Plaza Centers N.V.
18 November 2015
PLAZA CENTERS N.V.
THIRD QUARTER INTERIM MANAGEMENT
STATEMENT AND INTERIM FINANCIAL STATEMENTS
STABLE PERFORMANCE RECORDED IN CORE
PORTFOLIO AND FURTHER STRATEGY PROGRESS
Plaza Centers N.V. (LSE: PLAZ)
("Plaza" / the "Company" / the "Group"), a leading emerging markets
property developer, today announces its interim management
statement relating to the period from 1
July 2015 to 30 September 2015 (the "Period") and unaudited interim
financial information for the nine month period ended 30 September,
2015, together with an update on transactional activity to the date
of this announcement.
Stable performance at core CEE
shopping centres during the Period:
· Portfolio occupancy remained stable at 93.25% as of 30
September 2015, compared to 92% in Q3 2014.
o Over
3,000 sqm of GLA is currently under final negotiations which, when
completed, is expected to bring total portfolio occupancy to
95.5%.
o At
Torun Plaza, Poland, occupancy increased to 94% (2014: 92.5%),
contributing to a slight turnover increase of 2.0% at the shopping
centre compared to the same period last year.
o In
Riga Plaza Latvia, despite a decrease in occupancy to 96.5% (2014:
99.5%) as a result of a number of small retailers exiting the
Latvian market, Riga Plaza recorded an 8.9% increase in turnover
and a 3.7% increase in footfall, compared to the same period in
2014.
o Occupancy at Suwalki Plaza, Poland, increased to 95.4% (2014:
92%) following lettings to eight new tenants, including KIK and
Altero. With negotiations currently underway on the remaining five
units, we expect to reach close to 100% occupancy at the centre in
the near future. Suwalki Plaza continues to perform well with
turnover up and a 4.5% increase in footfall, versus the third
quarter in 2014.
o Turnover and footfall at Zgorzelec Plaza, Poland, remained
stable compared to the same period in 2014 despite the closure of a
supermarket in April 2015, which led to a decrease in occupancy to
89% (2014: 95.2%). Following the closure, proactive negotiations
were held with the remaining tenants, as a result of which the
majority elected to continue trading in the
centre.
o Turnover at Liberec Plaza, Czech Republic, increased by a
significant 10.5%, despite occupancy decreasing slightly to 82.8%
(2014: 84%), owing to lease expiries, and footfall being down by
3.73% against the third quarter in 2014.
Portfolio activity during the
Period:
As announced on 29 September 2015, a
wholly owned subsidiary of the Company was successful in a tender
to buy the loan to the wholly owned holding and operating company
for Liberec Plaza shopping and entertainment centre in the Czech
Republic and the relevant agreement was signed on that date. The
subsidiary acquired the €20.4 million bank loan, which was provided
by two commercial banks, for €8.5 million, reflecting a 58%
discount. The Company recorded a profit on the discount (circa €12
million) in its financial statements for the third quarter of 2015
and anticipates that the mall will deliver a net operating income
of circa €850,000 in 2015, which would reflect a yield of
approximately 10% on the loan purchase price.
On 10 September 2015, the Company
announced the sale of Palazzo Ducale, an 823 sqm office building in
Bucharest, Romania, for circa €1.1 million, consistent with the
asset's last reported book value. In line with the Company's stated
restructuring plan, 75% of the net cash proceeds from the sale were
distributed to the Company's bondholders as an early repayment in
late September 2015.
Supported by very strong tenant
demand, construction of Belgrade Plaza (Visnjicka) also commenced
during the Period, with demolition works on the existing site now
complete and excavation and pile works now underway.
The current consolidated cash
balance of the Company is circa €21 million, including
approximately €5.9 million of restricted cash mainly held in the
operating shopping centres, following interest and principal
prepayment on 30 September 2015 of circa €10.4 million.
Further information can be found
about the results for the nine months period ending on 30 September
2015 on the Company's website:
http://www.plazacenters.com/index.php?p=company_presentation
Appointment of a CEO:
On 22 September 2015, Plaza
announced the resignation of the CEO, Mr. Akiva Azulay. The
appointment of an experienced and able CEO is actively underway and
the Company hopes to be able to make an announcement on this in the
near future.
Roy
Linden, Chief Financial Officer of Plaza Centers N.V.,
said:
"The third quarter has seen us
produce another stable performance across our portfolio with some
encouraging figures being recorded in our core shopping
centres. Further progress has also been achieved on our
strategy of focusing on the core Central and Eastern European
markets, to drive value and growth for investors, following the
disposal of Koregaon Park and a number of other non-core assets
earlier in the year.
"As the result of the Liberec loan
purchase and the €1.4 million bank loan forgiveness connected to a
plot sold in Ploiest, Romania, a total financial gain of €13.3
million was recorded which has helped us to further deleverage the
Company. The planned developments of Timisoara Plaza and Belgrade
Plaza (Visnjicka) are advancing and, as we move towards the end of
this financial year, we are confident that the Company is in a yet
stronger position to deliver on our objectives."
