12th Sep 2016 17:45
12 September 2016
BCRE - Brack Capital Real Estate Investments N.V.
("BCRE" or the "Company")
Interim Results
The Board of BCRE - Brack Capital Real Estate Investments N.V. releases the results of the Company, its subsidiaries and the Company's interest in associates and joint ventures (together the "Group") for the six months period ended 30 June 2016 (the "Period").
Trading update for the Period
· The Group generated revenues of €40.5 million from rental income during the Period (30 June 2015: €37.4 million).
· The net asset value ("NAV") of the Group amounted to €204.6 million as at 30 June 2016 (31 December 2015: €240.7 million); mainly reflecting the current economic situation in Russia.
· As at 30 June 2016, the aggregate value of assets in which the Company is interested (in different percentages) was approximately €2.1 billion (31 December 2015: €2.1 billion).
· Following the last year's acquisition of 720 West End Avenue, a major residential building in the Upper West Side of Manhattan, the programme of the replacement site on 125th Street, Manhattan is progressing well.
· At 90 Morton Street, a major development in the West Village, Manhattan, the condo offering plan for the project has been approved by the New York City attorney general.
· Following the successful launch of the Indigo Lower East Side hotel in Manhattan, the 295 room hotel, operated by InterContinental Hotel Group, is ramping up well with a monthly net operating income ("NOI") exceeding $1 million in May and June 2016.
· Completed the setting-up of a private real estate investment trust ("REIT"), to carry out our multifamily business in the USA, currently managing over 500 units in Cincinnati, Ohio.
· BCRE Germany continued to expand its income producing portfolio, with new deals exceeding €80 million in value and approximately 70,000 sq m of lettable area in Kiel, Nordrhein Westfalen and Hannover1.
· BCRE Germany issued 60,058 additional bonds during the Period, at a price of NIS1,021 each; total gross proceeds amounted to NIS61.3 million.
· Standard & Poor's Maalot, a credit rating agency accredited by Israel, increased the credit rating of BCRE Germany and its existing debentures to ilAA- from ilA+ with stable outlook.
· The Company continues stabilizing the Russian platform, as the shopping center in Dmitrov, the logistic warehouse in Lobnia and the Kazan's main retail module are almost fully occupied, whereas the Lyubertsy shopping center and the two additional modules in Kazan are still ramping up.
· Completed the sale of Fountain Court in Manchester UK at a significant upside to its acquisition cost.
· The Company raised $29.6 million during the Period within the extended bonds programme.
· Under the share buyback programme initiated in June 2016, the Company repurchased during the Period approximately 1.32 million shares for a total consideration of €1.17 million and approximately 0.04 million shares for a total consideration of €0.04 million in July 2016.
· During the Period, both the Company and BCRE Germany distributed to their shareholders approximately €4.8 million and €6 million, respectively in relation to 2015.
Harin Thaker, Chairman, said:
I am pleased to report the results of the Group for the first half of 2016. The Company continues to maintain a healthy financial position and has improved its liquidity through fund raising activity under the extended bonds programme during this Period. The Company may consider raising additional capital for pursuing opportunities and to benefit its operations.
The buyback programme initiated by the Company towards the end of the Period was positive in reducing the discount between the share price and the NAV per share. The Company may again consider a share buyback programme in the future, depending on the movement in share price vis-à-vis NAV growth.
We are confident that the Group's broad based business, with diversified revenue streams in the US and Germany, provide a strong foundation for continuing growth.
Ariel Podrojski, Chief Executive Officer, said
Over the Period, we have continued the process of streamlining our business and geographic presence through increasing focus on our US and German platforms while discontinuing certain non-core activities. At the same time, we continued working towards the stabilization of our Russian portfolio.
Our portfolio in Germany continues to expand through new acquisitions and internally through the increase in rental income. The Grafental project in Dusseldorf is also progressing well. In addition, our core projects in Manhattan, New York are advancing in line with our strategy.
In Russia, despite some recent macro indicators showing several signs of stabilization, the conditions continue to be challenging with the consumer market remaining under pressure.
ENQUIRIES:
BCRE - Brack Capital Real Estate Investments N.V. | |
Ariel Podrojski, Chief Executive Officer | |
Nansia Koutsou, Chief Financial Officer / Chief Operating Officer | +31 20 514 1004 |
Novella Communications | |
Tim Robertson | |
Toby Andrews | +44 20 3151 7008 |
Our key markets
Set out below are the highlights for the Period in relation to the Group's main regional platforms.
USA
The Group's portfolio in the US (valued at approximately $909 million) is mainly focused on residential conversion activity and the lodging market in Manhattan, in addition to income producing activities that include multifamily properties in Cincinnati, Ohio.
Following last year's acquisition of 720 West End Avenue, a major residential building with a gross area of approximately 240,000 sq ft in the Upper West Side of Manhattan, the programme of the replacement site on 125th Street, Manhattan is progressing well, with the demolition of the existing building completed and the excavation and the foundation works to commence soon.
At 90 Morton Street, a major development in the West Village Manhattan, with a net area of approximately 90,000 sq ft, the condo offering plan for the project has been approved by the New York City attorney general and the permits to begin development work have been received.
The Group's position in the Manhattan lodging market with three hotels (valued at approximately $469 million) continues to advance, as the Indigo Lower East Side hotel is ramping up well, with a monthly NOI exceeding $1 million in May and June 2016. In addition, the 230 room CitizenM Hotel in Times Square recorded an average occupancy of 84% and an average daily rate of $228 per room during the Period. The construction of the 300 room CitizenM Hotel at Bowery Street is progressing well and is scheduled to be completed in the second half of 2017.
In line with our strategy, BCRE USA completed the establishment of a private REIT structure for the multifamily residential business. The existing 516 multifamily units in Cincinnati, Ohio (valued at approximately $38 million) have been transferred into the REIT structure. The performance of the US multifamily residential portfolio continues to improve with an overall average occupancy of around 96%, yielding an annualized NOI of approximately $2.8 million.
Germany
The Company's interest in Brack Capital Properties N.V. ("BCRE Germany") is 34.76% as of 30 June 2016.
During the Period BCRE Germany performed exceptionally well, with the rental income growing by approximately 8% to €35.1 million (30 June 2015: €32.6 million), net profit attributable to equity holders growing by approximately 18% to €27.8 million (30 June 2015: €23.5 million) and funds from operations, excluding contribution from the Grafental project in Dusseldorf, increasing by approximately 23% to €28 million (30 June 2015: €22.8 million).
