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Unaudited interim financial results for the six months ended 31 December 2014
Delta International Property Holdings Limited
(formerly Osiris Properties International Limited)
(Incorporated in Bermuda with registration number 46566)
BSX share code: DLI.BH
JSE share code: DLI ISIN: BMG2707T1018
("Delta International" or "the Company" or "the Group")
Unaudited interim financial results for the six months ended 31 December 2014
Directors' commentary
Nature of the business
Delta International was incorporated on 16 May 2012 in Bermuda as an Exempted Company in accordance with the applicable laws of Bermuda.
Pursuant to a shareholders resolution passed on 31 October 2014, the Company is in the process of migrating from Bermuda to Mauritius and will be
continued as a Global Business Company organised under the laws of Mauritius. Delta International has a primary listing on the Bermuda Stock Exchange
("BSX") and a secondary listing on the Alternative Exchange ("AltX") of the Johannesburg Stock Exchange Limited ("JSE"). The Company will delist from
the BSX and is seeking a listing on the Stock Exchange of Mauritius ("SEM"), subject to the registration and continuance of the Company in Mauritius.
The application to migrate the Company is still pending and is expected to be completed during February 2015. Upon the completion of the migration to
Mauritius and subsequent listing on the SEM, the Company intends to transfer from the JSE's AltX to the JSE Main Board.
The primary objective of the Company is to invest in high quality real estate assets underpinned by long-term leases with strong counterparties delivering
sustainable income. The Company's strategy is to invest in stable, high growth countries in Africa, outside of South Africa.
Business review
During the financial period ended 30 June 2014 the Company disposed of its only asset, a UK based property, and changed its focus from the United
Kingdom and Europe to Africa (excluding South Africa). A comparison of the six months ended 31 December 2014 to the six months ended 31 December
2013 is therefore not considered meaningful and has not been presented.
During the six-month period ended 31 December 2014 the Company raised United States Dollars ("USD") 87,941,691 through the issue of 43,992,267
new shares. The equity raised, together with new debt facilities, was used to acquire the two properties outlined below:
- On 14 July 2014 the Company, through its subsidiary Delta International Mauritius Limited, acquired a property known as the Anadarko Building
through the acquisition of 100% of the issued shares of SAL Investment Holdings Limited. The Anadarko Building is a 7,805 m2 office building located in
the affluent suburb of Sommershield, Maputo, Mozambique. Within Sommershield there is an emerging prime business node with many international
tenants. The building is anchored by Anadarko Petroleum Corporation ("Anadarko") with a lease term of 15 years which commenced in June 2013.
- On 25 July 2014 the Company, through its subsidiary Freedom Property Fund SARL, acquired a property known as Anfa Place. The 30,711 m2 shopping
centre is located in the prestigious suburb of Anfa in Casablanca, Morocco. The centre has been operational for 24 months and forms part of a mixed
use complex, including offices, residential apartments, a Four Seasons Hotel (opening mid 2015) and a Pestana Hotel. The regional shopping centre
is anchored by Carrefour, Marks & Spencer, H&M as well as several brands within the Alshaya Group.
For the six months ended 31 December 2014, the Group showed a net loss after tax of USD 1.4 million. Included in the loss is a deferred tax expense of
USD 2.0 million relating to straight-line rental income and investment property fair value adjustments as well as an unrealised foreign currency exchange
loss of USD 6.4 million, primarily relating to the conversion of Moroccan Dirham ("MAD") denominated net assets within Freedom Property Fund SARL,
a 100% owned subsidiary.
Contractual rentals on the Anadarko Building are denominated in USD whereas the rentals on Anfa Place are denominated in MAD. The MAD rental
income on Anfa Place is converted into USD using the average exchange rate for the reporting period. The Company does not hedge its MAD currency
positions. From the date of acquisition of Anfa Place to 31 December 2014, the MAD has depreciated by 10.1% against the USD. The weaker exchange
rate resulted in a reduced USD-based rental income of USD 0.47 million.
The loan to value ratio of the Group at 31 December 2014 was 49.48%.
The geographic breakdown of property revenue for the period under review was as follows:
SEE PRESS FOR GRAPH
Property Portfolio
Market value as Weighted
at 31 December average Property
Total GLA 2014 lease yield Occupancy
Property name Location Sector (m2) (USD'000) expiry (%) (%)
Anfa Place Casablanca, Morocco Retail 30,711 112,906 7.5 years 7.54 90.8
Anadarko Building Maputo, Mozambique Office 7,805 37,500 10.9 years 10.42 100.0
Total 38,516 150,406 92.6^
^Represent the weighted average occupancy.
Dividend
Delta International's maiden dividend for the six-month period ended 31 December 2014 is 6.63 USD cents per share (2013: Nil).
Subsequent events
On 23 January 2015 the Group indirectly acquired the Hollard Building for USD 14.1 million through the acquisition of 100% of the issued shares of
HM&K Properties Limited. The Hollard Building is a 4,945 m2 building, located in the rapidly emerging new downtown CBD of Maputo, Mozambique. The
weighted average lease expiry is 3.6 years. The property yield in year one is 10.43%. The acquisition was funded with new debt facilities. The property is
100% occupied, and is anchored by Hollard Insurance, KPMG and British Petroleum. Other tenants in the area include the headquarters of Millennium
Bank, USAID, Vale as well as various international oil and gas producing companies.
