PRESS RELEASE 20 September 2013

Transcription

1 PRESS RELEASE 20 September 2013 Publication of the second quarter and first half 2013 results Sound operating results impacted by devaluation of investment portfolio Globe Trade Centre S.A. (GTC) released its second quarter and first half 2013 results today. The results have been prepared in accordance with International Financial Reporting Standards (IFRS) and are presented in Euro. Q Financial Highlights Gross margin from rental activity back to 72% (70% in Q1 2013; 74% in Q2 ) Earnings before taxes, share based provision, revaluations and share of associates up to 4m ( 3m in Q2 ) as a result of a decrease in administrative and financial expenses Rental and service revenues at 30m ( 33m in Q2 ) reflecting sale of Platinium Business Park ( 2m) and softening of rental rates in office segment in Poland and Hungary Net loss on revaluation of investment properties and impairment of 44m mainly related a decrease in expected rental rates in retail sector in Romania, Bulgaria and Croatia as well as softening of rental rates on new leases in office segment in Poland and Hungary and a moderate shift in yields in Poland Financial expenses down to 12 ( 16m in Q2 ) mainly due to a decrease in debt level following the repayment of bonds and loans related to Platinum Business Park H Financial Highlights Earnings before taxes, share based provision, revaluations and share of associates up to 7m ( 3m in H1 ) from increased efficiency in asset management, decrease in financial expenses and cost cutting Rental and service revenues at 60m ( 64m in H1 ) reflecting primarily the sale of Platinium Business Park ( 4m) Administrative expenses, after eliminating the stock based program provision, decreased by 21% to 6m ( 7m in H1 ) due to cost cutting initiatives. Net loss on revaluation of investment properties and impairment of 70m mainly related to change of zoning of Galleria Bucharest land site following changes in law and a decrease in expected rental rates in retail sector in Romania, Bulgaria and Croatia as well as softening of

2 rental rates on new leases in office segment in Poland and Hungary and a moderate shift in yields in Poland Loan to value stable at 56% (56% in H1 ) Cash flow from operations after interest payment at 10m ( 11m in H1 ) despite sale of Platinium Business Park which generated 3m in H1 Cash and cash equivalents and deposits of 116m H Operating Highlights New leases and lease extension for 39,000 sq m of office and retail space Occupancy at 91% (89% in H1 ) Tender for construction of Galeria Białołęka opened Despite the fact that our investment portfolio was devaluated, mostly due to challenging conditions in SEE markets, especially Romania and Bulgaria, we managed to build a strong foundation for growth in Poland, the strongest market in the region, by entering into cooperation with new anchor tenants and signing numerous new leases and lease extensions in Krakow, Katowice, Wroclaw and Lodz. In addition, we continued our efforts towards obtaining building permits for Galeria Białołęka and Galeria Wilanów as well as Ada Mall, which are our priority and will drive our growth in the near term - said Alain Ickovics, GTC S.A. Chairman of the Management Board. We are on track in our asset disposal plan and expect to achieve important steps and communicate them later this year. added Alain Ickovics. Financial overview Rental and service revenues decreased to 30m in Q and 60m in H from 33m in Q2 and 64m in H1, as a result of disposal of Platinium Business Park project in Warsaw and softening of rental rates especially in the office segment in Poland and Hungary. Margin on rental activities was at 72% in Q (74% in Q2 ) and 71% in H (73% in H1 ). As of June 2013, GTC s completed buildings were leased in 91%, therefore further rental revenue growth is probable. Revenues from sale of residential properties decreased to 3m in Q and 6m in H from 5m in Q2 and 10m in H1, respectively, mostly due to a decrease in available inventory and softer demand in various markets. Gross profit from operations was 21m in Q and 42m in H compared to 25m in Q2 and 47m in H1 mostly due to the disposal of Platinium Business Park and one off write downs on the fit out contributions related to new tenants in certain assets. Selling expenses decreased to 1m in Q and 2m in H mainly due to a decrease in sale and leasing activities. 2

