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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Secure Property Development & Investment Plc | LSE:SPDI | London | Ordinary Share | CY0102102213 | ORD EUR0.01 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 4.00 | 3.50 | 4.50 | 4.00 | 4.00 | 4.00 | 0.00 | 08:00:16 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2020 to Apr 2025
TIDMSPDI
RNS Number : 9229S
Secure Property Dev & Inv PLC
30 September 2014
30 September 2014
Secure Property Development and Investment Limited PLC
("Secure" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2014
Significant progress with strategy
SECURE PROPERTY Development & Investments Ltd (LSE:SPDI), a South Eastern European focused property and investment company, today announces its half year results for the six months ended 30 June 2014.
Financial highlights:
-- Operational income increased by 9% to $1.93 million as at 30 June 2014 (30 June 2013: $1.78 million).
-- Annualised net operating income has further increased by 185% to $8million (2013: $2.8 million) since the period end following a number of accretive acquisitions.
-- Gross asset value increased by 33% to circa $72 million at 30 June 2014 from US$54 million at 31 December 2013.
-- Gross asset value since the period end has increased further to $120 million as a result of the latest acquisitions.
-- Net asset value was $50.7 million as at 30 June 2014 (31 December 2013: $52.2 million and 30 June 2013 $50.2 million), the slight fall being due primarily to a foreign exchange loss on Terminal Brovary.
-- The loan to value ratio as at 30 June 2014 stands at 38% (31 December 2013: 32%).
Operational highlights:
-- Completed the acquisition of Innovations Logistics Park in Bucharest, Romania, for EUR12.6 million. This asset contributes an annualised Net Operating Income ("NOI") of approximately $1.8 million.
-- Signed binding agreements (which were executed post period end in August 2014) for the acquisition of three more assets which will bring into the Company an additional annualized NOI of more than $3.1 million:
- a logistics terminal in the outskirts of Athens, rented mostly to the German logistics operator Kuehne + Nagel; an office building in Bucharest that houses the headquarters of Danone, the French multinational food company, in Romania; a portfolio of 122 apartments in Bucharest which are almost fully let.
-- These acquisitions have significantly broadened the geographical diversity of the Company's asset base, with 55% of its gross asset value located in Romania and Greece, and the balance in Ukraine.
Lambros Anagnostopoulos, Chief Executive Officer of Secure Property, said: "Against a challenging but improving economic backdrop we have made substantial progress with our strategy, which is focused on growth and diversification. This has led to a significant increase in annualised profitability cash generation as well as and a notable uplift in our gross asset value. "
- Ends -
Enquiries: SECURE PROPERTY Development & Investment + 380 44 459 3000 plc www.secure-property.eu Lambros Anagnostopoulos Constantinos Bitros SP Angel Corporate Finance LLP (NOMAD) Tercel Moore Jeff Keating +44 (0) 20 3463 2260 FTI Consulting Richard Sunderland Nick Taylor Ellie Sweeney +44 (0) 20 3727 1000 1. Management Report
1.1. Corporate Overview & Financial Performance
Hot Features
Premium
In summary
During the first half of 2014, the management has been successful
in its strategy of:
a) driving forward the growth and diversification plan,
the cornerstone of the Company's strategy to become a large
regional property company;
b) ensuring that the Ukrainian assets continued to produce
sustainable and recurring revenues; and,
c) addressing the lingering legal "legacy liabilities" (those
predating the Company's restructuring in August 2011) in
Odessa & Brovary.
While the economic climate in Europe improved substantially
in 2013 (with Greece and Cyprus addressing the issues required
to stimulate an economic recovery), 2014 started with troubles
in Ukraine which have evolved in a full blown military and
economic crisis. Currently the situation in eastern Ukraine
remains unstable with wider uncertainty still surrounding
the territorial integrity of Southern Ukraine. As a result
the Hryvnia experienced a substantial devaluation of circa
40%, while the wider Ukrainian economy remains challenged.
In line with our stated growth strategy, the Company transacted
several acquisitions in the greater South East European
region, and specifically in Romania and Greece. While Romania
is demonstrating the most robust economic fundamentals in
the region, Greece is recovering and also offers substantial
opportunities.
During the reporting period, the Company acquired the Innovations
Logistics Park, which is located on Bucharest's ring road
and is the main cold storage facility of Nestle in Romania.
The asset will generate a NOI of approximately US$1.8m for
the Company, starting from June 2014.
In addition, the Company signed binding Agreements (which
were executed in August 2014) for the acquisition of three
more assets:
a) a logistics terminal in the outskirts of Athens, rented
mostly to the German logistics operator Kuehne+Nagel;
b) an office building in Bucharest that houses (under a
12 year lease agreement) the headquarters of Danone in Romania;
and,
c) a portfolio of 122 apartments in Bucharest which are
almost fully let.
These three assets will bring into the Company an additional
annualized NOI of more than US$3.1m.
In June 2014, the Company engaged SP Angel as its Nominated
Advisor, a company that not only has the capabilities and
experience to act in such capacity but expressed both support
for SPDI's potential and a strong willingness to join us.
During the period, the Management continued to spend time
on finalizing the restructuring of the EBRD loan, which
has been agreed since March 2013, but was delayed until
January 2014 when the B Lender (Bank of Cyprus) gave its
agreement, only for EBRD and the borrower to then request
some additional clauses in the spring of 2014. However,
the Management believes that the restructuring will be signed
within 2014.
2. Regional Economic Developments (1)
Ukraine
According to the estimates, real GDP decreased by 1.1% year
on year ("yoy") in Q1 2014, which is well below the consensus
forecast of -5.3%, indicating that the political turmoil
has not yet fully affected the major economic sectors.
In Q1 2014, the Current Account Deficit shrank to 3.8%,
mainly because of decline in imports (-18.3% yoy). A major
reason for the latter is the decrease in energy imports
by 25.9% yoy, while non-energy imports dropped by 15.5%,
reflecting the lower domestic demand, as well as the depreciation
of the Hyrvnia.
The National Bank of Ukraine decided to raise the discount
rate to 9.5% from 6.5%. The social and political tensions
contribute further to macroeconomic conditions which pose
risks to price stability, with inflation growing at faster
rate in Q1 2014. It is indicative that inflation grew to
3.4% in March from 1.2% in February.
The International Monetary Fund Executive Board approved
an exceptional two year USD17 billion Stand-By Arrangement,
with USD3.2 billion being immediately disbursable. This
is expected to unlock further international assistance from
other donors such as World Bank and the EBRD.
Romania
Romania's Real GDP soared by 3.8% yoy in Q1 2014 from an
average growth of 1.6% per quarter in H2 2013. The Current
Account Deficit inched up by 0.2 pps to 0.2% of GDP, in
Q1 2014. Simultaneously, the trade deficit leveled off,
in yoy terms, at 0.4% of GDP, and the import growth was
offset by an increase in exports (10.1% yoy in Q1 2014 vs
13.3% in Q4 2013).
On July 1(st) , the National Bank of Romania decided to
keep the annual monetary policy rate unchanged at 3.5% and
to pursue adequate liquidity management in the banking system.
Moreover, it decided to lower the minimum reserve requirement
ratio on foreign currency-denominated liabilities of credit
institutions to 16% from 18%.
Standard and Poor's upgraded Romania to investment grade
by raising its credit rating by one notch to BBB-. This
decision came mainly as a result of an adjustment in Romania's
external imbalances, such as the Current Account Deficit
that from a high of 14.3% of GDP in 2007 decreased to 1.1%
in 2013.
During the European Parliamentary elections the ruling Social-Democratic
Union gained 37.6%, winning 16 out of a total of 32 seats,
reflecting its dominance, while the liberal PNL was the
second largest party with 15% (6 seats).
Bulgaria
Real GDP growth in Bulgaria stood at 1.2% yoy in Q1 2014,
which is the same level of increase seen in the first quarter.
However, a positive 3.1% yoy increase in domestic demand
is significantly higher than the 0.6% yoy decrease seen
in Q4 2013. The Current Account Deficit narrowed by 0.8
pps to 0.2% of GDP in Q1 2014, mainly due to lower income
inflows related with FDI and higher official transfers.
In addition, the trade deficit widened to 2% of GDP, mainly
because of a steep decrease of 6.9% in exports, particularly
to Ukraine and Turkey (-15.2%).
The Coalition government of Bulgaria, led by the Bulgarian
Socialist Party and the Movement for Rights and Freedoms,
faced a vote of no confidence during the European Parliaments
elections on May 25(th) , with the main opposition party
(GERB) gaining 30.4% of vote and the Coalition for Bulgaria
gaining 18.9%.
Corporate Commercial Bank, the fourth-largest lender in
terms of assets, and owner of the local unit of Credit Agricole,
was placed in receivership. As a result, the Central Bank
of Bulgaria decided to increase the capital of the bank,
whilst also adopting amendments to BNB Ordinance No. 6 on
Extending Collateralized Lev Loans to Banks. Amongst other
things, these amendments set the required percentage of
collateral at 100% of the original amount of the resources
provided, in case of need. Moreover, the Bulgarian Central
Bank reduced interest rates on deposits held with Corporate
Commercial Bank down to the average market rate.
Greece
The Greek economy is expected to record marginally positive
growth in 2014 for the first time in six years, as subdued
domestic demand will be offset by robust exports. A return
to stronger, more broad based growth is anticipated for
2015 when rising export orders on the back of higher external
demand and improving competitiveness of Greek producers
eventually feeds into private investment activity. A fiscal
slippage is still the main risk to growth. In addition,
Greek economy has benefited from the spectacular increase
in tourist arrivals in 2013 and in the first semester 2014.
[1] Sources : World Bank Group, Eurostat, National Bank
of Greece, Elstat, UniCredit Group - research Division,
Eurobank Research, NBG Strategy and Economic Research Division,
National Institute of Statistics- Romania, National Statistical
Institute -Republic of Bulgaria.
3. Real Estate Market Developments(2)
3.1 Ukraine
General
he social and political turbulence that began in Ukraine
in late 2013 has resulted in a significant number of potential
deals being put on hold.
Logistics Market
In Q1 2014, the total warehouse stock in Kiev stood at 1,489,000
sqm, having upward prospects for 2014. The vacancy rate
leveled off at 3.5%, having improved consistently from 24%,
five years ago.
Office Market
In Q1 2014 there was a 28.7% yoy increase in new office
development to 91,400 sqm, which is the highest level of
quarterly completion since 2011. 63% of the sqm delivered
is Class B, with 76% of the space located on the Right Bank
of Kiev. The high level of completions in combination with
relatively low demand pushed the vacancy rate from 18.7%
in Q4 2013 to 22.1% in Q1 2014.
Retail Market
The political turmoil resulted in the mothballing of almost
50% of the shopping centres which were expected to complete
in 2014. In Q1 2014, demand decreased significantly and
as a result the vacancy rate almost doubled to 6.3%. The
prime rent remained flat at USD100 sqm/year.
3.2 Romania
General
In 2013, the investment market recorded deals (yielding
assets) with a total volume of approximately EUR300 million,
an increase of almost 100% compared to 2012.
Logistics Market
The rate of construction of new warehouses remains low,
although vacancy rate dropped to below 14% in 2013.
Office Market
In Q1 2014, two office buildings were completed, adding
25,000 sqm of space and pushing up the total stock to 2.17
million, constituting 38% of class A space and 62% of Class
B space. During the same period, 66,500 sqm of office space
was transacted, which is up by 8% compared with the same
quarter of 2013. The headline rent and yield remained relatively
stable at EUR18 per sqm per month and 8.25%, respectively.
Retail Market
Total Romanian traditional retail stock has increased by
47% over the last five years, although the speed of development
has decelerated during the last two. 2014 is expected to
be the year with the lowest levels of new supply since 2008,
although supply is expected to increase from 2015 to 2017.
In addition, rents have begun to stabilise following the
limited levels of new supply that came online during 2013
and their steep decrease of around 10%, during 2012.
Residential Market
In Q1 2014, on yoy terms, there are signs of clear stabilization
in residential prices despite an aggregated decrease of
over 40% from 2008. Prices are expected to pick up in 2014
and accelerate in 2015.
