Performance of REDSIDE funds in January 2023

Monthly reporting of REDSIDE funds for the period 1/2023

NOVA Real Estate

In January 2023, the appreciation of the NOVA Real Estate fund reached a value of 0.46%.

At the beginning of 2023, the transaction of the sale of the portfolio hobby market – Baumax, was completed, but without impact on the NAV, as the sale was already taken into account in the December

performance figures after the signing of the contract. OC Orlice Park tenants provide us with turnover data showing a full-year increase of 11.9% compared to 2021 and 31.6% compared to 2019, which was the last normal year before the coronavirus outbreak. In terms of center attendance, we see growth of 9.1% compared to 2021 and 0.4% compared to 2019.

At the end of the year, the real estate owned by the fund was revalued by an external expert. The value distribution of the portfolio adheres to the intended contours of diversification, where 38.4% is allocated to regional retail, 34.1% of the portfolio consists of premium office buildings in the central locations of Prague and 27.4% is the logistics-industrial segment.

Report NOVA Real Estate

NOVA Green Energy Sub-Fund 1

In the Krnča biomass heating plant, Subfund 1 continuously takes steps for the purpose of financial and operational optimization. The Slovak decree set the ceiling of purchase prices for electricity from biomass for the year 2023 at 232 EUR/MWh, which fortunately did not give another negative signal to the sector. We believe that, in the long term, the price ratios of wood chips and electricity will level out and these types of heating plants will continue to be profitable. Although the issued government measure did not thwart the production of electricity from biomass, the current market setting of wood chip and electricity prices currently offers the possibility of covering only part of the fixed costs.
A repayment schedule for the remaining small part of the loan was agreed with the financing bank. The projects of two biomass heating plants, whose secured claims are also the assets of Subfund 1, face similar price-operational problems as the Krnča heating plant. However, here as well as the current management, we believe in the long-term perspective of the heating plants. A motion for a payment order was filed in Austria in the matter of the recovery of receivables from the title of these two heating plants, the matter will be further resolved in the local courts. With effect from 1 August 2022, Sub-fund 1 does not formally plan, with regard to the gradual termination of activity, further investments in new resources. On the other hand, it focuses on the management and optimization of assets falling into the "Side Pocket", with the aim of eliminating all risks and transferring these assets to Subfund 2. We have published detailed information in the form of questions and answers regarding the fund distribution project on the website of Subfund 1 in the section "FAQ - "Side Pocket". The extraordinary financial statement as of 7/31/2022 related to the initiation of the formal liquidation of Subfund 1 was drawn up on 11/30/2022.
The appreciation of Subfund 1 for the month of January 2023 was 0.39%.

Report NOVA Green Energy podfond 1

NOVA Green Energy Sub-Fund 2

In January, work continued on the development of several PV plants, mainly in the Czech and Slovak Republics. We received studies for 12 roof installations on the roofs of buildings owned by sister fund NOVA Real Estate. These studies show that these 12 roofs could be equipped with photovoltaic power plants with an output of up to 3 MWp. For investment in these PV plants, we are considering investment subsidy support from a subsidy program of the MFŽP or MPO.
Currently, the first requests to connect factories to the distribution network have been submitted. We have received a building permit for the Orlice roof-top PVE pilot project with an installed capacity of 0.5MWp, and at the same time we have issued a call for tenders for the contractor of this project. We are currently also focusing on the situation of existing Czech PV plants owned by Subfund 2. In our two Czech PV plants, we switched to the purchase scheme of the so-called green bonus, where we contracted the sale of electricity in EUR.
We decided to purchase in euros due to drawing up new loans in this currency, which will significantly reduce the exchange rate risk of loan repayment vs. revenues. The borrowing process was successfully completed at the turn of January and February, the funds will be used to finance new development projects and also to manage the liquidity of this sub-fund. In Slovakia, an implementing decree was approved, which set purchase price ceilings for photovoltaic sources as well. For PV plants that have contracted purchase prices and meet several other conditions, i.e. for all PV plants owned by Subfund 2 in Slovakia, this windfall tax will have no impact, which we assess as extremely positive.
The appreciation of Subfund 2 for the month of January 2023 was 0.59 %.

Report NOVA Green Energy podfond 2