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Unaudited consolidated interim financial statements for the three months and the nine months ended 31 March 2015
DELTA INTERNATIONAL PROPERTY HOLDINGS LIMITED
(The "Company")
(Registered by continuation in the Republic of Mauritius)
(Registration number 128881 C1/GBL)
JSE share code: DLI SEM share code: DEL.N0000
ISIN: MU0473N00002 (Old ISIN number BMG2707T1018)
UNAUDITED
Consolidated interim financial statements
for the three months and the nine months ended 31 March 2015 (the "financial statements")
DIRECTORS' COMMENTARY
Nature of the business
The Company was initially incorporated in Bermuda on 16 May 2012 as a Bermudian exempted company under the laws of
Bermuda and has been operational since 01 June 2012. The Company was discontinued from Bermuda on 11 March 2015 and was
registered by continuation in Mauritius as a public company limited by shares on 11 March 2015. It holds a Category One
Global Business License as from 13 March 2015.
On 30 March 2015 the Company transferred its primary listing from the Bermuda Stock Exchange to the Stock Exchange of
Mauritius Ltd ("SEM"). The Company has a secondary listing on the Alternative Exchange ("AltX") of the Johannesburg
Stock Exchange Limited ("JSE"). Delta International is in the process of migrating its listing on the AltX to the main
board of the JSE and will maintain two primary listings going forward. The rationale for the migrations was to attract a
more diverse shareholder base and to increase the liquidity of the shares.
The Company and its subsidiaries ("Delta International" or "the Group") have embarked on a strategy of acquiring a
portfolio of African real estate assets (excluding assets situated in South Africa) in furtherance of its objective of
investing in real estate assets that will provide strong sustainable income from high quality tenants. The Group has
been significantly restructured since the change in ownership in May 2014.
Review
During the three month period from 01 January 2015 the focus has been on restructuring the Group and raising additional
capital to complete the acquisition of the Hollard Building, the Vodacom Building and Zimpeto Square. These assets are
all based in Maputo, Mozambique and are in line with the investment criteria of sustainable income from high quality
tenants.
The Anadarko Building in Mozambique is operating as expected and remains 100% occupied. The day to day management of the
property has been bedded down and it is generating attractive returns on capital. The development of phase 2 of the
Anadarko Building is expected to commence by the end of 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. The development
fee is based on the Group's existing interest in the land. The development will be pre-committed with a long-term lease
to Anadarko and will create favourable growth on forward returns for the Group.
Anfa Place in Morocco is performing well with vacancies improving monthly. McDonald's has recently been signed up as a
new tenant. The much anticipated opening of the adjacent Four Season's hotel in September 2015 should see further
reductions in vacancies and potential uplift in the footfall. The arrears are monitored continuously with strong efforts
on collections which are yielding positive results. Management will continue to work with centre management on bedding
down the asset in order to optimise its full potential. From a macro-economic perspective Morocco has seen a record
harvest in cereal this year. With agriculture being one of the main industries this should lead to positive GDP growth
and potential strengthening of the Moroccan Dirham.
Historically the Moroccan Dirham ("MAD") has been a stable currency against the United States Dollar ("USD"). This is
due to the fact that the MAD is a managed currency having been based on a basket of currencies consisting of the Euro
and the USD, with weights of 80% and 20% respectively. This weighting has now changed to a 60% Euro, 40% USD.
Since 1 July 2014 up until 13 May 2015, the USD has gained c.20% in value against the Euro. Due to the fact that the MAD
is managed as per the high weighting to the Euro above, this translates into the USD making significant value gains
against the MAD (c.17% since 1 July 2015).
Although the MAD has lost significant value against the USD since 1 July 2015, the Moroccan economy still provides a
strong investment case. The MAD has strengthened against the USD in recent weeks and through continued strengthening
will see USD earnings on Anfa Place increase in the same manner.
The loan to value ratio of the Group at 31 March 2015 was 54.6% which is greater than the targeted 50%. This is
temporarily higher than targeted due to debt facilities drawn down on to pay for deposits on the Hollard Building and
the Vodacom Building which had not yet transferred by 31 March 2015.
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 Group will continue to be focused on
increasing its investments in Mozambique and Morocco.
