Wrap Text
Condensed consolidated financial results for the year ended 31 December 2016
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
Registered office: 2nd Floor, Anglo International House, Lord Street, Douglas, Isle of Man, IM1 4LN
BVB share code: NEP
JSE share code: NEP
ISIN: IM00B23XCH02
('NEPI', 'the Group' or 'the Company')
CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS' COMMENTARY
DISTRIBUTABLE EARNINGS
The Group achieved 40.50 euro cents in distributable earnings per share for 2016, a 14.7% improvement in recurring distributable
earnings per share compared to 35.34 euro cents per share distributed in 2015 (respectively a 16.5% increase as compared to the 2015
recurring distributable earnings based on which the earnings guidance was provided). This growth is due to the strong performance of
the Group's assets, profitable acquisitions and developments completed during the year, as well as having maintained a moderate liquidity
profile during the period.
FINAL DISTRIBUTION AND OPTION TO RECEIVE CAPITAL RETURN
The Board of Directors declares a distribution of 21.82 euro cents per share for the second half of 2016, which, combined with 18.68
euro cents per share for the first half of the year, results in a 40.50 euro cents per share distribution for 2016. Shareholders can
elect to receive distribution either in cash or as an issue of fully-paid shares based on a ratio between distribution declared and the
reference price. The reference price will be calculated using a maximum 7% discount to the five-day volume-weighted average
traded price, less distribution, of NEPI shares on the Johannesburg Stock Exchange (JSE), no later than 31 March 2017.
A circular containing full details of the election being offered to shareholders, accompanied by announcements on the Stock
Exchange News Service (SENS) of the JSE and the Bucharest Stock Exchange (BVB), will be issued in due course.
MERGER OF NEPI AND ROCKCASTLE
During the fourth quarter of 2016, NEPI and Rockcastle Global Real Estate Company Limited (Rockcastle), a property investment
company established in Mauritius and listed on the JSE and the Stock Exchange of Mauritius (SEM), issued joint cautionary
announcements regarding a potential transaction. On 14 December 2016, a framework agreement was announced (Framework
Agreement), pursuant to which their respective businesses would be merged into an entity newly-incorporated in the Isle of Man,
NEPI Rockcastle plc (NewCo). This is expected to be implemented with an effective share swap ratio of 4.5 Rockcastle shares for
one NEPI share (the Swap Ratio).
In accordance with the Framework Agreement, NEPI and Rockcastle will transfer all assets and liabilities, including their
subsidiaries, effectively transferring their entire businesses to NewCo. In exchange, NewCo will issue ordinary shares (NewCo
Shares) to NEPI and Rockcastle, in line with the Swap Ratio.
NewCo is expected to benefit from enhanced liquidity, and be the largest listed real estate company in Central and Eastern
Europe (CEE). NewCo Shares are expected to be listed on the Main Board of the JSE and Euronext Amsterdam, as well as other
stock exchanges NEPI and Rockcastle agree upon. The transaction will integrate two complementary management teams,
unlocking strategic synergies and creating additional value for shareholders.
Considering the envisaged merger, including anticipated improvements in portfolio size and diversification, Standard & Poor's
Global Ratings (S&P) revised NEPI's outlook from 'Stable' to 'Positive', and reaffirmed the long-term 'BBB' corporate credit rating.
Moody's Investors Service (Moody's) retained NEPI's Baa3 Stable, but considers the merger credit positive.
These transactions will be implemented following the fulfilment, or waiver, of several conditions precedent, including approval by
Boards of Directors and shareholders, as well as all relevant authorities, on or before 30 June 2017.
A circular detailing this transaction, accompanied by announcements on the relevant stock exchanges, is expected to be issued
by 30 April 2017.
CONTINUING STRATEGIC EXPANSION IN CEE
The Group's exceptional track record continued throughout 2016 with a property portfolio growth of 47%, from EUR1.73 billion on
31 December 2015 to EUR2.55 billion on 31 December 2016. Income-producing properties currently cover 1,000,000m(2) GLA and
over 200,000m(2) GLA of properties are being permitted for development or are under construction.
