TIDMRC2
RNS Number : 8062K
Reconstruction Capital II Ltd
30 August 2023
30 August 2023
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2023
Reconstruction Capital II Limited ("RC2", the "Company" or the
"Group"), a closed-end investment company incorporated in the
Cayman Islands admitted to trading on the AIM market of the London
Stock Exchange, today announces its results for the six months
ended 30 June 2023.
Copies of the company's interim financial statements will today
be posted to shareholders. The interim report is also available on
the Company's website http://www. reconstructioncapital2.com/.
Financial highlights
On 30 June 2023, Reconstruction Capital II Limited ("RC2") had a
total unaudited net asset value ("NAV") of EUR23.4m or EUR0.1729
per share, which represents a 1.59% fall since the beginning of the
year.
As at 30 June 2023, RC2 and its subsidiary, RC2 (Cyprus) Ltd had
cash and cash equivalents of approximately EUR0.017m and
receivables of EUR0.017m. As at 30 June 2023, RC2 had short-term
liabilities of EUR0.243m.
Operational highlights
During the first half of 2023, the macroeconomic challenges
which started in 2022 due to the outbreak of war in neighbouring
Ukraine continued to erode consumers' purchasing power, affecting
all of the Fund's investee companies, although inflationary
pressures which had been fuelled by the outbreak of war fell
significantly in the second quarter.
The Policolor Group achieved revenues of EUR 37.6m during the
first semester, 22.7% below budget and 15.9% lower year-on-year, as
the anhydrides division struggled to source the necessary raw
materials due to the less available ortho-xylene, pursuant to the
EU banning imports from Russia. The coatings division's sales were
slightly higher year-on-year but 9% below budget, as the
cost-of-living crisis reduced consumers' discretionary spending,
while the construction market weakened. Although the Group's gross
margin overperformed the budget in percentage terms, the Group's
six-month EBITDA of EUR 1.5m was EUR 1.3m below budget, mainly due
to the reduced activity at the anhydrides division and the
underperformance of the coatings division.
The Mamaia Hotel did not meet its budget over the first half of
2023, as the cost-of-living crisis and the ongoing war in Ukraine
across the Black Sea significantly impacted demand for the Hotel in
the second quarter, despite an unexpectedly good performance in the
first quarter. In addition, unseasonal bad weather, including lots
of rainfall on weekends in May and June, led to the cancellation of
a number of corporate events and a significant reduction in the
number of walk-in clients. As a result, the Hotel generated
revenues of EUR 0.90m, 22% below budget. During the first half of
the year, the Hotel posted an EBITDA loss of EUR 0.52m, EUR 0.14m
higher than the budgeted loss of EUR 0.38m, mainly due to lower
accommodation revenues, higher food and beverage costs, and higher
salaries due to a tight labour market.
During the first half of 2023, Telecredit generated interest
revenues of EUR 0.83m, 7.8% higher year-on-year but 10% below
budget, and an operating profit before depreciation and interest
expenses of EUR 0.25m, below both the EUR 0.34m budget target and
last year's result of EUR 0.38m. The underperformance was mainly
driven by lower demand in the first quarter since Telecredit
outperformed its budgeted financing volumes in the second quarter.
In May, Telecredit extended the maturity of its EUR 2.0m loan from
a specialized institutional lender by a year to 2024, and increased
the facility amount to EUR 3.0m.
At the end of June, RC2 had cash and cash equivalents of EUR
0.017m, receivables of EUR 0.017m, and short-term
liabilities of EUR 0.243m.
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Luca Nicolae
Tel: +40 21 316 76 80
Grant Thornton UK LLP
(Nominated Adviser)
Philip Secrett
Tel: +44 (0) 20 7383 5100
finnCap Limited
(Broker)
William Marle / Giles Rolls
Tel: +44 20 7220 0500
ADVISER'S REPORT
For the six months ended 30 June 2023
During the first half of 2023, the macroeconomic challenges which
started in 2022 due to the outbreak of war in neighbouring Ukraine
continued to erode consumers' purchasing power, affecting all of
the Fund's investee companies, although inflationary pressures which
had been fuelled by the outbreak of war fell significantly in the
second quarter.