For further details please
contact:
Plaza
Roy Linden, CFO
|
+36 1 462 7222
|
FTI Consulting
Dido Laurimore / Claire Turvey / Tom
Gough
|
+44 20 3727 1000
|
Plaza Centers N.V. (www.plazacenters.com) is a leading emerging markets developer
of shopping and entertainment centres with operations in Central
and Eastern Europe and India. It focuses on constructing new
centres and, where there is significant redevelopment potential,
redeveloping existing centres in both capital cities and important
regional centres. The Company is listed on the Main Board of the
London Stock Exchange, the Warsaw Stock Exchange and, as of 27
November 2014, the Tel Aviv Stock Exchange (LSE:"PLAZ"; WSE:
"PLZ/PLAZACNTR"; TASE: "PLAZ"). Plaza Centers N.V. is an indirect
subsidiary of Elbit Imaging Ltd. ("EI"), an Israeli public company
whose shares are traded on both the Tel Aviv Stock Exchange in
Israel and the NASDAQ Global Market in the United States. It has
been active in real estate development in emerging markets for over
19 years.
Forward-looking
statements
This press release may contain
forward-looking statements with respect to Plaza Centers N.V.
future (financial) performance and position. Such statements are
based on current expectations, estimates and projections of Plaza
Centers N.V. and information currently available to the company.
Plaza Centers N.V. cautions readers that such statements involve
certain risks and uncertainties that are difficult to predict and
therefore it should be understood that many factors can cause
actual performance and position to differ materially from these
statements. Plaza Centers N.V. has no obligation to update the
statements contained in this press release, unless required by
law.
Plaza Centers N.V.
Condensed Consolidated Interim
Financial Information
September 30, 2015
Contents
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Independent Auditors' Report on
review of interim financial information
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Condensed consolidated interim
financial information
|
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- Condensed
consolidated interim statement of financial position
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- Condensed
consolidated interim statement of profit or loss
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- Condensed
consolidated interim statement of comprehensive income
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|
-
Condensed consolidated interim statement of changes in equity
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-
Condensed consolidated interim statement of cash
flows
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- Notes to
the condensed consolidated interim
financial information
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Independent Auditors' Report on
Review of Interim Financial Information
Board of Directors
Plaza Centers N.V.
Introduction
We have reviewed the accompanying
condensed consolidated statement of financial position of Plaza
Centers N.V. ("the Company") as at September 30, 2015, the
condensed consolidated statements of profit or loss and
comprehensive income for the nine and three month period then
ended, and the statement of changes in equity and cash flows for
the nine month period then ended, and notes to the interim
financial information ("the condensed consolidated interim
financial information"). Management is responsible for the
preparation and presentation of this condensed consolidated interim
financial information in accordance with IAS 34, 'Interim Financial
Reporting' as adopted by the EU.
Our responsibility is to express a conclusion on
this condensed consolidated interim financial information based on
our review.
Scope of Review
We conducted our review in
accordance with the International Standard on Review Engagements
2410, "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity". A review of interim financial
information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has
come to our attention that causes us to believe that the
accompanying condensed consolidated interim financial information
as at September 30, 2015 is not prepared, in all material respects,
in accordance with IAS 34, 'Interim Financial Reporting' as adopted
by the EU.
Budapest, November 17,
2015
KPMG Hungária Kft.
Plaza Centers N.V.
