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ATENOR

Interim / Quarterly Report Sep 24, 2014

3908_ir_2014-09-24_765e9fa2-baf2-494b-adcb-2abda7c121b2.pdf

Interim / Quarterly Report

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HALF YEAR FINANCIAL REPORT 2014

La Hulpe, 24 September 2014

A. Interim Management Report

The first half of 2014 closed with a consolidated net profit (group share) of 3.00 million euros compared to a result of 9.21 million euros for the first half of 2013.

The sale of block B1 of the UP-site project, the increase in the contribution of the Port du Bon Dieu project in Namur, the first revenue from the Hungarian project and the reduction in overhead contributed to the results for the first half of 2014. The first half of 2013 was marked by a major contribution from the TREBEL project after obtaining the permit and the end of appeal proceedings.

Results 30.06.2014 30.06.2013
Net consolidated result (group share) 3,000.00 9,212.33
Profit per share (in euros) 0.55 1.75
Number of shares 5,457,264 5,251,918
of which own shares 157,142 157,583
Balance sheet 30.06.2014 31.12.2013
Total assets 382,915 376,709
Cash position at the end of the period 24,383 38,909
Net indebtedness (-) -203,534 -174,932
Total of consolidated equity 103,028 104,786

Table of key consolidated figures ('000 euro) - Limited review of the auditor

Turnover, revenue from ordinary activities

The turnover as at 30 June 2014 amounted to 65.75 million euros. It mainly consists of revenue related to the UP-site project partly from the sale of the B1 block of offices, the apartments of the Tower and the Terrace Buildings (38.12 M euros) and partly from the turnover resulting from the second portion (22.34 M euros) of the TREBEL project. The revenue from the sale of the apartments of the Namur project (3.53 M euros) completes this turnover.

The operating result amounts to 13.10 million euros, influenced on the one hand by the transfer to INASTI of UP-site's office block B1 and the apartments of the Tower and of the Terrace Buildings, pro rata the progress of the works (11.94 million euros) and on the other hand by the contribution of the TREBEL project (2.02 million euros), as booked in accordance with its degree of progress (from 38.48% to 44%). The sale of apartments in the Port du Bon Dieu project in Namur (0.9 M euros), the revenue associated with the leasing of the first Hungarian office building (0.57 M euros), as well as the indemnities received within the framework of the City Docks project in Anderlecht (0.31 M euros) provide an additional contribution to the operating result. Ultimately, administrative costs amounting to 2 million euros reduce this result.

The net financial result amounts to -2.73 million euros, compared with -2.77 million euros for the first half of 2013. This stability of financial charges over the first half year is mainly due to a certain balance in the net debt related to project development, coupled with favourable financing conditions.

Deferred tax expense: In compliance with the IAS 12 and the situation of the fiscal losses of ATENOR, the UP-site and the Trebel projects resulted, when launched, in the recording of deferred tax assets. In the first half of 2014, the impact of the taking back these deferred taxes amounted to 6.68 million euros.

The net result of the first half of the financial year amounts to 3.00 million euros.

Consolidated balance sheet

The consolidated shareholders' equity amounts to 103.03 million euros, which amounts to 26.9% of the balance sheet total.

As at 30 June 2013, the group has a net financial indebtedness of 203.53 million euros (including cash amounting to 24.38 million euros), compared with a net financial indebtedness of 174.93 million euros (including cash amounting to 38.81 million euros) as at 31 December 2013.

The increase in net debt of the Group (28.6 million euros) is mainly due to the acquisition of 50% of the AIR Properties project in Luxembourg and the continuation of the work on all portfolio projects, 9 of which are in the commercialization phase or already sold.

The "buildings held for sale" classified under "Stock" represent the real estate projects in portfolio and in the course of development. This item amounts to 255.90 million euros, a net decrease of 5.37 million euros in comparison with 31 December 2013. This change is mainly due to (a) sales of apartments and the B1 block of offices in the UP-site project which reduced the stock by 20.08 million euros and (b) the continuation of the work on the Hermes Business Campus project (Romania), the Vaci Greens project (Hungary), the Port du Bon Dieu project in Namur and the Brussels Europa project in Brussels, making a total of +12.59 million euros. The remainder (2.12 million euros) is distributed over the other projects in development.

