Eurocastle announces financial results for the fourth quarter and the end of 2023.

Oak Fund Services (Guernsey) Limited - Administrator company

Address:

Hannah Crocker

Phone:

+44 1481 723450

Eurocastle Investment Limited (Euronext Amsterdam: ECT) today published its annual report for the year ended December 31, 2023.

The adjusted net assets (NAV) amount to €11.10 million, or €11.12 per share, compared to €11.14 per share in the third quarter of 2023 and €10.33 per share at the end of 2022. The main increase in 2023 was due to the payment of €0.9 million in reserves from previous tax periods as a result of a partial refund received in July following the company's appeal.

The IFRS NAV is €21.74 million, or €21.77 per share, compared to €21.89 per share in the third quarter of 2023 and €22.45 per share at the end of 2022.

Below is a summary table of NAV by segments:

YE 2023 NAV Q3 2023 NAV YE 2022 NAV

• New investment strategy - Greece: €0.10 million, or €0.10 per share
• The most promising real estate funds in Italy: €0.08 million, or €0.08 per share (€0.08 million, or €0.08 per share at the end of 2022)
• Corporate net cash: €17.83 million, or €17.86 per share (€18.05 million, or €18.08 per share at the end of 2022)
• Recent tax assets in Germany: €3.73 million, or €3.73 per share (€3.73 million, or €3.73 per share at the end of 2022)
• IFRS NAV: €21.74 million, or €21.77 per share (€21.86 million, or €21.89 per share at the end of 2022)
• Additional reserves: (-€10.64 million, or -€10.65 per share) (€-10.74 million, or -€10.75 per share at the end of 2022)
• Adjusted NAV: €11.10 million, or €11.12 per share (€11.12 million, or €11.14 per share at the end of 2022)

The number of ordinary shares outstanding at the end of 2023: 998,555.

By the end of 2023, the company's assets mainly consist of:

1. Net corporate cash of €17.8 million, or €17.86 per share, most of which is available for investment under the new investment strategy.
2. A tax asset of €3.7 million, or €3.73 per share, representing amounts paid in connection with an additional tax assessed on the German subsidiary related to inheritance. The company is currently appealing the assessment in the tax court in Germany and expects this issue to be resolved in its favor.
3. A deposit of €0.1 million, or €0.10 per share, paid in connection with the Company's first investment under the new investment strategy.
4. Residual interests in two inherited Italian properties with net assets of €0.08 million, or €0.08 per share, where the underlying assets have been fully sold and both funds are in the process of liquidation.

Key events of 2023

Throughout 2023, the Company made significant progress in monetizing its remaining assets as part of its realization plan, with 79% of its NAV as of the end of 2022 relating to realized investments during the period. By the end of 2023, the Company had realized 109% of NAV from investments reported at the time of the announcement of the realization plan in November 2019. In particular, the remaining assets of the legacy Italian investments of Eurocastle, which consist of the residual net assets of two real estate investment funds, have a NAV of €0.1 million, or less than 1% of the Company's total adjusted NAV. Additionally, in November, the Company agreed to acquire its first asset under the new investment strategy - a shopping center in Athens, with expected investments for Eurocastle amounting to €5 million. To support its new investment program, Eurocastle is creating an investment structure through which it expects to invest the overwhelming majority of its current corporate cash alongside selected external co-investors, which the Company plans to attract in the second quarter. In addition to generating attractive risk-adjusted returns on the Company's share of the stated investments, Eurocastle also expects to receive funds from standard market management and incentive fees from external investors.

Strategy for new investments:

The first asset being acquired under the New Investment Strategy is being purchased from one of the largest Greek banks at a reduced price. Eurocastle's strategy is to lease out the last 20% of the building, which is currently unoccupied, and then enter the open market. Eurocastle is acquiring the asset together with a local partner who plans to acquire a 20% stake in the asset. The expected investment amounts to approximately €6.3 million, of which €5.0 million will be contributed by Eurocastle. The closing of the deal is planned for the second quarter of 2024, subject to certain conditions. As part of the agreement, Eurocastle made a €100,000 advance payment, which will be refunded if some preliminary conditions are not met. Concurrently with the first investment, the Company is exploring several additional opportunities.

