Annual Report • Aug 28, 2020
Annual Report
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Regulated information within the meaning of the Royal Decree of November 14, 2007
"In the most turbulent and volatile year the world economy has known since the Second World War, AvH's diversified model has proven its value and resilience.
DEME's order backlog increased to a record level of 4.3 billion euros. The clients of Delen Private Bank and Bank J.Van Breda & Co confirmed their trust in the banks' prudent asset management with a gross inflow of almost 2 billion euros, so that the total assets under management again reached nearly 50 billion euros as of June 30, 2020.
Naturally, the consolidated half-year result of the AvH group suffered as a result of the lockdown measures during the COVID-19 crisis and the volatility on the stock markets. Based on the information currently available, however, we still expect to realise a solid consolidated net profit over the full 2020 financial year.
As a token of trust, and despite the fact that the supervisors still do not allow our banks to pay dividends, the board of directors of AvH has nevertheless decided to pay a dividend in respect of the 2019 financial year in the form of an interim dividend of 2.32 euros, identical to the payout over full year 2018.
Moreover, its healthy balance sheet and cash position permit AvH to keep seeking out new investment opportunities, of which we hope to realize some in the second half of the year."
Jan Suykens, CEO - Chairman of the executive committee
| (€ million) | 1H20 | 1H19 |
|---|---|---|
| Marine Engineering & Contracting | 7.5 | 26.0 |
| Private Banking | 61.6 | 58.2 |
| Real Estate & Senior Care | -3.7 | 15.8 |
| Energy & Resources | 0.6 | -0.6 |
| Contribution from core segments | 65.9 | 99.4 |
| Growth Capital | 3.0 | 5.6 |
| AvH & subholdings | -15.6 | -1.0 |
| Net capital gains(losses) / impairments | 3.0 | 108.9 |
| Consolidated net result | 56.3 | 212.9 |
The shareholders' equity of AvH (group share) increased to 3,489.3 million euros on June 30, 2020, which, after correction for the treasury shares in portfolio, corresponds to 105.39 euros per share. As of December 31, 2019, the shareholders' equity amounted to 3,456.1 million euros, or 104.32 euros per share. In light of the uncertainty caused by the COVID-19 crisis, and bearing in mind the recommendation of the European Central Bank in the first half of 2020, no dividend was paid out. In the fourth quarter of 2020, an extraordinary general meeting will be convened, where it will be proposed to still pay a dividend of 2.32 euros per share.
At the end of June 2020, AvH had a net cash position of 201.0 million euros, compared to 267.4 million euros at the end of 2019. This position consists of 48.7 million euros in cash investments and 120.3 million euros in cash and cash equivalents. The rest is made up of treasury shares, less short-term debts in the form of commercial paper amounting to 8 million euros.
AvH invested a total of 58.1 million euros in the first half of 2020, primarily to strengthen its participations in CFE (and therefore also in DEME, Rent-A-Port and Green Offshore) by 0.94% and in SIPEF by 2.35%. Together with SIPEF, AvH acquired the 52% interest of Sime Darby Plantation in Verdant Bioscience (SIPEF 10%, AvH 42%). AvH also invested in a number of promising technology-driven companies in Belgium (Biotalys, MRM Health, OncoDNA) and in India (Medikabazaar).
AvH owned 378,250 own shares as of June 30, 2020 (compared to 363,000 at the end of December 2019) to hedge present and future stock option plan obligations. To this number were added, on June 30, 2020, 10,510 own shares resulting from acquisitions and disposals within the framework of the AvH stock liquidity agreement
All group companies have by now adjusted their outlook for the rest of the year. Naturally, the currently known impact of the pandemic is taken into account in that outlook.
Based on the information currently available, the board of directors of Ackermans & van Haaren expects a marked improvement in the results during the second half of the year relative to the first half, and therefore to realise a substantial net result over the full 2020 financial year.
AvH's diversification model, DEME's focus on innovation and on the expansion of its concession activities, the persistently strong commercial performance of both Delen Private Bank and Bank J.Van Breda & Cº, backed up by very solid ratios and the group's net cash position that make it possible to constantly keep exploring new investment opportunities, permit us to look to the future with confidence and give us the capacity to realise a long-term sustainable growth of our consolidated shareholders' equity and results.
| 30.06.2020 | 30.06.2019 | ||
|---|---|---|---|
| 33,496,904 | 33,496,904 | ||
| 1.70 | 6.43 | ||
| 1.70 | 6.41 | ||
| 30.06.2020 | 31.12.2019 | ||
| Net equity per share (€) | |||
| 105.39 | 104.32 | ||
| Evolution of the stock price (€) | |||
| 149.8 | 144.9 | ||
| 110.9 | 125.2 | ||
| 116.4 | 139.7 | ||
Key figures - consolidated balance sheet
| (€ million) | 30.06.2020 | 31.12.2019 |
|---|---|---|
| Net equity (part of the group - before allocation of profit) |
3,489.3 | 3,456.1 |
| Net cash position of AvH | 201.0 | 267.4 |
(1) Corrected for own shares
Verdant Bioscience
The ESG policy pursued by AvH and group companies helped to substantially boost our resilience during the COVID-19 crisis. Combined with the strong focus on employee well-being and financially healthy businesses, this helped to quickly reassure employees, customers and suppliers.
Experiences of how various HR aspects have been addressed during this crisis were exchanged on a regular basis through the network of HR managers of the group companies. Many participations focused strongly on social aspects in their relations with employees and customers. In one of the hardest hit sectors, Anima Care offered all available support to its staff to allow them to provide the best possible care to its residents. Bank J.Van Breda & Cº, which has many clients from the medical sector, granted more extension of payment, and guidance where necessary, than was asked by the government. Extensa organised COVID shelter in collaboration with Médecins Sans Frontières. DEME made serious efforts to get all its staff, wherever they were in the world, back home and change teams.
Thanks to its prudent financial policy, the group never found itself in financial need, quite the opposite. AvH continued to invest, with its Biotalys, MRM Health and Verdant Bioscience meriting special attention from an ESG perspective. Those companies endeavour, each in their own way, to break new ground to meet special environmental and social needs. AvH also organised workshops in which it stressed, even in these times, the need for innovative thinking and to look for opportunities in the new context. Mediahuis, for instance, invested in 'edtech' (education technology).
On the initiative of the executive committee, the 'AvH Solidarity Fund' was set up to respond to urgent needs brought about by COVID-19 in the area of poverty, disadvantage, physical and mental health care and education. The executive committee of AvH voluntarily donated part of their net salary, and the staff of AvH and the other group companies also had the opportunity to follow that example. AvH increased those collected funds threefold, thereby raising a total sum of around 650,000 euros by July 31, 2020. Various participations also took initiatives of their own.
| (€ million) | 1H20 | 1H19 |
|---|---|---|
| DEME | 8.2 | 25.8 |
| CFE | -4.4 | 0.2 |
| Rent-A-Port | -1.0 | -1.1 |
| Green Offshore | 4.7 | 1.1 |
| Total | 7.5 | 26.0 |
Thanks to its diversification strategy, DEME (AvH 61.85%) reported positive results in the first half of 2020, despite the COVID-19 pandemic, the impact of sharply decreased oil prices and the accident with the Orion.
In operational terms, COVID-19 primarily caused complications in the changing of crews, inefficiency of projects and delays in deliveries. DEME has always prioritised the well-being and safety of its staff. There were virtually no projects in progress that had to be shut down or postponed, despite the restrictions imposed by the local authorities.
The main dredging projects in progress are in Europe (Belgium, Germany, Russia and Poland), Africa and India. The maintenance dredging activities held up well. The utilisation rate of the hopper dredging fleet was good, while the activity level of the cutters was low in the first half of 2020. The dredging division reported a turnover of 429.0 million euros, compared to 572.1 million euros last year.
At the beginning of May 2020, DEME Offshore was confronted with an accident on the offshore installation vessel 'Orion'; as a result, the vessel could not be deployed on the Moray East project as planned. The crane was badly damaged during load tests. Fortunately, there were only a few minor injuries. The vessel, which was still under construction and is owned by COSCO (Qidong) Offshore Co, was moored at the quay of the Liebherr shipyard in Rostock (Germany). Repair work on the 'Orion' has begun, yet the ship will probably only become operational by the end of 2021. Nevertheless, DEME has come up with alternative solutions that are taken into account in the result of the project, so that the project will be delivered more or less within the specified time limit.
In the first half of the year, DEME achieved important milestones on various offshore wind farms.
DEME Offshore realised a turnover of 434.6 million euros in the first half of 2020 (H1 2019: 582.9 million euros), which represents 41.4% of DEME's total group turnover. The decrease of the turnover is primarily due to a low amount of procurement.
| (€ million) | 1H20 | 1H19 |
|---|---|---|
| Turnover | 1,047.9 | 1,349.3 |
| EBITDA(1) | 153.8 | 199.1 |
| Net result | 15.5 | 44.3 |
| Equity | 1,438.7 | 1,365.7 |
| Net financial position(2) | -665.4 | -805.7 |
(1) Incl. IFRS16 effect of € 10.2 million (1H20), € 17.0 million (1H19) (2) Incl. IFRS16 effect of € 82.2 million (1H20), € 86.1 million (1H19)
The infrastructure projects such as the Terneuzen lock, the Blankenburg tunnel and the Rijnlandroute continued, albeit at a slightly lower level of productivity due to the strict COVID-19 measures. In Denmark, DEME and its partners are preparing to start work on the Fehmarnbelt connection at the beginning of 2021. DEME's infra division achieved a turnover increase of approximately 10% to 101.1 million euros.
DEME's total group turnover over the first half of the year amounted to 1,047.9 million euros, a decrease of 301.4 million euros compared to last year. DEME estimates that the COVID-19 pandemic and the associated decrease in the price of a barrel of oil explain a negative impact of approximately half of that decrease. An impact of the same magnitude is expected in the second half of the year.
On May 12, DEME Concessions closed the sale of its 12.5% stake in the Merkur offshore wind farm, one of the largest operational wind farms (396 MW) in Germany. This transaction earned DEME 88.9 million euros in cash and a capital gain of 64 million euros. The increasing importance of the concession activities strengthen DEME's capacity to realise similar capital gains on a regular basis. DEME Concessions still has a beneficial interest of 144 MW in the Rentel, SeaMade and C-Power wind farms. This capital gain more or less compensated for the extra costs connected with COVID-19 (such as charter flights and vessels for crew changes, doubling of crews to comply with quarantine regulations), the oil crisis and the 'Orion' (hiring of external vessels).
The total impact of the pandemic, the decrease in oil and gas prices and the accident with the 'Orion' on the EBIT of H1 2020 is estimated at approximately 60 million euros and at approximately 100 million euros over the full year 2020. Following the outbreak of the COVID-19 pandemic, DEME also took measures aiming to structurally reducing non-project related costs.
The EBITDA of H1 2020 amounted to 153.8 million euros, or a margin of 14.7% (H1 2019: 199.1 million euros, 14.8%). DEME reported a net profit of 15.5 million euros, compared to 44.3 million euros in the first half of 2019.
DEME's order backlog increased to the record level of 4,300 million euros at the end of June 2020, compared to 3,415 million euros at the end of March 2020 and 3,750 million euros at year-end 2019. In the second quarter of 2020, DEME managed to win a substantial new contract in Russia, as well as the contract (worth 140 million euros) for the construction of the Scheldt tunnel, the main link in the Oosterweel connection. Additionally, the Danish government gave the 'notice to proceed' to start work on the great Fehmernbelt project (700 million euros) on January 1, 2021; consequently, this contract is included in the order backlog as of June 30. The offshore wind farm
DEME - SeaMade DEME - Moray East - First jacket foundation
projects Hai Long and Zhong Neng in Taiwan (contract value in total in excess of 1 billion euros) and the works that will be carried out under the memorandum of understanding with Penta-Ocean Construction for offshore wind farms in Japan, however, were not yet included in this order backlog as of the end of June. Likewise, the 'substantial' contract for the inter-array cables for Dogger Bank (UK), the world's largest offshore wind farm under development, which was awarded at the end of August is not yet included in this order backlog.
DEME invested 128.4 million euros (excl. IFRS 16) in the first half of 2020 in the renewal and expansion of its fleet. The trailing suction hopper dredgers 'Thames River' (2,500 m³) and 'Meuse River' (8,300 m³) joined the fleet in the second quarter. The 'Spartacus' is expected to be delivered by IHC before the end of this year. Additionally, CS-BC-DEME Wind Engineering (CDWE) ordered the ground-breaking offshore wind installation vessel 'Green Jade' at the end of June. The first floating heavy-duty crane and installation vessel with DP3 capacity in Taiwan will be equipped with a high-tech crane with a lifting capacity of 4,000 tonnes. Starting in 2023, the vessel will be deployed in the thriving local offshore wind market.
Despite the additional costs, DEME has succeeded in generating a substantial cash flow, allowing it to constitute large cash reserves. DEME's net financial debt (incl. IFRS 16) decreased to 665.4 million euros, partly as a result of the delay in the investments for the 'Orion'.
Despite a difficult market environment, DEME expects to close also H2 2020 with a profit thanks to the diversification of its revenues. The investments in strengthening the offshore wind installation fleet and the developments in deep sea minerals and green hydrogen open up highly promising perspectives in DEME's development from a pure dredging company to a diversified marine engineering operation, based on a strengthened concession portfolio.
By purchasing approximately 15 million euros worth of CFE shares on the stock market in the first half of 2020, AvH increased its stake in CFE to 61.85%. Consequently, the participations in DEME (61.85%), Rent-A-Port (80.92%) and Green Offshore (80.92%) increased as well.
CFE
CFE - Riva - Brussels CFE - Mobix
At CFE (AvH 61.85%), CFE Contracting reported a decrease in turnover to 423.2 million euros (H1 2019: 501.4 million euros) and a decrease in the operating result to -5.6 million euros (H1 2019: 1.4 million euros). The COVID-19 pandemic mainly had a major impact in Belgium and Luxembourg. Most of the projects were shut down from mid March to the beginning of May under the lockdown measures. CFE Contracting estimates the impact of this crisis on the turnover at approximately 70 million euros, with the construction activities in Belgium accounting for more than three quarters of this figure, and at 20 million euros on the operating result. The fixed costs and the extra cost of personal protective equipment and other COVID-19 measures were compensated by temporary unemployment for approximately 5 million euros. CFE Polska, which was relatively unaffected by the corona crisis, performed very well in the first half of the year, as did the Multitechnics division. The order book of CFE Contracting decreased to 1,298 million euros. Major new contracts include the new court building in Namur, the residential wooden building in Mertert (Luxembourg) for BPI, and houses in Vilvorde for Matexi. CFE Contracting expects a decrease in turnover by approximately 10% and a positive net result over the full year 2020.
In the Real Estate Development division, the real estate portfolio amounted to 177 million euros, an increase of 34 million euros compared to year-end 2019. BPI currently has 557,000 m² under development, of which 129,000 m² under construction. BPI acquired six new projects in 2020: Brouck'R, Serenity Valley, Pure and an office building (all four of them in Brussels), an industrial building with offices in Bertrange (Luxembourg) and Wagrowska (Poland). BPI experienced relatively minor delays in sales and construction works as a result of the COVID-19 pandemic, although in Brussels, the planning applications are taking considerably longer to process. The positive net result (3.2 million euros) is attributable, among other things, to the margin on housing units sold in Luxembourg and Belgium, and the profit on the delivery of the Vilda Park project in Poland. BPI expects for the full year 2020 a net profit at least in line with 2019.
During the first half of the year, Rent-A-Port (AvH 80.92%) sold 10.6 hectares of industrial land in Vietnam of the projected 80 hectares for the full year 2020. This is less than initially expected, which is primarily due to COVID-19 (closure of borders and quarantine measures), and is accordingly reflected in a loss of 1.3 million euros. The operating activities, on the other hand, experienced relatively little impact from the pandemic, and therefore it is expected that the sale of a substantial volume of land can be completed during the second half of the year.
At Green Offshore (AvH 80.92%), Rentel (309 MW) was able to take advantage of excellent conditions in the first quarter of 2020 for the production of wind energy and of the recognition of deferred tax assets. This resulted in a very solid result in the first half of the year.
The installation work on the SeaMade offshore wind farm (487 MW) is progressing well and will normally be completed before the end of 2020. The first turbines are already generating electricity.
When SeaMade will be operational, the participations of Green Offshore will provide, from an economic perspective, a production capacity of 81 MW of renewable energy.
CFE: Breakdown by division (excl. DEME)
| Turnover | Net result(1) | |||
|---|---|---|---|---|
| (€ million) | 1H20 | 1H19 | 1H20 | 1H19 |
| Construction | 300.3 | 383.6 | ||
| Multitechnics | 78.1 | 79.8 | ||
| Rail Infra | 44.8 | 38.0 | ||
| Contracting | 423.2 | 501.4 | -7.6 | -2.9 |
| Real Estate Development |
33.4 | 24.0 | 3.2 | 4.5 |
| Holding, non-trans ferred items and eliminations |
-13.3 | -27.0 | -0.6 | -1.5 |
| Total | 443.3 | 498.4 | -5.0 | 0.1 |
(1) Including contribution from Rent-A-Port and Green Offshore to the CFE result
| (€ million) | 1H20 | 1H19 |
|---|---|---|
| FinAx | 0.0 | -0.1 |
| Delen Private Bank | 47.1 | 43.5 |
| Bank J.Van Breda & C° | 14.5 | 14.8 |
| Total | 61.6 | 58.2 |
After the dip in Q1 2020 as a result of depressed stock markets, the combined assets entrusted by the clients of Delen Private Bank and Bank J.Van Breda & Cº largely recovered to 49.8 billion euros at the end of June 2020, compared to 45.8 billion euros at March 31, 2020 and 51.9 billion euros at December 31, 2019. It is remarkable how, in the volatile financial markets of the first half-year, Delen Private Bank and Bank J.Van Breda & Cº had almost 2 billion euros more assets entrusted by their clients. This represents a positive net inflow of 400 million euros.
Thanks to the net inflow mentioned above and the excellent performance of the portfolio management at the end of June 2020, the assets under management of Delen Private Bank (AvH 78.75%) on a consolidated basis (Delen Private Bank, JM Finn, Oyens & Van Eeghen) amounted to 41,231 million euros. The strong decrease during
Delen Private Bank: Consolidated assets under management
| (€ million) | 1H20 | 2019 |
|---|---|---|
| Delen Private Bank | 41,231 | 43,566 |
| Delen Private Bank | 30,340 | 31,489 |
| JM Finn | 10,134 | 11,448 |
| Oyens & Van Eeghen | 757 | 629 |
| Bank J.Van Breda & Co | ||
| Off-balance sheet products | 10,870 | 10,651 |
| Client deposits | 5,651 | 5,416 |
| AuM at Delen(1) | -7,928 | -7,761 |
| FinAx | 49,824 | 51,872 |
(1) Already included in AuM Delen Private Bank
the first quarter to 37,412 million euros (compared to 43,566 million euros at year-end 2019) as a result of strong stock market corrections was to a large extent made up in the second quarter.