The Policolor Group achieved revenues of EUR 37.6m during the first
semester, 22.7% below budget and 15.9% lower year-on-year, as the
anhydrides division struggled to source the necessary raw materials
due to the less available ortho-xylene, pursuant to the EU banning
imports from Russia. The coatings division's sales were slightly
higher year-on-year but 9% below budget, as the cost-of-living crisis
reduced consumers' discretionary spending, while the construction
market weakened. Although the Group's gross margin overperformed
the budget in percentage terms, the Group's six-month EBITDA of EUR
1.5m was EUR 1.3m below budget, mainly due to the reduced activity
at the anhydrides division and the underperformance of the coatings
division.
The Mamaia Hotel did not meet its budget over the first half of 2023,
as the cost-of-living crisis and the ongoing war in Ukraine across
the Black Sea significantly impacted demand for the Hotel in the
second quarter, despite an unexpectedly good performance in the first
quarter. In addition, unseasonal bad weather, including lots of rainfall
on weekends in May and June, led to the cancellation of a number
of corporate events and a significant reduction in the number of
walk-in clients. As a result, the Hotel generated revenues of EUR
0.90m, 22% below budget. During the first half of the year, the Hotel
posted an EBITDA loss of EUR 0.52m, EUR 0.14m higher than the budgeted
loss of EUR 0.38m, mainly due to lower accommodation revenues, higher
food and beverage costs, and higher salaries due to a tight labour
market.
During the first half of 2023, Telecredit generated interest revenues
of EUR 0.83m, 7.8% higher year-on-year but 10% below budget, and
an operating profit before depreciation and interest expenses of
EUR 0.25m, below both the EUR 0.34m budget target and last year's
result of EUR 0.38m. The underperformance was mainly driven by lower
demand in the first quarter since Telecredit outperformed its budgeted
financing volumes in the second quarter. In May, Telecredit extended
the maturity of its EUR 2.0m loan from a specialized institutional
lender by a year to 2024, and increased the facility amount to EUR
3.0m.
At the end of June, RC2 had cash and cash equivalents of EUR 0.017m,
receivables of EUR 0.017m, and short-term liabilities of EUR 0.243m.
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2023
30 June 30 June 31 December
2023 2022 2022
EUR EUR EUR
Unaudited Unaudited Audited
Investment Income
Fair value loss on financial
assets at
fair value through profit
or loss (261,845) (102,597) (2,615,823)
Interest income 255,360 257,916 518,085
--------------- --------------- ---------------
Net investment income (6,485) 155,319 (2,097,738)
--------------- --------------- ---------------
Expenses
Operating expenses (363,202) (394,892) (844,981)
Net financial income/(expense) (11,925) (35) (871)
--------------- --------------- ---------------
Total expenses (375,127) (394,927) (845,852)
--------------- --------------- ---------------
(Loss)/profit for the
period/year (381,612) (239,608) (2,943,590)
--------------- --------------- ---------------
Other comprehensive income - - -
--------------- --------------- ---------------
Total comprehensive (loss)/profit
for the period/year attributable
to owners (381,612) (239,608) (2,943,590)
--------------- --------------- ---------------
Earnings Per Share attributable
to the owners of the Company
Basic and diluted earnings
per share (0.0028) (0.0018) (0.0217)
--------------- --------------- ---------------
STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
30 June 30 June 31 December
2023 2022 2022
EUR EUR EUR
Unaudited Unaudited Audited
ASSETS
Non-current assets
Financial assets at fair
value through profit or
loss 24,027,598 26,557,140 24,104,083
--------------- --------------- ---------------
Total non-current assets 24,027,598 26,557,140 24,104,083
--------------- --------------- ---------------
Current assets
Trade and other receivables 17,126 19,172 15,492
Cash and cash equivalents 17,221 46,438 73,337
--------------- --------------- ---------------
Total current assets 34,347 65,610 88,829
--------------- --------------- ---------------
TOTAL ASSETS 24,061,945 26,622,750 24,192,912
--------------- --------------- ---------------
LIABILITIES
Current liabilities
Trade and other payables 243,207 91,174 124,485