3.3 Bulgaria
General
According to preliminary results, the overall volume of
construction in the first half increased 6.2% yoy, mainly
driven by civil engineering (+14.7% yoy), whilst building
construction dropped slightly by 0.1% yoy.
Logistics Market
In Q1 2014, total stock in Sofia inched up by 1% over
the previous quarter at 803,000 sqm, due to the diminished
pipeline, whilst, in Q1 2014, the lowest quarterly construction
volume since 2010 was recorded. Rental levels remained
stable at EUR3.5 per sqm per month, while the market continued
to be characterized by a lack of high-quality stock.
Office Market
Total office stock in Sofia increased by approximately
30,000 sqm to 1.68 mln sqm, while the pipeline contracted
further to 143,000 sqm. The major players in the market
were the IT and outsourcing sectors.
Retail Market
In Q1 2014, the total leasable area of operational shopping
malls stood at 688,000 sqm, while there is another 47,000
sqm that represents existing, but non-operational shopping
centers. Against this backdrop, the main retailers focused
on established projects in the large cities.
3.4 Greece
General
The Greek real estate market is showing signs of emerging
from a five year recession with a significant amount of
distressed assets, but also with plenty of interested
investors looking for opportunities.
Office Market
Prime rents have stabilized at EUR19.00/sqm/month, although
price levels remain almost 60% off their ten year high
and no significant construction projects have been initiated.
The overall vacancy rate, which at the end of Q2 2014
was 11.2%, is expected to decline further by the erosion
of current overhang space. The number of investors remains
limited.
Retail Market
Deflation is providing some relief to domestic budgets
and is set to continue throughout 2014. Meanwhile, retail
sales volumes recorded a significant upturn in April with
growth of 7.3% year on year. Another promising factor
is that a considerable number of units previously occupied
by banks have now been leased to retail tenants, especially
in central locations, despite a slow improvement in economic
conditions.
2 Sources : National Bank of Greece, Bank of Greece, Eurobank,
Jones Lang LaSalle, DTZ Research, CBRE Research, Colliers
International, Cushman & Wakefield, MBL Research.
4. Property Assets
4.1 Aisi Brovary - Terminal Brovary Logistic Park , Ukraine
Project description
The Brovary Logistic Park consists of a 49,180 sq m GLA Class
A warehouse and associated office space. The building has
large facades to Brovary ring road, at the intersection of
the Brovary ( -95/ -01 highway) and Borispil ring roads.
It is located 10 km from Kiev city border and 5 km from Borispol
international airport.
The building is divided into six independent sections (each
at least 6,400 sq m), with internal clear ceiling of 12m
height and industrial flooring constructed with an anti-dust
overlay quartz finish. The terminal accommodates 90 parking
spaces for cars and trucks, as well as 24 hour security and
municipal provided sewage, water and garbage collection.
Current status
As of the end of June, the building remained 90% leased,
with a 100% lease of its warehouse capacity leased.
4.2 Innovations Logistics Park, Romania
Project description
The Park incorporates approximately 8,470 sqm of multipurpose
warehousing space, 6,395 sqm of cold storage and 1,705 sqm
of office space. It is located in the area of Clinceni, south
west of Bucharest center, 200m from the city's ring road
and 6km from Bucharest-Pitesti (A1) highway. Its construction
was tenant specific, was completed in 2008 and it comprises
four separate warehouses, two of which offer cold storage.
Current status
As of the end of June the warehouse was 100% leased with
Nestle Ice Cream Romania being the anchor tenant (100% of
cold space and 72% of total NOI), following the recent renewal
of its lease .
4.3 Dimitriou Warehouse and Photovoltaic Park, Greece
Project description
The 17,756 sqm complex that consists of industrial and office
space is situated on a 44,268 sqm land plot in the West Attica
Industrial Area (Aspropyrgos). It is located at exit 4 of
Attiki Odos (the Athens ring road) and is 10 minutes from
the port of Piraeus and the National Road. The roofs of the
warehouse buildings house a photovoltaic park of 1,000KWp.
The buildings are characterized by high construction quality
and state-of-the-art security measures. The complex includes
100 car parking spaces, as well as two central gateways (south
and west).
Current status
The Company reached a binding agreement in August for the
acquisition of the asset which is expected to be concluded
upon the transfer of the asset from previous owner to a newly
formed company, and completion of certain other conditions.
The complex is currently 100% occupied, while the major tenant
(approximately 70%) is the international transportation and
logistics company Kuehne + Nagel .
4.4 EOS Business Park - Danone headquarters, Romania
Project description
The park consists of 5,000 sqm of land including a class
"A" office building of 3,386 sqm GLA and 90 parking places.
It is located next to the Danone factory, in the North-Eastern
part of Bucharest with access to the Colentina Road and the
Fundeni Road. The Park is very close to Bucharest's ring
road and the DN 2 national road (E60 and E85) and is also
serviced by public transportation. The park is highly energy
efficienct.
Current status
The Company has reached a binding agreement in August for
the acquisition of the asset which is expected to be finalised
upon completion of certain conditions. The complex is currently
fully let to Danone Romania, the French multinational food
company, until 2026.
4.5 Residential portfolio
-- Romfelt Plaza (Doamna Ghica), Bucharest, Romania
Project description
Romfelt Plaza is a residential complex located in Bucharest,
Sector 2, relatively close to the city center, easily accessible
by public transport and nearby supporting facilities and
green areas.
The residential unit portfolio acquired by the Company comprises
2,990 sqm across nine studios, six two bed apartments and
thirteen three bed apartments, all located in buildings A,
D, E, F, and I.
Current status
As of the date of issuance of this report the total existing
leases stood at 21 indicating an occupancy rate of 75%.
-- Linda Residence, Bucharest, Romania
Project description
Linda Residence is a residential complex located in Bucharest,
Sector 3, close to subway transportation which connects the
project to all areas in Bucharest in less than 30 minutes.
The 2,642 sqm residential portfolio acquired by the Company
comprises twenty seven apartments including two studios,
fifteen two bed, eight three bed and two four bed apartments,
as well as 27 storage spaces, and 20 surface parking spaces.
Current status
As of the date of issuance of this report there are a total
of 12 total existing leases indicating an occupancy rate
of approximately 44%.
-- Monaco Towers, Bucharest, Romania
Project description
Monaco Towers is a residential complex located in South Bucharest,
Sector 4, enjoying good car access due to the large boulevards
, public transportation, and a shopping mall (Sun Plaza)
reachable within a short driving distance or easily accessible
by subway.
The residential portfolio acquired by the Company comprises
forty apartments, twenty five two-room apartments and fifteen
three-room apartments, totaling 3,609 sqm.
Current status
As of the date of issuance of this report the total existing
leases stood at 30 indicating an occupancy rate of 75%.
-- Blooming House, Bucharest, Romania
Project description
Blooming House is a residential development project located
in Bucharest, Sector 3, a residential area with the biggest
development and property value growth in Bucharest , offering
a number of supporting facilities such as access to Vitan
Mall, kindergartens, café, schools and public transportation
(both bus and tram).
The residential unit portfolio acquired by the Company comprises
twenty seven apartments, comprising twelve two bed, forteen
three bed, and one five bed, totaling 2,387 m(2) , plus 28
parking spaces, 13 above ground, 15 underground.
Current status
At the end of the reporting period the total existing leases
stood at eighteen (18) indicating an occupancy rate of approximately
67%.
4.6 Land Bank
-- Aisi Bela - Bela Logistic Center
Project description
The site consists of a 22.4 ha plot of land with zoning allowance
to construct up to 103,000 sqm GBA industrial properties
and is situated on the main Kiev - Odessa highway, 20km from
Odessa port, in an area of high demand for logistics and
distribution warehousing.
Current status
Following the completion of planning and issuance of permits
in 2008, construction commenced, with column foundation and
peripheral walls for 100,000 sqm completed in 2009. Development
was then put on hold, due to lack of funding and deteriorating
market conditions.
-- Kiyanovskiy Lane - Land for Residential Complex
Project description
The project consists of 0.55 ha of land located at Kiyanovskiy
Lane, near Kiev city centre. It is destined for the development
of business to luxury residences with beautiful protected
views overlooking the scenic Dnipro River, St. Michaels'
Spires and historic Podil.
Current status
The concept design of the project is under review with the
proposed development to include residential apartments (GBA
of circa 21,000 sqm) and 100 parking spaces across two basement
levels.
-- Tsymlyanskiy Lane - Land for Residential Complex
Project description
The 0.36 ha plot is located in the historic and rapidly developing
Podil District in Kiev. The Company owns 55% of the plot,
with one local co-investor owning the remaining 45%.
Current status
In 2009, all necessary documents were submitted to relevant
authorities for approval and issuance of a construction permit.
The plan was to develop approximately 10,000 sqm GBA of 40
high end residential units and office spaces on lower floors,
as well as 41 parking spaces over three underground levels.
Since then, the project has been mothballed.
-- Balabino-Land for Retail/Entertainment Development
Project description
The 26.38 site is situated on the south entrance of Zaporozhye
city, three km away from the administrative border of Zaporozhye.
It borders the Kharkov-Simferopol Highway (which connects
eastern Ukraine and Crimea and runs through the two largest
residential districts of the city) as well as another major
artery accessing the city centre.
Current status
The site is zoned for retail and entertainment and various
development options are being evaluated as per the market's
needs.
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2014
Note Six month ended
---------------------------
30 June
30 June 2014 2013
US$ US$
Operational income 7 1.926.819 1.784.299
Investment Property gains derived
from functional currency devaluation 14 18.122.951 -
Administration expenses 8 (2.115.054) (1.393.092)
Investment property operating expenses 9 (349.231) (378.927)
Other operating income/(loss), net 10 (22.780) 226.850
Gain realized on acquisition 14 536.068 -
Operating profit 18.098.773 239.130
Finance costs, net 11 (774.401) (783.710)
Foreign exchange losses 12 (19.993.208) (25.399)
Income/(loss) before tax (2.668.836) (569.979)
Income tax expense 13 (17.719) -
Profit/(loss) for the period (2.686.555) (569.979)
Other comprehensive (loss)/income
Exchange difference on translation
of foreign operations 18 42.976 43.777
Total comprehensive loss for the period (2.643.579) (526.202)
Profit/(loss) attributable to:
Owners of the parent (2.648.931) (565.692)
Non-controlling interests (37.624) (4.287)
------------- ------------
(2.686.555) (569.979)
------------- ------------
Total comprehensive loss attributable
to:
Owners of the parent (2.605.956) (521.915)
Non-controlling interests (37.624) (4.287)
------------- ------------
(2.643.579) (526.202)
------------- ------------
Profit/(losses) per share (US$ per
share): 6
Basic loss for the period attributable
to ordinary equity owners of the parent (0,09) (0,02)
Diluted loss for the period attributable
to ordinary equity owners of the parent (0,09) (0,02)
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2014
30 June 31 December 30 June
Note 2014 2013 2013
US$ US$ US$
ASSETS
Non-current assets
Investment property 14b 57.378.800 39.600.000 39.270.576
Investment property under construction 14a 9.000.000 9.000.000 8.353.161
Advances for investments 14c 5.000.000 5.000.000 5.000.000
Property, plant and equipment 87.749 142.658 163.577
Long-term assets 171.522 - -
--------------- ------------- -------------
71.638.071 53.742.658 52.787.314
Current assets
Prepayments and other current 15
assets 4.182.324 4.958.887 5.035.303
Cash and cash equivalents 16 4.205.896 13.333.497 14.463.850
8.388.220 18.292.384 19.499.153
Total assets 80.026.291 72.035.042 72.286.467
EQUITY AND LIABILITIES
Issued share capital 17 5.771.208 5.762.809 5.728.918
Share premium 123.292.416 123.141.051 121.388.224
Convertible shares 17 956.871 - -
Translation difference reserve 18 (1.297.695) (1.340.671) (1.205.749)
Accumulated losses (78.004.340) (75.355.408) (75.735.952)
--------------- ------------- -------------
Equity attributable to equity
holders of the parent 50.718.460 52.207.781 50.175.441
Non-controlling interests 19 1.025.641 1.063.265 1.034.508
Total equity 51.744.101 53.271.046 51.209.949
Non-current liabilities
Interest bearing borrowings 20 - - 1.872.630
Finance lease liabilities 24 9.987.452 534.264 526.169
Trade and other payables 21 443.095 662.599 671.004
Deposits from tenants 22 588.847 435.250 427.918
--------------- ------------- -------------
11.019.394 1.632.113 3.497.721
Current liabilities
Interest bearing borrowings 20 14.828.383 15.276.622 15.302.805
Trade and other payables 21 1.266.860 1.075.268 1.371.500
Taxes payable 23 279.945 584.102 460.197
Provisions for taxes 23 110.968 164.144 416.641
Deposits from tenants 22 162.492 - -
Finance lease liabilities 24 614.148 31.747 27.654
--------------- ------------- -------------
17.262.796 17.131.883 17.578.797
Total liabilities 28.282.190 18.763.996 21.076.518
Total equity and liabilities 80.026.291 72.035.042 72.286.467
US$ Net Asset Value (NAV) per share:
6
Basic NAV attributable to equity
holders of the parent 1,76 1,85 1,95
Diluted NAV attributable to equity
holders of the parent 1,54 1,62 1,71
On 26(th) September 2014 the Board of Directors of SECURE PROPERTY DEVELOPMENT AND INVESTMENT PLC authorised these financial statements for issue.