Prospects
The Group is in the process of finalising the previously announced acquisition of the Vodacom Building in Maputo, Mozambique. The delay in transfer of
the property has resulted in the purchase price increasing from USD 45 million to USD 49 million. The property, completed in December 2010, is an
iconic multi-storey building located in a prime position in the new downtown CBD of Maputo, close to the Hollard Building. The single tenanted building is
occupied by the Vodacom Group Limited with a 10 + 10-year fully maintaining lease, which commenced on 01 January 2011. The property is expected
to be acquired at a yield of 6.97%.
Management will continue to focus on bedding down the initial acquisitions in order to optimise the full potential of the portfolio.
The development of phase 2 of the Anadarko Building is expected to commence in 2015. In addition to the net rental income to be generated on the
leased building, the Group will share in the development fee without taking any development risk, reflecting the Group's existing interest in the land. The
development will be pre-committed with a long-term lease to Anadarko.
The Company is committed to progressively increasing its portfolio and continues to evaluate potential opportunities consistent with its strategy and
investment principles. In the short term the Company will be focused on increasing its investments in Mozambique and Morocco.
Directors' interests in shares
The interests of directors in the share capital of the Company as at 31 December 2014 were as follows:
Beneficial
Name Title Direct Indirect Shareholding %
Non-executive directors
Bronwyn Corbett Non-executive director – 3,122,492 6.99
Sandile Nomvete Chairman – 3,837,114 8.59
6,959,606 15.58
Unaudited consolidated statement of changes in equity
for the six months ended 31 December 2014
Foreign
currency Total
Share translation Retained attributable to
capital reserve earnings equity holders
USD'000 USD'000 USD'000 USD'000
Balance at 01 September 2013 865 (31) 67 901
Total comprehensive loss for the period – – (48) (48)
Foreign currency translation reserve movement – 84 – 84
Balance at 30 June 2014 865 53 19 937
Total comprehensive loss for the period – – (2,156) (2,156)
Foreign currency translation reserve movement – 736 – 736
Shares issued 87,942 – – 87,942
Share issue expenses (1,164) – – (1,164)
Balance at 31 December 2014 87,643 789 (2,137) 86,295
Consolidated segmental analysis
Unaudited Audited
six months ended 10 months ended
31 Dec 2014 30 Jun 2014
USD'000 USD'000
Profit/(loss) before tax
Morocco (3,500) –
Mozambique 6, 791 –
Corporate (2,933) (48)
Total 358 (48)
Unaudited Audited
As at As at
31 Dec 2014 30 Jun 2014
USD'000 USD'000
Total assets
Morocco 118,718 –
Mozambique 46,439 –
Corporate 5,158 –
Total 170,315 –
Consolidated statement of financial position
as at 31 December 2014
Unaudited Audited
As at As at
31 Dec 2014 30 Jun 2014
USD'000 USD'000
Assets
Non-current assets
Investment property 150,406 –
Fair value of property portfolio 149,490 –
Straight-line rental income accrual 916 –
Property, plant and equipment 81 –
Goodwill 5,205 –
Other financial assets 3,275 276
Total non-current assets 158,967 276
Current assets
Trade and other receivables 9,504 32
Cash and cash equivalents 1,844 649
Total current assets 11,348 681
Total assets 170,315 957
Equity and liabilities
Total equity attributable to equity holders
Share capital 87,643 865
Foreign currency translation reserve 789 53
Retained earnings (2,137) 19
Total equity attributable to shareholders 86,295 937
Liabilities
Non-current liabilities
Interest-bearing borrowings 74,418 –
Deferred tax 7,975 –
Total non-current liabilities 82,393 –
Current liabilities
Trade and other payables 1,105 20
Current tax payable 522 –
Total current liabilities 1,627 20
Total liabilities 84,018 20
Total equity and liabilities 170,315 957
Net asset value per share (cents) 193.24 141.07
Net asset value per share (excluding deferred taxation) (cents) 211.10 141.07
Consolidated statement of comprehensive income
for the six months ended 31 December 2014
Unaudited Audited
six months ended 10 months ended
31 Dec 2014 30 Jun 2014
USD'000 USD'000
Gross rental income 6,837 –
Straight-line rental income accrual 916 –
Revenue 7,753 –
Investment income – 63
Property operating expenses (1,671) –
Net property income 6,082 63
Other income 66 –
Administrative expenses (572) (78)
Profit/(loss) from operations 5,576 (15)
Acquisition costs (2,487) –
Set-up costs (525) –
Fair value adjustment on investment property 5,333 –
Disposal of investment in subsidiary – (33)
Realised foreign currency gain 516 –
Unrealised foreign currency loss (6,373) –
Profit/(loss) before interest and taxation 2,041 (48)
Interest income 18 –
Finance costs (1,701) –
Profit/(loss) for the period before tax 358 (48)
Current tax expense (530) –
Deferred tax expense (1,984) –
Loss for the period after tax (2,156) (48)
Gain on translation of presentation currency 736 84
Total comprehensive (loss)/income for the period attributable
to equity holders (1,420) 36
Reconciliation of earnings, headline earnings and distributable earnings
for the six months ended 31 December 2014
Unaudited Audited
six months ended 10 months ended