Thanks to the increase of the average assets under management relative to the previous year, the consolidated gross revenues increased to 197.1 million euros compared to 188.0 million euros in the first half of 2019. The cost-income ratio decreased to 53.8% (42.0% at Delen Private Bank, 84.0% at JM Finn), which is a particularly strong figure compared to the competition. The net profit increased in the first half of 2020 to 59.8 million euros (compared to 55.2 million euros in the first half of 2019), which includes the contribution from JM Finn of 4.0 million euros and a slightly negative contribution of 1.1 million euros from Oyens & van Eeghen, which nevertheless is heading for a break-even result thanks to an increasing volume of assets under management.
| 1H20 | 1H19 |
|---|---|
| 197.1 | 188.0 |
| 59.8 | 55.2 |
| 866.0 | 741.6 |
| 41,231 | 41,129 |
| 38.2 | 31.5 |
| 53.8 | 57.5 |
The consolidated shareholders' equity of Delen Private Bank amounted to 866.0 million euros at June 30, 2020 (809.6 million euros at year-end 2019). The Core Tier1 capital ratio of 38.2% is well above the industry average.
Delen Private Bank opened two new branches in the first half of the year, one in Waregem and one in Brasschaat.
Bank J.Van Breda & Cº (AvH 78.75%) reported solid results in the first half of the year, in full corona crisis. The total assets invested by clients increased to 16.5 billion euros as of June 30, 2020 (16.1 billion euros at the end of December 2019), of which 10.9 billion euros off-balance sheet products (+2%) and 5.6 billion euros client deposits (+4%). The loan portfolio increased slightly to 5.3 billion euros (end of December 2019: 5.2 billion euros). The bank responded proactively to requests for payment extensions on professional and mortgage loans. Those requests were handled quickly and efficiently, allowing entrepreneurs and liberal professionals to focus on managing the crisis and restarting their activities. The half-year figures include an IFRS provision of 4.8 million euros for expected credit losses (ECL), although so far no major losses have been reported on specific loans as a result of corona, and it was even possible to reverse provisions.
Delen Private Bank Bank J.Van Breda & C° - Antwerp
The bank product increased by 8% to 79.1 million euros (compared to 73.1 million euros at the end of June 2019). The net interest result increased thanks to volume growth, although the commission income in particular made a substantial contribution to the bank product, of which they already represent more than 45%. With bank levies spread over the full year, the normalised cost-income ratio came to 56.9%, compared to 62.7% in the first half of 2019. Despite the increased income and the stable costs, the net result decreased slightly to 18.4 million euros (compared to 18.8 million euros in the first half of 2019). This is entirely explained by the constitution of 4.8 million euros provisions for the expected credit losses (ECL) as a result of the corona crisis. Moreover, extraordinary income had been realised in 2019 by the final write-off of the debt of minority shareholders of ABK (+2.4 million euros).
Thanks to its healthy liquidity position, Bank J.Van Breda & C° remains well placed to cope with stress on the financial markets that may arise from the corona crisis and the economic recession that can result from this. The shareholders' equity (group share) increased from 573 million euros at year-end 2019 to 590 million euros at the end of June 2020. The Core Tier1 capital ratio increased to 13.3% and the leverage ratio was 8.0%, both well above what is required.
Bank J.Van Breda & C°: Invested by clients
| Client deposits | 16,521 (€ million) |
(€ million) | 1H20 | 1H19 |
|---|---|---|---|---|
| 10,870 (€ million) |
Bank product | 79.1 | 73.1 | |
| 9.177 (€ mio) |
Net result | 18.4 | 18.8 | |
| Equity | 589.7 | 547.7 | ||
| Off-balance sheet products | 10,870 | 10,135 | ||
| 5,651 (€ million) 4.566 |
Client deposits | 5,651 | 5,202 | |
| (€ mio) | Loan portfolio | 5,285 | 5,030 | |
| Core Tier1 capital ratio (%) | 13.5 | 12.7 | ||
| 0 | Cost-income ratio (%) | 56.9 | 62.7 | |
| (€ million) | 1H20 | 1H19 |
|---|---|---|
| Leasinvest Real Estate | -8.7 | 8.3 |
| Extensa Group | 3.3 | 4.9 |
| Anima Care | 1.6 | 2.6 |
| Total | -3.7 | 15.8 |
Leasinvest Real Estate (LRE, AvH 30.01%) recorded a net loss of 30.7 million euros in the first half of 2020, compared to a net profit of 25.3 million euros in the same period last year. This strong decrease is due to a minor extent to lower rental income, but primarily to the impairment loss (-32.4 million euros) on its participation (10.7%) in Retail Estates. Additionally, this year the dividend of Retail Estates (5.9 million euros) was paid out in July and therefore only recorded in the third quarter, whereas last year that had been done in June.
The fair value of the consolidated real estate portfolio, including project developments, remained stable at 1.1 billion euros relative to year-end 2019. Since the works on LRE's development projects were halted for several weeks during the COVID-19 lockdown, this resulted in minor delays in delivery. In July, LRE received the building permit for Monteco, the first wooden office building in the European district in Brussels.
Thanks to the strong geographical and operational diversification of its portfolio, LRE managed to confine the impact of the COVID-19 pandemic during the first half of the year. The assets in Austria are retail parks only. By June 2020, the number of visitors to Frunpark Asten returned to the same level as last year (compared to 65% in March).
LRE: Real estate portfolio (% based on fair value)
In Luxembourg as well, retail represents a substantial segment of the portfolio. Since the borders reopened between Belgium and Luxembourg, trading activity has resumed here too. The real estate portfolio in Belgium, however, consists primarily of office properties, which experienced less impact from the lockdown measures.
The greatest impact was reported on the participation in Retail Estates, a real estate company (BE-REIT) that is 100% invested in retail parks in Belgium and the Netherlands.
At LRE, several tenants have asked for relief during the difficult lockdown period. LRE has always adopted a constructive attitude towards tenants who got into financial difficulty as a result of the lockdown, and has entered into negotiations with tenants who requested a rent reduction on valid grounds. Those negotiations are largely concluded.
The rental income decreased to 29.1 million euros in the first half of 2020, compared to 32.4 million euros in the first half of 2019. The decrease is the result of a partial loss of rent due to the COVID-19 lockdown and changes in the real estate portfolio in 2019. The overall occupancy rate and the rental yield increased slightly to 91.05% (yearend 2019: 90.46%) and 5.90% (year-end 2019: 5.84%) respectively.
At the end of June 2020, the shareholders' equity (group share) amounted to 428 million euros (year-end 2019: 493 million euros). The debt ratio increased to 58.07% (54.78% at the end of December
LRE: Real estate portfolio
| 1H20 | 2019 | |
|---|---|---|
| Real estate portfolio fair value (€ mio) | 1,113.4 | 1,110.2 |
| Rental yield (%) | 5.90 | 5.84 |
| Occupancy rate (%) | 91.05 | 90.46 |
Extensa - Gare Maritime - Tour & Taxis Anima Care
12
Half-year results 2020
2019) following the payment of the dividend in respect of the 2019 financial year.
The net result of Extensa Group (AvH 100%) over the first six months of 2020 amounted to 3.3 million euros (compared to 4.9 million euros as of June 30, 2019). The lower net result is partly due to the COVID-19 crisis, which essentially causes a deferment of the net result to subsequent periods.
The apartments in the Riva residence in Brussels were delivered in the first six months of 2020. Off-plan sales of six apartment buildings (totalling 319 units) of the Park Lane project on Tour & Taxis continue (146 reservations), but are delayed by the COVID-19 crisis. Construction began gradually at the end of last year and will take approximately three years. In the former Gare Maritime freight station, the first tenants have already brought a few modules into use. The other modules are expected to be let this year. The operation of the accompanying underground car park (908 parking places) experienced a difficult start, but is expected to improve in the second half of the year as the office modules in the Gare Maritime are brought into use. As a result of the COVID-19 pandemic, trade fairs, events and seminars in Tour & Taxis were cancelled or postponed. Some activities are still planned for the autumn, albeit on a smaller scale than under normal conditions.
In the Cloche d'Or project in Luxembourg (Extensa 50%), the final phase of the first residential project (îlot A) will be delivered this year. Of the new residential project (îlot D - 345 apartments), 60% of the apartments have already been sold off-plan. Construction work is also continuing on 5 new office buildings (approximately 30,000 m² in total), which include 'Bijou' (6,000 m²), 'Spaces' (4,300 m²) and a new head office for 'Banca Intesa Sanpaolo' (10,800 m²).
As a result of COVID-19, Extensa expects:
Since the end of the first quarter, living and working at the residential care centres of Anima Care has been complicated due to the COVID-19 pandemic. AvH would like to pay a sincere tribute to all employees of Anima Care's residential care centres. They have given their utmost to support, help and care for their residents, often in exceptionally difficult conditions. Unfortunately, we have not been able to shield every residential care centre from the effects of the COVID-19 virus. Our thoughts therefore go to all employees, residents and their families who were confronted with the crisis.
The turnover of Anima Care (AvH 92.5%) increased to 47.2 million euros, compared to 43.7 million euros in the same period last year. On that turnover, an EBITDA was realised of 9.9 million euros (H1 2019: 9.5 million euros) and a net profit of 1.8 million euros (H1 2019: 2.8 million euros).
In mid-January, the new-build residence Nuance (Vorst), with a capacity of 121 nursing home beds, was brought into use.
The impact of the corona crisis on the consolidated results is felt especially in the four recent new-build projects, which were unable to take in new residents due to the admission stop. The operating results of these new-build sites were insufficient to offset the increased depreciation and finance costs, causing the net profit to decrease relative to the first half of 2019. Thanks to the remarkable efforts of the 1,600 Anima Care employees and additional support measures, the other care centres have generally been holding up well in the first half of 2020.
As of June 30, 2020, Anima Care had 2,485 beds in operation, of which 2,089 nursing home beds, 137 convalescence beds and 259 service flats, spread over 22 care centres (9 in Flanders, 7 in Brussels, 6 in Wallonia). At the beginning of July, Anima Care acquired the residential care centre Les 3 Arbres in Mellet (Hainaut), with a capacity of 54 beds.
| (€ million) | 1H20 | 1H19 |
|---|---|---|
| SIPEF | -0.2 | -1.5 |
| Sagar Cements | 0.8 | 0.9 |
| Total | 0.6 | -0.6 |
Thanks to favourable weather conditions, the total palm oil production of SIPEF (AvH 34.68%) increased in the first half of 2020 by 5.64% to 162,368 tonnes (H1 2019: 153,696 tonnes). At the Indonesian plantations, the increase in the volume of fruits harvested - thanks to the regular rainfall - and the generally favourable oil extraction rates (OER) led to a 9.2% increase in palm oil production compared to the same period last year. In Papua New Guinea, the recovery from the damage caused by the three volcanic eruptions in 2019 is progressing well. Nevertheless, the loss of production for 2020 is estimated at 25,000 tonnes of palm oil. Thanks to increased purchases of fruits from smallholders, the total palm oil production of Hargy Oil Palms was kept up.
In operational terms, COVID-19 brought numerous restrictions. It also complicated the management of the plantations and extraction mills. Nevertheless, COVID-19 has so far had no significant direct negative impact on the operational activities of the SIPEF group, except for the effect of a sudden sharp drop in the price of palm oil since mid-February. The price of palm oil dropped from 610 USD at the beginning
SIPEF: Production
| (Tonne)(1) | 1H20 | 1H19 |
|---|---|---|
| 162,368 | 153,696 | |
| 3,046 | 3,364 | |
| 1,478 | 1,312 | |
| 16,169 | 16,728 |
(1) Own + outgrowers
of April to below 500 USD per tonne CIF Rotterdam mid-May, before closing the half-year at 585 USD per tonne. The average world market price during this period (649 USD) was 23% higher than in the same period last year.
As a result of the increased palm oil production volumes and the higher world market price for palm oil, SIPEF's turnover increased to 117.7 million USD, compared to 113.2 million USD in the first half of 2019. In Indonesia, the fixed export levy of 50 USD per tonne was reintroduced in January 2020, and even raised to 55 USD per tonne as from June 2020. This levy has skimmed off part of the profit potential. The net result amounted to -0.7 million USD, compared to -5.2 million USD last year.
In Musi Rawas (South Sumatra, Indonesia), expansion continued steadily, respecting the RSPO sustainability procedures. In the first six months of 2020, an additional 482 hectares were compensated, and an additional 755 hectares were prepared for planting or planted. As a result, the cultivated hectares in Musi Rawas increased to 12,958 at the end of June 2020.
The rubber and tea activities made a negative contribution in the first half of 2020, primarily as a result of the sharp decrease in market prices. On the other hand, SIPEF's banana activity (in Ivory Coast) confirmed its profitability in the first half of 2020.
Taking into account the sales already realised, the recent market prices and the production outlook for palm oil, SIPEF expects a return to a recurring profit position for the year 2020.
AvH increased its shareholding percentage in SIPEF by acquisitions on the stock market to 32.6% in the first quarter of 2020 and to 34.68% in the second quarter of 2020.
| (USD million) | 1H20 | 1H19 |
|---|---|---|
| Turnover | 117.7 | 113.2 |
| EBIT | 4.6 | -2.1 |
| Net result | -0.7 | -5.2 |
| Equity | 625.8 | 632.5 |
| Net cash position | -165.6 | -135.4 |
SIPEF - Agro Muko Verdant Bioscience
At the end of May, AvH and SIPEF signed an agreement with Sime Darby Plantation Berhad (Malaysia) to acquire the latter's 52% interest in Verdant Bioscience Pte Ltd (VBS), which is based in Singapore. AvH acquires a 42% stake in VBS, representing an investment of 7 million USD. SIPEF increases its stake by 10% to 48% for an amount of 1.7 million USD.
For AvH, this acquisition is a strategic investment in line with its 34.68% interest in SIPEF. VBS gives SIPEF direct access to top-quality palm oil seeds that have as their main characteristic a higher yield per hectare. Verdant Bioscience is on track with its ambition to commercialise the first fully tested F1 hybrid palm oil seeds in 2028.
Verdant Bioscience will start contributing to the consolidated results of the AvH group in the second half of 2020.
Higher yields from Verdant seed will mark a very significant step forward for the environment and will help to meet the market demand for vegetable oil, while at the same time removing the pressure from the destruction of forests and biodiversity.
Sagar Cements (AvH 19.57%) reported a turnover of 5,677 million INR (69.3 million euros) in the first half of 2020, compared to 7,100 million INR (89.5 million euros) in the first half of 2019. The net result amounted to 374.2 million INR, or 4.6 million euros (H1 2019: 482.6 million INR or 6.1 million euros).
In July, the final tranche of the preferential allocation of convertible warrants was exercised. AvH participated in the preferential allocation on a 50/50 basis, together with the Reddy family. As a result, its interest increased to 21.85%.
| (€ million) | 1H20 | 1H19 |
|---|---|---|
| Contribution of participations | 3.0 | 5.6 |
| AvH & subholdings | -15.6 | -1.0 |
| Capital gains(losses)/ impairments |
3.0 | 108.9 |
| AvH & Growth Capital | -9.7 | 113.5 |
At the end of April 2020, Mediahuis (AvH 13.5%) acquired all the shares of media group Saint-Paul Luxembourg, publisher of titles such as Luxemburger Wort, Luxembourg Times, Télécran and Contacto. This acquisition will enable Luxembourg's largest media group to accelerate the digital transformation of its brands and organisation.
Euro Media Group (EMG, AvH 22.5%), a leading player on the market of audiovisual technical facilities in Europe, was badly affected by the outbreak of the COVID-19 crisis in the first half of 2020. Not only were prominent major sporting events in which EMG was to be actively involved postponed, such as the European Football Championship and the Olympic Games, virtually all big regular sports competitions (football, cycling, cricket, rugby, golf) or other live events were interrupted or cancelled as well. To make up for this sudden loss of turnover, a financing package of 40 million euros was deployed with the support of the French government, EMG's banking pool, and also the shareholders of EMG. AvH has a participation of 22.5%, and contributed 4.1 million euros to this package. In the second half of 2020, EMG's activities are gradually picking up again in the various countries where it operates.
At the beginning of March 2020, Biotalys (AvH 13.3%) closed a second 'Series C' financing round totalling 10 million euros. All existing shareholders and the new shareholder, Novalis LifeSciences, participated in that round. At the beginning of May, Biotalys announced the positive results of the field tests. The company is on track to launch its fungicide BioFun-1 on the US market in 2022 and to roll it out worldwide later on. Also in May, Biotalys received a grant of 1.6 million euros for its research from the Flemish Agency for Innovation & Entrepreneurship (VLAIO).
In February 2020, AvH participated in a capital increase of MRM Health. With its contribution of 4 million euros, AvH acquired a 17.2% stake. MRM Health, established in the Ghent biotech cluster, develops innovative human microbiome-based medicines. The first product is designed to treat inflammatory bowel disease (colitis ulcerosa and Crohn's disease) and will enter the clinical phase at the beginning of 2021. Research is also being carried out into the treatment of spondyloarthritis (rheumatic diseases), metabolic diseases and the development of certain probiotics.
In July, OncoDNA (AvH 10.6%) announced a public take over bid on the French company IntegraGen. This transaction would bring together the expertise of OncoDNA in the field of oncology precision medicine and the know-how of IntegraGen in the field of DNA sequencing services and bioinformatics analyses. The comprehensive solutionwouldwill benefit the treatment of patients with advanced cancer. The transaction is expected to be closed in the third quarter.
In the second quarter of 2020, a broad consortium of investors and industry partners from dredging and offshore markets (Ackermans & van Haaren, HAL Investments, MerweOord and Huisman) and the existing international syndicate of banks completed the acquisition and recapitalization of Royal IHC. This gives Royal IHC new perspectives as a leading Dutch maritime player with a solid balance sheet. By setting up a continuity foundation (that will hold the shares in IHC Merwede Holding B.V.), the consortium seeks to preserve the leading technology of Royal IHC, and Royal IHC as a major hub in the marine cluster. Through the industrial consortium, AvH has contributed 10 million euros worth of financial resources to this rescue operation of Royal IHC.
AvH charged 9.0 million euros (unrealised) impairment losses to profit and loss in H1 2020 to bring its portfolio to 'fair' value (market price). In the first half of 2019, a positive result of 5.0 million euros had been reported (1.6 million euros realised and 3.4 million euros unrealised), which explains the considerable change in the contribution of 'AvH & subholdings' to the group result.
At the end of February 2020, AvH sold its 50% stake in the Indian company Oriental Quarries & Mines, which was recognized as 'held for sale', to the co-shareholder, resulting in a capital gain of 3.0 million euros.
For the comparative figures, account must be taken of the capital gains of 108.9 million euros that were realised in the first half of 2019, primarily on the disposal of the 71.72% participation in Residalya.
At the beginning of July, HealthQuad successfully completed the first closing of its second fund with more than 68 million USD in committed capital. AvH has assumed the role of anchor investor in HealthQuad II and is investing 15 million USD over a period of four years. Besides AvH, which was also the anchor investor in HealthQuad's first fund, the second fund will be supported by Teachers Insurance and Annuity Association of America (TIAA), the Indian-based SIDBI, Swedfund and Merck & Co. Inc.
