Regulated information, Leuven, 27 January 2017 (17.40 hrs CET)
Interim Financial Report 2016/2017
KBC Ancora recorded a profit of EUR 67.2 million in the first half of the financial year 2016/2017. This compared with a loss of EUR 10.5 million for the same period in the previous financial year. This result was principally determined by the interim dividend distributed by KBC Group in November 2016, in combination with the usual operating costs and interest charges in the first half of each financial year.
Abridged financial summary and notes[1]
Results for the first half of the financial year 2016/2017
| 1H fin. Year (x EUR 1,000) | 2016/2017 per share (in EUR) | 1H fin. Year (x EUR 1,000) | 2015/2016 per share (in EUR) | |
| Recurring financial profit/loss | 68,242 | 0.87 | -9,432 | -0.12 |
| Other recurring profit/loss | -1,054 | -0.01 | -1,063 | -0.01 |
| Profit/loss from capital operations | 0 | 0.00 | 0 | 0.00 |
| Extraordinary profit/loss | 0 | 0.00 | 0 | 0.00 |
| Result before taxes | 67,189 | 0.86 | -10,495 | -0.13 |
| Result after taxes | 67,189 | 0.86 | -10,495 | -0.13 |
| Number of shares in issue* | 78,301,314 | 78,301,314 |
* No instruments have been issued which could lead to dilution.
KBC Ancora recorded a positive result of EUR 67.2 million in the first six months of the current financial year, equivalent to EUR 0.86 per share, compared with a negative result of EUR 10.5 million in the same period in the previous financial year.
The result principally comprised the interim dividend distributed by KBC Group (EUR 77.5 million), interest charges on debt (EUR 9.3 million) and operating costs (EUR 1.1 million).
Balance sheet as at 31 December 2016
| (x EUR 1,000) | 31.12.2016 | *30.06.2016 |
| BALANCE SHEET TOTAL | 2,498,531 | 2,441,801 |
| Assets | ||
| Fixed assets | 2,441,766 | 2,441,766 |
| Financial fixed assets | 2,441,766 | 2,441,766 |
| Current assets | 56,765 | 35 |
| Liabilities | ||
| Capital and reserves | 2,112,394 | 2,045,206 |
| Issued capital | 2,021,871 | 2,021,871 |
| Legal reserve | 7,541 | 7,541 |
| Unavailable reserves | 35,955 | 35,955 |
| Profit (loss) carried forward | -20,161 | -20,161 |
| Result for the period | 67,189 | 0 |
| Creditors | 386,137 | 396,595 |
| Amounts falling due after more than one year | 375,000 | 375,000 |
| Amounts falling due within one year | 170 | 19,883 |
| Accruals and deferred income | 10,967 | 1,712 |
* The balance sheet as at 30 June 2016 is shown after appropriation of profit.
The balance sheet total stood at EUR 2.5 billion, EUR 56.7 million higher than at the end of the financial year 2015/2016.
The number of shares held by KBC Ancora in KBC Group remained unchanged.
Capital and reserves rose by an amount equal to the positive result over the first six months of the year (EUR 67.2 million). Amounts owed to creditors reduced by EUR 10.5 million, while current assets rose by EUR 56.7 million.
Interim report on the first six months of the current financial year 2016/2017
Notes on the first half of the current financial year 2016/2017
Results for the first six months of the financial year 2016/2017
KBC Ancora recorded a positive result of EUR 67.2 million in the first six months of the current financial year, compared with a negative result of EUR 10.5 million in the same period in the previous financial year.
This result was influenced principally by the following elements:
- Dividend income totalling EUR 77.5 million; as announced on 11 August 2016, KBC Group distributed an interim dividend in November 2016 of EUR 1.00 per KBC Group share.
- Interest charges totalling EUR 9.3 million, EUR 0.2 million less than in the same period in the previous financial year.
- Operating expenses amounting to EUR 1.1 million, in line with the previous financial year. The recurring operating expenses consisted primarily of costs incurred within the cost-sharing agreement with Cera (EUR 0.8 million). In addition, there were the usual costs such as listing fees (EUR 0.1 million) and management expenses (EUR 0.1 million).
