Wrap Text
Condensed consolidated financial results for the year ended 31 December 2014
NEW EUROPE PROPERTY INVESTMENTS PLC
Incorporated and registered in the Isle of Man with registration number 001211V
Registered as an external company with limited liability under the laws of
South Africa registration number 2009/000025/10
Registered office: 2nd Floor, Anglo International House, Lord Street, Douglas, Isle of Man, IM1 4LN
AIM share code: NEPI BVB share code: NEP JSE share code: NEP ISIN: IM00B23XCH02
("NEPI", "the Group" or "the Company")
CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014
DIRECTORS' COMMENTARY
DISTRIBUTABLE EARNINGS
The Group achieved 15.53 euro cents distributable earnings per share for the second half of the 2014 financial year. This
result, combined with the 14.16 euro cents distributable earnings per share for the first half of the financial year, repre-
sents a 15% improvement in recurring distributable earnings per share compared to 2013. This improvement is due to the
continuing strong performance of Group assets and the favourable impact of acquisitions and developments completed
during the financial year.
DISTRIBUTION OF RETAINED DISTRIBUTABLE EARNINGS
The Company has maintained a constant 15% per annum growth in distributions per share from the 2010 base to the 2014
interim period distribution. This was achieved by balancing variations in distribution growth per share, stemming partly
from significant, but irregular, growth in recurring distributable income from completed property developments which
have a dilutive effect during construction, by retaining and offsetting the distribution of non-recurring distributable
earnings to date. Following the 2014 interim distribution, the balance of retained distributable earnings carried forward
from prior financial periods was EUR5.1 million. Earnings guidance for the 2015 financial year predicts robust growth in re-
curring distributable earnings per share, therefore the Company is distributing the balance of retained distributable earn-
ings carried forward from prior financial periods.
FINAL DISTRIBUTION AND OPTION TO RECEIVE CAPITAL RETURN
The Board has declared a final distribution of 17.35 euro cents per share for the six months ended 31 December 2014.
This results in a 32.22 euro cents per share distribution for 2014, an improvement of 20% compared to the previous year.
Shareholders have the option to receive their distribution as cash or an issue of fully-paid shares at a ratio of 2.05 new
shares for every 100 held. A circular detailing this resolution, accompanied by announcements on the Stock Exchange
News Service (SENS) of the Johannesburg Stock Exchange Limited (JSE), the Regulatory News Service (RNS) of the
London Stock Exchange (LSE) and the Bucharest Stock Exchange (BVB), will be issued in due course.
ACQUISITIONS AND DEVELOPMENTS
The Group completed the acquisition and development of a number of properties during 2014 discussed below. The effec-
tive date or opening date of acquisitions and developments, as the case may be, is included in parentheses. Further infor-
mation is available in previous announcements. All figures relating to populations are estimates.
RETAIL PROPERTY ACQUISITIONS AND COMPLETED DEVELOPMENTS
The Group acquired and developed four malls and three value centres during the financial year, and the acquisition of
another mall became unconditional in January 2015. Including these, NEPI owns nine malls and nine value centres in
Romania, two malls in Slovakia and one mall in Serbia. Two additional malls are currently being constructed by NEPI in
Romania.
VASLUI VALUE CENTRE (22 MAY 2014)
The Group completed a value centre extension to a Kaufland hypermarket in Vaslui, Romania. Vaslui has 55,400
inhabitants, with 221,900 residents living within a 45-minute drive of the shopping centre. The value centre has 6,700m2
Gross Leasable Area (GLA), of which NEPI owns 1,782m2. The Company's tenants are international and national brands
Altex, Deichmann and Takko.
AURORA SHOPPING MALL, BUZAU AND ALBA IULIA VALUE CENTRE (13 AUGUST 2014)
The Group has acquired Aurora Shopping Mall, Buzau, a 17,959m2 GLA under-performing mall, and the Alba Iulia Value
Centre, a 3,220m2 GLA extension to a Kaufland hypermarket, in a three party transaction including the seller's lending
bank.
