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Immobel NV

Interim / Quarterly Report Sep 28, 2016

3964_rns_2016-09-28_67271d3b-4a9d-4233-88d5-537d4a45324e.pdf

Interim / Quarterly Report

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Intermediary report as of June 30, 2016

Contents
Pages
1. Interim management report ………………………………………………1 ‐ 12
2. Interim condensed consolidated financial statements
2.1 Statement of comprehensive income……………………… 13
2.2 Statement of financial position……………………………… 14
2.3 Statement of cash flow…………………………………………… 15
2.4 Statement of changes in equity……………………………… 16
2.5 Notes to the consolidated financial statements………17 ‐ 35
3. Statement from the responsible persons…………………………… 36
4. Auditor's report……………………………………………………………………37 ‐ 38

INTERIM MANAGEMENT REPORT as at 30 June 2016

Brussels, 28 September 2016

Highlights

  • Merger between ALLFIN and IMMOBEL approved by the Extraordinary General Meeting of 29 June 2016;
  • Following the merger, the new group offers a less cyclical profile with more residential projects;
  • New investment projects in Belgium (Prince Royal, Greenhill Park) and in Luxembourg (Centre Etoile, Infinity);
  • Sale of the WestSide Village (Luxembourg) and Okraglak (Poland) projects;
  • A net income of EUR 30.3 million for the first half of 2016, including the accounting impacts of the merger (net positive impact of EUR 25.2 million).

Accounting impacts of the merger

The first six months were marked by the merger between the companies ALLFIN and IMMOBEL, approved by the Extraordinary General Meeting of 29 June 2016. As detailed below, this merger makes it difficult to compare the figures for the first half of 2016 with those of the previous year due to the change in scope and the accounting impacts linked to the merger.

The financial statements are legally IMMOBEL ones but represent in practice the continuity of ALLFIN financial statements (except for the share capital of the company).

In terms of the balance sheet:

The merger between ALLFIN and IMMOBEL is regarded, for accounting purposes, as a reverse merger, in other words the legally acquired company (ALLFIN) absorbs the legally acquiring company (IMMOBEL) from an accounting perspective. This means that, on the date of the merger, all of IMMOBEL's assets and liabilities are revalued at their true value and the revaluation resulting from this exercise is recorded directly in the company's equity. As at 30 June 2016, this generated an increase in the consolidated equity of EUR 8.8 million. This implies that these EUR 8.8 million will never go through the profit and loss statement.

Moreover, IMMOBEL's first six months of "pre‐merger" results (an operational loss of EUR 2.9 million and a net loss of EUR 6 million) are incorporated directly into the equity and are not included in the income statement published below.

In terms of the income statement:

Given the reverse merger of 29 June 2016, the profit and loss statement only reflects, except for the gains and losses directly related to the merger itself, the first six months of ALLFIN. In accordance with IFRS 3, negative goodwill of EUR 11.6 million linked to the merger was recorded positively in the operational income. This sum is the difference between the true value of the IMMOBEL assets and liabilities transferred (EUR 185 million) and the IMMOBEL market capitalisation on the merger date (EUR 197 million). Before the merger, the IMMOBEL shares held by ALLFIN were also the subject of a revaluation (+EUR 2.8 million).

Furthermore, as agreed in the merger agreements, ALLFIN undertook a carve‐out of its non‐core assets before the merger. The sale of those assets generated a capital gain of EUR 13.3 million, which was also recorded as operational income.

Finally, the other operating expenses were affected by the costs linked to the merger process, namely a

sum of EUR 2.6 million (EUR 0.2 million of which was then recategorised under equity as it was directly and legally linked to the merger – notary and auditor costs).

It is worth remembering that these accounting elements had no impact on the valuation of the two companies carried out by the various banks at the time of the merger.

Operating income

The operating income at the end of the six months stood at EUR 40.4 million. This sum includes the impacts mentioned in the previous paragraph and is broken down as follows:

  • ‐ ALLFIN's operating income was EUR 12.7 million
  • ‐ the impact of the carve‐out was EUR 13.3 million
  • ‐ the amount recognised in the operating statement for the negative goodwill linked to the merger was EUR 11.6 million
  • ‐ the revaluation of the IMMOBEL shares held by ALLFIN was EUR 2.8 million

In terms of the company's activities, it will be noted that the majority of the operating income came from the new sales and the progress in the Chambon (EUR 9.6 million), Lake Front (EUR 2.2 million), Flint (EUR 3.1 million) and Ernest (EUR 2.3 million) residential projects, and from the sale of the office part of the Chambon (rue des Boiteux) project. The operating income also includes the rent (EUR 2.6 million) from the tenants of currently leased buildings before reallocation and/or conversion (mainly the Lebeau building situated at the Sablon which is leased to Proximus).

This highlights one of the advantages of the merger: IMMOBEL's profile is now less cyclical. There were no sales of offices generating margin during the first six months but the residential projects, which are more numerous and varied since the merger, generated broadly positive operating income, apart from the elements linked to the merger.

The activity of the Landbanking department was marked by the start of some significant capital works in the new landbanks at Verger de Fayenbois (15ha) (Grivegnée‐Liège), Domaine des Vallées (10ha) (Gastuche‐Grez‐Doiceau), Havenzijde (4.5ha) (Lombardsijde‐Middelkerke), Seilles (1.2ha) (Andenne) and Soignies (1.8ha). The sales in the Eghezée, Waremme, Uccle, Gastuche and Geel landbanks contributed to the half‐year turnover. A number of purchase commitments were also signed for the new Grivegnée development. Finally, it should be noted that the land development permit for the Wavre plot in chemin de Vieusart (4.5ha) has been issued.

The Landbanking activity generated a margin of EUR 0.8 million (EUR 1.7 million including the developments), which is below forecast. This delay will be partially made up over the second six months (nonetheless, the margin will remain between EUR 2 million and EUR 4 million below forecast). However, as indicated in the paragraph entitled "Accounting impacts of the merger", the Landbanking activity for the first six months is not included in the IMMOBEL income statement.

Financial result

The net financial result was EUR ‐ 4.9 million and is made up of:

  • ‐ Financial revenue of EUR 1.5 million (coming mainly from the equity and bond portfolio)
  • ‐ Non‐capitalised financial expenses of EUR 4.6 million (mainly interest on the bonds and on the corporate credit lines)
  • ‐ The negative revaluation of the interest rate hedging instruments (‐EUR 1.7 million)

Net income

After deduction of the tax expenses, (EUR ‐ 4 million) and minority interests (EUR ‐ 1.2 million), the net income was EUR 30.3 million, in other words an income of EUR 5.16 per share.

Consolidated balance sheet

The total assets of the company as at 30 June 2016 were EUR 740.3 million and were composed mainly of the company's cash as at 30 June 2016 (EUR 84.8 million) and the projects in the portfolio. These are distributed between:

  • ‐ the holdings in the joint companies and associate companies (EUR 88 million, mainly Belair RAC 4, Bella Vita, Universalis Park and Solvay)
  • ‐ the stocks (EUR 502 million, mainly the Lebeau, O'Sea, Cedet, Möbius and Black Pearl projects).

See the distribution of the project portfolio as at 30 June 2016, by segment and by geography:

The graph below shows, for the major projects, the year in which the gross margin was achieved per project. It is important to note that, for the residential projects, the final year of sale is shown.

2016 is due to be marked by the sale of Black Pearl, Gateway and Galerie Kons. The latter two projects were initially planned for 2017 but, following some recent rentals and favourable progress made on the project, the company anticipates a sale in 2016.

The Cedet project is behind schedule in its construction and its marketing. Initially planned for the end of 2017, the delivery and sale of the project is not due to take place until the 2018 financial year.

The consolidated equity reached EUR 290.7 million, while the debt was EUR 349.2 million, composed mainly of the bonds (EUR 135.4 million), credit lines and project financing.

The debt ratios (calculated excluding IFRS 11) as at 30 June 2016 have changed as follows:

The loan‐to‐cost ratio (debts/stocks) is increasing as some large projects are reaching maturity, just like the asset‐backed project financing, and are on the point of being sold (Galerie Kons, Black Pearl, etc.). This ratio does not include the cash.

By contrast, the net financial debt/equity ratio does include cash and is improving (108% as at 30 June 2016 compared with 124% as at 31 December 2015).

ACTIVITIES OF THE IMMOBEL GROUP DURING THE FIRST HALF OF 2016

Here is a description of the projects that have contributed to the activity of the IMMOBEL group during the first half of 2016 (in order of project area).

