COMPAGNIA IMMOBILIARE AZIONARIA S.P.A.
Milan, 27 August 2015
The Board of Directors of the Compagnia Immobiliare Azionaria Spa (CIA) met in Milan today, to examine the activities and consolidated results for the first six months of the year.
Total revenues in the period to 30 June 2015 amounted to 3.77 million euro, up 21.2% with respect to the comparative period.
Operating costs amounted to 3.15 million euro, compared with 1.59 million euro in the first half of 2014.
The gross operating profit (EBITDA) totalled 0.61 million euro, or 16.3% of revenues, as against 1.52 million euro in the comparative period.
The consolidated statement of comprehensive income statement reports a consolidated net loss attributable to the group of 190 thousand euro, compared with a net profit of 66 thousand euro in the first half of 2014.
The consolidated net financial position reflects net borrowing of 47.14 million euro at 30 June 2015, essentially unchanged since 31 December 2014 (47.71 million euro).
Consolidated net equity amounts to 15.12 million euro, compared with 15.31 million euro at 31 December
2014.
• Italian property market
During the first half of 2015 the property market confirmed the growth prospects identified at the end of
2014, with an increase in home sales of 5-7%. The principal factors contributing to this recovery include the
continuing decline in selling prices and the greater willingness of banks to grant mortgages (accordingly to ABI data, new mortgages for the purchase of property rose by 55.2% semester/semester). At a European level, the situation was encouraged by the quantitative easing measures implemented by the ECB, which have effectively stimulated lending by injected liquidity into the system. In Italy, the above action was sustained by the Unblock Italy decree, which includes incentives for purchasing and renting out homes, the re-opening of construction sites, the simplification of procedures for the division of property and, lastly, greater flexibility in the governance of listed property companies (SIIQ). Further impetus was given to the market by foreign investors: investment in Italy during the first half of 2015 totalled 3.6 billion euro, more than double that in the comparative period of 2014, of which 34% was concentrated in the province of Milan due, in part, to the EXPO effect.
Against this background, work to promote the property portfolio has continued, with a view to realising the inherent capital gains.
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The considerations and projections for the residential market do not apply to the offices-services sector,
which experienced average declines of around 10%. The recovery of this sector is, as indicated by leading analysts, adversely influenced by increasing over supply, the rise in property taxes and the overall economic performance of the country. The amount of time required to lease property has risen to 11-12 months on average; discounts on the requested rentals average 20-25%, and the average yield is now less than 5%.
In a market characterised by volatility and uncertainty, the Group's property investments in the office sector guarantee essentially stable yields, despite a temporary reduction in the current year, due to the binding, long-term contracts that have been signed and to the related activities.
• Italian wine market
Italian wines did well in the first half of 2015, with a 3.85% rise in exports resulting in sales totalling more than 1 billion euro. The most active destination markets included the United States (+9% in volume terms and +14% in value terms), probably due to the current weakness of the euro against the dollar, and Germany, with a 1% rise in volume and a 5% rise in value terms. Growth was also achieved in the United Kingdom (+6%), Switzerland (+1.8%) and the Netherlands (+3.4%), but contractions were experienced in Canada (-1.5%), Japan (-1%), France (-5.3%) and Russia where, according to Nomisma's Wine Monitor, the value of the market collapsed by 35% with a 25% reduction in volume. By contrast, the immense Chinese market (which has not yet expressed its full potential) showed signs of recovery: +51% in value terms and
+38% in volume terms compared with the same period in the prior year. In Italy, sales of wine through the
traditional channels (Normal Trade, HO.RE.CA, etc.) continued to decline, although chain retailing generated growth of 0.4%.
Based on Coldiretti estimates for the grape harvest in Italy, which will be earlier due to the heat wave, wine production will be at least 5% higher than in 2014, at around 44 million hectolitres, and the quality will be excellent.
Feudi del Pisciotto experienced a slight decline in the volume of wine sold during the first half of 2015, after a major increase in the prior year, but this was largely offset by an increase in average prices (+3.3% compared with the situation at 30 June 2014). Orders and sales forecasts are positive, with a recovery in volume expected from the third quarter of the year. This reflects the steady improvement in brand awareness, which is facilitated by the excellent ratings awarded to the wines by international critics.