Condensed consolidated interim
statement of financial position
|
|
September 30,
|
December 31,
|
|
|
2015
|
2014
|
|
|
€ '000
|
€ '000
|
|
Note
|
Unaudited
|
Audited
|
ASSETS
|
|
|
|
Cash and cash equivalents
|
|
15,835
|
33,363
|
Restricted bank deposits
|
|
5,853
|
6,886
|
Held for trading financial
assets
|
|
-
|
1,434
|
Trade receivables
|
|
1,809
|
2,719
|
Other receivables
|
|
1,688
|
2,963
|
Prepayments and advances
|
|
608
|
767
|
Total current assets
|
|
25,793
|
48,132
|
|
|
|
|
Trading property
|
10(a,b,c,k,n)
|
328,158
|
370,761
|
Equity accounted
investees
|
10(o)
|
38,895
|
36,108
|
Loan to equity accounted
investees
|
|
4,693
|
6,121
|
Property and equipment
|
10(f)
|
2,499
|
4,029
|
Related parties
receivables
|
10(e)
|
2,737
|
-
|
Deferred taxes
|
|
651
|
921
|
Other non-current assets
|
|
-
|
25
|
Total non-current assets
|
|
377,633
|
417,965
|
Total assets
|
|
403,426
|
466,097
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
Interest bearing loans from
banks
|
|
32,365
|
37,885
|
Trade payables
|
|
961
|
1,893
|
Related parties
liabilities
|
|
81
|
1,161
|
Derivatives
|
|
567
|
430
|
Other liabilities
|
|
5,811
|
13,175
|
Total current liabilities
|
|
39,785
|
54,544
|
|
|
|
|
Non-current liabilities
|
|
|
|
Interest bearing loans from
banks
|
10(a), 10(c)
|
71,167
|
112,962
|
Debentures at amortized
cost
|
7(a), 10(i), 10(j)
|
174,607
|
162,862
|
Provisions
|
|
15,597
|
15,597
|
Derivatives
|
|
425
|
559
|
Total non-current
liabilities
|
|
261,796
|
291,980
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
|
6,856
|
6,856
|
Translation reserve
|
|
(27,942)
|
(36,699)
|
Capital reserve due to transaction
with Non-controlling interests
|
|
(20,706)
|
(20,706)
|
Other reserves
|
|
35,340
|
35,340
|
Share premium
|
|
282,596
|
282,596
|
Retained losses
|
|
(175,065)
|
(148,486)
|
Equity attributable to owners of the
Company
|
|
101,079
|
118,901
|
Non-controlling interests
|
|
766
|
672
|
Total equity
|
|
101,845
|
119,573
|
Total equity and
liabilities
|
|
403,426
|
466,097
|
November 17, 2015
|
|
|
|
|
Date of approval of the
|
|
Roy Linden
|
|
David Dekel
|
financial statements
|
|
Chief Financial officer
|
|
Director and Chairman of the Audit
Committee
|
The notes are an integral part of
this condensed consolidated interim financial
information.
Plaza Centers N.V.
Condensed consolidated interim
statement of profit or loss
|
|
For the three months
|
For the nine months
|
|
|
ended September 30,
|
ended September 30,
|
|
|
2015
|
2014
|
2015
|
2014
|
|
|
€ '000
|
€ '000
|
€ '000
|
€ '000
|
|
Note
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
Revenue from disposal of Trading
Property
|
10(a)
|
-
|
38,600
|
34,684
|
38,600
|
Rental income
|
|
4,417
|
5,577
|
14,202
|
17,270
|
Revenues from entertainment
centers
|
|
136
|
425
|
504
|
1,295
|
|
|
4,553
|
44,602
|
49,390
|
57,165
|
|
|
|
|
|
|
Cost of Trading Property
disposed
|
10(a)
|
-
|
(38,600)
|
(34,684)
|
(38,600)
|
Cost of operations
|
|
(1,511)
|
(2,219)
|
(5,056)
|
(6,252)
|
Cost of operations - entertainment
centers
|
|
(145)
|
(383)
|
(631)
|
(1,581)
|
Loss from disposal of Trading
property SPV
|
10(a)
|
-
|
-
|
(8,802)
|
-
|
|
|
|
|
|
|
Gross profit
|
|
2,897
|
3,400
|
217
|
10,732
|
|
|
|
|
|
|
Write-down of Trading
Property
|
10(k)
|
(1,734)
|
-
|
(8,495)
|
(69,716)
|
Loss from disposal of trading
property
|
|
-
|
(621)
|
-
|
(621)
|
Loss from disposal of equity
accounted investees (holding undeveloped Trading
Property)
|
|
-
|
-
|
-
|
(4,048)
|
Share in results of equity-accounted
investees, net of tax
|
|
498
|
429
|
669
|
843
|
Administrative expenses, excluding
restructuring costs
|
10(m)
|
(1,328)
|
(1,428)
|
(5,271)
|
(5,590)
|
Restructuring costs
|
|
-
|
99
|
-
|
(2,420)
|
Other income
|
10(e), 10(g)
|
331
|
-
|
6,898
|
2,336
|
Other expenses
|
|
-
|
(488)
|
(748)
|
(1,523)
|
|
|
|
|
|
|
Results from operating
activities
|
|
664
|
1,391
|
(6,730)
|
(70,007)
|
|
|
|
|
|
|
Finance income
|
10(b),10(c)
|
16,629
|
163
|
20,423
|
374
|
Finance costs
|
10(i)
|
(7,780)
|
(3,093)
|
(39,920)
|
(30,579)
|
Net finance income
(costs)
|
|
8,849
|
(2,930)
|
(19,497)
|
(30,205)
|
|
|
|
|
|
|
Profit (loss) before income
tax
|
|
9,513
|
(1,539)
|
(26,227)
|
(100,212)
|
|
|
|
|
|
|
Tax benefit (income tax
expense)
|
|
(99)
|
255
|
(352)
|
368
|
|
|
|
|
|
|
Profit (loss) from continuing
operations
|
|
9,414
|
(1,284)
|
(26,579)
|
(99,844)
|
|
|
|
|
|
|
Discontinued operation
|
|
|
|
|
|
Profit from discontinued operation,
net of tax
|
|
-
|
19
|
-
|
78
|
|
|
|
|
|
|
Profit (loss) for the
period
|
|
9,414
|
(1,265)
|
(26,579)
|
(99,766)
|
|
|
|
|
|
|
Profit (loss) attributable
to:
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
9,414
|
(1,265)
|
(26,579)
|
(99,766)
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
Basic and diluted profit (loss) per
share (in EURO)
|
|
0.01
|
(0.00)
|
(0.04)
|
(0.34)
|
|
|
|
|
|
|
Earnings per share - continuing
operations
|
|
|
|
|
|
Basic and diluted profit (loss) per
share (in EURO)
|
|
0.01
|
(0.00)
|
(0.04)
|
(0.34)
|
The notes are an integral part of
this condensed consolidated interim financial
information.