O'Sea – 88,500 m² ‐ Oostende, Belgium
Situation as at 30 June 2016 Phase 1 – 19,000 m² "O'Sea Charme": permit obtained. The marketing began at the
beginning of July 2016, after the permit was obtained.
Project characteristics The O'Sea project is a residential complex situated in a strategic location in Oostende,
on the Belgian coast. It is proceeding in 4 phases. This urban regeneration project,
covering around 88,500 m², is a sustainable and totally integrated project which
creates a new reference district in the heart of the city thanks to the wide choice of
lifestyles it offers (permanent residents, second homes, students, families and assisted
living). This major complex will redesign an already trendy section of the seafront and
will boost its attraction.
Residential units Phase 1 ‐ O'Sea Charme: 10 houses ‐ 18 small apartments ‐ 50 assisted living dwellings ‐
33 larger apartments ‐ 56 apartments (tower)
Programme 88,500 m² of residential space in 4 phases (8 years).
Phase 1 – 19,000 m²: 167 residential units ‐ 3 retail outlets ‐ 1 restaurant ‐
1 crèche
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes
Construction period Q1 2017/2019
MOBIUS ‐ 59,400 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 Negotiations for the sale to an owner‐occupier subject to the condition precedent of
obtaining the permit. Negotiations finalised on 12 September 2016 still subject to the
conditions precedent of obtaining the permit (see press release of 13 September 2016)
Project characteristics The project is situated in the Quartier Nord [northern District], very close to the Gare
du Nord station.
The project has been revised by Assar for the construction of two office towers
Programme 2 office buildings (27,100 m² and 32,300 m²)
Permits obtained Planning permission: New planning permission submitted
Environmental permit: New permit submitted
Construction period N.A./N.A.
BELAIR (RAC 4) – 56,420 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 In the process of obtaining permit
Project characteristics RAC 4 is the remaining part of the former administrative offices. It is mainly residential
and will be converted into a residential, infrastructure and commercial space.
Residential units 433
Programme 4,430 m² of commercial space, 7,840 m² of public facilities, 44,150 m² of residential
space (conventional and subsidised dwellings)
Permits obtained Planning permission: No ‐ Environmental permit: No
Construction period Q3 2017/Q2 2021
ERNEST ‐ 50,000 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 Phase 1 – delivery ongoing.
Residences for students and the elderly: 100% sold and fully delivered.
Residential spaces: more than 80% sold and marketing still ongoing.
Phase 2: dwellings part awaiting permit (favourable consultation in March 2016); hotel
part under due diligence (subject to permit condition), consultation planned for
28 September 2016
Project characteristics The Ernest project is a mixed‐use complex situated in the heart of Brussels (former
headquarters of SOLVAY), between Avenue Louise and the European Quarter. This
urban regeneration project, covering nearly 50,000 m², will fundamentally redesign
this already very exclusive and trendy district and will increase its attractiveness.
Residential units Phase 1: 110 apartments & penthouses ‐ 95 student rooms ("The Place to") ‐ 1
residence for the elderly (114 beds)
Phase 2: 198 apartments & penthouses ‐ 1 crèche ‐ 1 hotel
Programme 50,000 m² comprising residential areas, a student residence, a nursing home, a crèche
and a hotel
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes (Phase 2 procedure ongoing)
Construction period Phase 1. Partially completed (2014‐2016)
Phase 2. Q2 2016/Q4 2019
CHAMBON ‐ 42,452 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 More than 85% sold and marketing still ongoing. Delivery until Q4 2016.
Project characteristics The Chambon project is a mixed‐use complex situated in the heart of the historic urban
centre of Brussels (former headquarters of the CGER). This urban regeneration project,
covering nearly 50,000 m², will fundamentally redesign the entire neighbouring district
and will revitalise it.
Residential units 248 apartments & penthouses
134 studios pour students
2 hotels
Programme 20,000 m² of office space and hotel space
30,000 m² of residential space and retail outlets
Permits obtained Planning permission: Yes
Environmental permit: Yes
Construction period Q1 2013/Q4 2016
DOMAINE DES VALLÉES ‐ 37,000 m² ‐ Grez‐Doiceau, Belgium
Situation as at 30 June 2016 61% sold in Phase 1 (169 units)
Project characteristics This huge project, in partnership with a developer and the Régie Foncière du Brabant
wallon [Walloon Brabant Housing Management Service], over an area of 10ha,
comprises 45 apartments, 158 single‐family maisonettes and 7 commercial units. This
project includes 88 dwellings reserved for buyers who have links with Walloon Brabant.
The conditions for accessing these 88 dwellings are based mainly on the buyers'
income.
Residential units 203
Programme 203 residential units (158 houses and 45 apartments), 6 commercial units and a crèche,
including 37 units purchased by the Régie Foncière du Brabant wallon
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes
Construction period Q4 2015/Q4 2019
BELLA VITA ‐ 33,300 m² ‐ Waterloo, Belgium
Situation as at 30 June 2016 248 units sold out of 269
Project characteristics First intergenerational concept in Belgium, with services such as a crèche, assisted
living, health centre, swimming pool, restaurant, shop, library, gym, offices, meeting
rooms, etc.
Residential units 269
Programme 182 apartments and 87 houses, a crèche, an assisted living residence, a health centre, a
swimming pool, a restaurant, a shop, a library, a gym, offices, meeting rooms
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes
Construction period Q2 2013/Q4 2015 (end of external works and finishing works: ongoing)
INFINITY – 33,300 m² ‐ Luxembourg‐Ville, Grand Duchy of Luxembourg
Situation as at 30 June 2016 Submission of building permit application introduced in 25 2016 as planned.
Office and shop marketing ongoing. Residential marketing has start mid‐September
2016 as planned.
Project characteristics The INFINITY project is a mixed‐use complex situated at the entrance to the city of
Luxembourg, at the junction with the Kirchberg plateau. This mixed‐use project will
distinctly redraw the city's skyline thanks to its residential tower (20,000 m²), its office
tower (6,800 m²) and its shopping centre (6,500 m²). This complex, covering around
33,300 m², constitutes a sustainable and totally integrated project which will establish
itself as a new, desirable location in Luxembourg Composed of apartments, offices and
shops – all of high quality –, INFINITY will boost the attractiveness of this already
trendy district in the heart of the city, opposite the Philharmonie concert hall and the
MUDAM museum.
Residential units 150 apartments, penthouse and studios
Programme 33,300 m² of mixed‐use space, 150 residential units, 6,500 m² of commercial space (23
shops), 6,500 m² of office space.
Permits obtained Building permit application procedure will be submitted on 25 July 2016.
Construction period From March 2016 to mid‐2019.
Polvermillen – 26,600 m² ‐ city of Luxembourg, Grand Duchy of Luxembourg
Situation as at 30 June 2016 Submission of building permit application and marketing planned for early 2017.
Project characteristics The Polvermillen project is a mixed‐use complex nestled between the city and its
natural hinterland, close to the Central Business District and the Kirchberg plateau.
Ideally situated on the river and easily accessible, this project in a prime district will
combine the best of both worlds for the maximum benefit of its residents. This luxury
project, covering nearly 26,600 m², will offer a comprehensive residential programme
which will contribute to the development of the district while revitalising the city.
Residential units 218 apartments and houses
Programme 25,000 m² of residential space (1 main house, 17 houses, 18 lofts, 181 apartments and
studios). 1,600 m² of office space.
Permits obtained PAG (Plan d'Aménagement Général [General Development Plan]) and PAP (Plan
d'Aménagement Particulier [Special Development Plan])
Ministerial demolition and sanitation orders
Construction period From September 2016 (demolition and sanitation) to early 2020
CEDET ‐ 22,400 m² ‐ Warsaw, Poland
Situation as at 30 June 2016 Construction and marketing ongoing (25% of the area let)
Project characteristics Cedet is an office building with a commercial section. It is situated in the centre of
Warsaw, in the heart of the main public transport network.
The project includes the restoration of the historic, protected, modernist building and
the design of a new part.
Programme Office building and shops
Permits obtained Planning permission: Yes ‐ Environmental permit: N/A
Construction period Q1 2015/Q4 2017
VESALIUS ‐ 16.133 m² ‐ Leuven, Belgium
Situation as at 30 June 2016 More than 85% sold
Project characteristics The Vesalius project is a mixed‐use complex situated in Leuven, close to the historic
centre of the city and its world‐renowned university (KUL). This project, covering
30,000 m², offers exclusive apartments, rooms for students, studios, retail stores, two
cinemas and an auditorium organised around a magnificent plaza. This project will
enable the revitalisation of the entire district adjoining the campus.
Residential units 128 apartments and studios
Programme 16,133 m² ‐ 68 apartments ‐ 60 studios ‐ 10 retail stores ‐ 2 cinemas ‐ 1 auditorium
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes
Construction period Q3 2014/Q3 2016
Lake Front – 12,232 m² ‐ Knokke‐Heist, Belgium
Situation as at 30 June 2016 Phase 1 – construction ongoing. More than 80% sold and marketing still ongoing.
Phase 2 ‐ The construction and marketing began in May 2016.
Project characteristics The Lake Front project is a residential complex situated in Knokke, a stone's throw
from the magnificent city centre and overlooking the Duinenwater lake. This project,
covering 12,000 m², offers some exclusive apartments facing the lake and a short
distance from the new golf course, the swimming pool and the beach.
Residential units Phase 1: 70 apartments. Phase 2: 50 apartments.
Programme 1,000 m² of residential space
Permits obtained Planning permission: Yes
Construction period Phase 1: Q3 2014/Q3 2016. Phase 2: Q2 2016/Q4 2019.
THE BLACK PEARL ‐ 11,000 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 Building leased (usufruct) subject to the condition precedent of completing the
development work and pre‐sold subject to the condition precedent of the usufruct
contract taking effect
Project characteristics The Black Pearl was awarded the "2012 Exemplary Building" by the Brussels‐Capital
Region. It is also regarded as a passive building by PMP and will obtain an "Excellent"
BREEAM certification.
Programme Office building
Permits obtained Planning permission: Yes
Environmental permit: Yes
Construction period Q2 2012/Q4 2014
RIVERVIEW ‐ 10,747 m² ‐ Nieuwpoort, Belgium
Situation as at 30 June 2016 More than 50% sold in 6 months and marketing still ongoing
Project characteristics The Riverview project is a residential complex situated in Nieuwpoort, between the
magnificent city centre and the riverbank. This project, covering 10,747 m², offers
some exclusive apartments facing the canal (Riverview) or facing the old town
(Heritage). This project will revitalise the entire district situated right next to the new
marina.
Residential units 101 apartments & penthouses
Programme 10,747 m² of residential space
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes
Construction period Q3 2015/Q4 2017
C de Ligne ‐ 9,500 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 Negotiations ongoing for the renting of the entire building
Project characteristics The C de Ligne office complex is the attractive result of the total refurbishment of a
building constructed in 1958.
Programme Office building, 3,750 m² of archives underground.
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes
Construction period N.A./N.A.
Royal Louise ‐ 8,000 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 Permit application procedure ongoing.
Project characteristics The Royal Louise project is a residential complex situated in one of the most exclusive
and trendy areas in Brussels. Barely 50m from the famous Place Stéphanie and Avenue
Louise, this project will offer the most beautiful apartments with terraces overlooking a
secluded private garden, moments away from the best restaurants and shopping
arcades in the city. The Royal Louise will become the reference point for the urban
lifestyle in Brussels.
Residential units 77 apartments
Programme 8,000 m² of residential space
Permits obtained Permit application procedure ongoing
Construction period To be confirmed – After obtaining the permit. Q1 2017/Q3 2019
OKRĄGLAK ‐ 7,900 m² ‐ Poznan, Poland
Situation as at 30 June 2016 Sold
Project characteristics The project consists of two buildings, Okrąglak and Kwadraciak, offering first‐class
office space and a shopping area on the ground floor. Multi‐tenant building, currently
with 19 tenants offering various services. In general: law firms, consulting companies
and financial sector.
Programme Office building and shops
Permits obtained Planning permission: Yes ‐ Environmental permit: N.A.
Construction period Q2 2011/Q3 2012
Greenhill Park ‐ 6,000 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 Permit application procedure ongoing. The marketing will begin at the end of 2016,
after obtaining the permit
Project characteristics This project is a residential complex situated in one of the greenest and most exclusive
municipalities in Brussels. It is easily accessible but still in a secluded, desirable district.
This luxury project, covering nearly 6,000 m², will offer apartments of impeccable style
in an already exclusive and very trendy district.
Residential units 31 apartments or penthouses
Programme 6,000 m² of residential space
Permits obtained Permit application procedure ongoing
Construction period After obtaining the permit. Q1 2017/Q2 2019.
Chient Vert ‐ 5,000 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 In the process of obtaining the permit
Project characteristics The current structure, which is an office building dating from the late 1980s, will be
converted into an attractive, contemporary apartment block.
Residential units 42
Programme 42 apartments, 1 office unit and 1 bank branch leased to KBC Bank
Permits obtained Planning permission: No ‐ Environmental permit: Yes
Construction period Q3 2016/2019
PARC SAINTE‐ANNE ‐ 3,500 m² ‐ Brussels, Belgium
Situation as at 30 June 2016 15 units sold out of 26
Project characteristics 26 spacious, luxury apartments situated near Château Sainte‐Anne, in the vicinity of a
Natura 2000 area.
Residential units 26
Programme 1 residential building comprising 26 luxury apartments
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes
Construction period Q1 2016/Q2 2018
RÉSIDENCES TROIS RUISSEAUX ET GRAND PRÉ ‐ 2,200 m² ‐ Chastre, Belgium
Situation as at 30 June 2016 11 apartments sold out of 16
Project characteristics In a land bank of 24 lots, 2 lots have been reserved for an apartment block.
Residential units 16
Programme 16 apartments (including 2 social apartments) and a crèche spread over 2 parcels of a
2‐hectare site and also including 22 parcels for houses and villas
Permits obtained Planning permission: Yes ‐ Environmental permit: Yes
Construction period Q2 2014/Q4 2015