Aurora Shopping Mall is situated on the main boulevard of Buzau, Romania, a major transit hub for two of the country's
main historical regions. Buzau is the capital of Buzau county that has 432,000 residents, 430,000 of which are living
within a 45-minute drive of the mall. Major tenants include international and national brands such as Altex, Carrefour,
Deichmann and New Yorker. NEPI plans to reconfigure and refurbish the mall, including building a cinema, improving
the layout and tenant configuration.
The Alba Iulia Value Centre is located near the intersection of two busy roads, in Alba Iulia, Romania, adjacent to a
Kaufland hypermarket and a Profi supermarket, that combined form a retail platform of approximately 10,000m2 GLA.
Historical Alba Iulia has 64,000 inhabitants, with 137,000 residents of the county living within a 45-minute drive of the
value centre. NEPI's tenants are international and national brands Altex, Deichmann, dm and Takko.
KRAGUJEVAC PLAZA (1 SEPTEMBER 2014)
The Group has acquired Kragujevac Plaza, a regional mall of 21,870m2 GLA next to a busy intersection in Kragujevac,
Serbia, 145km from the capital Belgrade. The centre is one of three modern malls in Serbia.Kragujevac, the country's
fourth largest city, has 150,000 inhabitants, and there are 280,000 people living within a 45-minute drive of the mall. The
city's economy is best known for its automotive production and has been an important regional industrial and commercial
centre for over two centuries. Tenants include international and national brands, such as Adidas, C&A, Cineplexx,
Deichmann, Idea, McDonalds, New Yorker, Orsay and Tom Tailor. This is the Group's first acquisition in Serbia that will
serve as a platform for careful further expansion in the country and former Yugoslavia. Serbia is on the accession path to
the European Union and NEPI's management believes its retail market has the potential for high growth.
VULCAN VALUE CENTRE (4 SEPTEMBER 2014)
The Group has completed the development of Vulcan Value Centre, Bucharest, Romania. The 24,700m2 GLA centre is
located in the city's densely populated south west and tenants include international and national brands, such as C&A,
Carrefour, CCC, Deichmann, dm, Domo, Hervis Sports, H&M, Jysk, Lems, Noriel and Takko. There are 49,000 residents
living within a fifteen-minute walk, while the centre is visible, and accessible, from a major boulevard and has convenient
bus and tram stops. Trading has been very strong, with a healthy number of tenants paying turnover rent in excess of base
rent during the first few months. The value centre was 94.8% let at year-end and is expected to be fully let by May 2015.
The centre was opened within nine months of the issuance of the building permit. Construction permits for the planned
KFC drive-through had not been obtained by the date of this report.
SHOPPING CITY TARGU JIU (16 OCTOBER 2014)
The Group has completed the development of a regional mall in Targu Jiu, Romania. The city has a population of 78,600,
is the capital of Gorj county and this is its only modern mall. There are 323,500 inhabitants living within a 45-minute
drive from the mall. The 26,800m2 GLA mall, currently houses various international and national brands, such as
Carrefour, CCC, Cinema City, Deichmann, dm, H&M, Jysk and KFC. The mall is 99.2% let and expected to be fully oc-
cupied by the beginning of the Easter 2015 sales period when C&A and New Yorker open. The mall was opened within a
year of the issuance of the building permit.
Promenada Mall (31 October 2014)
The Group has acquired the 40,300m2 GLA Promenada Mall, situated in the emerging Floreasca-Barbu Vacarescu
business district of Bucharest, close to some of the city's most affluent neighbourhoods. NEPI also owns two office
buildings in the area. Promenada Mall opened in 2013 and is located in an area significantly developed in recent years,
including new A-grade offices and infrastructure. There are 385,000 inhabitants living within a 15-minute drive, an
estimated additional 24,000 office employees within a 10-minute walk working in the nearby offices (based on infor-
mation collated in October 2014) and a further 135,000 residents within a 20-minute metro ride. Promenada Mall will
benefit from substantial additional local office and infrastructure development in the near future. In addition to
Bucharest's main subway line, the mall is also serviced by trams and buses. Tenants include international and national
brands, such as Billa, Bershka, C&A, Deichmann, H&M, Hervis, Intersport, Lacoste, Massimo Dutti, Oysho, Peek &
Cloppenburg, Promod, Stradivarius, Tommy Hilfiger and Zara. In order to broaden the mall's reach, the Group intends to
extend it with approximately 25,000m2 GLA, including fashion, entertainment and leisure, and has acquired an adjoining
1.2ha currently zoned for the development of 50,000m2 of above ground offices. The Group intends to apply for rezoning
of the acquired land in order to develop a mixed-use extension with integrated A-grade offices.
