Quarterly Report • May 12, 2010
Quarterly Report
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1 July 2009 – 31 March 2010
| ESTAVIS AG | 3rd quarter 09/10 1 Jan. 2010 – 31 March 2010 |
3rd quarter 08/09 1 Jan. 2009 – 31 March 2009 |
9 months 09/10 1 July 2009 – 31 March 2010 |
9 months 08/09 1 July 2008 – 31 March 2009 |
|---|---|---|---|---|
| Revenues and earnings* | TEUR | TEUR | TEUR | TEUR |
| Revenues | 8,863 | 11,410 | 49,198 | 57,053 |
| Total operating performance | 15,105 | 15,518 | 51,757 | 59,803 |
| EBIT | –143 | –1,440 | 3,227 | –4,448 |
| Pre-tax profit | –881 | –2,512 | 698 | –7,865 |
| Net profit | –1,117 | –1,774 | 319 | –5,716 |
* from continued operations
| ESTAVIS AG | 31 March 2010 | 30 June 2009 |
|---|---|---|
| Structure of assets and capital | TEUR | TEUR |
| Non-current assets | 22,540 | 22,241 |
| Current assets | 121,628 | 185,047 |
| Equity | 51,943 | 49,080 |
| Equity ratio | 36% | 24% |
| Total assets/equity and liabilities | 144,168 | 207,287 |
| Share | |
|---|---|
| Stock exchange segment | Prime Standard |
| ISIN | DE000A0KFKB3 |
| German Securities Code Number (WKN) | A0KFKB |
| Number of shares on 31 March 2010 | 8,099,427 |
| Free float (as of April 2010) | 71.1% |
| Share price high (1 July 2009 – 31 March 2010*) | EUR 2.55 |
| Share price low (1 July 2009 – 31 March 2010*) | EUR 1.25 |
| Closing price on 31 March 2010* | EUR 1.71 |
| Market capitalisation on 31 March 2010* | EUR 14 million |
* Closing prices in Xetra trading
Dear Shareholders, dear Ladies and Gentlemen,
ESTAVIS AG has made important progress in the third quarter of 2009/10 in the implementation of its corporate strategy.
The strategic participation of TAG Immobilien AG (TAG) in our company and the acquisition of a large listed site in Berlin were at the forefront here. Both transactions offer promising perspectives for the future development of ESTAVIS.
With a holding of about 15% TAG, a successful listed real estate company from Hamburg, is now the largest single shareholder of ESTAVIS AG.
The holding was acquired by means of a capital increase through non-cash contributions. Some 1.4 million new shares were subscribed to at a price of EUR 2.35 per share. The capital increase was entered into the commercial register on 26 April 2010.
The subject of the non-cash contribution is a listed property in a very sought-after location in the centre of Berlin. On a total surface area of around 3,900 m² 54 high-quality apartments and loft apartments are being created through the planned refurbishment of the building dating from 1910. We expect total revenues from the sale of the listed apartments of some EUR 13 million.
We consider TAG's commitment as a sign of confidence in our corporate strategy. The participation of TAG furthermore serves to strengthen our shareholder structure and also offers interesting business prospects for both companies.
We have secured a lucrative major project for our sales pipeline with the acquisition of a unique listed ensemble in the immediate vicinity of the river Spree. The renovation and conversion of the former "Glanzfilmfabrik Köpenick" will result in the creation of a total of 230 apartments. Furthermore, the construction of new town houses is planned.
We are convinced that the "Glanzfilmfabrik" will be a major success – both architecturally and in business terms. Even before the official launch of sales to take place in the current quarter we are registering a large amount of interest from private investors and first reservations have been made.
We expect total proceeds from the sale of the property of around EUR 65 million. The acquisition and renovation of this unique listed ensemble in Berlin has enabled us to expand our range of top-quality residential real estate in the upper price segment and at the same time strengthen our presence in this segment.
Our revenue and earnings trend in the quarter under review was largely in line with expectations. The prolonged winter weather resulted in delays in construction progress at some renovation properties but we will catch up here in the quarter currently under way.
In the first nine months of the 2009/10 financial year we sold a total of 499 apartments and achieved revenues of EUR 49.2 million (previous year: EUR 57.1 million).
Our business is benefiting particularly from the prevailing high demand for listed real estate that enables private purchasers to derive significant tax benefits. Our sales and renovation pipeline currently contains listed real estate with a sales value of some EUR 40 million (excluding major projects).