31 Dec 2014 30 Jun 2014
USD'000 USD'000
Basic earnings (1,420) 36
Fair value adjustment on investment property (net of deferred taxation) (3,633) –
– Fair value adjustment (5,333) –
– Deferred taxation 1,702 –
Gains or loss on the loss of control of a subsidiary – 33
Foreign currency translation reserve movement (736) (84)
Headline earnings/(loss) attributable to shareholders (5,788) (15)
Straight-line rental income accrual (net of deferred taxation) (633) –
– Straight-line rental income accrual (916) –
– Deferred taxation 283 –
Unrealised foreign currency exchange differences 6,373 –
Acquisition costs 2,487 –
Set-up costs 525 –
Distributable earnings attributable to shareholders for the period 2,963 (15)
Distribution from reserves – –
Less: interim dividend (2,963) –
Earnings not distributed – (15)
Number of shares entitled to a dividend 44,656,447 664,180
Distributable earnings per share (cents) 6.63 N/A
Number of shares in issue 44,656,447 664,180
Weighted average number of shares in issue 20,071,041 664,180
Basic (loss)/earnings per share (cents)* (7.07) 5.48
Headline earnings/(loss) per share (cents)* 0.34 (2.10)
* The Company does not have any dilutive instruments in issue.
Condensed consolidated statement of cash flows
for the six months ended 31 December 2014
Unaudited Audited
six months ended 10 months ended
31 Dec 2014 30 Jun 2014
USD'000 USD'000
Net cash utilised in operating activities (3,796) (335)
Net cash (utilised in)/generated from investing activities (94,368) 651
Net cash generated from financing activities 99,359 294
Net cash at the beginning of the period 649 39
Net cash at the end of the period 1,844 649
Further details concerning the Company and this regulatory release can be accessed via the Company's website at www.
deltainternationalproperty.com.
By order of the Board
Sandile Nomvete Louis Schnetler
Chairman Chief executive officer
Bermuda
4 February 2015
Notes
Basis of preparation
The unaudited interim results for the six months ended 31 December 2014 have been prepared in accordance with International Financial
Reporting Standards ("IFRS"), including IAS 34 – Interim Financial Reporting, the rules of the BSX and the Listings Requirements of the JSE.
The results above have not been audited or reviewed by the Company's external auditors, Deloitte Limited Bermuda. The accounting policies
adopted are consistent with those published in the audited annual financial statements for the year ended 30 June 2014. Where applicable,
new accounting policies have been adopted by the Group in the current reporting period. The investments in subsidiaries which the Group
has made in the current reporting period have been accounted for as a financial instrument in terms of IFRS 9 and are measured at fair value
through profit and loss in its separate financial statements.
These financial statements were approved by the Board on 04 February 2015.
Dividend declaration
The Board has approved and notice is hereby given that a maiden cash dividend of 6.63 USD cents per share, has been declared in respect
of the six months from 01 July 2014 to 31 December 2014.
The salient dates for the dividend are set out below:
Last day to trade cum dividend (BSX and JSE) Friday, 20 February 2015
Securities trade ex-dividend (BSX and JSE) Monday, 23 February 2015
Record date (BSX and JSE) Friday, 27 February 2015
Payment date Monday, 02 March 2015
Payment date
No dematerialisation or rematerialisation of share certificates, nor transfer of shares between sub-registers in Bermuda and South Africa
will take place between Monday, 23 February 2015 and Friday, 27 February 2015, both days inclusive. Shareholders on the South African
sub-register will receive dividends in South African Rand, based on the exchange rate to be obtained by the Company on or before Friday,
13 February 2015. A further announcement in this regard will be made on or before Friday, 13 February 2015.
The Board accepts full responsibility for the accuracy of the information contained in these financial statements. The directors are not
aware of any matters or circumstances arising subsequent to the period ended 31 December 2014 that require any additional disclosure
or adjustment to the financial statements.
Registered office
Williams House, 3rd Floor, 20 Reid Street, Hamilton, Bermuda, HM11
Directors: Sandile Nomvete (Chairman and non-executive director), Louis Schnetler (Chief executive officer), Greg Pearson (Chief operating officer),
Greg Booyens (Chief financial officer), Bronwyn Corbett (Non-executive director), James Keyes (Independent non-executive director), David Brown
(Independent non-executive director) and Peter Todd (Independent non-executive director).
Auditors: Deloitte Limited (Bermuda)
Transfer secretary: Computershare Investor Services Proprietary Limited Ground Floor, 70 Marshall Street, Johannesburg, 2001, South Africa
Registrar and transfer agent: Apex Fund Services Limited
BSX sponsor: Global Custody and Clearing Limited
JSE sponsor: Java Capital
Company secretary: Apex Fund Services Limited
www.deltainternationalproperty.com
5 February 2015
Date: 05/02/2015 05:46:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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