IMMOBILIARE GRANDE DISTRIBUZION SIIQ SPA PRESS RELEASE
IGD SIIQ SPA: THE BOARD OF DIRECTORS APPROVES THE HALF-YEAR FINANCIAL REPORT AT 30 JUNE 2015. Significant increase posted in the key financial performance indicators: Group's net profit: €20.4 million (vs. €4.5 millionin first half 2014); Core business funds from operations (FFO): €21.3 mlilion, +23.8% against 30 June 2014; Core business revenue: €62.3 million, +3.3% againstfirst half 2014 EPRA NNNAV per share: stable at €1.23 Sales of retailers in Italian malls up markedly: + 6.7%. Bologna, 6 August 2015. Today, in a meeting chaired by Gilberto Coffari, the Board of Directors of IGD - Immobiliare Grande Distribuzione SIIQ S.p.A. ("IGD" or the "Company"), a major player in Italy's retail property market and listed on the STAR segment of the Italian Stock Exchange, examined and approved the Half-Year Financial Report at 30 June 2015. "The numbers for this half show an increase in the key financial performance indicators with significant growth in revenue, EBITDA, profit and FFO", Claudio Albertini, IGD - Immobiliare Grande Distribuzione SIIQ S.p.A.'s Chief Executive Officer stated. "We believe that we have finally entered into a recovery phase which should stabilize in the next few months, not only for IGD, but also for Italy's macroeconomic environment. The strong growth in retailers' sales, in fact, and the steady number of footfalls at our shopping centers confirm the recovery in consumption underway, in addition to demonstrating, once again, the validity of the shopping center model. The net profit for the first half of the year was also positively impacted by property valuations which benefitted, in addition to the consolidated quality of the portfolio, from a slight, but expected and hoped for, yield compression."Operating income statement at 30 June 2015.
€/000
N.B.: Certain cost and revenue items have been reclassified or offset which explains the difference with respect to the financial statements.
Principal consolidated results at 30 June 2015The shopping centers continued to perform well in first half 2015 with retailers' sales at Italian shopping centers rising 6.7% (including the extensions, the sixth consecutive quarter of growth) and footfalls stable; in Romania, footfalls increased (+1.7%) due also to a decrease in the construction work underway.
The occupancy improved in Italy (average for malls and hyper reached 96.2%) and, above all, in Romania (88.9%
versus 86.2% at 31/03/2015).
Core business revenue reached €62.3 million, an increase of 3.3% against the same period of the prior year. Rental income rose 3.8% against the same period 2014 to €59.9 million; the increase is explained primarily by:for €2.3 million, the new openings made in 2014 klie the Centro d'Abruzzo extension, Piazza Mazzini in Livorno, the reformatted Le Porte di Napoli center and the acquisition of a portfolio of core real estate assets in October 2014 post-capital increase, in addition to the inauguration of Clodì Retail Park in May 2015;
like-for-like revenue in Italy which, net of the strategic or planned vacancies, was largely unchanged for both hypermarkets and malls;
for -€612 thousand, by like-for-like strategic vacancies (vacant space which has already been pre-let, but where new layouts are being completed), sale of the City Center property on via Rizzoli at the end of May
2015 and other minor changes;
for €116 thousand, by an increase in like-for-likerevenue in Romania, due to the marketing carried out in the period. The vacancies needed to proceed with the investment plan and other changes caused revenue to fall by-€140 thousand.
As for the Porta a Mare project, the income generated by the rental of offices at Palazzo Orlando reached €162 thousand (an increase of approximately €30 thousand), while revenue from trading (relating to the sale of three residential units and appurtenances) amounted to €8 6 thousand.
Core business Ebitda amounted to €41.4 million, an increase of 3.9% against 30 June 2014, while total Ebitda rose 3.8% to €41.2 million.
The core business Ebitda Margin came to 66.5%, while the Ebitda Margin for freehold management reached
76.7%. Ebit came to €40.1 million, an increase of 59.2% against the same period 2014, due primarily to a drop in writedowns and negative fair value adjustments (-92.4%). Net financial expense improved markedly against 30 June 2014, coming in at €20.3 million(- 11.3 %) and the average cost of debt came to 3.88% (vs. 4.06% in the previous period). The change is linked primarily to the decrease in financial payables as a result of the capital increase completed year-end 2014 which made it possible to extinguish a few loans, along with a drop in the spreads applied. The bond swap completed in April 2015 also held to reduce financial expense (the positive effects of this transaction will become more apparent in the second half).The Group's portion of net profit amounted to €20.4 million at 30 June 2015, an increase of morethan €16 million against the same period 2014.