FUNDING

IMMOBEL is carrying out a detailed strategic analysis of its debt and its funding. Over the coming months, it will implement the necessary actions to restructure its funding, in terms of both form and volume, in accordance with this new strategy.

Currently, the debt of EUR 349.2 million is broken down as follows:

  • ‐ Bonds: EUR 135.4 million
  • ‐ Corporate credit line: EUR 55 million
  • ‐ Project funding: EUR 158.8 million

In December 2016, as planned, IMMOBEL will repay its bond of EUR 40 million which is maturing. This will allow an improvement in its average borrowing cost with effect from the 2017 financial year. The bond that will be repaid bore interest at 7%.

OWN SHARES

As a result of the merger between ALLFIN (which held 29.85% of the IMMOBEL shares before the merger) and IMMOBEL, the merged entity IMMOBEL holds a total of 1,230,398 own shares today. In accordance with IAS 32, these own shares are presented after deduction of the equity (with a value of EUR 55.4 million as at 30 June 2016). These own shares have neither voting rights nor dividend rights.

EVENTS AFTER THE CLOSURE

Polvermillen

After the closure on 30 June 2016, IMMOBEL acquired the shares of the company Tractim S.A. [société anonyme – limited company], owner of the former brownfield site called Secalt Tractel SA. More commonly known as the "former industrial site of Polvermillen", this parcel of more than 2.6 hectares in the heart of the capital will enable the group to diversity its project portfolio and consolidate its position in the Luxembourg market over the long term. This transaction complements the previous acquisition of a company that owns an adjoining plot of 26 ares. Thus, over an area of just under 3 hectares, some 25,000 m² will be dedicated to the residential development (houses, lofts, apartments, studios) comprising 210 dwellings, and 1,600 m² to offices.

Belair

IMMOBEL and its partner Breevast have also concluded the rental of the Belair building to the Brussels‐ Capital Region for a fixed period of 18 years. The transaction was effected on the basis of a office rent of EUR 185/m² per year and the owner being responsible for a large portion of the leasehold improvements, which should represent, at the sale, an asset value of more than EUR 50 million, taking into account the current market conditions.

Möbius 1 – Place de Brouckère

On 13 September 2016, IMMOBEL and Allianz announced that Allianz was going to vacate its offices situated in Place de Brouckère and consolidate all of its operational activities in Brussels in a new head office situated in Boulevard du Roi Albert II, in the Quartier Nord in Brussels. It chose one of the two towers of the Möbius project, being developed by IMMOBEL. Allianz has opted for a modern, green building constructed according to its specific needs, while being well served by the transport network. The move is planned between late 2019 and early 2020. Following the delivery of the Allianz Tower, after fulfilling the conditions precedent, the land in Place de Brouckère, where the current Allianz head office is situated, will be acquired.

Its redevelopment by BPI and IMMOBEL will become a reality from 2020. The Brouckère site has a permit obtained by Allianz for some 55,000 m². The programme will be revised in order to incorporate a greater urban mix. The project will comprise, for the most part, residential areas (conventional, prestige or student), offices or a hotel. The ground floors will offer a range of shops, thus being part of the dynamic redeployment plan for the pedestrian areas and for Brussels city centre.

PROSPECTS FOR THE SECOND HALF OF 2016

IMMOBEL's residential projects will continue to contribute to the gross margin for the second half of the year, both through the sales that continue dynamically and through the progress of the works currently underway, particularly the Chambon, Lake Front, Riverview and Solvay projects.

Furthermore, IMMOBEL hopes to finalise the sales of the Black Pearl and Galerie Kons projects by the end of the year. The timing of these two sales is, however, concentrated in the month of December, which presents a risks of a discrepancy as a result recording the margin in the 2017 financial year in the event of unexpected events or a delay.

ORGANISATION

The merger on 29 June also resulted in a reorganisation of the executive committee which, today, is made up of Marnix Galle1 , Alexander Hodac2 , Valéry Autin3 , Nicolas Billen4 and Hilde De Valck5 .

Since 29 August, the teams have been meeting on a single site, at Rue de la Régence, in the centre of Brussels. The integration of the two teams is going well and they are delighted to be working together to create a new spirit and a new dynamism for the largest listed developer in Belgium.

At the Board Meeting on 28 September 2016, the decision was taken to:

  • o Coopt Mrs Annick Van Overstraeten (CEO Lunch Garden Group) as Director as a replacement for Hilde De Valck (in her capacity as permanent representative of the company DV Consulting, H. De Valck Comm.V); Mrs Annick Van Overstraeten will be a Member of the Comité de Nomination [Nomination Committee] and the Comité de Rémunération [Remuneration Committee];
  • o Propose that the next Extraordinary General Meeting should appoint Mrs Karin Koks (member of the Supervisory Board of NSI, which is quoted on Eurnext Amsterdam) as a Director.

FINANCIAL CALENDAR

Annual results 2016 23 March 2017
General Meeting 2016 24 May 2017
Half‐year results 2017 1st September 2017.

1 Mandate carried out by A³ Management sprl [société privée à responsabilité limitée – private limited company], represented by Mr Marnix GALLE

2 Mandate carried out by AHO Consulting sprl, represented by Mr Alexander HODAC

3 Mandate carried out by the company Val U Invest sprl, represented by Mr. Valéry AUTIN

4 Mandate carried out by the company Pride Rock Belgium sprl, represented by Mr. Nicolas BILLEN

5 Mandate carried out by the company DV Consulting, H. De Valck Comm.V, represented by Mrs Hilde DE VALCK

2.1 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(IN THOUSANDS OF EUR)

Notes 30‐06‐2016 30‐06‐2015
In accordance with IFRS 3 IMMOBEL SA
"Reverse Acquisition" 1 Published
OPERATING INCOME 113 927 50 693 40 561
Turnover 7 83 794 47 702 36 828
Other operating income 8 30 133 2 990 3 733
OPERATING EXPENSES ‐73 069 ‐30 976 ‐29 309
Cost of sales 9 ‐66 226 ‐24 842 ‐19 898
Personnel expenses ‐1 031 ‐ 815 ‐3 219
Amortisation, depreciation and impairment of assets ‐ 127 ‐ 383 ‐ 268
Other operating expenses 10 ‐5 685 ‐4 936 ‐5 924
JOINT VENTURES AND ASSOCIATES ‐ 452 1 121 603
Share in the net result of joint ventures and associates 11 ‐ 452 1 121 603
OPERATING RESULT 40 406 20 837 11 855
Interest income 1 515 3 662 1 093
Interest expense ‐4 585 ‐6 211 ‐4 487
Other financial income 507 3 850 16
Other financial expenses ‐2 367 ‐ 687 ‐ 172
FINANCIAL RESULT 12 ‐4 930 614 ‐3 550
RESULT FROM CONTINUING OPERATIONS BEFORE TAXES 35 476 21 451 8 305
Income taxes 13 ‐3 979 ‐3 818 ‐ 40
RESULT FROM CONTINUING OPERATIONS 31 497 17 634 8 265
RESULT OF THE PERIOD 31 497 17 634 8 265
Share of non‐controlling interests 1,197 286 ‐ 6
SHARE OF IMMOBEL 30 300 17 348 8 271
RESULT OF THE PERIOD 31 497 17 634 8 265
Other comprehensive income ‐ items subject to subsequent recycling in the 0 0 87
income statement
Currency translation
0 0 87
TOTAL OTHER COMPREHENSIVE INCOME 0 0 87
COMPREHENSIVE INCOME OF THE PERIOD 31 497 17 634 8 352
Share of non‐controlling interests 1 197 286 ‐ 6
SHARE OF IMMOBEL 30 300 17 348 8 358
NET RESULT PER SHARE (EUR) (DILUTED AND BASIC) 14 5.36 3.00 2.01

* "Ex‐Allfin"

1 The merger of the companies Allfin and Immobel, effective 29 June 2016 is considered for accounting (IFRS 3) as a reverse merger. The legal acquiree company (Allfin) absorbs for accounting purposes the legal acquirer company (Immobel). As such, the first 6 months of the income statement of Immobel (before the merger) are recorded in equity and do not pass through the income statement (see Note 3 for details).

