2nd Dec 2008 15:16
Engel East Europe N.V
Trading update for the year ending 31 December 2008
TUESDAY, 2 December 2008 - Engel East Europe N.V. ('Engel' or 'the Company') the AIM-listed Central and Eastern European property developer (EEE:L), today announces a trading update for the year ending 31 December 2008.
Since 22 August 2008, when Engel announced interim results for the 6 months ended 30 June 2008, the world has witnessed the biggest financial crisis in living memory resulting in a government-led rescue of the global banking system and the prospect of global recession. This has created major challenges for the economies and property markets of Central and Eastern Europe, where construction lending and the availability of mortgage finance have been severely curtailed, and for Engel.
Despite these challenges, for 2008 overall the Board expects the Company to achieve revenues and gross profit well above the levels for 2007, and to make an operating profit compared to the operating loss of 2007. However, after financing costs, the Board does not believe the Company can achieve a profit before tax for the full year as currently expected by the market.
The Company forecasts that the number of units which will be sold and will be taken to profit during 2008 will be approximately 500 units, falling short of management's target of 800 units for the year.
The Board continues regularly to review the value of Engel's inventory of housing units and investment property. Net asset value per share at 30 September 2008 was €0.49.
The increased level of construction during the year has resulted in an increase in net debt which, at 30 September 2008, was €42.5 million compared to €37 million at 30 June 2008 and €20.7 million at 31 December 2007.
Since September, management efforts have been focused on improving profitability and cash flow through the sale of units, rigorous cost control and limiting construction activity.
The Company expects to make a full announcement of results for the year ending 31 December 2008 in March 2009.
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Enquiries:
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Engel East Europe N.V. |
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Sam Salman |
Tel: +1 (646) 214 2000 |
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Samuel Hibel |
Tel: +972 (9) 970 7004 |
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Libertas Capital Corporate Finance Limited |
Tel: +44 (0) 20 7569 9650 |
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Sandy Jamieson |
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Bankside Consultants |
Tel: +44 (0) 20 7367 8888 |
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Simon Bloomfield or Andy Harris |
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