Funds from Operations (FFO) rose 23.8% against first half 2014 to €21.2 million.The NNNAV was in line with the figure recorded at 31 December 2014 (€1.23 per share); the Group's net equity was impacted by the operating results posted in first half 2015, as well as the €28.4 million in dividends paid on
20 May 2015.
The IGD Group's net financial position amounted to €937.9 million at 30 June 2015, stablewith respect to 31
December 2014 (€942.0 million); both loan to value (48.3%) and the gearing ratio (0.95) were basically unchanged. Net financial expense improved also as a result of the bond swap finalized in April 2015.
The Real Estate Portfolio at 30 June 2015Based on the independent appraisals of CBRE, Reag Advisory and Cushman&Wakefield, the market value at 30
June 2015 of the IGD Group's real estate portfolio- comprised of 56 properties in Italy and 15 in Romania - reached €1,942.38 million, down with respect to the€1,951.15 million recorded at 31 December 2014 duealso to the sale of the property on Via Rizzoli in Bologna.
Like-for-like hypermarkets were up by +1.5% (+€9.0million) while, like-for-like, shopping malls and retail parks increased by 1.2% to €11.5 million. The average financial occupancy in Italy came to 96.24% (97.21% at
31/12/2014) while average yields reached 6.45% for hypermarkets and 6.42% for shopping malls.
The market value of the Romanian portfolio at 30 June 2015 was €172.6 million, down with respect to the €175.3 million recorded at 31/12/2014. The financial occupancy amounted to 88.94%, an improvement against the figure recorded at year-end 2014 (86.54%), and the average yield to 6.37%
The Board of Directors, after the Committee for Related Party Transactions issued a favorable opinion, resolved to amend the Procedure for Related Party Transactions in order to voluntarily extend application to include the material transactions carried out with companies of the Unipol Group.
The Procedure for Related Party Transactions, as amended, is available on IGD's website, http://www.gruppoigd.it/Governance, as well as at the Company's registered offices, at Borsa Italiana S.p.A. and the authorized storage mechanism provided through www.emarketstorage.com.
Grazia Margherita Piolanti, IGD S.p.A.'s Financial Reporting Officer, declares pursuant to para. 2, article 154-bis of Legislative Decree n. 58/1998 ("Testo Unico della Finanza" or TUF) that the information reported in this press release corresponds to the underlying records, ledgers and accounting entries.
Please note that in addition to the standard financial indicators provided for as per the IFRS, alternative performance indicators are also provided (for example, EBITDA) in order to allow for a better evaluation of the operating performance. These indicators are calculated in accordance with standard market procedures.
IGD - Immobiliare Grande Distribuzione SIIQ S.p.A.
Immobiliare Grande Distribuzione SIIQ S.p.A. is one of the main players in Italy's retail real estate market: it develops and manages shopping centers throughout the country and has a significant presence in Romanian retail distribution. Listed on the Star Segment of the Italian Stock Exchange, IGD was the first SIIQ (Società di Investimento Immobiliare Quotata or real estate investment trust) in Italy. IGD has a real estate portfolio valued at circa €1,942.38 million at 30June 2015, comprised of, in Italy, 25 hypermarkets and supermarkets, 20 shopping malls and retail parks, 1 city center, 2 plots of land for development, 1 property held for trading and an additional 7 real estate properties. Following the acquisition of the company Winmark Magazine SA in 2008 14 shopping centers and an office building, found in 13 different Romanian cities, were added to the portfolio. An extensive domestic presence, a solid financial structure, the ability to plan, monitor and manage all phases of a center's life cycle: these qualities summarize IGD's strong points.
www.gruppoigd.it
CONTACTS INVESTOR RELATIONS
CLAUDIA CONTARINI
Investor Relations
+39 051 509213 clazorzettoudia.contarini@gruppoigd.it
FEDERICA PIVETTI
IR Assistant
+39 051 509242 federica.pivetti@gruppoigd.it
CONTACTS MEDIA RELATIONS
IMAGE BUILDING
Cristina Fossati, Federica Corbeddu
+39 02 89011300 igd@imagebuilding.it
The press release is available on the website www.gruppoigd.it, in the Investor Relations section, and on the website www.imagebuilding.it, in the Press Room section.
