Wrap Text
Condensed consolidated audited financial statements for the year ended 31 December 2012
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
BVB share code: NEP
JSE share code: NEP
ISIN: IM00B23XCH02
(“NEPI”, “the Group” or “the Company”)
CONDENSED CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
DECEMBER 2012
DIRECTORS’ COMMENTARY
DISTRIBUTABLE EARNINGS
The Group has achieved distributable earnings of 25.95 euro cents per
share for the financial year ended 31 December 2012. This distinctive
financial result is due to continued strong performance in the Group’s
assets, the favourable impact of the acquisition of City Business Centre
in February 2012, additional rental income generated through various re-
developments that were completed towards the end of the prior year and a
settlement with the vendors of Promenada Mall (which gave rise to €7.1
million in non-recurring distributable earnings). Recurring distributable
earnings per share improved by 12.6% compared to the prior year.
DISTRIBUTION
The Board of Directors resolved to limit the 2012 full year distribution
to 23.29 euro cents per share, an improvement of 15% over the 20.25 euro
cents distribution declared in relation to the 2011 financial year.
Accordingly, the Board has declared a final distribution of 12.05 euro
cents per share in respect of the six months ended 31 December 2012.
OPTION TO RECEIVE CAPITAL RETURN
Consistent with the practice introduced in relation to the 2012 half year
distribution and given the ongoing development and acquisition programme,
the Board has resolved to offer shareholders the option to receive the
distribution in relation to the six months ended 31 December 2012 as a
cash distribution or a return of capital by way of an issue of new shares
credited as fully paid up at a ratio of 2.774 new shares for each 100
shares held. A circular that contains details of the election, accompanied
by an announcement on the Stock Exchange News Service of the JSE (“SENS”),
the Regulatory News Service of the LSE (“RNS”) and the Bucharest Stock
Exchange (“BVB”), will be issued in due course.
RETAINED DISTRIBUTABLE EARNINGS
The balance of retained distributable earnings as at 31 December 2012,
after the full year distribution in relation to 2012, amounts to €8.2
million (this amount includes distributable earnings carried forward from
prior years). The retained distributable earnings will be considered for
distribution during the 2013 and 2014 financial years as the Group pursues
various property developments. The developments are expected to have a
positive impact on per share distributions, once completed. However,
during the construction period, developments dilute distributable earnings
as interest in relation to property under construction is capitalised at
the Group’s average cost of finance and as cash balances retained to
finance such developments yield low returns.
OTHER HIGHLIGHTS
Improvement in the volumes of trading in the Company’s shares has been a
priority for a number of years. During 2012, the Company raised €138
million via the issue of ordinary shares. Partly as a result of this, the
shareholder base of the Company expanded to over 3,400 shareholders by the
2012 financial year end (compared to approximately 1,900 shareholders at
the end of the 2011 financial year) and the volumes of daily trade of the
Company’s shares have improved further.
Adjusted Net Asset Value (“NAV”) as at 31 December 2012 is 18.5% higher
compared to the prior year end. Vacancy is on a downward trend; the
vacancy calculated as a portion of available rentable area (excluding the
rentable areas under earn-out arrangements in City Business Centre in
Timisoara) at the 2012 year end is 4.8% compared to 5.3% at the prior year
end and has reduced further since the 2012 year end. Non-recoverable
tenant income amounted to €72,000 in respect of the year ended on 31
December 2012, equivalent to 0.18% of contractual rental income and
expense recoveries for the year.
RETAIL PROPERTY ACQUISITIONS, EXTENSIONS AND DEVELOPMENTS
During the 2012 financial year, the Group made significant progress in
extending its portfolio of retail properties and retail development
pipeline with the opening of Ploiesti Shopping City and the conclusion of
a number of transactions that secure further retail development and
extension opportunities for the 2013 and 2014 financial years. The Group
will benefit from rental income generated in relation to Ploiesti Shopping
City in 2013. In addition, three significant and six smaller retail
developments and/or extension projects have or are expected to commence
construction during the 2013 financial year. NEPI has withdrawn from the
Victoria City Centre development opportunity in Bucharest, Romania,
reported in the 2011 annual report.