a. in Sicily, work is almost finished on a restaurant, cookery school and small spa within the complex owned by Feudi del Pisciotto. This will complete the planned investment in the Wine Relais, following the earlier opening of hospitality services (10 rooms and suites with every comfort, created in the habitable part of the island's largest eighteenth-century Palmento or winery). The significant number of visitors to the Relais during the first half of 2015, traditionally considered to be low season, generated encouraging revenues and an increase in the occupancy rate. The comments made by guests all continue to be extremely positive, with top ratings in most cases (source of data: Booking.com and Tripadvisor);
b. a project is being finalised for the construction of additional rooms and suites in a portion of the ancient fortified farmhouse, extending over 2,600 sq.m., owned by Feudi del Pisciotto Srl, with a view to consolidating and strengthening the facilities currently offered by the Wine Relais;
c. on the Isle of Levanzo (Sicily), work to enhance the value of the properties owned by Agricola Florio Srl has commenced, with the implementation of a coordinated development plan for the area that combines the rural identity of the complex with its importance for tourism. The approach taken adopts the values considered appropriate for Rural Tourism. The first stage of the project involves work to renovate and
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upgrade about 400 sq.m. of buildings, with the construction of charming dwellings equipped with every
comfort, which respect in full the architecture and natural surroundings found on the island. The project was originally presented pursuant to the PO FESR Sicily 2007-2013 regional development programme. After initial exclusion, the project was readmitted to the selection procedure at a level likely to qualify for a capital grant, following the presentation of an appeal to the Sicilian Administrative Justice Board that was accepted in April. Once the decree allocating the funds has been issued, probably soon, the executive phase of the project can commence. In view of the above and the increased market value of the land owned, partly due to investment in the island by the Prada group, it was considered appropriate to remeasure its carrying amount in accordance with international accounting standards. This work, performed on a highly prudent basis, identified that the land was worth 1.24 million euro more than its previous carrying amount, which was restated accordingly at the reporting date. This extra value is reported in the consolidated statement of comprehensive income for the period ended 30 June 2015.
CIA is party to a dispute following its exercise of a put option for the sale to NH Hotel, a Spanish group, of a
15% interest in Donnafugata Resort Srl. The counterpart has refused to pay. Following the second favourable arbitration award in December 2014, requiring the counterpart to pay, and given its continued failure to comply, CIA has granted powers of attorney to a leading Spanish law firm, with instructions to take legitimate enforcement action in order to collect the sum owed as quickly as possible. The counterpart has challenged this second award, requesting the Milan Court of Appeal to suspend its effects. The first hearing of this appeal rejected the suspension request and set 23 February 2016 as the hearing date for clarification and conclusions. This time horizon is extremely rapid for the Italian justice system, which is clearly aware that the actions of the counterpart are intended solely to waste time. Also in this regard, on 19 January 2015 the Court of Milan rejected the appeal brought by the counterpart seeking annulment and/or cancellation of the mandate granted to the valuer on 22 December 2010. This action sought to render invalid and void the appraisal made by Prof. Luigi Guatri.
Objecting to the adverse ruling handed down by the Council of State in 2014, regarding the appeal filed by the Condominium at Corso Italia 66/68 regarding the work on the property complex at via Borgazzi 1, on 13
January 2015 Diana Bis filed an appeal with the competent authorities for the ruling to be overturned. Following the reopening of the administrative procedure, in order to carry out a new investigation of the amnesty requests that resulted in permission to construction the property concerned, in July the Municipal Administration, as the primary recipient of the Council of State ruling, notified its rejection of the amnesty requests. Diana Bis has challenged these measures. On 23.07.2015, the Regional Administrative Court (TAR) deferred discussion of the case to October 2015 and, in the meantime, suspended the measures that have been challenged.
Should any liabilities crystallise, Diana Bis may call on the guarantees in its favour given by the seller of the company, as part of the purchase transaction, which will offset all potentially adverse economic and financial effects.
Macroeconomic conditions are still marked by uncertainties about the prospects for growth, especially when it comes to Italy. However there are some encouraging signs of recovery and the outlook for the operations of the Group remains good. This reflects the stability of the returns from the property investments made, expectations for the outcome of current property transactions and the expansion of the commercial activities of Feudi del Pisciotto.
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For additional information, please contact: Gian Marco Giura
Tel: +39 02-58219395
E-mail: gmgiura@class.it
The income statement and the statement of financial position are presented below. The consolidated half-year report will be made available to the publid on the website of CIA, www.c-i-a.it, prior to the legal deadline.
The executive responsible for preparing the corporate accounting documents of Compagnia Immobiliare Azionaria S.p.A., Walter
Villa, hereby certifies that the accounting information contained in this document is consistent with the underlying documents, registers and accounting entries.
