| Fri 13 May 2016, 8:00 | | NEW EUROPE PROPERTY INVESTMENTS PLC - Unaudited Condensed Consolidated Financial Results For The Thress Months Ended 31 March 2016 |
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NEP 201605130005A
Unaudited Condensed Consolidated Financial Results For The Thress Months Ended 31 March 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
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 THREE MONTHS ENDED 31 MARCH 2016
The Company is required to publish financial results for the three months ended 31 March 2016 in terms of the rules of the
Romanian Financial Supervisory Authority ('RFSA') and the Rule Book of the Bucharest Stock Exchange ('BVB'). Accordingly,
this announcement presents the unaudited condensed consolidated financial results of the Group in respect of the financial
period from 1 January 2016 to 31 March 2016 in a form compliant with the requirements of the RFSA and the BVB. Earnings guidance
for the financial year remains unchanged.
Management Accounts
CONSOLIDATED STATEMENT OF INCOME 31 Mar 2016 31 Dec 2015 31 Mar 2015
Gross rental income 31 601 110 937 23 943
Net service charge and operating expenses (465) (2 526) (592)
Service charge and other recoveries 13 509 44 074 9 491
Property operating expenses (13 974) (46 600) (10 083)
Net operating income 31 136 108 411 23 351
Corporate expenses (2 698) (9 618) (1 554)
Property management net result 842 2 902 760
EBITDA 29 280 101 695 22 557
Net finance (expense)/income (4 492) (5 759) (256)
Finance expense (6 433) (17 829) (3 446)
Finance income 557 3 822 619
Interest capitalised on development costs 1 384 8 248 2 571
Non-controlling interest 2 676 (7 427) 1 755
Dividends received from financial investments 292 – –
Current income tax (79) – –
Direct investment result 27 677 88 509 24 056
Indirect investment result (5 619) 69 889 (3 040)
Profit for the period attributable to equity holders 22 058 158 398 21 016
Reverse indirect result 5 619 (69 889) 3 040
Company specific adjustments (1 531) 12 096 (102)
Distributable earnings before issue cum distribution 26 146 100 605 23 954
Issue cum distribution adjustment 341 1 954 362
Distributable earnings 26 487 102 559 24 316
Distributable earnings per share (euro cents) 8.75 35.34 8.61
of which recurring distributable earnings per share (euro cents) 8.75 34.76 8.61
Distribution per share (euro cents) – 35.34 –
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 Mar 2016 31 Dec 2015 31 Mar 2015
ASSETS
Non-current assets 1 899 181 1 858 740 1 529 040
Investment property 1 856 792 1 814 357 1 469 842
Investment property at fair value 1 714 808 1 655 219 1 200 850
Developments at cost 141 984 159 138 268 992
Goodwill 23 986 23 986 22 828
Other long-term assets 17 255 18 115 36 219
Financial assets at fair value through profit or loss 1 148 2 282 151
Current assets 408 421 410 095 175 983
Investment property held for sale 23 605 25 255 27 688
Trade and other receivables 50 495 55 229 50 039
Financial investments at fair value through profit or loss 22 015 – –
Cash and cash equivalents 312 306 329 611 98 256
Total assets 2 307 602 2 268 835 1 705 023
LIABILITIES 804 272 772 285 454 947
Bank borrowings 223 846 201 095 294 912
Bonds 394 456 393 414 –
Deferred tax liabilities 98 154 93 571 69 756
Other long-term liabilities 15 538 15 443 14 348
Financial liabilities at fair value through profit or loss 3 480 3 417 4 878
Trade and other payables 68 798 65 345 71 053
Equity attributable to equity holders 1 503 330 1 496 550 1 250 076
Total liabilities and equity attributable to equity holders 2 307 602 2 268 835 1 705 023
Adjusted net asset value per share (euro) 5.21 5.25 4.62
All amounts in EUR '000 unless otherwise stated
RECONCILIATION OF PROFIT FOR THE PERIOD
TO DISTRIBUTABLE EARNINGS 31 Mar 2016 31 Dec 2015 31 Mar 2015
Profit for the period attributable to equity holders 22 058 158 398 21 016
Unrealised foreign exchange (gain)/loss (145) 348 19
Acquisition fees 721 933 520
Share-based payment expense – 670 7
Accrued interest on share-based payments 1 89 100
Fair value adjustments of investment property – (89 946) –