3 Administrative expenses decreased by 1m to 4m in Q2 2013, due to decrease in provision for mark-to-market of phantom shares program. Administrative expenses decreased by 5m to 4m in H mainly due to reversal of provision for markto-market of phantom shares program and cost cutting initiatives. On a like-for-like basis, after eliminating the stock based program provision, administrative expenses decreased by 21% to 6m in H Net loss on revaluations of investment property and impairments of residential projects was 44m in Q and 70m in H and is attributable to a change of designation of Galleria Bucharest land following a change of law in Romania and expansion of yield in office sector in Bucharest as well as a decrease in expected rental rates in retail sector in Romania, Bulgaria and Croatia as well as a decrease in rental rates on new leases in office segment in Poland and Hungary and a moderate shift in yields in Poland. Financial expenses decreased to 12m in Q and 25m in H1 2013, which was mainly due to a decrease in interest on financial liabilities following a decrease in the debt level due to repayment of bonds and loans. Net loss amounted to 48m in Q and 74m in H This is attributable mainly to a loss on revaluation of investment properties and impairment of residential projects coupled with tax charge. The value of the property portfolio was at the level of 1,714m (including 1m of assets held for sale) and loan to value was at the level of 56% as at 30 June NAV per share stood at 2.4 as at 30 June 2013 compared to 2.7 as at 31 December. Key achievements Important leases and renewals GTC continues to benefit from company s ability to deliver high quality office space and to provide tailored solutions for companies representing variety of business sectors. In the first half of 2013, GTC signed a number of new lease agreements for office space (over 20,000 sq) and extended leases for more than 19,000 sq m during H New lease agreements for 20,000 sq m IBM has become a new tenant in in Francuska Office Centre in Katowice. The company has leased 3,200 sq m office space, boosting the office complex occupancy to 76%. The agreement is one of the largest office lease transaction in Katowice market concluded in last few years New tenants in University Business Park in Lodz, boosting occupancy to 81%: Accenture leased 1,700 sq m, Mobica has leased nearly 1,200 sq m with further extension option, Samsung Electronics Poland leased 1,100 sq m with further extension option, PKP Informatyka leased nearly 900 sq m Marketing and advertising agency Event has become a new tenant of Korona Office Complex (500 sq m) DFDS logistics company leased 1,600 sq m in Globis Poznan Canon leased 3,100 sq m in Prague Marina Office Center (Prague), boosting occupancy to 76% 3

4 Askent leased 3,600 sq m in Galleria Stara Zagora (Stara Zagora, Bulgaria) New tenants in retail centres across the region (4,000 sq m) (Quicksilver, LPP, Giacomo Conti in Galeria Jurajska; Matras, Cukiernia Sowa, Organique in Galeria Kazimierz) Significant renewals and extensions for 19,000 IBM has extended the lease agreement for approximately 3,000 sqm office space in Korona Office Complex (Kraków) Medicover has extended the lease agreement for 1,400 sqm space in the Globis Wroclaw Arvato Poland, GPC and UWI Inwestycje have extended their leases for a combined total of over 3,000 sq m in Globis Poznan Pandora has extended its lease for 1,100 sq m in Corius office building in Okecie Business Park (Warsaw) Genpact has extended its lease of over 3,000 sq m in Edison office building in Korona Office Complex (Kraków) E.ON Romania extended its lease for 2,400 sq m in City Gate (Bucharest) ROCHE extended its lease for 1,400 sq m in GTC Square (Belgrade) Australian Embassy extended its lease for 1,600 sq m in 19 Avenue (Belgrade) Lease extensions for 1,600 sq m extended in retail centres across the region (LPP, Tatuum, Wojas, Douglas in Galeria Jurajska) New developments Galeria Wilanow: GTC shall receive an environmental opinion in August Term sheet with Cinema City is signed Galeria Wilanow opening is scheduled for 2016 Galeria Bialoleka: A tender for construction was opened Land acquisition is in progress Term sheet with Cinema City is signed Galeria Bialoleka opening is expected in 2015 Ada Mall: Land assembly in the final stage 4