COMPREHENSIVE INCOME PER SHARE (EUR) (DILUTED AND BASIC) 14 5.16 2.95 2.03

2.2 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(IN THOUSANDS OF EUR)

ASSETS 31/12/2015 *
In accordance with IFRS 3
"Reverse Acquisition"
31‐12‐2015
IMMOBEL SA
Published
NON‐CURRENT ASSETS 105 625 108 165 67 538
Intangible assets 164 25 169
Property, plant and equipment 759 296 730
Investment property 2 829 2 715 2 829
Investments in joint ventures and associates 15 87 945 66 122 63 373
Other non‐current financial assets 4 214 28 328
Deferred tax assets 4 389 1 531 186
Other non‐current assets 5 325 9 149 251
CURRENT ASSETS 634 666 283 186 379 607
Inventories 16 502 357 175 414 334 541
Trade receivables 17 15 262 6 712 6 037
Tax receivables 392 332 178
Other current assets 18 30 574 8 311 21 899
Other current financial assets 1 308 5 730
Cash and cash equivalents 84 773 86 687 16 952
TOTAL ASSETS 19 740 291 391 351 447 145
EQUITY AND LIABILITIES Notes 30‐06‐2016
31/12/2015 *
In accordance with IFRS 3
"Reverse Acquisition"
31‐12‐2015
IMMOBEL SA
Published
TOTAL EQUITY 290 682 165 466 194 358
EQUITY SHARE OF IMMOBEL 288 640 156 347 194 375
Share capital 97 156 60 302 60 302
Retained earnings 121 573 95 989 133 596
Reserves 69 911 56 477
NON‐CONTROLLING INTERESTS 2 042 9 119 ‐ 17
NON‐CURRENT LIABILITIES 296 283 160 547 145 534
Employee benefit obligations 264 264
Deferred tax liabilities 8 659 6 702
Provisions 52 4
Financial debts 19 284 812 152 191 143 757
Trade payables 503 1 509
Derivative financial instruments 19 2 011 1 570
Other non‐current liabilities 34 32
CURRENT LIABILITIES 153 326 65 338 107 253
Provisions 20 2 953 3 728
Financial debts 19 64 339 26 560 62 267
Trade payables 21 29 904 14 319 18 894
Tax liabilities 22 12 442 6 149 163
Derivative financial instruments 19 384 88 140
Other current liabilities 23 43 304 18 222 22 061
TOTAL EQUITY AND LIABILITIES 740 291 391 351 447 145

* "Ex‐Allfin"

(IN THOUSANDS OF EUR)

2.3 CONSOLIDATED STATEMENT OF CASH FLOW

Notes 30‐06‐2016 30/06/2015 * 30‐06‐2015
In accordance with IFRS 3
"Reverse Acquisition"
Operating income 99 533 50 693 40 561
Operating expenses ‐71 506 ‐30 976 ‐29 309
Amortisation, depreciation and impairment of assets 127 383 268
Change in provisions ‐ 1 ‐ 3
Disposal of joint ventures and associates
Repayment of capital and advances by joint ventures 100 2 020 13 543
Acquisitions, capital injections and loans to joint ventures and associates ‐ 372 ‐ 346 ‐1 921
CASH FLOW FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL 27 882 21 773 23 139
Change in working capital 24 ‐15 601 ‐15 878 ‐6 282
CASH FLOW FROM OPERATIONS BEFORE PAID INTERESTS AND PAID TAXES 12 281 5 895 16 857
Paid interests ‐2 960 ‐4 806 ‐5 212
Interest received 603 2 871 1 093
Other financing cash flows ‐ 156
Paid / received taxes ‐1 632 ‐ 74
CASH FROM OPERATING ACTIVITIES 8 292 3 960 12 508
Acquisitions of intangible, tangible and other non‐current assets 0 0 ‐ 118
Cash and cash equivalents from the merger 25 16 116
CASH FROM INVESTING ACTIVITIES 16 116 0 ‐ 118
Increase in financial debts 76 757 5 932 18 948
Repayment of financial debts ‐72 580 ‐8 662 ‐6 975
Gross dividends paid (2016 = ex shareholders ALLFIN GROUP) ‐30 499 ‐3 298
CASH FROM FINANCING ACTIVITIES ‐26 322 ‐2 730 8 675
NET INCREASE OR DECREASE (‐) IN CASH AND CASH EQUIVALENTS ‐1 914 1 230 21 065
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 86 687 57 612 25 470
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 84 773 58 842 46 535

* "Ex‐Allfin"

Acquisitions and sales of projects, either directly or indirectly through the acquisition or the sale of project company (subsidiaries, joint venturesand associates), are not considered as investing activities and are directly included in the cash flows from the operating activities, mainly "Operating income / Operating expenses and change in working capital".

2.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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1

Following the merger by absorption of ALLFIN GROUP on 29 June 2016 the registered capital of IMMOBEL SA is represented by 9,997,356 ordinary shares, against 4,121,987 at 31 December 2015.

(IN THOUSANDS OF EUR)

1. PREPARATION BASIS

The interim condensed consolidated financial statements have been prepared in accordance with the IAS 34 Interim Financial Reporting as adopted in the European Union.

2. ACCOUNTING PRINCIPLES AND METHODS

The retained accounting principles are the same that the principles used for the yearly consolidated financial statement at December 31, 2015.

STANDARDS AND INTERPRETATIONS APPLICABLE FOR THE ANNUAL PERIOD BEGINNING ON JANUARY 1ST, 2016

  • ‐ Improvements to IFRS (2010‐2012) (applicable to yearly periods after February 1st, 2015)
  • ‐ Improvements to IFRS (2012‐2014) (applicable to periods after January 1st, 2016)
  • ‐ Amendments to IFRS 11 Joint arrangements Accounting for acquisition of interests in joint operations (applicable to yearly periods after January 1st, 2016)
  • ‐ Amendments to IAS 1 Presentation of Financial Statements Disclosure initiative (applicable to yearly periods after January 1st, 2016)
  • ‐ Amendments to IAS 16 and IAS 38 Tangible and intangible assets Clarification of acceptable methods of depreciation and amortisation (applicable to yearly periods after January 1st, 2016)
  • ‐ Amendments to IAS 19 Employee benefits Employees contributions (applicable to yearly periods after February 1st, 2015)

The application of these new standards had no material impact for the Group.

STANDARDS AND INTERPRETATIONS PUBLISHED FOR THE ANNUAL PERIOD BEGINNING ON JANUARY 1ST, 2016

The Company decided not to anticipate the application standards and interpretations here below that are not mandatory on June 30, 2016:

  • ‐ IFRS 9 Financial Instruments and subsequent amendments (applicable for annual periods beginning on or after January 1st, 2018, but not yetendorsed in the EU)
  • ‐ IFRS 14 Regulatory Deferral Accounts (applicable for annual periods beginning on or after January 1st, 2016 but not yet endorsed in the EU)
  • ‐ IFRS 15 Revenue from Contracts with Customers (applicable for annual periods beginning on or after January 1st, 2018 but not yet endorsed in the EU)
  • ‐ IFRS 16 Leases (applicable for annual periods beginning on or after January 1st, 2019 but not yet endorsed in the EU)
  • ‐ Amendments to IFRS 2 Classification and Measurement of Share‐based Payment Transactions (applicable for annual periods beginning on or after January 1st, 2018 but not yet endorsed in the EU)
  • ‐ Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception (applicable for annual periods beginning on or after January 1st, 2016 but not yet endorsed in the EU)
  • ‐ Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (the effective date has been deferred indefinitely, and therefore the endorsement in the EU has been postponed)
  • ‐ Amendments to IAS 7 Statement of Cash Flows Disclosure Initiative (applicable for annual periods beginning on or after January 1st, 2017 but not yet endorsed in the EU)
  • ‐ Amendments to IAS 12 Income Taxes Recognition of Deferred Tax Assets for Unrealised Losses (applicable for annual periods beginning on or after January 1st, 2017 but not yet endorsed in the EU)

The potential impacts of these standards and interpretations on the group's consolidated financial statements are being determined.

The group does not expect any material changes resulting from the application of the standards and interpretations except for IFRS 9, IFRS 15 and IFRS 16.

(IN THOUSANDS OF EUR)

3. MERGER BY ABSORPTION OF ALLFIN GROUP ON JUNE 29, 2016

The first half of the year 2016 has been marked by the merger between the companies ALLFIN and IMMOBEL, approved by the Extraordinary General Meeting of 29 June 2016, the "transaction".

In accordance with IFRS, the "transaction" is considered for accounting purposes as a reverse acquisition, operation by which IMMOBEL SA legally absorbed the assets and liabilities of ALLFIN GROUP, by issuing, in compensation for the transfer, an adequate number of shares entitled to vote, so the shareholders of the absorbed company legally obtained the control. of IMMOBEL merged.

In a consequence, the legal acquirer (IMMOBEL) should be considered as the accounting acquiree and the legal acquiree (Allfin Group) should be considered the accounting acquirer

Therefore, the consolidated financial statements prepared in accordance with IFRS represent the continuation of the financial of the company legally acquired (ALLFIN GROUP).

CONSOLIDATED FINANCIAL STATEMENTS REFLECT:

  • The assets and liabilities of the legal subsidiary (the accounting acquirer Allfin Group) recognized and measured at their pre‐combination carrying amounts;
  • The identifiable assets and liabilities of the legal parent (the accounting acquiree Immobel) recognized and measured in in accordance with IFRS 3 – Business combination;
  • The retained earnings of the legal subsidiary (the accounting acquirer Allfin Group) before the business combination;
  • The consolidated statement of comprehensive income, which, the transaction being completed on 29 June 2016, represents the consolidated results of the company legally acquired (ALLFIN GROUP) for the first half of 2016 to which must be add the elements described below (Step & acquisition Badwill).
  • Equity: the amount recognised as issued equity interests in the consolidated financial statements is determined by adding the issued equity interest of the legal subsidiary (the accounting acquirer) 'outstanding immediately before the business combination to the fair value of the legal parent '(accounting acquiree) determined in accordance with this IFRS. However, the equity structure (ie the number and type of equity interests issued) reflects the equity structure of the legal parent (the accounting acquiree), including the equity interests the legal parent issued to effect the combination. Accordingly, the equity structure of the legal subsidiary (the accounting acquirer) is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent (the accounting acquiree) issued in the reverse acquisition.

IFRS 3 B19‐B27 requires that comparative figures for the previous year included on the financial statements (Statement of comprehensive income ‐ Statement of financial position ‐ Statement of cash flows and statement of changes in equity) are the consolidated figures of the acquired legally, ALLFIN GROUP, retroactively adjusted to reflect the legal capital of IMMOBEL. However, the figures of IMMOBEL group are also included for information on these financial statements. The result of the semester of IMMOBEL before fusion is provided in note 3bis.