Participating interest in KBC Group, net debt position and net asset value
The number of KBC Group shares in portfolio remained unchanged during the past six months at 77,516,380. KBC Ancora holds 0.99 KBC Group shares per KBC Ancora share in issue. The average book value of the KBC Group shares is EUR 31.5 per share.
KBC Ancora's net debt amounted to EUR 4.21 per share as at 31 December 2016, a reduction of EUR 0.85 per share compared with 30 June 2016. This reduction in net debt was due to the interim dividend distributed by KBC Group in November 2016. KBC Ancora's intention to distribute an (interim) dividend in early June 2017 will cause net debt to increase again.
The net asset value of one KBC Ancora share as at 31 December 2016 was thus equivalent to the price of 0.99 KBC Group shares less EUR 4.21. Based on the closing price of the KBC Group share on 31 December 2016 (EUR 58.83), the net asset value of one KBC Ancora share amounted to EUR 54.03, and the KBC Ancora share (EUR 39.775) was trading at a discount of 26.4% to the net asset value.
Based on the closing price of the KBC Group share on 26 January 2017 (EUR 61.25), the net asset value of one KBC Ancora share amounted to EUR 56.43, and the KBC Ancora share (EUR 41.845) was trading at a discount of 25.8% to the net asset value.
The following charts illustrate the movements in the price of the KBC Group and KBC Ancora shares and the discount of the KBC Ancora share to its net asset value.
| Trend in KBC Group and KBC Ancora share price (January - December 2016) | Trend in discount of KBC Ancora share to its net asset value (January - December 2016) |
Principal risks and uncertainties in the remaining months of the financial year
Certain risk factors could have an impact on the value of the assets held by KBC Ancora and on its ability to distribute a dividend. Reference is made in this regard to the description of the risks in the most recent annual report (page 9).
KBC Group reported a net profit of EUR 1.74 billion for the first nine months of 2016. KBC Group will announce its annual result for the financial year 2016 on 9 February 2017.
In August 2016, KBC Group confirmed its dividend policy of applying a dividend payout ratio (including the coupon on the outstanding Additional Tier-1 instruments) of at least 50% of the consolidated profit. Following its Annual General Meeting in May 2017, KBC Group will distribute a final dividend which, together with the interim dividend distributed in November 2016, will constitute the total dividend in respect of the financial year 2016.
In addition to a final dividend received from KBC Group, KBC Ancora's result in the second half of the current financial year (2016/2017) will consist principally of interest charges plus the usual limited operating expenses (costs within the cost-sharing agreement with Cera, listing costs and management expenses).
Barring unforeseen circumstances, KBC Ancora will close the financial year 2016/2017 with a positive result. KBC Ancora intends to distribute its recurring result, after reconciliation of the loss carried forward of EUR 20.2 million and the addition to the legal reserve, as an interim dividend. The amount and the payment date of the interim dividend will be announced on 19 May 2017 (17.40 hrs CEST).
Declaration by the responsible individuals
"We, the members of the Board of Directors of Almancora Société de gestion, statutory manager of KBC Ancora SCA, hereby jointly declare that, in so far as we are aware:
- the abridged financial summaries, drawn up in accordance with the applicable standards for financial statements, present a true and fair picture of the capital position, financial position and results of KBC Ancora,
- the interim financial report presents a true and fair view of the key events and principal transactions with affiliated parties during the first six months of the current financial year and of their impact on the abridged financial summaries, as well as a description of the principal risks and uncertainties during the remaining months of the financial year."
Information on the external audit
The auditor has reviewed the interim financial information. The auditor's report is appended to this interim report.
---------------------------------
KBC Ancora is a listed company which holds 18.5% of the shares in KBC Group and which together with Cera, MRBB and the Other Permanent Shareholders is responsible for the shareholder stability and further development of the KBC group. As core shareholders of KBC Group, these parties have signed a shareholder agreement to this effect.
Financial calendar:
19 May 2017 (17.40 hrs CEST) Announcement of interim dividend (amount/payment date)
31 August 2017 Annual press release for the financial year 2016/2017
26 September 2017 (17.40 hrs CEST) Annual Report 2016/2017 available
27 October 2017 General Meeting of Shareholders
This press release is available in Dutch, French and English on the website www.kbcancora.be.
