Interim / Quarterly Report • Mar 30, 2017
Interim / Quarterly Report
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Manu Vandenbulcke, CEO TINC: "TINC can look back at a successful first half year. The capital increase in December strengthens the financial capacity to further grow the investment portfolio. This portfolio currently includes 14 participations in infrastructure in Belgium, the Netherlands and since November also with a participation located in Ireland. This Irish investment of approximately € 30 million in windfarm Meenwaun, which is currently in realisation and shall generate revenues as of end 2017, contributes to the geographical diversification of the portfolio. Furthermore, TINC committed itself to acquire an additional stake in the public private partnership for the realization of the Beatrix lock in Nieuwegein (NL) at a later stage, an investment of approximately € 5 million. Based on this interim result, TINC is well on track to meet the full year projections, including the distribution of the forecasted dividend."
TINC is an investment company holding participations in companies that realize and operate infrastructure. TINC adopts a diversified investment policy, holding participations in public and private infrastructure and through both equity and debt investments.
At 31 December 2016, the diversified portfolio of TINC includes 14 participations with a market value of € 143,1 million.
The portfolio generates cash flows of a long term sustainable nature, which form the basis for TINC's dividend policy.
TINC's objective is to grow its portfolio through new investments in infrastructure companies. TINC aims to further develop its activities in the geographical markets where it is already present (Belgium, the Netherlands and Ireland) and will seek additionally to expand in neighbouring countries.
Per the reporting date (31 December 2016), the portfolio of TINC includes the following participations:
| Portfolio | Description | Geography |
|---|---|---|
| Berlare Wind | Onshore windfarm | Belgium |
| Bio-Accelerator | Business service centre | Belgium |
| Kreekraksluis | Onshore windfarm | The Netherlands |
| L'Hourgnette | Detention facility | Belgium |
| Lowtide/Hightide | Solar energy | Belgium |
| Nobelwind | Offshore windfarm | Belgium |
| Northwind | Offshore windfarm | Belgium |
| Eemplein Car Park | Car park | The Netherlands |
| Princess Beatrix lock | Lock complex | The Netherlands |
| Project Brabo I | Light rail infrastructure | Belgium |
| Solar Finance | Solar energy | Belgium |
| Storm Ireland | Onshore windfarm | Ireland |
| Storm Flanders | Onshore windfarm | Belgium |
| Via R4 Ghent | Road infrastructure | Belgium |
The portfolio includes participations located in Belgium, The Netherlands and Ireland and consists of Public Private Partnerships (PPP), Energy and other infrastructure, as shown in the pie charts below*:
* Breakdown on the basis of FMV on the reporting date (31 December 2016)
TINC committed to participate in three additional infrastructure companies through entering into Forward Purchase Agreements for an estimated investment amount totalling approximately € 42 million.
| Contracted participations | Description | Geography |
|---|---|---|
| A11 | Road infrastructure | Belgium |
| A15 | Road infrastructure | The Netherlands |
| Princess Beatrix lock | Lock complex | The Netherlands |
The operational and financial performance of the investment portfolio in the reporting period was substantially in line with, and in some cases somewhat higher than, the long-term forecasts.
On 19 December 2016, TINC increased its share capital by subscription in cash on the basis of non-statutory preferential rights for a gross amount of € 76.704.547,50 by issuing 6.818.182 new shares with an issue price of € 11,25 per share. The offered shares were fully subscribed whereby more than 85% of the preferential rights were exercised during the subscription period, the remainder being allocated on the basis of a private placement.
TINC continues to manage risk in view of creating and protecting shareholder value. Risk is inherent in TINC's activities, but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. TINC is exposed to market risk, credit risk and liquidity risk arising from the financial instruments it holds.
There have been no major changes to the risks and uncertainties set forth in the annual accounts per 30 June 2016 or in the prospectus of the capital increase of 1 December 2016.
During the reporting period, TINC invested a total amount of € 13,8 million both in existing and new portfolio companies:
TINC has made, during the reporting period, a commitment to acquire an additional interest in Princess Beatrix lock by entering into a forward purchase agreement for an amount of ca. € 5 million.
TINC received € 0,7 million of repayments from its participations. This includes repayments in the framework of the reconstitution of the invested capital.
