Interim / Quarterly Report • Aug 30, 2018
Interim / Quarterly Report
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La Hulpe, 30 August 2018
The first half of 2018 closed with a consolidated net profit (group share) of 5.64 million Euro compared to a result of 16.75 million Euro for the first half of 2017. The difference against the first half of 2017 is easily explained by the realization of major disposals in the first half of 2017, while we foresee such disposals in the second half of 2018.
In the first half of 2018, it is mainly margins generated on pre-sold projects, both office and residential, both in Western Europe and in Central Europe that generated this result. The lease revenues of the HBC (Bucharest), Nysdam (La Hulpe) and UBC (Warsaw) buildings have also brought a significative contribution. The revenue of this semester has once again been diverse with 10 projects contributing to the results.
| Results | 30.06.2018 | 30.06.2017 |
|---|---|---|
| Net consolidated result (group share) | 5,638 | 16,749 |
| Profit per share (in Euro) | 1.00 | 2.97 |
| Number of shares | 5,631,076 | 5,631,076 |
| of which own shares | 191,813 | 172,927 |
| Balance sheet | 30.06.2018 | 31.12.2017 |
| Total assets | 657,547 | 593,180 |
| Cash position at the end of the period | 64,693 | 43,296 |
| Net indebtedness (-) | -387,106 | -333,835 |
| Total of consolidated equity | 141,367 | 149,640 |
The revenues from ordinary activities as at 30 June 2018 amounted to 45.68 million Euro. They mainly consist of (a) the residual revenue realised on the sale of the D building of the Vaci Greens project in Budapest (€ 9.97 M), (b) revenues from the sale of apartments in residential projects: The One (Brussels; € 8.46 M), City Dox (Anderlecht; € 6.95 M), UP-site (Brussels;€ 5.09 M), Au Fil des Grands Prés (Mons; € 4.78 M) as well as (c) lease revenues on the Hermes Business Campus buildings in Bucharest (€ 4.92 M).
The other operating revenue (€ 5.59 M) mainly includes the reinvoicing of service charges and miscellaneous costs of the leased buildings (€ 2.76 M) as well as the remaining capital gain made from the sale of the Senior Island subsidiary (City Dox project) following the delivery of the elderly home (€ 2.74 M).
The operating result amounts to 11.25 million Euro. It is mainly influenced by the sale of building D of the Vaci Greens project (Budapest; € 2.72 M), the sale of apartments of the various residential projects, mainly Au Fil des Grands Prés (Mons), City Dox (Anderlecht), Palatium (Brussels), and The One (Brussels) for respectively € 1.25 M, € 1.07 M, € 0.84 M, and € 0.44 M.
The rental revenue net of charges of the HBC (Bucharest; € 4.20 M) and Nysdam (La Hulpe ; € 0.44 M) buildings as well as the sale of Senior Island in Anderlecht (City Dox project; € 2.74 M) bring an additional contribution to the result.
The net financial result amounts to -3.97 million Euro compared with -4.93 million Euro for the first half of 2017. The decrease of net financial charges over the first half year is mainly due to a more favourable weighted average interest rate (2.43% vs. 3.18%), coupled with a rise in capitalizations (IAS 23 – € +0.22 M compared to 2017), relating to the developments in progress.
Taxes amounted to 1.59 million Euro on 30 June 2018 and are mainly composed of current tax and deferred tax liabilities relating mainly to the City Dox (€ 0.43 M), Vaci Greens (€ 0.34 M) and The One (€ 0.30 M) projects.
The net result (group share) of the first half of the financial year amounts to 5.64 million Euro.
The consolidated shareholders' equity amounts to 141.37 million Euro, which represents 21.5 % of the balance sheet total.
As at 30 June 2018, the Group has a net financial indebtedness of 387.11 million Euro (excluding cash) compared with a net financial indebtedness of 333.84 million Euro as at 31 December 2017.
The increase in net debt of the Group (€ +53.27 M) in comparison with 31 December 2017 is mainly due to the issue, last April, of the bond in two tranches (retail bond) of 50 million Euro. This successful operation demonstrated the confidence institutional and private investors have in ATENOR.
The "buildings held for sale" classified under "Inventories (Stock)" represent the real estate projects in portfolio and in the course of development. This item amounts to 499.08 million Euro, a net increase of 55.11 million Euro in comparison with 31 December 2017. This change is mainly due to (a) acquisition of the UBC project (Warsaw; € 40.63 M), (b) of the remaining balance following the sale of the Vaci Greens D building (Budapest ;€ - 5.55 M), (c) the continuation of works and studies of The One office (Brussels), City Dox (Anderlecht), Bords de Seine (Bezons), Berges de l'Argentine (La Hulpe) projects representing in total 26.55 million Euro and (d) the apartment sales of the Palatium, Au Fil des Grands Prés, City Dox, The One and UP-site projects which have decreased the stock by 8.68 million Euro. The remaining balance of the net variation of this item (€ +2.16 M) is distributed over the other projects in development.
In the course of the first half of the year, ATENOR continued the development of its 18 projects in portfolio representing approx. 800,000 m²
The favourable evolution observed over the last few months of the projects in portfolio shows an active management of our projects in a satisfactory real estate market.
The projects experienced the following developments:
THE ONE - European Quarter, rue de la Loi, Brussels (31,000 m² of offices and 11,000 m² of residential)
The construction works are continuing with the target for provisional delivery at the end of 2018. This mixed housing-office tower is the first concrete achievement of the Plan Urbain Loi (PUL), a vast urban overhaul of the European Quarter conducted by the government of the Brussels Region.
On the commercial side, 73% of the apartments and the two ground-floor retail spaces have been sold (excluding reservations).
After the the signing of a first lease for 4,000 m² with Welkin&Meraki, (co-working centre), efforts and discussions are continuing in a competitive Brussels market.
To our knowledge the investigation of the appeal against the RZUPR at the Council of State is continuing, however without any damaging impact to be expected on The One.