Consolidated income for the first nine months of 2009/10 came to EUR 0.7 (previous year: EUR –9.4 million). We are therefore on good course for achieving our target for the current financial year – the return to the profit zone.
Dear shareholders, We consider ESTAVIS to be on a good footing for future development.
Our competence – exit solutions for private and institutional property investments – is encountering growing demand in the real estate market. We will expand this business further and in doing so tap new potential in markets in which we are able to achieve sustained profits.
Chief Executive Member of the
Florian Lanz Eric Mozanowski Officer (CEO) Management Board
ESTAVIS shares are listed on the Regulated Market of the Frankfurt Stock Exchange and fulfil the transparency requirements of the Prime Standard.
With effect from 26 April 2010, the number of shares went up to 9,546,235 due to a capital increase. The new major shareholder is TAG Immobilien AG, Hamburg, which subscribed to 1,446,808 shares at a price of EUR 2.35 per share within the scope of a capital increase. This means that TAG Immobilien AG has a stake of around 15.2 % in ESTAVIS AG. The members of the Management Board of ESTAVIS AG retain a significant share in the company of around 11 %.
On 16 February 2010 the ordinary Annual General Meeting for the 2008/09 financial year took place in Berlin. All items on the agenda were approved with an overwhelming majority by the Annual General Meeting. The resolutions included the reduction in size of the Supervisory Board which from now on only consists of three members.
We intensified our financial communication over the past few months in order to convince the investment community of the potential of our newly realigned business model.
On 4 February 2010, we took part in the Small & Mid Cap Conference of Close Brothers Seydler AG in Frankfurt am Main. Furthermore, at the DVFA Real Estate Conference on 23/24 February 2010, we informed participants about the prospects of our company in a corporate presentation and during several individual discussions.
On top of this, on 22 April 2010, we presented ESTAVIS AG for the first time at the Munich Capital Market Conference, which offers a high-quality shareholder communication platform in particular for small and medium-sized enterprises.
| ESTAVIS AG | |||||
|---|---|---|---|---|---|
| Share | |||||
| Stock exchange segment | Prime Standard | ||||
| ISIN | DE000A0KFKB3 | ||||
| German Securities Code Number (WKN) | A0KFKB | ||||
| Number of shares on 31 March 2010 | 8,099,427 | ||||
| Free float (as of April 2010) | 71.1% | ||||
| Share price high (1 July 2009 – 31 March 2010*) | EUR 2.55 | ||||
| Share price low (1 July 2009 – 31 March 2010*) | EUR 1.25 | ||||
| Closing price on 31 March 2010* | EUR 1.71 | ||||
| Market capitalisation on 31 March 2010* | EUR 14 million |
* Closing prices in Xetra trading
The growing confi dence in the positive economic development continued in the period under review with a recovery on the global fi nancial markets. ESTAVIS' share price also benefi ted from this development, increasing by around 16 % during this period.
The company's shares closed at EUR 1.71 on 31 March 2010 compared with EUR 1.48 at the start of the fi nancial year on 1 July 2009. ESTAVIS' market capitalisation totalled around EUR 14 million as of 31 March 2010.
ESTAVIS' shares reached a high of EUR 2.55 on 13 August 2009 compared with a low of EUR 1.25 on 6 July 2009 (Xetra closing prices).
The ESTAVIS share is currently being covered by analysts at WestLB ("Buy", target price EUR 3.00) and SES Research ("Buy", target price EUR 3.40).
The global economy continued to recover in the first quarter of 2010. The general economic conditions in Germany also benefited. Sentiment among consumers and companies improved markedly.
The development on the international financial markets in the first quarter reflected the growing economic optimism. However, ongoing risks such as the weak development on the employment market, sluggish lending and concerns about the financial stability of individual countries are endangering the economic recovery that is getting under way.
The limited lending particularly poses a risk to the recovery of the real economy. The restrictions in financing are also perceptible in the German real estate sector. Increasing requirements by banks in terms of the creditworthiness of private real estate purchasers are also having a detrimental effect on business performance in the real estate sector.
In view of the overall economic conditions, ESTAVIS AG recorded positive business performance in the first nine months of the 2009/10 financial year. Despite a downturn of sales compared with the previous period, net profit of EUR 0.7 million was generated.
Performance in the third quarter of the 2009/10 financial year was particularly impaired by the prolonged winter weather. This led to delays in the completion of some properties undergoing renovation. These delays will be largely made good in the current fourth quarter.
The sale of apartments – especially listed property with attractive tax relief – made a significant contribution to the positive business performance.
