Prosperity Minerals Holdings Ltd Preliminary Results (8924H)

TIDMPMHL

RNS Number : 8924H

Prosperity Minerals Holdings Ltd

26 June 2013

26 June 2013

Prosperity Minerals Holdings Limited

("Prosperity" or "the Company")

Preliminary Results Announcement for the year ended 31 March 2013

Prosperity Minerals Holdings Limited (PMHL.L), an iron ore trader/operator and real estate owner/developer in the People's Republic of China (PRC), today announces its annual results for the year ended 31 March 2013. All figures are expressed in US dollars unless otherwise stated.

Summary

-- Strong and improving sales at theOriental Landmark development in Guangzhou, with residential unit selling prices of the fourth block currently at RMB 43,000 per square metre (compared to RMB 31,000 in the first block when the presales commenced in December 2011)

-- Contracted sales in Guangzhou at 31 March2013totalled $288 million with cash received during the year at $268million

   --      In iron ore, trading  was characterised by a particularly difficult market 
   --      Total revenue was 48% lower at $390.6 million (2011-12: $754.0 million) 
   --      EBITDA loss of $28.2 million (2011-12: EBITDA of $14.7 million) 
   --      Cash flow from operating activities was $130.7 million (2011-12: $6.6 million) 
   --      Net impairment loss on available for sale investments of $14.8 million (2011-12: nil) 
   --      At 21 June 2013, Prosperity's 33.06% holding in ACC was valued at $162 million 
   --      Proposed final dividend of 3 cents per share (2011-12: 9 cents) 

Operating highlights

   I.    Iron Ore Operations 

Iron Ore Trading

-- Price movements in iron ore during the year were volatile and the Company adopted a more selective approach to both suppliers and customers. In turn, this led to significantly lower sales volumes of 2.8 million tonnes (2011-12: 4.8 million tonnes)

-- As previously reported, however, there was an occasion at the end of July 2012 where, for the first time, a customer reneged on an agreement to accept a shipment (in this case 200,000 tonnes). Prosperity subsequently found alternative buyers in the spot market, but at a lower price, which resulted in a loss of some $3.5 million

-- Iron ore trading incurred a segment loss(1) of $7.2 million in the year (2011-12: profit of $4.7 million)

-- On 6 February 2013, Prosperity announced that its prepayment to Century Iron Mines had been reduced to zero and the full $8 million has been returned to Prosperity as per the agreement between the parties. Otherwise, the terms of the Century Off-take Agreement remain unchanged

-- On 6 February 2013, Prosperity entered into a Supplementary Agreement with Blackrock Metals Inc. in which the first shipment date of iron ore was extended to no later than June 2015. At the same time, Prosperity was awarded an additional 800,000 tonnes of iron ore, at the same discount to the prevailing market price, to the 4 million tonnes of iron ore in the original Blackrock Iron Ore Off-take Agreement at no extra cost

-- On 27 February 2013, the Company announced that it had completed a Master Restructuring Agreement with ZC Group related to the settlement of outstanding prepayments made by Prosperity to secure reliable and competitively priced iron ore. Under the terms of the agreement, Prosperity utilised part of the prepayment cash to acquire an iron ore processing plant in Malaysia (the Gebeng Plant) from ZC Group for $19.5 million. Prosperity has leased the plant back to ZCM, part of ZC Group, on an exclusive basis for a fee of $2.5 million per annum. The Company also has the option to require ZCM to repurchase the Gebeng Plant at a price equal to the consideration plus an annual rate of return of 8% between 27 February 2013 and the exercise of the option. In fiscal 2012-13, the Company received $224,000 according to the lease agreement. For more information on the Master Restructuring Agreement, please refer to the Company's announcements on 22 October 2012 and 27 February 2013

Investment in United Goalink Limited (UGL)

-- The Company holds a 35% effective interest in UGL, a joint venture company engaged in the production and exploration of iron ore in Brazil

-- During the period under review, UGL shipped 111,490 tonnes of raw, unprocessed iron ore with approximately 58% iron content (2011-12: 218,808 tonnes). The decrease reflected a decision by management to withhold shipments until UGL's processing plant became operational. The improved iron content after processing will enable the Company to sell the processed ore at higher prices. Construction of the new processing plant was completed in May 2013 and trial production has commenced. It will increase the quality of iron ore to 63% iron content, or higher, and gradually raise production capacity to 900,000 tonnes of processed ore per annum

-- UGL reported an attributable loss of $5.5 million for the year (2011-12: loss of $1.7 million)

-- Post the year end, on 17 June 2013, Prosperity announced that it had agreed to provide UGL with an additional loan of $12 million at an interest rate of 12% per annum. On full drawdown, total loans outstanding to UGL amount to approximately $49.8 million. For further details please refer to the Company's announcements on 31 October 2011, 6 June 2012 and 17 June 2013

   II.   Real Estate Investment and Development 

-- The first revenue and profit from the sale of residential units in the Oriental Landmark development will be recognised on completion in fiscal 2013-14; and, in the meantime, the Real Estate Division continued to report a segmental loss due to administrative and sales expenses

-- In fiscal 2012-13 theDivision's revenue was generated solely by rent from SilverBay Plaza (SBP)

Guangzhou City, Guangdong Province, PRC

-- Prosperity holds a 55 per cent interest in the Oriental Landmark commercial and residential development which is currently under construction

-- Presale volumes and prices of residential units at Oriental Landmark have continued to exceed the Company's original expectations and it believes that, on completion in fiscal 2013-14, the completed sales of these units will generate a very good return

-- Presales in the first block commenced in December 2011, and up to 21 June 2013, 191 of the 192 units had been sold at an average price of approximately RMB 31,000 per square metre

-- Presales in the second block commenced in April 2012 and, up to 21 June 2013, 162 from 176 available had been sold at an average price of RMB 34,000 per square metre

-- Presales in the third block commenced in July 2012 and, by 21 June 2013, these totalled 151 out of 155 at an average price of RMB 38,000 per square metre

-- Presales in the fourth block commenced in October 2012 and, to date, 100 units from 126 offered had been sold at an average price of RMB 43,000 per square metre

-- At 31 March 2013, contracted sales of residential units amounted to RMB 1,810 million ($288 million) with the Company having received approximately RMB 1,669 million ($268 million) in cash

-- Since then, contracted sales have increased and, as at 21 June, they were RMB 1,974 million ($322 million) with RMB 1,936 million ($316 million) in cash already received. Under IFRS, revenue and profit on property sales is recognised when legal title is passed to the buyer, and the Company expects the majority of these to occur in fiscal 2013-14