Please find below the IGD Group's consolidated income statement, statement of financial position, statement of cash flows and net financial position at 30 June 2015.Consolidated income statement at 30 June 2015 | |||
Consolidated income statement | 30/06/2015 | 30/06/2014 | Change |
(in thousands of Euro) | (A) | (B) | (A-B) |
Revenue: | 59,907 | 57,734 | 2,173 |
- from third parties | 39,344 | 38,534 | 810 |
- from related parties | 20,563 | 19,200 | 1,363 |
Other revenue: | 2,551 | 2,817 | (266) |
- other income | 1,705 | 2,059 | (354) |
- from related parties | 846 | 758 | 88 |
Revenue from property sales | 886 | 1,278 | (392) |
Total revenue and operating income | 63,344 | 61,829 | 1,515 |
Change in work in progress inventory | (420) | (572) | 152 |
Total revenue and change in inventory | 62,924 | 61,257 | 1,667 |
Cost of work in progress | 369 | 521 | (152) |
Material and service costs | 11,320 | 11,411 | (91) |
- third parties | 10,429 | 9,722 | 707 |
- related parties | 891 | 1,689 | (798) |
Cost of labour | 4,547 | 4,335 | 212 |
Other operating costs | 4,863 | 4,611 | 252 |
Total operating costs | 21,099 | 20,878 | 221 |
(Depreciation, amortization and provisions) | (1,361) | (1,528) | 167 |
(Impairment losses)/Reversals on work in progress and inventories | (1,327) | (1,673) | 346 |
Change in fair value - increases / (decreases) | 924 | (12,082) | 13,006 |
Total depreciation, amortization, provisions, impairment and change in fair value | (1,764) | (15,283) | 13,519 |
EBIT | 40,061 | 25,096 | 14,965 |
Income/(loss) from equity investments | (161) | 120 | (281) |
Financial income: | 22 | 60 | (38) |
- third parties | 19 | 57 | (38) |
- related parties | 3 | 3 | 0 |
Financial charges: | 20,304 | 22,828 | (2,524) |
- third parties | 20,270 | 22,362 | (2,092) |
- related parties | 34 | 466 | (432) |
Net financial income (charges) | (20,282) | (22,768) | 2,486 |
PRE-TAX PROFIT | 19,618 | 2,448 | 17,170 |
Income taxes | (606) | (1,672) | 1,066 |
NET PROFIT FOR THE PERIOD | 20,224 | 4,120 | 16,104 |
Minority interests in net (profit)/loss | 186 | 334 | (148) |
Parent Company's portion of net profit | 20,410 | 4,454 | 15,956 |
- basic earnings per share | 0.027 | 0.013 | |
- diluted earnings per share | 0.027 | 0.013 |
Consolidated statement of financial position at 30 June 2015
Consolidated statement of financial position 30/06/2015 31/12/2014 Change (in thousands of Euro) (A) (B) (A-B) NON-CURRENT ASSETS
Intangible assets
Intangible assets with finite useful lives 74 82 ( 8) Goodwill 12,662 12,662 0
Investment property 1,832,410 1,782,283 50,127
Buildings 8,741 8,861 ( 120) Plant and machinery 372 473 ( 101) Equipment and other assets 1,966 2,098 ( 132) Leasehold improvements 1,408 1,514 ( 106) Assets under construction 51,631 82,179 ( 30,548)
Deferred tax assets 7,463 9,722 ( 2,259) Sundry receivables and other non-current assets 77 75 2
Equity investments 4,916 408 4,508
Non-current financial assets 1,052 1,128 ( 76) Derivatives - assets 28 49 ( 21)
Work in progress inventory and advances 68,186 69,355 ( 1,169) Trade and other receivables 13,327 14,036 ( 709) Related party trade and other receivables 3,468 1,530 1,938
Other current assets 4,389 3,623 766
Related party financial receivables and other current financial assets 151 151 0
Cash and cash equivalents 10,661 15,242 ( 4,581) TOTAL CURRENT ASSETS (B) 100,182 103,937 ( 3,755) Non-current assets held for sale (C) - 28,600 ( 28,600) TOTAL ASSETS (A + B) 2,022,982 2,034,071 ( 11,089) NET EQUITY:
Share capital 549,760 549,760 0
Share premium reserve 39,971 147,730 ( 107,759) Other reserves 324,830 231,818 93,012
Group profit 33,178 20,921 12,257
Derivatives - liabilities 36,047 43,961 ( 7,914) Non-current financial liabilities 800,810 850,466 ( 49,656) Provision for employee severance indemnities 2,073 1,910 163
Deferred tax liabilities 24,155 24,730 ( 575) Provisions for risks and future charges 3,775 1,827 1,948