Ploiesti Shopping City
The Group finalised and opened the first phase of a regional mall in joint
venture with Carrefour Property on 15 November 2012, in less than
11 months from the start of construction works. On opening day the mall
which comprises 46,000 m2 of Gross Lettable Area (“GLA”) included more
than 75 operational tenants including Altex, Bershka, Carrefour (the
second largest retailer in the world), Douglas, Deichmann, Flanco, H&M,
Intersport, KFC, Leonardo, New Yorker, Office Shoes, Orsay, Paul, Pull and
Bear, Quasi Pronti, Reserved, Segafredo, Sephora, Stradivarius, Takko,
Vodafone, Yves Rocher and Zara. A 12 screen cinema complex (the largest
such complex in Romania outside of the capital city) operated by Cinema
City (the largest cinema operator in central Europe) opened on 5 December
2012. Trading since opening has exceeded expectations. A second phase
development is under consideration.
Brasov Shopping City
During the year, the Group completed the purchase and leaseback of a
retail box (including additional land) from Mobexpert, the leading
Romanian furniture retailer. The acquired properties are adjacent to the
Group’s 2011 re-developed strip mall and the Carrefour hypermarket in
Brasov, Romania, and the acquisition was concluded with the intention to
re-develop the combined properties into a regional mall, in partnership
with Carrefour Property. Brasov is the eighth largest city in Romania and
one of the most important industry hubs in the country. Due to its
numerous historical sites and its proximity to popular ski and mountain
resorts, Brasov is also a leading tourist destination in Romania. The city
does not have a large modern shopping centre and NEPI and Carrefour’s
properties are ideally located to be re-developed into a dominant regional
mall. The original intention was to develop up to 57,000 m2 of GLA. The
Group and its development partner have since agreed to enlarge the planned
mall and are, to this end, in the process of acquiring an additional
7,000 m2 plot of land adjacent to NEPI’s assets. The enlarged regional
mall will consist of approximately 65,000 m2 of GLA and will be integrated
with 13,200 m2 of neighbouring bulk retail. The completion of the
development, which is subject to final approval by the NEPI and Carrefour
boards, is planned for 2014.
Galati Shopping City
As announced in November 2012 the Group has concluded an agreement to
acquire a plot of land of approximately 12,700 m2 in Galati, Romania. The
site of the proposed Galati development is located on one of the main
boulevards of Galati and has good vehicular and public transport access.
Galati is the seventh largest Romanian city and the largest Romanian port
city on the Danube River. The site is 25 kilometres from Promenada Mall
Braila, NEPI’s regional shopping centre in neighbouring town Braila. There
are no major retail centres in Galati. The Group acquired the land with
the intention of developing a retail value centre anchored by a
hypermarket and several international value brands. Due to strong tenant
demand, the Group now intends to develop a shopping centre on the site.
The permitting process is progressing well. Construction of the first
phase (approximately 30,000 m2 of GLA) will commence once the required
building permit has been obtained.
Vulcan Value Centre
As announced in June 2012, the Group entered into a joint venture to
acquire and develop a former factory site located in an under-serviced and
densely populated area of Bucharest (the capital city of Romania). The
site has good vehicular and public transport access. NEPI plans to develop
a value centre with 25,500 m2 of GLA anchored by a hypermarket and other
value tenants. The zoning approval was obtained during December 2012,
which was later than anticipated. Lease agreements have been entered into
with Carrefour (for a hypermarket) and KFC (for a drive through). Lease
discussions with a number of other international tenants are progressing
well. Broad commercial terms have been negotiated in respect of 65% of the
planned GLA. Site preparation works have commenced and construction works
will begin when the required building permit has been obtained, with an
opening planned by the 2013 year end, provided that there are no further
delays in the permitting process.