REALEX [90% ATENOR] – European Quarter, between the rues de la Loi & de Lalaing, Brussels (minimum 54,000 m² of offices)
Realex responded to the call for projects launched by the European institutions for the acquisition of a conference centre of about 24,000 m² excluding ground. For the office area (± 30,000 m²) which completes this project, Realex has responded to a second call for projects launched by the European institutions, which concerns the lease of ±150,000 m² by 2020-2024.
A new application for building permit will therefore be submitted in the second half of the year in order to adapt the project to these requirements.
The delivery of the elderly home last 23 May enabled the subsidiary to be transferred to Federales Assurances and its operator Armonéa to open for business on 1 July. This opening fostered the sales process of the 71 service residence units (26% sold) delivered in June. The deliveries of the 93 residential units planned for the 4thquarter (60% of which have been sold) and of the 8,500 m² of integrated business services will complete the first phase of the City Dox project.
Furthermore, the subdivision permit for the second phase of the project, mainly residential, was delivered on 16 July, enabling us to submit the building permit application for the Lot 3 which includes 21,000 m² of residential units, 12,700 m² of them subsidised (citydev.brussels), 3,000 m² of production premises and 7,300 m² of integrated business services. The ongoing development will also include a school, public spaces and housing on the edge of the canal.
The studies to be carried out as part of the Midi Master Development Plan (MDP) were launched at the initiative of the Government of the Brussels Region. Our intention is to launch an international architecture competition for the residential part and to submit a building permit application or urban certificate for the entire project as soon as possible, expected before the end of 2018. The urban planning situation is therefore undergoing concrete changes.
Renovation works on the street-front offices (phase 1 – 4,000 m²) are continuing for delivery at the end of 2018. Discussions for letting/sales are in progress.
The second phase of the project (26,000 m² of housing), has been completely revised in order to meet the wishes expressed by the municipal council. A building permit application will be submitted as soon as possible.
The commercial repositioning of the building has been completed; following the last lease contract signings, it has an occupancy rate of 92 %.
The commercial success of this project has been remarkable considering that the first eight blocks of the first phase (268 homes – 25,500 m² sold in total) have all been (pre)sold! The first four have been delivered and the next four are under construction, with the deliveries spreading from September 2018 to mid-2020 for the last block.
Furthermore, the strategy for the permit application procedure relating to the other plots of the project (phase 2) has been reviewed following the rejection of the planning permit application last June by municipality council of Mons. An initial application for 14,000 m² of offices will be submitted in Autumn 2018. In the long term, the development of this second phase will include several hundred apartments, local retail areas and offices allowing to link the shopping gallery to the train station.
The first four blocks (91 apartments) have been delivered and the building of the 5th block (35 homes), started in December 2016, is continuing, with delivery scheduled for September 2018. To date, 67% of the 126 apartments have been sold. At the same time, the urban revitalisation works being executed alongside the project should be completed in September allowing us to complete the sale of the last units.
The withdrawal of observations and other minor works executed by the genereal contractor are still in progress and should be finished this autumn. Discussions are continuing for the sale of the remaining 3 retail areas.
NAOS [55% ATENOR] – Belval, Grand-Duchy of Luxembourg (offices and retail units – 14,000 m²) Construction work continued in accordance with the schedule for delivery planned for July 2019. Furthermore, letting rate has risen to 62% and steps are in progress relating to rent the remaining areas as well as the sales'process without it being possible at this stage to predict the timing of their outcome.
TWIST (EX LOT 46) – Belval, Grand-Duchy of Luxembourg (offices, housing and retail units – 14,300 m²) This project concerns the development of a mixed building of 14,300 m² on 28.8 ares of land including offices, housing and retail units acquired after ATENOR won the competitive bid. Talks are underway with the local authorities for the submission of a detailed urban development plan (PAP) which should be obtained before the end of the year.
Via its Luxembourg subsidiary, ATENOR signed a pre-agreement last November for the acquisition of almost 1.3 hectares of land located in the "Am Bann" area of Leudelange This project, named "BuzzCity", concerns the development of a potentially phaseable office complex of some 16,800 m². The building permit has been submitted and it is expected to be obtained by September 2018, which will enable to finalize the acquisition deed and start the construction. The market is already showing its interest in this high growth area.
Following the issue of the new permit allowing 34,800 m² in February, the call for bids process is coming to an end, the intention being to start the construction in October in a highly active Péri-Défense market.
ATENOR, through its new Polish subsidiary, completed on 1 June the acquisition of long term lease rights on two office buildings of 30,500 m² offering an annual rental income of approximately three million Euro. These offices located in the very active Mokotow quarter of Warsaw will undergo redevelopment in two phases, the first being the demolition and reconstruction of UBC 1, the smallest and oldest of the two buildings.
VACI GREENS – Vaci Corridor, Budapest (block D: 17,500 m² and blocks E and F: 55,000 m² of offices)
The Vaci Greens D building sold in October 2017 on future completion and delivered in January 2018 has had its last vacant spaces filled by big names like Ford and General Electric, thereby reducing the rental guarantee given to the buyer. The final fit-out works are in progress.
The building permit for the last blocks (E and F) of the campus (55,000 m²) will be implemented shortly, with a delivery of the first building expected in March 2020.
The building permit for the entire project (4 blocks) has been issued this month allowing the construction works of the first block (A – 23,500 m²) to start in September.
In general, the economic outlook remains favourable and continues to have a positive influence on the office rental and investment market.
To date, the three buildings are fully leased
Steps are still in progress to sell these buildings in an increasingly active investment market without it being possible at this stage to predict the timing of their outcome.
A first permit for the renovation of the listed building has been obtained and the renovation work is in progress. A double application for building permit covering the entire project (old and new parts) has been submitted as part of a UZDP (Urban Zone Development Plan) and should be obtained in the following weeks.
The lease market has also shown its interest in this ideally located project.
This site will enable the development of an office complex of some 46,900 m², demonstrating yet again ATENOR's determination to pursue innovative property projects in a buoyant Romanian property market. A first building permit will be submitted in autumn 2018 for a start of works in early 2019.
As a reminder:
ForAtenoR SA ratified the existing shareholder agreement dated 30th November 2016.
The Board of Directors is watchful of the analysis and management of the various risks and uncertainties to which ATENOR and its subsidiaries are confronted with.
