Luxembourg, 31 May 2017 Press Release
Orco Property Group
Q1 2017 Financial Results
Key recent events
Disposal of Capellen office building: On 25 January 2017, a share deal related to disposal of the office building in Capellen, Luxembourg was completed. The building with a Gross lettable area[1] of approximately 7,700 square meters, located in the Capellen business park just outside of the City of Luxembourg, was sold to a private investor.
Suspension of Trading in Warsaw: On 17 February 2017 the Warsaw Stock Exchange informed Orco Property Group (the "Company" or together with subsidiaries the "Group") that it had suspended trading of the Company shares on the Warsaw Stock Exchange.
Annual General Meeting of 24 May 2017: The annual general meeting of the Company's shareholders held on 24 May 2017 (the "Meeting") approved the statutory annual accounts and consolidated annual accounts for the financial year ending 31 December 2016, as well as the allocation of financial results for the financial year ending 31 December 2016. The Meeting decided to appoint Mr. Jiri Dedera, Mr. Edward Hughes and Mr. Erik Morgenstern to the Board of Directors of the Company until the annual general meeting of 2018 concerning the approval of the annual accounts of the Company for the financial year ending 31 December 2017. Mr. Jiri Dedera was also elected Managing Director (administrateur délégué) of the Company.
Q1 2017 Financial highlights
Over the three months of 2017 the Group recorded net profit attributable to owners of the Company in the amount of EUR 2.6 million compared to a loss of EUR 3.7 million in Q1 2016.
Total revenue decreased year-on-year to EUR 0.5 million for the three months of 2017 compared to EUR 2.8 million over the same period in 2016 (82.7% y-o-y) due to disposal of non-core properties in 2016 and 2017.
Operating result as of March 2017 is represented by gain of EUR 3.7 million compared to loss of EUR 1.1 million over the same period in 2016. The improvement of result is mainly due to the reversal of impairments to the third party loans.
Financial result improved from a loss of EUR 2.6 million to a gain of EUR 1.2 million as at 31 March 2017 due to increase in interest income from loans provided to third parties.
Unaudited Statement of profit and loss and other comprehensive income
| TEUR | 31 March 2017 | 31 March 2016 |
| Gross rental revenue | 487 | 1,796 |
| Service revenue | -- | 722 |
| Property operating expenses | (298) | (878) |
| Net rental income | (189) | 1,640 |
| Development sales | 92 | 293 |
| Cost of goods sold | (34) | (280) |
| Net development income | 58 | 13 |
| Total revenues | 579 | 2,811 |
| Total direct business operating expenses | (332) | (1,158) |
| Net business income | 247 | 1,653 |
| Net valuation gain or loss on investment property | -- | 139 |
| Net gain or loss on the disposal of investment property | -- | (149) |
| Net gain or loss on disposal of subsidiaries and investees | 1,061 | -- |
| Amortization, depreciation and impairments | 2,953 | (1,735) |
| Other operating income | 6 | 53 |
| Administrative expenses | (659) | (1,116) |
| Other operating expenses | 43 | -- |
| Operating result | 3,651 | (1,155) |
| Interest income | 5,723 | 198 |
| Interest expense | (3,673) | (2,729) |
| Other net financial result | (889) | (88) |
| Net finance income / (costs) | 1,161 | (2,619) |
| Share of profit of equity-accounted investees (net of tax) | (1,397) | 55 |
| Profit before income tax | 3,415 | (3,719) |
| Income tax expense | (853) | 1 |
| Net profit for the period | 2,562 | (3,718) |
As at 31 March 2017 both Net debt[2] and Fair value of portfolio[3] increased by approx. EUR 400 million to EUR 565 million and EUR 890 million respectively. This was mainly due to the fact that Company received a loan from a third party in amount exceeding EUR 500 million as at 31 March 2017 all of which have been provided to third parties as a source of financing. As a consequence the LTV ratio[4] as at 31 March 2017 increased to 63.6%.
The EPRA Net Asset Value per share[5] as of 31 March 2017 is EUR 0.33 compared to EUR 0.32 as at 31 December 2016.
Unaudited Statement of financial position
| TEUR | 31 March 2017 | 31 December 2016 | ||
| NON-CURRENT ASSETS | ||||
| Investment property | 240,041 | 239,790 | ||
| Property, plant and equipment | 26 | 26 | ||
| Equity-accounted investees | 3 | 4 | ||
| Available-for-sale financial assets | 37,204 | 33,042 | ||
| Loans provided | 566,708 | 149,935 | ||
| Trade and other receivables | 87 | -- | ||
| Deferred tax asset | 114,028 | 114,025 | ||
| Total non-current assets | 958,097 | 536,822 | ||
| CURRENT ASSETS | ||||
| Inventories | 6,526 | 6,524 | ||
| Current income tax receivables | 279 | -- | ||
| Derivative instruments | 38,732 | 38,732 | ||
| Trade receivables | 3,751 | 3,833 | ||
| Loans provided | 5,789 | -- | ||
| Cash and cash equivalents | 7,702 | 2,215 | ||
| Other financial current assets | 733 | 1,162 | ||
| Other non-financial current assets | 635 | 1,169 | ||
| Assets held for sale | 393 | 23,209 | ||
| Total current assets | 64,540 | 76,844 | ||
| TOTAL ASSETS | 1,022,637 | 613,666 | ||
| TEUR | 31 March 2017 | 31 December 2016 | ||
| EQUITY | ||||
| Equity attributable to owners of the Company | 420,010 | 412,798 | ||
| Non controlling interests | 475 | 475 | ||
| Total equity | 420,485 | 413,273 | ||
| NON-CURRENT LIABILITIES | ||||
| Bonds issued | 12,568 | 15,705 | ||
| Financial debts | 517,145 | 128,348 | ||
| Derivative instruments | 1 | -- | ||
| Deferred tax liabilities | 13,765 | 12,911 | ||
| Provisions | 1,246 | 1,712 | ||
| Other non-current liabilities | 5,146 | 301 | ||
| Total non-current liabilities | 549 871 | 158 977 | ||
| CURRENT LIABILITIES | ||||
| Current bonds | 378 | 142 | ||
| Financial debts | 43,046 | 20,718 | ||
| Trade payables | 5,056 | 1,657 | ||
| Advance payments | 185 | 395 | ||
| Derivative instruments | -- | 7 | ||
| Other financial current liabilities | 165 | 599 | ||
| Other non-financial current liabilities | 3,451 | 3,030 | ||
| Liabilities linked to assets held for sale | -- | 14,868 | ||
| Total current liabilities | 52,281 | 41,416 | ||
| TOTAL EQUITY AND LIABILITIES | 1,022,637 | 613,666 | ||
For more information,
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[1] For definition of "Gross lettable area", please refer to Financial information 2016, page 37
[2] For definition of "Net debt", please refer to Financial information 2016, page 38
[3] For definition of "Fair value of portfolio", please refer to Financial information 2016, page 38
[4] For definition of "LTV ratio", please refer to Financial information 2016, page 38
[5] For definition of "EPRA NAV per share", please refer to Financial information 2016, page 36