Kaufland value extensions
The Group has concluded agreements to acquire land in two smaller Romanian
towns adjacent to existing Kaufland supermarkets (in Alexandria and Sfantu
Gheorghe) and is in the process of acquiring three further similar sites
in other similar towns with the intention to develop convenience retail
value schemes linked to the supermarkets. Kaufland is a German discount
supermarket chain which operates over 1,000 stores in Germany and several
Central and Eastern European countries. It became the leading food
retailer in Romania with 81 well located owned and operated stores by the
end of 2012 and over €1.3 billion in annual sales in Romania. The stores
have standard layouts with sales areas of approximately 5,000 m2 per
store. The five planned developments will initially range from 1,900 to
2,900 m2 of GLA per development.
Promenada Mall Braila
The expansion of the fashion offering referred to in NEPI’s 2011 annual
report was completed in May 2012 with the opening of H&M and C&A. This has
strengthened the mall’s regional dominance. Since this expansion, NEPI has
acquired approximately 1,900 m2 of land adjacent to the fashion section of
the mall with a view to effect a further extension of the mall with
additional international fashion brands.
OFFICE PROPERTY ACQUISITIONS, EXTENSIONS AND DEVELOPMENTS
Given the relative scarcity of capital for investment in its markets, NEPI
has identified attractive office acquisition and development opportunities
in Romania. NEPI’s office strategy is to own large A-grade offices that
comply with international tenant requirements in prime locations in cities
with significant multi-national tenant presence. To this end, the Group
has acquired the centrally located City Business Centre (the only A-grade
office development) in Timisoara and centrally located office development
land in Cluj-Napoca (“Cluj”). NEPI is in negotiations to acquire The
Lakeview offices in Bucharest. NEPI owns significant prime offices in
Bucharest and Timisoara and has commenced works in relation to a unique
office development in Cluj.
City Business Centre
During February 2012, the Group acquired the City Business Centre in
Timisoara. Timisoara is home to a growing back-office activities-and-
services market that offers a skilled labour force, low costs and
proximity to Western Europe. The acquisition includes three existing
office buildings of 27,150 m2 of GLA and a forward commitment to acquire
two further office buildings with approximately 20,000 m2 of GLA that were
under development. Tenants in the three existing office buildings include
Alcatel, Deloitte, IBM, Microsoft, PricewaterhouseCoopers, Raiffeisen
Bank, UniCredit Tiriac Bank and Wipro. The first of the two office
buildings which were under development at the time of the acquisition was
completed in September 2012. To date, close to 70% of the office space in
this building has been leased to tenants including Autoliv, EBS, Maerz,
SAP and Unified Post. The building also includes conference facilities.
The Office Cluj-Napoca
During July 2012, the Group acquired an 18,082 m2 plot of land in the city
centre of Cluj, in a joint venture with Mr. Ovidiu Sandor (the developer
of City Business Centre) with a view to develop, in three phases, up to
54,200 m2 of A-grade office GLA. Cluj is situated in the north-western
part of Romania and is the second largest city in Romania by population.
The city houses the headquarters of a number of multinational companies
and the city is also an important centre for tertiary education. Since the
project was announced, significant tenant enquiries were received for what
would be the first A-grade office development in Cluj. Site set-up has
commenced in February 2013 and the issue of a building permit is imminent.
The first phase of the development is expected to be completed by spring
2014.
The Lakeview
The Group is in negotiations to acquire The Lakeview offices in Bucharest,
Romania. The Lakeview is a landmark A-grade office building consisting of
offices and ground floor retail with a total GLA of 25,500 m2 and 485
parking bays. The Lakeview is located close to NEPI’s Floreasca Business
Park in the emerging office corridor between Floreasca and Barbu Vacarescu
Streets in the North East of Bucharest. The building is fully occupied
with tenants including Alcon, Colgate-Palmolive, Huawei, Philips,
PricewaterhouseCoopers and Royal Bank of Scotland. Further announcements in
relation to the acquisition of The Lakeview will be made as and when
appropriate.