Projects in our Portfolio

In the course of the first half of the year, ATENOR continued the development of the projects in the portfolio and recorded some major favourable events.

Further to the last new acquisitions, the portfolio currently includes 13 projects under development for a total on the order of 600,000 m².

The projects experienced the following developments:

UP-SITE – Canal area, quai des Péniches, Brussels (357 residential units, 29,689 m² of offices)

As recently communicated, the last of the 4 office buildings (10,000 m²) was subject to an agreement regarding its sale to INASTI. The transaction was approved on 30 June after the usual due diligence procedures, thus finalizing the sale of the office part of the project UP-site. This transaction contributes an amount of 4.71 million euros to the results for the first half of 2014.

The sale of the apartments in the Buildings-Terraces adjoining the Tower is reaching its conclusion, with the apartments on the canal front having all been quickly sold. The Tower's marketing has entered its final phase: while almost 90% of the apartments below the 25th floor have already found a taker, we opened a show apartment on the 27th floor demonstrating the exclusive nature of these residential units. Already, almost 25% of the apartments at the top of the tower have been reserved and specific marketing is about to be launched for the remaining units.

TREBEL – European Quarter, rue Belliard, Brussels (29,766 m² of offices)

The building work, which started in April 2013, continues according to the schedule agreed with the European Parliament, the provisional acceptance is planned for 2016. We remind you that the result is recognised as building work progresses, taking into account the sale commitment signed with the European Parliament.

BRUSSELS EUROPA – European Quarter, rue de la Loi, Brussels (29,000 m² of offices, 9,000 m² of residential) Following the conclusions of the impact assessment on the one hand, and based on the requirements of the RRUZ on the other hand, in March ATENOR filed a permit application amended to fit within this new regulatory framework. The current project now has 29,000 m² of offices for 9,000 m² of accommodation thus offering a vertical mix in a harmonious architecture.

Following the public inquiry and the committee for cooperation last May, the region authorities concluded a favourable opinion enabling ATENOR to obtain the environmental and demolition permits for the existing buildings. In addition, the planning permission will be granted as soon as the requested minor modifications have been validated by the administration. This last step suggests that the start of construction will be in the 2nd quarter of 2015, at the end of the demolition work.

VICTOR – opposite the South Station, Brussels (in the region of 100,000 m² mixed)

The master plan for the Midi district presented in March by the Brussels Capital Minister-Regional President has been included in the majority agreement of the new Government, which plans to approve it before the end of 2014. This master plan has led ATENOR and its partner to completely revise the initial project, for which a permit application has been submitted. This plan provides a consensual and ambitious vision of the district's future structure. The new project will now include a significant residential part, justified by the district dynamic thus created. Furthermore, the new architectural and engineering designs made are perfectly consistent with this blueprint with a view to a new permit application. In the meantime, ATENOR and its partner are engaged in competitive dialogue for the relocation of the offices of the Ministry of the Brussels-Capital Region, which could ultimately lead to an acceleration of the process.

CITY DOCKS - Canal area, quai de Biestebroeck, Anderlecht (of the order of 165,000 m² mixed)

A planning permit request was filed in March for the first phase of the project and focuses on the construction of housing, areas for integrated services to businesses and a nursing home and residenceservices for a total of 38,000 m². This application fits perfectly into the framework of the new PRAS demographic and entirely consistent with the Canal Plan's guidelines. Studies are underway for the second phase of the project, mainly of a residential character alongside the canal.

PORT DU BON DIEU – Namur (140 residential units, 5 shops, 1 restaurant - 20.614 m²)

The building works on this new residential complex at the gateway to the city continue at a steady pace, to such a point that we opened a model apartment on the 1st floor on 1st July. This event gives a boost to the marketing already well under way. In fact, since January 2013, nearly 60% of the first block of 46 apartments has been the subject of an agreement or a deed, the two other blocks following in their footsteps with 20% in pre-sales since the end of 2013. This trend confirms the market interest for this unique project in Namur. The completion of the work will be spread over the 2nd half of 2015.

