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KMC Properties ASA Interim / Quarterly Report 2010
3645_rns_2010-08-20_fe558bed-d9c4-4cb6-976f-f8051e7d7ca7.pdf
Interim / Quarterly Report
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Storm Real Estate ASA
Interim report January – June 2010
STORM
real estate asa
Storm Real Estate ASA's business strategy is to acquire and manage modern yielding commercial properties in Moscow and St Petersburg.
STORM real estate asa
Highlights H1 2010
- Properties 100% let.
- Rental income 13% up year-on-year.
- Operating profit before valuation of properties 2.0 MUSD.
- Value increase of properties 2.2 MUSD.
- The period ended with introduction to Oslo Stock Exchange, main market on 6 July 2010.
- A Letter of Intent was signed to acquire one additional property, but the company chose to cancel the transaction due to negative findings in the due diligence process.
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
Managed by STORM capital management
www.stormcapital.co.uk
STORM real estate asa
Board of Directors report
Summary
During the first six months of 2010 the company has focused on maintaining the rent level and cost level on the properties. The buildings are still fully let out. Some contracts have expired during the period, but the company has signed new contracts without any time gaps, despite a lower demand compared to pre-crisis levels.
In April, the company signed a Letter of Intent to acquire a third building. A comprehensive due diligence process was done on the target. This process revealed details and risks which made the company not wanting to complete the transaction at the agreed terms. The company continues to work on a number of potential acquisition opportunities, and we still expect addition to the portfolio in 2010.
Storm Real Estate has had a long term plan to list the company on Oslo Stock Exchange, and the company has during the first six months worked hard to reach this goal. On 6 July 2010 the company was listed on the main market on the Oslo Stock Exchange. The Board believes this could have a positive effect on the share. It will hopefully bring increased attention to the company, attract institutional investors and increase the liquidity of the share, which would be positive for the company's shareholders and future growth.
Income Statement H1 2010
The company's operations are solid and Operating Profit before valuation of properties is in accordance with expectations.
Total comprehensive income is 0.0 MUSD for the 6 months to June 2010. This compares to 6.0 MUSD for the same period in 2009.
The group's revenues were 5.4 MUSD for the first 6 months in 2010, compared the 4.8 MUSD for the same period last year. This represents an increase of 13% in revenues. Primarily this is due to revenues from the acquired Grifon House being included in the whole of the period in 2010. The building was acquired on 1 April 2009.
Property related expenses were 1.4 MUSD. This compares to 1.1 MUSD in the same period last year. The increase in costs is also related to the inclusion of Grifon House, but also the depreciation of US dollars to the Russian Ruble since H1 2009 has had an effect. Generally, the cost level is stable from the same period last year.
The sum of other operating expenses is 2.0 MUSD. In the same period last year, a one-off transaction of 1.4 MUSD was seller of one of our buildings. Comparable operating expenses for the first six months in 2009 were therefore 2.0 MUSD.
The market value of the properties has increased by 2.2 MUSD in the first half of 2010. The company values the buildings on a quarterly basis through an independent third party, Cushman & Wakefield. It is largely market related reasons behind the increase in value. Under IFRS standards, only the effect in Russian Rubles is presented over the traditional income statement. Translation differences which occur when translating the building values from RUR to USD are translation differences over equity and are included in comprehensive income for the period.
| Revaluation properties, MUSD | H1 2010 | H1 2009 |
|---|---|---|
| Over income statement | 4,6 | 9,7 |
| Over equity (compr. income) | -2,4 | -9,7 |
| Sum revaluation of properties | 2,2 | 0,0 |
Net finance is negative by 3.2 MUSD in the first 6 months of 2010. Of this, 1.3 MUSD are interest expenses. Value change of financial derivatives is minus 0.8 MUSD. The company has interest swap arrangements to fix the interest rate on c. 70% of the bank loan on a weighted average of 3.23% fixed interest. The present value of the swap contracts has fallen in the period, due to the decrease in long USD interest rates. We still believe that fixing future cash flow at such low levels is a good position for the company.