Plaza Centers N.V.
Condensed consolidated interim
statement of comprehensive income
|
|
For the three months
|
For the nine months
|
|
|
ended September 30,
|
ended September 30,
|
|
|
2015
|
2014
|
2015
|
2014
|
|
|
€ '000
|
€ '000
|
€ '000
|
€ '000
|
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
|
Profit (loss) for the
period
|
|
9,414
|
(1,265)
|
(26,579)
|
(99,766)
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
|
Items that are or may be
reclassified subsequently to profit or loss:
|
|
|
|
|
|
Foreign currency translation
differences - foreign operations (trading property) - reclassified
to profit or loss (refer to note 10(a)).
|
|
-
|
-
|
6,516
|
-
|
Foreign currency translation
differences - foreign operations (Equity accounted
investees)
|
|
(1,023)
|
2,093
|
1,258
|
3,563
|
Foreign currency translation
differences - foreign operations (trading property)
|
|
-
|
474
|
1,077
|
1,078
|
|
|
|
|
|
|
Other comprehensive income (loss)
for the period, net of income tax
|
|
(1,023)
|
2,567
|
8,851
|
4,641
|
|
|
|
|
|
|
Total comprehensive income (loss)
for the period, net of tax
|
|
8,391
|
1,302
|
(17,728)
|
(95,125)
|
|
|
|
|
|
|
Total comprehensive income (loss)
attributable to:
|
|
|
|
|
|
Owners of the
Company
|
|
8,391
|
1,271
|
(17,822)
|
(95,181)
|
Non-controlling interests
|
|
-
|
31
|
94
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes are an integral part of
this condensed consolidated interim financial
information.
Plaza Centers N.V.
Condensed consolidated interim statement of cash
flows
|
|
For the nine months
|
|
|
ended September 30,
|
|
|
2015
|
2014
|
|
|
|
€ '000
|
€ '000
|
|
|
|
Unaudited
|
Unaudited
|
Cash flows from operating
activities
|
|
|
|
Loss for the period
|
|
(26,579)
|
(99,766)
|
Adjustments necessary to reflect
cash flows used in operating activities:
|
|
|
Depreciation and impairment of
property and equipment
|
|
177
|
437
|
Net finance costs
|
|
19,497
|
30,205
|
Loss on sale of property and
equipment
|
|
-
|
109
|
Equity-settled share-based payment
transaction
|
|
-
|
175
|
Share of profit of equity-accounted
investees, net of tax
|
|
(669)
|
(843)
|
Income tax expense
|
|
352
|
(368)
|
|
|
(7,222)
|
(70,051)
|
|
|
|
|
Trade receivables
|
|
381
|
502
|
Other accounts receivable
|
|
(3,715)
|
1,924
|
Trading property
|
|
26,239
|
74,516
|
Equity accounted investees - net
investments
|
|
526
|
5,146
|
Trade payables
|
|
(528)
|
(383)
|
Other liabilities and related
parties liabilities
|
|
(4,219)
|
1,681
|
|
|
18,684
|
83,386
|
|
|
|
|
Interest received
|
|
68
|
331
|
Interest paid
|
|
(13,883)
|
(6,528)
|
Taxes paid
|
|
(82)
|
(11)
|
|
|
|
|
Net cash from (used in) operating
activities
|
|
(2,435)
|
7,127
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
Purchase of property and
equipment
|
|
(3)
|
(76)
|
Proceeds from sale of property and
equipment
|
|
1,198
|
1,375
|
Investment in short term
deposits
|
|
-
|
(11,696)
|
Sale of held for trading marketable
debt securities
|
|
2,227
|
-
|
Purchase of held for trading
marketable debt securities
|
|
(825)
|
-
|
Net cash from (used in) investing
activities
|
|
2,597
|
(10,397)
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
Cash outflow from hedging activities
through sell of currency options (refer to note 10(h))
|
|
(342)
|
-
|
Rights issuance
prepayments
|
|
-
|
(473)
|
Changes in restricted
cash
|
|
866
|
(1,196)
|
Repayment of debentures at amortized
cost
|
|
(6,585)
|
-
|
Repayment of interest bearing loans
from banks
|
|
(11,901)
|
(4,909)
|
|
|
|
|
Net cash used in financing
activities
|
|
(17,962)
|
(6,578)
|
Decrease in cash and cash
equivalents
|
|
(17,800)
|
(9,848)
|
Cash and cash equivalents at 1 of
January
|
|
33,363
|
26,157
|
Effect of exchange rate fluctuations
on cash held
|
|
272
|
434
|
Cash and cash equivalents at 30 of
September
|
|
15,835
|
16,743
|
The notes are an integral part of
this condensed consolidated interim financial
information.