With the recent acquisitions, BCRE Germany now holds approximately 387,000 sq m of commercial assets with around 96% overall occupancy and over 10,000 multifamily residential units with a total area of around 598,000 sq m with around 96% overall occupancy.
During the Period BCRE Germany's residential portfolio recorded a 5% increase in the rental income from same assets and an 11.3% increase in rental income in new leases compared to the corresponding period last year.
BCRE Germany's development projects (about 1,400 residential units currently being built or under planning in Dusseldorf and Aachen) that are expected to drive high growth and generate attractive cash flows and profitability, are also progressing well, as sell out prices and rate of sales improved significantly.
Standard & Poor's Maalot, a credit rating agency accredited by Israel, increased the credit rating of BCRE Germany and its existing debentures to ilAA- from ilA+ with stable outlook.
Russia
The range of sanctions and their extension, continue to have a significant negative effect on the Russian economy. Despite oil prices rising from very low levels, some recent macro indicators showing signs of stabilization in the Russian economy and reduced currency volatility, the Company's management foresees the Russian consumer market remaining under pressure for a prolonged period of time.
The Company continues to focus on stabilizing the Russian platform as the shopping center in Dmitrov, the logistic warehouse in Lobnia, and Kazan's main retail module are almost fully occupied whereas the Lyubertsy shopping center and the two additional modules in Kazan are still ramping up. In addition, BCRE Russia is in discussions with its lenders, which are expected to result in improved loan terms for some assets.
Outlook
The Company continues pursuing its business plan in the US for the existing assets, as well as growing its income producing arm in the US through the REIT.
Backed by a strong tailwind in the form of low interest rates and positive demographic trends, the Company expects that the German platform results will continue to improve, as the platform operational metric further enhances and the income producing portfolio grows.
Despite the challenging situation of the Russian economy, the Company believes that its asset stabilization strategy and the efforts for improving the loans terms for some assets in this geography will turn fruitful.
Forward-looking statements
This report contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of BCRE - Brack Capital Real Estate Investments N.V. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements.
On behalf of the Board
Harin Thaker
Chairman
BCRE - BRACK CAPITAL REAL ESTATE INVESTMENTS N.V.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF 30 JUNE 2016
EURO IN THOUSAND
INDEX
| Page | ||
Report on Review of Interim Condensed Consolidated Financial Statements | 6 | |
Interim Condensed Consolidated Statement of Financial Position | 7 - 8 | |
Interim Condensed Consolidated Income Statement | 9 | |
Interim Condensed Consolidated Statement of Comprehensive Income | 10 | |
Interim Condensed Consolidated Statement of Changes in Equity | 11 - 12 | |
Interim Condensed Consolidated Statement of Cash Flows | 13 - 14 | |
Notes to the Interim Condensed Consolidated Financial Statements | 15 - 21 | |
Directors' Responsibility Statement | 21 | |
Appendix to the Interim Condensed Consolidated Financial Statements | 22 |
- - - - - - - - - -
REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
to the shareholders -
BCRE - BRACK CAPITAL REAL ESTATE INVESTMENTS N.V.
Introduction
We have reviewed the accompanying interim condensed consolidated statement of financial position of BCRE - Brack Capital Real Estate Investments N.V. (the "Company") and its subsidiaries (together the "Group") as of 30 June 2016 and the related interim condensed consolidated statements of income, comprehensive income, changes in equity and cash flows for the six months period then ended, and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34 Interim Financial Reporting (IAS 34) as adopted by the European Union. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.
Scope of review
We conducted our review in accordance with 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 interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 as adopted by the European Union.
Tel-Aviv, Israel | KOST FORER GABBAY & KASIERER | |
12 September 2016 | A Member of Ernst & Young Global |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June | 31 December | |||
2016 | 2015 | |||
Unaudited | Audited | |||
Euro in thousand | ||||
ASSETS: | ||||
Non-current assets: | ||||
Investment property | 1,542,003 | 1,618,132 | ||
Investments and loans to associates and joint ventures | 121,864 | 146,231 | ||
Property, plant and equipment, net | 15,645 | 17,191 | ||
Inventory of land, inventory of apartments under construction and other inventory | 26,125 | 25,591 | ||
Other investments and loans | 20,387 | 27,673 | ||
Restricted bank accounts and deposits | 1,828 | 4,757 | ||
Deferred tax assets | 4,651 | 9,240 | ||
|
| |||
Total non-current assets | 1,732,503 | 1,848,815 | ||
|
| |||
Current assets: | ||||
Inventory of land, inventory of apartments under construction and other inventory | 213,427 | 69,326 | ||
Trade and other receivables |
| 30,080 |
| 26,131 |
Other investments and loans |
| 21,189 |
| 50,860 |
Restricted bank accounts and deposits |
| 7,531 |
| 11,315 |
Marketable securities and other short-term investments |
| 2,051 |
| 2,090 |
Cash and cash equivalents |
| 85,785 |
| 71,590 |
|
|
|
| |
|
| |||
Total current assets | 360,063 |
| 231,312 | |
|
| |||
Assets classified as held for sale | 10,635 |
| 6,197 | |
|
| |||
Total assets | 2,103,201 |
| 2,086,324 | |
| ||||
30 June | 31 December | |||
2016 | 2015 | |||
Unaudited | Audited | |||
Euro in thousand | ||||
EQUITY: | ||||
Attributable to the equity holders of the Company: | ||||
Share capital and premium | 142,999 | 149,020 | ||
Convertible loan | 16,575 | 16,575 | ||
Other reserves | (67,633) | (68,491) | ||
Retained earnings | 112,647 | 143,547 | ||
204,588 | 240,651 | |||
Non-controlling interests | 440,752 | 458,049 | ||