Furthermore, the restructuring measures implemented as part of the company's realignment had a positive impact on the financial performance. The revenues and earnings attained in the first nine months of the 2009/10 financial year provide a good basis for ESTAVIS AG to achieve its annual targets.
The new German Federal Government committed itself to the provision of tax relief for listed properties in its coalition agreement in October 2009 so that planning security will continue to exist here in the future.
Key figures for the first nine months 2009/10 and of the comparison period (first nine months of 2008/09 financial year) only relate to continued business operations.
In the first nine months of 2009/10 financial year ESTAVIS Group revenues decreased 14% to EUR 49.2 million from EUR 57.1 million in the comparison period.
Broken down for financial reporting purposes, revenues for continued operations were attributable to the following company business segments:
| • | Retail trading | EUR 45.1m | (previous year: EUR 49.3m) |
|---|---|---|---|
• Portfolio trading EUR 4.1m (previous year: EUR 7.7m)
Revenues generated in the first nine months 2009/10 are based on a business volume of 499 sold units (comparison period: 535) with a total residential and useful area of 27,015 m² (comparison period: 27,539 m²).
Other operating income increased to EUR 5.9 million (previous year: EUR 4.9 million). The increase is mainly attributable to write-ups on impaired receivables.
The gross margin for continued operations (revenues plus changes in inventories minus cost of materials/revenues) rose from 24.9 % to 40.9 % year-on-year. However, these values cannot be compared as the cost of materials in the previous year suffered much more from the settlement of the effects of purchase price allocation (particularly from the acquisition of B&V) than the cost of materials in the reporting period.
Total operating performance decreased by EUR 8.0 million, from EUR 59.8 million to EUR 51.8 million.
In the period under review, staff costs declined to EUR 2.0 million (previous year: EUR 2.5 million). This development is primarily due to the reduction in the number of employees as a result of the restructuring measures.
Other operating expenses decreased slightly from EUR 20.9 million to EUR 20.7 million in the period under review.
Earnings before interest and taxes (EBIT) rose sharply to EUR 3.2 million (previous year: EUR –4.4 million). The EBIT margin (EBIT/revenue) amounted to 6.6 % in the reporting period.
Financial result improved by EUR 0.9 million from EUR –3.4 million to EUR –2.5 million.
After income taxes (EUR –0.4 million) the consolidated net profit from continued operations rose to EUR 0.3 million in the period under review after a consolidated net loss of EUR 5.7 million in the same period of the previous year. This corresponds to earnings per share of EUR 0.04 (previous year: EUR –0.71).
The total assets of the ESTAVIS Group as of 31 March 2010 declined significantly by EUR 63.1 million to EUR 144.2 million (30 June 2009: EUR 207.3 million); this was primarily due to the completion of the sale of the shares in Hamburgische Immobilien SUCV AG (HAG Group).
The asset derecognised as a result of the sale of the shares in HAG amounted to EUR 47.0 million.
Furthermore, items within other receivables were offset by corresponding offsetting items under other liabilities with an overall effect of EUR 12.0 million.
Cash and cash equivalents decreased from EUR 3.9 million in the previous year to EUR 2.8 million.
The liabilities derecognised as a result of the sale of the shares in HAG amounted to EUR 43.4 million.
Financial liabilities, which mainly relate to liabilities to banks, decreased by EUR 2.1 million to EUR 66.4 million.
Shareholders' equity increased from EUR 49.1 million to EUR 51.9 million as a result of the expected capital increase.
The substantial reduction in total assets and the equity increase meant that the ESTAVIS Group's equity ratio increased from 23.7 % as of 30 June 2009 to 36.0 % at the end of the period under review.
Accordingly, the debt-to-equity ratio fell from 76.3% to 64.0 %. The ratio of cash and cash equivalents to total assets remained unchanged (1.9 %), while the Group's cash ratio (cash and cash equivalents/current liabilities) increased slightly from 2.5 % to 3.1 %.
In the first nine months of 2009/10, net cash from operating activities amounted to EUR –4.9 million (previous year: EUR –9.1 million).
Net cash used in investing activities totalled EUR –4.5 million in the period under review (previous year: EUR –0.5 million). This was attributable in particular to the sale of the HAG shares and the resulting derecognition of the cash and cash equivalents of the HAG Group.
Net cash used in financing activities amounted to EUR –0.5 million in the period under review (previous year: EUR –0.5 million).