The evolution of the fair market value (FMV) of the portfolio is set forth in the table below (in k €):
| FMV at the beginning of the period (30/06/2016) | 128.031,2 |
|---|---|
| + Investments | 13.832,7 |
| - Repayments of investments | (663,3) |
| +/- Non-realised gains/losses on financial assets | 1.859,2 |
| +/- Other | 50,0 |
| FMV at the end of the period (31/12/2016) | 143.109,8 |
The fair market value of the portfolio increased with €15,1 million to € 143,1 million or 11,8% compared to 30 June 2016. This increase is the result of investments for an amount of € 13,8 million and repayments for an amount of € 0,7 million. The portfolio also increased in value amounting to € 1,9 million. The remaining amount of € 0,05 million is particularly a small change in realized portfolio income that will be received shortly.
On 31 December 2016, the weighted average discount rate, applied for the purpose of valuating the portfolio, amounts to 8,26%. (as of 30 June 2016: 8,25%)
The statement of income for the period is as follows:
| Period: | 1/07-31/12/2016 | 1/07-31/12/2015 |
|---|---|---|
| Result (k euro) | unaudited | audited |
| Portfolio result | 6.327,8 | 5.780,5 |
| Interests | 2.840,8 | 2.718,4 |
| Dividends | 1.402,2 | 200,3 |
| Fees | 225,6 | 64,3 |
| Unrealised gains/losses on financial assets | 1.859,2 | 2.797,5 |
| Operating expenses | (957,4) | (932,5) |
| Operating result, profit (loss) | 5.370,4 | 4.848,1 |
| Financial result | (15,9) | 28,6 |
| Tax expenses | - | (55,8) |
| Net profit for the period | 5.354,4 | 4.820,9 |
| Earnings per share (€)* | 0,26 | 0,35 |
*Based on the total outstanding shares at resp. 31 December 2016 (20.454.546) and 31 December 2015 (13.636.364)
The portfolio result amounts to € 6,3 million, € 0,5 million higher than the income for the same period last year. The portfolio result consists of two components.
On the one hand the actual acquired income: interests (€ 2,8 million), dividends (€1,4 million) and fees (€ 0,2 million) obtained from the portfolio companies for a combined amount of € 4,4 million. The largest part was effectively received in cash and the remainder will be received shortly.
On the other hand there are € 1,9 million unrealized gains. This is the expression of the time value within the portfolio (expected cash flows getting closer), taking into account the actual acquired income and the update of the expected cash flows from the participations.
Cash income +/- Net unrealised Gains/Losses +/- Short Term income
The operating expenses which are deducted from the portfolio income relate to expenses for the normal business operations in the amount of € 1,0 million. The expenses related to the capital increase (ca. €2,2 million) are not included in the operating expenses but are directly deducted from the equity.
The operating result of the first semester amounts to € 5,37 million. The net financial costs amount to € 0,016 million, as a result of which the net result for the period of six months until 31 December 2016 amounts to € 5,35 million. This amount corresponds to earnings per share of € 0,26 based on the total outstanding shares on 31 December 2016. In the same period last year the earnings per share amounted to € 0,35. The lower earnings per share result from the increase in the number of outstanding shares from 13.636.364 to 20.454.546 following the capital increase on 19 December 2016.
The balance sheet at the end of the reporting period is as follows:
| Period ending on: | 31/12/2016 | 30/06/2016 |
|---|---|---|
| Balance (k €) | (unaudited) | (audited) |
| Fair Market Value of portfolio companies (FMV) | 143.109,8 | 128.031,2 |
| Deferred tax asset | 2.295,6 | 1.804,3 |
| Net cash | 88.686,4 | 28.327,7 |
| Other working capital | (758,5) | (445,1) |
| Net Asset Value (NAV) | 233.333,2 | 157.718,1 |
| Net Asset Value per share (€)* | 11,41 | 11,57 |
* Based on the total number of shares outstanding on resp. 31 December 2016 (20.454.546) and 30 June 2016 (13.636.364)
The net asset value (NAV) amounts to € 233,3 million or € 11,41 per share compared to € 11,57 on 30 June 2016.The difference compared to the previous period is determined by the payment of the final dividend for the financial year ended on 30 June 2016 of € 4,7 million or € 0,3475 per share on 26 October 2016 and by the increased number of shares as a result of the issuance of 6.818.182 new shares at € 11,25. The NAV is the sum of the fair market value of portfolio companies (FMV) of € 143,1 million (see portfolio valuation), a deferred tax asset valued at € 2,3 million, net cash amounting to € 88,7 million and a negative working capital of - € 0,8 million.
