Wrap Text
Unaudited condensed consolidated financial results for the six months ended 30 June 2013
NEW EUROPE PROPERTY INVESTMENT 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
Registered office: 2nd Floor, Anglo International House, Lord Street,
Douglas, Isle of Man, IM1 4LN
AIM share code: NEPI
BVB share code: NEP
JSE share code: NEP
ISIN: IM00B23XCH02
(“NEPI”, “the Group” or “the Company”)
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE SIX MONTHS
ENDED 30 JUNE 2013
DISTRIBUTABLE EARNINGS
The Group achieved distributable earnings of 11.87 euro cents per share
for the six months ended 30 June 2013 which represents a 17.27%
improvement in recurring distributable earnings per share compared to
the prior interim period. This excellent financial result was due to the
continuing strong performance of the Group’s assets, the acquisition of
The Lakeview in February 2013 and additional rental income generated
through the completion of Ploiesti Shopping City during the last quarter
of 2012.
DISTRIBUTION
The Board of Directors declared a distribution of 12.93 euro cents per
share in respect of the six months ended 30 June 2013, an improvement of
15% over the 11.24 euro cents per share distribution declared in
relation to the comparable prior interim period. This includes an amount
of €1.69 million of retained distributable earnings carried forward from
prior financial periods.
As of 30 June 2013 the balance of retained distributable earnings
carried forward from prior financial periods, after the interim period
distribution in relation to 2013, amounts to €6.5 million. The Board
will consider distributing the retained distributable earnings during
forthcoming financial periods as the Group pursues various property
developments. Once completed, these developments are expected to have a
positive impact on per share distributions. However, during the
construction period distributable earnings are diluted as interest in
relation to property under construction is capitalised at the Group’s
average cost of finance and any cash balances retained to finance such
developments yield low returns.
OPTION TO RECEIVE CAPITAL RETURN
Consistent with prior practice and given the ongoing development and
acquisition programme, the Board resolved to offer shareholders the
option to receive the distribution as a cash settlement or a return of
capital by way of an issue of new shares credited as fully paid up at a
ratio of 2.694 new shares for each 100 shares held.
A circular that contains details of the election, accompanied by
announcements on the Stock Exchange News Service (SENS) of the
Johannesburg Stock Exchange (JSE), the Regulatory News Service (RNS) of
the London Stock Exchange (LSE) and the Bucharest Stock Exchange (BVB),
will be issued in due course.
ACQUISITION AND DEVELOPMENT PIPELINE
The Group made significant progress in expanding its acquisition and
development pipeline during the interim period. As of 30 June 2013 the
Group had secured several additional earnings enhancing acquisitions and
a number of attractive new development opportunities.
Subsequent to the interim period the Group has acquired two shopping
centres and has committed to acquire a third shopping centre for an
aggregate pre-debt value of €€150 million. As of 30 June 2013 this cost
had not been incurred. The Group also decided not to proceed with the
acquisition of a 50% interest in a shopping centre in Budapest.
At the date of this report the Group’s development pipeline (including
redevelopment opportunities and extensions in relation to secured
acquisitions) has increased to €350 million of which €52 million had
been incurred as at 30 June 2013. This includes the purchase of a 70%
interest in a new shopping mall development in Bucharest and other
development opportunities detailed below.
RETAIL PROPERTY ACQUISITIONS, EXTENSIONS AND DEVELOPMENTS
Mega Mall
As announced on 2 August 2013 the Group has concluded a framework
agreement to acquire a 70% interest in a permitted development site
named Mega Mall (otherwise known as the former Electroaparataj factory
site) in Bucharest, Romania. NEPI intends to develop a 70,000m2 GLA
shopping mall in conjunction with Austrian development group Real4You.
The 5.1ha site is located in a very densely populated area of eastern
Bucharest, close to the Romanian national football stadium, which is
currently lacking retail space. The site has good visibility from a
major vehicle artery and has access to public transport, including
trams, buses and trolley buses. A metro station is planned in front of
the site and the shopping mall is expected to connect to it.
Approximately 30% of the planned GLA is already subject to tenant
commitments, including international clients such as Carrefour, C&A and
H&M. Construction will start in 2013 and the shopping mall will open
mid-2015. The agreement with Real4You is subject to various conditions
precedent to be fulfilled or waived by the end of August 2013. This
includes NEPI’s right to perform its payment obligations fully, or
partially, by means of vendor consideration placement.