At the end of July, AvH announced that it will invest 6 million euros, phased according to milestones to be achieved, in Indigo Diabetes, as part of a 'Series B' capital round of 38 million euros. As a result, AvH acquires a participation of around 10% (fully diluted). Indigo Diabetes is a young high-tech company that develops medical applications based on nanophotonics. The firm boasts an excellent management team that has emerged from a unique ecosystem that combines the photonics expertise of Ghent University with imec's nanoelectronics expertise. The new investment round will enable Indigo Diabetes to further develop its invisible multi-biomarker sensor for people with diabetes and to prepare and start up the clinical trial phase with a view to securing authorisation for the European and US market.
The half-yearly financial report for the period 01/01/20-30/06/20, which comprises besides the condensed financial statements, including all information according to IAS 34, also the interim management report, a statement of the responsible persons and information regarding the external audit, is available on the website www.avh.be.
Ackermans & van Haaren is a diversified group operating in 4 core sectors: Marine Engineering & Contracting (DEME, one of the largest dredging companies in the world - CFE, a construction group with headquarters in Belgium), Private Banking (Delen Private Bank, one of the largest independent private asset managers in Belgium, and asset manager JM Finn in the UK - Bank J. Van Breda & C°, niche bank for entrepreneurs and the liberal professions in Belgium), Real Estate & Senior Care (Leasinvest Real Estate, a listed real estate company - Extensa, a major land and real estate developer with a focus on Belgium and Luxembourg) and Energy & Resources (SIPEF, an agroindustrial group in tropical agriculture).
At an economic level, the AvH group represented in 2019 a turnover of 5.6 billion euros and employed 21,522 people through its share in the participations. The group focuses on a limited number of strategic participations with a significant potential for growth. AvH is listed on Euronext Brussels and is included in the BEL20 index, the Private Equity NXT index and the European DJ Stoxx 600 index.
All press releases issued by AvH and its most important group companies as well as the 'Investor Presentation' can also be consulted on the AvH website: www.avh.be. Anyone who is interested to receive the press releases via email has to register to this website.
| Q4 2020 | Extraordinary general meeting |
|---|---|
| November 23, 2020 | Interim statement Q3 2020 |
| February 26, 2021 | Annual results 2020 |
e-mail: [email protected]
For further information please contact:
Jan Suykens CEO - Chairman executive committee Tel. +32.3.897.92.36
Tom Bamelis CFO - Member executive committee Tel. +32.3.897.92.42
Antwerp, 28 August 2020
The half-yearly financial report was issued in accordance with article 13 of the Royal Decree of 14 November 2007.
This report contains:
an interim annual report concerning 1) the major events which occurred during the first six months of the financial year, 2) a description of the main risks and uncertainties about the remaining months of the year as well as, if applicable, 3) an overview of the major related parties transactions;
the condensed consolidated financial statements relating the first six months of the financial year, issued on a consolidated basis in accordance with IAS 34; information on the external audit;
a declaration on behalf of the company on the condensed financial statements and the interim annual report;
Lexicon
| 1. | Consolidated income statement 20 | ||
|---|---|---|---|
| 2. | Consolidated statement of comprehensive income 21 | ||
| 3. | Consolidated balance sheet 22 | ||
| 3.1. | Consolidated balance sheet – Assets 22 | ||
| 3.2. | Consolidated balance sheet – Equity and liabilities 23 | ||
| 4. | Consolidated cash flow statement (indirect method) 24 | ||
| 5. | Statement of changes in consolidated equity 25 | ||
| 6. | Segment reporting 26 | ||
| 6.1. | Segment reporting – Consolidated income statement 30-06-2020 27 | ||
| 6.2. | Segment reporting – Consolidated income statement 30-06-2019 29 | ||
| 6.3. | Segment reporting – Consolidated balance sheet 30-06-2020 – Assets 30 | ||
| 6.4. | Segment reporting – Consolidated balance sheet 30-06-2020 – Equity and liabilities 31 | ||
| 6.5. | Segment reporting – Consolidated balance sheet 31-12-2019 – Assets 33 | ||
| 6.6. | Segment reporting – Consolidated balance sheet 31-12-2019 – Equity and liabilities 34 | ||
| 6.7. | Segment reporting –Consolidated cash flow statement 30-06-2020 35 | ||
| 6.8. | Segment reporting – Consolidated cash flow statement 30-06-2019 37 | ||
| 7. | Notes to the financial statements 38 | ||
| 7.1. | Basis for the presentation of the condensed financial statements 38 | ||
| 7.2. | Impact of COVID-19 38 | ||
| 7.3. | Business combinations 39 | ||
| 7.4. | Financial assets and liabilities per category 40 | ||
| 7.5. | Seasonality or cyclicality of operations 41 | ||
| 7.6. | Earnings per share 41 | ||
| 7.7. | Treasury shares 41 | ||
| 7.8. | Impairments 42 | ||
| 7.9. | Contingent liabilities or contingent assets 42 | ||
| 8. | Main risks and uncertainties 42 | ||
| 9. | Overview of the major related party transactions 42 | ||
| 10. | Events after balance sheet date 42 |
| (€ 1,000) | 30-06-2020 | 30-06-2019 |
|---|---|---|
| Revenue | 1,785,486 | 2,174,547 |
| Rendering of services | 47,233 | 43,705 |
| Lease revenue | 5,735 | 5,439 |
| Real estate revenue | 73,697 | 113,389 |
| Interest income - banking activities | 45,950 | 45,889 |
| Fees and commissions - banking activities | 35,921 | 32,761 |
| Revenue from construction contracts | 1,512,070 | 1,881,172 |
| Other operating revenue | 64,880 | 52,192 |
| Other operating income | 227 | 12,613 |
| Interest on financial fixed assets - receivables | 0 | 5,858 |
| Dividends | 227 | 6,754 |
| Government grants | 0 | 0 |
| Other operating income | 1 | 0 |
| Operating expenses (-) | -1,799,938 | -2,069,411 |
| Raw materials and consumables used (-) | -946,531 | -1,158,407 |
| Changes in inventories of finished goods, raw materials & consumables (-) | 24,583 | 23,733 |
| Interest expenses Bank J.Van Breda & C° (-) | -11,025 | -12,366 |
| Employee expenses (-) | -427,799 | -425,393 |
| Depreciation (-) | -169,182 | -169,047 |
| Impairment losses (-) | -3,245 | 1,442 |
| Other operating expenses (-) | -267,408 | -329,657 |
| Provisions | 669 | 284 |
| Profit (loss) on assets/liabilities designated at fair value through profit and loss | -47,484 | 5,684 |
| Financial assets - Fair value through P/L (FVPL) | -41,429 | 9,558 |
| Investment property | -6,055 | -3,874 |
| Profit (loss) on disposal of assets | 68,367 | 117,724 |
| Realised gain (loss) on intangible and tangible assets | 690 | 6,716 |
| Realised gain (loss) on investment property | 0 | 795 |
| Realised gain (loss) on financial fixed assets | 67,680 | 108,137 |
| Realised gain (loss) on other assets | -3 | 2,076 |
| Profit (loss) from operating activities | 6,657 | 241,158 |
| Finance income | 22,302 | 20,161 |
| Interest income | 6,153 | 5,581 |
| Other finance income | 16,149 | 14,579 |
| Finance costs (-) | -44,792 | -39,813 |
| Interest expenses (-) | -17,070 | -17,218 |
| Other finance costs (-) | -27,722 | -22,595 |
| Derivative financial instruments designated at fair value through profit and loss | -4,787 | -4,673 |
| Share of profit (loss) from equity accounted investments | 76,205 | 62,365 |
| Other non-operating income | 0 | 4,424 |
| Other non-operating expenses (-) | 0 | 0 |
| Profit (loss) before tax | 55,584 | 283,621 |
| Income taxes | -14,337 | -24,881 |
| Deferred taxes | 26,941 | 18,081 |
| Current taxes | -41,278 | -42,962 |
| Profit (loss) after tax from continuing operations | 41,248 | 258,740 |
| Profit (loss) after tax from discontinued operations | 0 | 0 |
| Profit (loss) of the period | 41,248 | 258,740 |
| Minority interests | -15,024 | 45,796 |
| Share of the group | 56,272 | 212,945 |
| Earnings per share (€) 1. Basic earnings per share |
30-06-2020 | 30-06-2019 |
| 1.1. from continued and discontinued operations | 1.70 | 6.43 |
| 1.2. from continued operations 2. Diluted earnings per share |
1.70 | 6.43 |
| 2.1. from continued and discontinued operations | 1.70 | 6.41 |
| 2.2. from continued operations | 1.70 | 6.41 |
| (€ 1,000) | 30-06-2020 | 30-06-2019 |
|---|---|---|
| Profit (loss) of the period | 41,248 | 258,740 |
| Minority interests | -15,024 | 45,796 |
| Share of the group | 56,272 | 212,945 |
| Other comprehensive income | -27,728 | -42,330 |
| Elements to be reclassified to profit or loss in subsequent periods | ||
| Net changes in revaluation reserve: bonds - Fair value through OCI (FVOCI) | 2,219 | 4,108 |
| Net changes in revaluation reserve: hedging reserves | -9,552 | -46,488 |
| Net changes in revaluation reserve: translation differences | -20,274 | 203 |
| Elements not to be reclassified to profit or loss in subsequent periods | ||
| Net changes in revaluation reserve: shares - Fair value through OCI (FVOCI) | -1 | -59 |
| Net changes in revaluation reserve: actuarial gains (losses) defined benefit pension plans | -120 | -94 |
| Total comprehensive income | 13,519 | 216,411 |
| Minority interests | -21,059 | 26,890 |
Share of the group 34,579 189,521
For a breakdown of the item 'Share of the group and Minority interests' in the results, we refer to Note 6. Segment reporting.
As a result of the application as of 2018 of the new accounting standard "IFRS 9 Financial Instruments", financial assets are broken down into three categories on the balance sheet. Another consequence of the application of this new standard is that, as of 2018, fluctuations in the fair value of financial assets are reported in the consolidated income statement. The only exception to this rule are the fair value fluctuations in the investment portfolio of Bank J.Van Breda & C° and Delen Private Bank, which in the table above are divided into shares and bonds.
Hedging reserves arise from fluctuations in the fair value of hedging instruments used by group companies to hedge against risks. Several group companies have hedged against a possible rise in interest rates. Across the group, the total unrealized loss on hedging instruments, mainly on interest rates and exchange rates, has increased by 9.6 million euros (including minority interests) in H1 2020. Mainly DEME, Leasinvest Real Estate and Rentel/SeaMade have protected themselves against a change in interest rates. As a result of the evolution of the market interest rates, the market value of these hedges has evolved negatively.
Translation differences arise from fluctuations in the exchange rates of group companies that report in foreign currencies. In H1 2020, the euro increased in value against most relevant currencies, which on balance is reflected in negative translation differences of 20.3 million euros (including minority interests).
With the introduction of the amended IAS 19 accounting standard in 2013, the actuarial gains and losses on certain pension plans are recognized directly in the other comprehensive income.
| (€ 1,000) | 30-06-2020 | 31-12-2019 |
|---|---|---|
| I. Non-current assets | 10,670,383 | 10,478,704 |
| Intangible assets | 128,740 | 126,902 |
| Goodwill | 331,543 | 331,550 |
| Tangible assets | 2,901,586 | 2,909,167 |
| Land and buildings | 409,959 | 403,032 |
| Plant. machinery and equipment | 1,898,332 | 1,899,461 |
| Furniture and vehicles | 52,652 | 53,457 |
| Other tangible assets | 5,014 | 5,245 |
| Assets under construction and advance payments | 535,630 | 547,971 |
| Investment property | 1,358,644 | 1,336,093 |
| Participations accounted for using the equity method | 1,276,349 | 1,202,477 |
| Financial fixed assets | 233,683 | 254,824 |
| Financial assets : shares - Fair value through P/L (FVPL) | 127,043 | 154,418 |
| Receivables and warranties | 106,640 | 100,406 |
| Non-current hedging instruments | 1,292 | 1,213 |
| Amounts receivable after one year | 207,496 | 194,739 |
| Trade receivables | 0 | 0 |
| Finance lease receivables | 182,984 | 183,386 |
| Other receivables | 24,511 | 11,353 |
| Deferred tax assets | 135,901 | 111,004 |
| Banks - receivables from credit institutions and clients after one year | 4,095,151 | 4,010,736 |
| II. Current assets | 5,413,638 | 4,782,119 |
| Inventories | 472,056 | 458,096 |
| Amounts due from customers under construction contracts | 152,924 | 99,893 |
| Investments | 524,132 | 476,513 |
| Financial assets : shares - Fair value through P/L (FVPL) | 48,741 | 55,717 |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 470,224 | 420,628 |
| Financial assets : shares - Fair value through OCI (FVOCI) | 167 | 168 |
| Financial assets - at amortised cost | 5,000 | 0 |
| Current hedging instruments | 3,991 | 911 |
| Amounts receivable within one year | 1,167,163 | 1,201,722 |
| Trade debtors | 906,775 | 938,560 |
| Finance lease receivables | 72,689 | 70,706 |
| Other receivables | 187,698 | 192,456 |
| Current tax receivables | 25,858 | 25,927 |
| Banks - receivables from credit institutions and clients within one year | 1,997,525 | 1,595,849 |
| Banks - loans and advances to banks | 158,665 | 141,306 |
| Banks - loans and receivables (excluding leases) | 990,078 | 999,823 |
| Banks - cash balances with central banks | 848,782 | 454,720 |
| Cash and cash equivalents | 1,031,399 | 887,985 |
| Time deposits for less than three months | 300,089 | 217,717 |
| Cash | 731,310 | 670,268 |
| Deferred charges and accrued income | 38,589 | 35,221 |
| III. Assets held for sale | 45,168 | 40,724 |
| Total assets | 16,129,189 | 15,301,547 |
The breakdown of the consolidated balance sheet by segment is presented in Note 6.3 Segment reporting. This reveals that the full consolidation of Bank J.Van Breda & C° (Private Banking segment) has a significant impact on both the balance sheet total and the balance sheet structure of AvH. Bank J.Van Breda & C° contributes 6,931.0 million euros to the balance sheet total of 16,129.2 million euros, and although this bank is solidly capitalized with a Core Tier 1 ratio of 13.3%, its balance sheet ratios, as explained by the nature of its activity, are different from those of the other companies in the consolidation scope. To improve the readability of the consolidated balance sheet, certain items from the balance sheet of Bank J.Van Breda & C° have been summarized in the consolidated balance sheet.