1.
Reporting
entity
Plaza Centers N.V. ("the Company")
was incorporated and is registered in the Netherlands. The
Company's registered office is at Prins Hendrikkade 48-S, 1012 AC,
Amsterdam, the Netherlands. The Company conducts its activities in
the field of establishing, operating and selling of shopping and
entertainment centers, as well as other mixed-use projects (retail,
office, residential) in Central and Eastern Europe (starting 1996)
and India (from 2006).
The Company is listed on the Main
Board of the London Stock Exchange ("LSE"), the Warsaw Stock
Exchange ("WSE") and, starting November 2014, on the Tel Aviv Stock
Exchange ("TASE").
The Company's immediate parent
company is Elbit Ultrasound (Luxembourg) B.V. / S.à r.l. ("EUL"),
which holds 44.9% of the Company's shares, as at the end of the
reporting period. The Company regards Elbit Imaging Limited ("EI")
as the ultimate parent company.
The condensed consolidated interim
financial information of the Company as at September 30, 2015 and
for the nine months then ended comprise the Company and its
subsidiaries (together referred to as the "Group") and the Group's
interests in joint
ventures.
The consolidated financial
statements of the Group as at and for the year ended December 31,
2014 are available on the Company's website
(www.plazacenters.com) and
also upon request from the Company's registered office.
During the nine months period ended
September 30, 2015, no changes occurred in the Company's holdings,
with the exceptions, as described in notes 10(a) and 10(b) of this
report.
2. Basis
of accounting
This condensed consolidated interim
financial information has been prepared in accordance with IAS 34
Interim Financial Reporting, as adopted by the EU. It does not
include all of the information required for a complete set of IFRS
financial statements, and should be read in conjunction with the
annual Consolidated Financial Statements of the Group as at and for
the year ended December 31, 2014.
However, selected explanatory notes
are included to explain events and transactions that are
significant to an understanding of the changes in the Group's
financial position and performance since the last annual
consolidated financial statements as at and for the year ended
December 31, 2014.
This condensed consolidated interim
financial information was authorized for issue by the Company's
Board of Directors on November 17, 2015.
3. Use
of judgements and estimates
In preparing this condensed
consolidated interim financial information, management has made
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from
these estimates.
In preparing this condensed
consolidated interim financial information, the significant
judgments made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were
principally the same as those that applied to the consolidated
financial statements as at and for the year ended December 31,
2014.
4.
Significant accounting policies
The accounting policies applied by
the Group in this condensed consolidated interim financial information are the
same as those applied by the Group in its consolidated financial statements
as at and for the year ended December 31, 2014.
5. Operating
segments
The Group comprises the following
main geographical segments: CEE and India. The Group does not have
reportable segments by product and services. In presenting
information on the basis of geographical segments, segment revenue
is based on the revenue resulting from either selling or operating
of Trading Property geographically located in the relevant segment.
None of the Group's tenants is accounting for more than 10% of the
total revenue. Also, no revenue is derived in the Netherlands,
where the Company is domiciled. Data regarding the geographical
analysis in the nine months period ended September 30, 2015 and
2014 is as follows:
|
Central & Eastern
Europe
|
India (1)
|
Total
|
|
€ 000'
|
€ 000'
|
€ 000'
|
|
Nine months period ended September
30, 2015
|
Total revenues (2)
|
14,330
|
376
|
14,706
|
Operating profit (loss) by segment
(3)
|
133
|
(10,669)
|
(10,536)
|
Net finance costs
|
(2,109)
|
(611)
|
(2,720)
|
Other income, net
|
4,250
|
1,900
|
6,150
|
Share in profit ( loss) of
equity-accounted investees
|
2,059
|
(1,390)
|
669
|
Reportable segment profit (loss)
before tax
|
4,334
|
(10,771)
|
(6,437)
|
Less - unallocated general and
administrative expenses
|
|
|
(3,013)
|
Less - unallocated finance
costs
|
|
|
(16,777)
|
Loss before income taxes
|
|
|
(26,227)
|
Tax expense
|
|
|
(352)
|
Loss for the period
|
|
|
(26,579)
|
Assets and liabilities as at
September 30, 2015
|
|
|
|
Total segment assets
|
350,269
|
26,175
|
376,444
|
Unallocated assets (Mainly Cash and
other financial instruments held mainly on Dutch level)
|
|
|
26,982
|
Total assets
|
|
|
403,426
|
|
|
|
|
Segment liabilities
|
126,268
|
64
|
126,332
|
Unallocated liabilities (Mainly
debentures)
|
|
|
175,249
|
Total liabilities
|
|
|
301,581
|
(1) Including Koregaon Park
(refer to note 10(a)).