AU FIL DES GRANDS PRÉS –"Les Grands Prés" shopping precinct district, Mons (of the order of 70,000 m² mixed)

After an initial planning permit for the building of a block of 78 residential units in the context of the existing District Land Use Plan, we obtained a permit for four other residential blocks, representing a total of 134 residential units. Obtaining the latter enabled an agreement to be signed for the sale of these 4 blocks to a consortium specializing in the purchase and management of investment property; an agreement that provides for the construction of the first block in February 2015. A revised PCA is currently under discussion between local and regional authorities on the basis of which the further development may be considered.

LA SUCRERIE – Ath (183 residential units – 20,000 m²)

A request for a single permit for the development of around 20,000 m², mainly residential, was introduced in January 2014 as a result of which an advertising campaign was launched last May. Building is scheduled to start on the first two residential blocks at the beginning of the 4th quarter as soon as the permit is obtained.

LES BRASSERIES DE NEUDORF – – Luxembourg City (87 residential units, 12 shops – 11,500 m²)

This residential project having finally been granted planning permission, the construction work should begin shortly, based on a current provisional sale rate of 67%.

AIR – Quartier de la Cloche d'Or, Luxembourg (11,000 m² of office space)

Two major elements have marked the good progress of this project: on the one hand, obtaining the planning permission for the renovation/extension of the building, and on the other hand the signing of the basic commercial contract with CDCL. Work therefore began on 1st August, in order to deliver the building within the timeframe agreed with its new tenant, the financial services company BDO. Furthermore, the investment market has shown an interest in acquiring this project.

HERMES BUSINESS CAMPUS – Boulevard D. Pompeiu, Bucarest (73,180 m² of office space)

The construction work on the first building of 18.000 m² was completed in March and the first tenants moved in as the development work was completed. Today, the building is 100% pre-leased, which has enabled the procedures for invitations to tender to be initiated for the construction of the second block of offices of 26,500 m², adjacent to the first and for which we report a pre-sale rate of 20%. This favourable context leads to contacts on the investment market for the resale of the blocks, the project enjoys a good positioning in terms of quality-price ratio and location.

VACI GREENS – Vaci Corridor, Budapest (87,138m²)

The first building (A - 17.420 m²) has since January 2014 been completely leased to several prestigious companies, including the General Electric group, which occupies several floors. Some investors have expressed interest, our aim being to finalize the sale of the block before the end of the year. The interest of General Electric is also focused on two other buildings (B and C - 45.000 m²), for which construction began with the signing of commitments to lease equivalent to a pre-sale rate of 34% for block C.

RUE AUX LAINES – Quartier Louise, near the Palais de Justice, Brussels (of the order of 14,000 m² mixed) Atenor and INASTI have reached an agreement based on which Atenor will redevelop the former INASTI site into a mixed project of 14,000 m².

Moreover, Atenor has confirmed that it is in final negotiations for the acquisition of the Swift site at La Hulpe (4.5 ha between the city centre and the railway station). The intention is to redevelop the site by creating about 180 homes in the middle of a beautiful park, as well as multipurpose areas, shops and offices.

The negotiations should be completed in the coming weeks.

SOUTH CITY HOTEL – Rue Fonsny (opposite the Gare du Midi) – Brussels

The operation of the hotel under the PARK INN brand generated a good operating result in the first quarter of 2014. ATENOR, together with its partners, is examining the most appropriate commercial approaches with a view to selling the company owning the hotel.

Principal risks and uncertainties

Within the framework of the dossiers for liquidity companies, the case of the sale of the limited company s.a. Entreprises Migeotte to the Société Générale (France) that occurred in 1999 will be heard by the Turnhout Criminal Court on 3 and 4 December 2014.

In the context of the "Erasmonde - American Energy" case, the Court of Cassation should rule in the second semester on the appeal lodged against the referral decision issued in October 2013 against 13 companies and persons including Atenor Group and Stéphan Sonneville, the representative of Atenor Group's CEO.