Total current liabilities 243,207 91,174 124,485
--------------- --------------- ---------------
Non-current liabilities
--------------- --------------- ---------------
Borrowings 382,756 - 250,833
--------------- --------------- ---------------
Total non-current liabilities 382,756 - 250,833
--------------- --------------- ---------------
TOTAL LIABILITIES 625,963 91,174 375,318
--------------- --------------- ---------------
NET ASSETS 23,435,982 26,531,576 23,817,594
=============== =============== ===============
EQUITY ATTRIBUTABLE TO
OWNERS
Share capital 1,355,784 1,357,034 1,355,784
Share premium 109,187,284 109,196,034 109,187,284
Accumulated deficit (87,107,086) (84,021,492) (86,725,474)
--------------- --------------- ---------------
TOTAL EQUITY 23,435,982 26,531,576 23,817,594
--------------- --------------- ---------------
Net Asset Value per share
Basic and diluted net asset
value per share 0.1729 0.1955 0.1757
--------------- --------------- ---------------
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2023
Retained
Share (deficit)/
Share capital premium EUR EUR earnings Total
EUR EUR
Balance at 1 January 2022 1,358,569 109,206,779 (83,781,884) 26,783,464
Loss for the period - - (239,608) (239,608)
Other comprehensive income - - - -
------------- -------------
Total comprehensive loss for the period - - (239,608) (239,608)
------------- -------------
Repurchase and cancellation of own shares (1,535)
(10,745) - (12,280)
------------- -------------
Transactions with owners (1,535) (10,745) - (12,280)
------------- -------------
Balance at 30 June 2022 1,357,034 109,196,034 (84,021,492) 26,531,576
------------- -------------
Profit for the period - - (2,703,982) (2,703,982)
Other comprehensive income - - - -
------------- -------------
Total comprehensive profit for the period -
- (2,703,982) (2,703,982)
------------- -------------
Repurchase and cancellation of own shares
(1,250)
(8,750) - (10,000)
------------- -------------
Transactions with owners (1,250) (8,750) - (10,000)
------------- -------------
Balance at 31 December 2022 1,355,784
109,187,284 (86,725,474) 23,817,594
------------- -------------
Loss for the period - - (381,612) (381,612)
Other comprehensive income - - - -
------------- -------------
Total comprehensive loss for the period - - (381,612) (381,612)
------------- -------------
Balance at 30 June 2023 1,355,784 109,187,284 (87,107,086) 23,435,982
------------- -------------
CASH FLOW STATEMENT
For the six months ended 30 June 2023
30 June 30 June 31 December
2023 2022 2022
EUR EUR EUR
Unaudited Unaudited Audited
Cash flows from operating activities
(Loss)/profit before taxation (381,612) (239,608) (2,943,590)
Adjustments for:
Fair value loss on financial
assets at fair value
through profit or loss 261,845 102,597 2,615,823
Interest income (255,360) (257,916) (518,085)
Financial expenses 11,923 - 833
Net (gain)/loss on foreign exchange 2 35 6
--------------- --------------- ---------------
Net cash outflow before changes
in working
capital (363,202) (394,892) (845,013)
(Increase)/Decrease in trade
and other receivables (1,634) (13,145) (9,465)
(Decrease)/Increase in trade
and other payables 118,722 (114,511) (81,200)
Repayments of financial assets 70,000 570,000 770,000
Net cash provided by/(used
in) operating (176,114) 47,452 (165,678)
--------------- --------------- ---------------
Cash flows from financing activities
Payments to purchase own shares - (12,280) (22,280)
Proceeds from borrowings 120,000 - 250,000
Net cash flow (used in)/provided
by financing 120,000 (12,280) 227,720
--------------- --------------- ---------------
Net increase/(decrease) in
cash and cash
equivalents before currency
adjustment (56,114) 35,172 62,042
Effects of exchange rate differences
on cash and cash equivalents (2) (35) (6)
Net increase/(decrease) in
cash and cash
equivalents after currency
adjustment (56,116) 35,137 62,036
Cash and cash equivalents at
the beginning of the period/year 73,337 11,301 11,301
Cash and cash equivalents at
the end of the
period/year 17,221 46,438 73,337
--------------- --------------- ---------------
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END
IR EAPPEDLDDEEA
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August 30, 2023 04:46 ET (08:46 GMT)
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