Lambros Anagnostopoulos Paul Ensor Constantinos Bitros
Director & Chief Executive Director & Chairman Chief Financial Officer
Officer of the Board
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2014
Attributable to equity holders
of the Parent
Share Share Convertible Accumulated Foreign Total Non- Total
capital premium, shares losses, net currency controlling
net of translation interests
non-controlling reserve
interest
US$ US$ US$ US$ US$ US$ US$ US$
Balance - 31 December 5.531.191 104.779.503 - (75.170.260) (1.249.526) 33.890.908 1.038.795 34.929.703
2012
Profit/(Loss) for the
period - - - (565.692) - (565.692) (4.287) (569.979)
Issue of share 197.727 16.608.721 - - - 16.806.448 - 16.806.448
capital
Foreign currency
translation
reserve - - - - 43.777 43.777 - 43.777
Balance - 30 June 5.728.918 121.388.224 - (75.735.952) (1.205.749) 50.175.441 1.034.508 51.209.949
2013
Profit/(Loss) for the
period - - - 380.544 - 380.544 28.757 409.301
Issue of share 33.891 1.752.827 - - - 1.786.718 - 1.786.718
capital
Foreign currency
translation
reserve - - - - (134.922) (134.922) - (134.922)
Balance - 31 December 5.762.809 123.141.051 - (75.355.408) (1.340.671) 52.207.781 1.063.265 53.271.046
2013
Profit/(Loss) for the - - - (2.648.931) - (2.648.931) (37.624) (2.686.555)
period
Issue of share
capital,
net (note 17) 8.399 151.365 - - - 159.764 - 159.764
Issue of convertible
shares - - 956.871 - - 956.871 - 956.871
Foreign currency
translation
reserve - - - - 42.976 42.976 - 42.976
Balance - 30 June 5.771.208 123.292.416 956.871 (78.004.340) (1.297.695) 50.718.460 1.025.641 51.744.101
2014
Companies which do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits. Special contribution for defence at 20% will be payable on such deemed dividends to the extent that the shareholders (companies and individuals) are Cyprus tax residents. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defence is payable on account of the shareholders.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2014
Note 30 June 30 June
2014 2013
US$ US$
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax and non-controlling interest (2.668.836) (569.979)
Adjustments for:
Impairment loss/(reversal) of prepayments
and current assets 10 - 8.161
Accounts payable written off 10 - (339.207)
Depreciation of property, plant and equipment 8.139 5.795
Other expenses/(income) (135.737) 82.089
Interest expense 11 794.090 674.372
Interest income 11 (72.509) (46.630)
Change in provisions (53.176)
Effect of foreign exchange difference 12 19.993.208 25.399
Valuation gains from investment property 14 (18.122.951) -
Gain on acquisition 14 (536.068) -
Cash flows used in operations before working
capital changes (793.840) (160.000)
Increase in prepayments and other current
assets 15 (768.251) (157.191)
Decrease in VAT recoverable 15 166.866 289.589
Decrease in trade and other payables 21 (473.688) (577.775)
Change in other taxes and duties 37.318 (3.545)
Increase in deposit from tenants 208.263 -
Income tax paid (359.194) (66.085)
Net Working Capital Changes (1.188.686) (515.007)
Net cash flows used in operating activities (1.982.526) (675.007)
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in payables for construction 21 - (218.007)
Capital expenditures on investment property 14 - (40.576)
Decrease in financial lease liabilities 24 (11.194) (39.998)
Changes of property, plant and equipment (578) (73.041)
Interest received 72.509 46.630
Acquisition of subsidiary 14 (5.936.994) -
Net cash flows used in investing activities (5.876.257) (324.992)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 17 - 17.045.000
Repayment of borrowings (300.025) (1.216.177)
Interest and financial charges paid (952.558) (603.342)
Net cash flow from financing activities (1.252.583) 15.225.481
Effect of foreign exchange rates on cash (16.235) (18.079)
Net increase/(decrease) in cash at banks (9.127.601) 14.207.403
Cash: 16
At beginning of the period 13.333.497 256.447
At end of the period 4.205.896 14.463.850
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six monthsended 30 June 2014
1. General Information
Country of incorporation
SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC (the "Company") was incorporated in Cyprus on 23 June 2005 and is a public limited liability company, listed on the London Stock Exchange (AIM): ISIN CY0102102213. Its registered office is at Kyriakou Matsi 16, Eagle House, 10(th) floor, Agioi Omologites, 1082 Nicosia, Cyprus.
Principal activities
The principal activities of the Group, which are unchanged, are directly or indirectly to invest in and/or manage real estate properties as well as real estate development projects in Central, East and South East Europe (the "Region"). These include the acquisition, development, operation and selling of property assets, in major population centres in the Region.
The Group maintains offices in Kiev, Ukraine and Nicosia, Cyprus, while it has an affiliate in Bucharest, Romania.
As at the reporting date, the Group has 19 Full Time Equivalent (FTEs, 10 in Ukraine and 6 in Romania) employed persons, including the CEO, the CFO and the Commercial Director (December 2013 à 13, June 2013 à 12, December 2012 à 13).
2. Adoption of new and revised Standards and Interpretations
The accounting policies adopted for the preparation of these interim condensed consolidated financial statements for the six months ended 30 June 2014 are consistent with those followed for the preparation of the annual financial statements for the year ended 31 December 2013.
3. Significant accounting policies
Basis of preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2014 have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting".
Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with the International Financial Reporting Standards ("IFRS") have been condensed or omitted. However, such information reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of the Group's management, necessary to fairly state the results of interim periods.
Interim results are not necessarily indicative of the results to be expected for the full year.
The 31 December 2013 statement of financial position was derived from the audited consolidated financial statements.
Basis of consolidation
The interim condensed consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries).
The Group's consolidated financial statements comprise the financial statements of the parent company, SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC and the financial statements of the following subsidiaries:
Name Country Related Asset Holding %
of
--------------------------- --------------------------------------
incorporation as at 30.06.2014 as at 30.06.2013
--------------------------- --------------- ----------------------- ----------------- -------------------
SECURE Capital Limited Cyprus 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
Brovary Logistics
SECURE Logistics Limited Cyprus Park 100 100
--------------------------- --------------- ----------------------- ----------------- -------------------
Brovary Logistics
LLC Aisi Brovary Ukraine Park 100 100
--------------------------- --------------- ----------------------- ----------------- -------------------
Brovary Logistics
LLC Terminal Brovary Ukraine Park 100 100
--------------------------- --------------- ----------------------- ----------------- -------------------
LLC Aisi Ukraine Ukraine Kiyanovskiy Residence 100 100
--------------------------- --------------- ----------------------- ----------------- -------------------
LLC Trade Center Ukraine Kiyanovskiy Residence 100 100
--------------------------- --------------- ----------------------- ----------------- -------------------
Tsymlianskiy
LLC Almaz--pres--Ukrayina Ukraine Residence 55 55
--------------------------- --------------- ----------------------- ----------------- -------------------
Bela Logistic
LLC Aisi Bela Ukraine Park 100 100
--------------------------- --------------- ----------------------- ----------------- -------------------
Zaporizhia Retail
LLC Mirelium Investments Ukraine Center 100 100
--------------------------- --------------- ----------------------- ----------------- -------------------
Zaporizhia Retail
LLC Interterminal Ukraine Center 100 100
--------------------------- --------------- ----------------------- ----------------- -------------------
LLC Aisi Outdoor Ukraine 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
LLC Aisi Vida Ukraine 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
LLC Aisi Val Ukraine 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
LLC Aisi Ilvo Ukraine 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
LLC Aisi Consta Ukraine 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
LLC Aisi Roslav Ukraine 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
LLC Aisi Donetsk Ukraine 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
LLC Retail Development
Balabino Ukraine 100 100
--------------------------- ---------------------------------------- ----------------- -------------------
Myrnes Innovations Cyprus Innovations Logistics 100 -
Park Limited Park
--------------------------- --------------- ----------------------- ----------------- -------------------
Best Day Real Estate Romania Innovations Logistics 100 -
SRL Park
--------------------------- --------------- ----------------------- ----------------- -------------------
As of the reporting date the subsidiaries as LLC Mirelium Investments,
LLC Aisi Outdoor, LLC Aisi Vida, LLC Aisi Val, LLC Aisi Consta,
LLC Aisi Roslav and LLC Aisi Donetsk were under the merging process
to LLC Aisi Ilvo. The reorganization (merger) process is expected
to be finished in H2 2014.
During the reporting period the Company acquired Myrnes Innovations
Park and Best Day Real Estate Srl (note 14).
Functional and presentation currencies
The management believes that US Dollar reporting better reflects
the economic substance of the underlying events and circumstances
relevant to the Group itself.
The US Dollar is the functional currency of the Cyprus companies
(one only operates in Euro) of the Group while RON is the functional
currency of the newly acquired Romanian subsidiary (note 14). Ukrainian
Hryvnia has been determined as functional currency for all Ukrainian
companies of the Group.
The interim condensed consolidated financial statements are presented
in US Dollar which is the Group's presentation currency.
As management records the consolidated financial information of
the entities domiciled in Ukraine in Hryvnia and the consolidated
financial information of the entities domiciled in Romania in Euro,
in translating financial information of the entities domiciled
in Ukraine and Romania into US Dollars for incorporation in the
consolidated financial information, the Group follows a translation
policy in accordance with International Accounting Standard No.
21, "The Effects of Changes in Foreign Exchange Rates", and the
following procedures are performed:
* All assets and liabilities are translated at closing
rate;
* Income and expense items are translated using
exchange rates at the dates of the transactions, or
where this is not practicable the average rate has
been used;
* All resulting exchange differences are recognized as
a separate component of equity;
* When a foreign operation is disposed of through sale,
liquidation, repayment of share capital or
abandonment of all, or part of that entity, the
exchange differences deferred in equity are
reclassified to the consolidated statement of
comprehensive income as part of the gain or loss on
sale.
Average for the first 6 months 30 June
ended
---------- --------------------------------- ----------------
Currency 2014 2013 2014 2013
---------- ---------------- --------------- ------- -------
UAH 10,275 7,993 11,823 7,993
---------- ---------------- --------------- ------- -------
RON 3,2339 3,3923 3,2138 3,4151
---------- ---------------- --------------- ------- -------
The relevant exchange rates of the Central Bank of Ukraine and
Central Bank of Romania used in translating the financial information
of the entities domiciled in Ukraine and in Romania into US Dollars
are as follows:
4. Financial risk Management
4.1 Financial risk factors
The Group is exposed to country risk, stemming from the political
and economic environment of every country in which it operates.