Net currency effects were minus 1.2 MUSD. Both NOK and RUR have depreciated against USD in the period. For the same period last year the net finance was positive by 3.5 MUSD, and net currency effects were positive by 0.5 MUSD. The company terminated in June 2009 an interest swap contract with a profit of 1.8 MUSD. Interest expenses YTD 2009 were 1.4 MUSD.
Statement of financial position H1 2010
The company's investment properties have a market value of 84.0 MUSD. The company holds 33.4 MUSD in cash and liquid assets, of which 13.9 MUSD is invested in liquid bonds. In April, the company paid in 5.0 MUSD on an escrow account as a prepayment on acquisition of a new building.
Book value of the bank loan is 39.3 MUSD, of which 38.2 MUSD is long term portion and 1.1 MUSD short term portion. We also have a debt of 5.3 MUSD to sellers of the group's properties. Tenants have pre-paid 1.5 MUSD. The company has interest rate swap contracts and the value of these is -1.5 MUSD.
Equity is 74.4 MUSD. That is equivalent to 22.70 NOK per share. For comparison, the equity at 30 June 2009 was 72.7 MUSD. In the last annual financial report the company had equity of 73.8 MUSD (20.34 NOK per share).
included in relation to the release of a seller guarantee from the
Managed by
STORM capital management
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
STORM real estate asa
Cash Flow statement H1 2010
The company shows positive cash flow from operational activities of 3.1 MUSD in the first 6 months of 2010. For comparison the cash flow from operating activities in the same period last year was 4.5 MUSD.
There has been net cash outflow of 8.0 MUSD on investment activities. This includes 5.0 MUSD to an escrow account as a prepayment on acquisition of property. In addition, net cash flow on bond investments was 5.4 MUSD. This is part of the management of the company's liquid assets. In the same period in 2009 net cash flow from investment activities were 13.3 MUSD, of which 7.1 MUSD towards acquisition of property and 6.4 MUSD in purchase of treasury shares.
On financing activities, the company has repaid loans of 1.3 MUSD and interest of 1.3 MUSD. This compares to 0.3 MUSD on loans and 1.2 MUSD interest in the same period in 2009.
2nd quarter 2010
Operating profits before valuation of property is 1.0 MUSD. Change in market value of properties are 1.0 MUSD, of which 5.6 MUSD is presented of the income statement and -4.6 MUSD is translation differences over comprehensive income. Net finance expenses are 2.3 MUSD, of which 0.7 MUSD is interest cost, 0.7 USD is value change on financial derivatives (interest rate swaps) and 0.8 MUSD is net currency losses following further appreciation of USD against NOK (8.6%) and RUR (5.6%).
Share and shareholder information
The Annual General Meeting on 12 May 2010 approved a reverse split. This was done in preparation of the stock exchange listing. One of the criteria for listing on the Oslo Stock Exchange is a minimum share price of 10 NOK, and the company's share was traded at c. 3.50 NOK in the period prior to listing. The AGM therefore authorised a 4:1 reverse split, so that 4 shares with a par value of 0.10 NOK were merged into 1 share with a par value of 0.40 NOK. The total number of issued shares after the reverse split is 23,091,995.
The company was converted to a public limited liability company at the AGM on 12 May 2010 in preparation for listing on the Oslo Stock Exchange. The company's name was changed to "Storm Real Estate ASA" to reflect the change in company type.
Risk and uncertainty factors
The risks as described in the annual report for 2009 are expected to remain the same for the next six months. The company is exposed to Russian roubles and Norwegian kroner, and movements in currency exchange rates will affect the company's financial statements. Changes in the macroeconomic environment and interest levels can also influence the company's financial position. For further details, we refer to the Board of Directors' report for 2009 and in particular note 4 the annual accounts for 2009 where risks are described in further detail.