On 3 September, the Council Chamber in Brussels decided to return the "D-Facto - Cabepo" case to the Criminal Court. A dozen persons or legal entities are defendants in this case, which has been ongoing for more than a decade.

In general, Atenor Group, which has cooperated fully in the investigations carried out by the judicial and tax authorities, confirms that it has not committed any fraud, either in regard to tax or to company law, and is confident of having its good faith recognised in all the cases.

Own shares

During the first half of 2014, ATENOR GROUP s.a. acquired 9,967 own shares bringing the total number of own shares to 17,550. These were then fully transferred to the beneficiaries of the share option plan (SOP 2010).

The Atenor Group Investments subsidiary, which owned 150,000 Atenor shares, opted for further shares during the payment of the dividend for fiscal year 2013, bringing the total number of Atenor shares in its possession to 157,142.

Perspectives for the remaining months of the 2014 financial year

The positive development of the activities in the portfolio on the commercial and urban plans should support the results in the second half of the year.

In the absence of unforeseeable events specific to the Atenor Group or of a macro-economic nature, the annual results for 2014 should be close to the annual results for 2013.

Dividend

At the 2014 General Shareholders' Meeting, the Board of Directors proposed an optional dividend. 82.11% of shareholders opted in, thereby expressing their confidence in the group's strategy.

Financial calendar

Publication of the annual results for 2014 : 5 March 2015 Annual General Meeting 2014 : 24 April 2015 Publication of the half-yearly results for 2015 : 21 September 2015

Contact and Information

For more detailed information, we ask that you contact Stéphan Sonneville sa, CEO or Sidney D. Bens, CFO.

Tel +32 (2) 387.22.99 Fax +32 (2) 387.23.16 e-mail: [email protected] www.atenor.be

B. Summary Financial Statements

Consolidated income statement

In thousands of EUR
30.06.2014 30.06.2013
Revenue 65.753 77.983
Turnover 64.472 77.974
Property rental income 1.281 9
Other operating income 4.375 1.157
Gain (loss) on disposals of financial assets 9
Other operating income 4.360 940
Gain (loss) on disposals of non-financial assets 15 208
Operating expenses (-) -57.025 -61.433
Raw materials and consumables used (-) -27.433 -54.946
Changes in inventories of finished goods and work in progress -14.001 6.415
Employee expenses (-) -887 -743
Depreciation and amortization (-) -184 -87
Impairments (-) -120 -246
Other operating expenses (-) -14.400 -11.826
RESULT FROM OPERATING ACTIVITIES - EBIT 13.103 17.707
Financial expenses (-) -2.977 -3.205
Financial income 248 433
Share of profit (loss) from investments consolidated by the equity method -139 -125
PROFIT (LOSS) BEFORE TAX 10.235 14.810
Income tax expense (income) (-) -7.235 -5.598
PROFIT (LOSS) AFTER TAX 3.000 9.212
Post-tax profit (loss) of discontinued operations 0 0
PROFIT (LOSS) OF THE PERIOD 3.000 9.212
Attributable to minority interest
Group profit (loss) 3.000 9.212
EARNINGS PER SHARE EUR
30.06.2014 30.06.2013
Number of shares 5.457.264 5.251.918
Diluted earnings per share 0,55 1,75
Other elements of the overall profit and losses In thousands of EUR
30.06.2014 30.06.2013
Group share result 3.000 9.212
Items to be reclassified to profit or loss in subsequent periods :
Translation adjusments -968 -924

Cash flow hedge

Overall total results of the group 2.032 8.288

Overall profits and losses of the period attributable to third parties 1

B. Summary Financial Statements (continued)

Consolidated Balance sheet

ASSETS
In thousands of EUR
30.06.2014 31.12.2013
NON-CURRENT ASSETS 72.107 43.049
Property, plant and equipment 1.208 341
Investment property
Intangible assets 3.533 4.523
of which goodwill 3.516 4.498
Investments in related parties 0 0
Investments consolidated by the equity method 21.097 10.361
Deferred tax assets 4.003 10.281
Other non-current financial assets 17.901 17.535
Derivatives 0 0
Non-current trade and other receivables 24.360 3
Other non-current assets 5 5
CURRENT ASSETS 310.808 333.660
Assets held for sale
Inventories 255.900 261.267
Other current financial assets 12.439 37.379
Derivatives 0 0
Current tax receivables 4.060 3.440
Current trade and other receivables 25.478 29.146
Current loans payments 90 35
Cash and cash equivalents 11.944 1.530
Other current assets 897 863
TOTAL ASSETS 382.915 376.709

