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Unaudited condensed consolidated financial results for the nine months ended 30 September 2013
NEW EUROPE PROPERTY INVESTMENTS PLC
(Incorporated and registered in the Isle of Man with registered number 001211V)
(Registered as an external company with limited liability under the laws of South Africa,
registration number 2009/000025/10)
AIM share code: NEPI JSE share code: NEP BVB share code: NEP
ISIN: IM00B23XCH02
(“NEPI” or “the Group” or “the Company”)
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED 30
SEPTEMBER 2013
The Company is required to publish financial results for the nine months ended 30 September 2013 in terms of the rules of the
Romanian Financial Supervisory Authority ("RFSA") and the Rule Book of the Bucharest Stock Exchange (“BVB”). Accordingly,
this announcement presents the unaudited condensed consolidated financial results of the Group in respect of the financial period from
1 January 2013 to 30 September 2013 in a form compliant with the requirements of the RFSA and the BVB.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Pro forma IFRS Reported IFRS Reported IFRS IFRS Restated IFRS Restated
Unaudited Audited Unaudited Unaudited Unaudited Unaudited
30 Sep 2013 31 Dec 2012 30 Sep 2012 30 Sep 2013 31 Dec 2012 30 Sep 2012
€ € € € € €
ASSETS
Non-current assets 797 392 182 444 666 197 446 150 035 773 611 559 418 853 914 429 573 598
Investment property 736 950 075 416 674 175 418 385 813 674 736 143 356 732 724 374 721 508
Investment property at fair value 609 635 525 393 966 226 387 672 978 555 052 079 339 851 226 361 026 154
Investment property under
127 314 550 22 707 949 30 712 835 119 684 064 16 881 498 13 695 354
development
Goodwill 28 933 146 13 188 795 13 912 760 28 933 146 13 134 609 13 858 629
Investments in joint ventures -- – – 4 074 706 3 546 212 (1 437 606)
Long-term loans granted to joint
–- – – 34 361 557 30 368 931 29 127 907
ventures
Other long-term assets 29 845 532 14 727 635 13 703 706 29 842 578 14 995 846 13 155 404
Financial assets at fair value
through 1 663 429 75 592 147 756 1 663 429 75 592 147 756
profit or loss
Current assets 148 758 457 185 176 059 98 168 464 142 245 362 176 894 494 90 149 031
Trade and other receivables 30 254 573 15 798 975 11 479 924 26 949 110 9 748 620 7 644 189
Financial investments at fair
60 554 270 81 865 443 54 850 042 60 554 270 81 865 443 54 850 042
value through profit or loss
Cash and cash equivalents 57 949 614 87 511 641 31 838 498 54 741 982 85 280 431 27 654 800
Investment property held for sale 1 075 509 28 665 158 – 1 075 509 28 665 158 –
Total assets 947 226 148 658 507 414 544 318 499 916 932 430 624 413 566 519 722 629
EQUITY AND LIABILITIES
Equity attributable to equity
641 760 646 393 622 378 318 322 499 641 760 646 393 622 378 318 322 499
holders
Share capital 1 855 188 1 352 629 1 199 308 1 855 188 1 352 629 1 199 308
Share premium 561 761 838 355 026 520 293 287 953 561 761 838 355 026 520 293 287 953
Share-based payment reserve 24 296 603 15 491 810 13 946 514 24 296 603 15 491 810 13 946 514
Currency translation reserve (1 228 783) (1 228 783) 136 392 (1 228 783) (1 228 783) 136 392
Accumulated profit 55 075 800 22 980 202 9 752 332 55 075 800 22 980 202 9 752 332
Total liabilities 305 465 502 264 885 036 225 996 000 275 171 784 230 791 188 201 400 130
Non-current liabilities 198 416 151 147 151 095 204 827 698 172 036 776 120 605 636 185 720 584
Loans and borrowings 156 627 887 117 100 152 178 712 888 131 824 679 92 935 525 161 518 487
Deferred tax liabilities 35 323 328 22 321 189 19 205 561 34 505 568 21 567 836 18 452 208
Other long-term liabilities 1 608 904 – – 1 608 904 – –
Financial liabilities at fair value
through 4 856 032 7 729 754 6 909 249 4 097 625 6 102 275 5 749 889
profit or loss
Current liabilities 107 049 351 117 733 941 21 168 302 103 135 008 110 185 552 15 679 546
Trade and other payables 28 899 479 12 985 200 6 721 971 28 043 949 9 773 420 3 257 038
Loans and borrowings 74 854 458 102 048 042 11 709 194 71 902 831 97 781 406 9 728 738
Tenant deposits 3 295 414 2 700 699 2 737 137 3 188 228 2 630 726 2 693 770
Total equity and liabilities 947 226 148 658 507 414 544 318 499 916 932 430 624 413 566 519 722 629
CONSOLIDATED STATEMENTS OF INCOME
IFRS IFRS
Pro forma IFRS Reported IFRS IFRS Restated
Reported Restated
Unaudited Audited Unaudited Unaudited
Unaudited Unaudited
30 Sep 2013 31 Dec 2012 30 Sep 2013 31 Dec 2012