There is also one litigation ATENOR continues to face; this situation has not changed at all since the last publications:
We remind you that the company Com.Realty (Michel Pilette) claims a commission on the sale of the TREBEL project signed with the European Parliament following the public call for projects. By a decision handed down on 28 November 2016, the Commercial Court dismissed all of this company's claims against ATENOR. Com.Realty has, however, appealed the decision and the proceedings are still pending on appeal. ATENOR considers these claims to be unfounded (as confirmed by the decision at first instance) and, accordingly, has not posted any provision in this respect. The hearings will be held in early 2019.
On 31 December 2017, ATENOR s.a. held 35,195 own shares.
Following various transactions over the first half of the year, ATENOR s.a. held on 30 June 2018, 28,386 own shares. Although the policy is not strictly speaking a systematic buyback of own shares, Atenor seizes any opportunity for such buybacks in view of the value of the ATENOR share and the cash position.
The ATENOR GROUP INVESTMENTS subsidiary owns 163,427 ATENOR shares which are intended to increase the value of the option plans (2015 to 2018) awarded to ATENOR employees and service providers.
Real-estate markets in Europe are seeing positive development, driven by the return to growth.
As a major player in several markets, ATENOR should benefit from their positive development.
ATENOR's results will be supported, like the previous year, by the sales of the residential projects in Brussels and in the provinces.
Several major transactions are in progress although it is not possible to specify the calendar for their actual realization at this stage.
Furthermore, the second half of 2018 will be marked by the implementation (permit applications and
start of construction) of several major projects in the portfolio.
Lastly, new investments may be considered as part of the ongoing buy-develop-sell process applied to projects corresponding to our strategy and to our international positioning.
ATENOR will specify during the second half of the year, according to the evolution of the portfolio, the forecast results of the exercise, which appear to be at this stage comparable to the 2017 results.
ATENOR intends to maintain its dividend policy providing shareholders with an attractive and recurrent return.
| - | Intermediate declaration for third quarter 2018 | 15 November 2018 |
|---|---|---|
| --- | ------------------------------------------------- | ------------------ |
For more detailed information, please contact Stéphan Sonneville s.a., CEO represented by Mr Stéphan Sonneville or Mr Sidney D. Bens, CFO.
+32-2-387.22.99 - +32-2-387.23.16 - e-mail: [email protected] - www.atenor.be
| Notes 30.06.2018 30.06.2017 Operating revenue 45.678 144.181 39.811 138.582 Turnover Property rental income 5.867 5.599 Other operating income 5.589 3.691 Gain (loss) on disposals of financial assets 2.737 914 Other operating income 2.853 2.705 Gain (loss) on disposals of non-financial assets -1 7 2 Operating expenses (-) -40.019 -122.801 Raw materials and consumables used (-) -75.089 -60.661 Changes in inventories of finished goods and work in progress 62.743 -36.848 Employee expenses (-) -1.180 -1.322 Depreciation and amortization (-) -96 -172 Impairments (-) 1.483 539 Other operating expenses (-) -27.880 -24.337 RESULT FROM OPERATING ACTIVITIES - EBIT 11.248 25.071 Financial expenses (-) -4.059 -5.767 Financial income 9 1 833 Share of profit (loss) from investments consolidated by the equity method -117 -115 PROFIT (LOSS) BEFORE TAX 7.163 20.022 Income tax expense (income) (-) 7 -1.593 -3.326 PROFIT (LOSS) AFTER TAX 5.570 16.696 Post-tax profit (loss) of discontinued operations 0 0 PROFIT (LOSS) OF THE PERIOD 5.570 16.696 Non controlling interests -68 -53 Group profit (loss) 5.638 16.749 EARNINGS PER SHARE EUR 30.06.2018 30.06.2017 Total number of issued shares 5.631.076 5.631.076 of which own shares 191.813 172.927 Weighted average number of shares (excluding own shares) 5.439.269 5.457.339 Basic earnings 1,04 3,07 Diluted earnings per share 1,04 3,07 In thousands of EUR Other elements of the overall profit and losses 30.06.2018 30.06.2017 Group share result 5.638 16.749 Items not to be reclassified to profit or loss in subsequent periods : Employee benefits Items to be reclassified to profit or loss in subsequent periods : Translation adjusments -1.894 2.800 Tax -244 Overall total results of the group 3.500 19.549 |
In thousands of EUR | ||
|---|---|---|---|
Overall profits and losses of the period attributable to third parties -68 -53
| Notes | 30.06.2018 | 31.12.2017 | |
|---|---|---|---|
| NON-CURRENT ASSETS | 40.741 | 43.806 | |
| Property, plant and equipment | 335 | 287 | |
| Intangible assets | 221 | 327 | |
| of which goodwill | 9 3 | 173 | |
| Investments consolidated by the equity method | 20.366 | 20.123 | |
| Deferred tax assets | 6.177 | 5.404 | |
| Other non-current financial assets | 11.482 | 12.745 | |
| Non-current trade and other receivables | 2.160 | 4.920 | |
| CURRENT ASSETS | 616.806 | 549.374 | |
| Inventories | 9 | 499.083 | 443.973 |
| Other current financial assets | 4 | 17.339 | 25.011 |
| Current tax receivables (*) | 870 | 1.176 | |
| Current trade and other receivables | 42.680 | 51.125 | |
| Current loans payments | 134 | 221 | |
| Cash and cash equivalents | 4 | 52.388 | 23.121 |
| Other current assets | 4.312 | 4.747 | |