NEPI owns and operates 871,800m(2) retail GLA and 143,800m(2) office GLA, including joint ventures. During 2016, 286,200m(2) retail
GLA (including joint ventures) was added via the completed acquisitions and developments. The Group's team has grown proportionately during this
period, and currently comprises 330 professionals with expertise in accounting, architecture, asset management, administration,
development, finance, investments, law, leasing, marketing, property management and tax.
Retail assets comprise 87% of the operating property portfolio (by market value). Over the last five years, annual occupancy and
collection rates have exceeded 95% and 99%, respectively. Continuous Net Operating Income (NOI) growth illustrates not only
the benefits of active asset management, but also the success of the retail assets: 152 million people visited the Group's shopping
centres in 2016.
During the period, NEPI has continued to focus on expanding its portfolio of dominant retail assets. It entered two new CEE
markets in 2016: the Czech Republic and Croatia. The Group will soon start construction of its first development outside of
Romania: a mall in Novi Sad, Serbia's second largest city. NEPI's extensive development experience will ensure building of a
modern centre, with leading fashion, food, entertainment and leisure facilities, and many renowned international brands.
The Group is currently present in five CEE countries, and its multinational experience positions it for further growth of its
strategic relationships with tenants, suppliers and other stakeholders. The Company is actively pursuing investment opportunities
in CEE. Although increased competition and yield compression have been observed across these markets during the past
period, NEPI, with its established property platform, remains well positioned for further expansion.
The Company's investment grade ratings are currently limited by Romania's sovereign rating, as Romanian assets comprise 73%
(including joint ventures) by gross rentals of the income-producing portfolio. NEPI's low gearing ratio (interest bearing debt
less cash divided by investment property and listed property securities) of 27%, combined with a portfolio that is 87% unencumbered,
allows good access to liquidity necessary for further growth.
RETAIL ACQUISITIONS
The Group completed the acquisition and development of a number of properties during 2016, discussed below. The country and
effective or opening date are included in brackets. Populations are estimates.
Forum Usti nad Labem (Czech Republic, 29 February 2016)
NEPI acquired the dominant shopping centre in Usti nad Labem, a city with 93,000 inhabitants and 478,000 residents within a
45-minute drive. The centre has a 27,800m(2) GLA and is anchored by a Billa supermarket. The centre houses numerous national and
international fashion brands, as well as a Cinema City.
Shopping City Sibiu (Romania, 31 March 2016)
NEPI acquired Shopping City Sibiu, a 78,200m(2) GLA shopping mall located in Sibiu, a city with 170,000 inhabitants and 286,000
residents within a 45-minute drive. The region's dominant shopping centre, Shopping City Sibiu contains two hypermarkets, Auchan
and Carrefour, numerous national and international brands and a wide selection of furniture and DIY stores.
Mega Mall: acquisition of minority interest (Romania, 31 May 2016)
Following the purchase of the remaining 30% interest, NEPI became sole owner of Mega Mall, eastern Bucharest's 75,200m(2) GLA
dominant shopping centre, with 910,000 residents within a 30-minute drive.
Korzo Shopping Centrum (Slovakia, 19 July 2016)
The Group acquired the 16,100m(2) GLA Korzo Shopping Centrum, the dominant mall in Prievidza, a city with 48,000 residents
and 308,000 inhabitants within a 45-minute drive. The centre is part of a retail park that includes a Tesco and a DIY store. A
refurbishment and an extension are being considered.
Aupark Shopping Center Piestany (Slovakia, 31 August 2016)
NEPI acquired the 10,300m(2) GLA Aupark Shopping Center, the main retail centre in Piestany, Slovakia's main resort and spa centre,
with 28,000 inhabitants and 791,000 residents within a 45-minute drive. The centre is anchored by a Billa supermarket and houses
many international brands.
