Wrap Text
Unaudited Abridged Consolidated Interim Financial Statements For The Nine Months Ended 31 March 2017
Mara Delta Property Holdings Limited
(previously Delta Africa Property Holdings Limited)
(Registered by continuation in the Republic of Mauritius)
(Registration number C128881 C1/GBL)
SEM share code: DEL.N0000
JSE share code: MDP ISIN: MU0473N00028
("Mara Delta" or "the Company" or "the Group")
Highlights
Transfer of yield enhancing LUX Tamassa Resort and Mall de Tete
New strategic investor: National Pension Fund of Mauritius
Portfolio occupancy maintained at 98%
Cost of funding reduced to 5.80%
20% of total property portfolio sits in Mauritius
Unaudited abridged consolidated interim financial statements
for the nine months ended 31 March 2017 (the "financial statements")
DIRECTORS' COMMENTARY
NATURE OF THE BUSINESS
Mara Delta is a pan African property income fund focusing on African real estate assets
(excluding South Africa), underpinned by predominantly US Dollar and Euro denominated
medium- to long-term leases with high quality counterparties delivering sustainable income.
Listed in July 2014, the Company holds dual primary listings on the Official Market of the Stock
Exchange of Mauritius Ltd ("SEM") and on the Main Board of the JSE Limited ("JSE").
The Group's strategy remains to expand its property portfolio throughout targeted countries
in Africa, with assets that will provide sustainable long term, hard currency-based income from
high quality counterparties with a core focus on enhancing net asset value and dividend yield.
REVIEW
During the period, the Company has successfully raised capital of US$34.3 million, through
the issue of 21 870 592 shares at an average price of US$1.57 per share. The proceeds of these
issuances were utilised to settle the equity bridge facilities and to part fund the LUX Tamassa
transaction. On 22 March 2017, the Company's subsidiary, Mara Delta (Mauritius) Properties
Limited issued 1 284 non-redeemable preference shares to the National Pension Fund of
Mauritius at an issue price of US$10,000 per share, raising US$12.8 million to partly fund the
LUX Tamassa transaction.
On 6 March 2017, the Company paid its fifth distribution of 6.12 US$ cents per share (for the
six-month period ended 31 December 2016). The Company maintains its distribution growth
forecast of between 2% and 4% on the previous year's full year distribution of 11.75 US$ cents
per share.
Acquisitions transferred during the reporting period
- A 100% interest in Mall de Tete, a 11 571m2 retail mall in Tete, Mozambique, which transferred
on 1 March 2017 for a purchase price of US$24.2 million with additional security of a three-
year net operating income guarantee from the seller. The acquisition was funded via debt of
US$13.3 million from Bank of China raised at libor + 5.10% and the issue of 7 111 420 shares at
a price equal to the net asset value per share.
- LUX Tamassa Resort, a 214 room hotel, located in Bel Ombre, Mauritius, which was transferred
on 30 March 2017 for a consideration of the Euro equivalent of US$40.0 million (US$43.4
including costs). The acquisition was funded by a combination of debt (EUR22.3 million at
Euro libor + 3.75%), preference shares (US$12.8 million at 6.25%) and the balance via the
issue of shares at US$1.54 per share.
Pending transfers
- The acquisition of a 44.4% interest in an entity owning three Beachcomber hotel assets
in Mauritius namely Le Victoria, Le Canonnier and Le Mauricia for a total consideration
of EUR50.0 million. The initial financial commitments of EUR21.5 million were made in
December 2016. Conditional regulatory approval has now been obtained and transfer will
take place during the next quarter.
- The 13 560m(2) Imperial Health Sciences logistics warehouse located in Nairobi, Kenya. The
total purchase price is US$19.87 million. During December 2016 Mara Delta paid the deposit
on the transaction and transfer is expected to be concluded during the next quarter.
- The Vale accommodation compound, consisting of 83 villas and 40 apartments, in Tete,
Mozambique, at a consideration of US$33.1 million and is expected to take transfer pending
final payment at the date of the rights offer.
- Cosmopolitan Mall in Lusaka, Zambia is a 26 512m2 retail centre anchored by Shoprite and
Game. All regulatory approvals have now been obtained. The initial deposit of US$3.0 million
was paid in June 2016 and transfer will be concluded pending final payment.