5 Annex 1 Consolidated Statement of Financial Position as at 30 June June June 31 December ASSETS Non current assets Investment property 1,565,702 1,690,482 1,613,745 Residential landbank 94,265 77,280 73,225 Investment in associates 38,401 50,120 42,074 Loans granted to joint venture and 22,097 22,062 21,932 other receivables Property, plant and equipment 1,739 1,917 1,781 Deferred tax asset 6,041 8,106 7,334 Long-term deposits 2,800 Other non-current assets ,731,110 1,850,075 1,760,151 Assets held for sale ,400 42,453 Current Assets Inventory 53,364 98,354 81,916 Debtors 5,673 7,712 5,318 Accrued income VAT and other tax recoverable 4,110 8,457 3,938 Income tax recoverable 1,255 1,297 1,439 Prepayments, deferred expenses 4,018 4,015 2,931 Short-term deposits 27,003 32,276 25,954 Cash and cash equivalents 85, , , , , ,260 TOTAL ASSETS 1,913,883 2,384,961 2,152,864 5

6 Annex 1 Consolidated Statement of Financial Position as at 30 June 2013 (cont) EQUITY AND LIABILITIES Equity attributable to equity holders of the parent 30 June June 31 December Share capital 7,082 4,741 7,082 Share premium 312, , ,155 Unregistered share capital - 99,697 - Capital reserve 16,222 22,191 16,008 Hedge reserve (18,416) (36,500) (25,068) Foreign currency translation 4,451 5,979 5,181 Accumulated profit 377, , , , , ,463 Non-controlling interest (25,589) (24,224) (16,732) Total Equity 672, , ,731 Non current Liabilities Long-term portion of long-term loans 819, , ,961 and bonds Deposits from tenants 5,160 5,703 4,760 Long term payable 6,404 1,655 1,737 Provision for share based payment 4,079 2,425 5,583 Derivatives 7,882 47,937 34,866 Provision for deferred tax liability 126, , , ,056 1,176,489 1,083,684 Current liabilities Liabilities to be repaid upon sale ,468 Trade and other payables 24,973 47,742 33,688 Current portion of long-term loans and bonds 199, , ,620 Deposits from tenants VAT and other taxes payable 1,336 1,729 34,532 Income tax payable 2,460 1,221 2,380 Derivatives 40,484 44,028 32,362 Advances received 3,051 4,816 3, , , ,449 TOTAL EQUITY AND LIABILITIES 1,913,883 2,384,961 2,152,864 6

7 Annex 2 Consolidated Income Statement for the three and six-month period ended 30 June 2013 Six-month period ended 30 June Three-month period ended 30 June (unaudited Year ended 31 December Revenues from operations 65,670 73,984 32,461 37, ,591 Cost of operations (23,384) (26,538) (11,419) (12,931) (57,174) Gross margin from operations 42,286 47,446 21,042 24,568 90,417 Selling expenses (1,689) (3,058) (847) (1,292) (3,946) Administration expenses (4,383) (9,291) (3,891) (5,007) (18,881) Profit (loss) from revaluation/ impairment of assets (68,054) (9,288) (42,695) (11,633) (101,227) Impairment of residential projects (1,906) (664) (1,796) (664) (13,434) Other income Other expenses (2,135) (2,550) (1,179) (1,847) (4,595) Profit (loss) from continuing operations before tax and finance income / (expense) Foreign exchange differences gain/(loss), net (35,757) 22,838 (29,345) 4,227 (51,285) (2,772) (288) (1,155) (947) 2,886 Interest income 1,883 2, ,135 5,133 Financial expense (24,818) (33,901) (11,539) (15,641) (71,950) Share of profit (loss) of associates (2,806) (5,171) (2,621) (4,579) (9,992) Profit (loss) before tax (64,270) (13,995) (43,837) (15,805) (125,208) Taxation (10,148) (4,404) (4,389) (5,646) (6,986) Profit (loss) for the period (74,418) (18,399) (48,226) (21,451) (132,194) Attributable to: Equity holders of the parent (65,078) (8,164) (42,305) (14,487) (96,034) Non-controlling interest (9,340) (10,235) (5,921) (6,964) (36,160) Basic earnings per share (Euro) (0.20) (0.03) (0.13) (0.06) (0.36) Diluted earnings per share (Euro) (0.20) (0.03) (0.13) (0.06) (0.36) 7