LIABILITIES AND EQUITY

30.06.2014 31.12.2013

TOTAL EQUITY 103.028 104.786
Group shareholders' equity 103.028 104.786
Issued capital 51.113 44.644
Reserves 58.260 66.517
Treasury shares (-) -6.345 -6.375
Minority interest 0 0
Non-current liabilities 190.175 184.682
Non-current interest bearing borrowings 175.834 164.097
Non-current provisions 436 424
Pension obligation 80 80
Derivatives 39 61
Deferred tax liabilities 9.432 10.170
Current trade and other payables 4.062 9.814
Other non-current liabilities 292 36
Current liabilities 89.712 87.241
Current interest bearing debts 52.083 49.744
Current provisions 1.052 1.052
Pension obligation 0 0
Derivatives 17 28
Current tax payables 2.049 1.663
Current trade and other payables 26.954 27.181
Other current liabilities 7.557 7.573
TOTAL EQUITY AND LIABILITIES 382.915 376.709

B. Summary Financial Statements (continued)

Consolidated cash flow statement (indirect method)

In thousands of EUR
30.06.2014 30.06.2013 31.12.2013
Operating activities
- Profit/loss after tax (excl. discontinued operations) 3.000 9.212 12.028
- Result of investments consolidated by the equity method 139 125 324
- Stock options plans / IAS 19 41 49 113
- Depreciations (+/-) 205 108 172
- Write off (+/-) 120 246 46
- Provisions (+/-) 13 4 17
- Translation adjustments (+/-) 40 14 -16
- Profits/losses on assets disposals -15 -173 -205
- Self-constructed assets
- Deferred taxes (+/-) 5.664 4.444 4.554
- Cash flow 9.207 14.029 17.033
- Increase/decrease in inventories 10.750 -15.890 -32.294
- Increase/decrease in receivables -27.491 -46.079 -56.114
- Increase/decrease in debts 2.337 9.910 -13.627
- Increase/decrease in working capital -14.404 -52.059 -102.035
Cash from operating activities (+/-) -5.197 -38.030 -85.002
Investments activities
- Acquisitions of intangible and tangible assets -1.044 -91 -141
- Acquisitions of financial investments -10.875 -60
- New loans -372 -1.201 -1.779
- Subtotal of acquired investments -12.291 -1.292 -1.980
- Disposal of intangible and tangible assets 851 0
- Disposal of financial investments 0 11.309 0
- Reimbursement of loans 6 163 163
- Subtotal of disinvestments 857 11.472 163
Cash from investment activities (+/-) -11.434 10.180 -1.817
Financial activities
- Capital increase 0 0 0
- Capital decrease 0 -11.438 -288
- Own shares 29 0
- New long-term loans 12.412 38.321 43.179
- Reimbursement of long-term loans -6.158 -51.118 -11.463
- Dividends paid by parent company to its shareholders -4.024 -3.983 -3.983
- Fees paid to the directors -225 -225 -225
Cash from financial activities (+/-) 2.034 -28.443 27.220
- Changes in scope of consolidation and exchange rate 71 -305 -208
Net cash variation -14.526 -56.598 -59.807
- Opening value of cash accounts in balance sheet 38.909 98.716 98.716
- Closing value of cash accounts in balance sheet 24.383 42.118 38.909