(2) CEE- Out of which Poland -
EUR 11.8 million.
(3) CEE- including write-down
of EUR 7.0 million. India - loss of EUR 8.8 million from selling
the shopping Center in Pune (refer to note 10(a)) and write-down of
EUR 1.5 million (refer to note 10(k).
|
Central & Eastern
Europe
|
India
|
Total
|
|
€ 000'
|
€ 000'
|
€ 000'
|
|
Nine months ended September 30,
2014
|
Total revenues (1)
|
17,829
|
736
|
18,565
|
Operating loss by segment
(2)
|
(55,650)
|
(11,313)
|
(66,963)
|
Net finance costs
|
(4,039)
|
(2,389)
|
(6,428)
|
Other income (expenses),
net
|
(1,523)
|
2,336
|
813
|
Share in results of equity-accounted
investees
|
1,702
|
(859)
|
843
|
Reportable segment loss before tax
(3)
|
(59,510)
|
(12,225)
|
(71,735)
|
Less - unallocated general and
administrative expenses
|
|
|
(2,280)
|
Restructuring cost
|
|
|
(2,420)
|
Discontinued operations
|
|
|
78
|
Less - unallocated finance
costs
|
|
|
(23,777)
|
Loss before income taxes
|
|
|
(100,134)
|
Tax benefit
|
|
|
368
|
Loss for the period
|
|
|
(99,766)
|
Assets and liabilities as at
September 30, 2014
|
|
|
|
Total segment assets
|
390,796
|
63,889
|
454,685
|
Unallocated assets (Mainly Cash and
other financial instruments held mainly on Dutch corporate
level)
|
|
|
39,250
|
Total assets
|
|
|
493,935
|
|
|
|
|
Segment liabilities
|
152,156
|
29,416
|
181,572
|
Unallocated liabilities (Mainly
debentures)
|
|
|
196,985
|
Total liabilities
|
|
|
378,557
|
(1) Including Koregaon Park
(refer to note 10(a))
(2) CEE- Out of which Poland -
EUR 11.8 million.
(3) CEE- including impairment
of EUR 59.6 million. India - includes impairment of EUR 10.1
million.
6.
Financial risk management
During the nine months period ended
September 30, 2015 there were no changes in the Group's financial
risk management. Objectives and policies are consistent with those
disclosed in the consolidated financial statements as at and for
the year ended December 31, 2014.
7.
Financial instruments
a. Carrying amounts and
fair values
In respect to the Company's
financial instruments assets not presented at fair value, being
mostly short term market interest bearing liquid balances, the
Company believes that the carrying amount approximates its fair
value. In respect of the Company's financial instruments
liabilities:
For the Israeli debentures presented
at amortized cost, a good approximation of the fair value would be
the market quote of the relevant debenture, had they been measured
at fair value.
|
Carrying amount
|
Fair value
|
|
September 30, 2015
|
December 31, 2014
|
September 30, 2015
|
December 31, 2014
|
|
€ 000'
|
Statement of financial
position
|
|
|
|
|
Debentures at amortized cost - Polish
bonds
|
13,096
|
13,227
|
11,119
|
12,699
|
Debentures A at amortized cost -
Israeli bonds
|
57,828
|
53,257
|
46,926
|
47,148
|
Debentures B at amortized cost -
Israeli bonds
|
103,683
|
96,378
|
83,162
|
92,666
|
|
|
|
|
|
|
The total contractual liability of
the Debentures was EUR 198 million as at September 30, 2015. In
respect of most of other non-listed borrowings, as most financing
facilities are backed by real estate assets, and they bear floating
interest rate, the Company has a basis to believe that the fair
value of non-listed borrowings approximates the carrying
amount.
b. Fair value
hierarchy
The table below analyses recurring
fair value measurements for financial assets and financial
liabilities. These fair value measurements are categorised into
different levels in the fair value hierarchy based on the inputs to
valuation techniques used. The different levels are defined as
follows:
·
Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities that the Group can
access at the measurement date.
·
Level 2: inputs other than quoted prices included
within Level 1 that are observable for the asset or liability,
either directly or indirectly.
·
Level 3: unobservable inputs for the asset or
liability
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
€ 000'
|
Assets
|
|
|
|
|
|
Derivative
|
-
|
|
-
|
337
|
337
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Derivative
|
-
|
|
-
|
992
|
992
|
|
|
|
|
|
|
8.
