Management Board of Baltic Horizon Capital AS has approved the audited financial results of Baltic Horizon Fund (the Fund) for the twelve months of 2025. The financial results remained unchanged compared to the preliminary disclosure on 17 February 2026.

Baltic Horizon Fund reports its annual result and the financial standing at the end of 2025. Following additional capital raised from unitholders in the first quarter of 2026, the Fund continues to operate as a going concern.

The year ended with a EUR 20.1 million net loss, following consecutive losses of EUR 16.8 million in 2024 and EUR 23.0 million in 2023 (EUR 59.9 million over a three-year cycle). This massive adjustment is largely a result of the mark down of the value of the Fund’s investment portfolio in the total amount of EUR 58.1 million over the past three years (part of which is already realized through the disposals), but also due to continuous loss the Fund is suffering from. The underlying result from core operations for 2025 was a loss of EUR 0.7 million, compared to a loss of EUR 1.9 million in 2024. This figure excludes non-cash impacts, such as investment property revaluations, hedging instruments, and deferred taxes.

Reflecting back, this substantial valuation adjustment was driven by two fundamental reasons. First – the Fund was acquiring properties during the period of elevated market valuations and thus overpaid for most of its past investments, often supported by complex, high-leverage financing. Second – there was a historical reliance on external service providers and management structures that proved less adaptable to the significant shocks recently seen in the commercial property markets where the Fund operates. For the past 5 years the management has been primarily focused on ensuring the fundamental stability of Baltic Horizon Fund.

The Fund concluded 2025 with an equity level below the required thresholds for its bond covenants (ISIN: EE3300003235), with lenders of maturing property loans requiring strengthening of the capital of the Fund and accelerated amortization as conditions for their prolongation. In anticipation of these, the management in consultations with the Supervisory Board of the Fund and following a clear mandate from unitholders in December 2025, management executed a successful secondary public offering in March 2026. This capital raise secured EUR 12.3 million, effectively addressing imminent liquidity requirements and providing a solid runway through 2027. A significant portion of these proceeds, EUR 7.5 million, is being used for the partial redemption of outstanding bonds at the time of this report. With no property loans set to expire during 2026, the Fund’s liquidity position is now stable, supporting its continued operations as a going concern.

Management has aggressively streamlined the Fund’s administrative cost structure throughout 2025. By discontinuing the secondary listing in Stockholm and terminating non-core consultancy and marketing services, administrative expenses were reduced to EUR 1.9 million, down from EUR 2.4 million in 2024. The full benefit of these cost-saving measures will be realized during the 2026. To manage financial risks, the Fund holds interest rate swaps and monitors the interest rate environment.

During 2025 the ownership of the management company was taken up by the founders of a private investment company Grinvest, who have first invested into Baltic Horizon Fund in 2024 and since then became the largest unitholders. Following the new capital raising completed in March 2026, around 4.6% of the units are currently held by the management company (through its subsidiary Gene Investments OÜ).

The indebtedness of the Fund remains too high still, and restoring the performance of its investment portfolio will require sustained time, capital, and professional effort. Addressing these two are the essential building blocks for any future strategy choices. Consequently, the Fund will not be in a position to issue distributions to its unitholders during the coming year.

The Fund is advancing environmental sustainability by transitioning its property portfolio to wind and solar power through strategic green leases, while simultaneously driving social impact by hosting community health initiatives and climate awareness events at its retail and office hubs.

With a newly structured management team at both the Fund and property levels, we fully acknowledge the challenges of the past. Our focus is entirely forward-looking, as we remain dedicated to rebuilding value and realizing the Fund’s long-term potential through collective effort. The Fund now owns a portfolio of great commercial properties, at adequately adjusted valuations, some of them – the true landmarks in the Baltic capitals. Operational adjustments are well underway, imminent debt risks are mitigated, and we are determined to restore a healthy balance sheet of Baltic Horizon Fund over the next 12 months. Restoring commercial performance of our properties is the ultimate priority and will determine both the cash flow generation capacity of the Fund and the market value of the units.

Overview of the Fund’s investment properties as of 31 December 2025

1. Based on the latest valuation as of 31 December 2025, recognised right-of-use assets and subsequent capital expenditure.
2. The net initial yield (NIY) is calculated by dividing the 2025 NOI by the market value of the property at year-end.
3. The average NIY is the calendar year average of monthly yields, where each month’s yield is calculated as the annualized NOI divided by the property’s current market value.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

2025 Annual report EN