| ||||
Total equity | 645,340 | 698,700 | ||
|
|
| ||
LIABILITIES: | ||||
Non-current liabilities: | ||||
Derivative financial instruments and other liabilities measured at fair value | 6,317 | 8,763 | ||
Loans from banks and other borrowers | 1,005,800 | 978,415 | ||
Other non-current liabilities | 4,555 | 4,781 | ||
Deferred tax liabilities | 87,271 | 79,658 | ||
Total non-current liabilities | 1,103,943 | 1,071,617 | ||
Current liabilities: | ||||
Tax provision | - | 301 | ||
Trade and other payables | 30,742 | 35,597 | ||
Loans from banks and other borrowers | 275,455 | 243,797 | ||
Advances from buyers | 43,990 | 35,919 | ||
Derivative financial instruments and other liabilities measured at fair value | 773 | 393 | ||
Total current liabilities | 350,960 | 316,007 | ||
|
|
| ||
Liabilities of assets classified as held for sale |
| 2,958 | - | |
|
|
| ||
Total liabilities | 1,457,861 | 1,387,624 | ||
|
| |||
Total equity and liabilities | 2,103,201 | 2,086,324 | ||
|
| |||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
12 September 2016 | ||||||
Date of approval of the interim condensed consolidated financial statements | Harin Thaker Chairman of Board | Ariel Podrojski CEO | Nansia Koutsou CFO |
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT
| Six months ended 30 June | Year ended 31 December | |||||||
| 2016 | 2015 | 2015 | ||||||
Unaudited | Audited |
| |||||||
| Euro in thousand (except for per share data) | ||||||||
| |||||||||
| Gross rental income | 40,535 | 37,416 | 75,394 | |||||
| Service charge, management, other income and revenues | 16,968 | 15,514 | 32,260 | |||||
| Property operating and other expenses | (31,861) | (24,493) | (56,563) | |||||
| |||||||||
| Rental, management, other income and revenues, net | 25,642 | 28,437 | 51,091 | |||||
| |||||||||
| Proceeds from sale of residential units | 21,844 | 11,894 | 72,662 | |||||
| Cost of sales of residential units | (17,895) | (9,801) | (58,869) | |||||
| |||||||||
| Gross profit from sale of residential units | 3,949 | 2,093 | 13,793 | |||||
| |||||||||
| Interest and other related income from lending business | 987 | 1,403 | 2,684 | |||||
| Costs related to lending business | (180) | (185) | (471) | |||||
| |||||||||
| Gross profit from lending business | 807 | 1,218 | 2,213 | |||||
| |||||||||
| Total gross profit | 30,398 | 31,748 | 67,097 | |||||
| |||||||||
| Revaluation of investment property, net | 3,612 | 3,574 | 143,236 | |||||
| Administrative expenses | (6,353) | (6,134) | (12,380) | |||||
| Administrative expenses relating to inventory under development, sales and marketing in Germany | (267) | (88) | (242) | |||||
| Other income/(expenses), net | (1,075) | 26 | (9,995) | |||||
| Impairment of property, plant and equipment | (3,822) | - | (5,670) | |||||
| Share based payments | (807) | (1,173) | (1,851) | |||||
| Share of loss of associates and joint ventures | (30,833) | (14,197) | (103,854) | |||||
| |||||||||
| Operating profit/(loss) | (9,147) | 13,756 | 76,341 | |||||
| |||||||||
| Financial income | 1,490 | 22,674 | 25,995 | |||||
| Financial expenses | (22,945) | (20,217) | (40,108) | |||||
| Exchange rate differences, net | 18,815 | (19,168) | (47,031) | |||||
| |||||||||
| Financial expenses, net | (2,640) | (16,711) | (61,144) | |||||
| |||||||||
| Profit/(loss) before tax | (11,787) | (2,955) | 15,197 | |||||
| Tax expense | (13,157) | (5,374) | (33,226) | |||||
| |||||||||
| Net loss for the period | (24,944) | (8,329) | (18,029) | |||||
| |||||||||
| Profit/(loss) for the period attributable to: | ||||||||
| Equity holders of the Company | (30,900) | (23,281) | (27,675) | |||||
| Non-controlling interests | 5,956 | 14,952 | 9,646 | |||||
| |||||||||
| (24,944) | (8,329) | (18,029) | ||||||
| Loss per share attributable to equity holders of the Company: | ||||||||
| Basic | (0.20) | (0.14) | (0.17) | |||||
| Diluted | (0.20) | (0.14) | (0.21) | |||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 June | Year ended 31 December | ||||||
2016 | 2015 | 2015 | |||||
Unaudited | Audited | ||||||
Euro in thousand | |||||||
Net loss for the period | (24,944) | (8,329) | (18,029) | ||||
Other comprehensive income/(loss):
Items to be reclassified to profit or loss in subsequent periods: | |||||||
Exchange differences on translation of foreign operations, net | (3,673) | 15,517 | 9,230 | ||||
Share of other comprehensive income/(loss) of associates and joint ventures | 5,510 | 22,524 | (8,639) | ||||
Other comprehensive income, net of tax, not to be reclassified to profit or loss in subsequent periods: | |||||||
Share of other comprehensive income of associates and joint ventures | 703 | - | 23,479 | ||||
Total other comprehensive income | 2,540 | 38,041 | 24,070 | ||||
Total comprehensive income/(loss) for the period | (22,404) | 29,712 | 6,041 | ||||
Total comprehensive income/(loss) attributable to: | |||||||
Equity holders of the Company | (30,835) | 442 | (24,870) | ||||
Non-controlling interests | 8,431 | 29,270 | 30,911 | ||||
(22,404) | 29,712 | 6,041 | |||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Attributable to the equity holders of the Company |
| ||||||||||||||||||||||
| Share capital and premium |
|
| Convertible loan |
| Foreign currency translation reserve |
| Share based payment reserve |
| Reserves from transactions with non-controlling interests |
| Revaluation reserve |
| Retained earnings |
| Total | Non-controlling interests | Total equity |
| |||||
Euro in thousand |
| |||||||||||||||||||||||
|
| |||||||||||||||||||||||
Balance as at 1 January 2015 (audited) | 149,020 | 16,575 | (61,239) | 2,830 | (11,061) | - | 171,222 | 267,347 | 437,020 | 704,367 |
| |||||||||||||
|
|
| ||||||||||||||||||||||
Profit/(loss) for the year | - | - | - | - | - | - | (27,675) | (27,675) | 9,646 | (18,029) |
| |||||||||||||
Other comprehensive income/(loss) | - | - | (2,590) | - | - | 5,395 | - | 2,805 | 21,265 | 24,070 |
| |||||||||||||
Total comprehensive income/(loss) | - | - | (2,590) | - | - | 5,395 | (27,675) | (24,870) | 30,911 | 6,041 |
| |||||||||||||
| ||||||||||||||||||||||||
Share based payments | - | - | - | 326 | - | - | - | 326 | 1,525 | 1,851 |
| |||||||||||||