The ESTAVIS Group has implemented a risk management system that is designed for several purposes, including allowing the early recognition and appropriate communication of significant risk factors arising from its business activities that could be of relevance to its earnings situation or its continued existence. The risk management system allows action to be taken against potentially unfavourable developments and events in a timely manner and, where required, facilitates the implementation of countermeasures before any significant damages are incurred.
There have been no significant revisions to the risks for the ESTAVIS Group in the period under review compared with the Risk Report in the Group Management Report for the previous financial year. Accordingly, reference should be made to the information contained therein.
Based on the business development in the first nine months of the 2009/10 financial year, the Management Board confirms its forecast of a positive consolidated result for the year as a whole. The Management Board continues to consider revenues in a range from EUR 75.0 million to EUR 85.0 million (previous year EUR 70.7 million) to pose an ambitious, albeit achievable target. Reaching this target depends primarily on the successful conclusion of sales negotiations currently underway.
The assessment of the expected revenue and profit trend for the 2009/10 financial year is based largely on the volume of apartment sales notarised as of the reporting date and to the end of the first quarter of 2009/10. Notarised apartment sales have a high probability of generating revenue and earnings in the 2009/10 financial year.
Furthermore, on the basis of the forecast revenue and earnings trend, the Management Board expects cash inflows. According to the Management Board, this will result in the financial and liquidity situation stabilising – in connection with measures to improve the financing structure of the ESTAVIS Group which have already been implemented or are planned.
In addition, the information contained in the Forecast Report given in the Group Management Report for the 2008/09 financial year also continues to apply.
On the basis of the available information, we currently regard as realistic the forecast statements for the future course of business and the influencing factors judged decisive. However, they naturally involve the risk that the expected developments will not actually occur either in terms of their trend or their extent.
As per an agreement of 5 March 2010 ESTAVIS AG carried out a capital increase through non-cash contributions through the issue of 1,446,808 shares. The subject of the non-cash contribution is a property that was transferred to the stock corporation on 31 March 2010. The capital increase was entered in the commercial register on 26 April 2010.
| ESTAVIS AG | 31 March2010 | 30 June 2009 |
|---|---|---|
| Assets | TEUR | TEUR |
| Non-current assets | ||
| Goodwill | 17,776 | 17,776 |
| Other intangible assets | 15 | 18 |
| Property, plant and equipment | 458 | 485 |
| Investments in associates | 55 | 50 |
| Other non-current financial assets | 119 | 193 |
| Deferred income tax receivables | 4,117 | 3,718 |
| Total | 22,540 | 22,241 |
| Current assets | ||
| Inventories | 80,139 | 80,727 |
| Trade receivables | 7,785 | 1,955 |
| Other receivables | 30,121 | 49,424 |
| Current income tax receivables | 807 | 2,028 |
| Cash and cash equivalents | 2,774 | 3,884 |
| Assets held for sale | 0 | 47,029 |
| Total | 121,628 | 185,047 |
| Total assets | 144,168 | 207,287 |
| ESTAVIS AG | 31 March 2010 | 30 June 2009 |
|---|---|---|
| Equity | TEUR | TEUR |
| Issued capital | 8,099 | 8,099 |
| Capital reserves | 44,222 | 44,222 |
| Amount provided for capital increase | 2,474 | – |
| IAS 39 reserve | 0 | 16 |
| Retained earnings | –2,852 | –3,597 |
| Equity attributable to the shareholders of the parent company | 51,943 | 48,740 |
| Minority interests | 0 | 340 |
| Total equity | 51,943 | 49,080 |
| Liabilities | ||
| Non-current liabilities | ||
| Provisions | 97 | 97 |
| Non-current financial liabilities | 564 | 588 |
| Deferred income tax liabilities | 3,477 | 4,254 |
| Total non-current liabilities | 4,138 | 4,938 |
| Current liabilities | ||
| Provisions | 4,435 | 4,855 |
| Current financial liabilities | 65,825 | 67,918 |
| Advance payments received | 3,684 | 4,101 |
| Current income tax liabilities | 2,536 | 1,158 |
| Trade payables | 4,376 | 6,214 |
| Other liabilities | 7,231 | 25,586 |
| Liabilities held for sale | 0 | 43,437 |
| Total current liabilities | 88,086 | 153,269 |
| Total equity and liabilities | 144,168 | 207,287 |