In addition, before the merger, Allfin proceeded to a 'carve‐out' of its non‐core assets, generating a gain of 13.3 MEUR, and distributed a dividend of 30.5 MEUR to its shareholders.

At the balance sheet, this carve‐out resulted in Allfin to a decrease in current assets of 26.9 MEUR (mainly on inventories, investments in joint ventures and cash) and its non‐current liabilities 28.9 MEUR (repayment of bank debt)

(IN THOUSANDS OF EUR)

In accordance with IFRS, the following steps have been applied as part of the business combination :

  • Step acquisition : ALLFIN GROUP has remeasured its interest in IMMOBEL at fair value using the stock price at 29 June 2016, and recognized a gain of 2 832 KEUR recordes in the statement of comprehensive income;
  • Treasury shares : the shares held by ALLFIN GROUP in IMMOBEL before the merger, 1 230 398 shares, have become treasury shares and have therefore been presented as a deduction from equity at the amount remeasured (55 368 KEUR);
  • Adjustment for accounting policies : valuation rules of both merging entities have been compared to ensure comparability of the figures without identifying significant differences
  • ‐ The direct transaction costs related to the capital increase were recorded deducted from the issued capital (200 KEUR); The costs related to the study of the proposed merger are included in the consolidated statement of comprehensive income Other operating expenses for 2 568 KEUR (see note 10).
  • Net assets of Immobel have been remeasured at fair Value and the resulting difference with the consideration transferred has been accounted for in accordance with IFRS3 Business Combinations :
  • ‐ The fair value of the consideration transferred has been measured at acquisition date, i.e. the market value of Immobel as of 29 June 2016, 185 490 KEUR;
  • ‐ All assets and liabilities acquired of Immobel have been measured at fair value, 197 052 KEUR, after a net revaluation of of 8 763 KEUR of its assets and liabilities
  • ‐ The resulting difference between these two fair values (badwill) has been recognized into the consolidated statement of comprehensive income, for 11 562 KEUR.

Badwilll represents the difference between market expectations reflected in the stock price taken as fair value of the consideration transferred in application of IFRS 3 and the fair value of assets and liabilities measured individually.

TRANSITION TABLE FROM CONTRIBUTING FINANCIAL STATEMENTS TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
IMMOBEL ALLFIN
GROUP
SUBTOTAL ADJUSTM
ENTS
TOTAL
PRO‐
FORMA
IMMOBEL PUBLI‐
SHED
STATE‐
MENTS
(*) (**) (***) (*)
OPERATING INCOME 65 476 99 533 165 009 14 394 179 403 ‐65 476 113 927
Turnover 63 537 83 794 147 331 147 331 ‐63 537 83 794
Other operating income 1 939 15 739 17 678 14 394 32 072 ‐1 939 30 133
OPERATING EXPENSES ‐67 716 ‐73 069 ‐140 785 ‐140 785 67 716 ‐73 069
Cost of sales ‐61 636 ‐66 226 ‐127 862 ‐127 862 61 636 ‐66 226
Personnel expenses ‐1 855 ‐1 031 ‐2 886 ‐2 886 1 855 ‐1 031
Amortisation & depreciation ‐ 72 ‐ 127 ‐ 199 ‐ 199 72 ‐ 127
Other operating expenses ‐4 153 ‐5 685 ‐9 838 ‐9 838 4 153 ‐5 685
JOINT VENTURES AND ASSOCIATES ‐ 670 ‐ 452 ‐1 122 ‐1 122 670 ‐ 452
OPERATING RESULT ‐2 910 26 012 23 102 14 394 37 496 2 910 40 406
Financial result ‐2 731 ‐4 930 ‐7 661 ‐7 661 2 731 ‐4 930
Income taxes ‐ 305 ‐3 979 ‐4 284 ‐4 284 305 ‐3 979
RESULT OF THE PERIOD ‐5 946 17 103 11 157 14 394 25 551 5 946 31 497
Share of non‐controlling interests ‐ 19 1 197 1 178 1 178 19 1 197
SHARE OF THE GROUP ‐5 927 15 906 9 979 14 394 24 373 5 927 30 300

(*) The first 6 months of results of IMMOBEL "before fusion" are incorporated directly in the equity and are not published in the income statement.

(**) Including transaction costs, ‐ 2 568 KEUR, and a gain on "carve out" of 13 326 KEUR.

(***) The 14 394 KEUR include the badwill of 11 562 KEUR and the revaluation 'step acquisition' of 2 832 KEUR (see above)

(IN THOUSANDS OF EUR)

TRANSITION TABLE FROM CONTRIBUTING FINANCIAL STATEMENTS TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
IMMOBEL ALLFIN
GROUP
SUBTOTAL ADJUST‐
MENTS
PUBLI‐
SHED
STATE‐
MENTS
NON‐CURRENT ASSETS 68 279 78 044 146 323 ‐40 698 105 625
Investments in joint ventures and associates 64 586 66 040 130 626 ‐42 681 1) 87 945
Other non‐current assets 3 693 12 004 15 697 1 983 2) 17 680
CURRENT ASSETS 339 804 291 229 631 033 3 633 634 666
Inventories 294 789 203 935 498 724 3 633 3) 502 357
Trade receivables and other current assets 16 116 68 657 84 773 84 773
Cash and cash equivalents 28 899 18 637 47 536 47 536
TOTAL ASSETS 408 083 369 273 777 356 ‐37 065 740 291
TOTAL EQUITY 188 289 146 166 334 455 ‐43 773 290 682
Share capital 60 102 37 054 97 156 97 156
Reserves 128 223 107 034 235 257 ‐43 773 4) 191 484
NON‐CONTROLLING INTERESTS ‐ 36 2 078 2 042 2 042
NON‐CURRENT LIABILITIES 118 921 174 178 293 099 3 184 296 283
Financial debts 118 154 164 348 282 502 2 310 3) 284 812
Other non‐current liabilities 767 9 830 10 597 874 2) 11 471
CURRENT LIABILITIES 100 873 48 929 149 802 3 524 153 326
Financial debts 47 563 13 252 60 815 3 524 3) 64 339
Trade payables and other current liabilities 53 310 35 677 88 987 88 987
TOTAL EQUITY AND LIABILITIES 408 083 369 273 777 356 ‐37 065 740 291

ADJUSTMENTS :

1) Step acquisition 2 832
Adjustments to fair value of investments in joint ventures and associates of
Immobel following the purchase price allocation: 9 855
Treasury shares ‐55 368
Total ‐42 681

2) Recognition of deferred tax assets and liabilities of Immobel following the purchase price allocation

3) Adjustment to fair value of assets and liabilities of Immobel following the purchase price allocation

Total ‐43 773
Treasury shares ‐55 368
Step acquisition 2 832
4) Net adjustments to fair value 8 763

The adjustments to fair value related to inventories and fiancial debts at fixed rate.

The details of these adjustments is available in the pro‐forma accounts on the website www.immobel.be

(IN THOUSANDS OF EUR)

3BIS. RESULTS IMMOBEL "BEFORE MERGER"

The first 6 months of results of IMMOBEL "before fusion" are integrated directly in equity and are not in the published income statement

The result of the semester of IMMOBEL before merger, and excluding the impact of the costs related to the transaction, is negative up to ‐ 5,946 TEUR. This result is the consequence of lack of operating margin provided by the "Offices" sector (despite the sales of Westside and Okraglak projects) and a performance of the Landbanking activity below expectations.

OPERATING INCOME
65 476
40 561
Turnover
63 537
36 828
52 074
7 232
4 231
Other operating income
1 939
3 733
OPERATING EXPENSES
‐67 716
‐29 309
Cost of sales
‐61 636
‐19 898
‐52 309
‐6 000
‐3 327
Personnel expenses
‐1 855
‐3 219
The "Offices" sector record the sales of the
Amortisation & depreciation
‐ 72
‐ 268
projects Westside (Gd Duchy of Luxembourg)
Other operating expenses
‐4 153
‐5 924
and Okraglak (Poland) but the operating
JOINT VENTURES AND ASSOCIATES
‐ 670
603
margin generated by these projects remains
OPERATING RESULT
‐2 910
11 855
low (0.5 MEUR).
Interest income
1 253
1 093
The "Residential" segment is influenced by the
Interest expense
‐3 868
‐4 487
promotions Bella Vita, Charmeraie, Clos
Other financial income
97
16
Bourgeois, Lindepark, Oostduinkerke Bredene
Other financial Expenses
‐ 213
‐ 172
and Chastre.
FINANCIAL RESULT
‐2 731
‐3 550
Sales did not allow to absorb Immobel
Income taxes
‐ 305
‐ 40
structural costs and expenses of interests,
RESULT OF THE PERIOD
‐5 946
8 265
bringing the operating result and the net
Share of non‐controlling interests
‐ 19
‐ 6
result to be negative
SHARE OF IMMOBEL
‐5 927
8 271
30‐06‐2016 30‐06‐2015 Offices Residen‐
tial
Landban‐
king
Total
63 537
‐61 636
tial Landban‐
king
Total
The "Offices" sector record the sales of the

(IN THOUSANDS OF EUR)

4. MAIN ACCOUNTING JUDGMENTS AND ESTIMATES

Main accounting judgments and estimates are identical to those given on page 98 (paragraph 20) of the 2015 Annual Report. They mainly concern the deferred tax assets, impairment of assets, provisions, projects in inventory and construction contracts.

MAIN RISKS AND UNCERTAINTIES

The Immobel Group faces the risks and uncertainties inherent to the property development sector as well as those associated with the economic situation and the financial world.

The Board of Directors considers that the main risks and uncertainties included in pages 69 to 71 of the annual report 2015 are still relevant for the remaining months of 2016.

5. SCOPE OF CONSOLIDATION

The number of entities included in the scope of consolidation evolves as follows:

30‐06‐2016 31‐12‐2015
Subsidiaries ‐ Global method of consolidation 55 28
Joint Ventures ‐ Equity method 24 18
Associates ‐ Equity method 2 2
Total 81 48

During the first half year of 2016, the consolidation scope noted following changes :

‐ Disposal of 100% of shares of the company WESTSIDE

  • ‐ Liquidation of the company INTERGENERATIONNEL DE WATERLOO, 50,5% owned
  • ‐ Entry in the scope of consolidation following the merger by absorption of ALLFIN GROUP:
‐ Subsidiaries ‐ Global method of consolidation 28
-- ------------------------------------------------- ----

‐ Joint Ventures ‐ Equity method 7

6. OPERATING SEGMENT ‐ FINANCIAL INFORMATION BY BUSINESS SEGMENT

The segment reporting is presented in respect of the operational segments. The results and asset and liability items of the segment include items that can be attributed to a sector, either directly, or allocated on an allocation formula. The core business of the Company, real estate development, includes the activities of "offices", "residential development" and "land development".