| (€ 1,000) | 30-06-2020 | 31-12-2019 |
|---|---|---|
| I. Total equity | 4,649,288 | 4,681,834 |
| Equity - group share | 3,489,271 | 3,456,109 |
| Issued capital | 113,907 | 113,907 |
| Share capital | 2,295 | 2,295 |
| Share premium | 111,612 | 111,612 |
| Consolidated reserves | 3,496,972 | 3,439,322 |
| Revaluation reserves | -86,165 | -64,472 |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 5,209 | 3,469 |
| Financial assets : shares - Fair value through OCI (FVOCI) | 40 | 41 |
| Hedging reserves | -49,923 | -43,889 |
| Actuarial gains (losses) defined benefit pension plans | -23,486 | -23,019 |
| Translation differences | -18,005 | -1,074 |
| Treasury shares (-) | -35,443 | -32,648 |
| Minority interests | 1,160,016 | 1,225,725 |
| II. Non-current liabilities | 3,641,335 | 3,100,095 |
| Provisions | 47,456 | 45,541 |
| Pension liabilities | 76,345 | 75,990 |
| Deferred tax liabilities | 165,096 | 164,694 |
| Financial debts | 2,113,993 | 1,906,344 |
| Bank loans | 1,622,112 | 1,466,076 |
| Bonds | 244,519 | 204,152 |
| Subordinated loans | 28,885 | 37,422 |
| Lease debts | 165,430 | 151,984 |
| Other financial debts | 53,047 | 46,710 |
| Non-current hedging instruments | 119,172 | 96,874 |
| Other amounts payable after one year | 33,346 | 31,429 |
| Banks - non-current debts to credit institutions. clients & securities | 1,085,925 | 779,224 |
| Banks - deposits from credit institutions | 299,949 | 0 |
| Banks - deposits from clients | 736,679 | 729,872 |
| Banks - debt certificates including bonds | 0 | 0 |
| Banks - subordinated liabilities | 49,297 | 49,352 |
| III. Current liabilities | 7,838,567 | 7,519,619 |
| Provisions | 37,114 | 37,701 |
| Pension liabilities | 333 | 331 |
| Financial debts | 681,242 | 625,560 |
| Bank loans | 381,485 | 279,208 |
| Bonds | 20,586 | 49,969 |
| Subordinated loans | 13,216 | 13,216 |
| Lease debts | 35,759 | 42,707 |
| Other financial debts | 230,195 | 240,460 |
| Current hedging instruments | 13,569 | 10,563 |
| Amounts due to customers under construction contracts | 215,933 | 169,751 |
| Other amounts payable within one year | 1,541,210 | 1,569,197 |
| Trade payables | 1,254,304 | 1,305,836 |
| Advances received on construction contracts | 10 | 861 |
| Amounts payable regarding remuneration and social security | 180,437 | 197,967 |
| Other amounts payable | 106,459 | 64,533 |
| Current tax payables | 80,095 | 59,441 |
| Banks - current debts to credit institutions. clients & securities | 5,157,056 | 4,946,466 |
| Banks - deposits from credit institutions | 36,197 | 27,825 |
| Banks - deposits from clients | 4,890,688 | 4,650,623 |
| Banks - debt certificates including bonds | 215,325 | 241,367 |
| Banks - subordinated liabilities | 14,846 | 26,651 |
| Accrued charges and deferred income | 112,015 | 100,608 |
| IV. Liabilities held for sale | 0 | 0 |
| Total equity and liabilities | 16,129,189 | 15,301,547 |
| (€ 1,000) | 30-06-2020 | 30-06-2019 |
|---|---|---|
| I. Cash and cash equivalents - opening balance | 887,985 | 513,588 |
| Profit (loss) from operating activities | 6,657 | 241,158 |
| Reclassification 'Profit (loss) on disposal of assets to cash flow from divestments | -68,367 | -117,724 |
| Dividends from participations accounted for using the equity method | 20,723 | 55,433 |
| Other non-operating income (expenses) | 0 | 4,424 |
| Income taxes (paid) | -25,124 | -32,655 |
| Non-cash adjustments | ||
| Depreciation | 169,182 | 169,047 |
| Impairment losses | 3,292 | -1,339 |
| Share based payment | -2,572 | -1,814 |
| Profit (loss) on assets/liabilities designated at fair value through profit and loss | 47,484 | -5,684 |
| (Decrease) increase of provisions | -305 | -104 |
| Other non-cash expenses (income) | 1,774 | -4,259 |
| Cash flow | 152,745 | 306,481 |
| Decrease (increase) of working capital | -6,840 | 9,065 |
| Decrease (increase) of inventories and construction contracts | -22,578 | -70,782 |
| Decrease (increase) of amounts receivable | 9,961 | 48,997 |
| Decrease (increase) of receivables from credit institutions and clients (banks) | -475,496 | -210,815 |
| Increase (decrease) of liabilities (other than financial debts) | -37,423 | -45,634 |
| Increase (decrease) of debts to credit institutions, clients & securities (banks) | 517,454 | 288,946 |
| Decrease (increase) other | 1,242 | -1,647 |
| Cash flow from operating activities | 145,905 | 315,546 |
| Investments | -363,573 | -511,932 |
| Acquisition of intangible and tangible assets | -141,727 | -284,453 |
| Acquisition of investment property | -26,906 | -65,411 |
| Acquisition of financial fixed assets (business combinations included) | -39,468 | -49,809 |
| Cash acquired through business combinations | 0 | 37,345 |
| New amounts receivable | -11,400 | -9,830 |
| Acquisition of investments | -144,072 | -139,773 |
| Divestments | 196,627 | 355,242 |
| Disposal of intangible and tangible assets | 3,990 | 12,202 |
| Disposal of investment property | 0 | 15,845 |
| Disposal of financial fixed assets (business disposals included) | 94,978 | 197,627 |
| Cash disposed of through business disposals | 0 | -26,483 |
| Reimbursements of amounts receivable | 5,742 | 17,644 |
| Disposal of investments | 91,917 | 138,407 |
| Cash flow from investing activities | -166,945 | -156,691 |
| Financial operations | ||
| Interest received | 6,153 | 5,581 |
| Interest paid | -16,656 | -25,253 |
| Other financial income (costs) | -12,002 | -8,113 |
| Decrease (increase) of treasury shares | -3,506 | -4,894 |
| (Decrease) increase of financial debts | 235,565 | 489,781 |
| (Investments) and divestments in controlling interests | -11,092 | -5,557 |
| Distribution of profits | 0 | -76,985 |
| Dividends paid to minority interests | -29,283 | -50,118 |
| Cash flow from financial activities | 169,179 | 324,443 |
| II. Net increase (decrease) in cash and cash equivalents | 148,138 | 483,298 |
| Impact of exchange rate changes on cash and cash equivalents | -4,724 | 574 |
| III. Cash and cash equivalents - ending balance | 1,031,399 | 997,461 |
| (€ 1,000) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Issued capital & share premium |
Consolidated reserves | through OCI (FVOCI) Bonds -Fair value |
through OCI (FVOCI) Shares -Fair value |
Hedging reserves | defined benefit pension Actuarial gains (losses) plans |
Translation differences | Treasury shares | Equity - group share | Minority interests | Total equity | |
| Opening balance, 1 January 2019 | 113,907 3,124,841 | 1,568 | 228 | -13,528 | -14,997 | -7,462 | -28,112 3,176,446 1,181,549 | 4,357,994 | |||
| Profit | 212,945 | 212,945 | 45,796 | 258,740 | |||||||
| Unrealised results | 3,249 | -46 | -26,424 | -194 | -9 | -23,424 | -18,906 | -42,330 | |||
| Total of realised and unrealised results |
0 | 212,945 | 3,249 | -46 | -26,424 | -194 | -9 | 0 | 189,521 | 26,890 | 216,411 |
| Distribution of dividends of the previous financial year |
-76,985 | -76,985 | -50,117 | -127,103 | |||||||
| Operations with treasury shares | -4,206 | -4,206 | -4,206 | ||||||||
| Other (a.o. changes in consol. scope / beneficial interest %) |
-5,382 | -5,382 | 11,511 | 6,129 | |||||||
| Ending balance, 30 June 2019 | 113,907 3,255,419 | 4,817 | 182 | -39,952 | -15,190 | -7,471 | -32,318 3,279,393 1,169,832 | 4,449,225 |
| (€ 1,000) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Issued capital & share premium |
Consolidated reserves | through OCI (FVOCI) Bonds -Fair value |
through OCI (FVOCI) Shares -Fair value |
Hedging reserves | defined benefit pension Actuarial gains (losses) plans |
Translation differences | Treasury shares | Equity - group share | Minority interests | Total equity | |
| Closing balance, 31 december 2019 | 113,907 | 3,439,322 | 3,469 | 41 | -43,889 | -23,019 | -1,074 | -32,648 | 3,456,108 | 1,225,725 | 4,681,833 |
| Impact IFRS amendments | 0 | 0 | |||||||||
| Opening balance, 1 January 2020 | 113,907 | 3,439,322 | 3,469 | 41 | -43,889 | -23,019 | -1,074 | -32,648 | 3,456,108 | 1,225,725 | 4,681,833 |
| Profit | 56,272 | 56,272 | -15,024 | 41,248 | |||||||
| Unrealised results | 1,739 | -1 | -6,033 | -467 | -16,931 | -21,693 | -6,035 | -27,728 | |||
| Total of realised and unrealised results |
0 | 56,272 | 1,739 | -1 | -6,033 | -467 | -16,931 | 0 | 34,579 | -21,059 | 13,519 |
| Distribution of dividends of the previous financial year |
0 | 0 | -29,283 | -29,283 | |||||||
| Operations with treasury shares | -2,795 | -2,795 | -2,795 | ||||||||
| Other (a.o. changes in consol. scope / beneficial interest %) |
1,379 | 1,379 | -15,366 | -13,986 | |||||||
| Ending balance, 30 June 2020 | 113,907 | 3,496,973 | 5,208 | 40 | -49,922 | -23,486 | -18,005 | -35,443 | 3,489,271 | 1,160,016 | 4,649,288 |
More details on the unrealised results can be found in Note 2. Consolidated statement of comprehensive income.
In light of the COVID-19 uncertainty, and bearing in mind the recommendation addressed by the European Central Bank on March 27 to all banks in the eurozone not to pay out any dividends before October 1, 2020, AvH withdrew the initially formulated dividend proposal of 2.50 euros per share and reserved the entire profit for the 2019 financial year. In the fourth quarter of 2020, an extraordinary general meeting will be convened, where it will be proposed to pay an interim dividend of 2.32 euros per share.
In the course of the first semester of 2020, AvH has purchased 27,750 treasury shares in order to hedge options for the benefit of the staff. Over the same period, the beneficiaries of the share option plan exercised options on 12,500 AvH shares. On June 30, 2020, options were outstanding for a total of 354,250 AvH shares. In order to hedge these (and future) obligations, AvH owned 378,250 treasury shares on the same date.
In addition, 49,797 AvH shares were purchased and 44,815 shares were sold during the first 6 months of 2020 in the context of the contract that AvH entered into with Kepler Cheuvreux in order to support the liquidity of the AvH share. These transactions are initiated entirely autonomously by Kepler Cheuvreux, but, as they take place on behalf of AvH, the net purchase of 4,982 AvH shares has an impact on AvH's equity in this context. On June 30, 2020, the number of treasury shares in the portfolio in the context of this liquidity agreement amounts to 10,510.
The item "Other" in the "Minority interests" column arises, among other aspects, from the changes in the AvH consolidation scope (i.e. the increased stake in CFE). We refer to Explanatory Note 6. Segment reporting for more details.
The item "Other" in the colomn "Consolidated reserves" includes a.o. the eliminations of results on sales of treasury shares, the impact of the acquisition of minority interests and the impact of the measurement of the purchase obligation on certain shares.
DEME (global integration 61.85%), CFE (global integration 61.85%), Rent-A-Port (global integration 80.92%) and Green Offshore (global integration 80.92%).
The purchase of 236,963 CFE shares (+0.94%) on the stock market in 2020 led mechanically to a higher beneficial interest of AvH in DEME (61.85%), Rent-A-Port (80.92%) and Green Offshore (80.92%).
Segment 2
Delen Private Bank (equity method 78.75%), Bank J.Van Breda & C° (global integration 78.75%) and FinAx (global integration 100%).
Segment 3
Extensa (global integration 100%), Leasinvest Real Estate (global integration 30%), Leasinvest Real Estate Management (global integration 100%) and Anima Care (global integration 92.5%).
Segment 4
.
SIPEF (equity method 34.68%), AvH India Resources (global integration 100%) and Sagar Cements (equity method 19.57%).
AvH's stake in SIPEF increased from 32.33 % to 34.68% in H1 2020.
At the end of May, AvH and SIPEF signed an agreement with Sime Darby Plantation Berhad (Malaysia) to acquire the latter's 52% interest in Verdant Bioscience Pte Ltd (VBS), which is based in Singapore. AvH acquired a 42% stake in VBS, representing an investment of 7 million USD. SIPEF increased its stake by 10% to 48% for an amount of 1.7 million USD. Verdant Bioscience will start contributing to the consolidated results of the AvH group in the second half of 2020.
Following an extraordinary general meeting of Sagar Cements, 3,100,000 warrants that are convertible into shares were issued in January 2019. AvH India Resources has subscribed to 1,550,000 convertible warrants, and 775,000 of these have already been converted in 2019. In July, the final tranche of the preferential allocation of convertible warrants was exercised. As a result, its interest increased to 21.85%.
AvH India Resources holds no other participations than in Sagar Cements.
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine | Private | Real Estate & | Energy & | AvH & | Eliminations | Total | |
| Engineering & | Banking | Senior Care | Resources | Growth | between | 30-06-2020 | |
| Contracting | Capital | segments | |||||
| Revenue | 1,553,226 | 89,127 | 94,823 | 7 | 49,331 | -1,028 | 1,785,486 |
| Rendering of services | 0 | 0 | 47,222 | 0 | 964 | -953 | 47,233 |
| Lease revenue | 0 | 4,934 | 801 | 0 | 0 | 5,735 | |
| Real estate revenue | 33,433 | 0 | 40,264 | 0 | 0 | 73,697 | |
| Interest income - banking activities | 0 | 45,950 | 0 | 0 | 0 | 45,950 | |
| Fees and commissions - banking activities | 0 | 35,921 | 0 | 0 | 0 | 35,921 | |
| Revenue from construction contracts | 1,465,823 | 0 | 0 | 0 | 46,247 | 1,512,070 | |
| Other operating revenue | 53,970 | 2,322 | 6,537 | 7 | 2,119 | -75 | 64,880 |
| Other operating income | 0 | 0 | 0 | 0 | 297 | -70 | 227 |
| Interest on financial fixed assets - receivables | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends | 0 | 0 | 0 | 0 | 227 | 227 | |
| Government grants | 0 | 0 | 0 | 0 | 0 | 0 | |
| Other operating income | 0 | 0 | 0 | 0 | 71 | -70 | 1 |
| Operating expenses (-) | -1,614,430 | -65,481 | -66,030 | -78 | -55,016 | 1,098 | -1,799,938 |
| Raw materials and consumables used (-) | -902,215 | 0 | -24,748 | 0 | -19,568 | 0 | -946,531 |
| Changes in inventories of finished goods, raw materials & consumables (-) | 9,603 | 0 | 14,769 | 0 | 211 | 24,583 | |
| Interest expenses Bank J.Van Breda & C° (-) | 0 | -11,025 | 0 | 0 | 0 | -11,025 | |
| Employee expenses (-) | -347,057 | -23,648 | -34,762 | 0 | -22,332 | -427,799 | |
| Depreciation (-) | -157,288 | -3,583 | -5,651 | 0 | -2,660 | -169,182 | |
| Impairment losses (-) | 1,634 | -3,913 | -966 | 0 | 0 | -3,245 | |
| Other operating expenses (-) | -219,577 | -23,549 | -14,670 | -78 | -10,632 | 1,098 | -267,408 |
| Provisions | 471 | 237 | -3 | 0 | -35 | 669 | |
| Profit (loss) on assets/liabilities | |||||||
| designated at fair value through profit and loss | 0 | 0 | -38,487 | 0 | -8,997 | 0 | -47,484 |
| Financial assets - Fair value through P/L (FVPL) | 0 | 0 | -32,432 | 0 | -8,997 | -41,429 | |
| Investment property | 0 | 0 | -6,055 | 0 | 0 | -6,055 | |
| Profit (loss) on disposal of assets | 65,388 | -18 | 22 | 0 | 2,974 | 0 | 68,367 |
| Realised gain (loss) on intangible and tangible assets | 670 | 0 | 20 | 0 | 0 | 690 | |
| Realised gain (loss) on investment property | 0 | 0 | 0 | 0 | 0 | 0 | |
| Realised gain (loss) on financial fixed assets | 64,703 | 0 | 2 | 0 | 2,975 | 67,680 | |
| Realised gain (loss) on other assets | 15 | -18 | 0 | 0 | 0 | -3 | |
| Profit (loss) from operating activities | |||||||
| 4,184 | 23,628 | -9,672 | -72 | -11,411 | 0 | 6,657 | |
| Finance income Interest income |
20,610 4,490 |
0 0 |
1,488 1,461 |
0 0 |
709 707 |
-506 -506 |
22,302 6,153 |
| Other finance income | 16,120 | 0 | 27 | 0 | 2 | 16,149 | |
| Finance costs (-) | -32,538 | -2 | -11,856 | 0 | -902 | 506 | -44,792 |
| Interest expenses (-) | -9,847 | -1 | -7,427 | 0 | -300 | 506 | -17,070 |
| Other finance costs (-) | -22,691 | 0 | -4,430 | 0 | -602 | -27,722 | |
| Derivative financial instruments designated at fair value | |||||||
| through profit and loss | 0 | 185 | -4,972 | 0 | 0 | -4,787 | |
| Share of profit (loss) from equity accounted investments | 20,261 | 47,543 | 4,907 | 670 | 2,823 | 76,205 | |
| Other non-operating income | 0 | 0 | 0 | 0 | 0 | 0 | |
| Other non-operating expenses (-) | 0 | 0 | 0 | 0 | 0 | 0 | |
| Profit (loss) before tax | 12,517 | 71,354 | -20,105 | 598 | -8,780 | 0 | 55,584 |
| Income taxes | -3,343 | -6,697 | -3,403 | 0 | -894 | 0 | -14,337 |
| Deferred taxes | 25,972 | 1,049 | -235 | 0 | 156 | 26,941 | |
| Current taxes | -29,315 | -7,746 | -3,167 | 0 | -1,050 | -41,278 | |
| Profit (loss) after tax from continuing operations | 9,174 | 64,657 | -23,508 | 598 | -9,674 | 0 | 41,248 |
| Profit (loss) after tax from discontinued operations | 0 | 0 | 0 | 0 | 0 | 0 | |
| Profit (loss) of the period | 9,174 | 64,657 | -23,508 | 598 | -9,674 | 0 | 41,248 |
| Minority interests | 1,694 | 3,081 | -19,777 | 3 | -25 | -15,024 | |
| Share of the group | 7,480 | 61,577 | -3,731 | 596 | -9,650 | 56,272 |
The composition of the consolidation scope has remained virtually unchanged in relation to the first half of 2019. Although AvH increased its shareholding percentage in the participations of the "Marine Engineering & Contracting" segment and also in SIPEF, this did not give rise to changes in the consolidation method (see Note 6. Segment reporting for the full overview). The comparison of the income statement with that of last year is therefore not distorted by changes in the consolidation scope.
In the first six months of 2020, AvH realized 1,785.5 million euros revenue, which is 389.1 million euros (-18%) less than last year. The operating expenses also decreased by 269.5 million euros compared to last year (-13%). The result on balance is a negative impact of 119.6 million euros, which is concentrated in "Marine Engineering & Contracting" (-103.6 million euros) and in "Real Estate & Senior Care" (-19.5 million euros). As a direct and indirect consequence of the COVID-19 crisis, both DEME and CFE reported a lower level of activity. The expenses decreased as well, partly thanks to the support measures that the companies could rely on, albeit less than proportionally. In "Real Estate & Senior Care", revenue decreased compared to last year, primarily as a result of 44.8 million euros less income from real estate projects in Luxembourg (Cloche d'Or) and Brussels (Tour & Taxis). The decrease in rental income at Leasinvest Real Estate and Extensa, however, was limited to 3.6 million euros. Thanks to the expansion of its network of residential care centres, Anima Care was able to increase its turnover by 3.5 million euros compared to last year, despite the pressure of the COVID-19 crisis on the occupancy rates.
In "Private Banking", Bank J.Van Breda & C° succeeded in translating the higher commercial volumes into a proportionally stronger increase of revenues (+6%, mainly thanks to increased commissions) than of its operating expenses (+4%). In the "AvH & Growth Capital" segment, most of the revenue is generated by Agidens and Biolectric. There was a slight decrease in revenue (-5%), which, however, is amply offset by a 7% decrease in operating expenses.
The other operating income in the first half of 2020 amounted to just 0.2 million euros, compared with 12.6 million euros last year. This trend is primarily explained by the decision of the regulated real estate company Retail Estates (in which Leasinvest Real Estate holds a stake of more than 10%) to defer the payment of its dividend to the second half of the year. As of 2020, the 'interest on financial fixed assets – receivables' is included in the interest income, for an amount of 3.6 million euros (H1 2019: 5.9 million euros).
The operating expenses include 3.2 million euros worth of impairment losses while in the first half of 2019, a net reversal of 1.4 million euros of impairment losses was recorded. One the one hand, DEME and Bank J.Van Breda& C° were able to reverse respectively 1.7 million euros and 0.8 million euros worth of previously recognised impairment losses. On the other hand, Bank J.Van Breda & C° charged 4.8 million euros worth of impairment losses (Expected Credit Loss) on its loan portfolio to profit and loss in the first half of 2020, in anticipation of expected future credit losses estimated on the basis of certain market parameters, without such impairment losses already being currently identified in the bank's loan portfolio. Leasinvest Real Estate, too, recognised 0.9 million euros worth of "expected credit losses".
Assets/liabilities designated at fair value made a negative contribution of 47.5 million euros to the operating result in the first half of 2020. In the first half of 2019, a positive contribution of 5.7 million euros had been made. The negative adjustments of the first half of 2020 relate to the 1,351,320 Retail Estates shares held in the portfolio of Leasinvest Real Estate valued at the stock market price of 59.9 euros as at June 30, 2020, and the evolution of the fair value of the real estate portfolio as periodically assessed by external valuers. In "AvH & Growth Capital", too, a negative value adjustment of 9.0 million euros was recognised based on the share prices at 30/6/2020 (1H 2019: 3.3 million euros positive).
In the first half of 2020, the profit from operating activities is supported by 68.4 million euros worth of capital gains on the disposal of assets. Those gains include 63.9 million euros from the disposal by DEME Concessions of its 12.5% stake in the German offshore wind farm Merkur during the second quarter of 2020. In the "AvH & Growth Capital" segment, AvH sold its 50% participation in the Indian company Oriental Quarries & Mines Pvt ltd. Last year, those capital gains were higher (117.7 million euros), mainly thanks to the 105.7 million euros capital gain on the disposal of the participation in the French retirement home group Residalya.
The combination of lower revenue and lower other operating income, losses on assets/liabilities designated at fair value and lower capital gains than last year account for the decrease in the profit from operating activities to 6.7 million euros (1H 2019: 241.2 million euros).