Changes to the Board
On 14 April 2015 the Company announced that Mr Gideon Louis Schnetler, Delta International's chief executive officer and
a director of the Company, had tendered his resignation due to unforeseen personal reasons. Mr Schnetler's resignation
is effective on 07 July 2015. The Board is currently undergoing a process of identifying an appropriate replacement for
Mr Schnetler and is over-seeing the hand-over of his responsibilities to ensure minimal disruption to the Company. The
Company is in the process of appointing new directors who have key skills in the property sector and the listed
environment.
Subsequent events
On 20 April 2015 the Group completed the acquisition of the Hollard Building through the acquisition of 100% of the
issued shares of HM&K Properties Limited ("HM&K"). The delay in settlement of the balance owing to the HM&K shareholders
resulted in the purchase price increasing to US$14.9 million. The price increase was a direct correlation to the
increase in rentals which took place over the period of the delayed settlement and had no impact on the acquisition
yield.
On 22 April 2015 the Company raised US$39 million through the issue of 26 354 444 new ordinary shares through a private
placement. The proceeds will be utilised to fund the acquisition of the Vodacom Building, Zimpeto Square and to retire a
portion of debt associated with the completed acquisition of the Hollard Building. The equity raise brought on
additional shareholders including the Public Investment Corporation, the largest pension fund in Africa, who now own 25%
of the shares in issue. The Group has commenced applications with the Mozambique Central Bank for the approval of a
foreign loan to be brought into Mozambique to complete the acquisition of the Vodacom Building and Zimpeto Square.
Outlook
The Board remains confident on the prospects of the business and the future returns.
The aforegoing forecast statement and the information underlying such statement are the responsibility of the Board and
has not been reviewed or reported on by the Group's external auditors. The forecast is based on assumptions, including
assumptions that a stable regional, political and economic environment as well as a stable global macro-economic
environment will prevail.
By order of the Board
Apex Fund Services (Mauritius) Ltd
Company Secretary
14 May 2015
Consolidated Statements of Financial Position
Unaudited Unaudited Audited
For the three For the six For the ten
months ended months ended months ended
31 March 31 December 31 June
2015 2014 2014
$'000 $'000 $'000
Assets
Non-current assets
Investment property 145 184 150 406 -
Fair value of property portfolio 143 125 149 490 -
Straight line rental income accrual 2 059 916 -
Property, plant and equipment 97 81 -
Goodwill 5 205 5 205 -
Other financial assets 276
Total non-current assets 150 486 155 692 276
Current assets
Trade and other receivables 18 522 17 199 32
Other financial assets 7 515 3 275 -
Cash and cash equivalents 4 069 1 844 649
Total current assets 30 106 22 318 681
Total assets 180 592 178 010 957
Equity and liabilities
Total equity attributable to equity holders
Share capital 87 103 87 643 865
Foreign currency translation reserve 1 065 789 53
Retained loss (7 843) (2 136) 19
Total equity attributable to equity holders 80 325 86 296 937
Liabilities
Non-current liabilities
Interest-bearing borrowings 79 316 74 418 -
Deferred tax 9 245 7 975 -
Total non-current liabilities 88 561 82 393 -
Current liabilities
Trade and other payables 11 506 8 799 20
Current tax payable 200 522 -
Total current liabilities 11 706 9 321 20
Total liabilities 100 267 91 714 20
Total equity and liabilities 180 592 178 010 957
Net asset value per share (cents) 179.87 193.24 141.07
Net asset value per share (excluding deferred taxation) (cents) 200.57 211.10 141.07
Consolidated Statements of Comprehensive Income
Unaudited Unaudited
For the three For the nine
months ended months ended
31 March 31 March
2015 2014
$'000 $'000
Gross rental income 3 206 10 042
Straight-line rental income accrual 1 143 2 059
Revenue 4 349 12 101
Property operating expenses (1 218) (2 889)
Net property income 3 131 9 212
Other income – 65
Administrative expenses (376) (947)
Operating profit 2 755 8 330
Acquisition fees (203) (2 690)
Set-up costs (149) (673)
Fair value adjustment on investment property 3 149 8 483
Realised foreign currency gain – 516
Unrealised foreign currency loss (6 303) (12 676)
(Loss)/Profit before interest and taxation (751) 1 290
Interest income 25 44
Interest expense (1 201) (2 901)
Loss for the period before tax (1 927) (1 567)
Current tax expense 556 26
Deferred tax expense (1 373) (3 357)