Oslo, 19 August 2010
The Board of Directors, Storm Real Estate ASA
Managed by
STORM
capital management
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
STORM real estate asa
A message from Storm Capital Management Ltd.
There are many reasons to be optimistic about the Russian economy. We have seen a positive development in the Russian macro picture in the first half of 2010. The growth is up, foreign demand is up and exports have increased significantly the last six months, particularly during the 2nd quarter. The Ruble is now around 10% lower than the pre-crisis level. Moreover, the growth and exports have increased while inflation has kept falling. Inflation is now around 5.5%, the lowest level on record.
In the real estate market, there were more transactions in the first half of 2010 than in the same period last year. The majority of these have come in the 2nd quarter. There has also been an increase in office buildings sold to foreign investors. The focus has been on class B buildings in non-central areas. For class A buildings we have seen a large gap in price expectations between sellers and buyers, and there have been very few transactions.
Very few projects have been completed in the period which, together with increased demand has contributed to a drop in vacancy rates for the period. In Moscow this relates to outside the Central Business District
(CBD) where the majority of new office area has come on the market. Projects which are being completed in 2010 were started before the crisis, and few projects have been started during the crisis. We therefore expect very few completed developments during 2011 and 2012.
Rent levels have kept stable in the period in Moscow, while they have fallen somewhat in St. Petersburg. Such averages may a little academic; because good and well-run buildings in good locations have been able to increase their rents while others have pressure on their rates. The forecast for good and well-run office space, like Storm Real Estate's portfolio, looks promising.
Storm Capital Management is optimistic with regards to future growth for Storm Real Estate ASA. We have scanned the market and have reviewed a substantial number of potential targets. We believe there are good opportunities for acquisitions which represent an upside for the company's shareholders when Russia's economy grows. We signed a Letter of Intent to acquire a further property in the 2nd quarter. Unfortunately there were findings in the due diligence process which were
not satisfactory, and made it impossible for the company to complete the transaction at the agreed terms. The company's shareholders can rest assured that Storm Capital Management will not do transactions which do not represent the quality and value-add in line with the company's strategy. However, this was only one out of many targets we see as interesting, and we believe we will further grow the company's portfolio in 2010, as we did in 2009.
The listing of the company was a milestone for the company, and a beginning of a new era for the company and the shareholders. A listing process is a big process and we finished months of hard work with the opening of the Oslo Stock Exchange on 6 July 2010. We hope that the listing will contribute to increased trade in the share, and that increased attention towards the company results in more investors using the company to get exposure to Russia. We want the company to be a portal for investors seeking exposure to the Russian real estate market.
Managed by
STORM
capital management
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
STORM real estate asa
Consolidated Interim Income Statement
| 000 USD | Note | H1 2010 Unaudited | H1 2009 Unaudited | Q2 2010 Unaudited | Q2 2009 Unaudited | FY 2009 |
|---|---|---|---|---|---|---|
| Rental income | 3 | 5,401 | 4,770 | 2,707 | 2,812 | 9,832 |