Piata Victoriei office development
Design and permitting works are ongoing in relation to a landmark office
development on NEPI’s land in Piata Victoriei, Bucharest. As the site is
part of a historic area, progress is slow with several authorities that
need to approve the development proposal.
DISPOSALS
Retail Park Auchan Pitesti
As announced during August 2012, the Group entered into agreements with
the Auchan group to sell the hypermarket section of Retail Park Auchan
Pitesti for a total consideration of approximately €28.7 million. The
transaction, which is subject to a number of conditions precedent, is
expected to conclude early in 2013.
CASH MANAGEMENT AND DEBT
In addition to €147.4 million in cash and net listed property shares, the
Group has an undrawn secured revolving facility with UniCredit Tiriac Bank
for €9.5 million and is expected to be in a position to drawdown a further
€3.25 million as the construction loan with BRD (a subsidiary of Societe
Generale) in relation to Ploiesti Shopping City is converted into an
investment loan.
The Group will retain high levels of access to liquidity due to the
instability of the European banking markets, to finance the Group’s
development pipeline and to pursue further investment opportunities. In
order to mitigate the dilutory effect this has on earnings, a portion of
the cash held for capital commitments has been invested in liquid dividend
paying listed property shares. The total investment exposure to listed
securities amounted to €71.5 million as at year end. As at 31 December
2012 and as at the date of this report, the listed securities traded at a
premium to their initial acquisition cost and accrued income.
As reported on before, the Group has renewed its €9.5 million secured
revolving facility with UniCredit Tiriac Bank during the 2012 financial
year. The facility carries an interest rate of 1 month Euribor plus 4.0%
and matures on 31 May 2013 when, at the Group’s option, the facility is
convertible into a term loan repayable on 31 December 2014. The facility
remains undrawn at the date of this report.
A construction loan of €33.5 million was granted by BRD in July 2012 for
the development of Ploiesti Shopping City. NEPI and Carrefour Property
each own 50% of this project; therefore, the Group accounts for 50% of the
loan. The construction loan is in the process of conversion into an
investment loan and the total loan amount will increase to €40 million,
repayable in 10 years. The construction loan carries an interest rate of
3 month Euribor plus 4.5%, while the investment loan will carry an
interest rate of 3 month Euribor plus 4.0%.
The Group had €219 million of third party debt finance in place at
31 December 2012 (€197 million in secured term debt and €22 million in
short term facilities secured over the listed property shares). €79
million of the secured term debt is due for repayment during the 2013
financial year. The Group does not foresee difficulty to re-finance the
expiring debt. At year end, the Group’s gearing ratio (interest bearing
debt less cash divided by investment property and listed property shares)
decreased to 25%. The average interest rate (including interest rate
hedging costs) in relation to the debt was approximately 4.5% during the
2012 financial year.
PROSPECTS
NEPI has achieved high levels of growth in recurring distributable
earnings per share over the course of the past five years and as a result
achieved a nominal average compounded annual growth rate of 12.15% in
distribution per share from the 2008 to 2012 financial years. It remains
the Group’s ambition to pursue further attractive growth in recurring
distributable earnings in 2013 and onwards. Significant progress was made
through the acquisition and development activities reported above. In
addition, the Group has and will continue to explore and pursue further
acquisition and development opportunities in Romania and in other
countries in the region. These initiatives, which include two retail
development opportunities in Romania and five retail acquisition
opportunities in the Central and Eastern European region, are at various
stages of progress. Announcements in this regard will be made as and when
appropriate.
