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CPI FIM PR for Q3 2019

Press Release

Luxembourg, 29 November 2019                                                                                                                          

CPI FIM SA reports financial results for the third quarter of 2019

CPI FIM SA (hereinafter “CPI FIM”, the “Company” or together with its subsidiaries the “Group“),
a real estate group with a portfolio in Central and Eastern Europe, hereby publishes its unaudited financial results for the third quarter of the 2019 financial year.

As at 30 September 2019, CPI PROPERTY GROUP S.A. (hereinafter also the “CPI PG”, and together with its subsidiaries as the “CPI PG Group”) indirectly owns 97.31% of the Company shares
(97.31% voting rights).

Financial highlights

Performance   30-Sep-19 30-Sep-18 Change
Gross rental income € thousands 1,172 1,141 3%
Total revenues € thousands 22,162 15,407 44%
Operating result € thousands 17,227 7,199 139%
Net profit for the period € thousands 56,805 35,774 59%
Assets   30-Sep-19 31-Dec-18 Change
Total assets € thousands 4,302,187 3,192,868 35%
EPRA NAV € thousands 799,115 736,066 9%
Property Portfolio € thousands 514,000 483,000 6%
Gross leasable area sqm 18,000 10,000 80%
Occupancy in % % 61.9% 87.3% (25.4 pp)
Land bank area sqm 17,626,000 17,626,000 0%
Total number of properties No. 5 6 (17%)
Financing structure   30-Sep-19 31-Dec-18 Change
Total equity € thousands 932,059 868,866 7%
Equity ratio % 22% 27% (5.0 pp)

Income statement*

Income statement for the nine-month period ended 30 September 2019 and 30 September 2018 respectively was as follows:

  INCOME STATEMENT (€ thousands) 30-Sep-19 30-Sep-18  
  Gross rental income 1,172 1,141  
  Sale of services** 20,990 14,256  
  Cost of service charges** (2,416) (710)  
  Property operating expenses (817) (884)  
  Net service and rental income 18,929 13,803  
  Development sales - 10  
  Development operating expenses -   (7)  
  Net development income - 3  
  Total revenues** 22,162 15,407  
  Total direct business operating expenses** (3,233) (1,601)  
  Net business income 18,929 13,806  
  Net valuation gain/(loss) on investment property*** 2,361 1,155  
  Net gain on the disposal of investment property and subsidiaries 225 3,006  
  Amortization, depreciation and impairments 5,792 (2,434)  
  Administrative expenses (10,013) (9,171)  
  Other operating income 58 923  
  Other operating expenses (125) (86)  
  Operating result 17,227 7,199  
  Interest income 109,944 77,145  
  Interest expense (60,671) (39,082)  
  Other net financial result*** (7,053) (1,002)  
  Net finance income 42,220 37,061  
  Share of profit/ (loss) of equity-accounted investees (net of tax) (595) (562)  
  Profit before income tax 58,852 43,698  
  Income tax expense (2,047) (7,924)  
  Net profit from continuing operations 56,805 35,774  

* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34.

** In connection with the adoption of IFRS 15, the Group changed, in respect of service charges, revenue recognition from net to gross, before deduction of cost of services (please refer to the annual management report for 2018 for further detail). The presentation of the statement of profit or loss for the nine-month period ended 30 September 2018 was adjusted due to the changes in the accounting policy.

*** The Group reclassified the effect of changing foreign exchange rates on the revaluation of the investment properties from the Other net financial result to the Net valuation gain or loss. The comparative information for the 9-month period ended 30 September 2018 was adjusted accordingly.

Sale of services

Sale of services increased to €21.0 million for the 9-month period ended 30 September 2019 compared to €14.3 million for the 9-month period ended 30 September 2018 primarily due to the provision of advisory services to entities controlled by the ultimate shareholder of the Group.

Net finance income

Total net finance income improved to €42.2 million for the 9-month period ended 30 September 2019 from €37.1 million for 9-month period ended 30 September 2018. The majority of the increase relates to higher interest income (from €77.1 million to €109.9 million) due to an increase in loans provided by the Company to entities within the CPI PG Group and other related parties. Other net financial result in the 9-month period ended 30 September 2019 was mainly represented by foreign exchange losses of €7.4 million, reflecting primarily the movement of EUR against CZK during the period.