B. Summary Financial Statements (continued)

Consolidated statement of change in equity

In thousands of EUR

Issued capital Hedging reserves Own shares Accumulated
results
Profit/loss of the
period
IAS 19R reserves Cumulative
translation
adjusments
Minority
interests
Total Equity
Balance as of 01.01.2013 38.880 - (6.375) 76.190 - - (10.090) 138 98.743
Profit/loss of the period
Other elements of the overall results
-
-
-
-
-
-
-
-
12.028
-
-
(141)
-
(1.789)
-
-
12.028
(1.930)
Total comprehensive income - - - - 12.028 (141) (1.789) - 10.098
Capital increase
Paid dividends and directors' entitlements
5.764
-
-
-
-
-
-
(9.762)
-
-
-
-
-
-
-
-
5.764
(9.762)
Own shares
Share based payment
Others
-
-
-
-
-
-
-
-
-
-
81
-
-
-
-
-
-
-
-
-
-
-
-
(138)
-
81
(138)
Balance as of 31.12.2013 44.644 - (6.375) 66.509 12.028 (141) (11.879) - 104.786
First semester 2013
Balance as of 01.01.2013 38.880 - (6.375) 76.190 - - (10.090) 138 98.743
Profit/loss of the period - - - - 9.212 - - - 9.212
Other elements of the overall results - - - - -
-
(924) - (924)
Total comprehensive income - - - - 9.212 (924) - 8.288
Capital increase 5.764 - - - - - - - 5.764
Paid dividends and directors' entitlements - - - (9.762) - - - - (9.762)
Own shares - - - - - - - - -
Share based payment - - - - - - - - -
Others - - - 50 - - - (138) (88)
Balance as of 30.06.2013 44.644 - (6.375) 66.478 9.212 - (11.014) - 102.945
First semester 2014
Balance as of 01.01.2014 44.644 - (6.375) 78.537 - (141) (11.879) - 104.786
Profit/loss of the period - - - - 3.000 - - - 3.000
Other elements of the overall results - - - - -
-
(968) - (968)
Total comprehensive income - - - - 3.000 (968) - 2.032
Capital increase 6.469 - - - - - - - 6.469
Paid dividends and directors' entitlements - - - (10.204) - - - - (10.204)
Own shares - - 30 - - - - - 30
Share based payment - - - (85) - - - - (85)
Others - - - - - - - - -
Balance as of 30.06.2014 51.113 - (6.345) 68.248 3.000 (141) (12.847) - 103.028

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ON 30.06.2014

Note 1. Corporate information

The half-year consolidated financial statements of the Group of 30 June 2014 were adopted by the Board of Directors at 22 September 2014.

Note 2. Principal accounting methods

1. Basis for preparation

The consolidated accounts of 30 June 2014 were prepared in conformity with the IAS 34 standard relating to intermediate financial information.

The intermediate financial accounts do not include all the information that must be shown in the annual report and must be read alongside the annual report of 31 December 2013.

2. Consolidation principles and significant accounting principles

The evaluation rules adopted for the preparation of the consolidated financial situation of 30 June 2014 were not modified compared to the rules followed for the preparation of the annual report of 31 December 2013.

The new IAS 19 standard has come into force for periods starting after 1 January 2013 with retroactive effect. Considering Atenor Group's limited exposure to the staff benefits issue, the impact of the new standard is negligible.

The IAS 1R standard has been the subject of amendments and is mandatory for fiscal years starting from 1st July 2012.

The IFRS 13 standard, which provides a new definition of "fair value", namely "the price that would be received for selling an asset or paid for transferring a liability in a normal transaction between market participants on the valuation date", shall apply from 1 January 2013 but requires no modification of the comparative Financial statements. The information required supplements note 5 (financial liabilities).

Note 3. Seasonal information

The life cycle of the real estate projects of ATENOR GROUP 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:

  • a steering committee which meets weekly for each of the projects and
  • an executive committee that meets monthly for each of the projects and which is formalised by minutes.

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 contractor.

This communication system allows Atenor to determine, monitor and resolve all potential operational risks well in time.