By order of the Board
Martin Slabbert
Chief Executive Officer
Victor Semionov
Finance Director
6 February 2013
Registered office
2nd Floor, Anglo International House, Lord Street, Douglas, Isle of Man,
IM1 4LN
Transfer secretaries and settlement agent
Computershare Investor Services (Proprietary) Limited, 70 Marshall Street,
Johannesburg, 2001, South Africa (PO Box 61051, Marshalltown, 2107, South
Africa)
Computershare Investor Services (Jersey) Limited, 2nd floor, Queensway
House, Hilgrove Street, St Helier, JE1 1ES, Jersey
Directors
Dan Pascariu (Chairman)*, Desmond de Beer#, Michael Mills*, Dewald
Joubert*, Jeffrey Zidel*, Victor Semionov (Finance director), Martin
Slabbert (Chief executive officer) *Independent non-executive director
#Non-executive director
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 +44 20 7131 4000
JSE Sponsor
Java Capital +27 11 283 0042
Romanian Advisor
SSIF Intercapital Invest SA Razvan Pasol +40 21 222 8731
CONSOLIDATED STATEMENT OF INCOME
Audited Audited
31 Dec 12 31 Dec 11
€ €
Net rental and related income 30 432 771 23 727 203
Contractual rental income and expense
recoveries 40 176 801 32 069 075
Property operating expenses (9 744 030) (8 341 872)
Administrative expenses (2 211 006) (1 916 734)
Acquisition fees (1 594 393) (106 615)
Fair value adjustment of investment
property and goodwill 6 450 485 3 010 852
Fair value gains on investments 10 287 980 –
Distributable income from investments 822 691 –
Share-based payment expense (996 909) (1 041 647)
Foreign exchange loss (2 529 495) (475 883)
Other operating income 10 264 266 –
Profit before net finance expense 50 926 390 23 197 176
Net finance expense (12 574 251) (4 925 640)
Finance income 1 853 838 6 253 858
Finance expense (14 428 089) (11 179 498)
Profit before tax 38 352 139 18 271 536
Tax (5 248 690) 500 210
Profit for the year attributable to
equity holders* 33 103 449 18 771 746
*out of which profit for the year from
discontinued operations 1 748 367 1 715 793
Weighted average number of shares in issue 116 238 121 78 659 834
Diluted weighted average number of shares
in issue 121 391 646 84 264 285
Basic weighted average earnings per share
(euro cents) 28.48 23.86
Diluted weighted average earnings per share
(euro cents) 27.27 22.28
Distributable earnings per share (euro cents) 25.95 24.67
Headline earnings per share (euro cents) 22.93 20.04
Diluted headline earnings per share (euro cents) 21.96 18.70
RECONCILIATION OF PROFIT FOR THE YEAR TO DISTRIBUTABLE EARNINGS
Audited Audited
31 Dec 12 31 Dec 11
€ €
Profit for the year attributable to
equity holders 33 103 449 18 771 746
Unrealised foreign exchange loss 2 529 495 475 883
Acquisition fees 1 594 393 –
Share-based payment fair value adjustment 996 909 1 041 647
Accrued interest on share-based payments 569 597 685 186
Fair value adjustment on investment
property and goodwill (6 450 485) (3 010 852)
Fair value of listed securities investments (10 287 980) –
Fair value of interest rate derivatives 6 328 495 4 263 016
Amortisation of the interest rate derivatives (572 063) (972 520)
Dividends received from listed securities
investments (822 691) –
Accrued income from listed securities
investments 3 092 147 –
Deferred tax expense / (income) 5 248 690 (500 210)
Share issue cum distribution 3 156 648 2 323 347
Non-distributable portion of the vendor
settlement income (3 144 561) –
Distributable earnings for the year 35 342 043 23 077 243
Less: distribution declared (31 497 562) (18 689 531)
Interim distribution (14 101 923) (8 293 733)
Final distribution (17 395 639) (10 395 798)
Earnings not distributed 3 844 481 4 387 712
Number of shares entitled to distribution 144 362 152 99 196 545