Loss on disposal of investment property held for sale 235 – –
Fair value adjustment of financial assets and liabilities 1 197 (1 398) (202)
Amortisation of financial assets (1 670) (3 554) (166)
Fair value gains of financial investments (995) – –
Dividends received from financial investments (292) – –
Accrued dividend for financial investments 394 – –
Deferred tax expense 4 583 19 508 2 591
Shares issued cum distribution 341 1 954 362
Adjustments related to non-controlling interest
Fair value adjustment of Investment property – 18 598 -
Deferred tax expense 59 (3 041) 69
Distributable earnings for the period 26 487 102 559 24 316
Less: distribution declared – (102 559) –
Interim distribution – (51 304) –
Final distribution – (51 255) –
Earnings not distributed 26 487 – 24 316
Number of shares entitled to distribution 302 714 153 298 590 564 282 423 985
Distributable earnings per share for the period (euro cents) 8.75 35.34 8.61
Less: Distribution declared per share (euro cents) – (35.34) –
Interim distribution per share (euro cents) – (18.17) –
Final distribution per share (euro cents) – (17.17) –
Earnings not distributed (euro cents) 8.75 – 8.61
LEASE EXPIRY PROFILE 2016 2017 2018 2019 2020 2021 2022 2023 2024 =2025 Total
Total based on rental income 2.9% 9.5% 12.2% 13.8% 16.7% 15.5% 5.1% 3.0% 4.3% 17.0% 100%
Total based on rented area 1.0% 6.4% 12.1% 12.5% 14.0% 14.1% 5.6% 5.4% 5.6% 23.3% 100%
BASIS OF PREPARATION
These unaudited condensed consolidated financial results for the three months ended 31 March 2016 have been
prepared in accordance with the recognition and measurement criteria of the International Financial Reporting
Standards ("IFRS"), its 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 year ended 31 December 2015.
As the Group is focusing on being consistent in 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 unaudited management accounts. The main difference between the management accounts and
the financial statements is that the management accounts statements are prepared using the proportionate
consolidation method for investments in joint-ventures, which is not in accordance with IFRS (but consistent
with financial statements prepared in accordance with IFRS reported before 1 January 2013), while the IFRS
financial statements use the equity method for accounting for these investments (following the adoption of IFRS
11 'Joint Arrangements' effective 1 January 2013). The management accounts have been prepared by and are the
responsibility of the Directors of NEPI. Due to their nature, the management accounts may not fairly reflect the
financial position and results of the Group after the differences set out above.
The condensed consolidated financial results for the three months ended 31 March 2016, prepared in accordance
with IFRS and the management accounts have not been reviewed or reported on by the Group's external auditors.
By order of the Board of Directors
Alex Morar (Chief Executive Officer), Mirela Covasa (Finance Director)
13 May 2016
For further information please contact: New Europe Property Investments Plc, Mirela Covasa: +40 21 232 1398
AIM Nominated Adviser and Broker: Smith & Williamson Corporate Finance Limited, Azhic Basirov/Katy Birkin: +44 20 7131 4000
JSE sponsor: Java Capital: +27 11 277 3050 BVB advisor: SSIF Intercapital Invest SA, Razvan Pasol: +40 21 222 8731
IFRS Accounts
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unaudited Audited Unaudited
31 Mar 2016 31 Dec 2015 31 Mar 2015
Net rental and related income 29 773 104 067 22 298
Contractual rental income and expense recoveries 43 206 148 799 31 938
Property operating expenses (13 433) (44 732) (9 640)
Administrative expenses (1 825) (6 695) (703)
EBITDA 27 948 97 372 21 595
Acquisition fees (721) (933) (520)
Fair value adjustments of investment property – 81 742 –
Fair value gains on financial investments at –
995 –
fair value through profit or loss
Dividends received from financial investments 292 – –
Share-based payment expense – (670) (7)
Foreign exchange gain/(loss) 111 (339) (55)
Loss on disposal of investment property held for sale (235) – –