Inherited Italian mutual funds:

In April, Eurocastle received €0.5 million, or €0.5 per share, mainly as a share of the revenue from the sale of the last remaining apartment blocks.

Additional reserves:

The company reduced these reserves from €12.1 million to €10.7 million, or €10.65 per share, over the year. The decrease of €0.5 million reflects the use of reserves in line with expected expenses, while the payout of €0.9 million from reserves is related to a tax issue in Germany. As of the end of 2023, out of the total additional reserves of €10.7 million, €5.5 million are related to the tax issue in Germany, and the remaining approximately €5.2 million is intended to cover future expenses and potential liabilities as the company pursues its New Investment Strategy.

As previously announced, in July Eurocastle received a partial reimbursement of €1.1 million out of €4.8 million in additional tax paid by Eurocastle regarding a tax issue in Germany. This followed the Company's appeal against the collection of additional tax for the period from 2008 to 2012 and represents a full cancellation of the additional tax for 2008, as well as part of the amount for 2009. The Company is currently pursuing the collection of the remaining amount through the tax court in Germany. The current financial burden (excluding related costs of €0.2 million) is estimated at €1.5 million and pertains to the years 2013-2015, for which tax audits are ongoing.

Report on profits for the fourth quarter of 2023, financial year 2023 and 2022

Q4 2023 FY 2023 FY 2022

• Portfolio income
• Realized income from inherited non-performing debts and other loans: -€2,116
• Written-off income from inherited Italian real estate: -€1 -€50,282
• Income from changes in the value of underlying assets: -€1 -€48,398
• Movement of the value of remaining inheritance structures: €0 9
• Other income: -€2
• Interest income: €14 €25 €68
• Loss from foreign currency conversion: €0 -€2 -€7
• Total income: €141 €471 €468

• Expenses:
• Interest expenses: €0 - €1 €2
• Expenses for basic management and executive compensation: €219 €492
• Other operating expenses: €238 €1,012 €1,247
• Required additional capital: €259 €1,106 €1,339
• Total expenses: €259 €1,106 €1,351

Net loss for the period: -€118 -€635 -€883

Earnings per share (€): -€0.12 -€0.64 -€0.58

Balance and consolidated NAV at the end of 2023

New investment strategy in Italy Corporate: -17000822207365331103

Total NAVNAV for 2018-2022

The portfolio related to Italy's insolvency legacy and other loans has seen a realized profit change of 21,162.

The significance of the expected changes in the value of the remaining Italian real estate funds: -1-50282

Change in the value of fixed assets: -1-48398

Fluctuations in the value of remaining inheritance structures: -9

Other income: -2

Interest income: €1419

Total income: €141,471,468

Operating expenses:

Interest expenses: -1-12

Basic and incentive rewards for the management staff: €219,492

Other operating expenses: €2591 €1061 €1,339

Total expenses: €2591 €1061 €1351

Request: This announcement contains inside information within the framework of Market Abuse Regulation 596/2014.

Additional information

To obtain information about the investment portfolio, please refer to the latest financial report of the company, which will be available on the company's website.www.eurocastleinv.com).

About EUROCASTLE

Eurocastle Investment Limited ("Eurocastle" or "the Company") is a publicly traded investment company. On July 8, 2022, the Company announced the resumption of its investment activities and is in the early stages of implementing a new strategy, starting with a focus on promising real estate in Greece, with plans for expansion in Southern Europe. For more information about Eurocastle Investment Limited and to be added to our email distribution list, please visit our website.www.eurocastleinv.com.

ANNA THE ANALYST

This announcement contains statements that are forecasts. Such forecasts may relate, in particular, to future commitments regarding the sale of real estate and achieving goals related to the distribution, availability of investments, and the divestiture of non-residential assets, timelines, or the certainty of completing acquisition and divestiture transactions, the operational efficiency of our investments, and funding needs. The forecasts are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of operational results or financial condition, or include other forward-looking information. The Company's ability to predict results or the actual effect of future plans or strategies is limited. Although the Company believes that the expectations reflected in such forecasts are based on reasonable assumptions, its actual results and performance may differ from those expressed in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and other factors that may cause the Company's actual results in future periods to differ from the projected results or stated expectations, including risks related to Eurocastle's ability to declare dividends or achieve its goals regarding asset divestiture or their effectiveness.