Arena Centar (Croatia, 4 November 2016)
NEPI acquired the 62,100m(2) GLA Arena Centar, the largest shopping centre in Zagreb, Croatia's capital. The city has 790,000
residents and there are 1.4 million inhabitants within a 45-minute drive. The centre houses an Interspar hypermarket, a ten-screen
CineStar cinema and numerous popular national and international brands. The transaction included the acquisition of an additional,
adjacent 4.4ha land suitable for future development.
COMPLETED RETAIL DEVELOPMENTS AND EXTENSIONS
Shopping City Timisoara (Romania, 31 March 2016)
The Group completed the second phase of Shopping City Timisoara, an additional 40,400m2 fashion and entertainment GLA,
bringing the total GLA to 56,700m(2). The centre is located in Timisoara, Romania's third largest city, with 334,000 residents and
570,000 inhabitants within a 45-minute drive. Anchored by a Carrefour hypermarket, and adjacent to a Dedeman DIY store, the
mall houses numerous international brands, a gym, a swimming pool and a thirteen-screen cinema with IMAX and 4DX auditoriums.
A Peek & Cloppenberg store will open in March 2017.
City Park extension (Romania, 30 September 2016)
NEPI completed the fashion extension to City Park mall, Constanta, a city with 319,000 residents. The centre is now totalling
51,700m(2) GLA, and is becoming the dominant mall in the region. There are 541,000 inhabitants within a 45-minute drive. Anchored
by a Cora hypermarket, City Park has a ten-screen Cinema City, with a 4DX auditorium, and houses numerous popular national and
international brands. Subject to permitting, during 2017, the food court will be refurbished and expanded, and additional parking
spaces will be available.
Severin Shopping Center extension (Romania, 29 October 2016)
During 2016, the Group extended Severin Shopping Center with an additional 1,700m(2) GLA, including C&A, increasing total
GLA to 22,600m(2). It is the main centre in Drobeta-Turnu Severin, a city with 111,000 residents and 175,000 inhabitants within a
45-minute drive.
Shopping City Piatra Neamt (Romania, 1 December 2016)
The Group completed a 27,900m(2) GLA dominant regional mall in Piatra Neamt, a city with 116,000 residents and 245,000
inhabitants within a 45-minute drive. This centre is anchored by a Carrefour hypermarket, a six-screen Cinema City and houses
popular international brands, such as: Bershka, CCC, Deichmann, dm, H&M, Intersport, KFC, NewYorker, Pepco and Takko.
Braila Mall extension (Romania, 10 December 2016)
During 2016, NEPI completed the refurbishment of the mall's food court, and added supplementary GLA of new fashion tenants
such as: Bershka, LC Waikiki, Pull&Bear and Stradivarius. The mall now has a 55,400m(2) GLA and consolidated its position as the
main regional shopping destination in Braila, a city with 213,000 residents and 575,000 inhabitants within 45-minute drive.
DEVELOPMENT PIPELINE
Consistent with its strategy, the Group continues to invest in developments that significantly increase distributable earnings per
share. NEPI's development pipeline, including redevelopments and extensions, has increased to EUR726 million (estimated at cost), of
representing an increase of EUR125 million compared with the previous year. EUR179 million relating to the current development pipeline was spent by 31 December 2016.
RETAIL DEVELOPMENTS AND EXTENSIONS
Promenada Mall extension (Romania)
The process of obtaining new zoning and construction permits for Promenada Mall's retail extension and integrated office
building is underway, having experienced material delays. The mall is located in Bucharest's central business district, with 177,000
inhabitants within a 15-minute drive. The retail extension will include new fashion brands, a 14-screen Cinema City, additional leisure
and entertainment facilities and 1,600 new parking spaces. Subject to full permitting being obtained during 2017, NEPI targets to
complete the extension during 2018.
