Orco Property Group : Q3 2016 Financial Results
November 30 2016 - 12:18PM
Luxembourg, 30 November 2016
Press Release
Orco Property Group
Q3 2016 Financial Results
Key recent
events
Appointment of a valuation expert
for the determination of the equitable price to be offered to the
shareholders of OPG in the context of the mandatory takeover
bid: On 8 June 2016 CPI PROPERTY GROUP through its wholly
owned subsidiary Nukasso indirectly acquired 97.31% shares in ORCO
Property Group ("OPG" or the "Company" and together with its
subsidiaries as the "Group"). Nukasso has submitted a draft offer
document for approval to the CSSF in its capacity as competent
supervisory authority. On 22 September 2016, the CSSF appointed
PricewaterhouseCoopers société cooperative (Luxembourg) as the
independent expert for the determination of the equitable price to
be offered to the shareholders of OPG in the context of the
mandatory takeover bid over any and all of the ordinary shares of
OPG. The valuation report will take 8 June 2016 as the valuation
reporting date.
-
Disposal of CPI Property Group shares: On 29
August 2016, the Company disposed of 65,957,446 pieces of ordinary
shares of CPI Property Group for an aggregate consideration of EUR
34.59 million. The disposal of shares was based on the Agreement on
Put Option over Shares entered into by the Company and Mr. Radovan
Vítek on 24 September 2014. The disposal price per share equals to
EUR 0.47, plus a 6.00% p.a. interest from 24 September 2014 until
29 August 2016. The shares were acquired by a holding entity of Mr.
Vítek. The Company continues to hold app. 1.45% of CPI Property
Group shares.
-
Disposal of Vaci 188 and 190 projects: On 30
November 2016 the Company disposed of the Vaci 188 and 190
properties in Budapest, Hungary. The disposal, structured as a
share deal transaction, was completed today and the counterparty is
a consortium of Hungarian investors. The project company, which was
sold owns two properties: Vaci 188 - the office building with
15,000m2 gross area and 5,844m2 plot size and Vaci 190 - the
development plot with 4,583m2 area.
Q3 2016 Financial
highlights
Over the nine months of 2016 the
Group recorded net profit attributable to owners of the Company in
the amount of EUR 10.2 million compared to a loss of EUR 20.8
million in Q3 2015.
-
Total revenue decreased year on year to EUR 8.6
million for the nine months of 2016 compared to EUR 9.9 million
over the same period in 2015 (13.5% y-o-y). This decrease comes
from the Property Investment business line.
-
Operating result as of September 2016 is
represented by a gain of EUR 13.0 million compared to a loss of EUR
12.1 million over the same period in 2015. The improvement of
results is mainly due to the positive fair value adjustments on
investment property.
-
Financial result improved from a loss of EUR
13.3 million to a gain of EUR 6.6 million as at 30 September
2016.
-
The adjusted EBITDA increased by EUR 2.6 million
and amounts to EUR 0.5 million as at 30 September 2016 compared to
EUR -2.1 million in September 2015. Following the improvement of
operational results, Property Investments reports a positive
variation of EUR 3.4 million, while the development segment reports
worsened to an adjusted EBITDA (EUR 0.8 million).
-
The LTV ratio as at 30 September 2016 is 8.5%
and significantly decreased compared to 40.8% as at 31 December
2015. The main reason of this decrease was the repayment of the
loan provided by CPI PG to the Group (EUR 32.1 million), the
acquisition of New Notes (EUR 49.2 million) and received cash from
Put Option (EUR 34.6 million). Total amount of financial
liabilities including financial debts and New Notes is EUR 25.6
million as at the end of September 2016 in comparison to EUR 150.3
million at the end of 2015. The Fair value of portfolio is
evaluated from EUR 369.3 million to EUR 300.2 million.
Unaudited income
statement
|
|
9
months |
9 months |
|
|
2016 |
2015 |
|
|
|
|
|
|
|
|
Revenue |
|
8,570 |
9,907 |
Sale of goods |
|
1,556 |
879 |
Rent |
|
6,080 |
5,908 |
Hotels and restaurants |
|
- |
- |
Services |
|
934 |
3,120 |
|
|
|
|
Net gain from fair value |
|
|
|
adjustments on Investment Property |
|
8,496 |
(14,406) |
Other operating income |
|
289 |
492 |
Net result on disposal of assets |
|
238 |
(748) |
Cost of goods sold |
|
(2,754) |
(1,015) |
Employee benefits |
|
(179) |
(572) |
Amortization, impairments and provisions |
|
3,774 |
5,157 |
Other operating expenses |
|
(5,426) |
(10,885) |
|
|
|
|
Operating
result |
|
13,008 |
(12,070) |
|
|
|
|
Interest expense |
|
(5,446) |
(9,427) |
Interest income |
|
900 |
653 |
Foreign exchange result |
|
(439) |
1,629 |
Other net financial results |
|
11,577 |
(6,149) |
|
|
|
|
Financial result |
|
6,592 |
(13,294) |
Share of profit or loss of entities
accounted for using the equity method |
|
(7,057) |
2,928 |
|
|
|
|
Profit before
income taxes |
|
12,544 |
(22,436) |
|
|
|
|
Income taxes |
|
(2,351) |
1,260 |
|
|
|
|
Profit from
continuing operations |
|
10,193 |
(21,176) |
|
|
|
|
Profit after tax from discontinued operations |
|
- |
- |
|
|
|
|
Net profit
for the period |
|
10,193 |
(21,176) |
|
|
|
|
Total profit attributable to: |
|
|
|
Non-controlling interests |
|
6 |
(328) |
|
|
|
|
Owners of the
Company |
|
10,188 |
(20,848) |
1
Revenue by segment
The revenue decreased by 13.5%
compared to 2015, reaching EUR 8.6 million as of September
2016.