Aupark Zilina
As announced on 25 April 2013, and subsequent to the interim period that
ended on 30 June 2013, the Group completed the acquisition of Aupark
Zilina, a regional mall with approximately 22,000m2 of retail GLA,
situated in the city centre of Zilina, in Slovakia. Major tenants in the
mall include international brands such as Billa, C&A, Deichmann, H&M and
New Yorker. The effective date of the acquisition is 31 July 2013.
Deva Shopping Centre
Subsequent to the interim period that ended on 30 June 2013 the Group
has committed to the acquisition of a regional shopping centre with
approximately 42,000m2 of retail GLA in Deva, Romania. Deva is the
capital of the Hunedoara county, located in western central part of
Romania. In addition to Deva’s approximately 56,000 residents the
catchment area includes roughly 220,000 residents in a number of smaller
surrounding towns all within 45 minutes’ drive from the Centre. Major
tenants include Metro Cash & Carry, Real Hypermarket (in due course this
will probably become an Auchan Hypermarket as Real has been acquired by
Auchan in Romania), Praktiker DIY, DM, Domo, Jysk and Takko. The
acquisition includes approximately 2.9ha of additional land intended for
extensions. The effective date of the acquisition is 31 July 2013. The
transaction is subject to approval by the Romanian Competition Council.
Galati Shopping City
The Group obtained a building permit for its shopping mall development
in Galati, Romania, and commenced construction. The first phase of the
development will consist of approximately 27,000m2 of GLA and will open
at the end of this year. At the date of this report 62% of the planned
first phase GLA has been secured via signed lease agreements with
tenants including Altex, Benvenuti, Carrefour, DM, KFC, Noriel, Orange,
Otter, Puma, Sabon, Sensiblu and Vodafone. Commercial terms for a
further 25% of the planned GLA have been agreed in principle with
prospective tenants.
Kaufland value extensions
Further to the announcement made on 25 April 2013 the Group has
completed and opened the first of the Kaufland strip mall extensions in
Alexandria, Romania, started construction on two further sites and
obtained a building permit for a fourth development. Four strip malls
are expected to be open by the end of the 2013 financial year.
Severin Shopping Center
Further to the announcement made on 25 April 2013, and subsequent to the
interim period that ended on 30 June 2013, the Group finalised the
acquisition of the Severin Shopping Center, which has approximately
16,000m2 of GLA and approximately 2.3ha of additional land for extension
purposes. Major tenants include Carrefour, Altex, Takko, Deichmann, New
Yorker and Lee Cooper. The effective date of the acquisition is 1 May
2013.
Targu Jiu Shopping City
Further to the announcement made on 25 April 2013 the Group has obtained
zoning approval for a regional shopping mall of approximately 27,000m2
of GLA from the authorities in Targu Jiu, Romania. The Group is
currently engaged in the process of compiling and submitting
documentation for obtaining the building permit.
Vulcan Value Centre
As announced on 6 June 2012 the Group entered into a shareholders’
agreement with Mr Michael Topolinski to jointly acquire the Vulcan land
site in Bucharest, via a company named Zircon Properties, with the
intention of developing a value centre. As previously reported there
have been unforeseen delays with permitting. In addition, various
disagreements emerged between NEPI and Mr Topolinski, which make the
completion of the development as a joint project improbable. NEPI and Mr
Topolinski are currently discussing an amicable separation in relation
to the Vulcan Value Centre transaction. If this dialogue is unsuccessful
the joint venture may fail and NEPI may pursue the opportunity alone.
NEPI’s net exposure to the joint venture is limited to €2.6 million,
consequently failure of the joint venture will not have a material
impact on NEPI’s financial standing.
OFFICE PROPERTY ACQUISITIONS, EXTENSIONS AND DEVELOPMENTS
City Business Centre
Further to the forward sale-purchase agreement entered into in relation
to the acquisition of Buildings D and E of City Business Centre in
Timisoara, Romania, the Group has made an initial early payment to the
vendor in February 2013 by means of a secured loan of approximately €8
million.
The Office Cluj-Napoca
The Group and its development partner Mr Ovidiu Sandor have obtained a
building permit in relation to the development of the office building in
Cluj, Romania. Construction has started and the first phase of
approximately 19,000m2 of GLA is expected to be completed on schedule in
April 2014. Heads of terms have been entered into with a number of
prospective tenants including Deloitte and Three Pillar Global Romania.