Distributable earnings per share (euro cents) 25.95 24.67
Less: distribution declared (euro cents) (23.29) (20.25)
Interim distribution per share (euro cents) (11.24) (9.77)
Final distribution per share (euro cents) (12.05) (10.48)
Earnings per share not distributed (euro cents) 2.66 4.42
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Audited Audited
31 Dec 12 31 Dec 11
€ €
Profit for the year attributable to
equity holders 33 103 449 18 771 746
Other comprehensive income
– currency translation differences 1 421 739 314 303
Total comprehensive income for the year 34 525 188 19 086 049
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
31 Dec 12 31 Dec 11
€ €
ASSETS
Non-current assets 444 666 197 362 404 369
Investment property 416 674 175 341 802 837
Investment property at fair value 393 966 226 316 393 495
Investment property under development 22 707 949 25 409 342
Goodwill 13 188 795 13 351 499
Other long term assets 14 727 635 6 213 458
Financial assets at fair value through
profit or loss 75 592 1 036 575
Current assets 185 176 059 62 816 541
Trade and other receivables 15 798 975 7 751 441
Financial investments 81 865 443 –
Cash and cash equivalents 87 511 641 55 065 100
Investment property held for sale 28 665 158 –
Total assets 658 507 414 425 220 910
EQUITY AND LIABILITIES
Total equity attributable to equity holders 393 622 378 235 258 940
Share capital 1 352 629 955 693
Share premium 355 026 520 227 844 770
Share-based payment reserve 15 491 810 7 456 257
Currency translation reserve (1 228 783) (2 650 522)
Accumulated profit 22 980 202 1 652 742
Total liabilities 264 885 036 189 961 970
Non-current liabilities 147 151 095 174 098 216
Loans and borrowings 117 100 152 156 629 879
Deferred tax liabilities 22 321 189 15 086 152
Financial liabilities at fair value
through profit or loss 7 729 754 2 382 185
Current liabilities 117 733 941 15 863 754
Trade and other payables 12 985 200 5 251 265
Loans and borrowings 102 048 042 8 235 659
Tenant deposits 2 700 699 2 376 830
Total equity and liabilities 658 507 414 425 220 910
Net asset value per share 2.83 2.41
Adjusted net asset value per share 2.88 2.43
RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE
Audited Audited
31 Dec 12 31 Dec 11
€ €
Adjusted net asset value 415 243 794 249 738 983
Net asset value per the statement
of financial position 393 622 378 235 258 940
Loans in respect of the share purchase
scheme 12 489 022 12 745 390
Deferred tax liabilities 22 321 189 15 086 152
Goodwill (13 188 795) (13 351 499)
Net asset value per share 2.83 2.41
Adjusted net asset value per share 2.88 2.43
Number of shares for net asset value per
share purposes 139 258 914 97 569 456
Number of shares for adjusted net asset
value per share purposes 144 362 152 102 783 693
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
31 Dec 12 31 Dec 11
€ €
Cash flows from operating activities 25 644 072 17 186 867
Cash flows from financing activities 139 575 360 38 246 038
Cash flows from investing activities (132 603 532) (24 164 735)
Net increase in cash and cash equivalents 32 615 900 31 268 170
Cash and cash equivalents brought forward 55 065 100 23 847 282
Translation effect on cash and cash
equivalents (169 359) (50 352)
Cash and cash equivalents carried forward 87 511 641 55 065 100
RECONCILIATION OF PROFIT FOR THE YEAR TO HEADLINE EARNINGS
Audited Audited
31 Dec 12 31 Dec 11
€ €
Profit for the year attributable to
equity holders 33 103 449 18 771 746
Fair value adjustment of investment
property (6 450 485) (3 010 852)
Headline earnings 26 652 964 15 760 894
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share–based
Share Share payment
capital premium reserve
Group audited € € €
Opening balance 1 January 2011 712 686 159 308 324 759 550