Results
Rental income together with income from associates has increased by 21% versus the first nine
months of the 2016 financial year. The rental income increase included the impact of the new
acquisitions, US Dollar-based rental escalations, as well as the impact of the concessions and
vacancies linked to the Anfa Place Shopping Centre refurbishment. Operating costs (including
properties in associated companies) at 31 March 2017 decreased to 25.7% from the 27.6%
reported for the year ended at 30 June 2016.
The Company continues to focus on reducing its cost of borrowings with the weighted average
cost of debt at 31 March 2017 decreasing to 5.80% from 6.22% reported for the year ended
30 June 2016. Mara Delta has initiated the process to obtain new Euro denominated debt that
provides a natural balance sheet hedge to the new Euro-based investments and provides scope
to further reduce the cost of debt. The Company's loan to value ("LTV") ratio at 31 March 2017
was 53.02%, up from 48.85% reported in June 2016. The increase in LTV is due to equity bridge
facilities pending the rights offer which will be completed within the next quarter.
Mara Delta's net asset value per share ("NAVPS") decreased from 163.27 US$ cents per share at
30 June 2016 to 158.77 US$ cents per share at 31 March 2017. The positive increase in valuations
of the assets in Mozambique and Mauritius of US$4.4 million was offset by exchange differences
in the value of the Anfa Place Shopping Centre in Morocco of US$2.4 million (this movement
is related to the Euro's decline versus the US Dollar and its impact on the Moroccan Dirham).
Other factors influencing the NAVPS growth was the issue of 21 870 592 shares at an average
price of US$1.57 (a 3.9% discount to NAVPS) as well as the distribution of US$12.2 million paid
during the period.
Overall portfolio vacancies remain at 2% as at 31 March 2017. These vacancies are largely due
to the redevelopment of Anfa Place Shopping Centre.
Despite ongoing economic and liquidity challenges in Mozambique, Mara Delta's assets are
performing as expected. Vacancies remained at zero and no bad debts have originated from
the Mozambican portfolio. The improvement in the USD liquidity within Mozambique and the
recovery in the Meticais versus the USD (MZN 70.6:US$1 on 31 March 2017 from its peak of
MZN78.5 in September 2016) are positive signs of improvement of the macroeconomic situation
in Mozambique. The Company remains confident about the long-term growth prospects in its
Mozambican portfolio.
Funds from operations ("FFO")
Funds from operations is determined as the total cash generated from all property investments
(profit from operations adjusted for non-cash items, including any realised exchange gains
or loss, less net finance costs and taxation), expressed as US$ cents per share (based on the
weighted number of shares in issue).
Unaudited Unaudited
for the for the Audited
nine months nine months for the
ended ended year ended
31 March 31 March 30 June
2017 2016 2016
US$ US$ US$
Operating profit 15,742,777 15,295,420 19,623,873
Adjusted for non-cash items:
Property fair value adjustment included
in income from associates (742,551) - -
Depreciation and amortisation 501,834 16,619 36,142
Straight-line rental income accrual (930,776) (1,909,275) (2,217,399)
Realised foreign exchange gains 1,793,087 937,673 3,489,058
Interest income 887,645 59,816 170,158
Interest expense (7,257,746) (6,699,435) (9,698,267)
Taxation (159,163) (498,320) (1,493,959)
Total funds from operations 9,835,107 7,202,498 9,909,606
Weighted average number of shares 106,301,518 76,669,861 81,725,430
FFO per share 9.25 9.39 12.13
FFO decreased by 1.5% to 9.25 US$ cents for the nine months ended 31 March 2017
(31 March 2016: 9.39 US$ cents). The decrease is attributable to the concessions provided
to relocate tenants during the refurbishment at Anfa Place Shopping Centre which amounted
to US$0.9 million (or 0.86 US$ cents decrease in FFO).
OUTLOOK
Following these first nine months, the Board remains confident that the forecasted distribution
growth of 2% to 4% on previous year's full year distribution will be achieved. This confidence
is supported by Mara Delta's portfolio which is proving to be resilient during macro-economic
challenges in markets like Mozambique, due to the strength of its underlying tenant base and
together with the pending rights offer where the company will be in a position to fund other high
yielding properties.
Any forecast included above has been based on the assumption of stable regional, political and
economic environments as well as a stable global macroeconomic environment. This forecast is the
responsibility of the Mara Delta Board and has not been reviewed or reported on by the auditors of
the Company.