Income tax
The group calculates the period
income tax using the tax rate that would be applicable to the
expected total annual earnings.
The Group's consolidated effective
tax rate in respect of continuing operations for the nine months
period ended September 30, 2015 was -1% (nine months period
ended September 30, 2014: 0%) .
9.
Related parties
|
September 30,
2015
|
December 31,
2014
|
|
€ 000'
|
Statement of financial
position
|
|
|
Long term receivables (refer to note
11(e))
|
2,737
|
-
|
Trade and other payables
|
81
|
1,161
|
|
For the nine months period ended
September 30,
|
|
|
2015
|
2014
|
|
€ 000'
|
€ 000'
|
|
Statement of profit or
loss
|
|
|
Related parties - interest income on
balance with Elbit
|
35
|
-
|
Related parties - recharges from
Elbit
|
(155)
|
-
|
Related parties - rental fees charged
by Elbit subsidiary in Romania
|
(68)
|
(68)
|
10. Significant
events during the period
a. Selling of the SPV holding Koregaon
park shopping center in Pune, India
On May 13, 2015, the Company signed
an agreement to sell the SPV holding Koregaon Park Plaza, the
retail, entertainment and office scheme located in Pune, India for
circa EUR 35 million (2,500 million INR). The net cash proceeds
received (after repayment of the related bank loan which was
reclassified to short term other liabilities and transaction costs)
from the sale totalled EUR 7.4 million (525 million INR). In
line with the Company stated restructuring plan, all the net cash
proceeds from the transaction was retained within the
Company. The Company recorded a loss of EUR
6.5 million from this transaction due to realization of foreign
currency translation reserve accumulated relating to the SPV. An
additional loss of EUR 2.3 million was recorded mainly due to
impairment of related various receivables.
b. Selling of undeveloped plots in
Romania
On June 24, 2015, the Company
reached an agreement to sell its 46,500 sqm development site in
Iasi, Romania in two separate transactions (one for the sale of
37,334 sqm and the other for the sale of 9,166 sqm), for a gross
consideration of EUR 7.3 million. There was neither bank debt
secured against the property, nor profit or loss was recorded as a
result of the transaction.
In May 2015, the Company concluded
(through its 50.1% held subsidiary ("Plaza Bas")) the sale of a
circa 17,000 sqm plot in Brasov, Romania for a total consideration
of EUR 330 thousands. No profit or loss resulted from this
transaction.
In June 2015 the Company concluded
an additional sale (by Plaza Bas) of an SPV holding circa 1,200 sqm
plot in Ploiesti, Romania for a total consideration of EUR 240
thousands. The proceeds were used to repay a bank loan outstanding
and no proceeds were obtained by the Group. A waiver was obtained
for the remaining of the unpaid bank loan facility in a total
amount of EUR 1.4 million and the Company recorded accordingly a
gain, included as finance income in these reports.
In line with the Company stated
restructuring plan, 75% of the net cash proceeds from the
abovementioned transactions (where applicable) was distributed to
the Company's bondholders as an early repayment in late September
2015.
c. Liberec Plaza - settlement with financing
bank
On September 29, 2015 one of the
Company's wholly owned subsidiaries won a tender to buy the bank
loan to the wholly owned SPV of Liberec Plaza shopping and
entertainment centre in the Czech Republic.
The EUR 20.4 million bank facility
was provided by two commercial banks to which the Company agreed to
pay and paid an amount of EUR 8.5 million, reflecting a discount of
58%. The Company recorded an EUR 11.9 million profit on the
discount in these financial statements, included as finance income
in these reports.
d. Selling of leasehold rights in Romania (Cina
Plaza)
On March 13, 2015, one of the
Company's subsidiaries in Romania, having a 49 years leasehold
rights over a plot in Bucharest, Romania ("Property" and "Rights",
respectively), signed a pre-agreement for waiving its Rights for a
certain consideration to be further agreed with the owner of the
Property (a subsidiary of EI) and approved by the relevant organs
of these entities.
The mentioned pre-agreement was
signed as part of a sale transaction between the owner of the
Property to a certain third party and it is subject to fulfilment
of certain conditions precedent and approval by the relevant organs
of the Company.
The anticipated gross cash inflow
amount for the Company from this transaction is EUR 2.7
million.
e. Kochi project advanced payment settlement
In November 2013 the Company
exercised the corporate guarantee in the amount of EUR 4.3 million
including interest thereon up till such date (the "Reimbursement
Payment") provided by EI to the Company in the frame of the Indian
JV Agreement on the ground of EI's default to finalize and conclude
the transfer of the Kochi Project Rights to the Indian JV
Vehicle.
Due to uncertainty concerning the
recovery of the receivable, the Company has impaired the
Reimbursement payment in its 2013 financial statements.
In June 2015 the Company reached an
agreement with EI, based on the mentioned JV Agreement and its
ancillary documents (including corporate guarantee issued by EI in
favour of the Company), following which EI was obliged to repay the
Reimbursement amount in few instalments until mid-2018.