Transactions with owners 243 007 68 536 446 6 696 707
– Issue of shares 243 007 69 914 745 –
– Issue cost recognised to equity – (1 378 299) –
– Share-based payment reserve – – 6 696 707
– Earnings Distribution – – –
Total comprehensive income
– Other comprehensive income – – –
– Profit for the year – – –
Balance at 31 December 2011 955 693 227 844 770 7 456 257
Balance 1 January 2012 955 693 227 844 770 7 456 257
Transactions with owners 396 936 127 181 750 8 035 553
– Issue of shares 391 735 125 943 296 –
– Issue cost recognised to equity – (332 117) –
– Share-based payment reserve – – 9 258 789
– Sale of shares issued under the
Initial Share Scheme 1 110 326 324 –
– Sale of shares issued under the
Current Share Scheme 530 183 367 (158 795)
– Vesting of shares issued under the
Current Share Scheme 3 561 1 060 880 (1 064 441)
– Earnings Distribution – – –
Total comprehensive income – – –
– Other comprehensive income – – –
– Profit for the year – – –
Balance at 31 December 2012 1 352 629 355 026 520 15 491 810
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – continued
Currency
translation Accumulated
reserve (loss)/profit Total
Group audited € € €
Opening balance 1 January 2011 (2 964 825) (2 728 709) 155 087 026
Transactions with owners – (14 390 295) 61 085 865
– Issue of shares – – 70 157 752
– Issue cost recognised to equity – – (1 378 299)
– Share-based payment reserve – – 6 696 707
– Earnings Distribution – (14 390 295) (14 390 295)
Total comprehensive income 314 303 18 771 746 19 086 049
– Other comprehensive income 314 303 – 314 303
– Profit for the year – 18 771 746 18 771 746
Balance at 31 December 2011 (2 650 522) 1 652 742 235 258 940
Balance 1 January 2012 (2 650 522) 1 652 742 235 258 940
Transactions with owners – (11 775 989) 123 838 250
– Issue of shares – – 126 335 031
– Issue cost recognised to equity – – (332 117)
– Share-based payment reserve – – 9 258 789
– Sale of shares issued under the
Initial Share Scheme – – 327 434
– Sale of shares issued under the
Current Share Scheme – – 25 102
– Vesting of shares issued under the
Current Share Scheme – – –
– Earnings Distribution – (11 775 989) (11 775 989)
Total comprehensive income 1 421 739 33 103 449 34 525 188
– Other comprehensive income 1 421 739 – 1 421 739
– Profit for the year – 33 103 449 33 103 449
Balance at 31 December 2012 (1 228 783) 22 980 202 393 622 378
LEASE EXPIRY PROFILE
Total based Total based
on rental on rented
Year income area
2013 2.5% 2.4%
2014 14.5% 12.8%
2015 20.4% 15.0%
2016 7.2% 4.7%
2017 8.6% 7.6%
2018 6.5% 5.4%
2019 1.5% 1.3%
2020 2.2% 2.3%
2021 3.6% 3.5%
>=2022 33.0% 45.0%
Total 100% 100%
SEGMENTAL ANALYSIS
Audited Audited
31 Dec 12 31 Dec 11
€ €
Contractual rental income and expense
recoveries
Retail 18 567 825 14 848 471
Industrial 1 893 058 1 830 940
Office 19 715 918 15 389 664
Total 40 176 801 32 069 075
Profit before net finance expense
Retail 19 067 337 13 180 638
Industrial 1 501 942 1 097 525
Office 12 012 525 10 788 682
Corporate 18 344 586 (1 869 669)
Total 50 926 390 23 197 176
BANK LOANS AND BORROWINGS AS AT 31 DECEMBER 2012
Facility Outstanding Available for
amount amount drawdown
Borrower € € €
Nepi Bucharest One 6 200 000 6 200 000 –
General Investment 15 000 000 7 846 666 –
Nepi Bucharest Two and
Unique Delamode 9 500 000 – 9 500 000
Premium Portfolio 13 995 000 13 156 446 –
Promenada Mall 40 000 000 37 844 347 –
Retail Park Auchan Pitesti 28 813 000 26 457 536 –
Floreasca Business Park 77 000 000 62 246 248 –
City Business Centre 10 577 586 10 105 342 –
City Business Centre 10 836 177 10 383 067 –
City Business Centre 7 872 995 7 617 382 –
Ploiesti Shopping City 13 500 000 11 925 217 1 574 783