The Lakeview Further to the announcement of the 2012 financial results,
transfer of ownership of The Lakeview and payment of the purchase price
occurred in April 2013 with the effective date of the acquisition being
1 January 2013.
Piata Victoriei Office development
The Group has obtained a planning certificate enabling it to apply for a
building permit in relation to the planned office development in Piata
Victoriei, Bucharest.
LEGAL PROCEEDINGS REGARDING SIBIU SHOPPING CITY DEBT ACQUISITION
Further to the announcement made by NEPI on 11 July 2013, regarding the
information released via the RNS of the LSE on 9 July 2013 that Argo
Real Estate Opportunities Fund Limited (Argo), an Alternative Investment
Market (AIM) listed company with a market capitalisation of
approximately £10 million, had commenced legal proceedings against NEPI
and Volksbank in relation to the Sibiu Shopping City debt acquisition by
the Group, the Group confirms that there is no change in status
regarding the potential debt acquisition. In addition, NEPI’s counsel
has reviewed the Argo claim and shareholders of NEPI are advised that
the Board of Directors not only remains of the view that the Company has
at all times acted lawfully but considers Argo’s action to be void of
substance and vexatious in nature.
DISPOSALS
Retail Park Pitesti
As announced during August 2012 the Group entered into an agreement with
the Auchan Group to sell the hypermarket section of Retail Park Pitesti
for a total consideration of approximately €29.4 million. The
transaction concluded on 29 April 2013.
OTHER HIGHLIGHTS
Adjusted Net Asset Value (NAV) as of 30 June 2013 is 18% higher compared
to the comparable prior interim period. Vacancy is down for this period:
the vacancy calculated as a portion of available rentable area
(excluding those under earn-out arrangements in City Business Centre,
Timisoara) is 4.08% compared to 4.8% at the 2012 year end. Non-
recoverable tenant income amounted to €77,000 in respect of the six
months ended on 30 June 2013, equivalent to 0.29% of the contractual
rental income and expense recoveries for the interim period.
CASH MANAGEMENT AND DEBT
During the interim period that ended on 30 June 2013 the Company raised
€59 million via the issue of new ordinary shares on the South African
register in an over-subscribed private placing and ended the period with
€130 million in cash and listed property shares. The total investment
exposure to listed securities amounted to €55 million, while the listed
securities traded at a premium to their initial acquisition cost and
accrued income.
The Group raised €100 million in a rights issue that was completed after
the end of the interim period.
In addition to the cash balances the Group has an undrawn secured
revolving facility with UniCredit Tiriac Bank for €9.5 million and a €10
million undrawn facility with Morgan Stanley against its portfolio of
listed securities. The Group is expected to be in a position to drawdown
a further €2.85 million as the construction loan with BRD (a subsidiary
of Groupe Société Générale) in relation to Ploiesti Shopping City is
converted into an investment loan.
The Group had €177 million of third-party debt finance in place as at 30
June 2013 and acquired a further €55 million of third-party debt finance
due to the acquisition of Aupark Zilina.
The Group is in the process of raising €30 million of third-party debt
finance secured against The Lakeview office building. The Group and its
development partner are in the process of implementing a development
loan facility of €13 million in relation to the development of the first
phase of The Office Cluj-Napoca. The Group has also received and is
considering a non-binding term sheet from Raiffeisen Bank International
to extend the loan that is due for repayment in October 2013 secured
over the Floreasca Business Park offices in Bucharest.
At 30 June 2013 the Group’s gearing ratio (interest bearing debt less
cash divided by investment property and listed property shares)
decreased to 19%. The average interest rate (including interest rate
hedging costs) in relation to the debt was approximately 4.6% during the
interim period.
PROSPECTS
The Board is confident that recurring distributable earnings per share
for the second half of the 2013 financial year will range from 13.5 to
14 euro cents per share (compared to 10.75 euro cents per share for the
half year ended on 31 December 2012). Consequently, growth in
distributions of approximately 15% is expected to be achieved for the
2013 financial year. The growth is based on the assumptions that a
stable macro-economic environment will prevail, no major corporate
failures will occur and that the developments reported on above will
progress in accordance with expectations. Budgeted rental income was
based on contractual escalations and market related renewals. This
forecast has not been audited or reviewed by NEPI’s auditors.