Both the finance income and finance costs were higher than last year. The net result is an increase in finance costs by 2.8 million euros. The group continues to be financed in a conservative manner. The net interest expenses did not increase; the (net) increase is entirely situated in the other finance costs, which also include currency translation differences.
The cost of the fair value adjustment of derivative financial instruments remained virtually unchanged (4.8 million euros) in relation to last year. Leasinvest Real Estate in particular makes systematic use of this type of instruments (with fair value fluctuations through profit & loss) to hedge the impact of rising market interest rates on its finance cost.
As is traditionally the case in AvH's consolidated results, the share of profit from equity-accounted investments makes a very substantial contribution of 76.2 million euros to the group's result (1H 2019: 62.4 million euros). This figure includes the contributions of Delen Private Bank (47.1 million euros), SIPEF (-0.2 million euros), DEME's and Green Offshore's stakes in the offshore wind farm Rentel, Extensa in Luxembourg (Cloche d'Or), and most of the participations in AvH's Growth Capital portfolio.
Unlike last year (4.4 million euros), no other non-operating results were realised in the first half of 2020.
The income taxes amounted to 14.3 million euros in the first half of 2020, compared to 24.9 million euros last year. This decrease is explained by the strong decrease in the profit from operating activities. It should also be remembered that, when interpreting this tax expense, the contribution of the equity-accounted investments is shown on a net basis (after taxes) and therefore does not give a full picture of the total tax cost of the group.
| Total Marine Private Real Estate & Energy & AvH & Eliminations Engineering & Banking Senior Care Resources Growth between 30-06-2019 Contracting segments Capital Revenue 1,899,040 84,443 140,092 27 51,885 -940 2,174,547 Rendering of services 0 0 43,686 0 959 -940 43,705 Lease revenue 0 4,644 795 0 0 5,439 Real estate revenue 24,382 0 89,006 0 0 113,389 Interest income - banking activities 0 45,889 0 0 0 45,889 Fees and commissions - banking activities 0 32,761 0 0 0 32,761 Revenue from construction contracts 1,831,703 0 0 0 49,469 1,881,172 Other operating revenue 42,955 1,149 6,605 27 1,457 0 52,192 Other operating income 5,813 900 5,068 0 1,349 -517 12,613 Interest on financial fixed assets - receivables 5,813 0 0 0 493 -447 5,858 Dividends 0 900 5,068 0 787 6,754 Government grants 0 0 0 0 0 0 Other operating income 0 0 0 0 70 -70 0 Operating expenses (-) -1,856,688 -62,846 -91,844 -129 -58,915 1,010 -2,069,411 Raw materials and consumables used (-) -1,085,912 0 -46,171 0 -26,323 -1,158,407 Changes in inventories of finished goods, raw materials & consumables (-) 15,470 0 8,125 0 137 23,733 Interest expenses Bank J.Van Breda & C° (-) 0 -12,366 0 0 0 -12,366 Employee expenses (-) -350,493 -23,077 -31,550 0 -20,273 -425,393 Depreciation (-) -158,374 -3,815 -4,492 0 -2,366 -169,047 Impairment losses (-) 1,204 309 -71 0 0 1,442 Other operating expenses (-) -278,731 -23,286 -17,648 -129 -10,874 1,010 -329,657 Provisions 148 -611 -38 0 784 284 Profit (loss) on assets/liabilities 0 0 2,343 0 3,341 0 5,684 designated at fair value through profit and loss Financial assets - Fair value through P/L (FVPL) 0 0 6,217 0 3,341 9,558 Investment property 0 0 -3,874 0 0 -3,874 Profit (loss) on disposal of assets 6,403 737 811 0 109,774 0 117,724 Realised gain (loss) on intangible and tangible assets 6,403 294 22 0 -3 6,716 Realised gain (loss) on investment property 0 0 795 0 0 795 Realised gain (loss) on financial fixed assets 0 0 -7 0 108,144 108,137 Realised gain (loss) on other assets 0 443 0 0 1,633 2,076 Profit (loss) from operating activities 54,568 23,234 56,470 -102 107,434 -447 241,158 Finance income 16,323 5 3,578 0 587 -333 20,161 Interest income 1,924 5 3,474 0 511 -333 5,581 Other finance income 14,399 0 104 0 76 14,579 Finance costs (-) -29,798 0 -10,108 -1 -686 779 -39,813 Interest expenses (-) -10,832 0 -6,929 0 -236 779 -17,218 Other finance costs (-) -18,966 0 -3,179 -1 -449 -22,595 Derivative financial instruments designated at fair value 0 -650 -4,023 0 0 -4,673 through profit and loss Share of profit (loss) from equity accounted investments 12,413 43,661 135 -310 6,467 62,365 Other non-operating income 2,024 2,400 0 0 0 4,424 Other non-operating expenses (-) 0 0 0 0 0 0 Profit (loss) before tax 55,529 68,650 46,053 -412 113,802 0 283,621 Income taxes -14,755 -6,358 -3,300 0 -469 0 -24,881 Deferred taxes 17,852 76 -47 0 200 18,081 Current taxes -32,607 -6,434 -3,253 0 -669 -42,962 Profit (loss) after tax from continuing operations 40,775 62,292 42,753 -412 113,333 0 258,740 Profit (loss) after tax from discontinued operations 0 0 0 0 0 0 Profit (loss) of the period 40,775 62,292 42,753 -412 113,333 0 258,740 Minority interests 14,795 4,065 26,979 130 -173 45,796 |
(€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | |
|---|---|---|---|---|---|---|---|
| Share of the group | 25,980 | 58,227 | 15,774 | -542 | 113,506 | 212,945 |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth |
Eliminations between |
Total | |
| Contracting | Capital | segments | 30-06-2020 | ||||
| I. Non-current assets | 3,294,870 | 5,130,675 | 1,734,297 | 250,783 | 278,860 | -19,102 | 10,670,383 |
| Intangible assets | 97,334 | 1,247 | 30,031 | 0 | 128 | 128,740 | |
| Goodwill | 177,127 | 134,247 | 8,442 | 0 | 11,727 | 331,543 | |
| Tangible assets | 2,613,768 | 51,000 | 205,839 | 0 | 30,980 | 2,901,586 | |
| Land and buildings | 151,992 | 43,405 | 192,366 | 0 | 22,196 | 409,959 | |
| Plant. machinery and equipment | 1,890,099 | 1,982 | 4,496 | 0 | 1,756 | 1,898,332 | |
| Furniture and vehicles | 38,914 | 3,037 | 4,455 | 0 | 6,245 | 52,652 | |
| Other tangible assets | 275 | 851 | 3,344 | 0 | 544 | 5,014 | |
| Assets under construction and advance payments | 532,488 | 1,725 | 1,177 | 0 | 239 | 535,630 | |
| Investment property | 0 | 0 | 1,358,644 | 0 | 0 | 1,358,644 | |
| Participations accounted for using the equity method | 166,664 | 682,852 | 16,552 | 250,783 | 159,498 | 1,276,349 | |
| Financial fixed assets | 103,385 | 1,635 | 87,214 | 0 | 60,550 | -19,102 | 233,683 |
| Financial assets : shares - Fair value through P/L (FVPL) | 5,610 | 0 | 80,944 | 0 | 40,489 | 127,043 | |
| Receivables and warranties | 97,776 | 1,635 | 6,269 | 0 | 20,062 | -19,102 | 106,640 |
| Non-current hedging instruments | 1,055 | 55 | 182 | 0 | 0 | 1,292 | |
| Amounts receivable after one year | 10,456 | 161,632 | 21,795 | 0 | 13,613 | 207,496 | |
| Trade receivables | 0 | 0 | 0 | 0 | 0 | 0 | |
| Finance lease receivables | 0 | 161,632 | 21,352 | 0 | 0 | 182,984 | |
| Other receivables | 10,456 | 0 | 443 | 0 | 13,613 | 24,511 | |
| Deferred tax assets | 125,080 | 2,856 | 5,600 | 0 | 2,364 | 135,901 | |
| Banks - receivables from credit institutions and clients after one year |
0 | 4,095,151 | 0 | 0 | 0 | 4,095,151 | |
| II. Current assets | 2,239,644 | 2,614,703 | 323,768 | 148 | 240,870 | -5,496 | 5,413,638 |
| Inventories | 347,288 | 0 | 123,452 | 0 | 1,315 | 472,056 | |
| Amounts due from customers under construction contracts | 67,070 | 0 | 73,177 | 0 | 12,678 | 152,924 | |
| Investments | 3 | 475,391 | 0 | 0 | 48,738 | 524,132 | |
| Financial assets : shares - Fair value through P/L (FVPL) | 3 | 0 | 0 | 0 | 48,738 | 48,741 | |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 0 | 470,224 | 0 | 0 | 0 | 470,224 | |
| Financial assets : shares - Fair value through OCI (FVOCI) | 0 | 167 | 0 | 0 | 0 | 167 | |
| Financial assets - at amortised cost | 0 | 5,000 | 0 | 0 | 0 | 5,000 | |
| Current hedging instruments | 3,902 | 89 | 0 | 0 | 0 | 3,991 | |
| Amounts receivable within one year | 938,132 | 94,386 | 87,452 | 12 | 52,334 | -5,152 | 1,167,163 |
| Trade debtors | 868,383 | 54 | 21,639 | 0 | 17,853 | -1,152 | 906,775 |
| Finance lease receivables | 0 | 72,378 | 311 | 0 | 0 | 72,689 | |
| Other receivables | 69,750 | 21,954 | 65,502 | 12 | 34,481 | -4,000 | 187,698 |
| Current tax receivables | 23,911 | 25 | 1,412 | 0 | 510 | 25,858 | |
| Banks - receivables from credit institutions and clients within one year |
0 | 1,997,525 | 0 | 0 | 0 | 1,997,525 | |
| Banks - loans and advances to banks | 0 | 158,665 | 0 | 0 | 0 | 158,665 | |
| Banks - loans and receivables (excl. finance leases) | 0 | 990,078 | 0 | 0 | 0 | 990,078 | |
| Banks - cash balances with central banks | 0 | 848,782 | 0 | 0 | 0 | 848,782 | |
| Cash and cash equivalents | 837,869 | 36,042 | 33,770 | 137 | 123,582 | 1,031,399 | |
| Time deposits for less than three months | 219,632 | 0 | 4 | 0 | 80,453 | 300,089 | |
| Cash | 618,237 | 36,042 | 33,766 | 137 | 43,129 | 731,310 | |
| Deferred charges and accrued income | 21,468 | 11,245 | 4,506 | 0 | 1,714 | -343 | 38,589 |
| III. Assets held for sale | 44,725 | 0 | 444 | 0 | 0 | 45,168 | |
| Total assets | 5,579,238 | 7,745,378 | 2,058,509 | 250,931 | 519,730 | -24,598 | 16,129,189 |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine | Private | Real Estate & | Energy & | AvH & | Eliminations | Total | |
| Engineering & | Banking | Senior Care | Resources | Growth | between | 30-06-2020 | |
| Contracting | Capital | segments | |||||
| I. Total equity | 1,809,394 | 1,395,323 | 732,526 | 250,919 | 461,126 | 4,649,288 | |
| Shareholders' equity - group share | 1,098,777 | 1,271,413 | 413,249 | 250,919 | 454,913 | 3,489,271 | |
| Issued capital | 0 | 0 | 0 | 0 | 113,907 | 113,907 | |
| Share capital | 0 | 0 | 0 | 0 | 2,295 | 2,295 | |
| Share premium | 0 | 0 | 0 | 0 | 111,612 | 111,612 | |
| Consolidated reserves | 1,172,103 | 1,267,939 | 425,958 | 239,020 | 391,954 | 3,496,972 | |
| Revaluation reserves | -73,325 | 3,475 | -12,709 | 11,900 | -15,505 | -86,165 | |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 0 | 5,209 | 0 | 0 | 0 | 5,209 | |
| Financial assets : shares - Fair value through OCI (FVOCI) | 0 | 40 | 0 | 0 | 0 | 40 | |
| Hedging reserves | -36,524 | 0 | -12,927 | -465 | -7 | -49,923 | |
| Actuarial gains (losses) defined benefit pension plans | -22,939 | -1,294 | 0 | -1,020 | 1,767 | -23,486 | |
| Translation differences | -13,863 | -480 | 218 | 13,384 | -17,264 | -18,005 | |
| Treasury shares (-) | 0 | 0 | 0 | 0 | -35,443 | -35,443 | |
| Minority interests | 710,617 | 123,910 | 319,277 | 0 | 6,213 | 1,160,016 | |
| II. Non-current liabilities | 1,396,624 | 1,166,912 | 1,083,212 | 0 | 13,689 | -19,102 | 3,641,335 |
| Provisions | 33,442 | 10,744 | 2,651 | 0 | 619 | 47,456 | |
| Pension liabilities | 70,831 | 5,336 | 36 | 0 | 142 | 76,345 | |
| Deferred tax liabilities | 102,483 | 0 | 61,184 | 0 | 1,429 | 165,096 | |
| Financial debts | 1,164,165 | 2,779 | 954,979 | 0 | 11,172 | -19,102 | 2,113,993 |
| Bank loans | 891,441 | 0 | 722,719 | 0 | 7,953 | 1,622,112 | |
| Bonds | 60,167 | 0 | 184,352 | 0 | 0 | 244,519 | |
| Subordinated loans | 28,878 | 0 | 0 | 0 | 7 | 28,885 | |
| Lease debts | 113,617 | 2,779 | 45,822 | 0 | 3,212 | 165,430 | |
| Other financial debts | 70,063 | 0 | 2,086 | 0 | 0 | -19,102 | 53,047 |
| Non-current hedging instruments | 11,183 | 53,785 | 54,204 | 0 | 0 | 119,172 | |
| Other amounts payable after one year | 14,519 | 8,343 | 10,158 | 0 | 326 | 33,346 | |
| Banks - debts to credit institutions, clients & securities | 0 | 1,085,925 | 0 | 0 | 0 | 1,085,925 | |
| Banks - deposits from credit institutions | 0 | 299,949 | 0 | 0 | 0 | 299,949 | |
| Banks - deposits from clients | 0 | 736,679 | 0 | 0 | 0 | 736,679 | |
| Banks - debt certificates including bonds | 0 | 0 | 0 | 0 | 0 | 0 | |
| Banks - subordinated liabilities | 0 | 49,297 | 0 | 0 | 0 | 49,297 | |
| III. Current liabilities | |||||||
| Provisions | 2,373,220 29,718 |
5,183,144 22 |
242,772 7,212 |
12 0 |
44,915 162 |
-5,496 | 7,838,567 37,114 |
| Pension liabilities | 0 | 333 | 0 | 0 | 0 | 333 | |
| Financial debts | 521,370 | 6,128 | 141,545 | 0 | 16,199 | -4,000 | 681,242 |
| Bank loans | 339,156 | 0 | 37,206 | 0 | 5,123 | 381,485 | |
| Bonds | 0 | 0 | 20,586 | 0 | 0 | 20,586 | |
| Subordinated loans | 13,208 | 0 | 0 | 0 | 7 | 13,216 | |
| Lease debts | 29,591 | 2,128 | 1,970 | 0 | 2,070 | 35,759 | |
| Other financial debts | 139,414 | 4,000 | 81,782 | 0 | 8,999 | -4,000 | 230,195 |
| Current hedging instruments | 12,415 | 1,154 | 0 | 0 | 0 | 13,569 | |
| Amounts due to customers under construction contracts | 209,283 | 0 | 0 | 0 | 6,650 | 215,933 | |
| Other amounts payable within one year | 1,446,821 | 10,141 | 65,357 | 8 | 20,035 | -1,152 | 1,541,210 |
| Trade payables | 1,199,993 | 72 | 44,142 | 8 | 11,241 | -1,152 | 1,254,304 |
| Advances received | 0 | 0 | 10 | 0 | 0 | 10 | |
| Amounts payable regarding remuneration and social security | 157,202 | 7,536 | 8,251 | 0 | 7,449 | 180,437 | |
| Other amounts payable | 89,626 | 2,533 | 12,954 | 0 | 1,346 | 106,459 | |
| Current tax payables | 66,120 | 2,393 | 10,121 | 3 | 1,458 | 80,095 | |
| Banks - debts to credit institutions, clients & securities | 0 | 5,157,056 | 0 | 0 | 0 | 5,157,056 | |
| Banks - deposits from credit institutions | 0 | 36,197 | 0 | 0 | 0 | 36,197 | |
| Banks - deposits from clients | 0 | 4,890,688 | 0 | 0 | 0 | 4,890,688 | |
| Banks - debt certificates including bonds | 0 | 215,325 | 0 | 0 | 0 | 215,325 | |
| Banks - subordinated liabilities | 0 | 14,846 | 0 | 0 | 0 | 14,846 | |
| Accrued charges and deferred income | 87,495 | 5,917 | 18,537 | 0 | 410 | -343 | 112,015 |
| IV. Liabilities held for sale | 0 | 0 | 0 | 0 | 0 | 0 | |
| Total equity and liabilities | 5,579,238 | 7,745,378 | 2,058,509 | 250,931 | 519,730 | -24,598 | 16,129,189 |
The consolidated balance sheet total of AvH increased further in the first half of 2020, amounting to 16,129.2 million euros at June 30, 2020, which is 827.6 million euros higher (+5%) than at year-end 2019. The "Marine Engineering & Contracting" (+261.6 million euros) and "Private Banking" (+595.0 million euros) segments account for most of this increase.
As was already mentioned in earlier reports, the full consolidation of the 78.75% participation in Bank J.Van Breda & C° has a considerable impact on both the size and the composition of the total balance sheet. Due to its specific banking activity, Bank J.Van Breda & C° has a significantly larger balance sheet total than the other companies of the group: the full consolidation of Bank J.Van Breda & C° alone already accounts for 6,931 million euros (43%) of the balance sheet total of the AvH group. Moreover, as a financial institution, Bank J.Van Breda & C° has a distinct balance sheet structure that is adapted to and structured according to its activities. Although Bank J.Van Breda & C° is one of the best capitalised financial institutions in Belgium, it clearly has different balance sheet ratios than the other participations of the AvH group. A number of items from the balance sheet of Bank J.Van Breda & C° are grouped under separate items for an easier understanding of the consolidated balance sheet.
Even in the difficult conditions of the first six months of 2020, Bank J.Van Breda & C° continued to provide loans to its clientele of self-employed entrepreneurs and liberal professionals. The total loan portfolio increased by 52.4 million euros (+1%) to 5,285.1 million euros.
The biggest increase in banks - receivables from credit institutions and clients within one year is explained by the increase (by 394.1 million euros) in the cash balances with central banks (totalling 848.8 million euros at June 30, 2020).
Both the intangible assets and the goodwill remained virtually unchanged in relation to year-end 2019. AvH did not acquire or dispose of any fully consolidated participations, while at the same time the participations themselves reported very little of such activity. In "Marine Engineering & Contracting", a total sum of 231.8 million euros is explained by the acquisition at the end of 2013 of a controlling interest in DEME. 134.2 million euros worth of goodwill arises from the creation of Finaxis, now FinAx, the wholly owned subsidiary of AvH that holds the participating interests in Bank J.Van Breda & C° and Delen Private Bank. As in prior years the participation in Delen Private Bank (78.75%) is accounted for using the equity method; as a result, the constituent items of its balance sheet are not visible in AvH's consolidated financial statements. At 30/06/2020, the balance sheet of Delen Private Bank contained an amount of 232.3 million euros "clients". As of the same date, the total assets under management amounted to 41,231 million euros.