The BGAAP amortization of certain capitalized costs (e.g. related to the IPO and the capital increase on 19 December 2016), has resulted in a deferred tax asset of € 2,3 million on the IFRS balance. This amount has increased compared to 30 June 2016 as a result of an additional recording on the asset side of the balance sheet in the amount of the capital increase costs.
On 31 December 2016, net cash amounts to € 88,7 million. An important part (€ 76,7 million) results from the capital increase. This cash is available for investments.
The table below provides an overview of the evolution of NAV between 30 June 2016 and 31 December 2016.
| Period: | 1/07-31/12/2016 | 1/01/2015-30/06/2016 |
|---|---|---|
| Evolution NAV (k euro) | Unaudited | Audited |
| NAV at the beginning of the period | 157.718,1 | 72.211,0 |
| + Capital increase | 76.704,5 | 78.029,8 |
| - Costs related to capital increase | (2.196,4) | (3.982,3) |
| + Increase in deferred taxes | 491,2 | 1.324,4 |
| + Net profit of the financial year | 5.354,4 | 11.771,6 |
| - Dividends to shareholders | (4.738,6) | (1.636,4) |
| NAV at the end of the period | 233.333,2 | 157.718,1 |
The increase of NAV is the result of the capital increase, the increase in deferred taxes and the net profit of the reporting period, after deduction of the capital increase costs and the final dividend over the previous financial year.
The cash flows over the reporting period are represented in the following chart:
Cash flow from financing activities relates primarily to income from the capital increase for an amount of € 76,7 million. The capital increase costs amounted to € 2,2 million, of which € 1,6 million was actually paid during the reporting period.
Cash flow from investment activities comprises € 13,8 million of investments in participations, € 0,7 million of repayments and € 4,5 million of revenues from participations (i.e. dividends, interests, fees).
During the reporting period, TINC paid € 1,4 million of operating costs. This includes costs charged of the previous year
Finally TINC paid the final dividend for the past financial year for an amount of € 4,6 million (i.e. excluding € 136.555 to be paid) during the reporting period.
The final dividend of € 0,3475 per share was approved and subsequently paid on 26 October 2016 as part of the total gross dividend of € 0,4675 per share or € 6.375.000 for the past financial year ended on 30 June 2016. The final dividend totalled € 4.738.636.
For the current financial year an equal dividend of € 0,4675 per share for the financial year is aimed for. The new shares issued by the capital increase entitle the holders to dividends as of the date of issuance. The dividend right of the previously existing shares until the date of the capital increase are represented by coupon n°4, which was detached on 30 November 2016. Taking into account the dividend aimed for of € 0,4675 for the financial year, this would represent an amount of € 0,2190 per coupon. The remainder, estimated at € 0,2485 per share, will be allocated to all shares, including the new issued shares. These new issued shares will therefore be allocated a dividend equal to the pro rata temporis part for the period starting on the issue date, 19 December 2016, and ending on 30 June 2017, end of the financial year.
| Date | Event |
|---|---|
| 18 September 2017 | Publication annual report and annual results |
| 18 October 2017 | General Shareholders' Meeting |
| 23 October 2017 | Ex-date dividend |
| 24 October 2017 | Record date dividend |
| 25 October 2017 | Payment date dividend |
| 7 March 2018 | Publication interim report (semi-annual per 31 December 2017) |
This financial report comprises the unaudited interim condensed consolidated financial statements of TINC for the first semester of 2016 (for the period ended on 31 December 2016) of the financial year ending 30 June 2017, and contains particularly the following items:
| Period: | 1/07-31/12/2016 | 1/07-31/12/2015 | |
|---|---|---|---|
| unaudited | unaudited | ||
| Operating income | 6.886.921 | 5.301.347 | |
| Dividend income | 1.402.193 | 200.315 | |
| Interest income | 2.840.823 | 2.718.402 | |
| Gain on disposal of investments | - | - | |
| Unrealised gains on investments | 6.6 | 2.418.347 | 2.318.347 |
| Revenue | 225.558 | 64.283 | |
| Operating expenses (-) | (1.516.551) | (453.288) | |
| Unrealised losses on investments | 6.6 | (559.124) | 479.165 |
| Selling, General & Administrative Expenses | 6.5 | (921.701) | (932.089) |
| Other operating expenses | (35.726) | (364) | |
| Operating result, profit (loss) | 5.370.369 | 4.848.059 | |
| Finance income | 4.109 | 33.899 | |
| Finance costs (-) | (20.039) | (5.288) | |
| Result before tax, profit (loss) | 5.354.439 | 4.876.670 | |
| Tax expenses (-) | - | (55.769) | |
| Total comprehensive income | 4 | 5.354.439 | 4.820.901 |
| 1. Basic earnings per share (*) | 0,38 | 0,35 | |
| 2. Diluted earnings per share (**) | 0,38 | 0,35 | |
| Weighted average number of ordinary shares | 14.118.083 | 13.636.364 |
(*) Calculated on the basis of the weighted average number of ordinary shares
(**) Assumed that all stock options warrants which were in the money as at the end of the period would be exercised. The Company has no options / warrants outstanding throughout the reporting period.