Main contributors to the revenue
from rent are projects of the renting segment - Na Porící,
Hradcanská and Bubenská in the Czech Republic (EUR 3.5 million) and
Capellen in Luxembourg (EUR 1.4 million).
Revenue from sale of goods
recognized in Q3 2016 includes remaining units sold on project
Benice I (EUR 0.3 million) and Benice 1c (EUR 1.2 million).
|
Development |
Property Investments |
Total |
|
|
|
|
YTD
Revenue |
|
|
|
|
|
|
|
As at September 2016 |
2,411 |
6,159 |
8,570 |
As at September 2015 |
1,611 |
8,296 |
9,907 |
|
|
|
|
Variation |
800 |
(2,137) |
(1,337) |
2
Operating expenses
Total operating expenses decreased
by 51.1% to EUR 5.9 million over Q3 2016. This decrease is mainly
due to the relevant write-off of receivables towards disposed
Hungarian entities in 2015 (EUR 2.0 million) and reduction of legal
costs in Luxembourg (EUR 1.0 million) compared to the same period
in 2015. Furthermore employee benefits were reduced as a result of
continuing reduction in headcount.
|
9 months
2016 |
9 months
2015 |
|
|
|
Other
Operating expenses |
(5,426) |
(10,885) |
Leases and rents |
(149) |
(131) |
Building maintenance and
utilities supplies |
(1,696) |
(1,739) |
Marketing and representation
costs |
(143) |
(351) |
Administration costs |
(2,622) |
(5,528) |
Taxes other than income
tax |
(487) |
(572) |
Other operating expenses |
(329) |
(2,564) |
Employee
benefits |
(179) |
(572) |
|
|
Total
operating expenses |
(5,605) |
(11,457) |
3
Adjusted EBITDA[1]
Operating result is showing
positive YoY variation, loss of EUR 12.1 million reported in Q3
2015 improved to a gain of EUR 13.0 million over the same period in
2016, positively affected by gain on fair value adjustment.
|
Development |
Property
Investments |
TOTAL |
|
|
|
|
Operating
Result - 9m 2016 |
8,034 |
4,974 |
13,008 |
|
|
|
|
Net gain or loss from fair value adjustments on investment
property |
(6,070) |
(2,426) |
(8,496) |
Amortisation, impairments and provisions |
(3,935) |
161 |
(3,774) |
Net result on disposal of assets |
9 |
(247) |
(238) |
|
|
|
|
Adjusted
EBITDA - 9m 2016 |
(1,962) |
2,462 |
500 |
|
|
|
|
Adjusted
EBITDA - 9m 2015 |
(1,125) |
(949) |
(2,075) |
|
|
|
|
Variation YoY |
(837) |
3,411 |
2,575 |
4
Financial Result 4.1
Interests
The interest expenses YoY further
decreased by EUR 3.9 million from EUR 9.4 million to EUR 5.5
million. The bank interest for the 9 months of 2016 amounting of
EUR 1.5 million relates to the Property investment activity only.
The interest on third party loans for the 9 months of 2016 amounts
to EUR 0.7 million. As of September 2016, New Notes interests
amount to EUR 3.3 million for the 9 months of 2016.
4.2
Other net financial results
Other net financial results
amounting to EUR 11.6 million consist mainly of: (i) gain on
disposal of SHH stake EUR 8.2 million, (ii) gain on disposal of
Czech entities EUR 1.9 million, (iii) gain on New Notes purchase
EUR 1.1 million.
5
Consolidated balance sheet
Compared to year-end 2015, the
amount of total assets decreased from EUR 378.6 million to EUR
376.6 million as at end of September 2016.
Assets |
|
|
30
September |
31
December |
|
|
2016 |
2015 |
|
|
|
|
NON-CURRENT
ASSETS |
281,898 |
355,607 |
|
Investment property |
242,659 |
241,825 |
|
Property,
plant and equipment |
337 |
353 |
|
Non-current financial assets |
38,902 |
113,429 |
|
Other
non-current assets |
- |
- |
CURRENT
ASSETS |
85,907 |
22,955 |
|
Inventories |
9,805 |
7,774 |
|
Trade
receivables |
2,693 |
3,409 |
|
Derivative instruments |
36,760 |
- |
|
Cash and
cash equivalents |
34,710 |
3,264 |
|
Other
current assets |
10,729 |
8,508 |
TOTAL |
376,595 |
378,562 |
|
|
|
|
Equity and
liabilities |
|
|
30
September |
31
December |
|
|
2016 |
2015 |
|
|
|
|
EQUITY |
296,275 |
204,589 |
|
Equity
attributable to owners of the Company |
295,970 |
204,402 |
|
Non
controlling interests |
305 |
187 |
LIABILITIES |
80,320 |
173,973 |
Non-current
liabilities |
35,484 |
88,113 |
|
Bonds and
financial debts |
10,371 |
81,108 |
|
Other
long term liabilities |
25,113 |
7,005 |
Current liabilities |
44,836 |
85,860 |
|
Current
bonds and financial debts |
33,393 |
69,180 |
|
Other
current liabilities |
11,443 |
16,680 |
TOTAL |
376,595 |
378,562 |
For more
information,
visit www.orcogroup.com, or
contact us
at investors@orcogroup.com
[1] The
adjusted EBITDA is the recurring operational cash result calculated
by deduction from the operating result of non-cash items and
non-recurring items (Net gain or loss on fair value adjustments -
Amortization, impairments and provisions - Net gain or loss on the
sale of abandoned developments - Net gain or loss on disposal of
assets) and the net results on sale of assets or subsidiaries.
Q3 2016 Financial Results
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Orco Property Group via Globenewswire
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