Press Release
Luxembourg, 29 March 2019
ORCO PROPERTY GROUP
2018 Financial Results
Financial highlights
| Performance | 31-Dec-18 | 31-Dec-17 | Change | ||
| Gross rental income | € thousands | 1,683 | 2,156 | (22.0%) | |
| Total revenues | € thousands | 26,722 | 6,999 | 309.0% | |
| Operating result | € thousands | 8,079 | 108,576 | (92.6%) | |
| Net profit for the period | € thousands | 122,019 | 137,279 | (11.1%) | |
| Assets | 31-Dec-18 | 31-Dec-17 | Change | ||
| Total assets | € thousands | 3,192,868 | 1,980,303 | 61.2% | |
| EPRA NAV | € thousands | 736,066 | 598,736 | 22.9% | |
| Property Portfolio | € thousands | 483,000 | 457,000 | 5.7% | |
| Gross leasable area | sqm | 92,000 | 28,000 | 228.6% | |
| Occupancy in % | % | 87.3% | 82.2% | 5.1 pp | |
| Land bank area | sqm | 17,626,000 | 17,675,000 | (0.3%) | |
| Total number of properties | No. | 6 | 6 | 0% | |
| Financing structure | 31-Dec-18 | 31-Dec-17 | Change | ||
| Total equity | € thousands | 868,866 | 628,371 | 38.3% | |
| Equity ratio | % | 27% | 32% | (5.0 pp) | |
| Net debt | € thousands | (14,429) | (10,901) | (32.4%) | |
Income statement
Income statement for the 12 months period ended on 31 December 2018 and 31 December 2017 is as follows:
| TEUR | 31-Dec-18 | 31-Dec-17 | ||
| Gross rental income | 1,683 | 2,156 | ||
| Sale of services | 25,029 | 4,248 | ||
| Cost of service charges | (950) | (1,381) | ||
| Property operating expenses | (1,215) | (1,272) | ||
| Net service and rental income | 25,547 | 3,751 | ||
| Development sales | 10 | 595 | ||
| Cost of goods sold | (7) | (505) | ||
| Net development income | 3 | 90 | ||
| Total revenues | 26,722 | 6,999 | ||
| Total direct business operating expenses | (2,172) | (3,158) | ||
| Net business income | 24,550 | 3,841 | ||
| Net valuation gain on inv. property | 3,225 | 105,449 | ||
| Net gain on the disposal of inv. property and subsidiaries | 3,069 | 35 | ||
| Amortization, depreciation and impairments | (9,539) | 2,138 | ||
| Administrative expenses | (13,925) | (2,028) | ||
| Other operating income | 968 | 241 | ||
| Other operating expenses | (269) | (1,100) | ||
| Operating result | 8,079 | 108,576 | ||
| Interest income | 111,860 | 56,572 | ||
| Interest expense | (60,750) | (28,297) | ||
| Other net financial result | 10,408 | 3,758 | ||
| Net finance income | 61,518 | 32,033 | ||
| Share of profit of equity-accounted investees (net of tax) | (698) | 6,217 | ||
| Profit / (Loss) before income tax | 68,899 | 146,826 | ||
| Income tax expense | 53,120 | (9,547) | ||
| Net Profit for the period | 122,019 | 137,279 |
Sale of services
Service revenue increased to EUR 24.4 million in 2018 (2017: EUR 3.2 million). The increase is due to providing of advisory services to entities controlled by the ultimate shareholder of the Group.
Net valuation gain
The net valuation gain amounts to EUR 3.2 million (EUR 105.4 million in 2017) comprised of valuation gain of EUR 7.9 million, valuation loss of EUR 5.5 million and net foreign exchange gain of EUR 0.8 million.
Net finance income
Total net finance income has risen from EUR 32.0 million in 2017 to EUR 61.5 million in 2018. The interest income increased from EUR 56.6 million in 2017 to EUR 111.9 million in 2018. The increase in interest income reflects the increase in loans provided by the Company to entities within the CPI PG group and other related parties.
The other net financial result has improved from a gain of EUR 3.8 million in 2017 to a gain of EUR 10.4 million in 2018. The main cause of this improvement is the positive result from early repayment of bonds (EUR 5.6 million) which the Company acquired in August 2018. Net foreign exchange gain (EUR 4.8 million) was driven by movement of EUR against CZK.