| Sum income | 5,401 | 4,770 | 2,707 | 2,812 | 9,832 | |
| Property related expenses | 3 | 1,392 | 1,089 | 527 | 620 | 2,289 |
| Personnel expenses | 227 | 260 | 103 | 185 | 567 | |
| Depreciation | 19 | 12 | 12 | 6 | 24 | |
| Other operating expenses | 1,739 | 298 | 1,042 | -410 | 2,403 | |
| Total operating expenses | 3,377 | 1,659 | 1,684 | 401 | 5,282 | |
| Operating profit (loss) before fair value adjustments | 2,024 | 3,111 | 1,023 | 2,411 | 4,550 | |
| Fair value adjustments on investment property | 3 | 4,655 | 9,657 | 5,602 | 1,019 | -664 |
| Total operating profit (loss) | 6,680 | 12,768 | 6,626 | 3,430 | 3,886 | |
| Finance revenues | 7 | 323 | 4,078 | 104 | 1,956 | 821 |
| Finance expenses | 7 | -1,686 | -1,446 | -787 | -901 | -2,767 |
| Change in market value of financial derivatives | 7 | -820 | 389 | -726 | 389 | -175 |
| Change in market value of financial investments | 7 | 57 | -64 | -168 | -567 | 413 |
| Realisation of financial derivatives | 7 | 162 | 13 | 65 | 64 | 1,880 |
| Currency exchange gains (losses) | 7 | -1,231 | 546 | -778 | 493 | 5,599 |
| Net financial gains (losses) | -3,194 | 3,516 | -2,289 | 1,433 | 5,771 | |
| EARNINGS BEFORE TAX (EBT) | 3,485 | 16,284 | 4,336 | 4,863 | 9,656 | |
| Income tax expense | 9 | 1,018 | 2,195 | 971 | 278 | 1,051 |
| PROFIT (LOSS) FOR THE PERIOD | 2,468 | 14,090 | 3,365 | 4,586 | 8,605 | |
| Other comprehensive income: | ||||||
| Translation differences from foreign operations | -2,485 | -8,127 | -5,141 | 119 | -1,399 | |
| Sum other comprehensive income | -2,485 | -8,127 | -5,141 | 119 | -1,399 | |
| Total Comprehensive income for the period | -17 | 5,962 | -1,776 | 4,705 | 7,206 | |
| Average no of shares (excluding treasury shares) | 20,907,580 | 22,472,794 | 22,746,021 | 21,860,397 | 21,732,376 | |
| Earnings per share (USD) | 0.12 | 0.63 | 0.15 | 0.21 | 0.40 |
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
Managed by STORM capital management
STORM real estate asa
Consolidated Interim Statement of Financial Position
| 000 USD | Note | 30 Jun 2010
Unaudited | 30 Jun 2009
Unaudited | 31 Dec 2009 |
| --- | --- | --- | --- | --- |
| ASSETS | | | | |
| Non-current assets | | | | |
| Investment property | 3 | 84,020 | 83,000 | 81,780 |
| Property, Plant and Equipment (PPE) | | 163 | 142 | 143 |
| Financial derivative assets | 4 | 311 | 219 | 183 |
| Total non-current assets | | 84,494 | 83,361 | 82,105 |
| Current assets | | | | |
| Trade receivables | | 422 | 106 | 84 |
| Pre-paid expenses | | 1,012 | 117 | - |
| Financial investments | 4 | 13,889 | - | 9,582 |
| Other receivables | | 2,578 | 2,422 | 7,293 |
| Prepayments towards acquisition of property | | 5,000 | - | - |
| Cash and cash equivalents | 6 | 19,529 | 38,047 | 27,390 |
| Total current assets | | 42,430 | 40,691 | 44,349 |
| TOTAL ASSETS | | 126,924 | 124,053 | 126,453 |
| EQUITY AND LIABILITIES | | | | |
| Paid-in equity | | | | |
| Ordinary shares | | 1,556 | 1,556 | 1,556 |
| Share premium | | 21,036 | 21,036 | 21,036 |
| Treasury shares | 8 | -113 | -140 | -134 |
| Other paid-in equity | | 65,719 | 65,719 | 65,719 |
| Total paid-in equity | | 88,199 | 88,171 | 88,178 |
| Other equity | | | | |
| Other equity | | -13,749 | -15,498 | -14,419 |
| Total other equity | | -13,749 | -15,498 | -14,419 |
| TOTAL EQUITY | | 74,449 | 72,674 | 73,759 |
| Non-current liabilities | | | | |
| Loans from credit institutions | 4 | 38,208 | 39,411 | 39,924 |
| Deferred tax liabilities | | 1,564 | 1,065 | 887 |
| Financial derivative liability | 5 | 1,578 | 454 | 628 |
| Other long-term liabilities | | 1,538 | 1,397 | 1,319 |
| Total non-current liabilities | | 42,888 | 42,327 | 42,758 |
| Current liabilities | | | | |
| Trade payables | | 406 | 279 | 393 |
| Other short-term payables | | 9,181 | 8,774 | 9,542 |
| Total current liabilities | | 9,586 | 9,053 | 9,935 |