| TOTAL ASSETS | 657.547 | 593.180 |
| ASSETS | |||
|---|---|---|---|
| In thousands of EUR | |||
| Notes | 30.06.2018 | 31.12.2017 | |
| NON-CURRENT ASSETS | 40.741 | 43.806 | |
| Property, plant and equipment | 335 | 287 | |
| Intangible assets | 221 | 327 | |
| of which goodwill | 9 3 | 173 | |
| Investments consolidated by the equity method | 20.366 | 20.123 | |
| Deferred tax assets | 6.177 | 5.404 | |
| Other non-current financial assets | 11.482 | 12.745 | |
| Non-current trade and other receivables | 2.160 | 4.920 | |
| CURRENT ASSETS | 616.806 | 549.374 | |
| Inventories | 9 | 499.083 | 443.973 |
| Other current financial assets | 4 | 17.339 | 25.011 |
| Current tax receivables (*) | 870 | 1.176 | |
| Current trade and other receivables | 42.680 | 51.125 | |
| Current loans payments | 134 | 221 | |
| Cash and cash equivalents | 4 | 52.388 | 23.121 |
| Other current assets | 4.312 | 4.747 | |
| TOTAL ASSETS | 657.547 | 593.180 | |
| LIABILITIES AND EQUITY | |||
| 30.06.2018 | 31.12.2017 | ||
| TOTAL EQUITY | 141.367 | 149.640 | |
| Group shareholders' equity | 138.350 | 146.717 | |
| Issued capital | 57.631 | 57.631 | |
| Reserves | 88.537 | 97.281 | |
| Treasury shares (-) | -7.818 | -8.195 | |
| Non controlling interest | 3.017 | 2.923 | |
| Non-current liabilities | 279.764 | 213.777 | |
| Non-current interest bearing borrowings | 5 | 264.621 | 198.682 |
| Non-current provisions | 5.976 | 6.718 | |
| Deferred tax liabilities | 7.035 | 7.037 | |
| Non-current trade and other payables | 776 | 0 | |
| Other non-current liabilities | 880 | 864 | |
| Current liabilities | 236.416 | 229.763 | |
| Current interest bearing debts | 5 | 187.178 | 178.449 |
| Current provisions | 408 | 0 | |
| 6.786 | 4.930 | ||
| 34.498 | 42.980 | ||
| Other current liabilities | 7.546 | 3.404 | |
| TOTAL EQUITY AND LIABILITIES | 657.547 | 593.180 | |
| Current tax payables Current trade and other payables (*) The VAT debt obligation (€7.1 million on 31.12.2017) has been reclassified from the "Tax Receivable" heading to the"Current trade and other receivables" heading. |
(*) The VAT debt obligation (€7.1 million on 31.12.2017) has been reclassified from the "Tax Receivable" heading to the"Current trade
| Notes | In thousands of EUR | |||
|---|---|---|---|---|
| 30.06.2018 | 30.06.2017 | 31.12.2017 | ||
| Operating activities | ||||
| Net result - |
5.638 | 16.749 | 22.179 | |
| Result of non controlling interests - |
-68 | -53 | -117 | |
| Result of Equity method Cies - |
117 | 115 | 466 | |
| Net finance cost - |
3.453 | 4.285 | 7.798 | |
| Income tax expense - |
7 | 1.794 | 4.038 | 10.054 |
| Result for the year - |
10.934 | 25.134 | 40.380 | |
| Depreciations - |
9 6 | 172 | 269 | |
| Impairment losses - |
-1.483 | -539 | 567 | |
| Translation adjustments - |
100 | 2.906 | 4.258 | |
| Provisions - |
-270 | 3.549 | 4.410 | |
| Deferred taxes - |
7 | -200 | -712 | -7.574 |
| (Profit)/Loss on disposal of fixed assets - |
-2.787 | -986 | -1.839 | |
| SOP / IAS 19 - |
7 5 | -330 | -197 | |
| Adjustments for non cash items - |
-4.469 | 4.060 | -106 | |
| Variation of inventories - |
-56.629 | 35.690 | -14.090 | |
| Variation of trade and other amounts receivables - |
5.035 | 9.711 | 7.314 | |
| Variation of trade payables - |
-2.223 | -2.501 | 3.890 | |
| Variation of amounts payable regarding wage taxes - |
-332 | -134 | 248 | |
| - | -3.230 | -24.915 | -28.444 | |
| Variation of other receivables and payables | ||||
| - Net variation on working capital | -57.379 | 17.851 | -31.082 | |
| Interests received - |
90 | 832 | 971 | |
| Income tax (paid) received - |
150 | -2.460 | -9.829 | |
| Cash from operating activities (+/-) | -50.674 | 45.417 | 334 | |
| Investment activities | ||||
| Acquisitions of intangible and tangible fixed assets - |
-119 | -56 | -165 | |
| Acquisitions of financial investments - |
-6 | 0 | ||
| New loans - |
-103 | -3.555 | -688 | |
| Subtotal of acquired investments - |
-228 | -3.611 | -853 | |
| Disposals of intangible and tangible fixed assets - |
15 | 71 | 81 | |
| Disposals of financial investments - |
7.516 | |||
| Reimbursement of loans - |
1.364 | 331 | 910 | |
| Subtotal of disinvestments - |
8.895 | 402 | 991 | |
| Cash from investment activities (+/-) | 8.667 | -3.209 | 138 | |
| Financial activities | ||||
| Increase in capital - |
0 | 300 | 300 | |
| Decrease in capital - |
0 | 0 | 0 | |
| Treasury shares - |
376 | 4 2 | -1.124 | |
| Proceeds from borrowings - |
91.422 | 6.723 | 45.815 | |
| Repayment of borrowings - |
-16.514 | -66.774 | -119.209 | |
| Interests paid - |
-762 | -1.535 | -9.615 | |
| Dividends paid to company's shareholders - |
6 | -11.317 | -11.154 | -11.154 |
| Directors' entitlements - |
-316 | -316 | -316 | |
| Cash from financial activities (+/-) | 62.889 | -72.714 | -95.303 | |
| Net variation ot the period | 20.882 | -30.506 | -94.831 | |
| Cash and cash equivalent at the beginning of the year (*) - |
43.296 | 138.315 | 138.315 | |
| Net variation in cash and cash equivalent - |
20.882 | -30.506 | -94.831 | |
| Non cash variations (Cur. conversion, chge in scope, etc) - |
515 | 6 8 | -188 | |
| Cash and cash equivalent at end of the year - |
4 | 64.693 | 107.877 | 43.296 |
(*) The cash at start of the period of the previous closings has been restated to reflect the value of the securities of the Beaulieu certificate, (€ 7.08 M) . The period's variations on this item are reflected in the variation of the other debt obligations and debts of the working capital.