Promenada Novi Sad (Serbia)
Permitting for a mall of up to 56,000m2 GLA in Novi Sad is underway. Novi Sad is Serbia's second largest city, with 250,000
residents and 354,000 inhabitants within a 30-minute drive, and strong tenant demand. Construction is expected to commence
during the first quarter of 2017 and should be completed by the end of 2018.
Shopping City Satu Mare (Romania)
NEPI intends to develop a 28,700m2 regionally dominant mall in Satu Mare, a city with a population of 123,000 residents and
288,000 inhabitants within a 45-minute drive. Subject to permitting, construction should commence in the first quarter of 2017 and
the shopping centre is scheduled to open in 2018.
Ramnicu Valcea Mall (Romania)
Permitting for a 27,900m2 GLA regional mall in Ramnicu Valcea, a city with 119,000 residents and 315,000 inhabitants within
a 45-minute drive, is in progress. The centre will include a Carrefour hypermarket, Cinema City and numerous national and
international brands. Subject to permitting, construction will begin in the first quarter of 2017 and the centre is scheduled to open
in the fourth quarter of 2017.
Shopping City Galati extension (Romania)
The Group intends to extend Shopping City Galati, a 27,200m(2) GLA regional mall located in Galati, a city with 306,000 residents
and 559,000 inhabitants within a 45-minute drive. The centre's performance since opening has been excellent, and NEPI will
extend it with 21,000m(2) GLA, including a cinema, food court and international fashion brands. Subject to permitting, NEPI targets
completing the extension in the fourth quarter of 2017.
Retail parks (Serbia)
The Group acquired land in Krusevac, a city with 59,000 residents, and Sabac, a city with 54,000 inhabitants, with the intention
to develop two 9,000m(2) GLA retail parks, with the potential for future extension. There is no other material modern retail offering
in these cities. The retail schemes will be anchored by retailer-owned supermarkets. Subject to permitting, construction should
commence in 2017 and be completed in 2018.
Shopping City Sibiu: reconfiguration and extension (Romania)
NEPI intends to extend, reconfigure and refurbish Shopping City Sibiu, creating an additional 10,600m(2) GLA. The extension will
house a seven-screen cinema, additional restaurants and international fashion brands. Subject to permitting, construction is
planned to commence during the first half of 2017 and should be completed by year-end.
Ploiesti Shopping City extension (Romania)
The Group and its joint venture partner plan to extend Ploiesti Shopping City, a 45,800m(2) GLA regional mall, located in Ploiesti,
a city with 235,000 residents and 774,000 inhabitants within a 45-minute drive. The additional 6,200m(2) GLA will include new
international brands. Subject to permitting, NEPI targets completing the extension in the fourth quarter of 2017.
OFFICE DEVELOPMENTS AND EXTENSIONS
The Office Cluj-Napoca extension (Romania)
Construction of the 18,500m2 GLA third phase of The Office, Cluj-Napoca, is ongoing and will be handed over for tenant fit-out in
the second quarter of 2017.
Victoriei Office (Romania)
The Group has substantially finalised developing the 7,600m(2) GLA landmark office, located in central Bucharest, adjacent to the
Romanian Government building. Permitting of internal fit-out has experienced material delays; given the tenant demand, opening
will immediately follow permitting and the respective fit-out works.
OTHER HIGHLIGHTS
Non-recoverable tenant income for 2016 was 0.18% of annual contractual rental income and expense recoveries. The vacancy level
as of 31 December 2016 was 2%, not including properties held for sale.
NEPI withdrew its shares from trading on the Alternative Investment Market (AIM) of the London Stock Exchange, due to the low
trading volumes and the majority of capital raised having been accessed through the JSE. The delisting was effective 10 October
2016.
CHANGES TO THE BOARD OF DIRECTORS
Mr Tiberiu Smaranda resigned from his position as Executive Director, effective as of 1 September 2016.
The Board appointed Mr Robert Reinhardt Emslie and Mr Antoine Laurens Vincent Dijkstra as Non-executive Directors on
4 February 2016 and 13 June 2016, respectively. Mr Andries de Lange was appointed as alternate Director to Mr Desmond de Beer,
an Independent Non-executive Director, on 9 August 2016.