Transactions with non-controlling interests, net | - | - | - | - | (2,152) | - | - | (2,152) | 1,432 | (720) |
| |||||||||||||
Distributions to non-controlling interests, net | - | - | - | - | - | - | - | - | (12,839) | (12,839) | ||||||||||||||
|
| |||||||||||||||||||||||
Balance as at 31 December 2015 (audited) | 149,020 | 16,575 | (63,829) | 3,156 | (13,213) | 5,395 | 143,547 | 240,651 | 458,049 | 698,700 |
| |||||||||||||
|
|
| ||||||||||||||||||||||
Profit/(loss) for the period | - | - | - | - | - | - | (30,900) | (30,900) | 5,956 | (24,944) |
| |||||||||||||
Other comprehensive income/(loss) | - | - | (76) | - | - | 141 | - | 65 | 2,475 | 2,540 |
| |||||||||||||
Total comprehensive income/(loss) | - | - | (76) | - | - | 141 | (30,900) | (30,835) | 8,431 | (22,404) |
| |||||||||||||
| ||||||||||||||||||||||||
Share based payments | - | - | - | 15 | - | - | - | 15 | 792 | 807 |
| |||||||||||||
Purchase of own shares | (1,173) | - | - | - | - | - | - | (1,173) | - | (1,173) |
| |||||||||||||
Capital reduction | (4,848) | - | - | - | - | - | - | (4,848) | - | (4,848) |
| |||||||||||||
Transactions with non-controlling interests, net | - | - | - | - | 778 | - | - | 778 | (11,355) | (10,577) |
| |||||||||||||
Distributions to non-controlling interests, net | - | - | - | - | - | - | - | - | (15,165) | (15,165) | ||||||||||||||
| ||||||||||||||||||||||||
Balance as at 30 June 2016 (unaudited) | 142,999 | 16,575 | (63,905) | 3,171 | (12,435) | 5,536 | 112,647 | 204,588 | 440,752 | 645,340 |
| |||||||||||||
| Attributable to the equity holders of the Company |
| ||||||||||||||||||||
| Share capital and premium |
|
| Convertible loan |
| Foreign currency translation reserve |
| Share based payment reserve |
| Reserves from transactions with non-controlling interests |
| Retained earnings |
| Total | Non-controlling interests | Total equity |
| |||||
Euro in thousand | ||||||||||||||||||||||
Balance as at 1 January 2015 (audited) | 149,020 | 16,575 | (61,239) | 2,830 | (11,061) | 171,222 | 267,347 | 437,020 | 704,367 |
| ||||||||||||
| ||||||||||||||||||||||
Profit/(loss) for the period | - | - | - | - | - | (23,281) | (23,281) | 14,952 | (8,329) |
| ||||||||||||
Other comprehensive income | - | - | 23,723 | - | - | - | 23,723 | 14,318 | 38,041 |
| ||||||||||||
Total comprehensive income/(loss) | - | - | 23,723 | - | - | (23,281) | 442 | 29,270 | 29,712 |
| ||||||||||||
| ||||||||||||||||||||||
Share based payments | - | - | - | 306 | - | - | 306 | 867 | 1,173 |
| ||||||||||||
Transactions with non-controlling interests, net | - | - | - | - | (434) | - | (434) | 902 | 468 |
| ||||||||||||
Distributions to non-controlling interests, net | - | - | - | - | - | - | - | (7,026) | (7,026) |
| ||||||||||||
| ||||||||||||||||||||||
Balance as at 30 June 2015 (unaudited) | 149,020 | 16,575 | (37,516) | 3,136 | (11,495) | 147,941 | 267,661 | 461,033 | 728,694 |
| ||||||||||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended 30 June | Year ended 31 December | |||||||
Unaudited | Audited | |||||||
2016 | 2015 | 2015 | ||||||
Euro in thousand | ||||||||
Cash flows from operating activities: | ||||||||
Net loss for the period | (24,944) | (8,329) | (18,029) | |||||
Adjustments for: | ||||||||
Depreciation | 384 | 146 | 243 | |||||
Revaluation of investment property, net | (3,612) | (3,574) | (143,236) | |||||
Share of loss of associates and joint ventures | 30,833 | 14,197 | 103,854 | |||||
Deferred taxes, net | 13,157 | 4,674 | 31,363 | |||||
Tax provision | (301) | 127 | 252 | |||||
Share based payments | 807 | 1,173 | 1,851 | |||||
Other expenses | 1,121 | - | 71 | |||||
Interest and other related income from lending business | (987) | (1,403) | (2,684) | |||||
Impairment of property, plant and equipment | 3,822 | - | 5,670 | |||||
Financial expenses, net | 2,640 | 16,711 | 61,144 | |||||
Cash flows from operating profit before changes in working capital and provisions | 22,920 | 23,722 | 40,499 | |||||
Increase/(decrease) in advances from buyers | 8,072 | 19,659 | (7,527) | |||||
(Increase)/decrease in inventory of land, inventory of apartments under construction and other inventory | 5,840 | (8,309) | 24,068 | |||||
(Increase)/decrease in trade and other receivables | 190 | (2,426) | (1,599) | |||||
Increase/(decrease) in trade and other payables | (2,647) | (2,109) | 10,603 | |||||
11,455 | 6,815 | 25,545 | ||||||
Cash flows provided by operating activities | 34,375 | 30,537 | 66,044 | |||||
Cash flows from investing activities: | ||||||||
Acquisition of newly consolidated subsidiaries and obtaining control in companies previously accounted for using equity method, net (a) | - | - | (3,700) | |||||
Investment and loans to associates and jointly controlled entities, net | 159 | (7,664) | (9,654) | |||||
Changes in investments, net | 2,249 | 3,935 | 5,393 | |||||
Acquisitions and additions to property, plant and equipment | (656) | (76) | (3,630) | |||||
Acquisitions of investment property | (56,621) | (37,222) | (129,918) | |||||
Additions to investment property | (14,448) | (20,619) | (47,637) | |||||
Changes in short-term and long-term deposits, net | 6,714 | 7,229 | 8,957 | |||||
Interest received and settlement of derivative instruments | 25,818 | 1,136 | 2,746 | |||||
Proceeds from sale of investment property | - | - | 153 | |||||
Repayment of other non-current liabilities | (226) | - | (7,891) | |||||
Proceeds from disposal of marketable securities | - | - | 3,424 | |||||
Proceeds from disposal of assets classified as held for sale | 6,063 | 15,962 | 16,061 | |||||
Loans with related parties, net | 4,465 | - | 3,664 | |||||
Cash flows used in investing activities | (26,483) | (37,319) | (162,032) | |||||
| Six months ended 30 June | Year ended 31 December | |||||||||
Unaudited | Audited |
| |||||||||
| 2016 | 2015 | 2015 | ||||||||
| Euro in thousand | ||||||||||
| Cash flows from financing activities: | ||||||||||
| Payment for capital reduction | (4,848) | (4,821) | (4,821) | |||||||
| Purchase of own shares | (1,173) | - | - | |||||||
| Receipt of loans, net | 43,322 | 43,165 | 188,303 | |||||||
| Issuance of debentures, net | 38,180 | 3,268 | 3,288 | |||||||
| Repayment of long-term loans and debentures | (18,399) | (17,611) | (69,090) | |||||||