-- Associated retail space and car parking is also being developed at Oriental Landmark and the Company is confident that rents from both will provide a good level of recurring income. Marketing of these units commenced in 2013

-- SBP consists of some 11,472 square metres of office and commercial space in the central business district of Guangzhou City. At 31 March 2013, it had an occupancy rate of 98 per cent and contributed $1.3 million in rental revenue for the year (2011-12: $1.3 million)

Changzhou City, Fujian Province, PRC

-- The Company is revising the development plan for this project in light of current weakness in this regional property market and changes in government (central and local) policies. However, Prosperity remains confident about the long term future of this project

Hangzhou City, Zhejiang Province, PRC

-- The Company has conditionally agreed to sell its 50% stake in a commercial real estate development site in Hangzhou to Hangzhou Xihu Tea Market Company Limited for RMB 221.8 million (approximately $35.6 million). This will generate a pre-tax profit on disposal of around RMB 24 million ($3.9 million) on completion

   III.        Cement Operations 

Anhui Chaodong Cement Company Limited (ACC); 33.06% owned

   --      ACC reported an attributable profit of $3.3 million (2011-12: $15.8 million) 

-- Demand for cement in ACC's region weakened significantly in the period due to a slowdown in the local real estate market; which was exacerbated by a temporary delay in construction of the National Express Rail Link

-- ACC declared its first ever cash dividend to shareholders in July 2012 and Prosperity received RMB 8 million (approximately $1.3 million) in August 2012. In May 2013, ACC declared a final dividend for its fiscal year ended 31 December 2012, from which Prosperity's entitlement is RMB 2.4 million before tax

-- ACC is listed on the Shanghai Stock Exchange and, at a closing price of RMB 12.45 per share on 21 June 2013, it was capitalised at RMB 3.01 billion ($491.3 million), valuing Prosperity's shareholding at $162.4 million

TCC Liaoning Cement Company Limited (TCC Liaoning); 16.11% owned

-- TCC Liaoning reported an attributable profit of $1.2 million (2011-12: $2.2 million). See below

Overall, the Company's cement plants performed in line with our expectations.

Available for sale investments

The Company invests in listed and unlisted securities from time to time. The total investment as at 31 March 2012 was $21 million and there was a profit of $1.5 million from disposals. During the year under review, the Company made further investments and, as at 31 March 2013, the aggregate cost was $31 million. Based on a marked to market value, however, there has been a net decrease in value which has resulted in an impairment loss of $14.8 million.

Ongoing Substantial Transactions

The Company continues to consider an investment in iron ore in Malaysia and awaits regulatory approval on an agreed sale of an investment in cement.

-- On 21 June 2013, Prosperity announced that it had agreed to extend the deadline for PIHL's acquisition of BWC, owner of a Malaysian iron ore operation, from 30 June to 30 September 2013 in order to give PIHL more time to complete the acquisition. If not completed by that time, Prosperity will forgo its option to acquire up to 7.55% interest in BWC alongside PIHL and will ask for repayment of the $7 million deposit by the end of December 2013. At the same time, Prosperity would no longer be entitled to the accompanying 10 year iron ore off-take agreement. For further details please refer to the Company's announcements on 10 February, 7 March, 30 April, 29 June, 28 September, 20 November and 21 December 2012; plus 1 March and 21 June 2013

-- On 6 February 2013, Prosperity signed a conditional sale and purchase agreement with TCC International Holdings Limited (TCC International) to sell its 16.11% interest in TCC Liaoning for RMB 144.5 million (approximately $23 million). Completion remains subject to TCC International obtaining the necessary approvals from the Taiwan Investment Commission and its compliance with the listing requirements in Taiwan and Hong Kong

Chairman and CEO, David Wong said:

"It was a difficult year, primarily due to a difficult iron ore market. But we have not been idle. First and foremost, the dramatic shift in focus of our iron ore trading business - from agent to principal - continues. Similarly, our real estate strategy of identifying well-located development sites in major cities looks set to pay off handsomely in fiscal 2014."

The Company will release an announcement once the Company's Annual Report and Accounts for the year ended 31 March 2013 are available for download from the Company's website: www.pmhl.co.uk and posted to shareholders.

Notes:

The average exchange rates for the year ended 31 March 2013 and 31 March 2012 were $1 = RMB 6.2873 and RMB 6.4017 respectively; and on 31 March 2013 and 31 March 2012 they were $1 = RMB 6.2268 and RMB 6.2938. These rates are used throughout this announcement unless otherwise specified.

(1) Segment profit: profit before taxation and finance costs, adjusted for head office or corporate administration costs which are not specifically attributable to individual segments

Enquiries:

   Prosperity Minerals Holdings Limited                                      [phone] 

Patrick Li

Neelke Kruger-Logan

Citigate Dewe Rogerson [phone]

Martin Jackson

Priscilla Garcia

   Daniel Stewart & Company plc                                                [phone] 

Corporate Finance: Paul Shackleton, Antony Legge,

Emma Earl

Corporate Broking: Martin Lampshire

Notes to Editors:

Prosperity (AIM: PMHL) is:

- an iron ore trader and operator serving the PRC;

- a specialised real estate owner and developer in the same market; and

- an investor in two cement plants, also in the PRC.

Prosperity's iron ore trading business has been operating since 1992 and sources iron ore, for shipment and use in the PRC, from major international iron ore producers in South Africa, Brazil, Australia and South East Asia, Thailand and Malaysia in particular. The majority of the Company's iron ore is sold to large steel manufacturers in the PRC. In the fiscal years ended 31 March 2012 and 2013, Prosperity shipped 4.8 million tonnes and 2.8 million tonnes of iron ore respectively.

In December 2010, Prosperity acquired a 35% effective interest in United Goalink Limited (UGL), a Brazilian mining operation which owns approximately 600 square kilometres of exploration rights and 3 square kilometres of mining concession in the State of Ceará in the north east of the country. In the year ended 31 March 2013, UGL shipped 111,490 tonnes of iron ore (which is included in the above tally).

Prosperity's real estate investment and development division is focused on creating an attractive portfolio of PRC property and development assets. The Company has entered into a number of agreements with partners to develop residential, commercial and recreational projects principally in Guangzhou City and Changzhou City in the southern PRC. Prosperity also owns an interest in an existing commercial building in Guangzhou, which is a regional capital and is located in the Pearl River Delta, the foremost economic zone in the southern PRC.