There are no transactions between the different sectors.

The Group's activity is carried out in Belgium, The Grand Duchy of Luxemburg and Poland.

The breakdown of sales by country depends on the country where the activity is executed.

In accordance with IFRS, the Company applied since 1st January 2015, IFRS 11, which amends the strong readings of the financial statements of the Company but does not change the net income and shareholders'equity.

The Board of Directors believes that the financial data in application of the proportional consolidated method

(before IFRS 11) give a better picture of the activities and financial statements.

The "Internal" financial statements are those used by the Board and Management to monitor the financial performance of the Group.

(IN THOUSANDS OF EUR)

SUMMARY OF THE INTERNAL CONSOLIDATED FINANCIAL STATEMENTS

INCOME STATEMENT 30‐06‐2016 30‐06‐2016
Published Internal
OPERATING INCOME 113 927 144 684
Turnover 83 794 113 911
Other operating income 30 133 30 773
OPERATING EXPENSES ‐73 069 ‐101 864
Cost of sales ‐66 226 ‐92 964
Personnel expenses ‐1 031 ‐1 585
Amortisation, depreciation and impairment of assets (including reversals) ‐ 127 ‐ 179
Other operating expenses ‐5 685 ‐7 136
JOINT VENTURES AND ASSOCIATES ‐ 452
Share in the net result of joint ventures and associates ‐ 452
OPERATING RESULT 40 406 42 820
Interest income 1 515 1 544
Interest expense ‐4 585 ‐5 956
Other financial income and expenses ‐1 860 ‐1 968
FINANCIAL RESULT ‐4 930 ‐6 380
Share in the net result of investments in associates 0 ‐ 38
RESULT FROM CONTINUING OPERATIONS BEFORE TAXES 35 476 36 402
Income taxes ‐3 979 ‐4 905
RESULT FROM CONTINUING OPERATIONS 31 497 31 497
RESULT OF THE PERIOD 31 497 31 497
Share of non‐controlling interests 1 197 1 197
SHARE OF IMMOBEL 30 300 30 300

CONSOLIDATED INCOME STATEMENT (INTERNAL) PER SEGMENT :

Offices Residen‐ Landban‐ Unalloca‐ TOTAL
tial king ted items
(*)
Turnover 40 320 72 328 1 263 113 911
Other operating income 360 2 586 107 27 720 30 773
OPERATING INCOME 40 680 74 914 1 370 27 720 144 684
Cost of sales ‐35 545 ‐56 425 ‐ 993 ‐92 963
Personnel expenses, amortisation and other expenses ‐2 648 ‐2 893 ‐ 792 ‐2 568 ‐8 901
OPERATING EXPENSES ‐38 193 ‐59 318 ‐1 785 ‐2 568 ‐101 864
OPERATING RESULT 2 487 15 596 ‐ 415 25 152 42 820

(*) Unique accounting effects related to the merger

Operating result 25 152
Costs related to the study of the proposed merger ‐2 568
Subtotal 27 720
Fair value IMMOBEL shares held by ALLFIN 2 832
Impact of the badwill 11 562
Impact of the carve‐out 13 326

(IN THOUSANDS OF EUR)

SUMMARY OF THE INTERNAL CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30‐06‐2016 30‐06‐2016
Published Internal
NON‐CURRENT ASSETS 105 625 17 962
Investments in joint ventures and associates 87 945 199
Other non‐current assets 17 680 17 763
CURRENT ASSETS 634 666 804 190
Inventories 502 357 658 314
Trade receivables and other current assets 47 536 45 069
Cash and cash equivalents 84 773 100 807
TOTAL ASSETS 740 291 822 152
TOTAL EQUITY 290 682 290 682
NON‐CURRENT LIABILITIES 296 283 316 099
Financial debts 284 812 302 193
Other non‐current liabilities 11 471 13 906
CURRENT LIABILITIES 153 326 215 371
Financial debts 64 339 113 398
Trade payables and other current liabilities 88 987 101 973
TOTAL EQUITY AND LIABILITIES 740 291 822 152

CONSOLIDATED FINANCIAL POSITION (INTERNAL) PER SEGMENT :

OFFICES RESIDEN‐ LANDBAN‐ CONSOLI‐
TIAL KING DATED
Segment assets 285 185 329 883 87 540 702 608
Unallocated items (*) 119 544
TOTAL ASSETS 285 185 329 883 87 540 822 152
Segment liabilities 40 567 43 566 5 670 89 803
Unallocated items (*) 441 667
TOTAL LIABILITIES 40 567 43 566 5 670 531 470

(*) Unallocated items: Assets: Investments in associates & participating interests available for sale ‐ Deferred tax assets ‐ Other non‐current assets ‐ Cash ‐ Tax receivables ‐ Cash and equivalents ‐ Liabilities: Deferred tax liabilities ‐ Financial debts ‐ Tax liabilities ‐ Derivative financial instruments. Intangible assets, property plan and equipment are allocated to segments based on an allocation formula.

(IN THOUSANDS OF EUR)

SUMMARY OF THE INTERNAL CONSOLIDATED FINANCIAL STATEMENTS

30‐06‐2016 30‐06‐2016
INVENTORIES Published Internal
Allocation of inventories by segment is as follows:
Offices 194 634 275 276
Residential 225 332 300 647
Landbanking 82 391 82 391
TOTAL INVENTORIES 502 357 658 314
Allocation of inventories by geographical area is as follows:
Belgium 415 546 500 964
Grand‐Duchy of Luxemburg 27 736 88 273
Poland 59 075 69 077
TOTAL INVENTORIES 502 357 658 314
The book value of inventories evolve as follows:
INVENTORIES AS AT 1 JANUARY 175 414 199 674
Purchases and Developments of the year 92 859 103 121
Disposals of the year ‐66 261 ‐77 506
Merger IMMOBEL / ALLFIN Group 298 422 430 919
Borrowing costs 1 923 2 106
MOVEMENTS DURING THE YEAR 326 943 458 640
INVENTORIES AS AT 30 JUNE 502 357 658 314

Breakdown of the movements of the period (published accounts) :

Per segment Per geographical area
Offices Residen‐
tial
Landban‐
king
TOTAL Belgium Grand‐
Duchy of
Luxem‐
burg
Poland TOTAL
Purchases and Developments 26 620 66 239 92 859 69 604 23 255 92 859
Disposals ‐18 792 ‐47 469 ‐66 261 ‐48 658 ‐17 603 ‐66 261
Merger IMMOBEL / ALLFIN Group 167 625 48 406 82 391 298 422 239 347 59 075 298 422
Borrowing costs 71 1 852 1 923 1 923 1 923
TOTAL 175 524 69 028 82 391 326 943 262 216 5 652 59 075 326 943

Breakdown of the movements of the period (internal accounts) :

Per segment Per geographical area
Offices Residen‐
tial
Landban‐
king
TOTAL Belgium Grand‐
Duchy of
Luxem‐
burg
Poland TOTAL
Purchases and Developments 27 548 75 573 103 121 79 866 23 255 103 121
Disposals ‐18 792 ‐58 714 ‐77 506 ‐59 903 ‐17 603 ‐77 506
Merger IMMOBEL / ALLFIN Group 236 649 111 879 82 391 430 919 301 305 60 537 69 077 430 919
Borrowing costs 189 1 917 2 106 2 106 2 106
TOTAL 245 594 130 655 82 391 458 640 323 374 66 189 69 077 458 640

(IN THOUSANDS OF EUR)

7. TURNOVER 30‐06‐2016 30‐06‐2015*
Turnover is allocated as follows per segment:
Offices 24 776 23 853
Residential 59 018 23 849
Landbanking
TOTAL TURNOVER 83 794 47 702

The majority of the turnover is realized in Belgium

The "Offices" turnover is mainly influenced by the sale of the Boiteux project.(Chambon).

The projects Solvay, Chambon, Flint, Lake Front and Riverview contribue in particular to the "Residential" turnover.

8. OTHER OPERATING INCOME 30‐06‐2016 30‐06‐2015*
Break down as follows :
Rental income on properties available for sale or awaiting for development 2 413 2 033
Gain on the "Carve out" prior to the merger IMMOBEL / ALLFIN GROUP 13 326
Badwill resulting from the merger IMMOBEL / ALLFIN GROUP 11 562
Fair value IMMOBEL shares held by ALLFIN 2 832
Other income (recoveries of taxes and withholdings, miscellaneous reinvoicing…) 957
TOTAL OTHER OPERATING INCOME 30 133 2 990

The "Carve out" consists in the sale by ALLFIN GROUP of non‐core assets prior to the transaction in accordance with the merger agreement.

9. COST OF SALES

Cost of sales is related to the turnover and the projects mentioned in note 7.

10. OTHER OPERATING EXPENSES 30‐06‐2016 30‐06‐2015*
Break down as follows:
Services and other goods ‐4 135 ‐4 040
Other expenses ‐1 550 ‐ 896
Provisions
OTHER OPERATING EXPENSES ‐5 685 ‐4 936

Services and other goods includes in particular the related to the study of the proposed merger with ALLFIN GROUP, for an amount of KEUR 2 568.

11. JOINT VENTURES AND ASSOCIATES

The share in the result of joint ventures and associates, ‐ 452 KEUR, relates to the Solvay project and the share of ALLFIN in the results of IMMOBEL before the merger.

12. FINANCIAL RESULT 30‐06‐2016 30‐06‐2015*
The financial result breaks down as follows:
Cost of gross financial debt at amortised cost ‐4 362 ‐3 940
Fair value changes on financial instruments ‐ 469 ‐ 473
Fair value changes on financial assets ‐ 860
Losses on sales of financial assets ‐ 719 ‐ 382
Interest income 594 2 083
Gains on sales of financial assets 910 2 981
Other financial charges & income ‐ 24 345
FINANCIAL RESULT ‐4 930 614

(IN THOUSANDS OF EUR)

13. INCOME TAXES

Income taxes are as follows: 30‐06‐2016 30‐06‐2015*
Current income taxes ‐3 313 ‐1 922
Deferred income taxes ‐ 666 ‐1 896
TOTAL OF TAX EXPENSES RECOGNIZED IN THE STATEMENT OF COMPREHENSIVE INCOME ‐3 979 ‐3 818

14. RÉSULTAT PAR ACTION

Due to the absence of potential dilutive ordinary shares in circulation, the basic result per share is the same as the diluted result per share.