4.1.1. Operating Country Risks
4.1.1.1 Ukraine
In recent years, the Ukrainian economy has been characterized
by a number of features that contribute to economic instability,
including a relatively weak banking system providing limited
liquidity to Ukrainian enterprises, significant capital outflows,
and low wages for a large portion of the Ukrainian population.
On top, recent frictions with Russia have increased further
the uncertainty both politically and economically.
The implementation of reforms has been impeded by lack of political
consensus, controversies over privatization, the restructuring
of the energy sector, the removal of exemptions and privileges
for certain state-owned enterprises or for certain industry
sectors, the limited extent of cooperation with international
financial institutions and non-stable taxing environment.
Although Ukraine had made significant progress in increasing
its gross domestic product, decreasing inflation, stabilizing
its currency, increasing real wages and improving its trade
balance, these gains were not sustainable over the longer term
and may be reversed by the current political uncertainty which
plunges the country into a state of potential war and separatism.
In February 2014, the Parliament of Ukraine voted for reinstatement
of the 2004 Constitution and dismissal of the incumbent President
and a transitional government has been formed. On March 16,
2014 the residents of Crimea peninsula voted overwhelmingly
for their region to secede to Russia in a referendum not globally
accepted as legal and a week later Crimea was annexed by Russia.
On 25 May 2014, presidential elections took place and a new
President of Ukraine was elected.
Ukraine's government has to rely to a significant extent on
official or multilateral borrowings to avoid bankruptcy, finance
its budget deficit, fund its payment obligations under domestic
and international borrowings and support foreign exchange reserves.
These borrowings are to be conditioned on Ukraine's ability
to achieve a stable political environment to implement strategic,
institutional and structural reforms but seems to be mainly
depending on how long and how severe the current geopolitical
conflict will last; Further negative developments on these fronts
may result in Ukraine not finding adequate financing which could
have a material adverse effect on the Ukrainian economy as a
whole, and thus, on the Group's business prospects.
Current Ukraine relations with Russia may adversely affect supplies
of energy resources from Russia to Ukraine and Ukraine's revenues
derived from transit charges for Russian oil and gas towards
Europe. It already has negative effects on certain sectors of
the Ukrainian economy which could under certain conditions affect
the Group's business.
The Ukrainian legal system has also been developing to support
a market-based economy. Ukraine's legal system is, however,
in transition and is, therefore, subject to greater risks and
uncertainties than a more mature legal system. In particular,
risks associated with the Ukrainian legal system include, but
are not limited to:
(i) inconsistencies between and among the Constitution of Ukraine
and various laws, presidential decrees, governmental, ministerial
and local orders, decisions, resolutions and other acts;
(ii) provisions in the laws and regulations that are ambiguously
worded or lack specificity and thereby raise difficulties when
implemented or interpreted;
(iii) difficulty in predicting the outcome of judicial application
of Ukrainian legislation; and
(iv) the fact that not all Ukrainian resolutions, orders and
decrees and other similar acts are readily available to the
public or available in understandably organized form.
Furthermore, several fundamental Ukrainian laws either have
only relatively recently become effective or are still pending
hearing or adoption by the Parliament. The recent origin of
much of Ukrainian legislation, the lack of consensus about the
scope, content and pace of economic and political reform and
the rapid evolution of the Ukrainian legal system in ways that
may not always coincide with market developments, place the
enforceability and underlying constitutionality of laws in doubt,
and result in ambiguities, inconsistencies and anomalies.
In addition, Ukrainian legislation often contemplates implementing
regulations. Often such implementing regulations have either
not yet been promulgated, leaving substantial gaps in the regulatory
infrastructure, or have been promulgated with substantial deviation
from the principal rules and conditions imposed by the respective
legislation, which results in a lack of clarity and growing
conflicts between companies and regulatory authorities.
Tax laws are changing and compared to more developed market
economies are in a non-mature level thus creating often an unclear
tax environment of unusual complexity. This particularly may
affect negatively the ability of the Group to recuperate VAT
paid and/or to utilize operating losses as a carry forward tax
shield.
Ukraine's current political and economic situation is subject
to rapid change and the information set out in these financial
statements may become outdated relatively quickly.
Since November 2013 the Ukrainian Hryvnia devalued against major
world currencies and significant external financing is required
to maintain stability of the economy. The Government of Ukraine
has been negotiating with the International Monetary Fund ("IMF")
and other financial institutions a provision of the financial
aid and in April 2014 the Board of Governors of the IMF endorsed
a two-year loan program for Ukraine in the total amount of US$
17,010 million, out of which an installment of US$ 3,190 million
was already obtained in May 2014. Ukraine's sovereign rating
is at the level of CCC with a stable outlook.
Stabilization of the economy and the political situation depends,
to a large extent, upon success of the Ukrainian government's
efforts, yet further economic and political developments are
currently unpredictable and their adverse affect on the Ukrainian
economy may continue.
As of the date of this report, all operations of the Group's
throughout Ukraine continued to be carried out normally.
4.1.1.2 Cyprus
During the past 10 years Cyprus has become an established financial
center taking advantage of favorable double tax treaties with
various countries around the world, most importantly with Eastern
European countries where the Company operates. Due to the world
financial crisis erupting in 2008 and the ensuing debt crisis
which had a liquidity effect of the Cypriot banking system as
in all of the south and east European countries, following the
restructuring of the Greek public debt certain of the Cypriot
banks have taken a blow to their solvency (write off of EUR4,5bn
of Greek debt) and have requested the support of the ECB through
the ELA mechanism.
Thus, the indebtedness of the Cypriot Republic and its two main
banks Bank of Cyprus and Cyprus Popular Bank (Laiki) created
the basis for the country to be part of a financial rescue plan
under the supervision of the IMF, the ECB and the European Union
in early 2013.
At the same time, the recent discovery of potentially significant
natural gas and oil deposits within the boundaries of the Cypriot
exclusive economic zone perplexes the geographic and political
relationships and developments as Cyprus is in the crossroad
of 3 continents.
Any failure to effect and implement an economic restructuring
plan may have a significant negative effect on the financials
of the Cypriot economy that could lead to a default and the
abandonment of the Euro currency. Such result would have a destabilizing
effect on the operations of the Company at the corporate level.
On that note, the Company had proactively evaluated the probable
effect of the measures in relation to the levy on deposits and
the restrictions on capital movement applied to Cyprus based
financial institutions. The Company held most of its liquidity
with non-Cypriot owned banking institutions, partly in Cyprus
and partly outside Cyprus and to this date all operations of
the Group's throughout Ukraine continued to be carried out normally.
4.1.2 Risks associated with property holding
Several factors may affect the economic performance and value
of the Group's properties, including:
* risks associated with construction activity at the
properties, including delays, the imposition of liens
and defects in workmanship;
* the ability to collect rent from tenants, on a timely
basis or at all;
* the amount of rent and the terms on which lease
renewals and new leases are agreed being less
favourable than current leases;
* cyclical fluctuations in the property market
generally;
* local conditions such as an oversupply of similar
properties or a reduction in demand for the
properties;
* the attractiveness of the property to tenants or
residential purchasers;
* decreases in capital valuations of property;
* changes in availability and costs of financing, which
may affect the sale or refinancing of properties;
* covenants, conditions, restrictions and easements
relating to the properties;
* changes in governmental legislation and regulations,
including but not limited to designated use,
allocation, environmental usage, taxation and
insurance;
* the risk of bad or unmarketable title due to failure
to register or perfect our interests or the existence
of prior claims, encumbrances or charges of which we
may be unaware at the time of purchase;
* the possibility of occupants in the properties,
whether squatters or those with legitimate claims to
take possession;
* the ability to pay for adequate maintenance,
insurance and other operating costs, including taxes,
which could increase over time; and
* political uncertainty, acts of terrorism and acts of
nature, such as earthquakes and floods that may
damage the properties.
4.1.3 Property Market price risk
Market price risk is the risk that the value of the Company's
portfolio investments will fluctuate as a result of changes
in market prices. The Group's assets are susceptible to market
price risk arising from uncertainties about future prices of
the investments. The Group's market price risk is managed through
diversification of the investment portfolio, continuous elaboration
of the market conditions and active asset management.
The prevailing global economic conditions throughout 2008-2010
and the ensuing Euro zone Sovereign Debt crisis have had a considerable
effect on the market prices of the current portfolio investments
of the Group.
In cases that the Board of Directors deemed necessary, it has
taken provisions on the assets' valuation in order to ensure
that the asset value is presented within the financial statements
of the Group in such a way as to take into account various uncertainties.
To quantify the value of its assets and/or indicate the possibility
of impairment losses, the Company commissioned internationally
acclaimed valuers.
4.1.4 Interest rate risk
Interest rate risk is the risk that the value of financial instruments
will fluctuate due to changes in market interest rates.
The Group's income and operating cash flows are substantially
independent of changes in market interest rates as the Group
has no significant interest--bearing assets apart from its cash
balances that are mainly kept for liquidity purposes.
The Group is exposed to interest rate risk in relation to its
borrowings. Borrowings issued at variable rates expose the Group
to cash flow interest rate risk. Borrowings issued at fixed
rates expose the Group to fair value interest rate risk. All
of the Group's borrowings are issued at a variable interest
rate. Management monitors the interest rate fluctuations on
a continuous basis and acts accordingly.
4.1.5 Credit risk
Credit risk arises when a failure by counter parties to discharge
their obligations could reduce the amount of future cash inflows
from financial assets at hand at the end of the reporting period.
Cash balances are held with high credit quality financial institutions
and the Group has policies to limit the amount of credit exposure
to any financial institution.
Analysis for risks related to deposits is presented in note
4.1.1.2.
Management has been in continuous discussions with banking institutions
monitoring their ability to extend financing as per the Group's
needs. The sovereign debt crisis has affected the pan-European
banking system from 2011 onwards imposing financing uncertainties
for new development projects. The financial crisis in the European
Union periphery has strained any remaining liquidity and the
financial institutions in the region (including those that have
Italian, Greek or Austrian parent) are contemplating deleveraging
programs although during the reporting period management has
observed such programs to ease.
4.1.6 Currency risk
Currency risk is the risk that the value of financial instruments
will fluctuate due to changes in foreign exchange rates.
Currency risk arises when future commercial transactions and
recognized assets and liabilities are denominated in a currency
that is not the Group's functional currency. Most of the Group's
transactions, including the rental proceeds are denominated
in the functional currency. For the rest of the foreign exchange
exposure management monitors the exchange rate fluctuations
on a continuous basis and acts accordingly, by limiting net
exposures to 1-3 months.
As a precaution against probable depreciation of local currencies,
and especially of the UAH, the majority of the Group's liquid
assets are held in USD denominated deposit accounts while most
of the inflows of the Group are pegged to the US dollar. However,
the current political uncertainty in Ukraine, and the currency
devaluation may result in effecting the Group's income streams
indirectly through affecting the financial condition of the
tenants of the Group's properties. Management is monitoring
the situation closely and acts accordingly.
4.1.7 Capital risk management
The Group manages its capital to ensure that it will be able
to continue as a going concern while maximizing the return to
shareholders through the optimization of the debt and equity
balance. The Group's core strategy is described in note 28 of
the financial statements.
4.1.8 Compliance risk
Compliance risk is the risk of financial loss, including fines
and other penalties, which arises from non--compliance with
laws and regulations of the state.
Although the Group is trying to limit such risk, the uncertain
environment in which it operates in various countries increases
the complexities handled by management. The Group's exposures
are discussed under note 28.
4.1.9 Litigation risk
Litigation risk is the risk of financial loss, interruption
of the Group's operations or any other undesirable situation
that arises from the possibility of non--execution or violation
of legal contracts and consequentially of lawsuits. The risk
is restricted through the contracts used by the Group to execute
its operations and is discussed in note 26.