| Interest paid | (22,928) | (15,825) | (43,618) | |||||||
| Contributions from non-controlling interests, net | - | 7,022 | 6,152 | |||||||
| Purchase of rights from non-controlling interests of subsidiaries | (10,780) | (3,832) | (4,029) | |||||||
| Distributions to non-controlling interests, net | (15,165) | (14,048) | (18,990) | |||||||
| Exercise of stock options | - | 717 | 717 | |||||||
| Repayment of swap transaction, transaction costs and sale of derivatives, net | - | 7,141 | 7,141 | |||||||
| |||||||||||
| Cash flows provided by financing activities | 8,209 | 5,176 | 65,053 | |||||||
| |||||||||||
| (Decrease)/increase in cash and cash equivalents | 16,101 | (1,606) | (30,935) | |||||||
| Foreign exchange differences, net | (1,906) | 750 | 6,166 | |||||||
| Cash and cash equivalents at the beginning of the period |
| 71,590 | 96,359 | 96,359 | ||||||
| |||||||||||
| Cash and cash equivalents at the end of the period | 85,785 | 95,503 |
| 71,590 | ||||||
|
| ||||||||||
| Significant non-cash transactions: Transfer from investment property to inventory | 152,871 |
| - | - | ||||||
(a) | Acquisition of newly consolidated subsidiaries and obtaining control in companies previously accounted for using equity method: | ||||||
Assets and liabilities of newly consolidated subsidiaries on the purchase date: | |||||||
Working capital (excluding cash and cash equivalents), net | - | - | 3,251 | ||||
Investment property | - | - | (12,198) | ||||
Investments in associates | - | - | 1,117 | ||||
Loans from banks and other borrowers | - | - | 2,930 | ||||
Loan receivable netted off with consideration | - | - | 1,200 | ||||
- | - | (3,700) | |||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
| |||||||
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1:- GENERAL
a. These financial statements have been prepared in a condensed format as of 30 June 2016 and for the six months period then ended ("interim condensed consolidated financial statements"). These financial statements should be read in conjunction with the Company's annual consolidated financial statements as of 31 December 2015 and for the year then ended ("annual financial statements").
The interim condensed consolidated financial statements of the Company for the six months period ended 30 June 2016 comprise the Company and its subsidiaries and the Group's interest in associates and joint arrangements which are accounted for using the equity method. The Group is an international real-estate development and investment group interested in, develops and operates an international portfolio of real estate assets predominantly located in the US, Germany and Russia.
b. The interim condensed consolidated financial statements were authorized in accordance with a resolution of the Board of Directors on 12 September 2016.
NOTE 2:- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of preparation of the interim condensed consolidated financial statements:
The interim condensed consolidated financial statements for the six months period ended 30 June 2016 have been prepared in accordance with the International Financial Reporting Standard IAS 34 ("Interim Financial Reporting") as adopted by the European Union.
b. New standards, interpretations and amendments adopted by the Company:
The significant accounting policies and methods of computation followed in the preparation of the interim condensed consolidated financial statements are identical to those followed in the preparation of the latest annual financial statements.
NOTE 3:- FINANCIAL INSTRUMENTS
a. Set out below, are the carrying amounts and the fair value of the Group's financial instruments that are not presented in the interim condensed consolidated financial statements at fair value:
Carrying amount | Fair value | |||||||
30 June 2016 | 31 December 2015 | 30 June 2016 | 31 December 2015 | |||||
Euro in thousand | ||||||||
Financial liabilities: | ||||||||
Debentures and interest payable on debentures | 235,537 | 197,194 | 251,153 | 209,800 | ||||
The carrying amount of cash and cash equivalents, restricted bank accounts and deposits, short-term investments, trade receivables, other accounts receivable, trade payables and other payables and loans from banks and other borrowers presented at amortized cost approximates their fair value. Fair value of the quoted debentures is based on price quotations at the reporting date and is classified as Level 1 in the fair value hierarchy.
b. The following table provides the fair value measurement hierarchy of the Group's assets and liabilities as at 30 June 2016 (unaudited):
Fair value hierarchy | |||||||||
Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||
Euro in thousand | |||||||||
Assets measured at fair value: | |||||||||
Investment property | 1,542,003 | - | - | 1,542,003 | |||||
Assets classified as held for sale | 10,635 | - | 10,635 | - | |||||
Derivatives | 1,755 | - | 1,755 | - | |||||
Marketable securities and other short-term investments | 2,051 | 2,051 | - | - | |||||
Liabilities measured at fair value: | |||||||||
Derivatives | 7,090 | - | 1,178 | 5,912 | |||||
Loans from banks and other borrowers | 189,501 | - | - | 189,501 | |||||
Liabilities for which fair values are disclosed | 251,153 | 172,044 | - | 79,109 | |||||
There have been no transfers between Level 1 and Level 2 during the period.
The following table provides the fair value measurement hierarchy of the Group's assets and liabilities as at 31 December 2015 (audited):
Fair value hierarchy | |||||||||
Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||
Euro in thousand | |||||||||
Assets measured at fair value: | |||||||||
Investment property | 1,618,132 | - | 11,511 | 1,606,621 | |||||
Assets classified as held for sale | 6,197 | - | 6,197 | - | |||||
Derivatives | 25,761 | - | 25,761 | - | |||||
Marketable securities and other short-term investments | 2,090 | 2,090 | - | - | |||||
Liabilities measured at fair value: | |||||||||
Derivatives | 9,156 | - | 970 | 8,186 | |||||
Loans from banks and other borrowers | 245,509 | - | - | 245,509 | |||||
Liabilities for which fair values are disclosed | 209,800 | 156,751 | - | 53,049 | |||||
There have been no transfers between Level 1 and Level 2 during the year.