| ESTAVIS AG | 3rd quarter 09/10 1 Jan. 2010 – 31 March 2010 |
3rd quarter 08/09 1 Jan. 2009 – 31 March 2009 |
9 months 09/10 1 July 2009 – 31 March 2010 |
9 months 08/09 1 July 2008 – 31 March 2009 |
|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | |
| Revenues | 8,863 | 11,410 | 49,198 | 57,053 |
| Other operating income | 1,734 | 1,867 | 5,926 | 4,879 |
| Changes in inventories | 4,508 | 2,241 | –3,367 | –2,128 |
| Total operating performance | 15,105 | 15,518 | 51,757 | 59,803 |
| Cost of materials | 9,942 | 10,432 | 25,723 | 40,742 |
| Staff costs | 586 | 780 | 1,998 | 2,474 |
| Depreciation and amortisation | 35 | 36 | 98 | 102 |
| Other operating expenses | 4,689 | 5,703 | 20,715 | 20,930 |
| Operating profit | –147 | –1,433 | 3,223 | –4,444 |
| Net income from associates | 4 | –7 | 4 | –4 |
| Interest income | 56 | 148 | 257 | 591 |
| Interest expenses | 794 | 1,220 | 2,786 | 4,008 |
| Financial result | –738 | –1,072 | –2,529 | –3,417 |
| Pre-tax profit from continued operations | –881 | –2,512 | 698 | –7,865 |
| Income taxes | 237 | –738 | 379 | –2,148 |
| Result from continued operations | –1,117 | –1,774 | 319 | –5,716 |
| Result from discontinued operations | 487 | –1,397 | 419 | –3,651 |
| Net profit | –630 | –3,171 | 739 | –9,367 |
| attributable to parent company shareholders | –623 | –2,634 | 746 | –8,381 |
| attributable to minority interests | –7 | –537 | –7 | –986 |
| Earnings per share (EUR) | ||||
| from continued operations | –0.14 | –0.22 | 0.04 | –0.71 |
| from discontinued operations | 0.06 | –0.11 | 0.05 | –0.33 |
| from net profit | –0.08 | –0.33 | 0.09 | –1.03 |
| ESTAVIS AG | 3rd quarter 09/10 1 Jan. 2010 – 31 March 2010 |
3rd quarter 08/09 1 Jan. 2009 – 31 March 2009 |
9 months 09/10 1 July 2009 – 31 March 2010 |
9 months 08/09 1 July 2008 – 31 March 2009 |
|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | |
| Net profit | –630 | –3,171 | 739 | –9,367 |
| Available-for-sale financial assets | –8 | 0 | –16 | –16 |
| Changes in fair values | –8 | 0 | –16 | –16 |
| Reclassification recognized in profit or loss | 0 | 0 | 0 | 0 |
| Income taxes | 0 | 0 | 0 | 0 |
| Income directly recognized in equity | –8 | 0 | –16 | –16 |
| Total comprehensive income | –639 | –3,171 | 723 | –9,383 |
| attributable to parent company shareholders | –632 | –2,634 | 730 | –8,397 |
| attributable to minority interests | –7 | –537 | –7 | –986 |
| 9 months 09/10 1 July 2009 – 31 March 2010 |
9 months 08/09 1 July 2008 – 31 March 2009 |
||
|---|---|---|---|
| ESTAVIS AG | |||
| TEUR | TEUR | ||
| Net profit | 739 | –9,367 | |
| + | Depreciation/amortisation of non-current assets | 98 | 240 |
| +/– Increase/decrease in provisions | –420 | 1,413 | |
| +/– Change in value of investment property | 0 | 558 | |
| +/– Other non-cash expenses/income | –16 | 46 | |
| –/+ Increase/decrease in inventories, trade receivables and other assets that are not attributable to investing or financing activities |
16,881 | –13,230 | |
| +/– Increase/decrease in trade payables and other liabilities that are not attributable to investing or financing activities |
–21,737 | 10,591 | |
| –/+ Result from the disposal of consolidated companies | –419 | 680 | |
| = | Cash flow from current operating activities | –4,874 | –9,068 |
| + | Payments received for the disposal of financial assets | 30 | 0 |
| – | Payments for investments in intangible assets | –4 | –33 |
| – | Payments for investment property | 0 | –413 |
| – | Payments for investments in property, plant and equipment | –64 | –350 |
| – | Payments from the disposal of fully consolidated companies | –4,491 | 293 |
| = | Cash flow from investing activities | –4,529 | –504 |
| – | Payments to shareholders | 0 | –78 |
| + | Payments from issuing bonds and raising (financial) loans | 0 | 299 |
| – | Repayment of bonds and financial loans | –516 | –703 |
| = | Cash flow from financing activities | –516 | –482 |
| Net change in cash and cash equivalents | –9,919 | –10,054 | |
| + | Cash and cash equivalents at the beginning of the period | 12,694 | 25,733 |
| attributable to cash and cash equivalents reclassified as assets held for sale | 8,810 | – | |
| = | Cash and cash equivalents at the end of the period | 2,774 | 15,679 |
| ESTAVIS AG | Issued capital |
Capital reserves |
IAS 39 reserve |
Retained earnings |
Equity attrib utable to the shareholders of the parent company |
Minority interests |
Total |
|---|---|---|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | |
| As of 1 July 2009 | 8,099 | 44,222 | 16 | –3,597 | 48,740 | 340 | 49,080 |
| Total recognised income and expenses |