NEPI will continue to pursue profitable growth through further
acquisition and development opportunities in its markets. Further
announcements will be made as appropriate.
By order of the Board of Directors
Martin Slabbert
Chief Executive Officer
Victor Semionov
Finance Director
6 August 2013
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
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
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Pro forma IFRS Reported IFRS Reported
Unaudited Audited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
ASSETS
Non-current assets 548 768 124 444 666 197 435 824 057
Investment property 509 878 958 416 674 175 407 185 213
Investment property at
fair value 459 635 666 393 966 226 385 810 319
Investment property
under development 50 243 292 22 707 949 21 374 894
Goodwill 17 325 704 13 188 795 13 938 637
Investments in joint ventures – – –
Long term loans granted to
joint ventures – – –
Other long-term assets 21 401 663 14 727 635 14 387 551
Financial assets at fair
value through profit or loss 161 799 75 592 312 656
Current assets 151 899 484 185 176 059 96 417 479
Trade and other receivables 21 749 805 15 798 975 9 557 392
Financial investments at fair
value through profit
or loss 60 833 180 81 865 443 37 111 662
Cash and cash equivalents 69 316 499 87 511 641 49 748 425
Investment property held
for sale – 28 665 158 –
Total assets 700 667 608 658 507 414 532 241 536
EQUITY AND LIABILITIES
Equity attributable to
equity holders 473 426 120 393 622 378 311 905 776
Share capital 1 510 380 1 352 629 1 166 048
Share premium 416 163 768 355 026 520 293 035 978
Share-based payment reserve 13 659 756 15 491 810 14 004 458
Currency translation
reserve (1 228 783) (1 228 783) (2 276 952)
Accumulated profit 43 320 999 22 980 202 5 976 244
Total liabilities 227 241 488 264 885 036 220 335 760
Non-current liabilities 133 513 882 147 151 095 196 379 106
Loans and borrowings 101 931 266 117 100 152 171 837 475
Deferred tax liabilities 24 750 041 22 321 189 18 937 397
Other long term liabilities 1 608 904 – –
Financial liabilities at
fair value through profit
or loss 5 223 671 7 729 754 5 604 234
Current liabilities 93 727 606 117 733 941 23 956 654
Trade and other payables 15 537 551 12 985 200 5 202 296
Loans and borrowings 75 119 212 102 048 042 16 023 948
Tenant deposits 3 070 843 2 700 699 2 730 410
Total equity and liabilities 700 667 608 658 507 414 532 241 536
Net asset value per share 3.07 2.83 2.59
Adjusted net asset value per share 3.10 2.88 2.63
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)
IFRS IFRS Restated IFRS Restated
Unaudited Unaudited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
ASSETS
Non-current assets 524 179 725 418 853 914 424 255 381
Investment property 447 778 261 356 732 724 372 652 039
Investment property at
fair value 405 226 433 339 851 226 359 163 495
Investment property under
development 42 551 828 16 881 498 13 488 544
Goodwill 17 271 518 13 134 609 13 884 506
Investments in joint ventures 3 989 080 3 546 212 (895 235)
Long term loans granted to
joint ventures 32 651 168 30 368 931 24 554 795
Other long-term assets 22 327 899 14 995 846 13 746 620
Financial assets at fair
value through profit or loss 161 799 75 592 312 656
Current assets 145 732 685 176 894 494 90 761 684
Trade and other
receivables 18 382 234 9 748 620 7 964 542
Financial investments at
fair value through profit
or loss 60 833 180 81 865 443 37 111 662
Cash and cash equivalents 66 517 271 85 280 431 45 685 480
Investment property held
for sale – 28 665 158 –
Total assets 669 912 410 624 413 566 515 017 065
EQUITY AND LIABILITIES
Equity attributable to equity
holders 473 426 120 393 622 378 311 905 776
Share capital 1 510 380 1 352 629 1 166 048
Share premium 416 163 768 355 026 520 293 035 978
Share-based payment reserve 13 659 756 15 491 810 14 004 458
Currency translation
reserve (1 228 783) (1 228 783) (2 276 952)
Accumulated profit 43 320 999 22 980 202 5 976 244