Prosperity has two associate investments in the cement manufacturing industry in the PRC. The Company holds a 33.06% interest in Anhui Chaodong Cement Company Limited (ACC), located in Anhui Province in the eastern PRC. The designed sellable production capacity of ACC is 6 million tonnes of cement and clinker per annum. In addition, Prosperity owns 16.11% of TCC Liaoning Cement Company Limited which has a designed saleable production capacity of 2 million tonnes of cement and clinker per annum. As announced on 6 February 2013, this latter shareholding is the subject of a conditional sale and purchase agreement.

The PRC is the World's second largest economy (behind the US) and the biggest buyer of iron ore; it is also the largest producer and consumer of cement.

CHAIRMAN'S STATEMENT

It was a difficult year, primarily due to a difficult iron ore market. But we have not been idle. First and foremost, the dramatic shift in focus of our iron ore trading business - from agent to principal - continues. Similarly, our real estate strategy of identifying well-located development sites in major cities looks set to pay off handsomely in fiscal 2014.

IRON ORE OPERATIONS

I have been trading iron ore for more than 20 years but in the last three, the industry has undergone fundamental change. The catalyst for this was the move, in 2010, from annual to quarterly benchmark price setting. At the same time, the major producers of iron ore have sought to transact a larger proportion of their business directly with steel mills. Both these factors have led to a squeeze on traders' margins, which is why we have re-cast our iron ore trading model and chosen to invest directly in future raw material supplies at competitive prices.

This also means a shift from a traditional, low capital employed, but low margin, trading model to a more capital intensive one which will, ultimately, improve both profitability and the quality of earnings. We have, thus, invested as principal or in off-take agreements, and agreed long term contracts, in a range of schemes in Asia, Brazil, Canada and South Africa. This tonnage is guaranteed in the short, medium and long term; and many are guaranteed at prices which will be at a discount to whatever the prevailing market price is at that time of delivery.

However, investment in new iron ore mining is a long term business and an attractive rate of return is not immediate. At UGL in Brazil (35% owned), for example, construction of a processing plant was only completed in May 2013. This facility will increase the quality of the iron ore (from 58 to 63 per cent iron content or higher), which sells for more, and production capacity (from 450,000 tonnes to 900,000 tonnes per year); while, at the same time, lowering the costs of production.

REAL ESTATE INVESTMENT AND DEVELOPMENT

Our key development project here is the Oriental Landmark which is being built in the heart of Guangzhou, one of China's great cities and a regional capital in the southern PRC which enjoys consistent economic growth year on year. Residential sales here are robust and the selling price per square metre has exceeded our original targets, which means we expect to make a very good return, the majority of which will come in the current fiscal year. Indeed, under IFRS, revenue and profit on property sales are only recognised on completion and when legal title passes to the buyer; and, for the large part, these titles will be issued in fiscal 2013-14.

As the project moves towards final completion, we can also begin letting the 35,868 square metres of retail and commercial space plus 500 car parking spaces in one of the busiest parts of Guangzhou. This will provide the Company with recurrent and growing rental income over time.

Meantime, in Changzhou City, near Xiamen in Fujian Province, progress in a joint venture to develop a recreational, commercial and residential scheme has been slower than expected. This is due to a combination of changes in government policy (central and local) and a less buoyant market. However, Xiamen is a special economic zone in the PRC and the economic and financial centre of Fujian Province and we remain confident of long term success here.

In real estate, too, we know when it is time to sell and, in Hangzhou, we have done just that. The divestment is our share (50%) of a commercial real estate development site for some $35 million and on which we will make $3.9 million pre-tax profit upon completion.

Finally, our sole investment property, also in Guangzhou, SilverBay Plaza continues to enjoy 98 per cent occupancy.

CEMENT OPERATIONS

We own 33.06 per cent of Anhui Chaodong Cement Company Limited (ACC) which contributed $3.3 million to Prosperity in the year and it recently announced a dividend for its fiscal year ended 31 December 2012. ACC is also listed on the Shanghai Stock Exchange and, on 21 June, our stake was worth $162 million. Prosperity Minerals, as a whole, has a market value of $187 million.

Prosperity also has a 16.11 per cent equity interest in TCC Liaoning Cement Company Limited (TCC Liaoning) in the northern PRC and it added $1.2 million to our bottom line last year. However, in February, we agreed to sell our interest to TCC International for around $23 million and on which Prosperity will make a pre-tax profit of some $7 million at this time. Completion simply awaits various regulatory approvals and it is a further example of Prosperity's ability to generate excellent returns on its investments.

CORPORATE GOVERNANCE

The Company's focus is on being a responsible business which is committed to the highest standards of corporate governance. Hand in hand with this strategy, too, its core objectives are to create a durable and sustainable business which maximises returns to shareholders. And here, I would like to thank our Non-executive Directors for their continued counsel and direction.

OUR PEOPLE

The people who work at Prosperity are our greatest asset and I thank each and every one of them for their hard work and commitment during the year.

SHAREHOLDERS

I would also like to thank our shareholders for their continued support during the year. It is very much appreciated by myself and the Board.

DIVIDEND

A final dividend of 3 cents per ordinary share (2011-12: 9 cents) will be recommended by the Board. If approved at the AGM, the total dividend for the year will also be 3 cents per ordinary share (2011-12: 9 cents). The AGM date and dividend date will be confirmed when the AGM Notice is sent to shareholders. Since our IPO seven years ago, we have paid a dividend every year plus an additional, special dividend in fiscal 2011.

OUTLOOK

At the time of our half year announcement, I said no Chairman enjoys reporting a loss; and it is true. But in all my time of trading iron ore - over some two decades - I have not seen the market behave like it is now. For example, spot prices can move by double digit percentages in a single day; and Chinese steel mills, including a number of Prosperity's long term customers, continue to suffer intermittent losses.

This means we have also had to change the way our iron ore trading business operates; and we continue to transition from agent to principal. But this is not a quick fix, it takes time.

It also takes time to develop large mixed-use real estate developments. But, again, as we are proving in Guangzhou, the benefits are substantial when they come. Here, the vast bulk of the 649 residential units at Oriental Landmark will be completed and legally sold (under IFRS accounting) in the current fiscal year. This means we can then book the revenue and profit. And, while I know this number is repeated in the announcement, contracted sales as of last week, were worth $322 million. Elsewhere, we have also just agreed to sell a raw development site in Hangzhou on which we expect to book a double digit return without even putting a spade in the ground.

We sold the bulk of our cement manufacturing businesses for $500 million in 2010 (and a $200 million book profit), but continue to own two legacy investments. The smaller of these is a 16.11 per cent interest in TCC Liaoning and, in February, we agreed to sell it with a prospective return of more than 40%.