NOTE 4:- MATERIAL EVENTS DURING THE REPORTING PERIOD
a. Pursuant to the financing agreements entered into by two indirect subsidiaries of the Group in Russia amounting to $31.0 million (€27.9 million) and $80.7 million (€72.7 million) as of 30 June 2016, the subsidiaries undertaken to maintain certain financial covenants. As of 30 June 2016, these covenants were not met and both outstanding loan balances have been classified within current liabilities in the interim condensed consolidated financial statements of the Company. The bank provided a waiver to one of the subsidiaries with respect to the loan in the amount of $80.7 million (€72.7 million) for the default of these events subsequently to period end.
In addition, pursuant to the loan agreement entered in August 2014 between a Group's indirect subsidiary and a group of lenders amounting to $14.9 million (€13.4 million) as of 30 June 2016, the indirect subsidiary and the guarantor for the loan facility undertaken to comply with certain financial covenants. As of 30 June 2016, these covenants were not met and in this respect an amount of $11.8 million (€10.7 million) of the loan facility has been classified within current liabilities.
b. During the period and following the decision of management to proceed with the construction, the approval of the offering plan by the Attorney General and the commencement of construction work on the property located at 90 Morton Street, Manhattan, New York, the property, which was classified as investment property in the consolidated statement of financial position as of 31 December 2015, has been reclassified to inventory in accordance with the requirements of IAS 40. The fair value of the property at the time of transfer amounted to $169.7 million (€152.9 million).
c. In January 2016, Brack Capital Properties N.V. ("BCP") offered to investors holding interests in project company with BCP to sell their entire rights in this project company. Investors holding a total 17% of the project company accepted BCP's proposal and in the second quarter of 2016, the said rights were acquired for €8.65 million. The transaction prices were derived from the fair value of the assets held by the project company according to valuations of independent professional valuators and the consideration of other benefits to which BCP was entitled. As a result of the transaction a gain in the total amount of €0.4 million was recorded in the consolidated statement of changes in equity.
d. On 11 January 2016, BCP's general meeting of shareholders approved to distribute capital to BCP's shareholders in the total amount of €6,041 thousand (an amount of €6,012 thousand was paid to the shareholders, net of treasury shares held by BCP) out of BCP's share premium reserve. As a result of the capital distribution, the exercise price of the BCP's non marketable warrants was adjusted accordingly.
e. On 15 January 2016, the shareholders of the Company approved a capital reduction, that reduced the nominal value of each Company's share from €0.04 to €0.01 amounting in total to €4.8 million and which was paid to the shareholders on 11 April 2016.
f. On 1 February 2016, BCP entered into a refinancing agreement for a major portion of the Leipzig portfolio (about 2,790 residential units) for 7 years. The new loan of €57.5 million (similar to the unsettled principal balance of the loan from 2011) has a repayment date on 30 April 2023 and bears a fixed interest for the first 5 years of 1.12% per annum with an annual principal repayment of 2% of the original loan amount. Under the refinancing terms, a credit facility of €17.4 million was approved for BCP until 2023 which, if used, will bear a variable interest of 3-months Libor plus a margin of 1% per annum.
g. On 26 February 2016, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party to acquire the ownership rights of land in the city of Aachen in Germany, on which an old plant which is not in use is erected, for a total consideration of €6 million (BCP's share in the transaction equals to 50%). The consideration for the transaction was paid in April 2016. The indirect subsidiary of BCP intends to work for changing the zoning of the land into residential, such that it would be feasible to construct 180 - 220 residential units after demolishing the existing building in the property. The acquisition has been recorded as part of investment in associates and jointly controlled entities.
h. On 18 December 2015, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party to acquire 296 residential units in northern Germany for a total consideration of €20.4 million (including related transaction costs). For the purpose of financing the acquisition, the indirect subsidiary of BCP entered into an agreement with a German bank to obtain a loan of €14 million under non-recourse terms bearing fixed interest of 1.24% per annum with final repayment date in 5 years from the date of the loan agreement. The transaction was completed on 1 March 2016.
i. On 3 March 2016, the Company has increased the issuance limit of bonds series C from $60 million (€54 million) to $180 million (€162 million). On 31 March 2016, the Company issued bonds (series C) with an aggregate principal amount of $18.4 million out of which $17.5 million remains outstanding (€16.4 million out of which €15.5 million remains outstanding). On 20 April 2016, the Company made an additional issue of bonds (series C) with an aggregate principal amount of $12.7 million out of which $12.1 million remains outstanding (€11.4 million out of which €10.9 million remains outstanding). The additional bonds issued during the period were consolidated and formed a single series with the existing bonds series C that were outstanding at the beginning of the period.
j. On 4 March 2016, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party for the sale of rights in a building with a total area of 3,985 sq m located in Dusseldorf, Germany, which was not occupied since 2013 and which is under refurbishment. The consideration of the transaction was set at €5 million and was received in full by the indirect subsidiary of BCP upon the completion of the transaction in July 2016.
k. On 16 March 2016, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party to acquire 287 residential units in Kiel, northern Germany for a total consideration of €36 million (including related transaction costs). For the purpose of financing the acquisition, the indirect subsidiary of BCP entered into an agreement with a German bank for a loan facility of €25 million under non-recourse terms. The facility bears fixed interest of 1.65% per annum and has a final repayment date in 5 years from the date of the loan agreement. The transaction was completed on 1 July 2016.
l. On 18 March 2016, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party for the acquisition of a residential, commercial and office building in Hannover, Germany for a total consideration of €7.8 million (including related transaction costs). For the purpose of financing the acquisition, the indirect subsidiary of BCP entered into an agreement with a German bank to obtain a loan in the amount of €5.6 million under non-recourse terms with final repayment date on 31 December 2019, bearing a fixed annual interest of 1.49%. The transaction was completed on 1 July 2016.
m. On 23 March 2016, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party to acquire 32 residential units in Dortmund, Germany for a total consideration of €2.4 million (excluding related transaction costs). For the purpose of financing the acquisition, the indirect subsidiary of BCP entered into an agreement with a German bank to obtain a loan in the amount of €1.8 million under non-recourse terms with final repayment date in 5 years from the date of the loan agreement. The loan bears a variable interest of 3-months Euribor plus a margin of 1.3% per annum. The transaction was completed on 1 June 2016.