| Period ended on: | 31/12/2016 | 30/06/2016 | |
|---|---|---|---|
| ASSETS | (unaudited) | (audited) | |
| I. NON-CURRENT ASSETS | 145.405.347 | 129.835.563 | |
| Investments at fair value through profit and loss | 6.6 | 143.109.785 | 128.031.244 |
| Deferred taxes | 2.295.561 | 1.804.319 | |
| II. CURRENT ASSETS | 89.083.146 | 28.405.834 | |
| Trade and other receivables | 396.763 | 78.169 | |
| Cash and short-term deposits | 5 | 88.686.384 | 28.327.665 |
| Other current assets | - | - | |
| TOTAL ASSETS | 234.488.493 | 158.241.396 |
| Period ended on: | 31/12/2016 | 30/06/2016 | |
|---|---|---|---|
| LIABILITIES | (unaudited) | (audited) | |
| I. EQUITY | 233.333.240 | 157.718.091 | |
| Issued capital | 4 | 122.622.636 | 81.748.317 |
| Share premium | 4 | 71.334.673 | 35.504.445 |
| Reserves | 4 | 1.289.213 | 2.994.415 |
| Retained earnings | 4 | 38.086.717 | 37.470.914 |
| II. LIABILITIES | 1.155.254 | 523.305 | |
| A. Non-current liabilities | - | - | |
| B. Current liabilities | 1.155.254 | 523.305 | |
| Financial Liabilities | - | - | |
| Trade and other payables | 1.009.125 | 385.106 | |
| Income tax payables | 137.113 | 137.113 | |
| Other liabilities | 9.016 | 1.086 | |
| TOTAL EQUITY AND LIABILITIES | 234.488.493 | 158.241.396 |
| Issued capital | Share premium |
Reserves | Retained earnings |
Equity | ||
|---|---|---|---|---|---|---|
| As per 30 June 2016 (audited) | 3 | 81.748.317 | 35.504.445 | 2.994.415 | 37.470.914 | 157.718.092 |
| Total comprehensive income | 2 | - | - | 5.354.439 | 5.354.439 | |
| Capital increase | 5 | 40.874.319 | 35.830.228 | - | - | 76.704.548 |
| Dividends to shareholders | - | - | (4.738.636) | (4.738.636) | ||
| Other changes | - | (1.705.202) | - | (1.705.202) | ||
| A per 31 December 2016 (unaudited) |
3 | 122.622.636 | 71.334.673 | 1.289.213 | 38.086.717 | 233.333.240 |
| Issued capital | Share premium |
Reserves | Retained earnings |
Equity | |
|---|---|---|---|---|---|
| As per 30 June 2015 (audited) | 81.748.317 | 35.504.445 | 3.509.646 | 28.658.210 | 149.420.618 |
| Total comprehensive income | - | - | 4.820.901 | 4.820.901 | |
| Capital increase | - | - | - | ||
| Dividends to shareholders | - | - | (1.636.364) | (1.636.364) | |
| Other changes | - | (273.650) | - | (273.650) | |
| Per 31 December 2015 (unaudited) | 81.748.317 | 35.504.445 | 3.235.996 | 31.842.748 | 152.331.505 |
| Period: | 1/07-31/12/2016 | 1/07-31/12/2015 | |
|---|---|---|---|
| unaudited | unaudited | ||
| Cash at beginning of period | 3 | 28.327.665 | 28.462.646 |
| Cash Flow from Financing Activities | 4 | 70.518.471 | (1.718.043) |
| Proceeds from capital increase | 76.704.548 | - | |
| Capital repayment / decrease | - | - | |
| Proceeds from borrowings | - | - | |
| Repayment of borrowings | - | - | |
| Interest paid | (8.500) | - | |
| Dividends to shareholders | (4.602.065) | (1.636.368) | |
| Other cash flow from financing activities | (1.575.512) | (81.675) | |
| Cash Flow from Investing Activities | (8.714.903) | (530.046) | |
| Investments | (13.183.035) | (1.662.800) | |
| Repayment of investments | 663.318 | 4.340.749 | |
| Interest received | 2.659.625 | 2.965.642 | |
| Dividend received | 1.539.698 | 337.812 | |
| Other cash flow from investing activities | 255.116 | 64.283 | |
| Cash Flow from Operational Activities | (1.444.849) | (692.433) | |
| Management Fee | (1.267.030) | (785.620) | |
| Expenses | (177.819) | 93.187 | |
| Cash at end of period | 3 | 88.686.384 | 25.522.124 |
The Interim Condensed Consolidated Financial Statements of TINC (hereafter the "Company") for the six month reporting period ended on 31 December 2016 were approved by resolution of the statutory manager dated 6 March 2017.