Turning to ACC, this is a listed company in which we own just over 33%. The value of this stake is $162 million. This is 87% of Prosperity Minerals Holdings' own market value, which means that all of the other Company's businesses are notionally valued at less than $25 million.

Prosperity trades exclusively with customers in the PRC and the new government here has had its share of short term challenges; not least slowing economic growth - albeit still around 7% per annum. In the medium to longer term, too, the sheer scale of the nation, its vast wealth and population underwrite a bright future.

I believe the Company will share in China's growth and, empirically, it has proven itself to be an effective and very profitable developer and trader in business - and of businesses. No more so will this be true than in fiscal 2014, when I expect to report a very substantial recovery in profits.

(David) Ben Koon Wong

Chairman and CEO

26 June 2013

Operating Review

IRON ORE OPERATIONS

The PRC Government's principal focus is sustainable economic growth and social stability and two of its key policy instruments are the control of inflation and legislation to keep property price rises in check. At the same time, it is seeking to lead and manage a dramatic change in the structure of China's economy from predominately manufacturing to one which is more consumer based.

But, this has led to slower GDP growth and, in the most recent four quarters, it has been less than 8% for the first time in at least 20 years. Nonetheless, the consensus view amongst leading economists, including at HSBC and Goldman Sachs, is that growth this year will be between 7.0 and 7.5%, which remains the envy of most other major economies.

As expected, the performance of the domestic steel industry, including Prosperity's long term customers, has been adversely impacted by these changes and unprecedented price volatility in its core raw material, iron ore. For example, between April and October last year the price of iron ore fell by 40%. The latter has been wrought by the abandonment of annual benchmark pricing for iron ore (which has prevailed for four decades) and its replacement with pricing once a quarter. At the same time, iron ore producers, especially the majors, have sought to deal directly with the end user in China.

In turn, this underlines the efficacy of the Company's strategy to transform its iron ore business from trader to principal; and during the year further significant progress was made here.

Management is confident about the medium to long term prospects for iron ore in China. For example, right now just over half the population is urbanised - compared with more than 80% in Brazil - and this is expected to rise to 70% within five years. Indeed, on current urban migration rates, it needs to both expand existing cities and build 1,000 more during the next decade, according to China Confidential. As a result, steel intensity has yet to peak, so iron ore demand could almost double to 1.9 billion tonnes by 2030, forecasts Raw Materials Group.

Iron Ore Trading

In fiscal 2012-13, Prosperity's iron ore trading business shipped a total of 2.8 million tonnes of iron ore (2011-12: 4.8 million tonnes) and incurred a segment loss of $7.2 million (2011-12: profit of $4.7 million).

Prosperity has been more selective in accepting shipments during the period in view of the significant price volatility in the market. For example, at the end of July 2012, a customer, for the first time, reneged on an agreement to accept a shipment of 200,000 tonnes of iron ore. Prosperity subsequently found other buyers in the spot market, but at a lower price which resulted in a loss of some $3.5 million.

The reduced number of shipments during the yearalso underlines the importance of increasing the Company's access to reliable medium-to-long term supplies of iron ore at competitive prices, where Prosperity is either principal or has signed off-take agreements.

On 6 February 2013, Prosperity announced that its prepayment to Century Iron Mines had been reduced to zero and the full $8 million has been returned to Prosperity as per the agreement between the parties. Otherwise, the terms of the Century Off-take Agreement remain unchanged.

On 6 February 2013, Prosperity entered into a Supplementary Agreement with Blackrock Metals Inc. in which the first shipment date of iron ore was extended to no later than June 2015. At the same time, Prosperity was awarded an additional 800,000 tonnes of iron ore, at the same discount to the prevailing market price, to the 4 million tonnes of iron ore in the original Blackrock Iron Ore Off-take Agreement at no extra cost.

On 27 February 2013, the Company announced that it had completed a Master Restructuring Agreement with ZC Group related to the settlement of outstanding prepayments made by Prosperity to secure reliable and competitively priced iron ore. Under the terms of the agreement, Prosperity utilised part of the prepayment cash to acquire an iron ore processing plant in Malaysia (the Gebeng Plant) from ZC Group for $19.5 million. Prosperity has leased the plant back to ZCM, part of ZC Group, on an exclusive basis for a fee of $2.5 million per annum. The Company also has the option to require ZCM to repurchase the Gebeng Plant at a price equal to the consideration plus an annual rate of return of 8% between 27 February 2013 and the exercise of the option. In fiscal 2012-13, the Company received $224,000 according to the lease agreement. For more information on the Master Restructuring Agreement, please refer to the Company's announcements on 22 October and 31 December 2012 and 27 February 2013.

Investment in United Goalink Limited

Prosperity holds an effective 35 per cent interest in UGL, a joint venture company engaged in the exploration and production of iron ore in the State of Ceará, Brazil. UGL owns approximately 600 square kilometres of exploration rights and 3 square kilometres of mining concession in Ceará. In the year under review, UGL reported an attributable loss of $5.5 million (2011-12: $1.7 million).

During the year, UGL sold 111,490 tonnes of raw, unprocessed iron ore with an iron content of approximately 58 per cent (2011-12: 218,808 tonnes). The decrease reflects a decision by management to withhold shipments until the new processing plant became operational. The improved iron content after processing will enable the Company to sell the processed iron ore at higher prices. Construction of the processing plant was completed in May 2013 and trial production has commenced. The plant will increase the quality of iron ore to 63% iron content, or higher, and gradually increase production capacity to 900,000 tonnes per annum.

On full drawdown, the loans from Prosperity to UGL will amount to approximately $49.8 million. To date, the loans utilised by UGL have been invested in: (i) construction of its processing plant; (ii) the upgrading of other facilities plus administrative and operating costs; and (iii) limited exploration on new sites. Over time, the increased volumes and the production of higher quality, higher priced iron ore should lower production costs per tonne and enhance both profit and cash flow to the Company.

All loans and interest will be repaid from production proceeds on a tonne by tonne basis, with full payment expected within three years of target production being achieved.

Potential investment in iron ore assets in Malaysia

In February 2012, Prosperity announced its intention to acquire a competitively priced stake in a Malaysian iron ore operation together with a long term off-take agreement, through the acquisition of All Wealthy Capital Limited (AWC). It would do this alongside Prosperity International Holdings (H.K.) Limited (PIHL), the Company's majority shareholder. AWC owns a 70% interest in the Malaysian iron ore operation's owner, Billion Win Capital Limited (BWC).