CASH MANAGEMENT AND DEBT
As of 31 December 2016, the Group had EUR48 million in cash and additional undrawn facilities of EUR45 million.
During 2016 NEPI raised EUR219 million through the issue of new ordinary shares, used additional debt facilities of EUR224 million (out
of which EUR13 million from joint ventures) and repaid the Floreasca Business Park loan (EUR46 million). The committed unsecured
revolving facility was extended until December 2018 and increased to EUR130 million. The Aupark Zilina loan was extended until
December 2022 and increased to EUR65 million.
As of 31 December 2016, NEPI's gearing ratio (interest bearing debt less cash divided by investment property and listed property
shares) reached 27%, compared to 14% at the end of 2015.
In 2016, the average interest rate, including hedging costs, was 3.7%, down from 3.9% in 2015, as a result of contracting new debt
at lower cost and decreasing costs associated with existing debt. As of 31 December 2016, fixed-coupon bonds represented 61.7%
of outstanding debt; of the remaining debt exposed to Euribor, 62% was hedged with interest rate caps and 38% with interest rate
swaps.
PROSPECTS AND EARNINGS GUIDANCE
The Board projects that approximately 15% growth in distributable earnings per share for 2017 compared to 2016 is achievable
based on the following assumptions: a) any potential corporate-level transaction is ignored; b) planned developments remain on
schedule; and c) a stable macroeconomic environment prevails and no major corporate
failures occur. This forecast has not been audited or reviewed by NEPI's auditors and is the responsibility of the Board.
By order of the Board of Directors,
Alexandru Morar Mirela Covasa
Chief Executive Officer Chief Financial Officer
15 February 2017
For further information please contact: New Europe Property Investments Plc, Mirela Covasa: +40 21 232 1398
JSE sponsor: Java Capital: +27 11 722 3050 BVB advisor: SSIF Intercapital Invest SA, Razvan Pasol: +40 21 222 8731
www.nepinvest.com
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 Dec 2016 31 Dec 2015
ASSETS
Non-current assets 2 674 176 1 829 440
Investment property 2 546 772 1 732 760
Investment property in use 2 370 760 1 576 019
Investment property under development 176 012 156 741
Goodwill 58 390 23 986
Investments in joint ventures 22 023 15 640
Long-term loans granted to joint ventures 31 015 36 674
Other long-term assets 15 299 18 098
Financial assets at fair value through profit or loss 677 2 282
Current assets 107 538 381 097
Trade and other receivables 40 539 54 487
Financial investments at fair value through profit or loss 18 979 -
Cash and cash equivalents 48 020 326 610
Investment property held for sale
Total assets 15 525 25 255
2 797 239 2 235 792
EQUITY AND LIABILITIES
Total equity attributable to equity holders 1 814 552 1 496 550
Share capital 3 215 2 986
Share premium 1 368 171 1 213 325
Share-based payment reserve 4 797 4 797
Currency translation reserve (1 229) (1 229)
Accumulated profit 439 598 275 042
Non-controlling interest - 1 629
Total liabilities 982 687 739 242
Non-current liabilities 831 995 661 717
Bank loans 260 593 162 788
Bonds 394 819 392 140
Deferred tax liabilities 158 864 89 652
Other long-term liabilities 17 403 14 988
Financial liabilities at fair value through profit or loss 316 2 149
Current liabilities 150 692 77 525
Trade and other payables 71 536 62 827
Bank loans 17 999 13 424
Bonds 61 157 1 274
Total equity and liabilities 2 797 239 2 235 792
CONSOLIDATED STATEMENT Share Share Share-based Currency Non-
OF CHANGES IN EQUITY capital premium payment translation Accumulated controlling
reserve reserve profit interest Total
Balance at 1 January 2015 2 746 1 074 310 4 127 (1 229) 167 133 (5 798) 1 241 289