The Company is a limited liability company ("commanditaire vennootschap op aandelen/société en commandite par actions") incorporated and located in Belgium. The Company's registered office is located in Karel Oomsstraat 37, 2018 Antwerp, Belgium. TINC is an investment company holding participations in companies that realize and operate infrastructure.
The Interim Condensed Consolidated Financial Statements of the Company have been prepared in accordance with IAS 34 "Interim Financial Reporting".
The accounting principles and presentation and computation methods that have been used to draw up these Interim Condensed Consolidated Financial Statements are consistent with those stated in the financial statements per 30 June 2016 as contained in the Prospectus for the capital increase of TINC of 1 December 2016 (the "Prospectus"). The portfolio is now represented under 'Investments at fair value through profit and loss'.
In preparing the Interim Condensed Consolidated Financial Statements, TINC continued to apply, as it did with respect to the financial statements as per 30 June 2016 and the Prospectus, the amendments to IFRS 10 (Consolidated Financial Statements) regarding investment entities since TINC still meets the definition of an investment entity. As a consequence TINC measures all investments at fair value through profit or loss in accordance with IAS 39 (Financial Instruments: recognition and measurement).
The preparation of the Interim Condensed Consolidated Financial Statements is made on the basis of judgments, estimates and assumptions that are consistent with those stated in the financial statements as per 30 June 2016 and in the Prospectus, was approved for issuance on 29 November 2016, but are reviewed on an ongoing basis.
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are disclosed below. The Company considered to only list and address the ones expected to have an impact on the Group's financial position, performance, and/or disclosures. The Group intends to adopt these standards, if applicable, when they become effective.
1 Not yet approved by the EU on December 14, 2016
recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts, IFRIC 18 Transfers of Assets from Customers and IFRIC 13 Customer Loyalty Programmes. The Group did not yet elect the transition method (either full retrospective, either modified retrospective application), and is currently reviewing the potential impact on its financial statements resulting from the application of IFRS 15. The group expects to be able to provide a quantitative analysis mid 2017.
The changes are not expected to have a significant impact on the Company.
As a result of the capital increase on 19 December 2016, during the reporting period, the amount of the issued capital is increased by an amount of € 40.874.319, and the share premium account by an amount of € 35.830.228.
The reserves have decreased (in relation to 30 June 2016) with an amount of € 1.705.202 (in particular from € 2.994.415 as per 30 June 2016 to € 1.289.213 as per 31 December 2016), due to the deduction of reserves for the capital increase cost for an amount of € 2.196.444, partially compensated by an addition to reserves of the deferred tax asset amounting to € 491.242.
Compared to 30 June 2016, retained earnings increased by an amount of € 615.803, which is a combination of retained earnings of the reporting period for an amount of € 5.354.439 and the paid final dividend for the past financial year for an amount of € 4.738.636.
The Selling, General and Administrative expenses for the six month period ended up to and including 31 December 2016 amounts to € 921.701. This does not include the capital increase costs which were directly deducted from the equity.