Sundry payables and other non-current liabilities 6,885 6,810 75
Related party sundry payables and other non-current liabilities 13,922 13,492 430
Current financial liabilities 148,958 107,962 40,996
Related party current financial liabilities - 188 ( 188) Trade and other payables 18,595 14,512 4,083
Related party trade and other payables 652 522 130
Current tax liabilities 3,106 954 2,152
Other current liabilities 5,848 5,905 ( 57) Related party other current liabilities 14 14 0
Consolidated statement of cash flows at 30 June 2015
STATEMENT OF CASH FLOWS | 30/06/2015 | 30/06/2014 |
(in Euro/000) | ||
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Pre-tax profit | 19,618 | 2,448 |
Adjustments to reconcile net prof it with cash f low generated ( absorbed) by operating activities: | ||
Non-cash items | (3,786) | (1,230) |
(Depreciation, amortization and provisions) | 1,361 | 1,528 |
(Impairment losses)/reversals on work in progress | 1,327 | 1,673 |
Changes in fair value - increases / (decreases) | (924) | 12,082 |
Gains/losses from disposals | 213 | (120) |
CAS H FLOW FRO M OP E RAT ING ACT IV IT IE S | 17,809 | 16,381 |
Income tax | (487) | (651) |
CAS H FLOW FRO M OP E RAT ING ACT IV IT IE S NE T OF T AX | 17,322 | 15,730 |
Change in inventories | 433 | 583 |
Net change in current assets and liabilities w. third parties | 6,242 | 5,968 |
Net change in current assets and liabilities w. related parties | (1,808) | (1,171) |
Net change in non-current assets and liabilities w. third parties | (153) | 973 |
Net change in non-current assets and liabilities w. related parties | 430 | (671) |
CAS H FLOW FRO M OP E RAT ING ACT IV IT IE S | 22,466 | 21,412 |
(Investments) in non-current assets | (19,581) | (21,380) |
Disposals of non-current assets | 28,438 | 46,859 |
(Investments) in equity interests | (4,391) | (62) |
CAS H FLOW FRO M INV E S T ING ACT IV IT IE S ( b) | 4,466 | 25,417 |
Change in non-current financial assets | 76 | (166) |
Change in financial receivables and other current financial assets w. third parties | 0 | 20 |
Dividend reinvestment option | 0 | 13,693 |
Sale of treasury shares | 0 | 12,050 |
Plusvalenza per cessione quota a terzi | (108) | 0 |
Distribution of dividends | (28,363) | (22,620) |
Change in current debt with third parties | 47,928 | (153,533) |
Change in current debt with related parties | (188) | (13,447) |
Change in non-current debt with third parties | (50,859) | 121,326 |
CAS H FLOW FRO M FINANCING ACT IV IT IE S ( c) | ( 31,514) | ( 42,677) |
Exchange gains/(losses) on cash and cash equivalents | 1 | 34 |
NE T INCRE AS E ( DE CRE AS E ) IN CAS H BALANCE | ( 4,581) | 4,186 |
CAS H BALANCE AT BE GINNING OF Y E AR | 15,242 | 8,446 |
CAS H BALANCE AT E ND OF Y E AR | 10,661 | 12,632 |
Consolidated net financial position at 30 June 2015
NET FINA NCIA L POSITION
30/06/2015 | 31/12/2014 | |
Cash and cash equivalents | (10,661) | (15,242) |
Financial receivables and other current financial assets w. related parties | (151) | (151) |
LIQUIDITY | (10,812) | (15,393) |
Current financial liabilities w. related parties | 0 | 188 |
Current financial liabilities | 90,021 | 33,022 |
Mortgage loans - current portion | 55,460 | 66,708 |
Leasing - current portion | 298 | 293 |
Bond loan - current portion | 3,179 | 7,939 |
CURRENT DEBT | 148,958 | 108,150 |
CURRENT NET DEBT | 138,146 | 92,757 |
Non-current financial assets | (1,052) | (1,128) |
Non-current financial liabilities due to other sources of finance | 750 | 1,125 |
Leasing - non-current portion | 4,716 | 4,867 |
Non-current financial liabilities | 513,977 | 553,293 |
Non-current financial liabilities w. related parties | 0 | 0 |
Bond loan | 281,367 | 291,181 |
NON-CURRENT DEBT | 799,758 | 849,338 |
NET FINANCIAL POSITION | 937,904 | 942,095 |
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