On 21 December 2012, Prosperity announced that it had entered into a new agreement (New Agreement) which replaced all previous agreements relating to Prosperity's purchase of AWC's shares. PIHL proposes to buy a 100% interest in BWC, the Malaysian iron ore operation's owner. Upon completion, PIHL will offer the Company an option to buy up to 7.55% in BWC for $25 million. The 7.55% interest is valued at $37.75 million, giving Prosperity an immediate 51% uplift in the value based on a provision in the original sale and purchase agreement. If Prosperity exercises this option, it would also be offered a very attractive 10 year iron ore off-take agreement as part of the proposed deal.

In June 2013, Prosperity was informed by PIHL that its acquisition of BWC was taking longer than it had originally anticipated. Subsequently, Prosperity and PIHL agreed to allow up to 30 September 2013 (instead of 30 June) for PIHL to complete the acquisition of BWC. If not completed by that time, the New Agreement will lapse and Prosperity will ask the vendor to refund the $7 million deposit by the end of December 2013. In this event, the Company would no longer be entitled to the benefits of the off-take agreement.

For further details please refer to the Company's announcements on 10 February, 7 March, 30 April, 29 June, 28 September, 20 November and 21 December 2012; plus 1 March and 21 June 2013.

REAL ESTATE INVESTMENT AND DEVELOPMENT

Total investment in real estate development in 2012 in the PRC rose 16.2% to RMB 7.2 trillion ($1.2 trillion); and this included investment in residential buildings worth RMB 4.9 trillion, which was up 11.4%. Similarly, in the first five months of 2013 total investment was 20.6% higher at RMB 2.7 trillion. All data come from the National Bureau of Statistics (NBS).

In terms of selling prices in 2012, and of newly constructed residential buildings in particular, they rose in 63 of the nation's 70 large and medium-sized cities in a band from +0.1 to +12.1%. This was followed in April of this year, with annualised selling prices up in all but one of 70 cities in a band from +1.0 to +15.3%.

Prosperity owns and develops in a number of regions of the PRC and it is a diminutive but nimble operator. Its model focuses on 'location, location, location', price and profit and, where appropriate, it works together with local partners; for example, the very successful Oriental Landmark residential and commercial development in Guangzhou.

Market share is not relevant for the Company but it will benefit from the continued growth in China. For example, in September 2012, the National Development and Reform Commission announced plans to build more than 1,200 miles of roads, nine sewage treatment plants, five ports, and 25 subway and intercity rail projects. This is part and parcel of China's rapid urbanisation and Deputy Minister of Construction Qiu Baoxing is on record as saying that: "every year, new buildings in China total up to two billion square metres".

China's per capita income has also ballooned over the last five years. In 2005 it was $4,102. By 2010, it hit $7,519, according to the OECD, while last year, the CIA World Factbook put China's per capita income at $9,100; albeit this is still less than Brazil and a fifth of the US. This will be a key factor in the demand for living and commercial space.

China is the World's second largest economy (next to the US); and it is an economy in transition. Here, the shift to the cities and rampant income growth will change how China operates - away from an export driven economy to one that is geared more to its local consumers. This also means, according to the OECD, that it will surpass the US as the World's number one by 2016.

Guangzhou City, Guangdong Province, PRC

Prosperity owns approximately 11,472 square metres of office and commercial space in SilverBay Plaza, an existing commercial building, and has a 55 per cent interest in Oriental Landmark, a new commercial and residential development, both located in downtown Guangzhou.Guangzhou is a regional capital in southern China and is located in the Pearl River Delta, the foremost economic zone in the south.

SilverBay Plaza was completed in 2004 and, as at 31 March 2013, had 98 per cent occupancy. SilverBay Plaza contributed approximately $1.3 million in rental income during the year (2011-12: $1.3 million).

Prosperity also holds a 55 per cent interest in a commercial and residential development project known as Oriental Landmark, previously referred to as Dongfang Wende Plaza. Oriental Landmark is located in downtown Guangzhou within a few minutes' walk of Beijing Road, a popular pedestrianised shopping street. The development comprises a four floor shopping arcade with four basement floors (one of which is to be part of the shopping arcade and the other three will form a car park). Above, three residential buildings with 35 floors are being constructed, plus a fourth with 29 floors and a commercial building comprising 26 floors. The aggregate floor area will be approximately 169,204 square metres.

Presales in the first block commenced in December 2011 and up to 21 June 2013, 191 of the 192 units had been sold at an average price of approximately RMB 31,000 per square metre.

Presales in the second block commenced in April 2012 and, up to 21 June 2013, 162 from 176 available had been sold at an average price of RMB 34,000 per square metre.

Presales in the third block commenced in July 2012 and, by 21 June 2013, these totalled 151 out of 155 at an average price of RMB 38,000 per square metre.

Presales in the fourth block commencedinOctober 2012 and, to date, 100 units from 126 offered had been sold at an average price of RMB 43,000 per square metre.

At 31 March 2013, contracted sales of residential units amounted to RMB 1,810 million ($288 million) with the Company having received approximately RMB 1,669 million ($268 million) in cash. Since then, contracted sales have increased to RMB 1,974 million ($322 million) with RMB 1,936 million ($316 million) in cash already received.

Presale prices and results have exceeded the Company's original expectations. This is offset, in part, by higher than budgeted marketing costs, including sales commission. However, the net result is very positive for the Company. Under IFRS, revenue and profit on property sales is only recognised on completion and when legal title passes to the buyer. In turn, this is determined by the issue of an occupation permit by the relevant local government authority. The Company believes that occupation permits will be issued in fiscal 2013-14, which is also when the first revenue and profit will be booked. Following completion, Oriental Landmark will provide the Company with recurrent and growing rental income from the 35,868 square metres of commercial area in the shopping arcade and the 500 car park spaces located in one of the busiest areas in Guangzhou.

Changzhou City, Fujian Province, PRC

In May 2010, Prosperity entered into a 50:50 joint venture agreement to develop a combined recreational, commercial and residential project in Changzhou City, Fujian Province, in the southern PRC.

The development is located 39 kilometres from Xiamen City, which is classed as a special economic zone in the PRC. Xiamen is the economic and financial centre of Fujian Province and the largest city in the Province.

The development offers high-end accommodation and hot spring resort facilities. The joint venture company is buying the land for development in stages, while the land for the hot spring resort facilities is being leased from the local government.

Under the joint venture agreement, Prosperity's maximum investment is RMB 480 million (approximately $77 million). Up to 31 March 2013, the Company had invested a total of RMB 242 million (approximately $39 million) in the project.