AUPARK KOSICE (18 DECEMBER 2014)
The Group acquired Aupark Kosice, a mixed-use development, including a 34,000m2 GLA regional mall (Aupark Kosice
Mall), an adjoining 12,800m2 GLA office building (Aupark Kosice Tower), and a 4.1ha development site (Malinovsky
Barracks), in one transaction. Although the transfer of shares of the companies owning the properties was pending at
year-end, and as a result the transaction is not reflected as completed in the 2014 accounts, the effective date of the
acquisition is 18 December 2014.
Kosice, Slovakia, is 400km from the capital Bratislava, close to the Hungarian border, and Aupark Kosice is located in the
south east of the city centre. Kosice has 240,000 inhabitants and is the country's second largest city, eastern Slovakia's
economic and cultural centre and capital of a region with 792,000 residents. The city is an important industrial centre and
the US Steel Kosice steel mill is one of the largest employers. There are 480,000 inhabitants living within a 45-minute
drive. Tenants include international and national brands, such as Bata, Billa, C&A, Calvin Klein Jeans, Datart,
Deichmann, EXIsport, Geox, Gerry Weber, Golem, Guess, H&M, Intersport, Lenovo, Mango, Marionnaud, New Yorker,
Nike, Office Shoes, s. Oliver, Samsung, Terranova, Tom Tailor, Tommy Hilfiger and US Polo Assn.
The Malinovsky Barracks plot is located in the north west of the city centre, within 2km of Aupark Kosice Mall. The site
can be used for the development of a retail, or mixed-use, scheme of up to 50,000m2 GLA and was acquired defensively
due to its proximity to Aupark Kosice Mall. The acquisition of Aupark Kosice strengthens the Group's presence in
Slovakia.
OFFICE PROPERTY ACQUISITIONS AND COMPLETED DEVELOPMENTS
With the completion of Phase I of the Cluj office development, NEPI owns A-grade offices in Bucharest, Cluj-Napoca
and Timisoara, the three Romanian cities with the largest office markets and most multinational office tenants. This is
consistent with NEPI's office strategy to invest opportunistically in Romanian cities with significant multinational tenant
demand. Two additional office developments are under construction in Bucharest and Cluj.
THE OFFICE, CLUJ-NAPOCA PHASE I (21 AUGUST 2014)
The Group has completed the development of The Office Phase I in Cluj, the city's first A-grade office. Cluj is located in
north-western Romania, and, with 325,000 inhabitants, is the country's second largest city by population. It is one of
Romania's main technology clusters and has the country's second largest number of software and services companies.
The office market is competitive, however, it lacks A-grade offices and therefore demand for high-quality space is
growing. This office development, that will consist of approximately 58,000m2 GLA in three phases, is an opportunistic
development designed to capitalise on current and predicted future tenant demand. Phase I has 21,273m2 GLA. Leasing
has progressed well, and as of the date of this report, national and international tenants, such as 3Pillar Global, Betfair,
Bombardier, Bosch, Corporate Office Solutions (COS), Deloitte, National Instruments, TUI, Wolters Kluwer, Yardi and
Yonder have been secured for 92% of GLA.
AUPARK KOSICE TOWER (18 DECEMBER 2014)
The Group has acquired Aupark Kosice Tower with Aupark Kosice Mall (see above). Tenants include ESET, GTS,
Holcim, IBM and PricewaterhouseCoopers.
DISPOSALS
The Group sold its interest in the German properties acquired in 2008 to its co-investor for EUR18.2 million on a debt free
basis, which represents a premium of EUR619,402 on the book value. This is consistent with the Group's strategy to invest in
higher growth eastern EU markets. The transaction was finalised in December 2014.