– | – | –16 | 746 | 730 | –7 | 723 |
| Change in consolidated group | – | – | – | – | – | –333 | –333 |
| Equity to be used for capital increase * |
1,447 | 1,027 | – | – | 2,474 | – | 2,474 |
| As of 31 March 2009 | 9,546 | 45,249 | 0 | –2,852 | 51,943 | 0 | 51,943 |
* Amounts included in balance sheet item "Amount provided for capital increase"
| ESTAVIS AG | Issued capital |
Capital reserves |
IAS 39 reserve |
Retained earnings |
Equity attrib utable to the shareholders of the parent company |
Minority interests |
Total |
|---|---|---|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | |
| As of 1 July 2008 | 8,099 | 77,065 | 16 | 1,413 | 86,594 | 8,742 | 95,336 |
| Total recognised income and expenses |
– | – | –16 | –8,381 | –8,397 | –986 | –9,383 |
| Acquisition of shares of consolidated companies |
– | – | – | –1 | –1 | –19 | –20 |
| As of 31 March 2009 | 8,099 | 77,065 | 0 | –6,938 | 78,196 | 7,737 | 85,933 |
ESTAVIS AG and its subsidiaries trade in property upon which they undertake maintenance work partly for the purpose of resale. Furthermore, property is held as financial investments. The company is domiciled in Berlin, Germany. The company's shares are listed on the Frankfurt Stock Exchange for trading on the Regulated Market (Prime Standard).
On 31 March 2010, ESTAVIS AG acted as the operating holding company for numerous special purpose entities.
These Condensed Consolidated Interim Financial Statements were approved for publication by the company's Management Board in May 2010. The Condensed Consolidated Interim Financial Statements were not checked by an auditor or subjected to review.
The condensed interim consolidated financial statements for the third quarter of the 2009/10 financial year, which ended on 31 March 2010, were prepared in accordance with the provisions of IAS 34 "Interim Financial Reporting" as adopted by the EU by way of a regulation. The condensed interim consolidated financial statements should be read in conjunction with the most recent consolidated financial statements of ESTAVIS AG for the year ended 30 June 2009.
With the following exceptions, the accounting policies applied in the condensed interim consolidated financial statements are the same as those applied in the preparation of the most recent consolidated financial statements for the year ended 30 June 2009.
The amended IAS 1 and IAS 23 are required to be applied for the first time in preparing the IFRS consolidated financial statements for the 2009/10 financial year. The amendment to IAS 1 requires the additional presentation of other comprehensive income as part of the income statement. The amendment to IAS 23 requires the capitalisation of the financing costs of properties for renovation and development projects resulting from cumulative production costs for projects starting in the 2009/10 financial year. For all projects starting prior to 1 July 2009, the previous accounting treatment, under which interest is not recognised in cost, remains in force. The provisions of IFRS 8 "Segment Reporting", the amended IAS 27 "Consolidated and Separate Financial Statements in Accordance with IFRS" and the amended IFRS 3 "Business Combinations", which are required to be applied for the first time in the current financial year, were already applied by the company in the previous year. Above and beyond this, the following standards are required to be applied for the first time in the current financial year:
| Standard/Interpretation | |
|---|---|
| IAS 32 + IAS 1 |
Amendments: Puttable Financial Instruments and Obligations Arising on Liquidation |
| IAS 39 | Amendments: Eligible Hedged Items |
| IFRS 1 + IAS 27 |
Amendments: Cost of Subsidiaries, Joint Ventures and Associates |
| IAS 39 | Amendments: Reclassification of Financial Assets: Effective Date and Transition |
| IAS 39 + IFRIC 9 |
Amendments: Embedded Derivatives |
| IFRS 2 | Amendments: Vesting Conditions and Cancellation |
| IFRS 7 | Amendments: Enhancing Disclosures on Financial Instruments |
| IFRIC 12 | Service Concession Arrangements |
| IFRIC 13 | Customer Loyalty Programmes |
| IFRIC 14 | The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction |
| IFRIC 15 | Agreements on the Construction of Real Estate |
| IFRIC 16 | Hedges of a Net Investment in a Foreign Operation |
| IFRIC 17 | Distributions of Non-cash Assets to Owners |
| IFRIC 18 | Transfers of Assets from Customers |
| Various | IFRS Improvements 2008 |
This did not result in any changes to the financial reporting for the ESTAVIS AG Consolidated Financial Statements. No regulations were applied early.