Portfolio overview as per 31 December 2016:
| Portfolio | Voting rights | Activity |
|---|---|---|
| Berlare Wind | 49,00% | Onshore windfarm |
| Bio-Accelerator | 50,00% | Business service centre |
| Kreekraksluis | 43,65% | Onshore windfarm |
| L'Hourgnette | 81,00% | Detention facility |
| Lowtide/Hightide | 99,99% | Solar energy |
| Nobelwind | n/a | Offshore windfarm |
| Northwind | n/a | Offshore windfarm |
| Eemplein Car Park | 100,00% | Car park facility |
| Princess Beatrix lock | 3,75% | Lock complex |
| Project Brabo I | 52,00% | Light rail infrastructure |
| Solar Finance | 87,43% | Solar energy |
| Storm Ireland | 100% - 1 share | Onshore windfarm |
| Storm Flanders | 39,47% | Onshore windfarm |
| Via R4 Ghent | 74,99% | Road infrastructure |
All participations of TINC are considered level 3 in the fair value hierarchy. All participations in level 3, with the exception of Storm Ireland, are valued using a discounted cash flow methodology whereby future cash flows which are expected to be received by TINC from its participations in the Infrastructure Companies of the portfolio are discounted at a market discount rate. This valuation technique has been consistently applied to every investment. In case of Storm Ireland, the recent transaction price is considered as fair value.
TINC defines the following classes of investments:
Revenues in PPP participations are availability based. Revenues in Energy participations are based on production, applicable support regimes and electricity prices in the market. Revenues in Other participations are mainly demand driven. Loans to Energy infrastructure companies, with production based revenues, are less impacted by variations in revenues as there is an equity buffer.
For PPP Infrastructure the effective project term is used, usually between 25 and 35 years. Upon expiration of the project term, the infrastructure reverts to the concession grantor(s)/public partner(s).
For Energy participations typically a life span of 20 to 25 years is assumed. This corresponds to the average term of the usage rights regarding the land on which the infrastructure is erected. Upon expiration of the term, the Energy infrastructure is removed or reverts to the land owner(s).
For Other infrastructure the infrastructure-specific term is used.
The fair market value measurement of the participations of TINC is based on the following key significant 'unobservable inputs' at portfolio level:
Projected future cash flows for each participation are generated through detailed project-specific financial models. The expected cash flows are based on long term contracts, a regulated environment and/or a strategic position. The following assumptions are used, amongst others:
The chart below represents the projected electricity prices calculated on an average basis, weighted by capacity at portfolio level.
Further a balancing discount of 15% is taken into account. The balancing discount is a discount deducted from the market electricity price by the buyer of electricity generated from renewable energy. This discount reflects the uncertain wind and sun levels at any given time and therefore the uncertain volume of electricity generated at any time. The buyer has to ensure that the electricity network is balanced at all times.
For solar participations in Flanders the price levels of green certificates range from € 230 to € 450 per green certificate depending on the year of construction. For the installations within TINC's participations a projected average price of € 305 is used, weighted by capacity and the remaining lifetime of the installations. For onshore wind participations in Belgium the price levels of green certificates range from EUR 90 to EUR 93 per green certificate. The number of green certificates received by an installation is, in some cases, adjusted in function of the market electricity prices effectively received.
currently amounts to approximately € 80 per MWh and is indexed annually based on the index of consumer prices in Ireland. Produced electricity is sold in the market. If the sales price in the market is lower than the REFIT-price, the government pays to the producer the difference between the sales price and the 'REFIT'-price. This ensures the producer to receive at least the projected price. If the sales price in the market is higher than the REFIT-price, then the producer will receive the higher sales price.
The discount rate is used for discounting the projected future cash flows to calculate the fair market value of the participations. This discount rate reflects the risk inherent to the investment instrument, investment interest, the stage in the life cycle of infrastructure and other relevant risk factors.
In determining the discount rate recent transactions between market participants may give an indication of market conformity.
On 31 December 2016, the weighted average discount rate amounts to 8,26% (as of 30 June 2016: 8,25%). The individual discount rates of the participations vary from 7,09% up to 10,00%.