Profit before net finance income/(expense) 28 390 177 172 21 013
Net finance income/(expense) (3 003) (916) 774
Finance income 1 613 7 613 1 380
Finance expense (4 616) (8 529) (606)
Changes in fair value of financial instruments (740) 1 149 298
Share of (loss)/profit of joint ventures (838) 2 399 (161)
Profit before tax 23 809 179 804 21 924
Current tax expense (79) – –
Deferred tax expense (4 348) (13 979) (2 663)
Profit after tax 19 382 165 825 19 261
Total comprehensive income for the year 19 382 165 825 19 261
Non-controlling interest 2 676 (7 427) 1 755
Profit for the period attributable to equity holders 22 058 158 398 21 016
Weighted average number of shares in issue 298 977 923 284 461 222 274 638 368
Diluted weighted average number of shares in issue 299 002 923 285 813 260 278 186 394
Basic earnings per share (euro cents) 7.38 55.68 7.65
Diluted earnings per share (euro cents) 7.38 55.42 7.55
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unaudited Audited Unaudited
31 Mar 2016 31 Dec 2015 31 Mar 2015
ASSETS
Non-current assets 1 866 744 1 829 440 1 502 668
Investment property 1 774 558 1 732 760 1 402 862
Investment property at fair value 1 635 486 1 576 019 1 140 791
Investment property under development 139 072 156 741 262 071
Goodwill 23 986 23 986 22 828
Investments in joint ventures 14 802 15 640 9 033
Long-term loans granted to joint ventures 35 038 36 674 31 578
Other long-term assets 17 212 18 098 36 216
Financial assets at fair value through profit or loss 1 148 2 282 151
Current assets 380 794 381 097 144 547
Trade and other receivables 49 763 54 487 49 087
Financial investments at fair value through profit or loss 22 015 – –
Cash and cash equivalents 309 016 326 610 95 460
Investment property held for sale 23 605 25 255 27 688
Total assets 2 271 143 2 235 792 1 674 903
EQUITY AND LIABILITIES
Total equity attributable to equity holders 1 503 330 1 496 550 1 250 076
Share capital 3 027 2 986 2 793
Share premium 1 213 265 1 213 325 1 075 750
Share-based payment reserve 4 797 4 797 4 135
Currency translation reserve (1 229) (1 229) (1 229)
Accumulated profit 284 517 275 042 176 181
Non-controlling interest (1 047) 1 629 (7 554)
Total liabilities 767 813 739 242 424 827
Non-current liabilities 687 594 661 717 233 892
Bank borrowings 183 737 162 788 149 252
Bonds 393 048 392 140 –
Deferred tax liabilities 94 000 89 652 67 322
Other long-term liabilities 15 054 14 988 14 054
Financial liabilities at fair value through profit or loss 1 755 2 149 3 264
Current liabilities 80 219 77 525 190 935
Trade and other payables 66 978 62 827 69 873
Bank borrowings 11 833 13 424 121 062
Interest accrued on bonds 1 408 1 274 –
Total equity and liabilities 2 271 143 2 235 792 1 674 903
SEGMENTAL ANALYSIS Retail Office Industrial Corporate Total
31 March 2016 (unaudited)
Contractual rental income and expense recoveries 35 475 7 226 505 – 43 206
Profit before net finance expense 22 838 4 579 443 530 28 390
Total Assets 1 570 301 379 650 17 407 303 785 2 271 143
Total Liabilities 262 240 108 558 2 403 394 612 767 813
31 March 2015 (unaudited)
Contractual rental income and expense recoveries 24 693 6 746 499 – 31 938
Profit before net finance expense 18 233 2 855 403 (478) 21 013
Total Assets 1 242 768 322 220 17 407 92 508 1 674 903
Total Liabilities 256 321 137 380 2 417 28 709 424 827
All amounts in EUR '000 unless otherwise stated
Share-
Share Share based Currency Accumulated Non-
CONSOLIDATED STATEMENT capital premi payment translation profit controlling Total
OF CHANGES IN EQUITY reserve reserve interest
Balance at 1 January 2015 2 746 1 074 310 4 127 (1 299) 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 the Initial – – 670 – – – 670
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 41 (60) – – (12 583) – (12 602)
– Issue of shares 41 (60) – – – – (19)
– Earnings distribution – – – – (12 583) – (12 583)
Total comprehensive income – – – – 22 058 (2 676) 19 382
– Profit for the period – – – – 22 058 (2 676) 19 382
Balance at 31 March 2016 3 027 1 213 265 4 797 (1 229) 284 517 (1 047) 1 503 330
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Unaudited Audited Unaudited