| In thousands of EUR | Issued capital | Hedging reserves | Own shares | Consolidated reserves |
Profit/loss of the period |
IAS 19R reserves |
Cumulative translation adjusments |
Minority interests |
Total Equity |
|---|---|---|---|---|---|---|---|---|---|
| 2 0 1 7 | |||||||||
| Balance as of 01.01.2017 | 57.631 | - | (7.092) | 102.163 | - | (291) | (15.756) | 2.740 | 139.395 |
| Profit/loss of the period Other elements of the overall results |
- - |
- - |
- - |
- - |
22.179 - |
- (140) |
- 476 |
(117) - |
22.062 336 |
| Total comprehensive income | - | - | - | - | 22.179 | (140) | 476 | (117) | 22.398 |
| Capital increase Paid dividends Own shares Share based payment Other |
- - - - - |
- - - - - |
- - (1.103) - - |
- (11.154) - (196) - |
- - - - - |
- - - - |
- - - - - |
- - - - 300 |
- (11.154) (1.103) (196) 300 |
| Balance as of 31.12.2017 | 57.631 | - | (8.195) | 90.813 | 22.179 | (431) | (15.280) | 2.923 | 149.640 |
| First semester 2 0 1 7 | |||||||||
| Balance as of 01.01.2017 | 57.631 | - | (7.092) | 102.163 | - | (291) | (15.756) | 2.923 | 139.578 |
| Profit/loss of the period Other elements of the overall results |
- - |
- - |
- - |
- - |
16.749 - |
- - |
- 2.800 |
(53) - |
16.696 2.800 |
| Total comprehensive income | - | - | - | - | 16.749 | - | 2.800 | (53) | 19.496 |
| Capital increase Paid dividends Own shares Share based payment Other |
- - - - - |
- - - - - |
- - 80 - - |
- (11.154) - (329) - |
- - - - - |
- - - - - |
- - - - - |
- - - - 299 |
- (11.154) 80 (329) 299 |
| Balance as of 30.06.2017 | 57.631 | - | (7.012) | 90.680 | 16.749 | (291) | (12.956) | 3.169 | 147.970 |
| First semester 2 0 1 8 | |||||||||
| Balance as of 01.01.2018 | 57.631 | - | (8.195) | 112.992 | - | (431) | (15.280) | 2.923 | 149.640 |
| Change of method - IFRS 15 | (1.001) | (1.001) | |||||||
| Adjusted opening balance | 57.631 | - | (8.195) | 111.991 | - | (431) | (15.280) | 2.923 | 148.639 |
| Profit/loss of the period Other elements of the overall results |
- - |
- - |
- - |
- (244) |
5.638 - |
- - |
- (1.894) |
(68) - |
5.570 (2.138) |
| Total comprehensive income | - | - | - | (244) | 5.638 | - | (1.894) | (68) | 3.432 |
| Capital increase Paid dividends Own shares Share based payment Other |
- - - - |
- - - - |
- - 377 |
- (11.317) - 74 |
- - - - |
- - - - |
- - - - |
- - - - 162 |
- (11.317) 377 74 162 |
| Balance as of 30.06.2018 | - 57.631 |
- - |
- (7.818) |
100.504 | - 5.638 |
- (431) |
- (17.174) |
3.017 | 141.367 |
The half-year consolidated financial statements of the Group on 30 June 2018 were adopted by the Board of Directors at 29 August 2018.
The consolidated accounts of 30 June 2018 were prepared in conformity with the IAS 34 standard relating to intermediate financial information.
The intermediate financial accounts must be read alongside the annual report of 31 December 2017.
The evaluation rules adopted for the preparation of the consolidated financial situation of 30 June 2018 were not modified compared to the rules followed for the preparation of the annual report of 31 December 2017 with the exception of the regulations, amendments or interpretations, of compulsory application for the financial periods opened after 1 January 2018.
The consolidated half-year financial statements were prepared in accordance with IFRS standards (International Financial Reporting Standards) as adopted in the European Union.
This new standard, ratified by the European Union came into effect on 1 January 2018. It describes a single comprehensive framework that entities must use to recognise revenue from contracts with customers and in the case of ATENOR, where appropriate, with its investors.
It replaces the existing standards on revenue recognition, including "IAS 18 - Revenue" and "IAS 11 - Construction contracts" and related interpretations.
The European (ESMA) and Belgian (FSMA) regulators published in July 2016 their recommendations for the implementation and integration of this standard in the consolidated accounts.
The fundamental principle the IFRS poses is that ATENOR should recognise revenue in order to show when assets are provided to customers (buyers or investors in office buildings, apartments or in companies) and the amount of consideration that ATENOR expects to recognise in exchange for such disposals. This fundamental principle is presented as a five-step model:
ATENOR has been applying IFRS 15 since 1 January 2018 according to the simplified retrospective method. In application of this method, the comparative periods have not been restated and the impact relating to the change of the evaluation rule has been directly recorded in the opening equity (refer to the Consolidated state of equity variations). This impact stands at 1 million euros net of tax.
The table below details per item the IFRS 15 transition and the recognition in result in 2018 and 2019 linked to the change in method:
| In thousands of EUR | Equity | Result recognition | |||||
|---|---|---|---|---|---|---|---|
| 01.01.2018 | 01.01-30.06.18 | 01.07-31.12.18 | 2019 | Total | |||
| Turnover | -1.410 | -1.427 | 3.060 | -223 | 1.410 | ||
| Cost price | -12 | 1.887 | -2.104 | 229 | 1 2 | ||
| Gross result | -1.422 | 460 | 956 | 6 | 1.422 | ||
| Tax - 29.58% | 421 | -136 | -283 | -2 | -421 | ||
| Net impact | -1.001 | 324 | 673 | 4 | 1.001 |
The IFRS 15 transition concerns 3 residential projects segmented in the Western Europe sector (The One, City Dox and Au Fil des Grands Prés (blocks A & B)). In application of IFRS 15, the turnover (land proportion and constructions proportion) is recognised following the percentage of completion.
The application of standard IFRS 9 has no material impact on ATENOR's consolidated financial statements.
The life cycle of the real estate projects of ATENOR can be summarised in three major phases: the land purchase phase, the project development and construction phase, and the marketing and sales phase. The length and process of these phases are neither similar nor comparable from one project to another.