Balance sheet
| TEUR | ||||||
| 31-Dec-18 | 31-Dec-17 | |||||
| NON-CURRENT ASSETS | ||||||
| Intangible assets | 27 | -- | ||||
| Investment property | 474,778 | 450,373 | ||||
| Property, plant and equipment | 398 | 35 | ||||
| Equity-accounted investees | 3,890 | 4,571 | ||||
| Other investments | 125,406 | 104,613 | ||||
| Loans provided | 2,283,819 | 1,196,932 | ||||
| Trade and other receivables | 7,988 | 12 | ||||
| Deferred tax assets | 180,021 | 123,565 | ||||
| Total non-current assets | 3,076,327 | 1,880,101 | ||||
| CURRENT ASSETS | ||||||
| Inventories | 7,967 | 6,348 | ||||
| Income tax receivables | 275 | 279 | ||||
| Trade receivables | 5,400 | 4,540 | ||||
| Loans provided | 84,474 | 68,490 | ||||
| Cash and cash equivalents | 14,705 | 11,230 | ||||
| Other current assets | 3,334 | 8,918 | ||||
| Assets held for sale | 386 | 397 | ||||
| Total current assets | 116,541 | 100,202 | ||||
| TOTAL ASSETS | 3,192,868 | 1,980,303 | ||||
| EQUITY | ||||||
| Equity attributable to owners of the Company | 702,413 | 565,688 | ||||
| Non-controlling interests | 166,453 | 62,683 | ||||
| Total equity | 868,866 | 628,371 | ||||
| NON-CURRENT LIABILITIES | ||||||
| Financial debts | 2,091,697 | 1,113,884 | ||||
| Deferred tax liabilities | 34,160 | 33,048 | ||||
| Provisions | 1,574 | 1,559 | ||||
| Other non-current liabilities | 2,356 | 1,991 | ||||
| Total non-current liabilities | 2,129,787 | 1,150,482 | ||||
| CURRENT LIABILITIES | ||||||
| Financial debts | 87,853 | 54,581 | ||||
| Trade payables | 18,941 | 2,723 | ||||
| Income tax liabilities | 141 | 63 | ||||
| Other current liabilities | 87,280 | 144,083 | ||||
| Total current liabilities | 194,215 | 201,450 | ||||
| TOTAL EQUITY AND LIABILITIES | 3,192,868 | 1,980,303 | ||||
Total assets and total liabilities
Total assets increased by EUR 1,212.6 million (61.2%) to EUR 3,192.9 million as at 31 December 2018. The main reason is the increase of long-term loans provided to entities within the CPI PG group.
Non-current and current liabilities total EUR 2,324.0 million as at 31 December 2018 which represents an increase by EUR 972.0 million (71.9%) compared to 31 December 2017. Main driver of this increase was an additional drawdown of loan provided to the Company by CPI PG.
EPRA Net asset value
The EPRA Net Asset Value per share as of 31 December 2018 is EUR 0.56 compared to EUR 0.46 as of 31 December 2017.
The Triple NAV amounts to EUR 0.53 per share compared to EUR 0.43 at the end of last year. The calculation is compliant with the EPRA (European Public Real Estate Associations) “Triple Net Asset Value per share”.
| December 2018 | December 2017 | |
| Consolidated equity | 702,413 | 565,688 |
| Fair Value adjustment on asset held for sales | -- | -- |
| Fair value adjustments on inventories | -- | -- |
| Deferred taxes on revaluations | 33,653 | 33,048 |
| Goodwill | -- | -- |
| Own equity instruments | -- | -- |
| EPRA Net asset value | 736,066 | 598,736 |
| Existing shares (in thousands) | 1,314,508 | 1,314,508 |
| Net asset value in EUR per share | 0.56 | 0.46 |
| EPRA Net asset value | 736,066 | 598,736 |
| Deferred taxes on revaluations | (33,653) | (33,048) |
| Fair value adjustment of bonds issued by the Group | -- | -- |
| EPRA Triple Net asset value (*) | 702,413 | 565,688 |
| Fully diluted shares | 1,314,508 | 1,314,508 |
| Triple net asset value in EUR per share | 0.53 | 0.43 |
Over the year 2018 the consolidated equity increased by EUR 136.7 million. The main driver of this increase is the profit of the period amounting to EUR 122.0 million.
For disclosures regarding Alternative Performance Measures used in this press release please refer to our 2018 Financial Information, chapter GLOSSARY & DEFINITIONS; accessible at
http://www.orcogroup.com/investors/financial-documentation/full-year-documents.php
For full Management Report as of 31 December 2018, including Consolidated Financial Statements as at 31 December 2018 please refer to our website at www.orcogroup.com.
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