4.1.10 Reputation risk
The risk of loss of reputation arising from the negative publicity
relating to the Group's operations (whether true or false) may
result in a reduction of its clientele, reduction in revenue
and legal cases against the Group. Following the Group's restructuring
in 2011, the settlement of its liabilities, the letting of the
Terminal Brovary warehouse and the first capital raise of the
Company post 2010, management expects the Company to be receiving
positive publicity.
4.2. Operational risk
Operational risk is the risk that derives from the deficiencies
relating to the Group's information technology and control systems
as well as the risk of human error and natural disasters. The
Group's systems are evaluated, maintained and upgraded continuously.
4.3. Fair value estimation
The fair values of the Group's financial assets and liabilities
approximate their carrying amounts at the end of the reporting
period.
5. Critical accounting estimates and judgments
The accounting estimates and judgments used in the preparation
of the interim condensed consolidated financial statements are
consistent with those followed in the preparation of the Group's
annual financial statements for the year ended 31 December 2013.
6. Earnings and net assets per share attributable to equity holders of the parent
a. Weighted average number of ordinary shares
H1 2014 H1 2013
--------------------------------------------------- ----------- -----------
Issued ordinary shares 28.788.559 25.680.817
--------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares (Basic) 28.192.277 22.770.720
--------------------------------------------------- ----------- -----------
Diluted weighted average number of ordinary shares 32.304.928 26.402.559
--------------------------------------------------- ----------- -----------
b. Basic diluted and adjusted earnings per share
30 June 2014 30 June 2013
----------------------------------------------------- ------------- -------------
US$ US$
----------------------------------------------------- ------------- -------------
Loss after tax attributable to owners of the parent (2.648.931) (565.692)
----------------------------------------------------- ------------- -------------
Basic (0,09) (0,02)
----------------------------------------------------- ------------- -------------
Diluted (0,09) (0,02)
----------------------------------------------------- ------------- -------------
Loss attributable to shareholders in the amount of US$ 2.648.931 is mainly derived fromfunctional currency devaluation related to the investment property gains (note 14) and the non-realised foreign exchange losses from EBRD loan and intercompany loans provided by Secure Capital LTD (note 12).Considering also the investment property gains derived from functional currency devaluation, the overall foreign exchange impact is a net negative effect for the Group's equity of US$ 1.827.000 (note 12).
c. Net assets per share
30 June 2014 31 December 2013
--------------------------------------------------------- ------------- -----------------
US$ US$
--------------------------------------------------------- ------------- -----------------
Net assets attributable to equity holders of the parent 50.718.460 52.207.781
--------------------------------------------------------- ------------- -----------------
Number of ordinary shares 28.788.559 28.171.833
--------------------------------------------------------- ------------- -----------------
Diluted number of ordinary shares 32.901.210 32.196.381
--------------------------------------------------------- ------------- -----------------
Basic 1,76 1,85
--------------------------------------------------------- ------------- -----------------
Diluted 1,54 1,62
--------------------------------------------------------- ------------- -----------------
7. Operational income
Operational income represents rent, service charges and utilities' income generated during the reporting period through the rental agreements concluded with the tenants of the two income producing assets of the Group, the Terminal Brovary Logistics Park in Kiev and the Innovations Logistics Park in Bucharest. As at the reporting date the vacancy rate of both the Terminal and the Innovations was 0%.
8. Administration Expenses
H1 2014 H1 2013
------------------------------- ---------- ----------
US$ US$
------------------------------- ---------- ----------
Legal fees 182.621 206.305
------------------------------- ---------- ----------
Salaries and Wages 500.863 528.421
------------------------------- ---------- ----------
Consulting fees 872.712 138.751
------------------------------- ---------- ----------
Directors' remuneration 115.646 105.000
------------------------------- ---------- ----------
Public group expenses 71.872 56.563
------------------------------- ---------- ----------
Travelling expenses 90.880 159.853
------------------------------- ---------- ----------
Office expenses 75.942 56.506
------------------------------- ---------- ----------
Audit and accounting fees 74.510 63.634
------------------------------- ---------- ----------
Security 28.061 13.649
------------------------------- ---------- ----------
Taxes and duties 16.964 21.039
------------------------------- ---------- ----------
Depreciation 8.139 5.795
------------------------------- ---------- ----------
Other expenses 76.844 37.576
------------------------------- ---------- ----------
Total Administration Expenses 2.115.054 1.393.092
------------------------------- ---------- ----------
Legal and consulting fees mainly represent expenses of the Company in the various legal and tax cases it has in Ukraine as well as fees for the normal operation of the Group. Out of the Consulting fees an amount of $792.500 is non recurring.
Salaries and wages include the remuneration:
a) of the CEO, the CFO, the Group Commercial Director and the Managing Director Ukraine
b) of personnel employed in Ukraine
Directors' remuneration represents the remuneration of all non-executive Directors and committee members (note 25).
Public group expenses include among others fees paid to the AIM: LSE stock exchange and the Nominated Advisor of the Company related to the listing of the Company.
9. Investment property operating expenses
The Company has a three year Maintenance and Property Management Agreement with DTZ Consulting Limited Liability Company in respect of the servicing of Terminal Brovary Logistics Park. The Company has also a similar agreement with Colliers International for the Innovation Logistics Park.
Operating expenses also include utility expenses, insurance premiums, as well as various other expenses needed for the proper operation of the complexes in Kiev and in Bucharest.
10. Other operating income/(expenses), net
H1 2014 H1 2013
------------------------------ --------- ---------
US$ US$
------------------------------ --------- ---------
Accounts payable written off - 339.207
------------------------------ --------- ---------
Penalties (11.292) (16.133)
------------------------------ --------- ---------
Other income/(expenses), net (11.488) (96.224)
------------------------------ --------- ---------
Total (22.780) 226.850
------------------------------ --------- ---------
Accounts payable written off in H1 2013 mainly represent the amount of Altis Holding's (the general constructor of Terminal Brovary) guarantee reserve payable written off (US$ 311.390) as a result of negotiations and settlement within 2013.
Penalties recognized in the first half of 2014 and 2013 relate to Terminal Brovary LLC which were accrued by the tax authority on the land leased in Brovary.
Other expenses for 2014 and 2013 mainly consist of agency fees related to the letting of Terminal Brovary and VAT receivable written off amounting to US$ 38.409.
11. Finance costs/ (income), net
H1 2014 H1 2013
-------------------------------------------- --------- ---------
US$ US$
-------------------------------------------- --------- ---------
Borrowing interest expenses (notes 20, 25) 725.415 780.041
-------------------------------------------- --------- ---------
Finance leasing interest expenses (note
24) 68.675 39.998
-------------------------------------------- --------- ---------
Finance charges and commissions 52.820 10.301
-------------------------------------------- --------- ---------
Bank interest income (72.509) (46.630)
-------------------------------------------- --------- ---------
Net finance result 774.401 783.710
-------------------------------------------- --------- ---------
Borrowing interest represents interest paid on the borrowings of the Group for EBRD facility of the Terminal Brovary (note 20) and the interest expense accrued on a related party loan (note 25).
Finance leasing interest expenses relate to the sales and lease back agreement of the Group with Piraeus Leasing Romania for Innovations Logistics Park (note 24).
Finance charges and commissions include fees paid to the banks.
12. Foreign exchange losses
Foreign exchange losses (non realised) were derived from the loans denominated in US$: the EBRD loan (note 20) exchange loss in the amount of US$ 5.334.832 and the intercompany loans provided by Secure Capital LTD to Ukrainian subsidiaries (note 25) exchange loss of US$ 14.658.376 , because of the UAH devaluation which took place during the reporting period.
13. Tax
The corporate income tax rate for the Company's Ukrainian subsidiaries is 19% for the six months ended 30 June 2014. The corporate tax that is applied to the qualifying income of the Company and its Cypriot subsidiaries is 12.5% for the six months ended 30 June 2014.
14. Investment Property (all)
Investment Property consists of the following assets:
Terminal Brovary Logistic Park consists of a 49.180 sq m Class A warehouse and associated office space, situated on the junction of the main Kiev - Moscow highway and the Borispil road. The facility is in operation since Q1 2010 and as at the end of the reporting period is 100% leased.
Innovations Logistic Park is a 16.570 sq m gross leasable area logistics park located in Clinceni in Bucharest, which benefits from being on the Bucharest ring road. Its construction was tenant specific, was completed in 2008 and is separated in four warehouses, two of which offer cold storage, the total area of which being 6.395 sqm. Innovations was acquired by the Company in May 2014 (note 14).
Bela Logistic Center is a 22,4Ha plot in Odessa situated on the main highway to Kiev. Following the issuance of permits in 2008, below ground construction for the development of a 103.000 sq m GBA logistic center commenced. Construction was put on hold in 2009 following adverse macro-economic developments at the time.
Kiyanovsky Lane consists of four adjacent plots of land, totaling 0,55 Ha earmarked for a residential development, overlooking the scenic Dnipro River, St. Michael's Spires and historic Podil neighbourhood.
Tsymlianskiy Lane, is a 0,36 Ha plot of land located in the historic Podil District of Kiev and is destined for the development of a residential complex.
Balabino project is a 26,38 ha plot of land situated on the south entrance of Zaporizhia, a city in the south of Ukraine with a population of 800.000 people. Balabino is zoned for retail and entertainment development.
Asset Name Description/ Principal Related Companies Carrying Carrying
Location activities/ amount as amount as
Operations at 30 June at 31 December
2014 2013
US$ US$
-------------- ------------- --------------------- ------------------- ------------ ----------------
Terminal Brovary, Warehouse TERMINAL 25.200.000 25.200.000
Brovary Kyiv oblast BROVARY
Logistics AISI BROVARY
Park AISI LOGISTICS
-------------- ------------- --------------------- ------------------- ------------ ----------------
Innovations Clinceni, Warehouse MYRNES INNOVATIONS 17.778.800 -
Logistic Bucharest PARK LIMITED,
Park Best Day
Real Estate
SRL
-------------- ------------- --------------------- ------------------- ------------ ----------------
Bela Logistic Odesa Land and Development AISI BELA 9.000.000 9.000.000
Center Works for
Warehouse
-------------- ------------- --------------------- ------------------- ------------ ----------------
Kiyanovskiy Podil, Land for residential AISI UKRAINE 7.400.000 7.400.000
Lane Kiev City development TORGOVIY
Center CENTR
-------------- ------------- --------------------- ------------------- ------------ ----------------
Tsymlianskiy Podil, Land for residential ALMAZ PRES 2.400.000 2.400.000
Lane Kiev City development UKRAINE
Center
-------------- ------------- --------------------- ------------------- ------------ ----------------
Balabino Zaporizhia Land for retail INTERTERMINAL 4.600.000 4.600.000
development MERELIUM
INVESTMENTS
-------------- ------------- --------------------- ------------------- ------------ ----------------
TOTAL 66.378.800 48.600.000
-------------- ------------- --------------------- ------------------- ------------ ----------------
Carrying amounts of the properties owned as of 30 June 2014 stated in these interim condensed consolidated financial statements remain the same as were presented in the Group's audited consolidated financial statements as of 31 December 2013 in terms of their value in US$ as provided by CBRE an external valuer. The exchange gains from investment property of US$18.122.951 presented in these interim condensed consolidated financial statements arose from UAH devaluation which took place during the reporting period. Fair value estimates on all the Ukrainian properties remain the same as per the December 2013 valuations.
a. Investment Property Under Construction
As at 30 June 2014 investment property under construction represents the carrying value of Bela Logistic Center project, which has reached the +10% construction in late 2008 but it is stopped since then. The Company's external valuer has appraised the property's value at US$9.000.000 as at 31 December 2013.
b. Investment Property
H1 2014
----------------------------------------------- -----------
US$
----------------------------------------------- -----------
At 1 January 39.600.000
----------------------------------------------- -----------
Capital expenditure on investment property -
----------------------------------------------- -----------
Revaluation gain/(loss) on investment property -
----------------------------------------------- -----------
Acquisition of investment property 17.778.800
----------------------------------------------- -----------
At 30 June 57.378.800
----------------------------------------------- -----------
Terminal Brovary, Innovations, Kiyanovskiy Lane, Tsymlyanskiy Lane and Balabino Village are included in the Investment Property category.