Total liabilities 196 486 290 230 791 188 203 111 289
Non-current liabilities 107 833 907 120 605 636 181 515 406
Loans and borrowings 77 865 129 92 935 525 158 815 143
Deferred tax liabilitie 24 178 306 21 567 836 18 315 567
Other long term liabilities 1 608 904 – –
Financial liabilities at
fair value through profit
or loss 4 181 568 6 102 275 4 384 696
Current liabilities 88 652 383 110 185 552 21 595 883
Trade and other payables 14 166 675 9 773 420 3 531 071
Loans and borrowings 71 518 953 97 781 406 15 367 469
Tenant deposits 2 966 755 2 630 726 2 697 343
Total equity and liabilities 669 912 410 624 413 566 515 017 065
Net asset value per share 3.07 2.83 2.59
Adjusted net asset value per share 3.10 2.88 2.63
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share–based
Share Share payments
capital remium reserve
Balance at 1 January 2012 955 693 227 844 770 7 456 257
Transactions with owners 210 355 65 191 208 6 548 201
– Issue of shares 210 355 65 296 116 –
– Issue cost recognised to equity – (104 908) –
– Share-based payment reserve – – 6 548 201
– Earnings distribution – – –
Total comprehensive income – – –
– Other comprehensive income – – –
– Profit for the period – – –
Balance at 30 June 2012
– unaudited 1 166 048 293 035 978 14 004 458
Balance at 1 July 2012 1 166 048 293 035 978 14 004 458
Transactions with owners 186 581 61 990 542 1 487 352
– Issue of shares 181 380 60 647 180 –
– Issue cost recognised to equity – (227 209) –
– Share-based payment reserve – – 2 710 588
– 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 period – – –
Balance at 31 December 2012
– audited 1 352 629 355 026 520 15 491 810
Balance at 1 January 2013 1 352 629 355 026 520 15 491 810
Transactions with owners 157 751 61 137 248 (1 832 054)
– Issue of shares 149 156 58 860 846 –
– Issue cost recognised to equity – (598 533) –
– Share-based payment reserve – – 868 986
– Sale of shares issued under
the Initial Share Scheme 23 182 467 –
– Sale of shares issued under the
Current Share Scheme 1 070 343 184 (344 254)
– Vesting of shares issued under
the Current Share Scheme 7 502 2 349 284 (2 356 786)
– Earnings distribution – – –
Total comprehensive income – – –
– Profit for the period – – –
Balance at 30 June 2013
– unaudited 1 510 380 416 163 768 13 659 756
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Currency
Translation Accumulated
reserve profit Total
Balance at 1 January 2012 (2 650 522) 1 652 742 235 258 940
Transactions with owners – (10 054 366) 61 895 398
– Issue of shares – – 65 506 471
– Issue cost recognised to equity – – (104 908)
– Share-based payment reserve – – 6 548 201
– Earnings distribution – (10 054 366 (10 054 366)
Total comprehensive income 373 570 14 377 868 14 751 438
– Other comprehensive income 373 570 – 373 570
– Profit for the period – 14 377 868 14 377 868
Balance at 30 June 2012
– unaudited (2 276 952) 5 976 244 311 905 776
Balance at 1 July 2012 (2 276 952) 5 976 244 311 905 776
Transactions with owners – (1 721 623) 61 942 852
– Issue of shares – – 60 828 560
– Issue cost recognised to equity – – (227 209)
– Share-based payment reserve – – 2 710 588
– 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 – (1 721 623) (1 721 623)
Total comprehensive income 1 048 169 18 725 581 19 773 750
– Other comprehensive income 1 048 169 – 1 048 169
– Profit for the period – 18 725 581 18 725 581
Balance at 31 December 2012
– audited (1 228 783) 22 980 202 393 622 378
Balance at 1 January 2013 (1 228 783) 22 980 202 393 622 378
Transactions with owners – (1 380 259) 58 082 686
– Issue of shares – – 59 010 002
– Issue cost recognised to equity – – (598 533)
– Share-based payment reserve – – 868 986
– Sale of shares issued under
the Initial Share Scheme – – 182 490
– Sale of shares issued under
the Current Share Scheme – – –
– Vesting of shares issued under
the Current Share Scheme – – –
– Earnings distribution – (1 380 259) (1 380 259)
Total comprehensive income – 21 721 056 21 721 056
– Profit for the period – 21 721 056 21 721 056