All amounts in the Balance Sheet, Income Statement, Consolidated Statement of Comprehensive Income, Statement of Changes in Equity and Cash Flow Statement, as well as in the notes and tabular overviews, are given in thousands of euros (TEUR), unless otherwise noted. Both individual and total figures represent the value with the smallest rounding difference. Small differences can therefore occur between the sum of the individual values represented and the reported totals.
As of 31 March 2010, the condensed interim consolidated financial statements of ESTAVIS AG included 59 subsidiaries, two joint venturews and one associate. The sale of the shares in the HAG Group was completed in the first half of the current financial year. Accordingly, the 23 companies in this subgroup were deconsolidated with effect from 1 July 2009. One company was newly formed in the first quarter. In the second quarter two companies that are now largely wound up and no longer active were sold. All remaining shares in the joint venture to date (a property company) were acquired. The company will be fully consolidated as of 1 October 2010. In the third quarter two companies that are no longer active were sold. Shares in two joint ventures (property companies) were acquired and three more new property companies established.
The segment results for the third quarter of the 2009/10 financial year are shown below:
| Portfolio trading |
Retail trading |
Development | Consolidation | Group | |
|---|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | TEUR | |
| Revenues (external only) |
745 | 8,118 | – | – | 8,863 |
| Revenues (internal only) |
– | – | – | – | – |
| Segment result | 355 | –583 | 80 | – | –147 |
| Unallocated | – | – | |||
| Operating result | – | –147 | |||
| Net income from investments carried at-equity |
4 | – | – | – | 4 |
| Financial result | – | –738 | |||
| Pre-tax profit | – | –881 |
The segment earnings for the first nine months of the 2009/10 financial year are as follows:
| Portfolio trading |
Retail trading |
Development | Consolidation | Group | |
|---|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | TEUR | |
| Revenues (external only) |
4,138 | 45,060 | – | – | 49,198 |
| Revenues (internal only) |
– | – | – | – | – |
| Segment result | 377 | 2,569 | 277 | – | 3,223 |
| Unallocated | – | – | |||
| Operating result | – | 3,223 | |||
| Net income from investments carried at-equity |
4 | – | – | – | 4 |
| Financial result | – | –2,529 | |||
| Pre-tax profit | – | 698 |
The portfolio trading segment is to be discontinued during the fourth quarter. The assets attributable to the segment will be allocated to other activities in accordance with their expected deployment.
The segment results for the third quarter of the 2008/09 financial year (continued
operations) are as follows:
| Portfolio trading |
Retail trading |
Development | Consolidation | Group | |
|---|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | TEUR | |
| Revenues (external only) |
403 | 10,775 | – | – | 11,178 |
| Revenues (internal only with discontinued operations) |
191 | – | – | – | 191 |
| Segment result | –1,624 | 209 | –18 | – | –1,433 |
| Unallocated | – | – | |||
| Operating result | – | –1,433 | |||
| Net income from investments carried at-equity |
–7 | – | – | – | –7 |
| Financial result | – | –1,072 | |||
| Pre-tax profit | – | –2,512 |
The segment earnings for the first nine months of the 2008/09 financial year (continued operations) are as follows:
| Portfolio trading |
Retail trading |
Development | Consolidation | Group | |
|---|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | TEUR | |
| Revenues (external only) |
7,487 | 49,333 | – | – | 56,821 |
| Revenues (internal only with discontinued operations) |
231 | – | – | – | 231 |
| Segment result | –6,101 | 1,739 | –82 | – | –4,444 |
| Unallocated | – | – | |||
| Operating result | – | –4,444 | |||
| Net income from investments carried at-equity |
–4 | – | – | – | –4 |
| Financial result | – | –3,417 | |||
| Pre-tax profit | – | –7,865 |
In the second quarter, write-ups on impaired receivables for TEUR 1,000 were carried out. The income is contained in other operating income and is allotted to the portfolio trading segment. In the third quarter a written-off receivable on the activities discontinued in the previous year was sold. This resulted in a gain on disposal of TEUR 487 which is contained in the result from discontinued operations.