Acquisition of Subsidiaries
In May 2014, the Group acquired 100% of the shares of Myrnes Innovations Park Limited ("Myrnes"), a Cyprus registered company which in turns owns 100% of the shares of Best Day Real Estate SRL ("Best Day"), a Romanian entity, owner of a multipurpose warehousing space in South Bucharest, Romania. The acquisition has been funded by EUR4.4 million of the Company's existing cash resources and by issuance of 785.000 convertible shares to the sellers of the asset, with the remainder funded by bank debt (note 24). The fair value of identifiable assets and liabilities of Best Day Real Estate SRL as of the date of acquisition was as follows:
Fair value
recognized
on acquisition
US$
ASSETS
Non-current assets
Investment property 17.778.800
Long-term assets 171.522
17.950.322
Current assets
Cash and cash equivalents 42.153
42.153
Total assets 17.992.475
Non-current liabilities
Finance lease liabilities 9.665.767
9.665.767
Current liabilities
Trade and other payables 263.389
Finance lease liabilities 591.233
----------------
854.622
Total liabilities 10.520.389
Net assets acquired 7.472.086
Gain realized on acquisition (Net Assets - Total consideration) 536.068
Financed by
Cash consideration paid 5.979.147
Issue of convertible shares 956.871
----------------
Total consideration 6.936.018
c. Advances for Investments
The Group has made an advance payment of US$12mil. (representing principal plus interest) for the acquisition of a project in Podol (Kiev) in 2007. As of the end of the reporting period the management does not expect such acquisition to proceed while the seller has already defaulted on his credit to the Group.
As a consequence, the Group has progressed the legal proceedings initiated in 2013, for the transfer of the collateral (land plot of 42 ha in Kyiv Oblast) in the Group's name as well as legal proceeding against the company which collected the original US$12mil. payment.
15. Prepayments and other current assets
30 June 2014 31 December
2013
-------------------------------------- ------------- ------------
US$ US$
-------------------------------------- ------------- ------------
Prepayments and other current assets 843.894 781.182
-------------------------------------- ------------- ------------
VAT and other tax receivable 2.254.549 3.637.251
-------------------------------------- ------------- ------------
Deferred expenses 1.083.881 540.454
-------------------------------------- ------------- ------------
Total 4.182.324 4.958.887
-------------------------------------- ------------- ------------
Prepayments and other current assets mainly include prepayments made for services received by the Company. The figure includes as well the amount of US$135.000 which is the blocked amount by Cyprus authorities subject to finalisation of Laiki Bank restructuring and the possible receipt of shares in Bank of Cyprus.
VAT and other tax receivable represent the current portion of the Terminal Brovary VAT receivable, to be offset from VAT charged over rental income during the next years. The decrease is mainly attributable to the UAH devaluation during the reporting period.
Deferred expenses include legal, advisory, consulting and marketing expenses related to the ongoing share capital increase as mandated by the Annual General Meeting of the Company on 26/11/2012 and 30/12/2013 and due diligence expenses related to the possible acquisition of investment properties.
16. Cash and cash equivalents
Cash and cash equivalents represent liquidity held at banks.
30 June 2014 31 December
2013
---------------------- ------------- ------------
US$ US$
---------------------- ------------- ------------
Cash at banks in US$ 1.868.553 8.326.109
---------------------- ------------- ------------
Cash at banks in EUR 1.902.235 4.656.989
---------------------- ------------- ------------
Cash at banks in UAH 132.338 203.101
---------------------- ------------- ------------
Cash at banks in RON 301.540 -
---------------------- ------------- ------------
Cash equivalents 1.230 147.298
---------------------- ------------- ------------
Total 4.205.896 13.333.497
---------------------- ------------- ------------
17. Share capital
Number of Shares 31 December 2013 20 March 2014 16 May 2014 24 June 2014 30 June 2014
(as at)
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Reduction of Share Increase of Share Increase of Share
Capital Capital Capital
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Authorised
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Ordinary shares of 989.869.935 - - - 989.869.935
EUR0,01 each
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Ordinary Shares of
EUR0,92 each 1 (1) - - -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Deferred Shares of 4.142.727 (4.142.727) - -
EUR0,99 each -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Convertible Shares
of EUR0,01each - - 785.000 - 785.000
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Total 994.012.663 (4.142.728) 785.000 - 990.654.935
==================== ================= =================== =================== ==================== =============
Issued and fully
paid
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Ordinary shares of - -
EUR0,01 each 28.171.833 616.726 28.788.559
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Ordinary Shares of
EUR0,92 each 1 (1) - - -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Deferred Shares of (4.142.727) -
EUR0,99 each 4.142.727 - -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Convertible Shares
of EUR0,01each - - 785.000 - 785.000
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Total 32.314.561 (4.142.728) 785.000 616.726 29.573.559
==================== ================= =================== =================== ==================== =============
Value (as at) 31 December 2013 20 March 2014 16 May 2014 24 June 2014 30 June 2014
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Reduction of Share Increase of Share Increase of Share
Capital Capital Capital
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Authorised (EUR)
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Ordinary shares of 9.898.699 - - 9.898.699
EUR0,01 each -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Ordinary Shares of
EUR0,92 each 0.92 (0.92) - - -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Deferred Shares of (4.101.300) -
EUR0,99 each 4.101.300 - -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Convertible Shares
of EUR0,01each - - 7.850 - 7.850
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Total 14.000.000 (4.101.301) 7.850 - 9.906.549
==================== ================= =================== =================== ==================== =============
Issued and fully
paid ($)
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Ordinary shares of - -
EUR0,01 each 5.762.809 8.399 5.771.208
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Ordinary Shares of - -
EUR0,92 each - - -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Deferred Shares of - -
EUR0,99 each - - -
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Convertible Shares
of EUR0,01each - - 10.751 - 10.751
-------------------- ----------------- ------------------- ------------------- -------------------- -------------
Total 5.762.809 - 10.751 8.399 5.781.959
==================== ================= =================== =================== ==================== =============
17.1 Authorised Share Capital
As at the end of 2013 the authorized share capital of the Company was 989.869.935 Ordinary Shares of EUR0,01 nominal value each, 1 Ordinary Share of EUR0,92 nominal value and 4.142.727 Deferred Shares of EUR0,99 nominal value each.
On March 20, 2014 following the approval of the Annual General Meeting of 30/12/2013 the authorized share capital of the Company was reduced to EUR9.898.699,35 divided into 989.869.935 ordinary shares of EUR0,01 each and such reduction was effected by the cancellation of 1 ordinary share of EUR0,92 and 4.142.727 deferred shares of EUR0,99 each for the purpose of writing off losses of the Company.
On May 16, 2014 following the approval of the Extraordinary General Meeting of 5/5/2014 the authorized share capital of the Company was increased by EUR7.850 and such increase was effected by the issuance of 785.000 Convertible shares EUR0,01 each (note 17) for the purpose of in kind contribution of Innovation Park acquisition (note 14).
As at the end of the reporting period the authorized share capital of the Company is 989.869.935 Ordinary Shares of EUR0,01 nominal value each and 785.000 Convertible Shares of EUR0,01 nominal value each.
17.2 Issued Share Capital
As at the end of 2013 the issued share capital of the Company was 28.171.833 Ordinary Shares of EUR0,01 nominal value each, 1 Ordinary Share of EUR0,92 nominal value and 4.142.727 Deferred Shares of EUR0,99 nominal value each.
Further to the resolutions approved at the AGM of 30 December 2013 and at the EGM of 5 May 2014 the Board has proceeded:
1. On 20/3/2014, following the approval of the Annual General Meeting of 30/12/2013, in cancellation of 1 ordinary share of EUR0,92 and 4.142.727 deferred shares of EUR0,99 each for the purpose of writing off losses of the Company.
2. On 16/5/2014, following the approval of the Extraordinary General Meeting of 5/5/2014, in allotment of 785.000 Convertible shares EUR0,01 each for the purpose of in kind contribution of Innovation Park acquisition.
3. On 24/6/2014, following the approval of the Annual General Meeting of 30/12/2013, in allotment of 116.726 ordinary shares of EUR0,01 each to its Directors, who thus converted their receivables by the Company for 2013 amounting toGBP 86.375. (note 25) into equity.
4. On 24/6/2014, following the approval of the Annual General Meeting of 30/12/2013, in allotment of 550.000 ordinary shares of EUR0,01 each to the Directors, Management, Employees and Advisors of the Company in order to reward them for their continued commitment to the Company and their dedication and hard work in assisting the Company's turnaround since August 2011 and in working towards achieving its investment strategies and goals.
As at the end of the reporting period the issued share capital of the Company is 28.788.559 Ordinary Shares of EUR0,01 nominal value each and 785.000 Convertible Shares of EUR0,01 nominal value each.
17.3 Director's Option scheme
Under the said scheme each of the directors serving at the time, which is still a Director of the Company is entitled to subscribe for 2.631 Ordinary Shares exercisable as set out below:
Exercise Price Number of
-------------------------------- --------------- ----------
US$ Shares
-------------------------------- --------------- ----------
Exercisable till 1 August 2017 57 1.754
-------------------------------- --------------- ----------
Exercisable till 1 August 2017 83 877
-------------------------------- --------------- ----------
Director Franz M. Hoerhager Option scheme, 12 October 2007
Under the said scheme, director Franz M. Hoerhager is entitled to subscribe for 1.829 ordinary shares exercisable as set out below:
Exercise Price Number of
-------------------------------- --------------- ----------
GBP Shares
-------------------------------- --------------- ----------
Exercisable till 1 August 2017 40 1.219
-------------------------------- --------------- ----------
Exercisable till 1 August 2017 50 610
-------------------------------- --------------- ----------
17.4 Warrants issued
On 8 August 2011 the Company has issued an amount of Class B Warrants for an aggregate equivalent to 12,5% of the issued share capital of the Company at the exercise date. Each Class B Warrant entitles the holder to receive one Ordinary Share. The Class B Warrants may be exercised at any time until 31(st) December 2016, pursuant to a decision by the AGM of 30/12/2013. The exercise price of the Class B Warrants will be the nominal value per Ordinary Share as at the date of exercise. The Class B Warrant Instruments have anti-dilution protection so that, in the event of further share issuances by the Company, the number of Ordinary Shares to which the holder of a Class B Warrant is entitled will be adjusted so that he receives the same percentage of the issued share capital of the Company (as nearly as practicable), as would have been the case had the issuances not occurred. This anti-dilution protection will lapse on the earlier of (i) the expiration of the Class B Warrants; and (ii) capital increase(s) undertaken by the Company generating cumulative gross proceeds in excess of US$100.000.000. As of the reporting date, the aggregate amount of class B warrant is 4.112.651.
17.5 Capital Structure as at the end of the reporting period
As at the reporting date the Company's share capital is as follows:
Number of (as at) 30 June 2014 (as at) 31 December 2013 ---------------------------- --------------------- --------------------- ------------------------- Ordinary shares of EUR0,01 Listed in AIM 28.788.559 28.171.833 ---------------------------- --------------------- --------------------- ------------------------- Class B Warrants 4.112.651 4.024.548 ---------------------------- --------------------- --------------------- ------------------------- Total number of Shares Non Dilutive Basis 28.788.559 28.171.833 ---------------------------- --------------------- --------------------- ------------------------- Total number of Shares Full Dilutive Basis 32.901.210 32.196.381 ---------------------------- --------------------- --------------------- ------------------------- Ordinary Share EUR0,92 - 1 --------------------------------------------------- --------------------- ------------------------- Options 4.460 4.460 --------------------------------------------------- --------------------- ------------------------- Convertible shares 785.000 - --------------------------------------------------- --------------------- -------------------------
17.6 Convertible shares description
During the reporting period the Company has issued 785.000 convertible SPDI shares of nominal value EUR0,01 each. The Convertible shares have no voting powers or rights to dividend. 392.500 of the Convertible Shares shall be redeemed out of profits by the Company on 31 January 2015 (the "Redemption Date 1") at the price of EUR0,89 each and the rest 392.500 of the Convertible Shares shall be redeemed out of profits by the Company on 31 January 2016 (the "Redemption Date 2") at the price of EUR0,89. At any time prior to the Redemption Dates the holders shall have the option to unilaterally reconvert the Convertible Shares into ordinary shares of EUR0,01 each.