Loss for the period after tax (2 744) (4 898)
Gain on translation of functional currency 276 1 012
Other comprehensive income – –
Total comprehensive loss (2 468) (3 886)
Actual number of shares in issue 44 656 447 44 656 447
Weighted number of shares in issue 44 656 447 41 271 622
Basic loss per share (cents) (5.53) (9.42)
Headline loss per share (cents) (14.10) (36.04)
Reconciliation of basic and headline earnings:
Profit for the period attributable to shareholders (2 468) (3 886)
Fair value adjustments on investment property (1 776) (5 126)
– Fair value adjustment (3 149) (8 483)
– Deferred tax 1 373 3 357
Foreign currency translation reserve movement (276) (736)
Headline earnings attributable to equity holders (4 520) (9 748)
Consolidated Statement of Changes in Equity
Total
Foreign attributable
currency to
Share translation Retained equity
Capital reserve Earnings holders
$'000 $'000 $'000 $'000
Balance as at 1 July 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 (1 163) - - (1 163)
Balance as at 31 December 2014 87 644 789 (2 137) 86 296
Total comprehensive loss for the period - - (2 745) (2 745)
Dividends paid - - (2 962) (2 962)
Foregn currency translation reserve movement - 276 - 276
Shares issued - - - -
Share issue expenses (540) - - (540)
Balance as at 31 March 2015 87 104 1 065 (7 844) 80 325
Consolidated Statement of Cashflows
Unaudited Unaudited
For the three For the nine
months ended months ended
31 March 31 March
2015 2014
$'000 $'000
Net cash utilised in operating activities (6 238) (10 035)
Net cash utilised in investing activities (22) (94 390)
Net cash generated from financing activities 8 485 107 845
Increase in cash and cash equivalents 2 226 3 420
Cash and cash equivalents at beginning of period 1 844 649
Cash and cash equivalents at end of period 4 069 4 069
Consolidated segmental analysis
Unaudited Unaudited
For the three For the nine
months ended months ended
31 March 31 March
2015 2014
$'000 $'000
Profit/(Loss) before tax
Morocco (6 789) (10 289)
Mozambique 3 368 10 158
Corporate 1 496 (1 437)
Total (1 925) (1 568)
For the three For the six
months ended months ended
31 March 31 December
2015 2014
$'000 $'000
Total Assets
Morocco 118 371 118 718
Mozambique 50 730 46 439
Corporate 11 491 5 158
Total 180 592 170 315
NOTES
The Group is required to publish financial results for the three months and nine months ended 31 March 2015 in
accordance with the Listing Rule 12.19 of the SEM. Accordingly, this announcement presents the financial results of the
Group in respect of the three month period from 1 January 2015 to 31 March 2015, the nine month period from 1 July 2014
to 31 March 2015. Comparatives from the prior periods have not been disclosed due to the significant restructuring and
the change in year-end which has taken place subsequent to May 2014.
The accounting policies which have been applied are consistent with those used in the preparation of the audited
financial statements for the period ended 30 June 2014.
The financial statements for the quarter ended 31 March 2015 have been prepared in accordance with the measurement and
recognition requirements of IFRS, the requirements of IAS 34: Interim Financial Reporting, the JSE Listings
Requirements, the SEM Listing Rules and the Securities Act of Mauritius 2005.
The financial statements have not been reviewed or reported on by the Group's external auditors.
These financial statements were approved by the Board on 14 May 2015.
Copies of the financial statements and the Statement of direct and indirect interests of each officer of the Group,
pursuant to rule 8(2)(m) of the Securities (Disclosure Obligations of Reporting Issuers) Rules of Mauritius 2007, are
available free of charge, upon request at the Company's registered address.
This communiqué is issued pursuant to SEM Listing Rule 12.20 and section 88 of the Securities Act of Mauritius 2005. 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 March 2015 that
require any additional disclosure or adjustment to the financial statements.
Directors: Sandile Nomvete (chairman), Gideon Schnetler*, Gregory Pearson*, Greg Booyens*, Bronwyn Corbett, Peter Todd
(lead independent) and Maheshwar Doorgakant (*executive director)
Company Secretary: Apex Fund Services (Mauritius) Ltd
Registered address: 4th Floor, Raffles Tower, 19 Cybercity, Ebene, Mauritius
Transfer secretary (South Africa): Computershare Investor Services Proprietary Limited
Registrar and Transfer Agent (Mauritius): Mauritius Computing Services
JSE sponsor: Nedbank
SEM sponsor: LCF Securities
Date: 15/05/2015 10:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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