The Company is revising the development plan for this project in light of current weakness in this regional property market and changes in government (central and local) policies. However, Prosperity remains confident about the long term future of this project.

Hangzhou City, Zhejiang Province, PRC

On 2 May 2013, Prosperity announced that it had conditionally agreed to dispose of its 50% interest in a commercial property development site in Hangzhou, the capital of Zhejiang Province in Eastern China, to Hangzhou Xihu Tea Market Company Limited. The prospective consideration for the disposal is RMB 221.8 million ($35.6 million), which would result in a pre-tax profit on disposal of approximately RMB 24 million ($3.9 million) on completion.

The Company acquired its 50% interest in the Hangzhou Project in March 2011 and on the 6 February 2013, announced plans to increase this to 60% for a consideration of RMB 40 million ($6.4 million), with a view to taking the lead in the development. The proposed disposal represents a reasonable premium to this February value and, since construction, which had originally been due to start in 2012, had not commenced due to the construction permit being delayed, Prosperity believed it is prudent to realise cash and profit from the disposal which it can apply to other more attractive prospective projects and working capital.

CEMENT MANUFACTURING

Anhui Chaodong Cement Company (ACC)

Prosperity holds a 33.06 per cent interest in ACC in Anhui Province, eastern PRC. ACC reported an attributable profit of $3.3 million (2011-12: $15.8 million).

Demand for cement in ACC's region weakened significantly due to a slowdown in the local real estate market and this was exacerbated by a temporary delay in construction of the National Express Rail Link during the year under review.

ACC has a designed saleable production capacity of 6 million tonnes of cement and clinker per annum. Construction of the third 2 million tonnes per annum clinker production line at ACC was completed and trial production has commenced. During the year under review, ACC sold 4.7 million tonnes of cement and clinker.

ACC is listed on the Shanghai Stock Exchange and, as at 21 June 2013, its closing share price was RMB 12.45 at which ACC's market capitalisation was RMB 3.01 billion ($491.3 million), valuing Prosperity's shareholding at $162.4 million.

ACC declared its first cash dividend to shareholders in July 2012 and Prosperity received RMB 8 million (approximately $1.3 million) in August 2012. In May 2013, ACC declared a final dividend for the fiscal year ended 31 December 2012, of which Prosperity's entitlement is RMB 2.4 million before tax.

TCC Liaoning Cement Company (TCC Liaoning)

Prosperity holds a 16.11 per cent equity interest in TCC Liaoning which is located near Shenyang, the capital city of Liaoning Province in the northern PRC. TCC Liaoning reported an attributable profit of $1.2 million (2011-12: $2.1 million).

TCC Liaoning has a designed saleable production capacity of 2 million tonnes of cement and clinker per annum and, during the year under review, sold 1.9 million tonnes.

On 6 February 2013, Prosperity signed a conditional sale and purchase agreement with TCC International Holdings Limited (TCC International) to sell its 16.11% interest in TCC Liaoning for RMB 144.5 million (approximately $23 million). Prosperity acquired its interest in TCC Liaoning in September 2010 for a consideration of RMB 100 million and its disposal should generate a profit before tax of RMB 44.5 million (approximately $7million). Completion remains subject to TCC International obtaining the necessary approvals from the Taiwan Investment Commission and its compliance with the listing requirements in Taiwan and Hong Kong.

AVAILABLE FOR SALE INVESTMENTS

The Company invests in listed and unlisted securities from time to time. The total investment as at 31 March 2012 was $21 million and there was a profit of $1.5 million from disposals. During the year under review, the Company made further investments and, as at 31 March 2013, the aggregate cost was $31 million. Based on a marked to market value, however, there has been a net decrease of $14.8 million in value which has resulted in an impairment loss of $14.8 million.

Profit and Loss Account

The profit and loss account for the reporting period included the trading of iron ore and raw materials, real estate investment and development, profits from associates and losses from jointly controlled entities.

For the 12 months ended 31 March 2013, revenue decreased from $754.0 million for the previous year to $390.6 million, while gross profit for the year decreased from $12.1 million to $3.2 million. The gross profit margin decreased from 1.6 to 0.8per cent.

There was an EBITDA loss of $28.2 million for the year (2011-12: EBITDA of $14.7 million).

The operating loss for the year was$18.1 million (2011-12: $5.4 million).

Finance expense was $5.3 million, (2011-12: $4.2 million). Net finance costs were $0.2 million (2011-12: $0.9 million).

The Company's share of associate companies' profits i.e. 33.06 per cent of ACC and 16.11 per cent of TCC Liaoning, amounted to $4.5million (2011-12: $17.9 million).

The Company's share of losses of jointly controlled entities, i.e. a 50 per cent interest in Changtai Jinhongbang Real Estate Development Co., Ltd, a 50 per cent interest in Hangzhou Prosperous Property Ltd and a 35 per cent effective interest in UGL was a $6.1 million (2011-12: $2.0 million).

Profit before tax moved from $10.0 million in the previous year toa loss of $33.9 million. The provision for tax was $1.7 million (2011-12: $2.0 million).

Basic and diluted loss per share amounted to 23.09 cents (2011-12: earnings per share of 4.41 cents and diluted earnings per share of 3.71 cents respectively).

The dividend for the year will be 3 cents (2011-12: 9 cents) per ordinary share and includes a proposed final dividend of 3 cents (2011-12: 9 cents). The ex-dividend date, record date and payment date will be confirmed when the AGM Notice is sent to shareholders.

Cashflow and Balance Sheet

There was a net cash inflow from operating activities of $130.7 million for the year (2011-12: $6.6 million). Investing activities absorbed $115.0 million (2011-12: $69.9 million) while cash and cash equivalents at 31 March 2013 amounted to $100.8 million (31 March 2012: $171.4 million).

Liquidity measured by the current ratio (which is current assets divided by current liabilities) was 1.45 (31 March 2012: 1.80). The quick ratio (which is current assets, excluding properties under development for sale, divided by current liabilities) was 0.75 (31 March 2012: 1.01).

Capital expenditure of $0.7 million represented 0.2 per cent of revenue (2011-12: 0.3 per cent).

Net debt at the year end, defined as total borrowings less cash and cash equivalents, time deposits and restricted deposits was $5.4 million (31 March 2012: $50.3 million). This compares with net assets of $501.9 million as at 31 March 2013 (31 March 2012: $542.0 million).

The gearing ratio (i.e. net debt divided by shareholders funds) at the end of fiscal 2012-13 was 1.1 per cent (2011-12: 9.3 per cent).