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Consolidated statement of comprehensive income for the period ended 30 June 2015(thousands of euro) | 30 June 2014 | 30 June 2015 |
Revenues | 2,618 | 3,453 |
Other operating income | 490 | 315 |
Total revenues | 3,108 | 3,768 |
Purchase costs | (257) | (1,901) |
Service costs | (900) | (760) |
Payroll costs | (225) | (285) |
Other operating costs | (209) | (214) |
Investments measured at net equity | 1 | 6 |
Gross operating profit - Ebitda | 1,518 | 614 |
Non-core income/(charges) | 591 | (52) |
Depreciation, amortisation and write-downs | (880) | (1,131) |
Operating result - Ebit | 1,229 | (569) |
Net financial income/(charges) | (1,139) | (1,175) |
Pre-tax profit (loss) | 90 | (1,744) |
Income taxes | (26) | 405 |
Net result | 64 | (1,339) |
(Profit)/loss attributable to NCI | 3 | (1) |
Result attributable to owners of the parent | 67 | (1,340) |
Other components of comprehensive income | ||
Actuarial income/(charges) not recorded in income statement (IAS 19) | (1) | 3 |
Remeasurement of land | -- | 1,147 |
Taxes on other components of comprehensive income | -- | -- |
Total components of comprehensive income, net of tax effect | (1) | 1,150 |
TOTAL COMPREHENSIVE INCOME | 63 | (189) |
Attributable to: | ||
NON-CONTROLLING INTERESTS | (3) | 1 |
PARENT COMPANY SHAREHOLDERS | 66 | (190) |
Basic earnings per share | 0.00 | (0.00) |
Diluted earnings per share | 0.00 | (0.00) |
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Consolidated statement of financial position at 30 June 2015ASSETS (thousands of euro) | 31 December 2014 | 30 June 2015 |
Intangible assets with an indefinite life | -- | -- |
Other intangible assets | 3 | 2 |
Intangible assets | 3 | 2 |
Tangible fixed assets | 42,545 | 43,106 |
Investments measured at net equity | 13,413 | 13,419 |
Other equity investments | 265 | 286 |
Deferred tax assets | 420 | 488 |
Other receivables | 1,752 | 1,748 |
NON-CURRENT ASSETS | 58,398 | 59,049 |
Inventories | 17,548 | 15,667 |
Trade receivables | 9,378 | 5,169 |
Financial receivables | -- | -- |
Tax receivables | 527 | 902 |
Other receivables | 984 | 1,075 |
Liquid funds | 36 | 92 |
CURRENT ASSETS | 28,473 | 22,905 |
TOTAL ASSETS | 86,871 | 81,954 |
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LIABILITIES AND EQUITY (thousands of euro) | 31 December 2014 | 30 June 2015 |
Share capital | 923 | 923 |
Share premium account | 1,526 | 1,526 |
Legal reserve | 185 | 185 |
Other reserves | 7,660 | 8,782 |
Profit (loss) for the period | (19) | (1,340) |
Group net equity | 10,275 | 10,076 |
Capital and reserves attributable to NCI | 5,041 | 5,038 |
Net profit (loss) attributable to NCI | (3) | 1 |
Net equity attributable to NCI | 5,038 | 5,039 |
NET EQUITY | 15,313 | 15,115 |
Financial payables | 40,742 | 40,693 |
Deferred tax liabilities | -- | -- |
Provision for risks and charges | 3 | 3 |
Severance indemnities and other payroll provisions | 28 | 23 |
NON-CURRENT LIABILITIES | 40,773 | 40,719 |
Financial payables | 7,006 | 6,543 |
Trade payables | 5,607 | 6,038 |
Tax payables | 217 | 305 |
Other payables | 17,955 | 13,234 |
CURRENT LIABILITIES | 30,785 | 26,120 |
TOTAL LIABILITIES | 71,558 | 66,839 |
LIABILITIES AND NET EQUITY | 86,871 | 81,954 |
Statement of consolidated cash flows for the period ended 30 June 2015
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(thousands of euro) | 1st Half 2014 | 2014 | 1st Half 2015 |
OPERATING ACTIVITIES | |||
Net profit/(loss) for the period | 67 | (19) | (1,340) |
Adjustments | |||
- Depreciation and amortisation | 780 | 1,563 | 758 |
Self-financing | 847 | 1,544 | (582) |
Change in inventories | (1,856) | (1,872) | 1,881 |
Change in trade receivables | (170) | (3,026) | 4,209 |
Change in tax receivables/payables | 518 | 350 | (355) |
Change in other receivables | (121) | (87) | (87) |
Change in trade payables | 2 | (870) | 431 |
Change in other payables | 1,773 | 3,394 | (4,721) |
Cash flows from operating activities (A) | 993 | (567) | 776 |
INVESTING ACTIVITIES | |||
Tangible fixed assets | (39) | (56) | (1,318) |
Intangible assets | -- | -- | -- |
Equity investments | (1) | 2,136 | (27) |
Cash flows from investing activities (B) | (40) | 2,080 | (1,345) |
FINANCING ACTIVITIES | |||
Change in amounts due to banks and other lenders | (1,269) | (1,810) | (512) |
Change in provisions for risks and charges | 3 | 3 | -- |
Change in severance indemnities | 5 | 3 | (5) |
Payment of dividends | -- | -- | -- |
Change in net equity reserves | 14 | 4 | 1,141 |
Change in net equity attributable to NCI | (3) | (2) | 1 |
Cash flows from financing activities (C) | (1,250) | (1,802) | 625 |
Change in liquid funds (A) + (B) + (C) | (297) | (289) | 56 |
Liquid funds at start of period | 325 | 325 | 36 |
Liquid funds at end of period | 28 | 36 | 92 |
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Net consolidated financial position at 30 June 2015€uro/000 | 30/06/2014 | 31/12/2014 | 30/06/2015 | Changes 2015/2014 | Change % |
Liquid funds | 28 | 36 | 92 | 56 | n.a. |
Non-current financial payables | (41,369) | (40,742) | (40,693) | 49 | 0.1 |
Current financial payables | (6,920) | (7,006) | (6,543) | 463 | 6.6 |
Net consolidated financial position | (48,261) | (47,712) | (47,144) | 568 | 1.2 |
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