KBC Ancora Investor Relations & Press contact: Jan Bergmans
Tel.: +32 (0)16 279672
E-mail: jan.bergmans@kbcancora.be or mailbox@kbcancora.be
Appendix: Detailed balance sheet and profit and loss account with comparative figures
| (x EUR 1,000) | 31 December 2016 | 30 June 2016 |
| BALANCE SHEET TOTAL | 2,498,531 | 2,441,801 |
| Assets | ||
| Fixed assets | 2,441,766 | 2,441,766 |
| Financial fixed assets | 2,441,766 | 2,441,766 |
| Companies with which there is a participatory relationship | 2,441,766 | 2,441,766 |
| Participating interests | 2,441,766 | 2,441,766 |
| Current assets | 56,765 | 35 |
| Receivables due within one year | 24 | 29 |
| Cash at bank and in hand | 56,742 | 0 |
| Prepayments and accrued income | 0 | 6 |
| Liabilities | ||
| Capital and reserves | 2,112,394 | 2,045,206 |
| Capital | 2,021,871 | 2,021,871 |
| Issued capital | 2,021,871 | 2,021,871 |
| Reserves | 43,496 | 43,496 |
| Legal reserve | 7,541 | 7,541 |
| Unavailable reserves | 35,955 | 35,955 |
| Profit (loss) carried forward | -20,161 | -20,161 |
| Profit (loss) for the period | 67,189 | |
| Creditors | 386,137 | 396,595 |
| Amounts falling due after more than one year | 375,000 | 375,000 |
| Financial liabilities | 375,000 | 375,000 |
| Credit institutions | 375,000 | 375,000 |
| Amounts falling due within one year | 170 | 19,883 |
| Financial liabilities | 0 | 19,662 |
| Credit institutions | 0 | 19,662 |
| Trade creditors | 128 | 151 |
| Suppliers | 128 | 151 |
| Liabilities in respect of taxes, remuneration and social security costs | 0 | 0 |
| Taxes | 0 | 0 |
| Other creditors | 42 | 70 |
| Accruals and deferred income | 10,967 | 1,712 |
| (x EUR 1,000) | 1 July.2016- 31 Dec.2016 | 1 July 2015- 31 Dec.2015 |
| RESULTS | 67,189 | -10,495 |
| Expenses | 10,379 | 10,535 |
| Cost of debt | 9,274 | 9,432 |
| Other financial expenses | 0 | 0 |
| Services and sundry goods | 1,104 | 1,103 |
| Miscellaneous current expenses | 0 | 0 |
| Income | 77,567 | 41 |
| Income from financial fixed assets | 77,516 | 0 |
| Dividend | 77,516 | 0 |
| Income from current assets | 0 | 0 |
| Other financial income | 0 | 0 |
| Other current revenues | 51 | 41 |
| Gain on realisation of financial assets | 0 | 0 |
Statutory auditor's report to the statutory manager of KBC Ancora Comm VA on the review of the condensed interim financial information as at 31 December 2016 and for the six-month period then ended
FREE TRANSLATION OF A REPORT ORIGINALLY PREPARED IN DUTCH
Introduction
We have reviewed the accompanying condensed statement of financial position of KBC Ancora Comm VA as at 31 December 2016 and the statement of profit or loss for the 6 month period then ended ("the condensed interim financial information"). The management body is responsible for the preparation and presentation of this condensed interim financial information in accordance with the financial reporting framework applicable in Belgium for interim financial information. Our responsibility is to express a conclusion on this condensed interim financial information based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information as at 31 December 2016 and for the six-month period then ended has not been prepared, in all material respects, in accordance with the financial reporting framework applicable in Belgium for interim financial information.
Brussels, 27 January 2017
KPMG Réviseurs d'Entreprises / Bedrijfsrevisoren
Statutory Auditor
represented by
Olivier Macq
Réviseur d'Entreprises / Bedrijfsrevisor
[1] KBC Ancora's reporting is based on Belgian GAAP.
See Appendix for a detailed balance sheet and profit and loss account.