Unaudited Unaudited Unaudited Unaudited Audited
for the for the for the nine for the nine for the
quarter quarter months months year
CONSOLIDATED ended ended ended ended ended
STATEMENT OF 31 March 31 March 31 March 31 March 30 June
COMPREHENSIVE 2017 2016 2017 2016 2016
INCOME US$ US$ US$ US$ US$
Gross rental income 6,039,704 6,601,119 16,739,651 16,991,077 20,878,458
Straight-line rental
income accrual 155,156 256,678 930,776 1,909,275 2,217,399
Revenue 6,194,860 6,857,797 17,670,427 18,900,352 23,095,857
Income from associates 2,493,797 782,015 5,021,449 1,061,130 3,219,866
Property operating
expenses (1,369,552) (1,291,099) (4,305,955) (3,065,908) (5,769,024)
Net property income 7,319,105 6,348,713 18,385,921 16,895,574 20,546,699
Pre-transfer rental
accrued 544,766 854,601 1,703,415 1,139,468 1,987,335
Other income - 37,881 219,252 353,028 946,447
Administrative expenses (1,530,576) (1,266,736) (4,565,811) (3,092,650) (3,856,608)
Profit from operations 6,333,295 5,974,468 15,742,777 15,295,420 19,623,873
Acquisition fees (827,936) (134,977) (830,365) (893,390) (990,338)
Set-up costs (168,833) - (254,771) - (848,462)
Fair value adjustment on
investment property (2,293,604) 9,757,813 1,996,956 26,331,475 (3,759,543)
Fair value adjustment on
financial instruments (12,972) (331,970) 114,048 (525,839) (99,198)
Gain from bargain
purchase - - - - 250,515
Foreign currency gains/
(losses) 19,328 1,139,573 (2,622,242) (10,526,980) 2,763,774
Profit before interest
and taxation 3,049,278 16,404,907 14,146,403 29,680,686 16,940,621
Interest income 582,693 94,262 887,645 59,816 170,158
Finance costs (2,994,140) (1,407,851) (7,257,746) (6,699,435) (9,698,267)
Profit for the period
before tax 637,831 15,091,318 7,776,302 23,041,067 7,412,512
Current tax expense 771,216 (230,373) (159,163) (498,320) (1,493,959)
Deferred tax income/
(expense) (46,446) (537,137) 1,367,255 (457,604) (3,944,764)
Profit for the period
after tax 1,362,601 14,323,808 8,984,394 22,085,143 1,973,789
Profit/(loss) on
translation of functiona
currency 503,980 (10,670,163) 450,795 (20,715,479) 783,491
Other comprehensive
income - - - - -
Total comprehensive
income 1,866,581 3,653,645 9,435,189 1,369,664 2,757,280
Reconciliation of basic
earnings and headline
earnings
Basic earnings 8,984,394 22,085,143 1,973,789
Less: Fair value
adjustments on
investment property (net
of deferred taxation) (1,996,956) (26,331,475) 3,759,543
Gain from bargain
purchase - - (250,515)
Share of value
adjustment on
investment property
accounted by associate (1,744,625) - (1,418,401)
Fair value adjustments
on financial instruments (114,048) - 99,198
Headline earnings/
(loss) attributable to
shareholders 5,128,765 (4,246,332) 4,163,614
Number of shares in
issue 121,931,722 90,608,538 100,061,130
Weighted average
number of shares 106,301,518 76,669,861 81,725,430
Earnings per share
Basic and diluted
earnings per share
(cents) 8.45 28.81 2.42
Headline and diluted
headline earnings/(loss)
per share (cents) 4.82 (5.54) 5.09
Unaudited Unaudited
as at as at Audited
31 March 31 March as at
CONSOLIDATED STATEMENT OF 2017 2016 30 June 2016
FINANCIAL POSITION US$ US$ US$
Assets
Non-current assets
Total property investments 398,990,819 284,695,031 294,491,004
Fair value of property portfolio 321,608,124 239,984,588 243,705,971
Straight-line rental income accrual 5,662,567 4,137,196 4,839,694
Investment in associates 48,525,662 40,573,247 45,945,339
Other financial assets 23,194,466 - -
Property, plant and equipment 1,890,014 319,566 803,240
Intangible assets 5,315,776 26,903 5,699,199
Related party loans 1,988,767 - 978,277
Goodwill - 126,514 -
Deferred tax 6,937,863 139,773 5,984,142
Total non-current assets 415,123,239 285,307,787 307,955,862
Current assets
Trade and other receivables 15,968,603 19,491,527 18,101,466
Cash and cash equivalents 6,477,960 23,714,985 17,771,821
Total current assets 22,446,563 43,206,512 35,873,287
Total assets 437,569,802 328,514,299 343,829,149
Equity and liabilities
