Duna House : Quarterly Report Quarterly report of Duna House Holding Nyrt. (2017Q2) 2017.09.01.

2017. Q2

Quarterly report

August 25, 2017

Table of Contents

Executive summary…………………………..……………………………………………….. 3.

Franchise segment…………………………………..………………………………………... 5.

Own office segment………………………………………………………………………….

12.

Financial product intermediary services segment…………………………………………15.Complementary services segment………………………………………………………….20.Property investments segment and MyCity projects………………………………………25.Other- and consolidation segment ………………………………………..….…………….31.Consolidated financial statements…………………………………..…….……………….. 33.Revenue, operating income and profit after tax by countries….………..…….………... 38.Consolidated operating income and profit after tax without MyCity …………………… 39.Annex 1.: time-series report of operational segments ……………………………………40.Declaration……………………………………………………………………………………. 41.

• The Group has closed Q2 presenting impressive results, with the three-months' operating income (EBIT) adding up to HUF 253 Million, and a profit after tax (PAT) reaching HUF 288 Million.

• The Management increases its profit forecast of HUF 750-1.000 Million with relevance for the full year (calculated without MyCity) published on March 5, 2017 to HUF 850-1.000 Million. The named profit has reached HUF 535 Million by the end of the first six months.

• Operating income is nearly HUF 7 Million higher than the Q2 result of the previous year. Related to the core activity income, the following non-recurring items explain further HUF 50 Million when compared to Q2 of the previous year:

  • Decrease of the investment purpose property portfolio which had begun in Q2 2016, as well as the focus shift to property development activity within MyCity, resulted in a nearly HUF 115 Million lower profit in the current Q as one year earlier. Profit of property development projects can be realized only following the closure of the different projects.

  • Beginning with Q2 2017, MyCity group has fully been consolidated, decreasing the operating income by HUF 16 Million in total.

  • Activity in the Czech Republic - which, during the comparative period, has not yet been part of the Holding- presented a HUF 9 Million loss.

  • The impacts of the above were decreased as a result of a HUF 90 Million non-recurring expense volume, which appeared in Q2 2016 related to the IPO of the Holding's shares, the acquisition of the Polish Metrohouse group and SMART network.

    Overall, it can be stated that the Group's core activity in Hungary and Poland on EBIT level has improved by nearly HUF 57 Million when compared to Q2 of the previous year.

• Improvement of the operating income is most outstanding in the financial intermediary services segment, where the HUF 82 Million of Q2 last year increased by nearly 90%, reaching a HUF 155 Million result. The main reason behind the growth is the volume growth in the intermediated loans (and home savings accounts in Hungary), as well as the operation efficiency improvement in the Polish Metrofinance.

• Financial results of Metrohouse group continued to improve. In Q2 2017, the activity in Poland has reached the turn-around point, and became profitable for the first time. The consolidated operating income and profit after tax added up to HUF 22 Million.

• The current state of MyCity is regarded as positive by the Management. By increasing the sales prices, growing costs in the construction field of the property development market were managed to a large extent in every project. The project with the shortest deadline, the "Revitzky Liget" is advancing according to schedule and the planned delivery looks promising for Q4.

• At the time of publishing the present report, the 1-year return of the Impact Residential Property Investment Fund is net 9.2%, which is the highest yearly result among all property funds in Hungary. The net asset value of Impact Residential Property Investment Fund has risen to HUF 1.6 Billion by June 30, 2017, and by the time of publishing the present Report it reaches HUF

  1.83 Billion. Due to the outstanding performance, the Management is positive that the Fund's net asset value has the potential to produce further growth.

• Despite the significant improvement in the core activity performance, profit after tax fell back from the HUF 648 Million of Q2 2016 to HUF 288 Million. The reason behind is the fact that during the comparative period a one-time HUF 481 Million profit was accounted for in the MyCity joint venture, in connection with the increase in value of the plots of lands classified as investment properties prior to beginning the development activity.