n. On 4 April 2016, BCP successfully completed the issuance to the public of 60,058,000 bonds (series C) of NIS1 par value, each listed for trade by way of expanding the existing series of bonds (series C). The total gross consideration received was NIS61.3 million (€14.2 million).
o. On 13 May 2016, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party to acquire a commercial asset in the Dortmund area, Germany for a total consideration of €9.1 million (including related transaction costs). For the purpose of financing the acquisition, the indirect subsidiary of BCP entered into an agreement with a German bank to obtain a loan in the amount of €6.4 million under non-recourse terms, with final repayment date in 5 years from the date of the loan agreement, bearing a fixed annual interest of 1.55%. The transaction was completed on 1 July 2016.
p. On 13 May 2016, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party for the sale of rights of a fully occupied building with a total area of 3,602 sq m located in the city of Bad Kreuznach, Germany. The consideration was set at €5.1 million and was fully received by the indirect subsidiary of BCP upon the closing of the transaction at the end of July 2016. The consideration was partially used for the repayment of the related portfolio bank loan.
q. On 3 June 2016, the Company's Board of Directors authorized the Company to buy shares of its own capital up to an amount of €3 million ("share buyback programme"). Under the share buyback programme, 1,320,665 shares (0.82% of the Company's issued share capital) were purchased during the period ended 30 June 2016 for a total consideration of €1.2 million. Additional 37,750 shares (0.02% of the Company's issued share capital) were purchased after the end of the period for a total consideration of €42 thousand.
NOTE 5:- SEGMENT INFORMATION
Six months ended 30 June 2016 (unaudited) | Germany | Russia | USA | Others | Total | |||||||
Euro in thousand | ||||||||||||
Gross rental income | 35,103 | 3,435 | 1,997 | - | 40,535 | |||||||
Service charge, management, other income and revenues | 12,987 | 3,440 | 418 | 123 | 16,968 | |||||||
Proceeds from sale of residential units | 21,095 | 749 | - | - | 21,844 | |||||||
Cost of sales of residential units | (16,729) | (1,166) | - | - | (17,895) | |||||||
Interest and other related income from lending business | - | - | 987 | - | 987 | |||||||
Costs related to lending business | (180) | - | (180) | |||||||||
Property operating and other expenses | (21,430) | (4,401) | (4,090) | (1,940) | (31,861) | |||||||
Gross profit | 31,026 | 2,057 | (868) | (1,817) | 30,398 | |||||||
Revaluation of investment property, net | 30,616 | (32,298) | 5,294 | - | 3,612 | |||||||
Sha Share of loss of associates and joint ventures | - | (29,224) | (1,278) | (331) | (30,833) | |||||||
Segment results | 61,642 | (59,465) | 3,148 | (2,148) | 3,177 | |||||||
Administrative and other expenses, net | (12,324) | |||||||||||
Financial expenses, net | (2,640) | |||||||||||
Loss before tax | (11,787) | |||||||||||
Year ended 31 December 2015 (audited) | Germany | Russia | USA | Others | Total | |||||||
Euro in thousand | ||||||||||||
Gross rental income | 66,415 | 5,616 | 3,363 | - | 75,394 | |||||||
Service charge, management, other income and revenues | 26,277 | 2,047 | 2,997 | 939 | 32,260 | |||||||
Proceeds from sale of residential units | 68,372 | 4,290 | - | - | 72,662 | |||||||
Cost of sales of residential units | (54,637) | (4,232) | - | - | (58,869) | |||||||
Interest and other related income from lending business | - | - | 2,684 | - | 2,684 | |||||||
Costs related to lending business | - | - | (471) | - | (471) | |||||||
Property operating and other expenses | (40,136) | (5,063) | (9,032) | (2,332) | (56,563) | |||||||
Gross profit | 66,291 | 2,658 | (459) | (1,393) | 67,097 | |||||||
Revaluation of investment property, net | 44,256 | 2,317 | 95,219 | 1,444 | 143,236 | |||||||
Share of loss of associates and joint ventures | - | (103,513) | (282) | (59) | (103,854) | |||||||
Segment results | 110,547 | (98,538) | 94,478 | (8) | 106,479 | |||||||
Administrative and other expenses, net | (30,138) | |||||||||||
Financial expenses, net | (61,144) | |||||||||||
Profit before tax | 15,197 | |||||||||||
Six months ended 30 June 2015 (unaudited) | Germany | Russia | USA | Others | Total |
| ||||||||
Euro in thousand |
| |||||||||||||
| ||||||||||||||
Gross rental income | 32,595 | 3,359 | 1,462 | - | 37,416 | |||||||||
Service charge, management, other income and revenues | 12,281 | 127 | 2,178 | 928 | 15,514 | |||||||||
Proceeds from sale of residential units | 7,263 | 4,631 | - | - | 11,894 | |||||||||
Cost of sales of residential units | (5,979) | (3,822) | - | - | (9,801) | |||||||||
Interest and other related income from lending business | - | - | 1,403 | - | 1,403 | |||||||||
Costs related to lending business | - | - | (185) | - | (185) | |||||||||
Property operating and other expenses | (19,410) | (1,758) | (1,903) | (1,422) | (24,493) | |||||||||
Gross profit | 26,750 | 2,537 | 2,955 | (494) | 31,748 | |||||||||
Revaluation of investment property, net | 18,808 | (15,234) | - | - | 3,574 | |||||||||
Share of profit/(loss) of associates and joint ventures | - | (15,676) | 1,888 | (409) | (14,197) | |||||||||
Segment results | 45,558 | (28,373) | 4,843 | (903) | 21,125 | |||||||||
Administrative and other expenses, net | (7,369) | |||||||||||||
Financial expenses, net | (16,711) |
| ||||||||||||
| ||||||||||||||
Loss before tax | (2,955) |
| ||||||||||||
The Group has decided to disclose the following additional information:
Six months ended 30 June 2016 (unaudited) | Income producing commercial real estate | Income producing residential real estate | Property held for appreciation | Residential development | Other | Total | |||||||
Euro in thousand | |||||||||||||
Gross rental income | 20,972 | 19,412 | 151 | - | - | 40,535 | |||||||
Service charge, management, other income and revenues | 5,919 | 9,033 | 72 | - | 1,944 | 16,968 | |||||||
Proceeds from sale of residential units | - | - | - | 21,844 | - | 21,844 | |||||||