The tangible assets also remained on the same level (2,901.6 million euros). In the first half of 2020, DEME invested a total of 131.3 million euros in the renewal and expansion of its fleet. DEME's tangible assets represented a total net carrying amount of 2,511.9 million euros at June 30, 2020. The increase of the tangible assets in "Real Estate & Senior Care" by 12.8 million euros is virtually entirely explained by the inclusion of the new residential care centre 'Nuance' in Forest in the scope of Anima Care. The brand-new building of Nuance, however, remains the property of Care Property Invest, but is rented on a long lease and recognised in the balance sheet in accordance with IFRS 16 Leases.
Investment property increased by 22.6 million euros compared to year-end 2019, of which 19.4 million euros at Extensa with the completion of the new underground car park Parking Maritime on the Tour & Taxis site and the additional works on the Gare Maritime building. At Leasinvest Real Estate, the fair value of the investment property in the first half of 2020 decreased by 6.3 million euros, although on balance the value of the portfolio increased by 3.2 million euros as a result of additional investments.
The participations accounted for using the equity method increased by 73.9 million euros to 1,276.3 million euros. This increase is attributable to the profit contribution of these participations in the first half of 2020, which turned out much higher than the limited dividends that were paid by those participations, but is also due to the additional investments that were made during the first six months in "Energy & Resources", more particularly the 2.35% increase of the stake in SIPEF and the acquisition of a 42% participation in Verdant Bioscience Pte Ltd.
Financial fixed assets amounted to 233.7 million euros at 30/06/2020, a decrease by 21.1 million euros. In 1H 2020, Leasinvest Real Estate recognised a fair value decrease of 32.4 million euros on its participation in Retail Estates. AvH made additional investments in existing (Medikabazaar, Biotalys, Onco DNA, Epics) or new (MRM Health) non-consolidated participations.
The increase in amounts receivable after one year in "AvH & Growth Capital" is explained by the 10 million euros financing that AvH made available to help saving the Dutch maritime group IHC.
The fluctuations in inventories, trade debtors and construction contracts and other receivables were - on balance - limited in the first half of 2020. The land portfolios of both CFE and Rent-A-Port increased by 38.3 million euros and 16.2 million euros respectively. The increase of construction contracts in "Real Estate & Senior Care" is primarily explained by Extensa starting work on the residential development in zone C of the Tour & Taxis site in Brussels.
The cash and cash equivalents of the group again increased substantially during the first half of 2020, and now amount to 1,031.4 million euros. DEME (672.4 million euros) and CFE (132.9 million euros) account for a large proportion of that figure, and this should be seen in conjunction with the short-term financial debts of those companies.
The assets held for sale primarily relate to an industrial development in Vietnam from the portfolio of Rent-A-Port subsidiary Infra Asia Investments.
The evolution of the consolidated equity is explained in Note 5. Statement of changes in consolidated equity.
The long-term financial debt increased by 207.6 million euros to 2,114.0 million euros. The short-term financial debt increased as well, by 55.7 million euros to 681.2 million euros. This is offset on the assets side by 1,031.4 million euros in cash and cash equivalents, and the group continues to be conservatively financed.
The largest components on the liabilities side, too, derive from the accounts of Bank J.Van Breda & C°. For its long-term financing, Bank J.Van Breda & C° took up 300 million euros worth of TLTROs from the European Central Bank. The longterm client deposits increased slightly by 6.8 million euros. The short-term client deposits have increased by as much as 240.1 million euros since year-end 2019.
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine | Private | Real Estate & | Energy & | AvH & | Eliminations | Total | |
| Engineering & | Banking | Senior Care | Resources | Growth | between | 31-12-2019 | |
| Contracting | Capital | segments | |||||
| I. Non-current assets | 3,263,140 | 5,003,045 | 1,728,076 | 234,027 | 260,684 | -10,267 | 10,478,704 |
| Intangible assets | 94,871 | 1,680 | 30,120 | 0 | 231 | 126,902 | |
| Goodwill | 177,127 | 134,247 | 8,449 | 0 | 11,727 | 331,550 | |
| Tangible assets | 2,633,912 | 52,061 | 192,993 | 0 | 30,201 | 2,909,167 | |
| Land and buildings | 156,881 | 44,385 | 179,713 | 0 | 22,053 | 403,032 | |
| Plant. machinery and equipment | 1,892,734 | 2,003 | 3,535 | 0 | 1,189 | 1,899,461 | |
| Furniture and vehicles | 39,821 | 3,458 | 4,000 | 0 | 6,179 | 53,457 | |
| Other tangible assets | 308 | 1,038 | 3,335 | 0 | 563 | 5,245 | |
| Assets under construction and advance payments | 544,168 | 1,177 | 2,409 | 0 | 217 | 547,971 | |
| Investment property | 0 | 0 | 1,336,093 | 0 | 0 | 1,336,093 | |
| Participations accounted for using the equity method | 151,821 | 638,067 | 12,495 | 234,027 | 166,067 | 1,202,477 | |
| Financial fixed assets | 97,942 | 1,323 | 119,651 | 0 | 46,175 | -10,267 | 254,824 |
| Financial assets : shares - Fair value through P/L (FVPL) | 5,563 | 0 | 113,376 | 0 | 35,479 | 154,418 | |
| Receivables and warranties | 92,379 | 1,323 | 6,275 | 0 | 10,696 | -10,267 | 100,406 |
| Non-current hedging instruments | 0 | 381 | 832 | 0 | 0 | 1,213 | |
| Amounts receivable after one year | 7,018 | 161,986 | 21,842 | 0 | 3,892 | 194,739 | |
| Trade receivables | 0 | 0 | 0 | 0 | 0 | 0 | |
| Finance lease receivables | 0 | 161,986 | 21,400 | 0 | 0 | 183,386 | |
| Other receivables | 7,018 | 0 | 443 | 0 | 3,892 | 11,353 | |
| Deferred tax assets | 100,449 | 2,564 | 5,600 | 0 | 2,391 | 111,004 | |
| Banks - receivables from credit institutions and clients after one year |
0 | 4,010,736 | 0 | 0 | 0 | 4,010,736 | |
| II. Current assets | 2,014,225 | 2,147,323 | 317,423 | 231 | 309,835 | -6,918 | 4,782,119 |
| Inventories | 305,713 | 0 | 151,330 | 0 | 1,053 | 458,096 | |
| Amounts due from customers under construction contracts | 57,344 | 0 | 31,032 | 0 | 11,517 | 99,893 | |
| Investments | 3 | 420,796 | 0 | 0 | 55,713 | 476,513 | |
| Financial assets : shares - Fair value through P/L (FVPL) | 3 | 0 | 0 | 0 | 55,713 | 55,717 | |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 0 | 420,628 | 0 | 0 | 0 | 420,628 | |
| Financial assets : shares - Fair value through OCI (FVOCI) | 0 | 168 | 0 | 0 | 0 | 168 | |
| Financial assets - at amortised cost | 0 | 0 | 0 | 0 | 0 | 0 | |
| Current hedging instruments | 751 | 160 | 0 | 0 | 0 | 911 | |
| Amounts receivable within one year | 960,941 | 102,809 | 89,521 | 11 | 54,660 | -6,220 | 1,201,722 |
| Trade debtors | 886,539 | 100 | 29,293 | 0 | 23,772 | -1,145 | 938,560 |
| Finance lease receivables | 0 | 70,086 | 620 | 0 | 0 | 70,706 | |
| Other receivables | 74,402 | 32,623 | 59,607 | 11 | 30,888 | -5,075 | 192,456 |
| Current tax receivables | 23,307 | 0 | 1,458 | 0 | 1,163 | 25,927 | |
| Banks - receivables from credit institutions and clients within one year |
0 | 1,595,849 | 0 | 0 | 0 | 1,595,849 | |
| Banks - loans and advances to banks | 0 | 141,306 | 0 | 0 | 0 | 141,306 | |
| Banks - loans and receivables (excl. finance leases) | 0 | 999,823 | 0 | 0 | 0 | 999,823 | |
| Banks - cash balances with central banks | 0 | 454,720 | 0 | 0 | 0 | 454,720 | |
| Cash and cash equivalents | 644,971 | 18,270 | 41,008 | 220 | 183,517 | 887,985 | |
| Time deposits for less than three months | 57,000 | 0 | 4,804 | 0 | 155,913 | 217,717 | |
| Cash | 587,970 | 18,270 | 36,204 | 220 | 27,604 | 670,268 | |
| Deferred charges and accrued income | 21,196 | 9,439 | 3,074 | 0 | 2,211 | -698 | 35,221 |
| III. Assets held for sale | 40,280 | 0 | 444 | 0 | 0 | 40,724 | |
| Total assets | 5,317,645 | 7,150,368 | 2,045,942 | 234,258 | 570,519 | -17,185 | 15,301,547 |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth |
Eliminations between |
Total 31-12-2019 |
|
| Contracting | Capital | segments | |||||
| I. Total equity | 1,815,178 | 1,331,613 | 798,452 | 234,245 | 502,346 | 4,681,834 | |
| Shareholders' equity - group share | 1,086,037 | 1,211,241 | 428,478 | 234,245 | 496,109 | 3,456,109 | |
| Issued capital | 0 | 0 | 0 | 0 | 113,907 | 113,907 | |
| Share capital | 0 | 0 | 0 | 0 | 2,295 | 2,295 | |
| Share premium | 0 | 0 | 0 | 0 | 111,612 | 111,612 | |
| Consolidated reserves | 1,148,384 | 1,206,906 | 440,443 | 221,350 | 422,238 | 3,439,322 | |
| Revaluation reserves | -62,348 | 4,335 | -11,965 | 12,895 | -7,388 | -64,472 | |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 0 | 3,469 | 0 | 0 | 0 | 3,469 | |
| Financial assets : shares - Fair value through OCI (FVOCI) | 0 | 41 | 0 | 0 | 0 | 41 | |
| Hedging reserves | -31,693 | -9 | -12,225 | 40 | -1 | -43,889 | |
| Actuarial gains (losses) defined benefit pension plans | -22,592 | -1,294 | 0 | -951 | 1,818 | -23,019 | |
| Translation differences | -8,063 | 2,129 | 260 | 13,806 | -9,205 | -1,074 | |
| Treasury shares (-) | 0 | 0 | 0 | 0 | -32,648 | -32,648 | |
| Minority interests | 729,141 | 120,372 | 369,974 | 0 | 6,238 | 1,225,725 | |
| II. Non-current liabilities | 1,430,129 | 850,224 | 816,504 | 0 | 13,505 | -10,267 | 3,100,095 |
| Provisions | 31,765 | 10,640 | 2,485 | 0 | 651 | 45,541 | |
| Pension liabilities | 70,269 | 5,539 | 40 | 0 | 142 | 75,990 | |
| Deferred tax liabilities | 105,253 | 0 | 57,818 | 0 | 1,623 | 164,694 | |
| Financial debts | 1,202,741 | 3,231 | 699,871 | 0 | 10,767 | -10,267 | 1,906,344 |
| Bank loans | |||||||
| Bonds | 937,911 | 0 | 520,465 | 0 | 7,701 | 1,466,076 | |
| Subordinated loans | 60,049 | 0 | 144,103 | 0 | 0 | 204,152 | |
| Lease debts | 37,414 | 0 | 0 | 0 | 7 | 37,422 | |
| Other financial debts | 114,131 | 3,231 | 31,563 | 0 | 3,060 | 151,984 | |
| Non-current hedging instruments | 53,236 | 0 | 3,741 | 0 | 0 | -10,267 | 46,710 |
| 9,251 | 40,427 | 47,196 | 0 | 0 | 96,874 | ||
| Other amounts payable after one year | 10,850 | 11,163 | 9,095 | 0 | 322 | 31,429 | |
| Banks - debts to credit institutions, clients & securities | 0 | 779,224 | 0 | 0 | 0 | 779,224 | |
| Banks - deposits from credit institutions Banks - deposits from clients |
0 | 0 | 0 | 0 | 0 | 0 | |
| 0 | 729,872 | 0 | 0 | 0 | 729,872 | ||
| Banks - debt certificates including bonds Banks - subordinated liabilities |
0 | 0 | 0 | 0 | 0 | 0 | |
| 0 | 49,352 | 0 | 0 | 0 | 49,352 | ||
| III. Current liabilities | 2,072,339 | 4,968,531 | 430,986 | 13 | 54,668 | -6,918 | 7,519,619 |
| Provisions | 30,564 | 22 | 7,020 | 0 | 95 | 37,701 | |
| Pension liabilities | 0 | 331 | 0 | 0 | 0 | 331 | |
| Financial debts | 278,743 | 2,449 | 327,785 | 0 | 21,658 | -5,075 | 625,560 |
| Bank loans | 199,258 | 0 | 72,899 | 0 | 7,051 | 279,208 | |
| Bonds | 0 | 0 | 49,969 | 0 | 0 | 49,969 | |
| Subordinated loans | 13,208 | 0 | 0 | 0 | 7 | 13,216 | |
| Lease debts | 36,471 | 2,449 | 2,006 | 0 | 1,781 | 42,707 | |
| Other financial debts | 29,805 | 0 | 202,911 | 0 | 12,819 | -5,075 | 240,460 |
| Current hedging instruments | 9,356 | 1,207 | 0 | 0 | 0 | 10,563 | |
| Amounts due to customers under construction contracts | 164,999 | 0 | 0 | 0 | 4,752 | 169,751 | |
| Other amounts payable within one year | 1,460,660 | 11,906 | 71,078 | 10 | 26,688 | -1,145 | 1,569,197 |
| Trade payables | 1,240,371 | 46 | 52,635 | 10 | 13,920 | -1,145 | 1,305,836 |
| Advances received | 0 | 0 | 10 | 0 | 851 | 861 | |
| Amounts payable regarding remuneration and social security | 170,407 | 8,432 | 8,105 | 0 | 11,023 | 197,967 | |
| Other amounts payable | 49,883 | 3,428 | 10,328 | 0 | 894 | 64,533 | |
| Current tax payables | 49,922 | 1,253 | 7,320 | 4 | 943 | 59,441 | |
| Banks - debts to credit institutions, clients & securities | 0 | 0 | 0 | 4,946,466 | |||
| 0 | 4,946,466 | ||||||
| Banks - deposits from credit institutions | 0 | 27,825 | 0 | 0 | 0 | 27,825 | |
| Banks - deposits from clients | 0 | 4,650,623 | 0 | 0 | 0 | 4,650,623 | |
| Banks - debt certificates including bonds | 0 | 241,367 | 0 | 0 | 0 | 241,367 | |
| Banks - subordinated liabilities | 0 | 26,651 | 0 | 0 | 0 | 26,651 | |
| Accrued charges and deferred income | 78,093 | 4,897 | 17,784 | 0 | 532 | -698 | 100,608 |
| IV. Liabilities held for sale Total equity and liabilities |
0 | 0 | 0 | 0 | 0 | 0 |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine | Private | Real Estate & | Energy & | AvH & | Eliminations | Total | |
| Engineering & Contracting |
Banking | Senior Care | Resources | Growth C il |
between segments |
30-06-2020 | |
| I. Cash and cash equivalents - | |||||||
| opening balance | 644,971 | 18,270 | 41,008 | 220 | 183,517 | 0 | 887,985 |
| Profit (loss) from operating activities | 4,184 | 23,628 | -9,672 | -72 | -11,411 | 0 | 6,657 |
| Reclassification 'Profit (loss) on disposal of assets | -65,388 | 18 | -22 | 0 | -2,974 | -68,367 | |
| to cash flow from divestments | |||||||
| Dividends from participations accounted for using the equity method |
18,401 | 0 | 972 | 0 | 1,350 | 20,723 | |
| Other non-operating income (expenses) | 0 | 0 | 0 | 0 | 0 | 0 | |
| Income taxes (paid) | -13,161 | -7,746 | -3,167 | 0 | -1,050 | -25,124 | |
| Non-cash adjustments | |||||||
| Depreciation | 157,288 | 3,583 | 5,651 | 0 | 2,660 | 169,182 | |
| Impairment losses | -1,634 | 3,946 | 979 | 0 | 0 | 3,292 | |
| Share based payment | 0 | -3,085 | 0 | 0 | 513 | -2,572 | |
| Profit (loss) on assets/liabilities designated at | |||||||
| fair value through profit and loss | 0 | 0 | 38,487 | 0 | 8,997 | 47,484 | |
| (Decrease) increase of provisions | -274 | -438 | 372 | 0 | 35 | -305 | |
| Other non-cash expenses (income) | -52 | 1,517 | 0 | 0 | 309 | 1,774 | |
| Cash flow | 99,364 | 21,423 | 33,600 | -72 | -1,571 | 0 | 152,745 |
| Decrease (increase) of working capital | -24,494 | 47,556 | -16,516 | -2 | -18,152 | 4,768 | -6,840 |
| Decrease (increase) of inventories and construction contracts | -7,953 | 0 | -14,267 | 0 | -359 | -22,578 | |
| Decrease (increase) of amounts receivable | 8,685 | 8,752 | 619 | 0 | -12,864 | 4,768 | 9,961 |
| Decrease (increase) of receivables from credit institutions | 0 | -475,496 | 0 | 0 | 0 | -475,496 | |
| and clients (banks) Increase (decrease) of liabilities (other than financial debts) |
-28,219 | -1,698 | -2,191 | -1 | -5,313 | -37,423 | |
| Increase (decrease) of debts to credit institutions, | |||||||
| clients & securities (banks) | 0 | 517,454 | 0 | 0 | 0 | 517,454 | |
| Decrease (increase) other | 2,993 | -1,456 | -678 | 0 | 383 | 1,242 | |
| Cash flow from operating activities | 74,870 | 68,979 | 17,083 | -73 | -19,723 | 4,768 | 145,905 |
| Investments | -160,932 | -145,726 | -29,906 | -17,231 | -12,677 | 2,900 | -363,573 |
| Acquisition of intangible and tangible assets | -135,505 | -1,498 | -3,006 | 0 | -1,717 | -141,727 | |
| Acquisition of investment property | 0 | 0 | -26,906 | 0 | 0 | -26,906 | |
| Acquisition of financial fixed assets (business combinations included) | -14,962 | 0 | 7 | -17,231 | -7,281 | -39,468 | |
| Cash acquired through business combinations | 0 | 0 | 0 | 0 | 0 | 0 | |
| New amounts receivable | -10,464 | -313 | 0 | 0 | -3,523 | 2,900 | -11,400 |
| Acquisition of investments | 0 | -143,915 | 0 | 0 | -157 | -144,072 | |
| Divestments | 98,921 | 91,911 | 2,414 | 0 | 3,381 | 0 | 196,627 |
| Disposal of intangible and tangible assets | 3,966 | 0 | 24 | 0 | 0 | 3,990 | |
| Disposal of investment property | 0 | 0 | 0 | 0 | 0 | 0 | |
| Disposal of financial fixed assets (business disposals included) | 89,220 | 0 | 2,383 | 0 | 3,376 | 94,978 | |
| Cash disposed of through business disposals | 0 | 0 | 0 | 0 | 0 | 0 | |
| Reimbursements of amounts receivable | 5,735 | 0 | 7 | 0 | 0 | 0 | 5,742 |
| Disposal of investments | 0 | 91,911 | 0 | 0 | 6 | 91,917 | |
| Cash flow from investing activities | -62,011 | -53,815 | -27,492 | -17,231 | -9,296 | 2,900 | -166,945 |
| Financial operations | |||||||
| Interest received | 4,490 | 0 | 1,461 | 0 | 707 | -506 | 6,153 |
| Interest paid | -9,691 | -1 | -7,178 | 0 | -291 | 506 | -16,656 |
| Other financial income (costs) | -6,999 | 0 | -4,403 | 0 | -600 | -12,002 | |
| Decrease (increase) of treasury shares | 0 | 0 | 0 | 0 | -3,506 | -3,506 | |
| (Decrease) increase of financial debts | 193,994 | 2,609 | 53,370 | 0 | -6,740 | -7,668 | 235,565 |
| (Investments) and divestments in controlling interests | 3,901 | 0 | 0 | 0 | -14,993 | -11,092 | |
| Distribution of profits | 0 | 0 | 0 | 0 | 0 | 0 | |
| Dividends paid intra group | -900 | 0 | -10,840 | 0 | 11,740 | 0 | |
| Dividends paid to minority interests | 0 | 0 | -29,283 | 0 | 0 | -29,283 | |
| Cash flow from financial activities | 184,795 | 2,607 | 3,127 | 0 | -13,683 | -7,668 | 169,179 |
| II. Net increase (decrease) in cash and cash equivalents | 197,655 | 17,771 | -7,282 | -17,304 | -42,702 | 0 | 148,138 |
| Transfer between segments | 0 | 0 | 0 | 17,231 | -17,231 | 0 | |
| Impact of exchange rate changes on cash and cash equivalents | -4,756 | 1 | 44 | -10 | -2 | -4,724 | |
| III. Cash and cash equivalents - | |||||||
| ending balance | 837,869 | 36,042 | 33,770 | 137 | 123,582 | 0 | 1,031,399 |
AvH's cash flow for the first half of 2020 amounted to 152.7 million euros, a decrease by 50% compared to the 306.5 million euros that was reported in the first half of 2019.