Transactions with owners 240 139 015 670 - (50 489) - 89 436
- Issue of shares 205 129 767 - - - - 129 972
- Sale of shares issued under 35 9 248 - - - - 9 283
the Initial Share Scheme
- Vesting of shares issued under - - 670 - - - 670
the Initial Share Scheme
- Earnings distribution - - - - (50 489) - (50 489)
Total comprehensive income - - - - 158 398 7 427 165 825
- Profit for the period - - - - 158 398 7 427 165 825
Balance at
31 December 2015 2 986 1 213 325 4 797 (1 229) 275 042 1 629 1 496 550
Balance at 1 January 2016 2 986 1 213 325 4 797 (1 229) 275 042 1 629 1 496 550
Transactions with owners 229 154 846 - - (70 412) 687 85 350
- Issue of shares 229 154 800 - - - - 155 029
- Sale of shares issued under - 46 - - - - 46
the Initial Share Scheme
- Earnings distribution - - - - (48 288) - (48 288)
- Acquisition of non- - - - - (22 124) 687 (21 437)
controlling interest
Total comprehensive income - - - - 234 968 (2 316) 232 652
- Profit for the period - - - - 234 968 (2 316) 232 652
Balance at
31 December 2016 3 215 1 368 171 4 797 (1 229) 439 598 - 1 814 552
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 31 Dec 2016 31 Dec 2015
Profit after tax 232 652 165 825
Adjustments (93 262) (66 987)
Changes in working capital 5 066 1 378
Cash flows from operating activities 144 456 100 216
Proceeds from issue of shares 155 075 139 255
Earnings distribution (48 288) (50 489)
Net movements in bank loans and bonds 134 890 297 522
Other payments (24 500) (2 395)
Cash flows from financing activities 217 177 383 893
Investments in acquisitions and developments (621 262) (265 735)
Net cash flow used in investments in financial assets (18 961) -
Cash flows used in investing activities (640 223) (265 735)
Net (decrease)/increase in cash and cash equivalents (278 590) 218 374
Cash and cash equivalents brought forward 326 610 108 236
Cash and cash equivalents carried forward 48 020 326 610
RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE 31 Dec 2016 31 Dec 2015
Net Asset Value per the Statement of financial position 1 814 552 1 496 550
Loans in respect of the Initial Share Scheme 18 64
Deferred tax liabilities for controlled subsidiaries 158 864 89 652
Goodwill (58 390) (23 986)
Deferred tax liabilities for joint ventures 5 952 3 919
Adjusted Net Asset Value 1 920 996 1 566 199
Net Asset Value per share (euro) 5.64 5.01
Adjusted Net Asset Value per share (euro) 5.98 5.25
Number of shares for Net Asset Value per share 321 479 204 298 565 564
Number of shares for adjusted Net Asset Value per share 321 486 204 298 590 564
Korzo
BUSINESS COMBINATIONS Shopping Forum Usti Shopping Aupark Shopping Arena
City Sibiu Nad Labem Centrum Center Piestany Centar Total
Investment property in use 100 000 82 600 29 500 39 500 218 500 470 100
Investment property under development - - - - 19 000 19 000
Current assets 2 950 4 546 966 11 325 8 403 28 190
Current liabilities (5 495) (3 371) (1 132) (12 535) (10 612) (33 145)
Non-current liabilities - - - (20 080) - (20 080)
Deferred tax liabilities (9 850) (5 646) (2 899) (2 497) (13 512) (34 404)
Total identifiable net assets at fair value 87 605 78 129 26 435 15 713 221 779 429 661
Goodwill arising on acquisition 9 850 5 646 2 899 2 497 13 512 34 404
Total consideration payable 97 455 83 775 29 334 18 210 235 291 464 065
Amounts retained from sellers (1 000) - 126 - - (874)
/ receivable from sellers
Total consideration paid in cash 96 455 83 775 29 460 18 210 235 291 463 191
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 2016 2015
Net rental and related income 145 532 104 067
Revenues from rent and expense recoveries 209 890 148 799
Property operating expenses (64 358) (44 732)
Administrative expenses (8 186) (6 695)