| TOTAL LIABILITIES | | 52,475 | 51,380 | 52,693 |
| TOTAL EQUITY AND LIABILITIES | | 126,924 | 124,053 | 126,453 |
Managed by STORM capital management
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
STORM real estate asa
Consolidated Interim Statement of Cash Flow
| 000 USD | Note | H1 2010
Unaudited | H1 2009
Unaudited | 2009 |
| --- | --- | --- | --- | --- |
| Cash Flow from operational activities | | | | |
| Earnings before tax | | 3,485 | 16.284 | 9,656 |
| adjusted for: | | | | |
| depreciations | | 19 | 12 | 24 |
| value adjustment on investment property | 3 | -4,655 | -9.657 | 664 |
| finance income | 7 | -543 | -4.027 | -821 |
| finance expenses | 7 | 1,686 | 1.446 | 2,767 |
| net currency gains | 7 | 1,231 | -546 | -5,384 |
| change in fair value financial derivatives | 7 | 820 | -389 | -238 |
| Change in working capital: | | | | |
| trade receivables and other receivables | | 1,365 | 443 | -4,290 |
| trade payables and other payables | | -349 | 950 | 98 |
| paid taxes | | - | - | -336 |
| Net cash flow from operational activities | | 3,059 | 4.515 | 2,141 |
| Cash Flow from investment activities | | | | |
| Acquisition of investment property | 6 | -5,000 | -7,113 | -7,113 |
| Investment in financial securities | 4 | -5,394 | - | -9,632 |
| Net cash flow, placement of surplus capital | | 2,000 | - | -2,000 |
| Net purchase of treasury shares | 8 | -171 | -6,427 | -6,585 |
| Other investments | | - | - | -8 |
| Interest received | 7 | 588 | 253 | 568 |
| Net cash flow from investment activities | | -7,977 | -13,287 | -24,771 |
| Cash flow from financing activities | | | | |
| Repayment on loans | 4 | -1,310 | -311 | -623 |
| Change in long-term liabilities | | - | - | -130 |
| Interest paid | 7 | -1,274 | -1,199 | -2,108 |
| Net cash flow from financing activities | | -2,584 | -1,510 | -2,861 |
| Net change in cash and cash equivalents | | -7,502 | -10,282 | -25,491 |
| Carried forward cash and cash equivalents | | 27,390 | 46,022 | 46,022 |
| Currency exchange variation on cash and cash equivalents | | -358 | 2,307 | 6,989 |
| Cash and cash equivalents at closing date | | 19,529 | 38,047 | 27,390 |
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
Managed by STORM capital management
STORM real estate asa
Consolidated Interim Statement of Changes in Equity
(Unaudited)
| Paid-in equity | Other equity | ||||||
|---|---|---|---|---|---|---|---|
| Share capital | Share premium | Other paid-in equity | Treasury shares | Retained earnings | Other reserves | Total equity | |
| 1 January 2009 | 1,556 | 21,036 | 65,719 | - | -9,259 | -5,914 | 73,138 |
| Profit (loss) for the period | 14,090 | 14,090 | |||||
| Net purchase of treasury shares | -140 | -6,287 | -6,427 | ||||
| Other comprehensive income | -8,127 | -8,127 | |||||
| Sum | - | - | - | -140 | 7,802 | -8,127 | -465 |
| 30 June 2009 | 1,556 | 21,036 | 65,719 | -140 | -1,456 | -14,041 | 72,674 |
| Paid-in equity | Other equity | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Share capital | Share premium | Other paid-in equity | Treasury shares | Retained earnings | Other reserves | Total equity | |
| 1 January 2010 | 1,556 | 21,036 | 65,719 | -134 | -7,105 | -7,313 | 73,759 |
| Profit (loss) for the period | 2,468 | 2,468 | |||||
| Net purchase of treasury shares | 21 | 687 | 708 | ||||
| Other comprehensive income | -2,485 | -2,485 | |||||
| Sum | - | - | - | 21 | 3,155 | -2,485 | 691 |
| 30 June 2010 | 1,556 | 21,036 | 65,719 | -113 | -3,950 | -9,798 | 74,449 |
Managed by STORM capital management
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
STORM real estate asa
Selected notes
1. Corporate information
Storm Real Estate ASA is a public limited liability company domiciled in Norway. The company is listed on Oslo Stock Exchange. The principal activity of the company is investment in yielding properties in Russia through its subsidiaries.