DEVELOPMENT PIPELINE
The Group has been steadily increasing its investment in developments over the past few years. Completed developments
and redevelopments in the last four years have significantly contributed to the growth in recurring distributable earnings
per share. NEPI's development pipeline, including redevelopments and extensions to secured acquisitions, has increased
to EUR547 million (estimated at cost), of which EUR176 million had been spent by 31 December 2014. This represents an in-
crease of EUR161 million compared to the previous year.
RETAIL PROPERTY DEVELOPMENTS AND EXTENSIONS
MEGA MALL
The Group owns a 70% interest in the large ongoing development on the former Electroaparataj factory site in eastern
Bucharest. Construction and leasing efforts for the 72,100m2 GLA mall are progressing well and it should open as planned
during the second quarter of 2015. It is one of the country's largest non-public, non-infrastructure related construction
projects and is expected to dominate retail in the densely populated eastern Bucharest. There are 600,000 residents living
within a 15-minute drive. Tenant leases for 94% of GLA have been secured, including international and national brands,
such as Adidas, Benvenuti, Bershka, C&A, Carrefour, CCC, Cinema City, Deichmann, dm, Douglas, H&M, Hervis,
Intersport, KFC, Koton, LC Waikiki, Lego, Mango (Romanian flagship store), Marks & Spencer (Romanian flagship
store), New Yorker, Pandora, Peek & Cloppenburg, Pull & Bear, Samsung, Sephora, Stradivarius, Subway, Tom Tailor,
Tommy Hilfiger, World Class and Zara.
CITY PARK EXTENSION
The Group has made progress with its 20,200m2 GLA extension to the existing 29,284m2 GLA in City Park in Constanta,
Romania. A building permit was obtained for a ten-screen Cinema City with the country's second 4DX auditorium (the
first will be in NEPI's Mega Mall). Permitting and leasing for the 19,000m2 GLA Phase II of the extension are ongoing.
Phase I has commenced and is expected to open before June 2015. Dependant on permitting, the remaining extension
should open in November 2015.
DEVA SHOPPING CENTRE EXTENSION
Permitting for the 10,600m2 GLA extension and redevelopment of Deva Shopping Centre, Romania, into a regional mall
has been obtained. Construction and leasing are progressing well. The extension and redevelopment will include
additional fashion anchors, entertainment and leisure facilities including a six-screen cinema. It is expected to open in
September 2015.
SEVERIN SHOPPING CENTER EXTENSION
Permitting for the extension and redevelopment of Severin Shopping Center located in Drobeta-Turnu Severin, Romania,
has been obtained and leasing is ongoing. Phase I of the 9,700m2 planned GLA extension, including a six-screen cinema,
is expected to open in September 2015.
SHOPPING CITY TIMISOARA
The Group has acquired an 18ha land plot to develop a regional mall in Timisoara, Romania. The city has a population of
319,300 inhabitants, is the third largest in Romania and the capital of a county with 683,000 residents. Timisoara benefits
from a robust economy based on manufacturing automotive components, regional offices for multinational companies and
a strong IT&C sector. The city offers a skilled, relatively cheap labour force combined with close proximity to Western
Europe. NEPI is developing a phased 80,000m2 GLA regional mall on a main road in southern Timisoara. There are
570,500 inhabitants living within a 45-minute drive of the development, which has excellent visibility and accessibility
due to its 550m frontage on the city's major north-south boulevard. Across from the site, within walking distance, is a
densely populated residential neighbourhood housing 20,000 inhabitants. Construction on the 55,700m2 GLA Phase I,
including a Carrefour hypermarket, various fashion anchors and substantial modern entertainment and leisure facilities,
commenced in December 2014. An opening date has not been decided.
SHOPPING CITY PIATRA NEAMT
The Group has acquired 7.4ha of land between two main roads in Piatra Neamt, Romania, to develop into a 29,300m2
GLA regional mall. Piatra Neamt has 85,000 inhabitants, is the capital of a county with 470,000 inhabitants and has a
shortage of modern retail. There are 245,000 inhabitants living within a 45-minute drive. Permitting is ongoing and it is
expected that the development will be completed during 2016.
OFFICE DEVELOPMENTS
THE OFFICE, CLUJ-NAPOCA PHASE II
Following the completion of Phase I in August 2014 and increasing tenant interest in the development, the Group com-
menced the second of the three phases of this joint-venture in November 2014. Phase II will include 19,400m2 A-grade
office GLA and is expected to be ready for tenant fit out by November 2015.