EBITDA 137 346 97 372
Acquisition fees (4 339) (933)
Fair value adjustments of investment property 143 163 81 742
Fair value loss on financial investments at fair value through profit or loss (369) -
Dividends received from financial investments 738 -
Net result on sale of financial investments (355) -
Share-based payment expense - (670)
Foreign exchange loss (127) (339)
Loss on disposal of investment property held for sale (485) -
Profit before net finance expense 275 572 177 172
Net finance expense (13 059) (916)
Finance income 4 784 7 613
Finance expense (17 843) (8 529)
Changes in fair value of financial instruments 228 1 149
Share of profit of joint ventures 6 383 2 399
Profit before tax 269 124 179 804
Income tax (36 472) (13 979)
Current tax expense (1 664) -
Deferred tax expense (34 808) (13 979)
Profit after tax
Total comprehensive income for the year 232 652 165 825
232 652 165 825
Non-controlling interest 2 316 (7 427)
Profit for the period attributable to equity holders 234 968 158 398
Weighted average number of shares in issue 309 760 628 284 461 222
Diluted weighted average number of shares in issue 309 778 913 285 813 260
Basic earnings per share (euro cents) 75.85 55.68
Diluted earnings per share (euro cents) 75.85 55.42
RECONCILIATION OF PROFIT FOR THE PERIOD
TO DISTRIBUTABLE EARNINGS 2016 2015
Profit for the period attributable to equity holders 234 968 158 398
Reverse indirect result (108 683) (69 889)
Foreign exchange loss 127 344
Acquisition fees 4 339 933
Share-based payment expense - 670
Fair value adjustments of investment property
for controlled subsidiaries (143 163) (81 742)
Loss on disposal of investment property held for sale 485 -
Fair value loss of financial investments 369 -
Net result on sale of financial investments 355 -
Dividends received from financial investments (738) -
Fair value adjustment of financial assets and
liabilities for controlled subsidiaries (228) (1 149)
Deferred tax expense for controlled subsidiaries 34 808 13 979
Adjustments related to joint ventures
Fair value adjustments of investment property for joint ventures (7 252) (8 204)
Fair value adjustment of financial assets
and liabilities for joint ventures 227 (249)
Deferred tax expense for joint ventures 2 034 5 529
Foreign exchange gain for joint ventures (46) -
Company specific adjustments (558) 12 096
Amortisation of financial assets (3 730) (3 554)
Realised foreign exchange (loss)/gain for controlled subsidiaries (101) 4
Realised foreign exchange gain for joint ventures 7 -
Accrued dividend for financial investments 1 202 -
Accrued interest on share-based payments 2 89
Fair value adjustment of Investment property for
non-controlling interest 2 514 18 598
Deferred tax expense for non-controlling interest (452) (3 041)
Antecedent dividend 3 974 1 954
Distributable earnings 129 701 102 559
Less: Distribution declared (126 688) (102 559)
Antecedent dividend for the first half of 2016 (3 013) -
Interim distribution (59 566) (51 304)
Final distribution (70 135) (51 255)
Earnings not distributed - -
Number of shares entitled to distribution 321 486 204 298 590 564
Distributable earnings per share (euro cents) 40.50 35.34
Less: Distribution declared per share (euro cents) (40.50) (35.34)
Interim distribution per share (euro cents) (18.68) (18.17)
Final distribution per share (euro cents) (21.82) (17.17)
Earnings not distributed (euro cents) - -
SEGMENTAL ANALYSIS Retail Office Industrial Corporate Total
Year ended 31 December 2016
Revenues from rent and expense recoveries 177 614 30 263 2 013 - 209 890
Profit before Net finance expense 249 753 27 167 1 023 (2 371) 275 572
Total Assets 2 338 444 388 883 16 243 53 669 2 797 239
Total Liabilities 369 027 49 105 2 519 562 036 982 687