The profit from operating activities in the first six months of 2020 was limited to 6.7 million euros, a decrease of 234.5 million euros compared to last year. For details of the composition of this operating result, see section 6.1 Consolidated income statement at 30/06/2020 in this report.
This operating profit includes 68.4 million euros gains on disposal of assets in the first half of 2020. In this cash flow statement, these gains are transferred to cash flow from investing activities. The figure essentially consist of the capital gain that DEME realised (63.9 million euros) on the disposal of its 12.5% stake in the German offshore windfarm Merkur, and the capital gain that AvH realised on the disposal of its 50% participation in Oriental Quarries & Mines Pvt Ltd in India. In the first half of 2019, the total capital gains were higher (117.7 million euros), mainly thanks to the disposal of the participation in the French retirement home group Residalya, which at the time generated a profit of 105.7 million euros.
In the first half of 2020, AvH received 20.7 million euros worth of dividends from participations accounted for using the equity method, a decrease of 34.7 million euros compared to last year. This decrease is primarily situated in the "Private Banking" segment (-44.5 million euros) and is explained by the decision of Delen Private Bank not to pay a dividend in respect of the 2019 financial year, as requested by the ECB and the NBB. In the "AvH & Growth Capital" segment, too, the dividends received from equity accounted participations turned out somewhat lower than last year, since a number of participations decided in light of the COVID-19 pandemic either to cancel the payment of a dividend or to reconsider such payment later on in the year. More dividends were received in the "Marine Engineering & Contracting" segment, however. The increase is explained by 9.0 million euros worth of dividends received from Rentel (of which both DEME and Green Offshore are shareholders) and payments from participations of CFE through which real estate developments are realised in joint venture with partners.
Under the non-cash adjustments, the adjustment for depreciation remains considerable (169.2 million euros), though virtually on the same level as last year.
In the first half of 2020, the adjustment for impairment losses (3.3 million euros) and especially for losses on assets/liabilities designated at fair value (47.5 million euros) turned out substantially higher than last year (-1.3 million euros and -5.7 million euros respectively). As was already mentioned in the comments on the income statement, Leasinvest Real Estate recognised negative value adjustments through profit and loss in the first half of 2020 on investment property (6.3 million euros) and on the Retail Estates shares (32.4 million euros), as did AvH on certain financial fixed assets and cash investments (9.0 million euros). However, these are unrealised accounting impairments and are consequently neutralised in the cash flow statement.
In the first half of 2020, there was a limited increase of working capital by 6.8 million euros, compared to a decrease of 9.1 million euros in the first half of 2019. The 6.8 million euros increase is the balance of a lower working capital at Bank J.Van Breda & C°, where the increase of deposits from clients is higher than the increase of receivables from clients and credit institutions. The four other segments report a slight increase in working capital requirement as a result of higher inventories and a decrease of trade payables.
AvH spent 166.9 million euros net on investments, which is actually 10.3 million euros higher than in the first half of 2019.
Acquisitions of intangible and tangible assets (excluding IFRS 16) amounted to 141.7 million euros in the first half of 2020 and are essentially concentrated in "Marine Engineering & Contracting". The investments made by DEME, primarily in the maintenance and expansion of its fleet, accounted for 128.4 million euros in the first half of 2020, which is lower than expected. There were delays at the shipyards in the construction of the important vessels 'Spartacus' and 'Orion'. CFE invested 5.9 million euros.
Leasinvest Real Estate invested 8.4 million euros in several buildings and project developments. The balance of acquisitions of investment property (18.6 million euros) is situated at Extensa, where during the first half of 2020 the new underground car park Parking Maritime was finished and work continued on the conversion of the Gare Maritime building on the Tour & Taxis site in Brussels.
DEME invested an additional 5.2 million euros in the first half of 2020 in financial fixed assets, which include its share in the formation of a new joint venture in Taiwan, which will be active in the construction of offshore wind power in that country. CFE invested 9.7 million euros in companies that develop real estate projects. AvH itself invested an additional 17.2 million euros in "Energy & Resources", more particularly in the increase of its stake in SIPEF to 34.68% through the acquisition of 248,649 shares on the stock market and the acquisition of a 42% interest in the Singapore-based company Verdant Bioscience, which specialises in the development, production and marketing of more productive oil palm seeds. In the "Growth Capital" portfolio, AvH additionally invested 7.3 million euros in Medikabazaar, MRM Health, Biotalys, OncoDNA and Epics during the first six months of 2020. In "Private Banking", Bank J.Van Breda & C°, as part of the management of its investment portfolio, disposed of investments worth a total of 91.9 million euros, and acquired new investments worth 143.9 million euros.
The divestments of financial fixed assets primarily concern the previously mentioned disposal by DEME of its 12.5% stake in the German offshore windfarm Merkur for a total amount of 88.9 million euros and the disposal by AvH of its 50% stake in the Indian company Oriental Quarries & Mines. Extensa disposed of its participation in a real estate development company in Slovakia.
The increase of financial debts (excl. IFRS 16) by 235.6 million euros during the first six months of 2020 made a positive contribution to the financing cash flow. Nevertheless, the net interest expenses (interest received less interest paid) decreased by 9.2 million euros during that same period. DEME in particular has considerable liquidities and short-term financial debts outstanding at 30/6/2020.
The increase by AvH of its controlling interest in CFE during the first half of 2020 explain an amount of 15.0 million euros in investments in controlling interests. In "Marine Engineering & Contracting", CFE increased its stake in a real estate development company, and third parties participated in a capital increase in a development company of Rent-A-Port in Vietnam.
In the first half of 2020, Leasinvest Real Estate paid a dividend of 31.1 million euros in total, of which 21.8 million euros was paid outside the AvH group. The balance of the dividends in "Real Estate & Senior Care" paid to minority interests concerns a dividend payment by a subsidiary of Extensa.
| (€ 1,000) | |
|---|---|
| Financial debts at 31-12-2019 | 2,531,904 |
| Changes in Cashflow statement | 235,565 |
| Other adjustments | |
| - Changes in consolidation scope - acquisitions | 1,982 |
| - Changes in consolidation scope - divestments | 0 |
| - IFRS 16 Leases | 25,961 |
| - Impact of exchange rates | -163 |
| - Others | -13 |
| Financial debts at 30-06-2020 | 2,795,235 |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine | Private | Real Estate & | Energy & | AvH & | Eliminations | Total | |
| Engineering & |
Banking | Senior Care | Resources | Growth C il |
between | 30-06-2019 | |
| Contracting | segments | ||||||
| I. Cash and cash equivalents - opening balance |
390,746 | 9,355 | 62,785 | 409 | 50,293 | 0 | 513,588 |
| Profit (loss) from operating activities | 54,568 | 23,234 | 56,470 | -102 | 107,434 | -447 | 241,158 |
| Reclassification 'Profit (loss) on disposal of assets | |||||||
| to cash flow from divestments | -6,403 | -737 | -811 | 0 | -109,774 | -117,724 | |
| Dividends from participations accounted for | 5,970 | 44,525 | 0 | 0 | 4,938 | 55,433 | |
| using the equity method | |||||||
| Other non-operating income (expenses) | 2,024 | 2,400 | 0 | 0 | 0 | 4,424 | |
| Income taxes (paid) | -22,300 | -6,434 | -3,253 | 0 | -669 | -32,655 | |
| Non-cash adjustments | |||||||
| Depreciation | 158,374 | 3,815 | 4,492 | 0 | 2,366 | 169,047 | |
| Impairment losses | -1,204 | -232 | 97 | 0 | 0 | -1,339 | |
| Share based payment | 0 | -2,436 | 35 | 0 | 587 | -1,814 | |
| Profit (loss) on assets/liabilities designated at fair value through profit and loss |
0 | 0 | -2,343 | 0 | -3,341 | -5,684 | |
| (Decrease) increase of provisions | 40 | 603 | 38 | 0 | -784 | -104 | |
| Other non-cash expenses (income) | -2,229 | -2,140 | 0 | 0 | 109 | -4,259 | |
| Cash flow | 188,840 | 62,599 | 54,726 | -102 | 866 | -447 | 306,481 |
| Decrease (increase) of working capital | -50,732 | 10,603 | 3,790 | 3 | -14,599 | 60,000 | 9,065 |
| Decrease (increase) of inventories and construction contracts | -67,029 | 0 | 2,612 | 0 | -6,365 | -70,782 | |
| Decrease (increase) of amounts receivable | 54,670 | -63,323 | 7,132 | -2 | -9,480 | 60,000 | 48,997 |
| Decrease (increase) of receivables from credit institutions | |||||||
| and clients (banks) | 0 | -210,815 | 0 | 0 | 0 | -210,815 | |
| Increase (decrease) of liabilities (other than financial debts) | -39,962 | -2,530 | -5,549 | 6 | 2,401 | -45,634 | |
| Increase (decrease) of debts to credit institutions, | 0 | 288,946 | 0 | 0 | 0 | 288,946 | |
| clients & securities (banks) | |||||||
| Decrease (increase) other | 1,589 | -1,676 | -405 | 0 | -1,155 | -1,647 | |
| Cash flow from operating activities | 138,108 | 73,201 | 58,515 | -98 | -13,733 | 59,553 | 315,546 |
| Investments | -262,469 | -144,144 | -87,534 | -10,797 | -6,989 | 0 | -511,932 |
| Acquisition of intangible and tangible assets | -265,481 | -4,237 | -13,727 | 0 | -1,008 | -284,453 | |
| Acquisition of investment property | -828 | 0 | -64,583 | 0 | 0 | -65,411 | |
| Acquisition of financial fixed assets (business combinations included) | -23,688 | 0 | -9,224 | -10,797 | -6,101 | -49,809 | |
| Cash acquired through business combinations | 36,652 | 0 | 0 | 0 | 692 | 37,345 | |
| New amounts receivable | -9,125 | -296 | 0 | 0 | -410 | -9,830 | |
| Acquisition of investments | 0 | -139,611 | 0 | 0 | -162 | -139,773 | |
| Divestments | 29,440 | 137,136 | 18,563 | 0 | 173,552 | -3,450 | 355,242 |
| Disposal of intangible and tangible assets | 11,796 | 362 | 27 | 0 | 17 | 12,202 | |
| Disposal of investment property | 0 | 0 | 15,845 | 0 | 0 | 15,845 | |
| Disposal of financial fixed assets (business disposals included) | 0 | 0 | 29,175 | 0 | 168,452 | 197,627 | |
| Cash disposed of through business disposals | 0 | 0 | -26,483 | 0 | 0 | -26,483 | |
| Reimbursements of amounts receivable | 17,644 | 0 | 0 | 0 | 3,450 | -3,450 | 17,644 |
| Disposal of investments | 0 | 136,774 | 0 | 0 | 1,633 | 138,407 | |
| Cash flow from investing activities | -233,029 | -7,008 | -68,970 | -10,797 | 166,564 | -3,450 | -156,691 |
| Financial operations | |||||||
| Interest received | 1,924 | 5 | 3,474 | 0 | 511 | -333 | 5,581 |
| Interest paid | -18,723 | 0 | -7,073 | 0 | -236 | 779 | -25,253 |
| Other financial income (costs) | -4,591 | 0 | -3,075 | -1 | -446 | -8,113 | |
| Decrease (increase) of treasury shares | 0 | 0 | 0 | 0 | -4,894 | -4,894 | |
| (Decrease) increase of financial debts | 445,324 | -1,382 | 38,620 | 0 | 63,769 | -56,550 | 489,781 |
| (Investments) and divestments in controlling interests | 6,811 | 0 | 0 | 0 | -12,368 | -5,557 | |
| Distribution of profits | 0 | 0 | 0 | 0 | -76,985 | -76,985 | |
| Dividends paid intra group | -36,916 | 0 | -7,949 | 0 | 44,865 | 0 | |
| Dividends paid to minority interests | -23,839 | -5,387 | -20,892 | 0 | 0 | -50,118 | |
| Cash flow from financial activities | 369,990 | -6,764 | 3,106 | -1 | 14,216 | -56,103 | 324,443 |
| II. Net increase (decrease) in cash and cash equivalents | 275,069 | 59,429 | -7,350 | -10,896 | 167,046 | 0 | 483,298 |
| Transfer between segments | 9,000 | 0 | 0 | 10,620 | -19,620 | 0 | |
| Impact of exchange rate changes on cash and cash equivalents | 648 | -34 | -76 | 13 | 24 | 574 | |
| III. Cash and cash equivalents - | |||||||
| ending balance | 675,463 | 68,750 | 55,360 | 146 | 197,742 | 0 | 997,461 |
7.1. Basis for the presentation of the condensed financial statements
The condensed consolidated financial statements of AvH relating the financial year 2020 are issued in accordance with IAS 34. These condensed financial statements do not contain all the information that is required for full reporting and should be read in conjunction with the 2019 financial statements.
Following new standards and amendments to existing standards published by the IASB, are applied as from January 1, 2020.
The application of the new and amended standards and interpretations has no significant impact on the group's financial statements. The change to IFRS 16 Leases was not applied.
The COVID-19 pandemic disrupted normal life in communities worldwide in the first months of 2020 and had a negative impact on large sections of the economy. On March 31, 2020, AvH had already warned of the consequences for its outlook for the rest of the financial year.
Meanwhile, the first wave of the health crisis appears to be under control in most countries where the group is active, although caution is still recommended.
The past few months have shown the relevance of the group's investment strategy: AvH's diversified portfolio, with a limited number of participations in wellpositioned companies, has stood its ground fairly well under the exceptional conditions of the first half of 2020. This is also illustrated by the prospect (see press release of March 31, 2020) that the group still expects to realise a substantial net profit in 2020 as well. This expectation is in fact confirmed by the half-yearly figures for 2020, and is further reinforced by the announcement that in the second half of 2020 a dividend will be paid out identical to that of the previous financial year.
The effects of this pandemic on the group are essentially situated in the following areas:
AvH started the year 2020 with a positive net cash position of 267 million euros. This position remained largely intact (201.0 million euros) even after the investments of the first six months. Additionally, the group has a total of 280 million euros in confirmed credit lines that can be drawn down immediately. This gives the group an intervention capacity of approximately 0.5 billion euros, even without calling upon additional sources of financing.
AvH has always alerted its participations to the importance of a conservative balance sheet structure. This philosophy has again proved its worth in the turbulent first six months of 2020. Along with support measures taken by different governments, it has helped to ensure that, throughout the group, AvH needed to offer financial assistance to just one participation for a relatively modest amount of 4.1 million euros.
A number of AvH participations use bank loans which, in certain cases, come with specific covenants. As of 30/06/2020, there have been no breaches of such covenants.
During the first half of the year, some form of lockdown was imposed in most of the countries where the group is active.
This led to major logistical complications for our participations active in "Marine Engineering & Contracting", primarily as a result of extra costs, logistical complications, delays in works in progress and resulting productivity losses. DEME estimates the extra costs incurred as a direct result of COVID-19 at 20.7 million euros, of which 5.2 million euros was compensated by cost savings and support measures that were available in several countries. Besides the direct consequences, the COVID-19 crisis also had an impact on exchange rates, oil prices and delays in the intake of new orders. DEME estimates the overall negative impact of not being able to achieve its proposed turnover target (including the resulting costs of idleness and underutilisation of the fleet), the additional costs mentioned earlier, and the accident with the 'Orion' on the operating result of the first half of 2020 at 60 million euros. This overall negative impact is expected to amount to 100 million euros for the full year 2020.
In the Contracting activities of CFE, COVID-19 caused project delays, which had a negative impact on the results of the projects and additionally led to an undercoverage of overheads. As is the case at DEME, the result of construction contracts is recognised according to the rate of progress of the works. When a project is deemed to be loss-making, this result is immediately charged in the accounts to profit and loss for the period in which this assessment is made, including with respect to turnover that will only be realised in future periods. The impact of such "loss to completion" results can be considerable relative to the reported turnover, and remains dependent on the assumptions that are made when determining the results over the whole duration of a project.
CFE estimates the combined effect on the operating result at approximately 20 million euros. CFE was able for its various activities to rely on approximately 5 million euros worth of support measures, including temporary unemployment for economic reasons, so that the net impact amounted to approximately 15 million (negative) euros.
The upheaval that the health crisis also brought about on the financial markets eventually had only a limited impact on the operating results of Delen Private Bank and Bank J.Van Breda & C°. Despite the numerous challenges that the coronavirus has also created in terms of the practical organisation of the two institutions, the contribution of the "Private Banking" segment to the group's result actually increased by 3.4 million euros compared to last year, thereby confirming its position as main contributor to the group's result. At Bank J.Van Breda & C° 4.8 million euros worth of provisions were recorded to cover expected future (but not yet identified) credit losses in accordance with IFRS 9.