Balance at 30 June 2013
– unaudited (1 228 783) 43 320 999 473 426 120
BANK LOANS AND BORROWINGS AS AT 30 JUNE 2013
Facility Outstanding Available for
Borrower amount amount drawdown
Nepi Bucharest One SRL 6 200 000 6 200 000 –
General Investment SRL 15 000 000 7 238 885 –
Nepi Bucharest Two SRL and
Otopeni Warehouse and
Logistics SRL 9 500 000 – 9 500 000
Premium Portofolio 13 995 000 13 029 749 –
Promenada Mall Braila 40 000 000 36 766 522 –
Retail Park Pitesti 28 813 000 12 768 961 –
Floreasca Business Park 77 000 000 58 741 444 –
City Business Centre 10 577 586 9 862 916 –
City Business Centre 10 836 177 10 150 466 –
City Business Centre 7 872 995 7 489 202 –
Ploiesti Shopping City 13 500 000 12 298 034 –
Ploiesti Shopping City 5 150 000 2 264 301 –
Total 238 444 758 176 810 480 9 500 000
BANK LOANS AND BORROWINGS AS AT 30 JUNE 2013 (Continued)
Borrower Interest rate Hedge
Nepi Bucharest One SRL 1M Euribor+4.5% 1M Euribor capped at 2%
General Investment SRL Fixed at 6.23% –
Nepi Bucharest Two SRL and
Otopeni Warehouse and
Logistics SRL 1M Euribor+4% 1M Euribor capped at 2%
Premium Portofolio Fixed at 5.17% –
Promenada Mall Braila 3M Euribor+3.0% 3M Euribor swapped at 1.8%
Retail Park 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%
BANK LOANS AND BORROWINGS REPAYMENT PROFILE
Borrower 2013 2014 2015
Nepi Bucharest One SRL 6 200 000 – –
General Investment SRL 940 248 6 298 637 –
Premium Portofolio 166 844 12 862 905 –
Promenada Mall Braila 1 077 826 35 688 696 –
Retail Park Pitesti 489 821 1 042 071 11 237 069
Floreasca Business Park 58 741 444 – –
City Business Centre 614 827 1 265 202 1 314 149
Ploiesti Shopping City 184 471 3 002 184 737 882
Total 68 415 481 60 159 695 13 289 100
BANK LOANS AND BORROWINGS REPAYMENT PROFILE (Continued)
2017 and
Borrower 2016 beyond Total
Nepi Bucharest One – – 6 200 000
General Investment SRL – – 7 238 885
Premium Portofolio – – 13 029 749
Promenada Mall Braila – – 36 766 522
Retail Park Pitesti – – 12 768 961
Floreasca Business – – 58 741 444
City Business 1 365 022 22 943 384 27 502 584
Ploiesti Shopping 737 882 9 899 916 14 562 335
2 102 904 32 843 300 176 810 480
CONSOLIDATED STATEMENTS OF INCOME
Pro forma IFRS Reported IFRS Reported
Unaudited Audited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
Net rental and related income 19 525 167 30 432 771 14 713 551
Contractual rental income
and expense recoveries 26 166 571 40 176 801 19 104 741
Property operating expenses (6 641 404) (9 744 030) (4 391 190)
Administrative expenses (1 188 523) (2 211 006) (944 497)
Acquisition fees (883 280) (1 594 393) (782 961)
Fair value adjustments of
investment property – 6 450 485 –
Fair value gains of financial
investments at fair value
through profit or loss 681 704 10 287 980 2 194 434
Net result on sale of listed
securities investments 586 421 26 280 –
Dividends received from listed
securities investments 1 801 040 796 411 –
Share-based payment expense (868 986) (996 909) (872 241)
Foreign exchange gain/(loss) 224 927 (2 529 495) (2 106 142)
Gain on disposal of investment
property held for sale 527 258 – –
Other operating income – 10 264 266 10 264 266
Profit before net finance
(expense)/income 20 405 728 50 926 390 22 466 410
Net finance (expense)/income (392 729) (12 574 251) (6 947 609)
Finance income 4 213 998 1 853 838 835 282
Finance expense (4 606 727) (14 428 089) (7 782 891)
Share of profit/(loss) of
joint ventures – – –
Profit before tax 20 012 999 38 352 139 15 518 801
Deferred tax income/(expense) 1 708 057 (5 248 690) (1 140 933)
Profit for the period
attributable to equity
holders 21 721 056 33 103 449 14 377 868
Weighted average number of
shares in issue 145 133 096 116 238 121 105 639 309
Diluted weighted average
number of shares in issue 150 236 334 121 391 646 110 853 546
Basic weighted average
Earnings per share
(euro cents) 14.97 28.48 13.61
Diluted weighted average
earnings per share
(euro cents) 14.46 27.27 12.97
Distributable earnings per