Year ended 31 December 2015
Revenues from rent and expense recoveries 120 046 26 728 2 025 - 148 799
Profit before Net finance expense 162 501 15 856 1 295 (2 480) 177 172
Total Assets 1 532 260 380 016 17 099 306 417 2 235 792
Total Liabilities 241 875 99 038 2 372 395 957 739 242
RECONCILIATION OF PROFIT FOR THE PERIOD TO HEADLINE EARNINGS 2016 2015
Profit for the period attributable to equity holders 234 968 158 398
Fair value adjustments of investment property (143 163) (81 742)
Loss on sale of investment property held for sale 485 -
Tax effects of adjustments for controlled subsidiaries 24 446 14 333
Fair value adjustments of investment property for joint ventures (7 252) (8 204)
Tax effects of adjustments for joint ventures 1 160 1 312
Headline earnings 110 644 84 097
Weighted average number of shares in issue 309 760 628 284 461 222
Diluted weighted average number of shares in issue 309 778 913 285 813 260
Headline earnings per share (euro cents) 35.72 29.56
Diluted headline earnings per share (euro cents) 35.72 29.42
LEASE EXPIRY PROFILE 2017 2018 2019 2020 2021 2022 2023 2024 2025 >=2026 Total
Total based on rental income 5.4% 10.9% 13.9% 16.7% 17.5% 11.5% 3.9% 3.8% 2.6% 13.8% 100%
Total based on rented area 3.1% 8.8% 13.8% 14.1% 15.2% 11.7% 5.8% 4.7% 4.6% 18.2% 100%
DEBT REPAYMENT PROFILE Type Secured/Unsecured Ownership Outstanding Available for 2017 2018 2019 2020 2021 2022
amount drawdown and beyond
Aupark Kosice Mall & Tower Term loan Secured 100% 99 473 - 5 526 5 526 5 526 82 895 - -
Aupark Zilina Term loan Secured 100% 55 000 10 000 1 945 2 013 2 083 2 156 2 231 44 572
Aupark Piestany Term loan Secured 100% 19 503 - 396 396 396 396 17 919 -
Ploiesti Shopping City Term loan Secured 50% 15 239 - 1 095 1 095 1 095 1 095 1 095 9 764
The Office, Cluj-Napoca Term loan Secured 50% 20 916 - 1 360 1 320 1 320 1 320 15 596 -
NE Property Cooperatief Fixed coupon bonds Unsecured 100% 400 000 - - - - - 400 000 -
NE Property Cooperatief Fixed coupon bonds Unsecured 100% 50 000 - 50 000 - - - - -
NE Property Cooperatief Revolving facility Unsecured 100% 95 000 35 000 - 95 000 - - - -
New Europe Property Investment plc Revolving facility Unsecured 100% 10 249 - 10 249 - - - - -
Total 765 380 45 000 70 571 105 350 10 420 87 862 436 841 54 336
BASIS OF PREPARATION
The condensed consolidated financial results for the year ended 31 December 2016 have been prepared in accordance with the recognition and measurement criteria of the
International Financial Reporting Standards ("IFRS") and interpretations adopted by the International Accounting Standards Board ("IASB"), the presentation and the disclosure
requirements of IAS 34 Interim Financial Reporting and the JSE Listings Requirements. The accounting policies which have been applied are consistent with those used in the
preparation of the annual financial statements for the years ended 31 December 2015 and 31 December 2016. The directors take full responsibility for the preparation of this
preliminary report. This condensed report is extracted from the audited financial statements for the year ended 31 December 2016, but is not itself audited. The directors
take full responsibility for the preparation of the condensed report and for ensuring that the financial information has been correctly extracted from the underlying audited
annual financial statements. The auditors, PricewaterhouseCoopers LLC have issued their unmodified audit report on the annual financial statements for the year ended
31 December 2016 and a copy of the audit opinion, together with the underlying audited annual financial statements are available for inspection at the company's registered office.
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