Total equity attributable to equity holders
Share capital 203,951,569 156,562,686 171,995,297
Foreign currency translation reserve 448,897 (21,500,868) (1,898)
Antecedent dividend reserve 390,758 - 635,547
Retained (loss)/profit (11,200,194) 10,854,856 (9,256,498)
Total equity attributable to equity holders 193,591,030 145,916,674 163,372,448
Liabilities
Non-current liabilities
Preference shares: Non-redeemable 12,840,000 - -
Interest-bearing borrowings 147,028,377 130,781,305 127,070,183
Secured finance leases 179,597 - -
Deferred tax 797,204 1,214,438 835,646
Total non-current liabilities 160,845,178 131,995,743 127,905,829
Current liabilities
Interest-bearing borrowings 70,226,815 40,161,618 34,548,386
Secured finance leases 47,409 - -
Trade and other payables 10,589,928 9,809,816 15,029,154
Related party loans 1,365,000 - 1,365,000
Current tax payable 66,742 126,323 1,054,118
Financial instruments 55,049 504,125 554,212
Cash and cash equivalents 782,651 - -
Total current liabilities 83,133,594 50,601,882 52,550,870
Total liabilities 243,978,772 182,597,625 180,456,699
Total equity and liabilities 437,569,802 328,514,299 343,829,149
Loan to value % 53.02 51.71 48.85
Net asset value per share (cents) 158.77 161.04 163.27
Net asset value per share (excluding deferred
taxation) (cents) 153.73 162.23 158.13
Unaudited Unaudited
for the for the Audited
nine months nine months for the
ended ended year ended
31 March 31 March 30 June
CONDENSED CONSOLIDATED 2017 2016 2016
STATEMENT OF CASH FLOWS US$ US$ US$
Cash generated from operating activities 4,872,757 5,141,616 7,101,620
Changes in working capital (2,309,940) 423,833 2,523,677
Dividends paid (12,238,903) (8,469,702) (8,469,704)
Net cash utilised in investing activities (89,870,986) (48,853,387) (62,116,830)
Net cash generated from financing activities 87,470,560 69,249,734 72,510,167
Net movement in cash and cash equivalents (12,076,512) 17,492,094 11,548,930
Cash at the beginning of the year 17,771,821 6,222,891 6,222,891
Total cash at the end of the period 5,695,309 23,714,985 17,771,821
Represented by:
Cash at bank 6,477,960 23,714,985 17,771,821
Bank overdraft (782,651) - -
Total cash at the end of the period 5,695,309 23,714,985 17,771,821
Foreign
CONSOLIDATED currency Antecedent Total
Share translation dividend Retained equity
STATEMENT OF capital reserve reserve earnings holders
CHANGES IN EQUITY US$ US$ US$ US$ US$
Balance as at 1 July 2015 127,958,793 (785,389) - (2,760,581) 124,412,823
Profit for the period - - - 22,085,143 22,085,143
Dividends paid - - - (8,469,706) (8,469,706)
Foreign currency translation
reserve movement - (20,715,479) - - (20,715,479)
Shares issued 28,756,446 - - - 28,756,446
Share issue expenses (152,553) - - - (152,553)
Balance as at 31 March 2016 156,562,686 (21,500,868) - 10,854,856 145,916,674
Loss for the period - - - (20,111,354) (20,111,354)
Dividends paid - - - - -
Foreign currency translation
reserve movement - 21,498,970 - - 21,498,970
Shares issued 16,073,860 - - - 16,073,860
Share issue expenses (5,702) - - - (5,702)
Antecedent dividend (635,547) - 635,547 - -
Balance as at 30 June 2016 171,995,297 (1,898) 635,547 (9,256,498) 163,372,448
Unaudited for the nine
months ended 31 March 2017
Profit for the period - - - 8,984,394 8,984,394
Dividends paid - - (1,310,813) (10,928,090) (12,238,903)
Foreign currency translation
reserve movement - 450,795 - - 450,795
Shares issued 34,320,135 - - - 34,320,135
Share issue expenses (1,297,839) - - - (1,297,839)
Antecedent dividend (1,066,024) - 1,066,024 - -
Balance as at 31 March 2017 203,951,569 448,897 390,758 (11,200,194) 193,591,030
CONDENSED
CONSOLIDATED
SEGMENTAL
ANALYSIS Morocco Mozambique Zambia Kenya Mauritius Total
Geographical location
31 March 2017 - US$
Gross rental income 6,785,721 9,052,036 - - 901,894 16,739,651
Straight-line rental
income accrual 134,421 646,022 - - 150,333 930,776
Pre-transfer rental
accrued - 1,703,415 - - - 1,703,415
Property operating