31 Mar 2016 31 Dec 2015 31 Mar 2015
Profit after tax 19 382 165 825 19 261
Adjustments 7 007 (66 987) 1 653
Changes in working capital 5 031 1 378 34 934
Cash flows from operating activities 31 420 100 216 55 848
Proceeds from issue of shares (19) 139 255 1 487
Earnings distribution (12 583) (50 489) (11 968)
Net movements in bank loans and bonds borrowings 20 558 297 522 (6 703)
Other payments – (2 395) –
Cash flows from financing activities 7 956 383 893 (17 184)
Investments in acquisitions and developments (36 242) (265 735) (51 440)
Net cash flow used in financial investments (20 728) - –
Cash flows used in investing activities (56 970) (265 735) (51 440)
Net increase in cash and cash equivalents (17 594) 218 374 (12 776)
Cash and cash equivalents brought forward 326 610 108 236 108 236
Cash and cash equivalents carried forward 309 016 326 610 95 460
RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE Unaudited Audited Unaudited
31 Mar 2016 31 Dec 2015 31 Mar 2015
Net Asset Value per the Statement of financial position 1 503 330 1 496 550 1 250 076
Loans in respect of the Initial Share Scheme 64 64 8 003
Deferred tax liabilities 94 000 89 652 67 322
Goodwill (23 986) (23 986) (22 828)
Deferred tax liabilities for joint ventures 4 154 3 919 2 434
Adjusted Net Asset Value 1 577 562 1 566 199 1 305 007
Net Asset Value per share (euro) 4.97 5.01 4.48
Adjusted Net Asset Value per share (euro) 5.21 5.25 4.62
Number of shares for Net Asset Value per share purposes 302 689 153 298 565 564 279 250 260
Number of shares for adjusted Net Asset Value per share purposes 302 714 153 298 590 564 282 423 985
RECONCILIATION OF PROFIT FOR THE PERIOD TO HEADLINE EARNINGS Unaudited Audited Unaudited
31 Mar 2016 31 Dec 2015 31 Mar 2015
Profit for the period attributable to equity holders 22 058 158 398 21 016
Fair value adjustments of investment property – (81 742) –
Loss on sale of investment property held for sale 235 – –
Total tax effects of adjustments – 14 333 –
Fair value adjustment of investment property for joint ventures – (8 204) –
Total tax effects of adjustments for joint ventures – 1 312 –
Headline earnings 22 293 84 097 21 016
Weighted average number of shares in issue 298 977 923 284 461 222 274 638 368
Diluted weighted average number of shares in issue 299 002 923 285 813 260 278 186 394
Headline earnings per share (euro cents) 7.46 29.56 7.65
Diluted headline earnings per share (euro cents) 7.46 29.42 7.55
KEY PERFORMANCE INDICATORS 31 Mar 2016
Current liquidity ratio* 5.74
Gearing ratio** 15.6%
Tenant's receivable turnover 30.37
Return on investment property 7.28%
* Current liquidity ratio=(Current assets+Unused Revolving Facilities)/ Current liabilities
** Gearing ratio=(Loans and borrowings-Cash and cash equivalents)/(Investment property+Financial investments at fair value
through profit or loss)
DEBT Type Secured/Unsecured Ownership Outstanding Available for 2016 2017 2018 2019 2020 2021
REPAYMENT PROFILE amount drawdown and beyond
Aupark Kosice Term loan Secured 100% 103 618 – 4 145 5 526 5 526 5 526 82 895 –
Floreasca Business Park* Term loan Secured 100% 46 807 – 2 940 3 920 39 947 – – –
Aupark Zilina Term loan Secured 100% 45 405 – 1 547 43 858 – – – –
Ploiesti Shopping City (joint venture) Term loan Secured 50% 16 060 – 821 1 095 1 095 1 095 1 095 10 859
The Office, Cluj-Napoca (joint venture) Term loan Secured 50% 12 539 4 500 513 630 630 630 630 9 506
Timisoara City Business Centre One Term loan Secured 100% – 20 000 – – – – – –
NE Property Cooperatief Fixed coupon bonds Unsecured 100% 400 000 – – – – – – 400 000
NE Property Cooperatief Revolving facility Unsecured 100% – 80 000 – – – – – –
Total 624 429 104 500 9 966 55 029 47 198 7 251 84 620 420 365
The reference base rate (1 month EURIBOR, 3 month EURIBOR) was hedged with a weighted average interest rate cap of 0.3% for 47%
of the outstanding notional amount and a weighted average interest rate swap of 1.7% for 53% of the outstanding notional amount.
*Floreasca Business Park term loan was voluntarily repaid in April 2016.
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