The table below sets out the fair market value (FMV) of the portfolio broken down by infrastructure type.
| FMV on 31/12/2016 | PPP | Energy | Other | Total |
|---|---|---|---|---|
| Equity investments (*) | 49.002.388 | 63.043.182 | 18.856.190 | 130.901.760 |
| Weighted average discount rate | 8,01% | 8,25% | 9,02% | 8,28% |
| Investments in loans | 12.208.027 | 12.208.027 | ||
| Weighted average discount rate | 7,73% | 7,73% | ||
| Fair value with changes processed through profit and loss | 49.002.388 | 75.251.209 | 18.856.190 | 143.109.787 |
| Weighted average discount rate | 8,01% | 8,18% | 9,02% | 8,26% |
| (*) Including shareholder loans for a nominal amount outstanding of: | 25.307.792 | 25.980.667 | 4.638.294 | 55.926.754 |
The table below sets out the evolution of the fair market value of the portfolio during the reporting period broken down by infrastructure type and infrastructure instrument.
| Evolution FMV | PPP | Energy | Other | Total |
|---|---|---|---|---|
| Equity investments | ||||
| Opening balance (30/06/2016) | 48.601.709 | 48.889.312 | 17.961.451 | 115.452.472 |
| + Investments | - | 13.719.098 | - | 13.719.098 |
| - Divestments | (35.750) | (50.023) | (250.000) | (335.773) |
| +/- Unrealised gains and losses | 426.360 | 252.502 | 1.218.281 | 1.897.143 |
| +/- Other | 10.068 | 232.294 | (73.543) | 168.819 |
| Closing balance (31/12/2016) | 49.002.388 | 63.043.182 | 18.856.190 | 130.901.759 |
| Investments in loans | ||||
| Opening balance (30/06/2016) | 12.578.772 | 12.578.772 | ||
| + Investments | 113.562 | 113.562 | ||
| - Repayment from investments | (327.545) | (327.545) | ||
| +/- Unrealised gains and losses | (37.919) | (37.919) | ||
| +/- Other | (118.843) | (118.843) | ||
| Closing balance (31/12/2016) | 12.208.027 | 12.208.027 | ||
| Portfolio | ||||
| Opening balance (30/06/2016) | 48.601.709 | 61.468.083 | 17.961.451 | 128.031.244 |
| + Investments | - | 13.832.660 | - | 13.832.660 |
| - Repayments from investments | (35.750) | (377.568) | (250.000) | (663.318) |
| +/- Unrealised gains and losses | 426.360 | 214.583 | 1.218.281 | 1.859.224 |
| +/- Other | 10.068 | 113.451 | (73.543) | 49.976 |
| Closing balance (31/12/2016) | 49.002.388 | 75.251.209 | 18.856.190 | 143.109.787 |
During the reporting period TINC invested a total amount of € 13,8 million both in new participations (Storm Ireland) and in existing participations (Lowtide, Nobelwind and Storm Flanders). For the same period TINC received € 0,7 million of repayments from its participations.
The fair market value of the portfolio has increased by € 15,1 million, or 11,8% compared to 30 June 2016, to € 143,1 million. This increase is the result of investments amounting to € 13,8 million and repayments amounting to € 0,7 million. The portfolio also increased in value by an amount of € 1,9 million. The remaining amount of € 0,05 million is mainly the result of a small change in the realized portfolio income that will be received shortly.
The following chart shows the sensitivity of the fair market value of the portfolio to changes in the Energy prices, Energy production, Inflation and Discount rate. This analysis gives an indication on the sensitivity of the fair market value, while all other variables remain constant. These sensitivities are assumed to be independent of each other. Combined sensitivities are not shown here.
The net asset value and earnings per share attributable to the shareholders of TINC are as follows:
| 31/12/2016 6m (unaudited) |
30/06/2016 18m (audited) |
31/12/2015 6m (unaudited) |
|
|---|---|---|---|
| Number of outstanding shares | 20.454.546 | 13.636.364 | 13.636.364 |
| Net Asset Value (NAV) | 233.333.240 | 157.718.091 | 152.331.505 |
| NAV per share* | 11,41 | 11,57 | 11,17 |
| Fair Market Value (FMV) | 143.109.787 | 124.958.494 | 128.031.244 |
| FMV per share* | 7,00 | 9,16 | 9,39 |
| Net cash | 88.686.384 | 25.522.124 | 28.327.665 |
| Net cash per share* | 4,34 | 1,87 | 2,08 |
| Deferred taxes | 2.295.561 | 2.045.899 | 1.804.319 |
| Deferred taxes per share* | 0,11 | 0,15 | 0,13 |
| Other amounts receivable & payable | (758.491) | (195.012) | 78.169 |
| Other amounts receivable & payable per share* | (0,04) | (0,01) | 0,01 |
| Net profit/Profit | 5.354.439 | 4.820.901 | 11.771.588 |
| Earnings per share* | 0,26 | 0,35 | 0,86 |
* On the basis of total outstanding shares at 31 December 2016, 30 June 2016 and 31 December 2015.