As was the case in the "Marine Engineering & Contracting" segment, the lockdown period delayed progress on the development projects in Belgium and Luxembourg in the "Real Estate & Senior Care" segment, with a negative impact on the profits that could be recognised in profit and loss in the first half of the year, without however compromising the long-term profit potential. Leasinvest lost a total of 2.5 million euros in rental income in the first half of 2020 (of a total of 30.7 million euros). The 1,600 employees of Anima Care did everything possible, under extremely difficult conditions, to keep providing care to the residents of its residential care centres, service flats and convalescent homes. The exceptional conditions clearly put heavy pressure on the people, residents and organisation of Anima Care, and had a negative impact on Anima Care's short-term profitability. Some of Anima Care's sites have not been spared from the coronavirus outbreak. On top of the human suffering, Anima Care estimates the financial impact of this crisis at 2.4 million euros, caused by additional costs, lower income due to the closure of certain services and lower occupancy rates, particularly at the four newly built residences that opened during the past year and were unable to attract new residents under these circumstances. The combined negative impact was compensated by one million euros worth of support measures made available by the three regional governments.
Neither SIPEF nor Sagar Cements experienced too much of a negative impact on their results from the COVID-19 pandemic during the first half of 2020. Although SIPEF reported a 6% increase in its (sustainable) palm oil production, it experienced
an indirect negative impact from the sharp decrease in prices during the first half of the year. In the last few months, however, the market price of palm oil has been increasing again. At Sagar Cements in India, the lockdown caused the capacity utilization to decrease to 33% in the second quarter, although this was compensated by higher market prices.
In the "Growth Capital" segment, the impact is different depending on the sectors in which the companies operate. Clearly, the activities of Euro Media Group, a major provider of audiovisual services to big events (Olympic Games, European football championship, Eurovision song contest) and prominent sports competitions (football, rugby, cricket, golf, etc.), which were largely halted from March 2020 and were only steadily resumed towards the end of the first half of 2020, fell more than 40% short of budget. In those exceptional circumstances, the main shareholders of EMG, which include AvH for 4.1 million euros, in conjunction with the banks of EMG and the French public sector bank BPI, came up with a financial support package to bridge this difficult period. In June 2020, volumes began to increase again steadily month by month.
Other companies from AvH's "Growth Capital" segment also experienced the effects of the COVID-19 crisis, without however incurring any material losses in the first half of 2020.
The COVID-19 pandemic is hopefully an exceptional event and should not simply be extrapolated to the future. Nevertheless, AvH has already performed a halfyearly impairment test to determine whether impairment losses needed to be recognised on assets or on/at participations exhibiting special impairment indicators. This proved not to be the case, including the goodwill that was tested.
However, substantial negative fair value changes were recognised on market-listed assets and charged to profit and loss at June 30, 2020, after application of the fair value approach (level 1 in the fair value hierarchy). On AvH's investment portfolio and certain other financial fixed assets, which showed a fair value of 63.3 million euros at year-end 2019, a total impairment loss of 9.0 million euros was recognised to bring it into line with the fair value at 30/6/2020.
With a stake of 10.7%, Leasinvest Real Estate is the largest shareholder of its sector peer Retail Estates. This participation is not consolidated, but the fair value changes (based on the share price of Retail Estates) are reported through the profit and loss account of Leasinvest Real Estate. In the first half of 2020, the negative trend of the Retail Estates share price led to an (unrealised) loss of 32.4 million euros in the financial statements of Leasinvest Real Estate, and through AvH's 30% stake this had an impact of -9.7 million euros on AvH's group result.
The financial market regulators, such as the EBA, ECB, ESMA, etc., have issued guidelines on the application of the concept of expected credit losses in accordance with the IFRS 9 accounting standard ("Financial Instruments") in the 2020 halfyearly figures. The main exposure is obviously situated in the "Private Banking" segment. It is worth noting in this respect that, thanks to their conservative and consistent credit policy, both Delen Private Bank and Bank J.Van Breda & C° suffered a relatively limited impact. Delen Private Bank did not need to set aside any provisions for loan losses on the (limited) credit portfolio. Bank J.Van Breda & C° was even able, on balance, to reverse 0.8 million euros more than was needed to cover specific loan losses in the first half of 2020. Nevertheless, 4.8 million euros worth of provisions were set aside to cover expected future but not yet identified credit losses in accordance with IFRS 9.
Rent reductions that are granted exceptionally in times of economic crisis, such as the COVID-19 pandemic and the related lockdown, are accounted for as a reduction of income in accordance with IFRS 9 ("impairment loss").
No other material expected credit losses are to be reported within the group.
All the companies of the AvH group have made their assessment of the financial impact of the COVID-19 pandemic on their operating result. As described above, that result is adversely affected by extra costs (compensated by support measures where available), impairments (including "fair value adjustments") and provisions for credit losses. Costs of idleness/underutilisation and under-coverage of equipment and the inability to achieve proposed turnover targets and the margin on that turnover, also had a negative impact on the results for the first half of 2020. The impact of these last factors, however, is an estimate as it is less easy to determine objectively.
AvH estimates the combined impact of all these effects on the net result (share of the group) as of June 30, 2020 at approximately 70 to 75 million euros. This figure does not take into account the indirect consequences of the pandemic, such as the upward or downward movements of financial markets (except for those assets that are part of the portfolio), the evolution of commodity prices, etc.
In the first half of 2020, no business combinations took place within the group.
| (€ 1,000) | Fair value | Book value | ||
|---|---|---|---|---|
| 30-06-2020 | 31-12-2019 | 30-06-2020 | 31-12-2019 | |
| Financial assets | ||||
| Financial assets : shares - Fair value through P/L (FVPL) | 175,783 | 210,135 | 175,783 | 210,135 |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 470,224 | 420,628 | 470,224 | 420,628 |
| Financial assets : shares - Fair value through OCI (FVOCI) | 167 | 168 | 167 | 168 |
| Financial assets - at amortised cost | 5,000 | 0 | 5,000 | 0 |
| Receivables and cash | ||||
| Financial fixed assets - receivables and warranties | 106,640 | 100,406 | 106,640 | 100,406 |
| Finance lease receivables | 274,660 | 272,149 | 255,674 | 254,092 |
| Other receivables | 212,209 | 203,809 | 212,209 | 203,809 |
| Trade debtors | 906,775 | 938,560 | 906,775 | 938,560 |
| Time deposits for less than three months | 300,089 | 217,717 | 300,089 | 217,717 |
| Cash | 731,310 | 670,268 | 731,310 | 670,268 |
| Banks - receivables from credit institutions & clients | 6,480,889 | 5,960,543 | 6,092,676 | 5,606,585 |
| Hedging instruments | 5,283 | 2,124 | 5,283 | 2,124 |
| (€ 1,000) | Fair value | Book value | ||
|---|---|---|---|---|
| 30-06-2020 | 31-12-2019 | 30-06-2020 | 31-12-2019 | |
| Financial liabilities | ||||
| Financial liabilities valued at amortised cost | ||||
| Financial debts | ||||
| Bank loans | 2,011,871 | 1,771,425 | 2,003,598 | 1,745,284 |
| Bonds | 265,105 | 255,305 | 265,105 | 254,120 |
| Surbordinated loans | 42,571 | 51,445 | 42,101 | 50,637 |
| Finance leases | 202,806 | 196,643 | 201,189 | 194,692 |
| Other financial debts | 283,242 | 287,170 | 283,242 | 287,170 |
| Other debts | ||||
| Trade payables | 1,254,304 | 1,305,836 | 1,254,304 | 1,305,836 |
| Advances received | 10 | 861 | 10 | 861 |
| Amounts payable regarding remuneration and social security | 180,437 | 197,967 | 180,437 | 197,967 |
| Other amounts payable | 139,805 | 95,962 | 139,805 | 95,962 |
| Banks - debts to credit institutions, clients & securities | 6,276,632 | 5,760,852 | 6,242,981 | 5,725,690 |
| Hedging instruments | 132,741 | 107,437 | 132,741 | 107,437 |
| (€ 1,000) | 30-06-2020 | 31-12-2019 | ||||
|---|---|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |
| Financial assets | ||||||
| Financial assets : shares - Fair value through P/L (FVPL) | 135,370 | 40,414 | 176,724 | 33,411 | ||
| Financial assets : bonds - Fair value through OCI (FVOCI) | 470,224 | 420,628 | ||||
| Financial assets : shares - Fair value through OCI (FVOCI) | 167 | 168 | ||||
| Financial assets - at amortised cost | 5,000 | |||||
| Receivables and cash | ||||||
| Finance lease receivables | 274,660 | 272,149 | ||||
| Banks - receivables from credit institutions & clients | 1,007,459 | 5,473,430 | 596,085 | 5,364,458 | ||
| Hedging instruments | 5,283 | 2,124 | ||||
| Financial liabilities | ||||||
| Financial debts | ||||||
| Bank loans | 2,011,871 | 1,771,425 | ||||
| Bonds | 84,056 | 181,050 | 0 | 74,542 | 180,763 | 0 |
| Surbordinated loans | 42,571 | 51,445 | ||||
| Finance leases | 202,806 | 196,643 | ||||
| Banks - debts to credit institutions, clients & securities | 6,276,632 | 5,760,852 | ||||
| Hedging instruments | 132,741 | 107,437 |
The fair values must be classified in three levels according to the valuation hierarchy of IFRS 13, depending on the type of input used for the valuation of financial instruments. The specific effect of this for Bank J.Van Breda & C° is:
We find the following financial assets and liabilities in level 2:
Ackermans & van Haaren is active in several segments, each (more or less) cyclically sensitive : dredging & infrastructure, oil & energy markets (DEME, Rent-A-Port, Green Offshore), construction (CFE), evolution on the financial markets and interest rates (Delen Private Bank and Bank J.Van Breda & C°), real estate and interest
We find the following financial assets in level 3:
The fair value of the securities in the other investment portfolio of the Group is determined on the basis of the listing on the public market (level 1). The same applies to the public bonds issued by Extensa. The private bonds issued by BPI, Leasinvest Real Estate and Rent-A-Port are reported under level 2.
rates evolution (Extensa & Leasinvest Real Estate) and the evolution of commodity prices (SIPEF, Sagar Cements). The segments in which the Growth Capital participations are active, are also confronted with seasonal or cyclical activities.
| (€ 1,000) | 30-06-2020 | 30-06-2019 |
|---|---|---|
| Net consolidated result from continuing operations, group share (€ 1,000) | 56,272 | 212,945 |
| Weighted average number of shares (1) | 33,118,260 | 33,139,404 |
| Earnings per share (€) | 1.70 | 6.43 |
| Net consolidated result from continuing operations, group share (€ 1,000) | 56,272 | 212,945 |
| Weighted average number of shares (1) | 33,118,260 | 33,139,404 |
| Impact stock options | 55,636 | 84,960 |
| Adjusted weighted average number of shares | 33,173,896 | 33,224,364 |
| Diluted earnings per share (€) | 1.70 | 6.41 |
| Treasury shares as part of the stock option plan |
30-06-2020 | 30-06-2019 |
|---|---|---|
| Opening balance | 363,000 | 334,000 |
| Acquisition of treasury shares | 27,750 | 45,500 |
| Disposal of treasury shares | -12,500 | -16,500 |
| Ending balance | 378,250 | 363,000 |
In the course of the first semester of 2020, AvH has purchased 27,750 treasury shares in order to hedge options for the benefit of the staff. Over the same period, the beneficiaries of the share option plan exercised options on 12,500 AvH shares. On June 30, 2020, options were outstanding for a total of 354,250 AvH shares. In order to hedge these (and future) obligations, AvH owned 378,250 treasury shares on the same date.
| 30-06-2020 | 30-06-2019 |
|---|---|
| 5,528 | 9,415 |
| 49,797 | 45,745 |
| -44,815 | -46,575 |
| 10,510 | 8,585 |
In addition, 49,797 AvH shares were purchased and 44,815 shares were sold during the first 6 months of 2020 in the context of the contract that AvH entered into with Kepler Cheuvreux in order to support the liquidity of the AvH share. These transactions are initiated entirely autonomously by Kepler Cheuvreux, but, as they take place on behalf of AvH, the net purchase of 4,982 AvH shares has an impact on AvH's equity in this context. On June 30, 2020, the number of own shares in the portfolio in the context of this liquidity agreement amounts to 10,510.
The impairment losses have already been discussed in section 7.2 Impact of COVID-19, and more particularly in subsections "Impairment losses and changes in fair value" and "Expected credit losses".
In the course of the first half of 2020, AvH did not recognise any reversals on the provision for contingent liabilities with regard to its participation in CFE, which was established when control over CFE was acquired in 2013. This provision therefore remains unchanged at 16.0 million euros (AvH share 9.7 million euros).
The impacts of the COVID-19 pandemic are described in Note 7.2 Impact of COVID-19 of this report. A possible resurgence of COVID-19 and its potential consequences for businesses and the economy in general is clearly a risk.
For a description of the main risks and uncertainties, please refer to our annual report for the financial year ended 31/12/2019. The composition of AvH's portfolio changed only slightly during the year; accordingly, the risks and the spread of those risks have not changed fundamentally in relation to the situation at the end of the previous year.
Several group companies of AvH (such as DEME, CFE, Rent-A-Port, SIPEF, Telemond, Manuchar, Turbo's Hoet Groep, Agidens,...) are also internationally active and are therefore exposed to related political and credit risks.
When disposing of participating interests and/or activities, AvH and its subsidiaries are regularly required to provide certain warranties and representations. These may give rise to claims - legitimate or otherwise - from buyers for compensation on that basis. AvH received no such claims in H1 2020.
Several fully consolidated companies have agreed on certain ratios (covenants) in their credit agreements and these were respected end on June, 30 2020.
The composition of the consolidation scope has remained virtually unchanged in relation to year-end 2019, although AvH increased its shareholding percentage in the participations of the "Marine Engineering & Contracting" segment and in SIPEF. The subsidiaries of AvH invested in the further expansion of their activities. AvH believes that those investments do not fundamentally alter the risk profile; they are follow-up investments by companies in which the Group has been a shareholder for some time now.
Several group companies of AvH (such as DEME, CFE, Agidens...) are actively involved in the execution of projects. This always entails a certain operational risk, but also means that certain estimates of profitability need to be made at the end of such a project. This is inherent in such activity, as is the risk of disagreements with customers over divergent costs or changes in execution and the collection of these receivables. In the Netherlands, DEME is involved in a dispute with Rijkswaterstaat since 2018 regarding the execution of the Juliana canal project. On the basis of the information that is currently available, DEME is still not able to reliably estimate the financial consequences.
In the current market context, AvH is focusing more than ever on its role as proactive shareholder in the companies in which it has a stake. By participating in risk committees, audit committees, technical committees etc. at DEME, CFE, Rent-A-Port and Agidens, AvH specifically monitors the risks in its contracting division from a very early stage.
As regards the risk of value adjustments on assets, reference is made to section 7.8 Impairments.
In its role as proactive shareholder, AvH also sees to it that the companies in which it participates organize themselves in such a way as to comply with current laws and regulations, including all kinds of international and compliance rules.
DEME is fully cooperating with the judicial investigation that was started in 2018 into the circumstances around the award of a contract that has already been implemented. In the current circumstances, the financial impact on DEME cannot be reliably estimated.
No transactions with related parties took place during the first half of 2020 that have any material impact on AvH's results. Furthermore, during the first six months there were no changes in the transactions with affiliated parties as described in the annual report for the 2019 financial year which could have material consequences for AvH's financial position or results.
At the beginning of July, HealthQuad successfully completed the first closing of its second fund with more than 68 million USD in committed capital. AvH has assumed the role of anchor investor in HealthQuad II and is investing 15 million USD over a period of four years. Besides AvH, which was also the anchor investor in HealthQuad's first fund, the second fund will be supported by Teachers Insurance and Annuity Association of America (TIAA), the Indian-based SIDBI, Swedfund and Merck & Co. Inc.
At the end of July, AvH announced that it will invest six million euros, phased according to milestones to be achieved, in Indigo Diabetes, as part of a 'Series B' capital round of 38 million euros. As a result, AvH acquires a participation of around 10% (fully diluted). Indigo Diabetes is a young high-tech company that develops medical applications based on nanophotonics. The firm boasts an excellent management team that has emerged from a unique ecosystem that combines the photonics expertise of Ghent University with IMEC's nanoelectronics expertise. The new investment round will enable Indigo Diabetes to further develop its invisible multi-biomarker sensor for people with diabetes and to prepare and start up the clinical trial phase with a view to securing authorisation for the European and US market.
Report of the statutory auditor to the shareholders of Ackermans & van Haaren NV on the limited review of the interim condensed consolidated financial statements as of 30 June 2020 and for the 6 month period then ended.
Half-yearly financial report 2020
We have reviewed the accompanying interim condensed consolidated statement of financial position of Ackermans & van Haaren NV (the "Company"), and its subsidiaries (collectively referred to as "the Group") as at 30 June 2020 and the related interim condensed consolidated statements of income, the consolidated statement of comprehensive income, the statements of changes in consolidated equity and cash flows for the six month period then ended, and explanatory notes, collectively, the "Interim Condensed Consolidated Financial Statements".
These statements show a consolidated statement of financial position total of 16,219 million euros and a consolidated profit (share of the group) for the 6 month period then ended of 56.3 million euros. 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 ("IAS 34") as adopted for use in the European Union. Our responsibility is to express a conclusion on these Interim Condensed Consolidated Financial Statements based on our limited review.
We conducted our review in accordance the International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" applicable to review engagements. A limited 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 limited 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 limited review, nothing has come to our attention that causes us to believe that the accompanying Interim Condensed Consolidated Financial Statements do not give a true and fair view of the financial position of the Group as at 30 June 2020, and of its financial performance and its cash flows for the 6 month period then ended in accordance with IAS 34.
Antwerp, August 28, 2020 EY Bedrijfsrevisoren BV Statutory auditor Represented by Patrick Rottiers Wim Van Gasse Partner* Partner*
* Acting on behalf of a BV
To our knowledge:
(i) the condensed financial statements, drafted in accordance with the applicable standards for annual accounts, present a true and fair view of the assets, financial situation and the results of Ackermans & van Haaren and the companies included in the consolidation; (ii) the intermediate annual report provides a true and fair view of the main events and major transactions with related parties that took place in the first six months of the financial year and their effect on the condensed financial statements, as well as a description of the main risks and uncertainties for the remaining months of the financial year.
27 August 2020 On behalf of the company
Jan Suykens Tom Bamelis John-Eric Bertrand Piet Bevernage Chairman of the Member of the Member of the Member of the Executive Committee Executive Committee Executive Committee Executive Committee
André-Xavier Cooreman Piet Dejonghe Koen Janssen Member of the Member of the Member of the Executive Committee Executive Committee Executive Committee
EBITDA: EBIT plus depreciation and amortization on fixed assets
Net fnancial position: Cash & cash equivalents and investments minus short and long term fnancial debt.
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