2. Basis of preparation and accounting policies
Basis of preparation
The interim financial statements for the six months ended 30 June 2010 is prepared in accordance with IAS34. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2009. The group has only one business segment and does not present segment information. The interim financial statements are unaudited.
Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2009. The company presented interim results in 2009. Last year's interim results were not prepared in accordance with IAS34 Interim Financial Statements, and accounting principles applied in preparation of the annual report for 2009 and earlier interim statements in 2010. The company has therefore prepared new comparatives for the previous year.
All notes are in 000 USD except where indicated.
3. Investment Property
| Value | H1 2010 | H1 2009 |
|---|---|---|
| Per 1 January | 81,780 | 66,000 |
| Addition in the period | - | 17,000 |
| Changes in fair value * | 2,240 | - |
| Value at closing date | 84,020 | 83,000 |
-
The functional currency of the Russian subsidiaries including the buildings are Russian ruble. The fair value changes have two elements:
-
Changes in the local functional currency (RUR) are presented over the income statement.
- Translation differences in the group presentation currency (USD) are not allowed over the income statement, and are presented on the statement of comprehensive income.
The two effects are presented separately below:
| Changes in fair value | H1 2010 | H1 2009 |
|---|---|---|
| Change in RUB over income statement | 4,655 | 9,657 |
| Translation difference over compr. income | -2,415 | -9,657 |
| Net changes in fair value | 2,240 | - |
| NOI from properties | H1 2010 | H1 2009 |
| --- | --- | --- |
| Rental income | 5,401 | 4,770 |
| Direct property related expenses | 1,392 | 1,089 |
| NOI from properties | 4,009 | 3,681 |
| NOI % | 74% | 77% |
| --- | --- | --- |
| Annualised yield / fair value | 9.5 % | 8.9 % |
9
Managed by STORM capital management
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
STORM real estate asa
4. Financial assets and liabilities
| Bonds | H1 2010 | H1 2009 |
|---|---|---|
| Per 1 January | 9,582 | - |
| Additions | 6,825 | - |
| Disposals | -1,500 | - |
| Changes in fair value | 49 | - |
| Currency adjustments | -1,066 | - |
| Value at closing date | 13,889 | - |
| Other financial assets and liabilities | H1 2010 | H1 2009 |
| --- | --- | --- |
| Cash and cash equivalents | 19,529 | 38,047 |
| Embedded derivatives | 311 | 219 |
| Bank loan * | -39,297 | -41,033 |
| Interest rate swaps | -1,578 | -454 |
| Sum financial assets and liabilities | -21,034 | -3,221 |
Embedded derivatives
The embedded financial derivative occurs as a result of currency fluctuations between RUR and USD. Most of the tenancy lease agreements include a clause with a minimum exchange rate for the rental payments. The fair value of this asset is estimated based on currency forecasts, followed by calculations using the Black & Scholes model.
Interest rate swaps
The parent company has entered into an interest swap agreement with the lender, Swedbank, which fixes the interest on parts of the loan. Fair value of the interest swap is calculated based on expectations on future cash flows with today's interest rates and the yield curve over the remaining fixed period.