Cost of sales of residential units | - | - | - | (17,895) | - | (17,895) | |||||||
Interest and other related income from lending business | - | - | - | - | 987 | 987 | |||||||
Costs related to lending business | - | - | - | - | (180) | (180) | |||||||
Property operating and other expenses | (11,585) | (14,604) | (2,458) | (707) | (2,507) | (31,861) | |||||||
Gross profit | 15,306 | 13,841 | (2,235) | 3,242 | 244 | 30,398 | |||||||
Revaluation of investment property, net | (29,300) | 27,406 | 5,506 | - | - | 3,612 | |||||||
Share of loss of associates and joint ventures | (29,179) | - | - | - | (1,654) | (30,833) | |||||||
Segment results | (43,173) | 41,247 | 3,271 | 3,242 | (1,410) | 3,177 | |||||||
Administrative and other expenses, net | (12,324) | ||||||||||||
Financial expenses, net | (2,640) | ||||||||||||
Loss before tax | (11,787) | ||||||||||||
Year ended 31 December 2015 (audited) | Income producing commercial real estate | Income producing residential real estate | Property held for appreciation | Residential development | Other | Total | |||||||
Euro in thousand | |||||||||||||
Gross rental income | 39,872 | 35,110 | 412 | - | - | 75,394 | |||||||
Service charge, management and other income and revenues | 10,574 | 18,621 | 70 | - | 2,995 | 32,260 | |||||||
Proceeds from sale of residential units | - | - | - | 72,662 | - | 72,662 | |||||||
Cost of sales of residential units | - | - | - | (58,869) | - | (58,869) | |||||||
Interest and other related income from lending business | - | - | - | - | 2,684 | 2,684 | |||||||
Costs related to lending business | - | - | - | - | (471) | (471) | |||||||
Property operating and other expenses | (18,737) | (26,405) | (6,025) | (2,154) | (3,242) | (56,563) | |||||||
Gross profit | 31,709 | 27,326 | (5,543) | 11,639 | 1,966 | 67,097 | |||||||
Revaluation of investment property, net | 15,740 | 9,948 | 117,548 | - | - | 143,236 | |||||||
Share of profit/(loss) of associates and joint ventures | (99,899) | - | 835 | - | (4,790) | (103,854) | |||||||
Segment results | (52,450) | 37,274 | 112,840 | 11,639 | (2,824) | 106,479 | |||||||
Administrative and other expenses, net | (30,138) | ||||||||||||
Financial expenses, net | (61,144) | ||||||||||||
Profit before tax | 15,197 | ||||||||||||
Six months ended 30 June 2015 (unaudited)
| Income producing commercial real estate | Income producing residential real estate | Property held for appreciation | Residential development | Other | Total | |||||||||||||||||||
Euro in thousand | |||||||||||||||||||||||||
Gross rental income | 20,338 | 16,721 | 357 | - | - | 37,416 | |||||||||||||||||||
Service charge, management and other income and revenues | 4,267 | 8,906 | 1,838 | - | 503 | 15,514 | |||||||||||||||||||
Proceeds from sale of residential units | - | - | - | 11,894 | - | 11,894 | |||||||||||||||||||
Cost of sales of residential units | - | - | - | (9,801) | - | (9,801) | |||||||||||||||||||
Interest and other related income from lending business | - | - | - | - | 1,403 | 1,403 |
| ||||||||||||||||||
Costs related to lending business | - | - | - | - | (185) | (185) |
| ||||||||||||||||||
Property operating and other expenses | (8,654) | (13,660) | (398) | (926) | (855) | (24,493) | |||||||||||||||||||
Gross profit | 15,951 | 11,967 | 1,797 | 1,167 | 866 | 31,748 | |||||||||||||||||||
Revaluation of investment property, net | 8,224 | 8,522 | (13,172) | - | - | 3,574 | |||||||||||||||||||
Share of profit/(loss) of associates and joint ventures | (14,823) | - | 1,499 | - | (873) | (14,197) | |||||||||||||||||||
Segment results | 9,352 | 20,489 | (9,876) | 1,167 | (7) | 21,125 | |||||||||||||||||||
Administrative and other expenses, net | (7,369) | ||||||||||||||||||||||||
Financial expenses, net | (16,711) | ||||||||||||||||||||||||
Loss before tax | (2,955) | ||||||||||||||||||||||||
NOTE 6:- SUBSEQUENT EVENTS
a. On 8 July 2016, an indirect subsidiary of BCP entered into a notarized sale agreement with a third party to acquire 173 residential units in Dortmund, Germany for a total consideration of €8.2 million (including related transaction costs). For the purpose of financing the acquisition, the indirect subsidiary of BCP is in negotiations with a German bank to obtain a loan in the amount of €5.6 million under non-recourse terms with final repayment date in 5 years from the date of the loan agreement. The transaction is expected to be completed on 1 October 2016 and it is subject to the fulfillment of certain conditions.
DIRECTORS' RESPONSIBILITY STATEMENT
With reference to section 5:25d paragraph 2 under c of the Dutch Financial Supervision Act, the members of the Board of Directors of the Company hereby declare that, to the best of their knowledge:
· the interim condensed consolidated financial statements, which have been prepared in accordance with IAS 34 Interim Financial Reporting, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the subsidiaries included in the consolidation as a whole; and
· the additional management information provided in the press release attached to the interim condensed consolidated financial statements gives a fair view of the information required pursuant to section 5:25d paragraphs 8 and 9 of the Dutch Financial Supervision Act.
Amsterdam, 12 September 2016
Board of Directors BCRE - Brack Capital Real Estate Investments N.V.
APPENDIX TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
LIST OF SIGNIFICANT INVESTEES
Ownership interest | ||||||||
Country of | 30 June | 31 December | ||||||
Significant investees | Investee | incorporation | 2016 | 2015 | ||||
Brack Capital Properties N.V. | Subsidiary | The Netherlands | 34.76% | 34.76% | ||||
Brack Capital First B.V. | Subsidiary | The Netherlands | 100% | 100% | ||||
BCRE Russian Properties Ltd | Subsidiary | Cyprus | 85.07% | 85.07% | ||||
Brack Capital USA B.V. | Subsidiary | The Netherlands | 100% | 100% | ||||
BCRE India B.V. | Subsidiary | The Netherlands | 100% | 100% | ||||
- - - - - - - - - - - - - - - - - - - - - - -
1 One Dortmund property is subject to closing
Related Shares:
BCRE.L