18. Foreign Currency Translation Reserve
Exchange differences related to the translation from the functional currency of the Group's subsidiaries are accounted by entries made directly to the foreign currency translation reserve. The foreign exchange translation reserve represents unrealized profits or losses related to the appreciation or depreciation of the local currencies against the US$ in the countries where the Company's subsidiaries' functional currencies are not US$.
19. Non-Controlling Interests
Non-controlling interests represent the equity value of 45% shareholding in LLC Almaz-pres-Ukrayina, which is being held by ERI Trading & Investments Co. Limited.
20. Borrowings
30 June 2014 31 December
2013
----------------------------------------- ------------- ------------
US$ US$
----------------------------------------- ------------- ------------
Principal EBRD loan 13.931.024 14.231.049
----------------------------------------- ------------- ------------
Restructuring fees and interest payable
to EBRD 897.359 785.098
----------------------------------------- ------------- ------------
Interests payable to related parties
(note 25) - 32.098
----------------------------------------- ------------- ------------
Interests accrued on bank loans - 228.377
----------------------------------------- ------------- ------------
Total 14.828.383 15.276.622
----------------------------------------- ------------- ------------
In March 2013 the Company finalized negotiations with the EBRD on rescheduling the amortization plan of the Brovary construction loan. Unfortunately, at that time the Cyprus crisis hit, and the B Lender (Laiki Bank) soon became bankrupt and unable to approve such restructuring, despite the fact that SPDI has been observing the capital repayments under the new agreement with EBRD's consent ever since. In December 2013 the Company received notice that the B Lender agreed to the restructuring officially. According to the signed term sheet with EBRD the repayment of the loan is being extended to 2022, with a balloon payment of US$3.633.333. The exact terms of the loan restructuring will be announced upon signing of the related documents.
Under the current agreement the collaterals accompanying the existing loan facility are as follows:
1. LLC Terminal Brovary pledged all movable property with the carrying value more than US$25.000.
2. LLC Terminal Brovary pledged its Investment property, Brovary Logistics Centre that was finished construction in 2010 (note 14), and all property rights on the center.
3. SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC pledged 100% corporate rights in SL SECURE Logistics Ltd, a Cyprus Holding Company for the Shareholder of LLC Terminal Brovary, LLC Aisi Brovary.
4. SL SECURE Logistics Ltd pledged 99% corporate rights in LLC Aisi Brovary. 5. LLC Aisi Brovary pledged 100% corporate rights in LLC Terminal Brovary.
6. LLC Terminal Brovary pledged all current and reserved accounts opened by LLC Terminal Brovary in Fido Bank, Ukraine.
7. LLC Aisi Brovary entered into a call and put option agreement expiring on 16(th) of September 2014 with EBRD, SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC and LLC Terminal Brovary pursuant to which following an Event of Default (as described in the Agreement) EBRD has the right (Call option) to purchase at the Call Price from LLC Aisi Brovary, 20% of the Participatory Interest of LLC Terminal Brovary on the relevant Settlement Date. To this date and even though the loan is in default, EBRD has not served any notice of exercising the call option and as the discussion for the restructuring of the loan facility has been finalized, management estimates that such possibility has low probability to materialize before signing the restructuring. Furthermore, management is in discussions with EBRD for the cancellation of the option, as a result of the loan restructuring itself. Should such call option be exercised EBRD would have the put option right, exercisable in its sole discretion, to sell to LLC Aisi Brovary all but not less than all of the Participatory Interest, received under the call option, in the Charter Capital of LLC Terminal Brovary held by EBRD on the relevant Settlement Date at the Put Price.
8. LLC Terminal Brovary has granted EBRD a second ranking mortgage in relation to its own and LLC Aisi Brovary's obligations under the call and put option agreement.
21. Trade and other payables
30 June 2014 31 December 2013
------------------------------------------- ------------- -----------------
US$ US$
------------------------------------------- ------------- -----------------
Payables to related parties (note 25) 552.327 793.280
------------------------------------------- ------------- -----------------
Payables for construction, non-current 290.880 405.447
------------------------------------------- ------------- -----------------
Deferred income from tenants, non-current 152.214 257.151
------------------------------------------- ------------- -----------------
Deferred income from tenants, current 91.282 -
------------------------------------------- ------------- -----------------
Payables for services 475.734 167.091
------------------------------------------- ------------- -----------------
Accruals 147.518 114.898
------------------------------------------- ------------- -----------------
Total 1.709.955 1.737.867
------------------------------------------- ------------- -----------------
The fair values of trade and other payables due within one year approximate to their carrying amounts as presented above.
Payables for construction represent amounts payable to the contractor of Bela Logistic Center in Odessa. The settlement was reached in late 2011 on the basis of maintaining the construction contract in an inactive state (to be reactivated at the option of the Group), while upon reactivation of the contract or termination of it (because of the sale of the asset) the Group would have to pay an additional UAH5.400.000 (US$ 450.000) payable upon such event occurring. Since it is uncertain when the latter amount is to be paid it has been discounted at the current discount rates in Ukraine and is presented as a non-current liability.
Deferred Income from Tenants represents advances from tenants which will be used as future rental income & utilities charges.
Payables for services represent amounts payable to various service providers including auditors, legal advisors, consultants and third party accountants.
22. Deposits from Tenants
Deposits from tenants appearing under current and non-current liabilities include the amounts received from the tenants of LLC Terminal Brovary and Best Day SRL as advances/guarantees and are to be reimbursed to these clients at the expiration of the leases agreements.
23. Taxes payable & Provisions for taxes
30 June 2014 31 December 2013
------------------------------ ------------- -----------------
US$ US$
------------------------------ ------------- -----------------
Corporate Income tax payable 238.583 580.058
------------------------------ ------------- -----------------
Other taxes payable 41.362 4.044
------------------------------ ------------- -----------------
Provisions for taxes 110.968 164.144
------------------------------ ------------- -----------------
Total Tax Liability 390.913 748.246
------------------------------ ------------- -----------------
Corporate Income tax represents taxes payable in Cyprus and Romania.
Other taxes represent local property taxes payable in Ukraine, Romania and Cyprus.
Provision represents a management estimate on potential land tax payable for Bela LLC and land lease payment Terminal Brovary LLC accrued by the Tax Authority (note 26).
24. Finance lease liabilities
Minimum lease
payments Interest Principal
---------------------------- -------------- ------------- ------------
30 June 2014 30 June 2014 30 June
2014
---------------------------- -------------- ------------- ------------
US$ US$ US$
---------------------------- -------------- ------------- ------------
Less than one year 851.341 749.183 102.158
---------------------------- -------------- ------------- ------------
Between two and five years 3.450.723 2.883.274 567.450
---------------------------- -------------- ------------- ------------
More than five years 12.103.970 5.001.669 7.102.301
---------------------------- -------------- ------------- ------------
16.406.034 8.634.126 7.771.908
---------------------------- -------------- ------------- ------------
Minimum lease
payments Interest Principal
---------------------------- -------------- ------------ ------------
31 December 31 December 31 December
2013 2013 2013
---------------------------- -------------- ------------ ------------
US$ US$ US$
---------------------------- -------------- ------------ ------------
Less than one year 104.404 94.458 9.946
---------------------------- -------------- ------------ ------------
Between two and five years 443.054 293.852 149.202
---------------------------- -------------- ------------ ------------
More than five years 1.777.789 1.522.296 255.493
---------------------------- -------------- ------------ ------------
2.325.247 1.910.606 414.641
---------------------------- -------------- ------------ ------------
24.1 Land Plot Financial Leasing
The Group rents land plots classified as finance lease. Lease obligations are denominated in UAH.
The Group's obligations under finance leases are secured by the lessor's title to the leased assets.
The fair value of lease obligations approximates their carrying amounts.
24.2 Sale and Lease Back Agreement
In May 2014 the Company concluded the acquisition of Innovations Logistics Park in Bucharest (note 14), owned by Best Day Srl, through receiving debt from Piraeus Leasing Romania SA in the form of a sale and lease back agreement. The financed amount was EUR7.500.000 (without VAT) bearing interest rate at 3M Euribor plus 4,45% margin, being repayable in monthly tranches until 2028. At the maturity of the lease agreement Best Day will become owner of the asset.
Under the current finance lease agreement the collaterals accompanying the facility are as follows:
1. Best Day pledged its future receivables from its tenants. 2. Best Day pledged its shares. 3. Best Day pledged all current and reserved accounts opened in Piraeus Leasing , Romania.
4. Best Day is obliged to provide cash collateral in the amount of EUR250.000 in Piraeus Leasing Romania, which shall be deposited as follows, half in May 2014 and half in May 2015.
5. SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC provided a corporate guarantee in favor of the bank towards the liabilities of Best Day arising from the sales and lease back agreement.
25. Related Party Transactions
The following represent transactions with related parties:
25.1 Expenses
The below expenses were recognized during the reporting period:
H1 2014 H1 2013
--------------------------------- -------- --------
US$ US$
--------------------------------- -------- --------
Management Remuneration 214.684 209.600
--------------------------------- -------- --------
Board of Directors & Committees 115.646 105.004
--------------------------------- -------- --------
Back office - SECURE Management
Ltd 48.202 88.953
--------------------------------- -------- --------
Interest expenses to Narrowpeak
loan (notes 11,25) - 98.105
--------------------------------- -------- --------
Total 378.532 501.662
--------------------------------- -------- --------
Management remuneration represents the remuneration of the CEO and the CFO pursuant to the decision of the Remuneration Committee.
Board of Directors and Committees expense represents the remuneration of all the non-executive members of the board pursuant to the decision of the Remuneration Committee.
Back office expenses represent expenses incurred by the Group for part time expert personnel of SECURE Management Ltd, a real estate project and asset management company, seconded to the Company to cover various non-permanent positions, variations of the work flow in finance and administration functions and/or specialized advisory and consultancy needs.
Interest expense in H1 2013 represents the interest from the loan granted on 21(st) September 2012 from Narrowpeak Consultants Ltd and other parties, in order to facilitate the Group's cash flow. The loan to the Company was of up to US$2.500.000 bearing interest at 12% per annum and was repayable on 31(st) December 2014. Within 2013 the loan amount totaling to US$1.700.000 was converted into equity and the lenders received 2.310.190 shares.
25.2 Borrowings from related parties
30 June 2014 31 December 2013
---------------------------------- -------------- -----------------
US$ US$
---------------------------------- -------------- -----------------
Narrowpeak Consultants Ltd (note
20) - 228.377
---------------------------------- -------------- -----------------
Total - 228.377
---------------------------------- -------------- -----------------
On 21st September 2012, Narrowpeak Consultants Ltd and other parties, have provided a loan to the Company of up to US$2.500.000 bearing interest at 12% per annum which was repayable by 31 December 2014. Within 2013 the loan amount totaling to US$1.700.000 was converted into equity and the lenders received 2.310.190 shares. The amount payable at the end of 2013 represents the interest payable from the convertible loan which was settled within 2014.
25.3 Loans from SC SECURE Capital Ltd to the Company's subsidiaries
SECURE CAPITAL LTD, the finance subsidiary of the Company has proceeded to provide capital in the form of loans to the Ukrainian subsidiaries of the Company so as to support the acquisition of assets, development expenses of the projects, as well as various operational costs.