share (euro cents) 11.87 25.95 15.80
Headline earnings per share
(euro cents) 14.60 22.93 13.61
Diluted headline earnings
per share (euro cents) 14.11 21.96 12.97
CONSOLIDATED STATEMENTS OF INCOME (Continued)
IFRS IFRS Restated IFRS Restated
Unaudited Unaudited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
Net rental and related income 17 499 552 28 344 410 13 866 472
Contractual rental income
and expense recoveries 23 177 503 37 312 436 17 879 445
Property operating expenses (5 677 951) (8 968 026) (4 012 973)
Administrative expenses (1 054 212) (2 103 006) (937 997)
Acquisition fees (883 280) (915 212) (531 180)
Fair value adjustments of
investment property – 1 063 940 –
Fair value gains of financial
investments at fair value
through profit or loss 681 704 10 287 980 2 194 434
Net result on sale of listed
securities investments 586 421 26 280 –
Dividends received from listed
securities investments 1 801 040 796 411 –
Share-based payment expense (868 986) (996 909) (872 241)
Foreign exchange gain/(loss) 216 867 (2 352 634) (2 323 862)
Gain on disposal of investment
property held for sale 527 258 – –
Other operating income – 10 264 266 10 264 266
Profit before net finance
(expense)/income 18 506 364 44 415 526 21 659 892
Net finance (expense)/income 1 224 017 (9 537 659) (5 865 775)
Finance income 5 125 522 4 098 704 1 788 003
Finance expense (3 901 505) (13 636 363) (7 653 778)
Share of profit/(loss) of
joint ventures 464 236 2 720 919 (897 146)
Profit before tax 20 194 617 37 598 786 14 896 971
Deferred tax income/(expense) 1 526 439 (4 495 337) (519 103)
Profit for the period
attributable to equity
holders 21 721 056 33 103 449 14 377 868
Weighted average number of
shares in issue 145 133 096 116 238 121 105 639 309
Diluted weighted average
number of shares in issue 150 236 334 121 391 646 110 853 546
Basic weighted average earnings
per share (euro cents) 14.97 28.48 13.61
Diluted weighted average
earnings per share
(euro cents) 14.46 27.27 12.97
Distributable earnings per
share (euro cents) 11.87 25.95 15.80
Headline earnings per share
(euro cents) 14.60 22.93 13.61
Diluted headline earnings
per share (euro cents) 14.11 21.96 12.97
RECONCILIATION OF PROFIT FOR THE PERIOD TO DISTRIBUTABLE EARNINGS
IFRS IFRS
Pro forma Reported Reported IFRS
Unaudited Audited Unaudited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012 30 Jun 2013
Profit for the period
attributable to equity
holders 21 721 056 33 103 449 14 377 868 21 721 056
Unrealised foreign
exchange loss 98 759 2 529 495 2 106 142 106 820
Acquisition fees 883 280 1 594 393 777 050 883 280
Share-based payment
expense 868 986 996 909 872 241 868 986
Accrued interest on
share-based payments 285 378 569 597 297 352 285 378
Fair value adjustments
of investment property – (6 450 485) – –
Fair value gains of
financial investments
at fair value through
profit or loss (681 704) (10 287 980) – (681 704)
Financial assets at
fair value (2 592 051) 6 328 495 1 759 386 (2 006 674)
Amortisation of
financial assets (180 131) (572 063) (393 301) (180 131)
Net result on sale of
listed securities
investments (586 421) (26 280) – (586 421)
Dividends received from
listed securities
investments (1 801 040) (796 411) – (1 801 040)
Accrued income from
financial investments
at fair value through
profit or loss 1 952 962 3 092 147 382 930 1 952 962
Gain on disposal of
investment property
held for sale (527 258) – – (527 258)
Deferred tax (income)/
expense (1 708 057) 5 248 690 1 140 933 (1 526 439)
Shares issued cum
distribution 1 169 060 3 156 648 1 641 985 1 169 060
Non-distributable
portion of the vendor
settlement income – (3 144 561) (3 144 561) –
Adjustments related to
joint ventures
Unrealised foreign
exchange loss – – – (8 061)
Financial assets at
fair value – – – (585 377)
Deferred tax income – – – (181 618)
Distributable earnings
for the period 18 902 819 35 342 043 19 818 025 18 902 819
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 – 3 844 481 5 716 102 –
Number of shares
Entitled to