30 Sep 2012 30 Sep 2012
€ € € € € €
Net rental and related income 30 918 059 30 432 771 22 252 206 27 997 207 28 344 410 20 907 479
Contractual rental income and expense
41 869 346 40 176 801 28 813 628 37 628 001 37 312 436 26 970 868
recoveries
Property operating expenses (10 951 287) (9 744 030) (6 561 422) (9 630 794) (8 968 026) (6 063 389)
Administrative expenses (1 536 597) (2 211 006) (1 413 143) (1 338 642) (2 103 006) (1 388 409)
Acquisition fees (2 348 747) (1 594 393) (963 436) (2 348 747) (915 212) (509 752)
Fair value adjustments of investment
– 6 450 485 – – 1 063 940 –
property
Fair value gains of financial
investments at fair value through profit 660 054 10 287 980 6 391 471 660 054 10 287 980 6 391 471
or loss
Net result on sale of listed securities
586 421 26 280 26 250 586 421 26 280 26 250
investments
Dividends received from listed
1 940 223 796 411 308 692 1 940 223 796 411 308 692
securities investments
Share-based payment expense (972 544) (996 909) (877 193) (972 544) (996 909) (877 193)
Foreign exchange -loss (411 778) (2 529 495) (4 736 641) (426 131) (2 352 634) (4 493 137)
Gain on acquisition of subsidiaries 5 546 854 – – 5 546 854 – –
Gain on disposal of investment
527 258 – – 527 258 – –
property held for sale
Other operating income – 10 264 266 10 264 266 – 10 264 266 10 264 266
Profit before net finance income 34 909 203 50 926 390 31 252 472 32 171 953 44 415 526 30 629 667
Net finance (expense)/income (732 149) (12 574 251) (9 939 362) 1 679 559 (9 537 659) (8 323 281)
Finance income 4 978 627 1 853 838 1 578 966 6 335 191 4 098 704 3 120 878
Finance expense (5 710 776) (14 428 089) (11 518 328) (4 655 632) (13 636 363) (11 444 159)
Share of profit / (loss) of joint ventures – – – 261 135 2 720 919 (1 746 629)
Profit before tax 34 177 054 38 352 139 21 313 110 34 112 647 37 598 786 20 559 757
Deferred tax income / (expense) 1 767 225 (5 248 690) (1 409 097) 1 831 632 (4 495 337) (655 744)
Profit for the period attributable to
35 944 279 33 103 449 19 904 013 35 944 279 33 103 449 19 904 013
equity holders
RECONCILIATION OF PROFIT FOR THE PERIOD TO DISTRIBUTABLE EARNINGS
Pro forma IFRS Reported IFRS Reported IFRS
Unaudited Audited Unaudited Unaudited
30 Sep 2013 31 Dec 2012 30 Sep 2012 30 Sep 2013
€ € € €
Profit for the period attributable to equity holders 35 944 279 33 103 449 19 904 013 35 944 279
Unrealised foreign exchange loss 220 238 2 529 495 4 736 641 219 067
Acquisition fees 2 348 747 1 594 393 963 436 2 348 747
Share-based payment expense 972 544 996 909 877 193 972 544
Accrued interest on share-based payments 424 152 569 597 434 156 424 152
Fair value adjustments of investment property –- (6 450 485) – –
Fair value gains of financial investments at fair value
(660 054) (10 287 980) (938 264) (660 054)
through profit or loss
Financial assets at fair value (2 635 310) 6 328 495 – (1 766 238)
Amortisation of financial assets (306 270) (572 063) (572 063) (306 270)
Net result on sale of listed securities investments (586 421) (26 280) – (586 421)
Dividends received from listed securities investments (1 940 223) (796 411) – (1 940 223)
Accrued income from financial investments at fair value
3 755 076 3 092 147 1 329 538 3 755 076
through profit or loss
Gain on disposal of investment property held for sale (527 258) – – (527 258)
Gain on acquisition of subsidiaries (5 546 854) – – (5 546 854)
Deferred tax (income) / expense (1 767 225) 5 248 690 1 409 097 (1 831 633)
Shares issued cum distribution 2 497 976 3 156 648 1 778 338 2 497 976
Non-distributable portion of the vendor settlement income – (3 144 561) (3 144 561) –
Adjustments related to joint ventures
Unrealised foreign exchange loss – – – 1 171
Financial assets at fair value – – – (869 072)
Deferred tax expense – – – 64 408
Distributable earnings for the period 32 193 397 35 342 043 26,777,524 32 193 397
Distribution from reserves 1 691 799 – – 1 691 799
Less: distribution declared (20 594 618) (31 497 562) (14,101,923) (20 594 618)
Interim distribution (20 594 618) (14 101 923) (14,101,923) (20 594 618)
Final distribution – (17 395 639) – –
Earnings not distributed 13 290 578 3 844 481 12 675 601 13 290 578
Number of shares entitled to distribution 195 523 392 144 362 152 128,686,411 195 523 392
Distributable earnings per share (euro cents) 18.67 25.95 21.09 18.67
Distribution from reserves per share (euro cents) 1.06 – – 1.06
Less: distribution declared per share (euro cents) (12.93) (23.29) (11.24) (12.93)