As per an agreement of 5 March 2010, ESTAVIS AG carried out a capital increase through non-cash contributions through the issue of 1,446,808 shares. The subject of the noncash contribution is a property. It was transferred to the stock corporation on 31 March 2010. The capital increase was entered in the commercial register on 26 April 2010. The property was valued at TEUR 2,474 based on the stock exchange price of ESTAVIS AG as at 31 March 2010.
At the end of the 2008/09 financial year, the ESTAVIS Group sold its shares in the HAG subgroup with effect from the start of the 2009/10 financial year. The selling price for the shares in the HAG Group was TEUR 3,400. The sale was completed during the first half of financial year 2009/10. The disposal related to the assets and liabilities reported as available for sale as of 30 June 2009, which included cash and cash equivalents in the amount of TEUR 8,810.
Discontinued operations accounted for a cash outflow from the sale of shareholdings in the amount of TEUR –4,491 in the period under review (taking into account the cash and cash equivalents derecognised as a result of the sale and transaction costs). In the same period of the previous year, discontinued operations accounted for net cash from operating activities of TEUR 2,610, net cash used in investing activities of TEUR –767 and net cash used in financing activities of TEUR –471.
In the period under review, a company falling within the sphere of interest of Mr Rainer Schorr acquired a property from a Group company for a purchase price of TEUR 1,050. The proceeds of this sale were used to repay a loan liability to the same company. A loan in the amount of TEUR 979 due for repayment to a company belonging to the sphere of interest of Mr Rainer Schorr was extended during the third quarter until mid of May 2010.
In the first quarter, Mr Eric Mozanowski, a member of the Management Board of ESTAVIS AG, acquired a property from a Group company for a purchase price of TEUR 350. The short-term loan liability to Mr Eric Mozanowski as of 30 June 2009 in the amount of TEUR 300 was repaid. In the second quarter, Mr Eric Mozanowski granted a group company a short-term loan of TEUR 150 at an interest rate of 10% that was settled in the same quarter.
In the third quarter Mr Mozanowski granted a group company a short-term loan of TEUR 3,260 at an interest rate of 15 %. The term of the loan is 2.5 months.
Mr Rainer Schorr and Mr Florian Lanz have promised the Group cash of up to TEUR 2,000 and TEUR 500 respectively in the second quarter in the event of a liquidity bottleneck.
Above and beyond this, there were no significant new related party transactions, nor were any of the related party transactions reported in the notes to the consolidated financial statements for the 2008/09 financial year changed or derecognised.
The ESTAVIS Group employed 41 staff at the end of the third quarter. In the third quarter of the previous year, the figure was 56 (thereof 16 in disposed group companies). On average, 69 were employed in the Group during the last financial year.
1 June Investors' Conference "Real Estate Update", Frankfurt/Main
24 September Full Year Results 2009/10
This interim report contains specific forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events. This applies, in particular, to statements relating to future financial earning capacity, plans and expectations with respect to the business and management of ESTAVIS, growth, profitability and the general economic and regulatory conditions and other factors to which ESTAVIS is exposed.
Forward-looking statements are based on current estimates and assumptions made by the company to the best of its knowledge. Such forward-looking statements are based on assumptions and are subject to risks, uncertainties and other factors that may cause the actual results including the net asset, financial and earnings situation of ESTAVIS to differ materially from or disappoint expectations expressed or implied by these statements. The operating activities of ESTAVIS are subject to a number of risks and uncertainties that may also cause a forward-looking statement, estimate or prediction to become inaccurate.
This translation of the original German version of the interim report has been prepared for the convenience of our English-speaking shareholders. The German version is authoritative.
ESTAVIS AG Uhlandstraße 165 10719 Berlin, Germany
Phone: +49 (0)30 887 181 - 0 Telefax: +49 (0)30 887 181 - 11
E-Mail: [email protected] Home: www.estavis.de
Florian Lanz (Chairman) Eric Mozanowski
Dr. Karl-Josef Stöhr, Berlin
ESTAVIS AG Peter Vogt Investor & Public Relations
Phone: +49 (0)30 887 181 - 799 Telefax: +49 (0)30 887 181 - 779
E-Mail: [email protected]
Goldmund Kommunikation, Berlin www.goldmund.biz
Power-DesignThing GmbH www.derthing.de
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