Ploiesti Shopping City 3 250 000 3 194 228 55 772
New Europe Property
Investments PLC 21 942 531 21 942 531 –
Total 258 487 289 218 919 010 11 130 555
BANK LOANS AND BORROWINGS AS AT 31 DECEMBER 2012 – continued
Borrower Interest rate Hedge
Nepi Bucharest One 1M Euribor+4.5% 1M Euribor capped at 2%
General Investment Fixed at 6.23% –
Nepi Bucharest Two and
Unique Delamode 1M Euribor+4% 1M Euribor capped at 2%
Premium Portfolio Fixed at 5.17% –
Promenada Mall 3M Euribor+3.0% 3M Euribor swapped at 1.8%
Retail Park Auchan
Pitesti 1M Euribor+4.0% 1M Euribor capped at 2%
Floreasca Business Park 3M Euribor+2.5% 3M Euribor swapped at 1.79%
City Business Centre 1M Euribor+1.75% 1M Euribor swapped at 1.93%
City Business Centre 1M Euribor+1.75% 1M Euribor capped at 2%
City Business Centre 1M Euribor+4.0% 1M Euribor capped at 2%
Ploiesti Shopping City 3M Euribor+4.5% 3M Euribor swapped at 1.74%
Ploiesti Shopping City 3M Euribor+2.75% 3M Euribor capped at 2.25%
New Europe Property
Investments PLC EONIA + 2% –
BANK LOANS AND BORROWINGS REPAYMENT PROFILE
2013 2014 2015
Borrower € € €
Nepi Bucharest One 6 200 000 – –
General Investment 1 548 018 6 298 648 –
Premium Portfolio 293 541 12 862 905 –
Promenada Mall 2 155 653 35 688 694 –
Retail Park Auchan Pitesti 1 899 256 2 084 140 22 474 140
Floreasca Business Park 62 246 248 – –
City Business Centre 1 218 105 1 265 202 1 314 149
Ploiesti Shopping City 3 599 228 810 000 810 000
New Europe Property
Investments PLC 21 942 531 – –
Total 101 102 580 59 009 589 24 598 289
BANK LOANS AND BORROWINGS REPAYMENT PROFILE - continued
2017 and
2016 beyond Total
Borrower € € €
Nepi Bucharest One – – 6 200 000
General Investment – – 7 846 666
Premium Portfolio – – 13 156 446
Promenada Mall – – 37 844 347
Retail Park Auchan Pitesti – – 26 457 536
Floreasca Business Park – – 62 246 248
City Business Centre 1 365 022 22 943 313 28 105 791
Ploiesti Shopping City 810 000 9 090 217 15 119 445
New Europe Property
Investments PLC – – 21 942 531
Total 2 175 022 32 033 530 218 919 010
NOTES TO THE CONDENSED CONSOLIDATED AUDITED FINANCIAL STATEMENTS
BASIS OF PREPARATION
The condensed consolidated audited financial statements have been prepared
in accordance with the recognition and measurement criteria of the
International Financial Reporting Standards (IFRS), its interpretations
adopted by the International Accounting Standard Board (IASB), the
presentation and the disclosure requirements of IAS 34 Interim Financial
Reporting and the Listing Requirements of the JSE. The accounting policies
adopted are consistent with those of the prior year. Ernst & Young has
audited the financial information set out in these financial statements.
Their unmodified audit report is available for inspection at the Company’s
registered office. The independent auditor’s report will be included in
NEPI’s 2012 annual report.
INVESTMENT PROPERTY
Investment property are those held either to earn rental income or for
capital appreciation or both. After initial recognition investment
property are measured at fair value. Fair value is determined annually by
external independent professional valuators with appropriate and
recognised professional qualifications and recent experience in the
location and category of property being valued.
FINAL DISTRIBUTION
As detailed in the Directors’ commentary, the Board has resolved to offer
to shareholders the election to receive a cash distribution or a return of
capital by way of an issue of new shares credited as fully paid up. A
circular that contains details of the election, accompanied by an
announcement on SENS, RNS and the BVB, will be issued in due course.
Date: 06/02/2013 04:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
