.45 0.29 |
-------------------------------------------------------------------------------------------------------
ADJUSTED NAV RECONCILIATION

------------------------------------------------------------------------------------------------
| New Corporate Legacy Total |
| 1 |
| ...

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