Note 4. Other current financial assets, cash and cash equivalents

In thousands of EUR
30.06.2014 30.06.2013 31.12.2013
CASH AND CASH EQUIVALENTS
Short-term deposits
Bank balances 11.942 3.050 1.528
Cash at hand 2 2 2
Total cash and cash equivalents 11.944 3.052 1.530
Current Non-current TOTAL
Up to 1 year More than 1 year
Movements on Financial Liabilities
On 31.12.2013 49.744 164.097 213.841
Movements of the period
- New loans 9.650 11.750 21.400
- Reimbursement of loans -7.340 -7.340
- Short-term/long-term transfer
- Hedging of fair marketvalue 33 33
- Others -4 -13 -17
On 30.06.2014 52.083 175.834 227.917

In thousands of EUR

Atenor Group has issued two bonds with a nominal value of 75 million euros (2010-2015) and 60 million euros (2012-2017). In accordance with IFRS 13, the "fair value" of these two securities set on 30 June 2014 are, respectively, 76.59 million euros (102.12% of listing price - Bourse de Luxembourg) and 64.70 million euros (107.84% of the trading price on Euronext Brussels).

Note 6. Paid Dividends

In thousands of EUR
30.06.2014 30.06.2013 31.12.2013
Dividends on ordinary shares declared and paid during the period:
Final dividend for 2013: 2,00 EUR
The Atenor shareholders opted by a 82.11% majority (optional
dividend) for the creation of new shares. The amount of the capital
increase (26.05.2014) amounted to € 6.47 million -4.024 -3.983 -3.983
Final dividend for 2012: 2,00 EUR

Final dividend for 2013: 2,00 EUR

ATENOR GROUP does not offer any interim dividend.

Note 7. Income taxes

In thousands of EUR
INCOME TAX EXPENSE / INCOME - CURRENT AND DEFERRED 30.06.2014 30.06.2013 31.12.2013
INCOME TAX EXPENSE/INCOME - CURRENT
Current period tax expense
Adjustments to tax expense/income of prior periods
-1.596
26
-1.153 -1.661
-51
Total current tax expense, net -1.570 -1.153 -1.712
INCOME TAX EXPENSE/INCOME - DEFERRED
Related to the current period
Related to prior exercises (tax losses)
-5.767
102
-8.450
4.005
-11.962
7.408
Total deferred tax expense -5.665 -4.445 -4.554
TOTAL CURRENT AND DEFERRED TAX EXPENSE -7.235 -5.598 -6.266

Note 8. Segment reporting

ATENOR GROUP exercises its main activity of developing real estate promotion projects essentially in the area of office and residential buildings with relatively homogeneous characteristics and similar viability and risk profiles.

The activities of ATENOR GROUP form one single sector (Real Estate), within which the real estate development and promotion projects are not differentiated by nature or by geographical area. The primary segmentation (Real Estate) reflects the organisation of the group's business and the internal reporting supplied by Management to the Board of Directors and to the Audit Committee. There is no secondary segment.

The ATENOR GROUP activity report provides more detailed information on the results and purchases and sales during the period reviewed.

Note 9. Property, Plant and Equipment

The "tangible fixed assets" item is only affected by the amortization expense and any investments.

Note 10. Inventories

The "buildings held for sale" classified under "Stock" represent the real estate projects in portfolio and in the course of development. This item amounts to 255.90 million euros, a net decrease of 5.37 million euros in comparison with 31 December 2013. This change resulted primarily from (a) the sale of apartments and office block B1 in the UP-site project which reduce the stock by 20.08 million euros and (b) the continuation of the work on the Hermes Business Campus project (Romania), Vaci Greens project (Hungary), Port du Bon Dieu project in Namur and the Brussels Europa project in Brussels, totalling +12.59 million euros. the remainder of this item (2.12 million euros) is distributed over the other projects in development.

Note 11. Stock option plans for employees and other payments based on shares

On 3 February 2014, ATENOR GROUP issued a second tranche of the stock option plan (SOP 2013) for the subsidiary named Atenor Group Investments (AGI). The options issued on this subsidiary benefit ATENOR GROUP management, personnel and service providers (see page 93 of the financial annual report 2013).

On 28 February 2014, the Board of Directors, on the recommendation of the Remuneration Committee, distributed 1,139 Atenor Group Holdings (AGP) shares in accordance with the remuneration policy described in the "Corporate Governance" section of our 2013 Annual Financial Report (page 48).

The expense recognized for the first half of 2014 amounted to 42,102 euros.