Prosperity Minerals Holdings Limited

Consolidated income statement for the year ended 31 March 2013

 
                                            Year ended 31 March 
                                                 2013        2012 
                                              US$'000     US$'000 
 
 Revenue                                      390,631     753,975 
 Cost of sales                              (387,427)   (741,842) 
                                          -----------  ---------- 
 Gross profit                                   3,204      12,133 
 Other operating income                         2,143       2,403 
 Distribution expenses                        (6,780)     (4,081) 
 Administrative expenses                     (25,797)    (26,748) 
 Change in fair value of investment 
  properties and investment properties 
  under development                             9,117      10,932 
                                          -----------  ---------- 
 Loss from operations                        (18,113)     (5,361) 
 Finance income                                 5,528       3,334 
 Finance expenses                             (5,291)     (4,228) 
 Share of profits less losses of 
  associates                                    4,541      17,898 
 Share of profits less losses of 
  jointly controlled entities                 (6,069)     (1,980) 
 Loss on dilution of interest in 
  an associate                                      -     (2,074) 
 Net gain on sale of available-for-sale 
  investments                                      95       1,496 
 Impairment loss on available-for-sale       (14,822)           - 
  investments 
 Gain on re-measurement of derivative 
  financial instruments to fair value             184         927 
                                          -----------  ---------- 
 
 (Loss)/profit before taxation               (33,947)      10,012 
 Income tax                                   (1,681)     (2,008) 
                                          -----------  ---------- 
 (Loss)/profit for the year                  (35,628)       8,004 
                                          ===========  ========== 
 
   Attributable to: 
 Equity shareholders of the Company          (33,103)       6,306 
 Non-controlling interests                    (2,525)       1,698 
                                          -----------  ---------- 
 (Loss)/profit for the year                  (35,628)       8,004 
                                          ===========  ========== 
 
   (Loss)/earning per share (US cents) 
 Basic                                        (23.09)        4.41 
                                          ===========  ========== 
 Diluted                                      (23.09)        3.71 
                                          ===========  ========== 
 

Consolidated statement of comprehensive income for the year ended 31 March 2013

 
                                               Year ended 31 March 
                                                   2013        2012 
                                                US$'000     US$'000 
 (Loss)/profit for the year                    (35,628)       8,004 
 Other comprehensive income for the 
  year (Note): 
 Exchange differences on translation 
  of financial statements of subsidiaries, 
  associates and jointly controlled 
  entities in the People's Republic 
  of China (the "PRC")                            4,316      13,920 
 Net movement in fair value reserve 
  for available-for-sale investments              4,123     (5,267) 
                                             ----------  ---------- 
 Total comprehensive income for the 
  year                                         (27,189)      16,657 
                                             ==========  ========== 
 
   Attributable to: 
 Equity shareholders of the Company            (25,649)      11,562 
 Non-controlling interests                      (1,540)       5,095 
                                             ----------  ---------- 
 Total comprehensive income for the 
  year                                         (27,189)      16,657 
                                             ==========  ========== 
 

Note: There is no tax effect relating to the above components of other comprehensive income

Consolidated statement of financial position asat 31 March 2013

 
                                            31 March   31 March 
                                                2013       2012 
                                             US$'000    US$'000 
 Non-current assets 
 Property, plant and equipment                 1,097        757 
 Investment properties                        29,191     28,525 
 Investment properties under development     179,826    126,378 
 Interests in jointly controlled 
  entities                                    93,762     99,798 
 Interests in associates                      53,367     66,558 
 Available-for-sale investments               16,523     18,036 
 Prepayments                                  58,328     97,666 
 Finance lease receivables                    17,381          - 
                                           ---------  --------- 
                                             449,475    437,718 
                                           ---------  --------- 
 Current assets 
 Non-current asset held for sale              17,212          - 
 Properties under development for 
  sale                                       289,732    202,218 
 Trade and other receivables                 125,571     81,086 
 Finance lease receivables                     2,222          - 
 Held-to-maturity investment                       -        795 
 Available-for-sale investments                2,088      6,354 
 Prepaid income tax                            5,368          - 
 Restricted deposits                             374      2,171 
 Time deposits                                54,095          - 
 Cash and cash equivalents                   100,753    171,368 
                                           ---------  --------- 
                                             597,415    463,992 
                                           ---------  --------- 
 Current liabilities 
 Bank loans                                   75,210    167,741 
 Trade and other payables                    336,862     89,865 
 Income tax payable                              116        393 
                                             412,188    257,999 
                                           ---------  --------- 
 
 Net current assets                          185,227    205,993 
                                           ---------  --------- 
 
 Total assets less current liabilities       634,702    643,711 
                                           ---------  --------- 
 
 
 Non-current liabilities 
 Bank loans                                85,418      56,109 
 Deferred tax liabilities                  47,383      45,607 
                                       ----------  ---------- 
                                          132,801     101,716 
                                       ----------  ---------- 
 Net assets                               501,901     541,995 
                                       ==========  ========== 
 Capital and reserves 
 Share capital                              2,657       2,657 
 Reserves                                 248,877     241,423 
 Retained earnings                        166,219     212,227 
                                       ----------  ---------- 
 
 Total equity attributable to equity 
  holders of the Company                  417,753     456,307 
 
 Non-controlling interests                 84,148      85,688 
                                       ----------  ---------- 
 Total equity                             501,901     541,995 
                                       ==========  ========== 
 

Consolidated cash flow statement for the year ended 31 March 2013

 
                                                        Year ended 31 March 
                                                           2013           2012 
                                                        US$'000        US$'000 
 