Follow-up and compliance with the planning of each of these projects are assured by the implementation of a regular communication system. Internal control is provided by:
As soon as a project reaches the construction phase, a monthly progress meeting is held with:
the external specialists to ensure that the agreed deadlines are complied with and
the General Contractor in charge of construction.
This communication system allows ATENOR to determine, monitor and resolve well upfront all potential operational risks well.
| In thousands of EUR | |||||
|---|---|---|---|---|---|
| 30.06.2018 | 30.06.2017 | 31.12.2017 | |||
| CASH AND CASH EQUIVALENTS | |||||
| Short-term deposits | 12.305 | 68.983 | 20.175 | ||
| Bank balances | 52.385 | 38.891 | 23.119 | ||
| Cash at hand | 3 | 3 | 2 | ||
| Total cash and cash equivalents | 64.693 | 107.877 | 43.296 |
Read table page 8
| In thousands of EUR | |||
|---|---|---|---|
| Current | Non-current | TOTAL | |
| Up to 1 year | More than 1 year | ||
| MOVEMENTS ON FINANCIAL LIABILITIES | |||
| On 31.12.2017 | 178.449 | 198.682 | 377.131 |
| Movements of the period | |||
| - New loans | 16.310 | 74.750 | 91.060 |
| - Reimbursement of loans | -16.353 | -16.353 | |
| - Entries in the consolidation scope | |||
| - Variations from foreign currency exchange | -2 | -1 | -3 |
| - Short-term/long-term transfer | 8.755 | -8.755 | |
| - Other | 1 9 | -55 | -36 |
| On 30.06.2018 | 187.178 | 264.621 | 451.799 |
Refer to the comment on page 2 on the consolidated balance and the reduction of the indebtedness.
In 2016, ATENOR issued, in the context of its new European Medium Term Notes (EMTN) programme, four bond tranches of respectively €30 M (3% - maturity 2021), €18 M (3.125% - maturity 2022), €30 M (3.50% - maturity 2023) and €8.1 M (3.75% - maturity 2024). In February 2018, ATENOR issued two new tranches of €2M (2.25% maturity 2021) and €5M (3.50% - maturity 2025). All these bonds are quoted on Alternext Brussels.
As at 30 June 2018, their "fair value" is respectively € 29.85 M (99.51%), € 17.63 M (97.96%), € 29.62 M (98.72%), € 7.96 M (98.28%), € 2.002 M (100.10%) and € 5.13 M (102.50%).
Furthermore, in April 2018, ATENOR issued two retail-type bond tranches of € 30 M (3.50% - maturity 2024) and €20 M (2.875% - maturity 2022) respectively. These bonds are listed on Alternext Brussels. On 30 June 2018, their "fair values" stood at €30.92 M (103.06%) and €20.47 M (102.37%) respectively.
We remind you that ATENOR set up, in November 2014, the private placement of a 5-year bond of 25 million Euro whose maturity is fixed at 31.12.2019.
| In thousands of EUR | ||||||
|---|---|---|---|---|---|---|
| 30.06.2018 | 30.06.2017 | 31.12.2017 | ||||
| Dividends on ordinary shares declared and paid during the period: Final dividend for 2017 : € 2.08 Final dividend for 2016 : € 2.04 |
-11.317 | -11.154 | -11.154 |
ATENOR does not offer any interim dividend.
| In thousands of EUR | |||||
|---|---|---|---|---|---|
| TAXES | 30.06.2018 | 30.06.2017 | 31.12.2017 | ||
| Income tax expense / Income - current | |||||
| Current period tax expense | -1.952 | -4.116 | -10.238 | ||
| Adjustments to tax expense/income of prior periods | 158 | 7 7 | 184 | ||
| Total current tax expense, net | -1.794 | -4.039 | -10.054 | ||
| Income tax expense / Income - Deferred | |||||
| Related to the current period | 201 | 500 | 10.034 | ||
| Related to tax losses | 213 | -2.460 | |||
| Total deferred tax expense | 201 | 713 | 7.574 | ||
| Total current and deferred tax expense | -1.593 | -3.326 | -2.480 |
See table on page 7
| In thousands of EUR | 30.06.2018 | 30.06.2017 | ||||
|---|---|---|---|---|---|---|
| Western Europe |
Central Europe |
Total | Western Europe |
Central Europe |
Total | |
| Operating revenue | 30.399 | 15.279 | 45.678 | 42.963 | 101.218 | 144.181 |
| Turnover | 29.796 | 10.015 | 39.811 | 41.739 | 96.843 | 138.582 |
| Property rental income | 603 | 5.264 | 5.867 | 1.224 | 4.375 | 5.599 |
| Other operating income | 3.998 | 1.591 | 5.589 | 1.312 | 2.379 | 3.691 |
| Gain (loss) on disposals of financial assets | 2.737 | 2.737 | 914 | 914 | ||
| Other operating income | 1.262 | 1.591 | 2.853 | 326 | 2.379 | 2.705 |
| Gain (loss) on disposals of non-financial assets | -1 | -1 | 7 2 | 7 2 | ||
| Operating expenses (-) | -30.246 | -9.773 | -40.019 | -42.506 | -80.295 | -122.801 |
| Raw materials and consumables used (-) | -31.891 | -43.198 | -75.089 | -51.694 | -8.967 | -60.661 |
| Changes in inventories of finished goods and work in progress16.039 | 46.704 | 62.743 | 22.657 | -59.505 | -36.848 | |
| Employee expenses (-) | -1.007 | -173 | -1.180 | -1.186 | -136 | -1.322 |
| Depreciation and amortization (-) | -92 | -4 | -96 | -169 | -3 | -172 |
| Impairments (-) | 1.482 | 1 | 1.483 | 539 | 539 | |
| Other operating expenses (-) | -14.777 | -13.103 | -27.880 | -12.653 | -11.684 | -24.337 |
| RESULT FROM OPERATING ACTIVITIES - EBIT | 4.151 | 7.097 | 11.248 | 1.769 | 23.302 | 25.071 |
| Financial expenses (-) | -3.575 | -484 | -4.059 | -4.997 | -770 | -5.767 |
| Financial income | 9 0 | 1 | 9 1 | 832 | 1 | 833 |
| Share of profit (loss) from investments consolidated by | ||||||
| the equity method | -117 | -117 | -115 | -115 | ||
| PROFIT (LOSS) BEFORE TAX | 549 | 6.614 | 7.163 | -2.511 | 22.533 | 20.022 |
| Income tax expense (income) (-) | -1.253 | -340 | -1.593 | -2.412 | -914 | -3.326 |
| PROFIT (LOSS) AFTER TAX | -704 | 6.274 | 5.570 | -4.923 | 21.619 | 16.696 |
| Post-tax profit (loss) of discontinued operations | ||||||
| PROFIT (LOSS) OF THE PERIOD | -704 | 6.274 | 5.570 | -4.923 | 21.619 | 16.696 |
| Intercompany elimination | 343 | -343 | 0 | 6 8 | -68 | 0 |
| CONSOLIDATED RESULT | -361 | 5.931 | 5.570 | -4.855 | 21.551 | 16.696 |
| Overall profits and losses of the period attributable | ||||||
| to third parties | -68 | -68 | -53 | -53 | ||
| Group share result | -293 | 5.931 | 5.638 | -4.802 | 21.551 | 16.749 13 |
Segment information is prepared, both for internal reporting and external disclosure, on a single sector of activity, i.e. real-estate development projects (office and residential buildings). This activity is presented, managed and monitored by project. The various project committees, the Executive Committee and the Board of Directors are responsible for monitoring the various projects and assessing their performances.