8 Annex 3 Consolidated Statement of Cash Flow for the six month period ended 30 June 2013 Six-month period ended 30 June 2013 Six-month period ended 30 June Year ended 31 December CASH FLOWS FROM OPERATING ACTIVITIES: Profit (loss) before tax (64,270) (13,995) (125,208) Adjustments for: Revaluation/Impairment of assets 69,960 9, ,661 Share of (profit) loss of associates 2,806 5,171 9,992 Loss from sale of fixed assets and other Foreign exchange differences loss, net 2,218 (1,644) (3,197) Finance income (1,883) (2,527) (5,133) Finance expenses 24,818 33,901 71,950 Share based payment (1,505) 1,878 5,036 Depreciation and amortization Operating cash before working capital changes 32,598 33,087 68,808 Decrease/(increase) in debtors and prepayments and other current assets (377) 971 1,496 Increase (decrease) in inventory 5,595 8,377 15,897 Increase/(decrease) in advances received (941) (1,053) (1,306) Increase (decrease) in deposits from tenants (86) Increase/(decrease) in trade and other payables (2,769) (5,489) (6,065) Cash generated from/ (used in) operations 34,020 35,893 79,537 Tax paid in the period (972) (1,188) (2,467) Net cash from (used) in operating activities 33,048 34,705 77,070 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of non current assets (14,755) (33,224) (47,294) Sale of investment property 32, ,043 Acquisition of shares in associates - (198) (198) Acquisition of subsidiaries, net of cash acquired - - (13,957) Tax / VAT on sale of investment property (35,719) - 22,888 Interest received 1,213 2,352 3,973 Lease origination expenses - (267) (999) Loans granted (492) (135) (563) Loans repayments 2, ,571 Net cash used in investing activities (14,840) (30,994) 110,464 CASH FLOWS FROM FINANCING ACTIVITIES Issue of shares - 104, ,191 Share issuance expenses - (990) (3,975) Proceeds from long-term borrowings 3,633 40, ,002 Repayment of long-term borrowings (129,718) (54,816) (276,828) Interest paid (28,873) (31,468) (68,467) Loans origination cost - (724) (1,414) Increase (decrease) in short term deposits (3,853) 5,120 11,408 Net cash from (used in) financing activities (158,811) 61,582 (102,083) Effect of foreign currency translation (1,600) 7 1,013 Net increase / (decrease) in cash and cash equivalents (142,203) 65,300 86,464 Cash and cash equivalents, at the beginning of 228, , ,720 the period/year Cash and cash equivalents, at the end of the 85, , ,184 period/year Cash classified as part of assets held for sale - - (287) Cash and cash equivalents, at the end of the 85, , ,897 period/year as per Interim Condensed Consolidated Statement of Financial Position 8

9 (GTC) is one of the leading developers in Central, Eastern and Southern Europe. The company was established in 1994 in Warsaw, Poland. Currently GTC operates in Poland, Hungary, the Czech Republic, Romania, Serbia, Croatia, Slovakia, Bulgaria, Russia and Ukraine. GTC develops projects and manages completed properties in three key sectors of real estate: office buildings and parks, retail and entertainment centers and residential. To date, GTC has developed approximately 950,000 sqm of net commercial and 300,000 sq m of residential spaces. The company currently manages a combined 602,000 net sq m of completed and operational commercial space (of which the Group s proportional interest amounts to 548 thousand sq m). GTC also holds an impressive portfolio of investment projects at various stages of development. Those will facilitate the construction of 1.1 million sq m of commercial space and 615,000 sq m of residential space. GTC S.A. s total assets exceed EUR 1.9 billion. GTC S.A. is listed on the Warsaw Stock Exchange on the prestigious WIG20 index. The company's shares are also included in the international Dow Jones STOXX Eastern Europe 300 and the GPR250 index, which comprises the 250 biggest and most liquid real estate companies of the world. Also, GTS S.A. is listed on the FTSE EPRA/NAREIT Emerging Index. GTC S.A. s shareholders include many of the biggest Polish and international institutional investors. For further information Malgorzata Czaplicka Globe Trade Centre S.A. tel.: mczaplicka@gtc.com.pl Tomasz Boguszewicz Hill + Knowlton Strategies tel.: mobile: tomasz.boguszewicz@hkstrategies.com 9