 Operating activities 
 (Loss)/profit before taxation                         (33,947)         10,012 
 Adjustments for: 
  - Depreciation                                            411            430 
  - Equity-settled share-based transactions                   -            684 
  - Impairment loss on available-for-sale 
   investments                                           14,822              - 
  - Interest income                                     (5,528)        (2,745) 
  - Finance expenses                                      5,291          4,228 
  - Share of profits less losses of 
   jointly controlled entities                            6,069          1,980 
  - Share of profits less losses of 
   associates                                           (4,541)       (17,898) 
  - Gain on re-measurement of derivative 
   financial instruments to fair value                    (184)          (927) 
  - Change in fair value of investment 
   properties and investment properties 
   under development                                    (9,117)       (10,932) 
  - Loss on dilution of interest in 
   an associate                                               -          2,074 
  - Net gain on sale of available-for-sale 
   investments                                             (95)        (1,496) 
                                                    -----------   ------------ 
 Operating loss before changes in 
  working capital                                      (26,819)       (14,590) 
 (Increase)/decrease in trade and 
  other receivables                                     (1,696)          6,164 
 Decrease in amount due from an associate                     -            262 
 Increase in trade and other payables                   245,732         29,267 
 Additional construction cost of properties 
  under development for sale                           (80,490)       (14,213) 
                                                    -----------   ------------ 
 Cash generated from operations                         136,727          6,890 
 PRC tax paid                                           (6,051)          (279) 
                                                    -----------   ------------ 
 Net cash generated from operating 
  activities                                            130,676          6,611 
                                                    -----------   ------------ 
 Investing activities 
 Interest received                                        5,239          1,658 
 Interest received from finance lease                       224              - 
  receivables 
 Increase in time deposits                             (54,095)              - 
 Payment for purchase of property, 
  plant and equipment                                     (658)          (336) 
 Payment for purchase of investment 
  properties                                               (11)        (2,298) 
 Additional construction cost of investment 
  properties under development                         (40,903)        (5,998) 
 Dividend received from an associate                      1,145              - 
 Capital contributions to jointly 
  controlled entities                                         -       (15,684) 
 Deposit refunded/(paid) for an option 
  to purchase an available-for-sale 
  investment                                              6,000        (6,000) 
 Payment for purchase of derivative 
  financial instruments                                       -        (7,000) 
 Dividend received from a jointly 
  controlled entity                                           -            300 
 Advances to jointly controlled entities 
  and one of their subsidiaries                        (21,967)       (20,429) 
 Advances to joint venturers                            (5,733)        (4,178) 
 Advance to a non-controlling shareholder                     -        (1,271) 
 Advances to independent business 
  partners                                                    -       (11,540) 
 Repayment from a joint venturer                              -          3,178 
 Repayment from independent business 
  partners                                                    -         11,540 
 Acquisition of available-for-sale 
  investments                                          (11,732)       (26,965) 
 Proceeds from disposal of available-for-sale 
  investments                                             6,662         10,480 
 Acquisition of held-to-maturity investment                   -          (795) 
 Proceeds from disposal of held-to-maturity 
  investment                                                803          5,467 
 Net cash used in investing activities                (115,026)       (69,871) 
                                                    -----------   ------------ 
 Financing activities 
 Decrease in restricted deposits                          1,797          5,476 
 Proceeds from new bank loans                            78,139        291,656 
 Repayments of bank loans                             (144,212)      (247,400) 
 Interest paid                                          (9,440)       (10,399) 
 Proceeds from exercise of warrants 
  and options                                                 -          2,072 
 Dividends paid                                        (12,905)       (25,810) 
 
 Net cash (used in)/generated from 
  financing activities                                 (86,621)         15,595 
                                                    -----------   ------------ 
 
 Net decrease in cash and cash equivalents             (70,971)       (47,665) 
 Cash and cash equivalents at 1 April                   171,368        213,941 
 Effect of foreign exchange rate changes                    356          5,092 
                                                    -----------   ------------ 
 Cash and cash equivalents at 31 March                  100,753        171,368 
                                                    ===========   ============ 
 
 
 

Segment reporting

The Group manages its business by business lines. In a manner consistent with the way in which information is reported internally to the Group's most senior executive management for the purposes of resource allocation and performance assessment, the Group has presented the following two reportable segments. No operating segments have been aggregated to form the following reportable segments.

   -              Trading of iron ore and raw materials; and 
   -              Real estate investment and development 

Other operating segments which do not meet the quantitative thresholds prescribed by IFRS 8 for determining reportable segments are combined as "all other segments".

Segment results

For the purposes of assessing segment performancesand allocating resources between segments, the Group's senior executive management monitors the results attributable to each reportable segment on the following bases:

Revenue and expenses are allocated to the reportable segments with reference to the revenue generated and the expenses incurred by those segmentsor which otherwise arise from depreciation or amortisation of assets attributable to those segments. The measure used for reporting segment (loss)/profit is (loss)/profit before taxation and finance costs, adjusted for head office or corporate administration costs which are not specifically attributable to individual segments.

Segment reporting

Information regarding the Group's reportable segments for the year ended 31 March 2013 is set out below.

 
                         Trading of iron           Real estate 
                                ore                investment 
                         and raw materials       and development       All other segments                  Total 
                          Year ended 31           Year ended 31          Year ended 31                 Year ended 31 
                               March                  March                   March                        March 
                            2013       2012        2013        2012        2013       2012        2013            2012 
                         US$'000    US$'000     US$'000     US$'000     US$'000    US$'000     US$'000         US$'000 
 
 Revenue                 389,178    752,647       1,453       1,328           -          -     390,631         753,975 
 Other revenue               815      2,020         334         158           -         30       1,149           2,208 
                      ----------  ---------  ----------  ----------  ----------  ---------  ----------  -------------- 
 
 Reportable segment 
  revenue                389,993    754,667       1,787       1,486           -         30     391,780         756,183 
                      ----------  ---------  ----------  ----------  ----------  ---------  ----------  -------------- 
 
 
 Reportable segment 
  (loss)/profit          (7,161)      4,731    (13,808)     (9,554)       (178)      (953)    (21,147)         (5,776) 
                      ----------  ---------  ----------  ----------  ----------  --------- 
 
 Unallocated income 
  and expenses                                                                                 (6,083)        (10,517) 
                                                                                            ----------  -------------- 
 
 Loss from 
  operations                                                                                  (27,230)        (16,293) 
 Finance income                                                                                  5,528           3,334 
 Finance expenses                                                                              (5,291)         (4,228) 
 Share of profits 
  less losses 
  of associates                                                                                  4,541          17,898 
 Share of profits 
  less losses 
  of jointly 
  controlled 
  entities                                                                                     (6,069)         (1,980) 
 Loss on dilution of 
  interest 
  in an associate                                                                                    -         (2,074) 
 Net gain on sale of 
  available-for-sale 
  investments                                                                                       95           1,496 
 Change in fair 
  value of 
  investment 
  properties and 
  investment 
  properties under 
  development                                                                                    9,117          10,932 
 Impairment loss on 
 available-for-sale 
 investments                                                                                  (14,822)               - 
 Gain on 
  re-measurement of 
  derivative 
  financial 
  instruments 
  to fair value                                                                                    184             927 
                                                                                            ----------  -------------- 
 
 (Loss)/profit 
  before taxation                                                                             (33,947)          10,012 
 Taxation                                                                                      (1,681)         (2,008) 
                                                                                            ----------  -------------- 
 
 (Loss)/profit for 
  the year                                                                                    (35,628)           8,004 
                                                                                            ----------  -------------- 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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