The calculation of the average number of action is determined by IFRS 3 B 26.

Basic earnings and diluted earnings per share are determined using the following information:

Net result from continuing operations 31 497
Group's share in the net result for the year 30 300
Net earnings per
share (EUR)
Average number of shares considered for basic earnings and diluted earnings : Continuing
operations
Compre‐
hensive
income
New shares issued on the basis of the exchange ratio of the merger (IFRS

calculation 3 B 26)
5 875 369 5.36 5.16
‐ Outstanding shares at June 30, 2016 9 997 356 3.15 3.03
‐ Outstanding shares (excluding treasury shares) at June 30, 2016 8 766 958 3.59 3.46

15. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

The contributions of joint ventures and associates in the statement of financial position and the statement of comprehensive income is as follows :

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30‐06‐2016 31‐12‐2015*
Investments in joint ventures 87 746 66 122
Investments in associates 199
TOTAL INVESTMENTS INCLUDED IN THE STATEMENT OF FINANCIAL POSITION 87 945 66 122

The book value of investments in joint ventures and associates evolve as follows:

VALUE AS AT 1 JANUARY 66 122
Share in result ‐ 452
Acquisitions, capital injections and loans to joint ventures and associates 470
Repayment of capital and advances by joint ventures and associates ‐ 100
Fair value IMMOBEL shares held by ALLFIN 2 832
Treasury shares ‐55 368
Merger IMMOBEL / ALLFIN Group 64 586
Fair value resulting from the business combination 9 855
CHANGES FOR THE YEAR 21 823
VALUE AS AT 30 JUNE 87 945

(IN THOUSANDS OF EUR)

15. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

The table below shows the contribution of joint ventures and associates in the statement of financial position and the statement of comprehensive income.

% INTEREST BOOK VALUE OF THE
INVESTMENTS
SHARE IN
THE
COMPRE‐
HENSIVE
INCOME
NAMES 30‐06‐2016 31‐12‐2015 30‐06‐2016 31‐12‐2015 30‐06‐2016
Bella Vita 50.0% 8 134
CBD International 50.0% ‐ 793
Château de Beggen 50.0% 228
Espace Trianon 50.0% 1 790
Fanster Enterprise 50.0% 1 245
Foncière du Parc 50.0% 124
Gateway 50.0% 603
Ilot Ecluse 50.0% 189
Intergénérationnel de Waterloo 50.0% 0
Pef Kons Investment 33.3% 20 458
M1 50.0% 4 595
M7 50.0% 551
RAC 2 40.0% 7 930
RAC 3 40.0% 3 284
RAC 4 40.0% 12 153
Société Espace Léopold 50.0% 3 023
Temider Enterprise 50.0%
Universalis Park 50.0% 10 612
Vilpro 50.0% 116
Keyenveld, PA33 ‐ 44 ‐ 2, les Deux Princes (Solvay) 50.0% 50.0% 13 522 11 732 1 317
Argent Office (Chambon) 50.0% 50.0% ‐ 18 85
TOTAL JOINT VENTURES 87 746 11 817 1 317
DHR Clos du Château 33.3% 120
Espace Midi 20.0%
Graspa Development 25.0% 79
IMMOBEL 29.85% 54 305 ‐1 769
TOTAL ASSOCIATES 199 54 305 ‐1 769
TOTAL JOINT VENTURES AND ASSOCIATES 87 945 66 122 ‐ 452

(IN THOUSANDS OF EUR)

16. INVENTORIES

Inventories consist of buildings and land acquired for development and resale.

Allocation of inventories by segment is as follows: 30‐06‐2016 31‐12‐2015*
Offices 194 634 22 434
Residential 225 332 152 980
Landbanking 82 391
TOTAL INVENTORIES 502 357 175 414
Allocation of inventories by geographical area is as follows: 30‐06‐2016 31‐12‐2015*
Belgium 415 546 154 038
Grand‐Duchy of Luxemburg 27 736 21 376
Poland 59 075
TOTAL INVENTORIES 502 357 175 414
Break down of the movements of the year : 30‐06‐2016 31‐12‐2015*
INVENTORIES AS AT 1 JANUARY 175 414 159 998
Purchases an developments of the year 92 859 80 316
Disposals of the year ‐66 261 ‐63 800
Merger IMMOBEL / ALLFIN Group 298 422
Borrowing costs 1 923 2 731
Change in consolidation method ‐3 831
MOVEMENTS DURING THE YEAR 326 943 15 416
INVENTORIES AS AT 30 JUNE 502 357 175 414

17. TRADE RECEIVABLES

Trade receivables refer to the following segments: 30‐06‐2016
Offices 1 070
Residential 11 708
Landbanking 2 484
TOTAL TRADE RECEIVABLES 15 262

18. OTHER CURRENT ASSETS

The components of this line item are: 30‐06‐2016
Other receivable 25 613
of which: advances to joint ventures, associates and on projects in participation 12 390
taxes (other than income taxes) and VAT receivable 3 910
receivable on sale (escrow account) 1 583
grants and allowances receivable 1 617
advances and guarantees paid 4 380
other 1 733
Deferred charges and accrued income 4 961
of which: on projects in development 4 599
other 362
TOTAL OTHER CURRENT ASSETS 30 574

(IN THOUSANDS OF EUR)

and are related to the following segments: 30‐06‐2016
Offices 13 152
Residential Development 14 873
Land Development 2 549
TOTAL OTHER CURRENT ASSETS 30 574

19. INFORMATION RELATED TO THE NET FINANCIAL DEBT

The Group's net financial debt is the balance between the cash and cash equivalents and the financial debts (current and non current). It amounts to ‐ 264 378 KEUR as at 30 June 2016 compared to ‐ 92 064 KEURs at 31 December 2015.

30‐06‐2016 31‐12‐2015*
Cash and cash equivalents 84 773 86 687
Non current financial debts 284 812 152 191
Current financial debts 64 339 26 560
NET FINANCIAL DEBT 264 378 92 064

The Group's gearing ratio (net financial debt / equity) is 91% as at 30 June 2016.

CASH AND CASH EQUIVALENTS

Cash deposits and cash at bank and in hand amount to 84 773 KEUR compared to 86 687 KEUR at the end of 2015, representing a decrease of 1 914 KEUR.

The explanation of the change in available cash is given in the consolidated cash flow statement.

FINANCIAL DEBTS

Financial debts increase with 170 400 KEUR, from 178 751 KEUR at 31 December 2015 to 349 151 KEUR at 30 June 2016.

The components of financial debts are as follows: 30‐06‐2016 31‐12‐2015*
Bond issue maturity 28‐03‐2018 at 5.50% ‐ nominal amount 60 MEUR 59 531
Bond issue maturity 28‐03‐2018 at 5.50% ‐ fair value adjustment 2 310
Bond issue maturity 27‐06‐2019 at 6.75% ‐ nominal amount 36.65 MEUR 35 377 35 298
Credit institutions 187 594 116 893
NON CURRENT FINANCIAL DEBTS 284 812 152 191
Bond issue maturity 21‐12‐2016 at 7% ‐ nominal amount 40 MEUR 39 923
Bond issue maturity 21‐12‐2016 at 7% ‐ fair value adjustment 3 524
Credit institutions 18 552 26 560
Bonds ‐ not yet due interest 2 340
CURRENT FINANCIAL DEBTS 64 339 26 560
TOTAL FINANCIAL DEBTS 349 151 178 751
Financial debts at fixed rates 140 665 89 823
Financial debts at variable rates 206 146 88 928
Bonds ‐ not yet due interest 2 340
Amount of debts guaranteed by securities 206 146 143 101
Book value of Group's assets pledged for debt securities 412 919 233 142

(IN THOUSANDS OF EUR)

Financial debts evolve as follows: 30‐06‐2016 31‐12‐2015*
FINANCIAL DEBTS AS AT 1 JANUARY 178 751 171 667
Contracted debts 76 757 20 968
Repaid debts ‐74 750 ‐13 884
Exit from the scope of consolidation ‐3 428
Merger IMMOBEL / ALLFIN Group 165 717
Fair value resulting from the business combination 5 834
Amortization of deferred debt issue expenses 270
Charges for the year 170 400 7 084
FINANCIAL DEBTS AS AT 31 DECEMBER 349 151 178 751

All the financial debts are denominated in EUR.

Except the bonds, the financing of the Group and the financing of the Group's projects are provided based on a short‐term rate, the 1 to 12 month euribor, increased by commercial margin.

IMMOBEL disposes at June 30, 2016 of 2 Corporate credit lines, one of 60 MEUR, unused at June 30, the other of 30 MEUR, fully used by 30 June. These two credit lines are due in June 2017.

Moreover, IMMOBEL disposes at June 30, 2016 of confirmed bank credit lines for 227 MEUR of which 176 MEUR used at end of June 2016. These credit lines (project financing credits) are specific for certain projects in development.

FINANCIAL COMMITMENTS

The Group is, for the majority of the mentioned financial debts, subject to a number of financial commitments. These commitments are taking into account the equity, the net financial debt and its relation with the equity and the inventories. At 30 June 2016, as for the previous years, the Group was in conformity with all these financial commitments.

The table below summarizes the maturity of the financial liabilities of the Group:

DUE IN 2016 2017 2018 2019 2020 & + Total
Bonds 43 524 62 310 35 650 141 484 *
Bonds ‐ Interest 2 340 2 340
Project Financing Credits 11 765 43 610 61 697 55 674 33 400 206 146
TOTAL AMOUNT OF DEBTS 57 629 43 610 124 007 91 324 33 400 349 970

* The amount on the balance sheet, 140 665 KEUR, includes 819 KEUR charges to be amortized until maturity in 2016, 2018. and 2019.

INTEREST RATE RISK

On the basis of the situation as per 30 June 2016, each change in interest rate of 1% involves an annual increase or decrease of the interest charge on debts at variable rate of 2 061 KEUR.

In the frame of the availability of long term credits, Corporate or Project Financing, the Group uses financial instruments mainly for the hedging of interest rates.