distribution 159 277 789 144 362 152 125 461 951 159 277 789
Distributable earnings
per share (euro cents) 11.87 25.95 15.80 11.87
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) – 2.66 4.56 –
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited Audited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
Profit for the period
attributable to equity
holders 21 721 056 33 103 449 14 377 868
Other comprehensive income
– currency translation
differences – 1 421 739 373 570
Total comprehensive income
for the year 21 721 056 34 525 188 14 751 438
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Audited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
Cash flows from operating
activities 10 761 111 25 644 072 19 084 308
Cash flows from financing
activities 15 146 601 139 575 360 49 056 325
Cash flows used in investing
activities (44 102 854) (132 603 532) (72 805 525)
Net (decrease)/ increase in
cash and cash equivalents (18 195 142) 32 615 900 (4 664 892)
Cash and cash equivalents
brought forward 87 511 641 55 065 100 55 065 100
Translation effect on cash and
cash equivalents – (169 359) (651 783)
Cash and cash equivalents
carried forward 69 316 499 87 511 641 49 748 425
RECONCILIATION OF PROFIT FOR THE YEAR TO HEADLINE EARNINGS
Unaudited Audited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
Profit for the year attributable
to equity holders 21 721 056 33 103 449 14 377 868
Fair value adjustment of
investment property – (6 450 485) –
Gain on disposal of investment
property held for sale (527 258) – –
Headline earnings 21 193 798 26 652 964 14 377 868
RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE
Unaudited Audited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
Adjusted net asset value 493 333 163 415 243 794 329 492 038
Net asset value per the
Statement of financial
position 473 426 120 393 622 378 311 905 776
Loans in respect of the
Initial Share Scheme 12 482 706 12 489 022 12 587 502
Deferred tax liabilities 24 750 041 22 321 189 18 937 397
Goodwill (17 325 704) (13 188 795) (13 938 637)
Net asset value per share 3.07 2.83 2.59
Adjusted net asset value per share 3.10 2.88 2.63
Number of shares for net
asset value per share
purposes 154 174 551 139 258 914 120 247 714
Number of shares for adjusted
net asset value per share
purposes 159 277 789 144 362 152 125 461 951
LEASE EXPIRY PROFILE
Total based Total based
on rental on rented
Year income area
2013 0.2% 0.5%
2014 12.4% 11.4%
2015 18.6% 13.5%
2016 10.2% 7.1%
2017 9.5% 8.2%
2018 9.7% 9.9%
2019 4.8% 4.2%
2020 6.7% 5.3%
2021 2.9% 2.9%
>=2022 25.0% 37.0%
Total 100% 100%
SEGMENTAL ANALYSIS
Unaudited Audited Unaudited
30 Jun 2013 31 Dec 2012 30 Jun 2012
Contractual rental income
and expense recoveries
Retail 11 101 365 18 567 825 8 691 835
Industrial 975 812 1 893 058 944 358
Office 14 089 394 19 715 918 9 468 548
Total 26 166 571 40 176 801 19 104 741
Profit before net finance
expense
Retail 7 962 334 19 067 337 5 254 523
Industrial 801 956 1 501 942 755 542
Office 10 155 802 12 012 525 5 675 108
Corporate 1 485 636 18 344 586 10 781 237
Total 20 405 728 50 926 390 22 466 410
BASIS OF PREPARATION
These unaudited condensed consolidated interim financial results for the
six months ended 30 June 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”), specifically IAS34 “Interim
Financial Reporting”.
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 as at
30 June 2013 and unaudited pro forma statement of income for the six
months ended 30 June 2013. The main difference between the unaudited pro
forma statements and the unaudited condensed consolidated interim
financial results 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 differences set out above.
The condensed consolidated interim financial results are prepared in
accordance with IFRS and have not been reviewed or reported on by the
Group’s external auditors.
Date: 06/08/2013 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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