Note 12. Related Parties

In thousands of EUR
Sums due to related parties Sums due to the group from
related parties
- AIR PROPERTIES
share of the group: 50%
- -
- IMMOANGE
share of the group: 50%
- 13.975
- VICTOR PROPERTIES
share of the group: 50%
- 494
- SOUTH CITY HOTEL
share of the group :40%
- 3.134

As of May 30, 2014, ATENOR GROUP s.a., ATENOR GROUP Holdings and PI Group jointly acquired 45.5% and 50% respectively of the company AIR PROPERTIES. These three companies have agreed to a partnership between shareholders for the development of the project located at Cloche d'Or.

It will be recalled that SOUTH CITY HOTEL is a company consolidated by the equity method. Within the framework of the VICTOR project, a partnership was implemented with CFE in order to be able to develop a major mixed project. This partnership (50/50) has led to the consolidation by the equity method of the companies IMMOANGE, VICTOR PROPERTIES and VICTOR ESTATES.

No other important change was made concerning the related parties.

Note 13. Derivatives

ATENOR GROUP use derivative instruments for coverage purposes (and not trading purposes). No new contract was implemented to cover rate hedges or foreign exchange hedges during the first half of 2014.

The derivative item (in the current and non-current liabilities) concerns the fair market value of the "interest rate swaps" acquired by ATENOR GROUP s.a. within the framework of its long-term financing.

The financial instruments are evaluated at their fair value with variations of value assigned to the profit and loss account, except for financial instruments classified as "Cash flow hedges" for which the part of the profit or the loss on the hedging instrument that is considered as constituting effective cover is entered directly into equity via the consolidated statement of changes in equity.

Insofar as the "Fair value hedge" is concerned, the changes in the fair value of the derivatives designated and categorised as fair value hedges are entered in the profit and loss account, just as the changes in fair value of the asset or liability hedged imputable to the risk hedged.

Note 14. Own shares

MOVEMENTS IN OWN SHARES Amount
(In thousands of EUR)
Number of own shares
On 01.01.2014 (average price of 40,45 € per share) 6.375 157.583
Movements during the period
- acquisitions
- sales
624
-654
17.109
-17.550
Own shares as of 30.06.2014 (average price 40,45 € per share) 6.345 157.142
Number of shares to obtain in order to cover Number of shares
- stock options plan 2007 47.800
- stock options plan 2008 35.050
- stock options plan 2011 49.300
- stock options plan 2012 48.000
TOTAL 180.150

The number of options of the SOPs from 2007 to 2012 is part of a stock option plan of a total of 300,000 existing shares.

Note 15. Events after the closing date

No important event occurring since 30 June 2014 must be noted.

C. Statement by the Management

Stéphan SONNEVILLE s.a., CEO and President of the Executive Committee and the Members of the Executive Committee, of which, Mr Sidney D. BENS, CFO, acting in the name of and on behalf of ATENOR GROUP SA attest that to the best of their knowledge,

  • The summary financial statements at 30 June 2014 were prepared in conformity with IFRS standards and provide a true and fair view of the assets, of the financial situation and of the profits of ATENOR GROUP and of the enterprises included in the consolidation;1
  • The six month report contains a true reflection of the major events and of the principal transactions between related parties occurring during the first six months of the financial year and of their impact on the summary financial statements as well as a description of the main risks and uncertainties for the remaining months of the financial year (see page 4 of the present document).

1 Affiliated companies of ATENOR GROUP in the sense of article 11 of the Company Code

D. External audit

Statutory auditor's report on the review of the condensed consolidated interim financial information of ATENOR GROUP SA for the period ended 30 June 2014

Introduction

We have reviewed the condensed consolidated interim financial information of ATENOR GROUP SA as of June 30, 2014, and for the period of six months ended on that date, including the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of cash flows, the condensed consolidated statement of changes in equity, 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 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.

Scope of Review

We conducted our review in accordance with 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 consolidated interim financial information is not prepared, in all material respects, in accordance with IAS 34 - Interim Financial Reporting as adopted by the European Union.

Brussels, 22 September 2014

Mazars Réviseurs d'Entreprises SCRL Statutory auditor Represented by Philippe GOSSART

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