However, based on the location of the projects, two geographical segments are henceforth identifiable: on the one hand, Western Europe, covering Belgium, the Grand Duchy of Luxembourg and France and on the other hand, Central Europe, covering Hungary, Romania and Poland.
Both on 30 June 2018 and in the 1st half of 2017, the segmentation evidences the contribution to the results of the projects in Central Europe.
The ATENOR activity report provides more detailed information on the results and purchases and sales during the period reviewed.
| 30.06.2018 | ||||||
|---|---|---|---|---|---|---|
| Western | Central | Total | Western | Central | Total | |
| In thousands of EUR | Europe | Europe | Europe | Europe | ||
| ASSETS | ||||||
| NON-CURRENT ASSETS | 40.641 | 100 | 40.741 | 43.689 | 117 | 43.806 |
| Property, plant and equipment | 314 | 2 1 | 335 | 271 | 1 6 | 287 |
| Investment property | ||||||
| Intangible assets | 152 | 6 9 | 221 | 236 | 9 1 | 327 |
| of which goodwill | 2 4 | 6 9 | 9 3 | 8 2 | 9 0 | 172 |
| Investments in related parties | ||||||
| Investments consolidated by the equity | ||||||
| method | 20.366 | 20.366 | 20.123 | 20.123 | ||
| Deferred tax assets | 6.177 | 6.177 | 5.404 | 5.404 | ||
| Other non-current financial assets | 11.472 | 1 0 | 11.482 | 12.735 | 1 0 | 12.745 |
| Derivatives | ||||||
| Non-current trade and other receivables Other non-current assets |
2.160 | 2.160 | 4.920 | 4.920 | ||
| CURRENT ASSETS | 378.007 | 238.799 | 616.806 | 337.615 | 211.759 | 549.374 |
| Assets held for sale | ||||||
| Inventories | 296.566 | 202.517 | 499.083 | 279.419 | 164.554 | 443.973 |
| Other current financial assets | 17.339 | 17.339 | 25.011 | 25.011 | ||
| Derivatives | ||||||
| Current tax receivables | 398 | 472 | 870 | 509 | 667 | 1.176 |
| Current trade and other receivables | 21.639 | 21.041 | 42.680 | 27.102 | 24.023 | 51.125 |
| Current loans payments | 2 1 | 113 | 134 | 108 | 113 | 221 |
| Cash and cash equivalents Other current assets |
40.844 | 11.544 | 52.388 | 4.140 | 18.981 | 23.121 |
| TOTAL ASSETS | 1.200 418.648 |
3.112 238.899 |
4.312 657.547 |
1.326 381.304 |
3.421 211.876 |
4.747 593.180 |
| LIABILITIES AND EQUITY | ||||||
| TOTAL EQUITY | 107.245 | 34.122 | 141.367 | 120.089 | 29.551 | 149.640 |
| Group shareholders' equity | 104.228 | 34.122 | 138.350 | 117.166 | 29.551 | 146.717 |
| Issued capital | 57.631 | 57.631 | 57.631 | 57.631 | ||
| Reserves | 54.415 | 34.122 | 88.537 | 67.730 | 29.551 | 97.281 |
| Treasury shares (-) | -7.818 | -7.818 | -8.195 | -8.195 | ||
| Non controlling interest | 3.017 | 3.017 | 2.923 | 2.923 | ||
| Non-current liabilities | 247.923 | 31.841 | 279.764 | 179.264 | 34.513 | 213.777 |
| Non-current interest bearing borrowings | 239.525 | 25.096 | 264.621 | 171.844 | 26.838 | 198.682 |
| Non-current provisions | 460 | 5.516 | 5.976 | 612 | 6.106 | 6.718 |
| Pension obligation | 476 | 476 | 476 | 476 | ||
| Derivatives | ||||||
| Deferred tax liabilities | 6.686 | 349 | 7.035 | 6.332 | 705 | 7.037 |
| Non-current trade and other payables | 776 | 776 | ||||
| Other non-current liabilities | 880 | 880 | 864 | 864 | ||
| Current liabilities | 63.480 | 172.936 | 236.416 | 81.951 | 147.812 | 229.763 |
| Current interest bearing debts | 183.719 | 3.459 | 187.178 | 174.990 | 3.459 | 178.449 |
| Current provisions | 356 | 5 2 | 408 | |||
| Pension obligation | ||||||
| Derivatives | ||||||
| Deferred tax liabilities | 5.641 | 1.145 | 6.786 | 4.927 | 3 | 4.930 |
| Current trade and other payables Other current liabilities |
26.358 4.934 |
8.140 2.612 |
34.498 7.546 |
25.504 2.069 |
17.476 1.335 |
42.980 3.404 |
| Intercompany elimination / not allocated | -157.528 | 157.528 | -125.539 | 125.539 | ||
| TOTAL EQUITIES AND LIABILITIES | 418.648 | 238.899 | 657.547 | 381.304 | 211.876 | 593.180 |
| In thousands of EUR | ||||
|---|---|---|---|---|
| 30.06.2018 | 30.06.2017 | 31.12.2017 | ||
| Buildings intended for sale, beginning balance | 443.973 | 429.209 | 429.209 | |
| Activated costs | 90.864 | 66.568 | 171.196 | |
| Disposals of the year IFRS 15 transition |
-35.616 -12 |
-103.416 | -157.535 | |
| Entry in the consolidation scope | ||||
| Exit from the consolidation scope | ||||
| Reclassifications from/to the "Inventories" Borrowing costs (IAS 23) |
-495 1.381 |
2.071 1.158 |
2.899 | |
| Foreign currency exchange increase (decrease) | -2.388 | 117 | -3.189 | |
| Write-offs (recorded) | ||||
| Write-offs (written back) | 1.376 | 968 | 1.392 | |
| Movements during the year | 55.110 | -32.534 | 14.763 | |
| Buildings intended for sale, ending balance | 499.083 | 396.675 | 443.973 | |
| Accounting value of inventories mortgaged (limited to granded loans) | 134.506 | 103.351 | 124.744 | |
| Refer to the explanations on page 2. | ||||
| Note 10. Stock option plans for employees and other payments based on shares | ||||
