| | POLISH FINANCIAL SUPERVISION AUTHORITY | |
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| | | UNI - EN REPORT No | 6 | / | 2014 |
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| | Date of issue: | 2014-03-13 | | | | | | | | |
| | Short name of the issuer | | | | | | | |
| | PLAZA CENTERS N.V. | |
| | Subject | | | | | | | | | | |
| | Full Year results for the year ended 31 December 2013 | |
| | Official market - legal basis | | | | | | |
| | Inne uregulowania
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| | Unofficial market - legal basis | | | | | |
| | Contents of the report: | | | | | | | | |
| | CONTINUED IMPROVEMENT OF OPERATIONS, DISPOSAL OF NON CORE ASSETS AND GOOD PROGRESS WITH THE RESTRUCTURING PROCESS
Plaza Centers N.V. (“Plaza" / “Company" / “Group"), a leading property developer and investor with operations in Central and Eastern Europe (“CEE") and India, today announces its full year results for the year ended 31 December 2013.
Financial highlights:
• Reduction in total assets to €586 million (31 December 2012: €886 million restated – as a result of changes in the accounting presentation of joint venture Special Purpose Vehicles (‘SPVs’) (due to changes in IFRS)), and primarily due to impairment of trading properties and equity accounted investees as well as debt repayments.
o Book value of the Company’s trading properties reduced by 19% over the year, or by €117 million, primarily due to impairments recorded.
• Rental income slightly increased to €23.7 million (31 December 2012: €23.1 million), due to the improvement in the performance of the CEE shopping centres. The rental income performance would have been even stronger, had there not been a loss of income caused by a fire incident in India.
• Net Asset Value decreased by 40% to €274 million (31 December 2012: €459 million) primarily as a result of impairment of assets, mainly in Serbia, Romania and India.
o Net Asset Value per share of £0.79 (31 December 2012: £1.26), a decline of 37%, attributable mainly to the abovementioned impairments.
• Loss for the year of €218 million (31 December 2012: Loss of €86 million), stemming from a non-cash €186 million impairment of trading properties, equity accounted investees, investment property and pre-payments (31 December 2012: €83.7 million of impairments), and an overall net finance cost of €39 million compared to a net finance cost of €17 million in 2012. Impairment of real estate assets in the fourth quarter of 2013 totalled circa €43 million.
o Basic and diluted loss per share of €0.73 (31 December 2012: loss per share of €0.29).
• Consolidated cash position at year end (including restricted bank deposits, short term deposits and held for trading financial assets) of €33.7 million (31 December 2012: €65.8 million) and current cash position of circa €35.2 million (€7 million restricted).
• Gearing increased to 64% (31 December 2012: 50%) as a result of impairment losses and finance costs incurred during the year.Asset and operational highlights:
• On 31 October 2013, a consortium of shareholders of Dream Island, in which Plaza holds a 43.5% stake, completed the sale of its Dream Island project land holding to the Hungarian State for circa €16.5 million (HUF 5 billion). The proceeds of the transaction were used by the Consortium to repay a proportion of the securitised related bank debt held against the asset. As a result of a previous non-cash, market driven write-down, no accounting loss was incurred.
• On 8 November 2013, the Company’s Latvian 50% subsidiary signed a new €59.3 million investment loan with a consortium comprising two banks for its shopping and entertainment centre in Riga, Latvia. The new facility has duration of four years and therefore substantially lengthens the duration of the debt compared to the previous loan facility, which was due for repayment on 30 June 2014.
• On 14 November 2013, Plaza announced that it had reached an agreement to sell Koregaon Park Plaza, a retail, entertainment and office scheme located in Pune, India, subject to the satisfaction of certain closing conditions. The transaction valued the asset at circa €40 million, the asset’s current book value. Following the repayment of the outstanding related bank loan, Plaza expects to generate aggregate cash proceeds from the purchaser totalling circa €18 million, before taxes and transaction costs, which should be paid in instalments over the coming two years.
• Plaza’s 70% subsidiary reached an agreement in December 2013 to sell its 50% equity stake (together with the other 50% Joint Venture partner) in the Uj Udvar shopping mall in Budapest, Hungary. As a result of the transaction, proceeds of €2.35 million in cash were received by Plaza for its share in the asset.