At 30 June 2016, the derivative financial instruments have been concluded to hedge future risks and are the following:

Notional
Period Instruements Strike amounts
09/2015 ‐ 09/2018 IRS bought 0.10% 26 000
07/2014 ‐ 07/2017 CAP bought 2.00% 16 000
07/2014 ‐ 07/2017 CAP bought 2.00% 10 000
07/2014 ‐ 07/2017 CAP bought 2.00% 10 000
09/2014 ‐ 12/2019 IRS bought 0.855% 54 609
Total 116 609

(IN THOUSANDS OF EUR)

The fair value of derivatives is determined based on valuation models and future interest rates ("level 2"). The change in fair value of financial instruments is recognized through the statement of income as thos have not been designated as cash flow hedges.

FAIR VALUE OF FINANCIAL INSTRUMENTS 30‐06‐2016 31‐12‐2015*
Hedging instruments:
‐ Bought CAP Options 0 0
‐ Bought IRS Options 2 395 1 658
TOTAL 2 395 1 658
CHANGE IN FAIR VALUE OF THE DERIVATIVE FINANCIAL INSTRUMENTS
SITUATION AT 1 JANUARY 1 658
Changes during the period:
‐Change in the fair value recognised in the consolidated income statement 469
‐Merger IMMOBEL / ALLFIN Group 268
SITUATION AT 30 JUNE 2 395

No instrument has been documented as hedge accounting at 30 June 2016.

20. PROVISIONS

The components of provisions are as follows: 30‐06‐2016 31‐12‐2015*
Provisions related to the sales 2 943
Other provisions 10 52
TOTAL PROVISIONS 2 953 52
RELATED
TO THE
TOTAL PROVISIONS SALES OTHER
PROVISIONS AS AT 1 JANUARY 52 52
Use & reversal ‐ 52 ‐ 52
‐Merger IMMOBEL / ALLFIN Group 2 943 10 2 953
CHANGES FOR THE YEAR 2 943 ‐ 42 2 901
PROVISIONS AS AT 30 JUNE 2 943 10 2 953
From which current provisions 2 953
Allocation of this position by segment is as follows: 30‐06‐2016
Offices 2 680
TOTAL 2 953
Landbanking 95
Residential 178

21. TRADE PAYABLES

This account is allocated by segment as follows: 30‐06‐2016
Offices 9 690
Residential 16 997
Landbanking 3 720
TOTAL TRADE PAYABLES 30 407
of which current trade payables 29 904

(IN THOUSANDS OF EUR)

22. TAX LIABILITIES

This item includes 7.9 MEUR withholding tax withheld on dividends paid to the former shareholders of ALLFIN GROUP.

23. OTHER CURRENT LIABILITIES

The components of this account are: 30‐06‐2016
Personnel debts 338
Taxes (other than income taxes) and VAT payable 3 012
Advances received ‐ including in particular advances received for the Gateway project (20.9 MEUR)
and advances received on projects from the merger ALLFIN GROUP (MEUR 6.6) 28 751
Advances from joint ventures and associates 5 854
Accrued charges and deferred income 1 503
Operating grants
Other 3 846
TOTAL OTHER CURRENT LIABILITIES 43 304
Other current liabilities are related to the following segments: 30‐06‐2016
Offices 25 644
Residential 15 838
Landbanking 1 822
TOTAL OTHER CURRENT LIABILITIES 43 304

24. CHANGE IN WORKING CAPITAL

The change in working capital by nature is established as follows: 30‐06‐2016
Inventories, including acquisition and sales of entities that are not considered as
business combinations ‐28 521
Current assets / Current liabilitiesTrade receivables & Other current assets 12 920
CHANGE IN WORKING CAPITAL ‐15 601

25. CASH AND CASH EQUIVALENT FROM THE MERGER

This is cash and cash equivalents from the accounting acquired company (IMMOBEL)

on the date of the merger.

This cash is as follows:

Cash and cash equivalents as at 1 January 2016 16 952
Cash from operations before changes in working capital ‐6 451
Change in working capital 49 838
Paid / received interests ‐3 875
Paid taxes ‐ 254
Changes in intangible, tangible and other non‐current assets 161
Increase in financial debts 4 562
Repayement of ficnancial debts ‐44 817
Net increase or decrease (‐) in cash and cash equivalents ‐ 836
Cash and cash equivalents as at 30 June 2016 16 116

(IN THOUSANDS OF EUR)

26. RELATED PARTIES

Relations with related parties relate to IMMOBEL's relations with main shareholders and senior executives as well as its joint ventures and associates.

In the period under review mainly include:

Merger agreement : on April 6, 2016, Allfin and Immobel announced that an agreement was concluded to combine the activities of Immobel and Allfin by a merger by absorption of Allfin by Immobel. The closing of the transaction occured, as planned, on June 29, 2016, following approval by the Board, the validation by the auditor, the approval by the antitrust authorities, the associated procedures for consultation and the final approval by the shareholders.

The Board of Directors of 29 September 2016 approved the contract for the Executive President and the amendment of the contract for the Chief Executive Officer, as proposed by the President of the Nomination & Remuneration Committee.

27. MAIN CONTINGENT ASSETS AND LIABILITIES

30‐06‐2016 31‐12‐2015*
Guarantees from third parties on behalf of the Group with respect to:
‐ inventories 171 228 133 149
‐ other assets 111
TOTAL GUARANTEES FROM THIRD PARTIES ON BEHALF OF THE GROUP 171 339 133 149
These guarantees consist of:
‐ guarantees "Real estate trader" (acquisitions with registration fee at reduced rate) 32 408 14 320
‐ guarantees "Law Breyne" (guarantees given in connection with the sale of houses
or apartments under construction) 124 824 117 650
‐ guarantees "Good end of execution" (guarantees given in connection with the execution 11 308
of works)
‐ guarantees "Payment" and "Other" (successful completion of payment, rental) 2 799 1 179
TOTAL 171 339 133 149
Mortgage power ‐ Amount of inscription 473 784 336 406
Book value of Group's assets pledged for debt securities related to investment property and
inventory as a whole 431 739 233 142
BOOK VALUE OF PLEDGED GROUP'S ASSETS 431 739 233 142
Amount of debts guaranteed by above securities
‐ Non current debts 187 594 116 541
‐ current debts 18 552 26 560
TOTAL 206 146 143 101

28. SEASONAL CHARACTER OF THE RESULTS

Due to intrinsic character of its activity, Real Estate Development, and due to operations resulting from the business combination, the results of the first half year 2016 can not be extrapolated over the whole year. These results depend from the final transactions before 30 June 2016.

(IN THOUSANDS OF EUR)

29. EVENTS SUBSEQUENT TO INTERIM REPORTING DATE

No significant event that may change the financial statements occured from the reporting date on 30 June 2016 up to 28 September 2016 when the financial statements were approved by the Board of Directors.

OTHER EVENTS OCCURRING AFTER THE CLOSURE

Polvermillen

After the closure on 30 June 2016, Immobel acquired the shares of the company Tractim S.A. [société anonyme – limited company], owner of the former brownfield site called Secalt Tractel SA. More commonly known as the "former industrial site of Polvermillen", this parcel of more than 2.6 hectares in the heart of the capital will enable the group to diversity its project portfolio and consolidate its position in the Luxembourg market over the long term. This transaction complements the previous acquisition of a company that owns an adjoining plot of 26 ares. Thus, over an area of just under 3 hectares, some 25,000 m² will be dedicated to the residential development (houses, lofts, apartments, studios) comprising 210 dwellings, and 1,600 m² to offices.

Belair

Immobel and its partner Breevast have also concluded the rental of the Belair building to the Brussels‐Capital Region for a fixed period of 18 years. The transaction was effected on the basis of a office rent of EUR 185/m² per year and the owner being responsible for a large portion of the leasehold improvements, which should represent, at the sale, an asset value of more than EUR 50 million, taking into account the current market conditions.

Mobius 1 – Place de Brouckère

On 13 September 2016, Immobel and Allianz announced that Allianz was going to vacate its offices situated in Place de Brouckère and consolidate all of its operational activities in Brussels in a new head office situated in Boulevard du Roi Albert II, in the Quartier Nord in Brussels. It chose one of the two towers of the Mobius project, being developed by Immobel. Allianz has opted for a modern, green building constructed according to its specific needs, while being well served by the transport network. The move is planned between late 2019 and early 2020. Following the delivery of the Allianz Tower, after fulfilling the conditions precedent, the land in Place de Brouckère, where the current Allianz head office is situated, will be acquired. Its redevelopment by BPI and Immobel will become a reality from 2020. The Brouckère site has a permit obtained by Allianz for some 55,000 m². The programme will be revised in order to incorporate a greater urban mix. The project will comprise, for the most part, residential areas (conventional, prestige or student), offices or a hotel. The ground floors will offer a range of shops, thus being part of the dynamic redeployment plan for the pedestrian areas and for Brussels city centre

WARNING

This report contains information that is not historical but prospective. The achievement of forward‐looking statements in this report are subject to risks and uncertainties associated with many parameters, including general economic factors, interest rate and exchange rates fluctuations , the real estate market trends and his legislation, environmental and administrative standards, political stability, etc. Accordingly, results subsequently achieved could differ from those presented in the forward‐looking statements. Forward‐looking statements can be identified in this report by the use of words such "expects", intends, "will", "believe", "hope", "could", "estimate", "objective", " potential" or similar term. Should know or unknow risks or uncertainties materialize, or should expectations prove iinaccurate, actual results could differ from those expected. IMMOBEL undertakes no obligation to publicly update such forward‐looking information.

3. STATEMENT FROM THE RESPONSIBLE PERSONS

AHO Consulting bvba, represented by M. Alexander HODAC, in his capacity of Chief Executive Officer and Val U Invest sprl, represented by M. Valéry Autin, in his capacity of Chief Financial Officer, declare that, as far as they are aware :

‐ the interim report contains a true representation of the major events and, where appropriate, of the main transactions between the parties involved that took place during the first 6 months of the financial year and of their impact on the set of summarised accounts, as well as a description of the main risks and uncertainties for the remaining months of the financial year.

‐ the set of summarised financial statement, which have been drawn up in accordance with applicable accounting regulations, and which have been the subject of a limited review by the auditor, give a true representation of the financial situation and profits and losses of the IMMOBEL Group and of its subsidiaries.

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