expenses (3,463,076) (730,360) - - (112,519) (4,305,955)
Income from associates - - 5,026,733 (5,284) - 5,021,449
Net property rental and
related income 3,457,066 10,671,113 5,026,733 (5,284) 939,708 20,089,336
Fair value adjustment (2,417,681) 3,537,000 - - 877,637 1,996,956
Investment Property
vehicles 98,633,346 165,276,489 47,006,091 6,507,171 81,567,722 398,990,819
Investment property
at fair value 96,324,766 162,375,021 3,000,000 1,987,600 57,920,737 321,608,124
Straight-line rental
income accrual 2,308,580 2,901,468 - - 452,519 5,662,567
Investment in
associates - - 44,006,091 4,519,571 - 48,525,662
Other financial assets - - - - 23,194,466 23,194,466
Light Corporate
Hospitality Retail Office industrial accommodation Total
Type of property
31 March 2017 - US$
Gross rental income 17,204 7,903,381 7,986,673 832,393 - 16,739,651
Straight-line rental
income accrual - 107,460 823,316 - - 930,776
Pre-transfer rental
accrued - - - - 1,703,415 1,703,415
Property operating
expenses - (3,584,217) (638,368) (13,455) (69,915) (4,305,955)
Income from
associates - 5,021,449 - - - 5,021,449
Net property rental
and related income 17,204 9,448,073 8,171,621 818,938 1,633,500 20,089,336
Fair value adjustment - (2,517,681) 4,577,637 (63,000) - 1,996,956
Investment property
vehicles 66,541,240 185,328,972 130,745,668 10,587,600 5,787,339 398,990,819
Investment property a
fair value 43,346,774 134,396,687 127,489,724 10,587,600 5,787,339 321,608,124
Straight-line rental
income accrual - 2,406,623 3,255,944 - - 5,662,567
Investment i
associates - 48,525,662 - - - 48,525,662
Other financial assets 23,194,466 - - - - 23,194,466
NOTES
The Group is required to publish interim reports 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 nine
months period from 1 July 2016 to 31 March 2017.
The accounting policies which have been applied are consistent with those used in the preparation
of the audited financial statements for the year ended 30 June 2016.
The financial statements for the nine months ended 31 March 2017 have been prepared in accordance
with the measurement and recognition requirements of IFRS, the requirements of IAS 34: Interim
Financial Reporting, the SEM Listing Rules, the JSE Listings Requirements, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting
Pronouncements as issued by the Financial Reporting Accountants Council 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 21 April 2017. 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 office address.
By order of the board
21 April 2017
JSE sponsor and corporate advisor SEM authorised representative
to Mara Delta and sponsor to Mara Delta
PSG CAPITAL Perigeum Capital
Directors: Sandile Nomvete (chairman), Bronwyn Corbett*, Peter Todd (lead independent),
Chandra Gujadhur, Ian Macleod, Leon van de Moortele*, Jacqueline van Niekerk, Matshepo More
and Maheshwar Doorgakant# (*executive director) (#alternate to Mr Gujadhur)
Company secretary: Intercontinental Fund Services Limited
Registered address: c/o Intercontinental Fund Services Limited, Level 5, Alexander House,
35 Cybercity, Ebène, 72201, Mauritius
Transfer secretary (South Africa): Computershare Investor Services Proprietary Limited
Registrar and transfer agent (Mauritius): Intercontinental Secretarial Services Limited
Corporate advisor and JSE sponsor: PSG Capital Proprietary Limited
Sponsoring Broker: SBM Securities Limited
SEM authorised representative and sponsor: Perigeum Capital Limited
Mara Delta investor relations: +2782 480 4541 or +230 5859 0418
This communiqué is issued pursuant to SEM Listing Rules 11.3 and 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 this communique. The directors of the Company are not aware of any
matters or circumstances arising subsequent to the period ended 31 March 2017 that require any
additional disclosure or adjustment to the financial statements.
www.maradelta.com
Date: 21/04/2017 01:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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