Balance sheet*

  BALANCE SHEET (€ thousands)        
  30-Sep-19 31-Dec-18  
  Intangible assets 15 27  
  Investment property 513,577 474,778  
  Property, plant and equipment 33 398  
  Equity accounted investees 3,294 3,890  
  Other investments 133,336 125,406  
  Loans provided 2,924,211 2,283,819  
  Trade and other receivables 9,896 7,988  
  Deferred tax assets 179,073 180,021  
  Total non-current assets 3,763,435 3,076,327  
  Inventories 289 7,967  
  Income tax receivables 85 275  
  Trade receivables 9,492 5,400  
  Loans provided 150,799 84,474  
  Cash and cash equivalents 376,192 14,705  
  Other current assets 1,516 3,334  
  Assets held for sale 379 386  
  Total current assets 538,752 116,541  
  TOTAL ASSETS 4,302,187 3,192,868  
  Equity attributable to owners of the Company 765,175 702,413  
  Non-controlling interests 166,884 166,453  
  Total equity 932,059 868,866  
  Financial debts 3,147,852 2,091,697  
  Deferred tax liabilities 35,018 34,160  
  Provisions 1,569 1,574  
  Other financial liabilities 4,481 2,356  
  Total non-current liabilities 3,188,920 2,129,787  
  Financial debts 133,085 87,853  
  Trade payables 5,361 18,941  
  Income tax liabilities 2 141  
  Other current liabilities 42,760 87,280  
  Total current liabilities 181,208 194,215  
  TOTAL EQUITY AND LIABILITIES 4,302,187 3,192,868  

* The presented financial statements do not represent full set of interim financial statements as if prepared in compliance with IAS 34.

Total assets
Total assets increased by €1,109.3 million (35%) compared to 31 December 2018. The main reason is an increase of long-term loans provided to entities within the CPI PG Group. Further, cash and cash equivalents increased by €361.5 million since 31 December 2018.

Total liabilities

Total liabilities increased by €1,046.1 million (45%) compared to 31 December 2018. The increase primarily relates to additional loans provided to the Group by CPI PG (increase of €1,050.1 million).

Key events occurring after quarter-end include:

  • Acquisition of two office properties, Equator IV and Eurocentrum, in central Warsaw, Poland in November 2019.
  • Acquisition of an entity which owns three luxury residential properties in the south of France and 67 million shares of CPI PG in November 2019. CPI FIM now directly owns 252,302,248 of CPI PG shares (2.8% of shares and voting rights) and indirectly owns 67,000,000 of CPI PG shares (0.7% of shares and voting rights).

For more information please refer to our website at www.cpifimsa.com.

Investors contact:                                                                                                                                                           David Greenbaum, Director                                                                                                                                                         Tel: + 352 26 47 67 1                                                                                                                                                                                                   Fax: + 352 26 47 67 67                                                                                                                                                                                             Email: generalmeetings@cpifimsa.com


The Group presents alternative performance measures (APMs). The APMs used in this press release are commonly referred to and analysed amongst professionals participating in the Real Estate Sector to reflect the underlying business performance and to enhance comparability both between different companies in the sector and between different financial periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. The presentation of APMs in the Real Estate Sector is considered advantageous by various participants, including banks, analysts, bondholders and other users of financial information:

  • APMs provide additional helpful and useful information in a concise and practical manner.
  • APMs are commonly used by senior management and Board of Directors for their decisions and setting of mid and long-term strategy of the Group and assist in discussion with outside parties.
  • APMs in some cases might better reflect key trends in the Group’s performance which are specific to that sector, i.e. APMs are a way for the management to highlight the key value drivers within the business that may not be obvious in the consolidated financial statements.

EPRA Net Asset Value per share
EPRA Net Asset Value per share is defined as EPRA NAV divided by the diluted number of shares at the end of period.

EPRA NAV is a measure of the fair value of net assets assuming a normal investment property company business model. Accordingly, there is an assumption of owning and operating investment property for the long term. For this reason, deferred taxes on property revaluations and the fair value of deferred tax liabilities are excluded as the investment property is not expected to be sold and the tax liability is not expected to materialize. In addition, the fair value of financial instruments which the company intends to hold to maturity is excluded as these will cancel out on settlement. All other assets including trading property, finance leases, and investments reported at cost are adjusted to fair value.
The performance indicator has been prepared in accordance with best practices as defined by EPRA (European Public Real Estate Association) in its Best Practices Recommendations guide, available on EPRA’s website (www.epra.com).

Equity ratio
Equity Ratio provides a general assessment of financial risk undertaken. It is calculated as Total Equity divided by Total Assets.

Gross Leasable Area
Gross leasable area (GLA) is the amount of floor space available to be rented. Gross leasable area is the area for which tenants pay rent, and thus the area that produces income for the property owner.

Occupancy rate
The ratio of leased premises to total GLA.

Property Portfolio
Property Portfolio covers all properties held by the Group, independent of the balance sheet classification, from which the Group incurs rental or other operating income.

APM reconciliation

EPRA NAV per share reconciliation (€ thousands) 30-Sep-19 31-Dec-18
Consolidated equity 765,175 702,413
Deferred taxes on revaluations 33,940 33,653
EPRA Net asset value 799,115 736,066
Existing shares (in thousands) 1,314,508 1,314,508
EPRA Net asset value in per share 0.61 0.56

Equity ratio reconciliation (€ thousands) 30-Sep-19 31-Dec-18
Total equity 932,059 868,866
Total assets 4,302,187 3,192,868
Equity ratio 22% 27%