As a result of the agreement
reached, the Company recorded a EUR 4.5 million gain, included as
other income in the statement of profit and loss. Group liabilities
towards EI in the amount of EUR 0.8 million) were offset from this
balance, with partial repayment of EUR 1 million performed in late
September 2015, thus balance as of September 30, 2015 is EUR 2.7
million.
f. Selling of an office building in Romania
In September 2015 the Company sold
Palazzo Ducale, its wholly owned office building of 823 sqm GLA in
Bucharest, Romania, for circa EUR 1.1 million, consistent with the
asset's last reported carrying amount.
In line with the Company stated
restructuring plan, 75% of the net cash proceeds from the
abovementioned transaction was distributed to the Company's
bondholders as an early repayment in late September
2015.
g. Advance settlement in Koregaon park shopping center in Pune,
India
In respect of one of the advances
provided in 2013 and 2014 to the sold SPV in Pune (refer to note
10(a)) in the amount of INR 200 million (EUR 2.6 million), the
Company has reached a settlement in February 2015 with the
potential buyer to settle the liability, in view of the
cancellation of the signed pre-agreements, to refund the potential
buyer with INR 150 (EUR 1.9 million) of advances received.
The Company recorded a gain of INR 50 million (EUR 0.7 million) as
a result of this settlement, included as part of other income in
the statement of profit or loss.
h. Call
option activity and forward activity in 2015
The group has foreign currency
exposure risk mainly due to its NIS denominated debentures. Through
September 2015, the company sold EUR-NIS call options to hedge
its exposure to NIS debentures. As of balance sheet date the
group has no outstanding call options. The Company paid during the
nine months period a total amount of EUR 0.1 million due to this
activity.
i. Movements in NIS rate versus the EUR
In the course of the first nine
months of 2015 NIS appraised against the EUR by circa 6.5%,
resulting in recording of non-cash finance costs in the amount of
circa EUR 10.6 million by the Group, due to its outstanding NIS
denominated debentures.
j. Bonds held in treasury
As of September 30, 2015, the
Company holds through its wholly owned subsidiary NIS 14.7 million
par value of series B debentures (adjusted par value of NIS 17.1
million (EUR 3.9 million)).
k. Write-down in the period.
During the Course of the first nine
months of 2015 the Company recorded the main write-downs (as
Write-down of Trading Property in the statement of profit or loss):
1) EUR 6.2 million of write-down
to its Liberec asset - out of which on the first six months of
2015, EUR 4.9 is supported by an external valuation, and in the
third quarter of 2015 an additional EUR 1.3 million were written
down based on management estimation.
2) EUR 1.5 million of write-down
to its Koregaon Park asset - due to the expected SPV selling during
the period (as detailed in note 10(a)).
l. Update on covenants
In respect of the Coverage Ratio
Covenant ("CRC"), as defined in the restructuring plan, as at
September 30, 2015 the CRC was 131%, in comparison with 118%
minimum ratio required.
As at the end of the reporting
period, all of the group's companies are in compliance with the
entire loan covenants, with the exception of two bank facilities
totalling EUR 30 million, in which the Company negotiates with
financial institutions for obtaining of waivers, on all outstanding
breaches.
m. Key
management personnel compensation
As a result of the termination of
the services of the Group's CEO, the CEO received his retirement
entitlement. Accordingly, the Group has recognised an expense of
EUR 400 thousand for the nine months ended September 30, 2015 (nine
months ended September 30, 2014: nil).
n. Building permits obtained
In July 2015 the Company received
the building permit to develop Timisoara Plaza, a circa 37,000 sqm
GLA shopping and entertainment centre in Timisoara, western
Romania. A binding financing offer has also been agreed with
a commercial bank for circa 65% of the project cost.
Also in July 2015, the Company
received the building permit to develop Belgrade Plaza (Visnjicka),
a circa 32,000 sqm GLA shopping and entertainment centre in
Belgrade, Serbia.
o. Third party commitment to purchase the scheme in Chennai,
India
In September 2015 the Company
announced that its joint venture, Elbit Plaza India Real Estate
Holdings Limited (in which the Company holds a 50% stake with its
joint venture partner, Elbit) ("EPI"), which has been in
discussions regarding the sale of EPI's 80% stake in Kadavanthara
Builders Private Limited (the "Sale Transaction"), an Indian
company("SPV") which owns a 75 acre plot in Chennai, India, has
obtained a commitment that, subject to the fulfilment of certain
conditions precedent, the Sale Transaction will be completed by
January 15, 2016 (the "Long Stop Date").
The expected aggregate net disposal
price to EPI is circa EUR 21.6 million (INR 162 Crores), net of all
transaction related costs. If completion does not take place by the
Long Stop Date, then EPI's stake in the SPV will be increased to
100%.