The net profit per share amounts to € 0,26. This amount is calculated on the basis of the total shares outstanding on 31 December 2016. As a result of the capital increase on 19 December, the number of shares outstanding has increased from 13.636.364 to 20.454.546.
The final dividend of € 0,3475 per share was approved and subsequently paid on 26 October 2016 as part of the total gross dividend € 0,4675 per share or € 6.375.000 for the past financial year ended on 30 June 2016. The final dividend totalled € 4.738.636.
For the current financial year an equal dividend of € 0,4675 per share for the financial year is aimed for. The new shares issued by the capital increase entitle the holders to dividends as of the date of issuance. The dividend right of the previously existing shares until the date of the capital increase are represented by coupon n°4, which was detached on 30 November 2016. Taking into account the dividend aimed for of € 0,4675 for the financial year , this would represent an amount of € 0,2190 per coupon. The remainder, estimated at € 0,2485 per share, will be allocated to all shares, including the new issued shares. These new issued shares will therefore be allocated a dividend equal to the pro rata temporis part for the period starting on the issue date, 19 December 2016, and ending on 30 June 2017, end of the financial year.
| 31/12/2016 | 30/06/2016 | ||
|---|---|---|---|
| (unaudited) | (audited) | ||
| 1. Commitments to portfolio companies | 22.165.628 | 6.448.244 | |
| 2. Commitments to contracted participations | 41.634.114 | 36.933.085 |
Commitments to portfolio companies relate to funds which are committed to portfolio companies and which will be invested in accordance with contractual provisions. These commitments have increased during the reporting period mainly as a result of the investment in Storm Ireland and commitments related thereto.
Commitments to contracted participations comprise the funds for future acquisition of contracted new additional participations (particularly the A11, the A15 and an additional participation in Princess Beatrix lock).
Except for transactions in execution of the core activity of TINC as an investment entity (i.e. providing equity and debt financing), no new transactions with related parties have taken place during the reporting period which have a material impact on the results of TINC. Also no changes have occurred to the transactions with related parties as set forth in the Prospectus which have a material impact on the financial position or results of TINC.
There are no specific events following the reporting period to be reported.
Report of the statutory auditor to the shareholders of TINC Comm. VA on the review of the interim condensed consolidated financial statements as of 31 December 2016 and for the 6 month period then ended
We have reviewed the accompanying interim condensed consolidated statement of financial position of TINC Comm. VA (the "Company"), and its subsidiaries as at 31 December 2016 and the related interim condensed consolidated statements of income, comprehensive income, changes in equity and cash flows for the 6 month period then ended, and explanatory notes, collectively, the "Interim Condensed Consolidated Financial Statements". The board of directors is responsible for the preparation and presentation of these Interim Condensed Consolidated Financial Statements in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting as adopted by the European Union. Our responsibility is to express a conclusion on these Interim Condensed Consolidated Financial Statements based on our review.
We conducted our review in accordance with the International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the 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 accompanying Interim Condensed Consolidated Financial Statements are not prepared, in all material aspects, in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
Antwerp, 6 March 2017
Ernst & Young Bedrijfsrevisoren BCVBA Statutory auditor represented by
Ömer Turna Partner*
* Acting on behalf of a BVBA/SPRL
Ref: 17OT0126
To the best of our knowledge:
On behalf of the company The Board of directors
Manu Vandenbulcke, CEO TINC T +32 3 290 21 73 – [email protected]
TINC is a listed investment company that participates in companies that realise and operate infrastructure. TINC holds a diversified investment portfolio of participations in public private partnerships, energy and other infrastructure, located in Belgium, the Netherlands and Ireland. This investment portfolio generates cashflows of a long term sustainable nature, which form the basis for TINC's dividend policy.
For more information please visit www.tincinvest.com.
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