Interim distribution per share (euro cents) (12.93) (11.24) (11.24) (12.93)
Final distribution per share (euro cents) – (12.05) – –
Earnings per share not distributed (euro cents) 6.80 2.66 9.85 6.80
RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE
Pro forma IFRS Reported IFRS Reported
Unaudited Audited Unaudited
30 Sep 2013 31 Dec 2012 30 Sep 2012
€ € €
Adjusted net asset value 659 749 479 415 243 794 336 120 813
Net asset value per the Statement of financial position 641 760 646 393 622 378 318 322 499
Loans in respect of the Initial Share Scheme 11 598 651 12 489 022 12 505 513
Deferred tax liabilities 35 323 328 22 321 189 19 205 561
Goodwill (28 933 146) (13 188 795) (13 912 760)
Net asset value per share 3.36 2.83 2.58
Adjusted net asset value per share 3.37 2.88 2.61
Number of shares for net asset value per share purposes 190 804 302 139 258 914 123 576 781
Number of shares for adjusted net asset value per share purposes 195 523 392 144 362 152 128 686 411
KEY PERFORMANCE INDICATORS
Pro forma IFRS Reported IFRS Reported
Unaudited Audited Unaudited
30 Sep 2013 31 Dec 2012 30 Sep 2012
Current liquidity ratio 1.40 1.82 2.05
Gearing ratio (debt to equity) 2.4:10 3.0:10 5.6:10
Tenant’s receivable turnover 15.46 days 10.02 days 5.5 days
Return on investment property 7% per annum 8% per annum 8% per annum
BASIS OF PREPARATION
These unaudited condensed consolidated financial results for the nine months ended 30 September 2013 have been prepared in
accordance with the recognition and measurement criteria of the International Financial Reporting Standards (“IFRS”) and its
interpretations adopted by the International Accounting Board (“IASB”).
The accounting policies which have been applied are consistent with those used in the preparation of the annual financial statements
for the year ended 31 December 2012, with the following exceptions:
- As a result of the adoption of IFRS 11 “Joint Arrangements” effective 1 January 2013, the Group is now accounting for its
investments in joint ventures under the equity method. The Group has restated the presentation of the Statement of Financial
Position and Statement of Income starting 1 January 2012, which previously included joint ventures accounted for under the
proportionate consolidation method.
- The Group has changed the functional currency to Euro effective 1 January 2013. According to IFRS, previously issued financial
statements are not restated in this respect.
As the Group is focusing on being consistent on those areas of reporting that are seen to be of most relevance to investors and on
providing a meaningful basis of comparison for users of the financial information, it has prepared an unaudited pro forma statement of
financial position and an unaudited pro forma statement of income.
The main difference between the unaudited pro forma statements and the unaudited condensed consolidated financial results for the
nine months ended 30 September 2013 prepared in accordance with IFRS is that the unaudited pro forma statements are prepared
using the proportionate consolidation method for the investments in joint ventures, consistent with financial statements prepared in
accordance with IFRS reported in prior periods. The unaudited pro forma statement of financial position and the unaudited pro forma
statement of income have been prepared by and are the responsibility of the directors of NEPI.
Due to its nature, the unaudited pro forma statements of financial position and income may not fairly reflect the financial position and
results of the Group after the difference set out above.
The condensed consolidated financial results for the nine months ended 30 September 2013 prepared in accordance with IFRS, the pro
forma statement of financial position and the pro forma statement of income have not been reviewed or reported on by the Group’s
external auditors.
14 November 2013
For further information please contact:
New Europe Property Investments plc
Martin Slabbert +40 74 432 8882
Nominated Adviser and Broker
Smith & Williamson Corporate Finance Limited
Azhic Basirov/Siobhan Sergeant +44 20 7131 4000
JSE sponsor
Java Capital +27 11 283 0042
Romanian advisor
SSIF Intercapital Invest SA
Razvan Pasol +40 21 222 8731
Registered office: 2nd Floor, Anglo International House, Lord Street, Douglas, Isle of Man, IM1 4LN
Date: 14/11/2013 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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