*Bank loan
The parent company has a loan to finance the Gasfield building. The loan is secured with pledge in the investment property (valued at USD 63,620), and is repaid in quarterly instalments. The initial two years the principal is repaid with 1.5% of the balance, the following two years with 3% of the balance, and the remaining years with 5.7% of the balance. The loan is presented in the statement of financial position at amortised cost and repayments within 12 months are presented as short term liability:
| H1 2010 | H1 2009 | |
|---|---|---|
| Long term liability | 38,208 | 39,411 |
| Short term liability | 1,089 | 1,622 |
| Sum loan at amortised cost | 39,297 | 41,033 |
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
Managed by STORM capital management
STORM real estate asa
5. Fair value hierarchy
The following table shows an analysis of the fair values of financial instruments recognized in the statement of financial position by level of the fair value hierarchy.
Level 1 - Quoted prices in active markets that the entity can access at the measurement date..
Level 2 - Use of a model with inputs which are directly or indirectly observable market data.
Level 3 - Use of a model with inputs that are not based on observable market data.
| 30 June 2010: | Level 1 | Level 2 | Level 3 | Sum |
|---|---|---|---|---|
| Financial investments | 13,889 | 13,889 | ||
| Embedded derivative assets | 311 | 311 | ||
| Interest rate swaps | -1,578 | -1,578 | ||
| 30 June 2009: | Level 1 | Level 2 | Level 3 | Sum |
| --- | --- | --- | --- | --- |
| Embedded derivative assets | 219 | |||
| Interest rate swaps | -454 |
6. Cash and cash equivalents
| H1 2010 | H1 2009 | |
|---|---|---|
| USD | 13,856 | 15,281 |
| NOK | 1,356 | 20,175 |
| Other currencies | 4,318 | 2,591 |
| Sum | 19,529 | 38,047 |
7. Finance gains and losses
| H1 2010 | H1 2009 | |
|---|---|---|
| Currency | ||
| Currency gains | 1,284 | 3,224 |
| Currency losses | -2,516 | -2,678 |
| Net currency gains (losses) | -1,231 | 546 |
Finance revenue
| Interest revenue | 232 | 2,153 |
|---|---|---|
| Termination of financial instruments | 162 | - |
| Change in market value of financial instruments | 57 | - |
| Fair value adjustment, derivatives | 79 | 402 |
| Other finance revenue | 13 | 1,925 |
| Sum | 542 | 4,480 |
Finance expenses
| Interest expense | -1,345 | -1,416 |
|---|---|---|
| Fair value adjustment, interest rate swap | -820 | -64 |
| Other finance expense | -341 | -29 |
| Sum | -2,506 | -1,509 |
| NET FINANCE GAINS (LOSSES) | -3,194 | 3,516 |
| --- | --- | --- |
Managed by STORM capital management
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
STORM real estate asa
8. Shareholder information
20 largest shareholders at 30 June 2010:
| Shareholder | Type * | Country | Shares | % |
|---|---|---|---|---|
| SEB LONDON BRANCH | NOM | UNITED KINGDOM | 2,252,948 | 9.76% |
| STORM REAL ESTATE ASA | UNITED KINGDOM | 2,212,366 | 9.58% | |
| CREDO EIENDOM A/S | 770,288 | 3.34% | ||
| SEB PRIVATE BANK S.A. LUXEMBOURG | NOM | LUXEMBURG | 684,283 | 2.96% |
| ØRN NORDEN AS | 607,901 | 2.63% | ||
| BANK OF NEW YORK MELLON SA/NV | NOM | BELGIUM | 428,495 | 1.86% |
| VICTORY LIFE | SWITZERLAND | 426,463 | 1.85% | |
| FINANSFORBUNDET | 416,650 | 1.80% | ||
| STIG AS | 374,985 | 1.62% | ||
| DEUTSCHE BANK AG LONDON | NOM | UNITED KINGDOM | 363,293 | 1.57% |
| BJØRGVIN AS | 312,500 | 1.35% | ||
| AS BANAN | 301,338 | 1.30% | ||
| EBN INVEST AS | 280,688 | 1.22% | ||
| MINOR INVEST AS | 225,000 | 0.97% | ||
| JPMORGAN CHASE BANK | NOM | UNITED KINGDOM | 223,292 | 0.97% |
| BANQUE DE LUXEMBURG S.A | NOM | LUXEMBURG | 211,500 | 0.92% |
| LANGBERG | 191,250 | 0.83% | ||
| TDL AS | 182,250 | 0.79% | ||
| CASTELAR EIENDOM II KS US | 180,000 | 0.78% | ||
| MOTOR-TRADE EIENDOM OG FINANS AS | 180,000 | 0.78% | ||
| OTHER SHAREHOLDERS | 12,266,505 | 53.12% | ||
| SUM | 23,091,995 | 100.00% |
- NOM = Nominee accounts; foreign institution holding shares on behalf of clients.