| On 12 March 2018, ATENOR issued a new share option tranche (SOP 2018) for the subsidiary named Atenor | ||||
| Group Investments (AGI). | The options issued on this subsidiary benefit the members of the Executive | |||
| Committee, personnel and service providers. | ||||
| This SOP may be exercised during the three followings periods from 8 March to 31 March 2021, from 8 March to | ||||
| 31 March 2022 and from 8 to 31 March 2023 after each publication of the annual results. | ||||
| On 12 March 2018, the Board of Directors, on the recommendation of the Remuneration Committee, distributed | ||||
| 940 Atenor Group Participation (AGP) shares in accordance with the remuneration policy described in the "Corporate Governance" section of our 2017 Annual Financial Report (page 68). |
||||
| The Board of Directors decided to acquire 150,000 shares via a subsidiary to create in order to put in place a new stock option plan as from 2019. |
||||
| Note 11. Related Parties | ||||
| In thousands of EUR Sums due to the |
||||
| Sums due to related | group from related | |||
| parties | parties | |||
| - IMMOANGE | 373 | |||
| share of the group: 50% | - | |||
| - VICTOR ESTATES share of the group: 50% |
- | 4.932 | ||
| - VICTOR PROPERTIES share of the group: 50% |
- | 264 | ||
| - VICTOR BARA part de groupe: 50% |
- | 2.120 | ||
| - VICTOR SPAAK | - | 3.764 | ||
| part de groupe: 50% | ||||
| - NAOS | - | - | ||
| share of the group: 55% | ||||
| Within the framework of the Victor mixed project, the (50/50) joint-venture with BPI has led to the consolidation | ||||
| by the equity method of the companies Immoange, Victor Properties, Victor Estates, Victor Spaak and Victor | ||||
| Bara. | ||||
| ATENOR has receivables as set out in the table above in respect of equity-consolidated affiliates. | ||||
| No other important change occurred concerning the related parties during the first half of 2018. |
| In thousands of EUR | ||||
|---|---|---|---|---|
| Sums due to the | ||||
| Sums due to related | group from related | |||
| parties | parties | |||
| - IMMOANGE share of the group: 50% |
- | 373 | ||
| - VICTOR ESTATES share of the group: 50% |
- | 4.932 | ||
| - VICTOR PROPERTIES share of the group: 50% |
- | 264 | ||
| - VICTOR BARA part de groupe: 50% |
- | 2.120 | ||
| - VICTOR SPAAK part de groupe: 50% |
- | 3.764 | ||
| - NAOS share of the group: 55% |
- | - |
15
ATENOR does not use derivative instruments for trading purposes. No new contract was implemented to cover interest rate hedges or foreign exchange hedges during 2018.
| MOVEMENTS IN OWN SHARES | Amount (in thousands of €) |
Number of shares |
|---|---|---|
| On 01.01.2018 (average price € 41.26 per share) | 8.195 | 198.622 |
| Movements during the period - acquisitions - sales |
1.324 -1.701 |
28.623 -35.432 |
| On 30.06.2018 (average price € 40,76 per share) | 7.818 | 191.813 |
Although the policy is not strictly speaking a systematic buyback of own shares, ATENOR seizes any opportunity for such buybacks in view of the value of the share and the cash position.
No significant event subsequent to 30 June 2018 is to be noted.
Stéphan SONNEVILLE s.a., CEO and President of the Executive Committee and the Members of the Executive Committee, including Mr Sidney D. BENS, CFO, acting in the name of and on behalf of ATENOR SA attest that to the best of their knowledge,
1 Affiliated companies of ATENOR in the sense of article 11 of the Company Code
_
We have reviewed the condensed consolidated interim financial information of ATENOR SA as of June 30, 2018, and for the period of six months ended on that date, which comprises the condensed consolidated interim statement of profit or loss and other comprehensive income, the condensed consolidated interim statement of financial position, the condensed consolidated interim statement of cash flows, the condensed consolidated interim statement of changes in equity, the accounting policies, and a selection of explanatory notes.
The board of directors is responsible for the preparation and fair presentation of this condensed consolidated interim financial information in accordance with the international standard IAS 34 - Interim Financial Reporting as adopted by the European Union. Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.
We conducted our review in accordance with the international standard ISRE (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.
Based on our review, nothing has come to our attention that causes us to believe that the preceding condensed consolidated interim financial information is not prepared, in all material respects, in accordance with the international standard IAS 34 - Interim Financial Reporting as adopted by the European Union.
Brussels, August 29, 2018
Mazars Réviseurs d'Entreprises SCRL Statutory auditor Represented by Xavier DOYEN
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