• Improved occupancy levels achieved across the Company’s existing shopping and entertainment centres in the CEE, with the overall portfolio occupancy rate increasing from 89% in 2012 to 93% as at the reporting date, with the following notable successes:
o At Torun Plaza, Poland, occupancy increased to 89% (2012: 84%). A contract with TK Maxx, the multinational fashion retailer, was signed at Torun Plaza (Poland) for 2,700 sqm, creating a new two level store which was opened on 5 March 2014. The letting represents circa 7% of the total lettable area of the mall
o At Riga Plaza, Latvia, occupancy increased to 97% (2012: 94%). H&M, a multinational fashion retailer, signed a contract for 2,700 sqm in Riga Plaza (Latvia). The store is scheduled to open in April 2014 and it is expected that the mall will be nearly fully let by mid-2014
o At Suwalki Plaza, Poland, occupancy increased to 91% (2012: 90%)
o At Zgorzelec Plaza, Poland, occupancy increased to 91% (2012: 89%), and the centre achieved a 58% growth in turnover on year to year basis
o At Liberec Plaza, Czech Republic, occupancy increased to 86% (2012: 80%).
Key highlights since the period end:
Following the announcement of the Company’s restructuring programme made on 18 November 2013, Plaza has made good progress towards resolving its liquidity situation. The market prices of the Company’s traded debt have reacted positively to the restructuring plan and negotiations with the Company’s creditors are moving forward.
The original date of the creditors’ voting, scheduled for 17 April 2014, has been postponed to 26 June 2014 due to technicalities involved in formally completing the arrangement. For more details on the court decision, please refer to the Company's website under Investor relations/ Debt restructuring. Despite this, Plaza remains confident that it should be able to conclude its restructuring process successfully in Q3.
Commenting on the results, Ran Shtarkman, the President and CEO of Plaza Centers, said:
“Whilst we have witnessed some confidence returning for prospects in Europe’s central and eastern regions, conditions in many of our markets remained challenging in 2013 as the persistent uncertainty created by the crisis continued to be felt. As such, and as announced, despite our efforts to progress asset disposals and complete some alternative financing transactions, we took the decision in November to withhold payment on the upcoming short term maturities of our corporate bonds and approach creditors with a restructuring plan. This was undertaken in order to resolve our liquidity situation, safeguard the continuity of the business and thereby protect the long term interest of our investors, creditors and shareholders.
“Against this backdrop, we are particularly pleased to report that, throughout 2013, we made considerable operational improvements across our portfolio. These are clearly reflected in the increase in occupancy levels from 89% at the end of 2012 to 93% as at the reporting date. At the same time, we continued to make good progress in the ongoing process of re-positioning our business model, ensuring its continued focus on deleveraging the balance sheet and reallocating capital, primarily through the disposal of completed or non-core assets and reinvestment into our core yielding assets. This is best illustrated by the €61 million raised during the year through the sale of five assets, the remaining proceeds from the dissolution of the US holding entity and successful asset management initiatives at Torun Plaza, Suwalki Plaza, Kragujevac Plaza and Riga Plaza.
“Our clear priority is to conclude our restructuring process successfully whilst continuing to leverage the ability and expertise of our management team and the quality of our income generating assets to achieve success in our day-to-day operations. It is this combination of factors that underpins the Board’s continued confidence that the Company retains significant value for its stakeholders and will be able to repay its creditors."
For further details please contact:
Plaza
Ran Shtarkman, President and CEO
Roy Linden, CFO
+36 1 462 7221
+36 1 462 7222
FTI Consulting
Stephanie Highett/Nina Legge
+44 20 7831 3113
Notes to Editors
Plaza Centers N.V. (www.plazacenters.com) is a leading emerging markets developer of shopping and entertainment centres with operations in Central and Eastern Europe and India. It focuses on constructing new centres and, where there is significant redevelopment potential, redeveloping existing centres in both capital cities and important regional centres. The Company is dual listed on the Main Board of the London Stock Exchange and, as of 19 October 2007, the Warsaw Stock Exchange (LSE:"PLAZ", WSE: “PLZ/PLAZACNTR"). Plaza Centers N.V. is an indirect subsidiary of Elbit Imaging Ltd. (“EI"), an Israeli public company whose shares are traded on both the Tel Aviv Stock Exchange in Israel and the NASDAQ Global Market in the United States. It has been active in real estate development in emerging markets for over 18 years.
Forward-looking statements
This press release may contain forward-looking statements with respect to Plaza Centers N.V. future (financial) performance and position. Such statements are based on current expectations, estimates and projections of Plaza Centers N.V. and information currently available to the company. Plaza Centers N.V. cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. Plaza Centers N.V. has no obligation to update the statements contained in this press release, unless required by law.
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| | Annexes | | | | | | | | | | |
| | File | Description | |
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Plaza_Centers_YE_RESULTS_2013_FINAL_CLEAN.pdf
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