There has been no material changes in shares held by members of the board or management or the company's management.
Treasury shares
The company has bought and sold treasury shares in the period.
| H1 2010 | H1 2009 | |
|---|---|---|
| Net change in number of treasury shares | -354,505 | - |
| Amount net paid on purchase of treasury shares (NOK) | 4,679,353 | - |
| Average per share (NOK) | 13.20 | - |
Reverse Split
The Annual General Meeting on 12 May 2010 approved a reverse split. This was done in preparation of the stock exchange listing. One of the criteria for listing on the Oslo Stock Exchange is a minimum share price of 10 NOK, and the company's share was traded at c. 3.50 NOK in the period prior to listing. The AGM therefore authorised a 4:1 reverse split, so that 4 shares with a par value of 0.10 NOK were merged to 1 share with a par value of 0.40 NOK. The total number of issued shares after the reverse split is 23,091,995.
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
Managed by STORM capital management
STORM real estate asa
9. Income Tax
| H1 2010 | H1 2009 | |
|---|---|---|
| Income taxes in the income statement | ||
| Current income tax expense | 220 | 143 |
| Deferred income tax expense | 798 | 2,052 |
| Total income taxes in the income statement | 1,018 | 2,195 |
10. Transactions with related parties
| H1 2010 | H1 2009 | |
|---|---|---|
| Storm Capital Management Ltd. | 592 | 513 |
| Surfside Ventures Ltd. | 197 | 171 |
| Sum | 789 | 684 |
11. Events after the reporting date
The company was listed on Oslo Stock Exchange on 6 July 2010.
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
Managed by STORM capital management
STORM real estate asa
Responsibility Statement
We confirm that the interim financial statements for the period 1 January to 30 June 2010 has, to the best of our knowledge, been prepared in accordance with IAS34 Interim Financial Reporting and that the information in the statement gives a true and fair view of the Company's consolidated assets, liabilities, financial position and results of operations.
The interim report gives, to the best of our knowledge, a true and fair overview of important events in the period and their effect on the interim financial statements, and a description of material transactions with related parties.
We confirm that, to the best of our knowledge, the interim report includes a fair review of the information under the Norwegian Securities Trading Act section 5-6 fourth paragraph.
Oslo, 19 August 2010
| Stein Aukner
Chairman | Morten E. Astrup
Board member | Fredrikke Aaeng
Board member |
| --- | --- | --- |
| Nini H. Nergaard
Board member | Christopher W. Ihlen
Board member | Henrik Poppe
Board member |
| Torun Litzén
Board member | Einar Pedersen
CEO | |
100 New Bond Street, London, W1S 1SP
Tel: +44(0)20 7409 3369
Fax: +44(0)20 7491 3464
www.stormcapital.co.uk
Managed by STORM capital management
STORM
real estate asa
Storm Real Estate ASA
C/o Storm Capital Management Ltd.
100 New Bond Street, 3rd floor
London W1S 1SP
United Kingdom
Tel: +44 207 409 33 66
Fax: +44 207 491 3464
www.stormcapital.co.uk