Borrower Repayment Limit Outstanding Outstanding amount,
date -US$ amount, as of as of 31 December
30 June 2014 2013- US$
- US$
-------------------- ------------ ------------- ---------------- --------------------
LLC "TERMINAL 19/12/2014 35.000.000 33.482.771
BROVARY" 35.000.000 33.182.771
-------------------- ------------ ------------- ---------------- --------------------
LLC "AISI UKRAINE" 18/10/2014 28.000.000 14.903 14.903
-------------------- ------------ ------------- ---------------- --------------------
LLC "ALMAZ PRES
UKRAINE" 21/03/2014 10.000.000 170.000 170.000
-------------------- ------------ ------------- ---------------- --------------------
25.4 Payables to related parties
The below amounts were payables as at the end of the reporting period:
30 June 2014 31 December 2013
--------------------------------- ------------- -----------------
US$ US$
--------------------------------- ------------- -----------------
Grafton Properties 150.000 150.000
--------------------------------- ------------- -----------------
Secure Management Ltd 24.000 -
--------------------------------- ------------- -----------------
Board of Directors & Committees 122.789 159.514
--------------------------------- ------------- -----------------
Management Remuneration 255.538 483.766
--------------------------------- ------------- -----------------
Total 552.327 793.280
--------------------------------- ------------- -----------------
25.4.1 Board of Directors & Committees
The amount payable represents mainly fees payable to non-Executive Directors and members of Committees covering H1 2014 remuneration. The members of the Board of Directors have agreed in order to facilitate the Company's cash flow, to exchange part of their fees related to prior years for shares in the Company's capital. This was approved by the Annual General Meeting of the Company's shareholders.
25.4.2 Loan payable to Grafton Properties
Under the Settlement Agreement of July 2011, the Company undertook the obligation to repay to certain lenders who had contributed funds for the operating needs of the Company between 2009-2011, by lending to AISI Realty Capital LLC, the total amount of US$450.000. As of the reporting date the liability towards Grafton Properties, representing the Lenders, was US$150.000, which is contingent to the Company raising US $50m of capital in the markets.
25.4.3 Payable to Secure Management
Payable to Secure Management represents the amount allotted for expert personnel seconded by SECURE Management Ltd, covering for Q2 2014.
25.4.4 Management Remuneration
Management Remuneration represents deferred amounts payable to the CEO and CFO.
26. Contingent liabilities
The Group is involved in various legal proceedings in the ordinary course of its business.
26.1 Tax litigation
The Group performed during the reporting period most of its operations in Ukraine and therefore within the jurisdiction of the Ukrainian tax authorities. The Ukrainian tax system can be characterized by numerous taxes and frequently changing legislation, which may be applied retroactively, open to wide interpretation and in some cases, is conflicting. Instances of inconsistent opinions between local, regional, and national tax authorities and between the National Bank of Ukraine and the Ministry of Finance are not unusual. Tax declarations are subject to review and investigation by a number of authorities, which are enacted by law to impose severe fines and penalties and interest charges.
Any tax year remains open for review by the tax authorities during the three subsequent calendar years; however, under certain circumstances a tax year may remain open for longer. These facts create tax risks which are substantially more significant than those typically found in countries with more developed tax systems. Management believes that it has adequately provided for tax liabilities, based on its interpretation of tax legislation, official pronouncements and court decisions. However, the interpretations of the relevant authorities could differ and the effect on these consolidated financial statements, if the authorities were successful in enforcing their interpretations, could be significant.
At the same time the Group's entities are involved in court proceedings with tax authorities; management believes that the estimates provided within the financial statements present a reasonable estimate of the outcome of these court cases.
26.2 Construction related litigation
There are no material claims from contractors due to the postponement of projects or delayed delivery other than those appearing in the financial statements.
26.3 Other Litigation
Management does not believe that the result of any legal proceedings will have a material effect on the Group's financial position or the results of its operations other than the one already provided for, within the financial statements.
26.4 Other Contingent Liabilities
The Group had no other contingent liabilities as at 30 June 2014.
27. Commitments
The Group had no commitments as at 30 June 2014.
28. Financial Risk Management
28.1 Capital Risk Management
The Group manages its capital in order to maximize the return to stakeholders through the optimization of the debt-equity structure and value enhancing actions in respect of its portfolio of investments. The capital structure of the Group consists of borrowings (note 20), net of cash and cash equivalents (note 16) and equity attributable to ordinary shareholders (issued capital, reserves and retained earnings).
The Group is not subject to any externally imposed capital requirements.
Management reviews the capital structure on an on-going basis. As part of the review management considers the differential capital costs in the debt and equity markets, the timing at which each investment project requires funding and the operating requirements so as to proactively provide for capital either in the form of equity (issuance of shares to the Group's shareholders) or in the form of debt. Management balances the capital structure of the Group with a view of maximizing the shareholder's Return on Equity (ROE) while adhering to the operational requirements of the property assets and exercising prudent judgment as to the extent of gearing.
28.2 Significant Accounting Policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liabilities and equity instruments are disclosed in note 3 of the financial statements.
28.3 Categories of Financial Instruments
Financial Assets Note 30 June 2014 31 December 2013
----------------------------- ----- ------------- -----------------
US$ US$
----------------------------- ----- ------------- -----------------
Cash at Bank 16 4.205.896 13.333.497
----------------------------- ----- ------------- -----------------
Total 4.205.896 13.333.497
----------------------------- ----- ------------- -----------------
Financial Liabilities Note 30 June 2014 31 December 2013
----------------------------- ----- ------------- -----------------
US$ US$
----------------------------- ----- ------------- -----------------
Interest bearing borrowings 20 14.828.383 15.276.622
----------------------------- ----- ------------- -----------------
Trade and other payables 21 1.709.955 1.737.867
----------------------------- ----- ------------- -----------------
Deposits from tenants 22 751.339 435.250
----------------------------- ----- ------------- -----------------
Finance lease liabilities 24 10.601.600 566.011
----------------------------- ----- ------------- -----------------
Taxes payable 23 279.945 748.246
----------------------------- ----- ------------- -----------------
Total 28.171.222 18.763.996
----------------------------- ----- ------------- -----------------
28.4 Financial Risk Management Objectives
The Group's Treasury function provides services to its various corporate entities, coordinates access to local and international financial markets, monitors and manages the financial risks relating to the operations of the Group, mainly the investing and development functions. Its primary goal is to secure the Group's liquidity and to minimize the effect of the financial asset price variability on the cash flow of the Group. These risks cover market risks including foreign exchange risks and interest rate risk as well as credit risk and liquidity risk.
The above mentioned risk exposures may be hedged using derivative instruments whenever appropriate. The use of financial derivatives is governed by the Group's approved policies which indicate that the use of derivatives is for hedging purposes only. The Group does not enter into speculative derivative trading positions. The same policies provide for the investment of excess liquidity. As at 30 June 2013, the Group had not entered into any derivative contracts.
28.5 Economic Market Risk Management
The Group's activities expose it primarily to financial risks of changes in currency exchange rates and interest rates. The exposures and the management of the associated risks are described below. There has been no change to the Group's manner in which it measures and manages risks.
Foreign Exchange Risk
Currency risk arises when commercial transactions and recognized financial assets and liabilities are denominated in a currency that is not the Group's functional currency. Most of the Group's financial assets are denominated in the functional currency. Management is monitoring the net exposures and enacts policies to contain them so that the net effect of devaluation is minimized.
Interest Rate Risk
The Group's income and operating cash flows are substantially independent of changes in market interest rates as the Group has no significant interest-bearing assets. On June 30th, 2014, cash and cash equivalent financial assets amounted to US$4.205.896 (31/12/2013:US $13.333.497).
The Group is exposed to interest rate risk in relation to its borrowings amounting to US$14.828.383 (31/12/2013: US$15.276.622) as they are issued at variable rates tied to the Libor. Management monitors the interest rate fluctuations on a continuous basis and evaluates hedging options to align the Group's strategy with the interest rate view and the defined risk appetite. Although no hedging has been applied for the reporting period, such may take place in the future if deemed necessary in order to protect the cash flow of a property asset through different interest rate cycles.
The Group's exposures to financial risk are discussed also in note 4.
28.6 Credit Risk Management
The Group has no significant credit risk exposure. The credit risk emanating from the liquid funds is limited because the Group's counterparties are banks with high credit-ratings assigned by international credit rating agencies. The Credit risk of receivables is reduced as the majority of the receivables represent VAT to be offset through VAT income in the future.
28.7 Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which applies a framework for the Group's short, medium and long term funding and liquidity management requirements. The Treasury function of the Group manages liquidity risk by preparing and monitoring forecasted cash flow plans and budgets while maintaining adequate reserves. The following table details the Group's contractual maturity of its financial liabilities. The tables below have been drawn up based on the undiscounted contractual maturities including interest that will be accrued.
30 June 2014 Carrying Total Less than From one More than
amount one year to two years
two years
----------------------------- ----------- ----------- ----------- ----------- -----------
US$ US$ US$ US$ US$
----------------------------- ----------- ----------- ----------- ----------- -----------
Financial assets
----------------------------- ----------- ----------- ----------- ----------- -----------
Cash at Bank 4.205.896 4.205.896 4.205.896 - -
----------------------------- ----------- ----------- ----------- ----------- -----------
Financial liabilities
----------------------------- ----------- ----------- ----------- ----------- -----------
Interest bearing borrowings 14.828.383 14.828.383 14.828.383 - -
----------------------------- ----------- ----------- ----------- ----------- -----------
Trade and other payables 1.709.955 1.709.955 1.266.861 152.214 290.880
----------------------------- ----------- ----------- ----------- ----------- -----------
Deposits from tenants 751.339 751.339 162.492 85.009 503.838
----------------------------- ----------- ----------- ----------- ----------- -----------
Finance lease liabilities 10.601.600 16.406.034 851.341 843.406 14.711.287
----------------------------- ----------- ----------- ----------- ----------- -----------
Taxes payable 279.945 279.945 279.945 - -
----------------------------- ----------- ----------- ----------- ----------- -----------
31 December 2013 Carrying Total Less than From one More than
amount one year to two years
two years
----------------------------- ----------- ----------- ----------- ----------- -----------
US$ US$ US$ US$ US$
----------------------------- ----------- ----------- ----------- ----------- -----------
Financial assets
----------------------------- ----------- ----------- ----------- ----------- -----------
Cash at Bank 13.333.497 13.333.497 13.333.497 - -
----------------------------- ----------- ----------- ----------- ----------- -----------
Financial liabilities
----------------------------- ----------- ----------- ----------- ----------- -----------
Interest bearing borrowings 15.276.622 15.276.622 15.276.622 - -
----------------------------- ----------- ----------- ----------- ----------- -----------
Trade and other payables 1.737.867 1.737.8673 1.075.268 - 662.599
----------------------------- ----------- ----------- ----------- ----------- -----------
Deposits from tenants 435.250 435.250 - 262.546 172.704
----------------------------- ----------- ----------- ----------- ----------- -----------
Finance lease liabilities 566.011 2.325.247 104.404 104.404 2.116.439
----------------------------- ----------- ----------- ----------- ----------- -----------
Taxes payable 748.246 748.246 748.246 - -
----------------------------- ----------- ----------- ----------- ----------- -----------
29. Events after the end of the reporting period
A. Dimitriou Warehouse and Photovoltaic Park Acquisition
The Company reached a binding agreement in August for the acquisition of Dimitriou warehouse, an income producing logistics park that includes warehouse space as well as an alternative energy production facility in Athens, Greece which is expected to be concluded upon the transfer of the asset from previous owner to a newly formed company, and completion of certain other conditions. The complex is currently 100% occupied, while the major tenant (70%) is the international transportation and logistics company Kuehne + Nagel with remained contract duration 11 years. Upon completion the annual NOI of the Group will increase by EUR1.4million
B. EOS Business Park Acquisition
The Company reached a binding agreement in August for the acquisition of EOS Business Park, which is expected to be finalised upon completion of certain conditions. The park which includes a Class A office Building in Bucharest, is currently fully let to Danone Romania, the French multinational food company, until 2026. Upon completion the annual NOI of the Group will increase by EUR0.6million
C. Residential Portfolio Acquisition
Within August the Company acquired, in exchange of new ordinary SPDI shares, an income producing residential portfolio in Bucharest, Romania consisting of 122 apartments totalling approximately 11,700 sqm across four separate complexes located in different residential areas of Bucharest and with a Net Asset Value of EUR3.3 million. The portfolio has an annualised NOI of EUR270.000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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