VICTORIEI OFFICE
The Group obtained a building permit for the historic Piata Victoriei, Bucharest, in early 2014, and secured permitting to
relocate utility infrastructure in December 2014. The site is located in the capital's central business district near landmark
buildings, such as the Government's office, and has very good access to the subway and other public transport. Work on
the 8,400m2 GLA landmark office development, which includes the refurbishment of a national monument, has
commenced and offices should be available for tenant fit out by December 2015.
FIRST-TIME CREDIT RATING
NEPI's long-term debt strategy is to fund assets with approximately 30% (capped at 35%) debt on a loan-to-value (LTV)
basis. Financing sources will be diversified to optimise the long-term cost of debt, and therefore the Group intends issuing
unsecured debt at a corporate level. Considering the attractive levels of long-term corporate debt issuance in Europe
during summer 2014, NEPI obtained a first-time Ba1 (stable outlook) corporate family rating from Moody's Investors
Service in October 2014. The rating is one notch below Romania's rating and international investment grade. This is a
significant achievement given NEPI's relatively small scale of operations compared to other European corporate issuers
and its substantial development pipeline, and is a testimony to the Group's robust financial metrics. A roadshow for
European institutional fixed income investors was undertaken in the same month, however, as relevant interest rates
increased relative to those offered earlier in the year NEPI decided to postpone the issue. The matter will be
reconsidered when markets improve significantly or when the Group's rating is upgraded to international investment
grade. Management estimates that an international investment grade rating will be achieved within 18 months.
OTHER HIGHLIGHTS AND CHANGES TO THE BOARD
Collection of tenant receivables reflects the quality of the tenant covenant. Non-recoverable tenant income for 2014
amounted to EUR158,753, equivalent to 0.17% of annual contractual rental income and expense recoveries. The vacancy
level, including the Kosice assets, is 1.81% (without accounting for properties held for sale). Given the growth in opera-
tions, the Group extended the Board of Directors with the appointment of Victor Semionov (formerly Finance Director) as
Chief Operating Officer, Mirela Covasa as Finance Director and Nevenka Cresnar Pergar as a Non-Executive Director.
Ms Covasa is a chartered accountant and auditor, and was a Senior Manager with PricewaterhouseCoopers before joining
NEPI in 2012 as Finance Manager. Ms Pergar is a qualified attorney with MBA from Clemson University USA and
investment professional with substantial transactional and investment experience in the former Yugoslavian market,
where NEPI is considering expanding its business. She is also a former Junior Minister and Secretary General of the
Government of the Republic of Slovenia.
CASH MANAGEMENT AND DEBT
Throughout the financial year the Company raised EUR497 million through the issue of new ordinary shares, EUR26 million of
secured debt facilities were extended, EUR38 million of new secured debt facilities were obtained and EUR51 million of secured
debt facilities were repaid when they expired. The Group disposed of its listed security holdings during the financial year.
Following the credit rating issued by Moody's, Raiffeisen Bank International underwrote an EUR80 million unsecured re-
volving credit facility for NEPI which remained undrawn at year-end. The Group has additional undrawn secured
revolving facilities of EUR9.7 million. The Group pre-paid the equity portion of the purchase price for the Kosice acquisition
(the balance is funded with a retained bank loan) and ended the year with EUR112 million in cash.
On 31 December 2014 the Group's gearing ratio (interest bearing debt less cash divided by investment property and listed
property shares) decreased to 8% compared to 22.5% at year-end 2013. The average interest rate of the debt (including
hedging costs) was approximately 5% over the financial year, while 44% of the base interest rate (Euribor) was hedged
with interest rate caps and 56% with interest rate swaps. Further debt facilities will be considered during the current
financial year.
PROSPECTS AND EARNINGS GUIDANCE
The development and extension pipeline detailed above, as well as the potential acquisitions being explored, positions the
Group for strong growth in its recurring distributable earnings during 2015 and thereafter. In the interim 2014 results
announcement the Group indicated that 'it will focus on opportunities that will lead to, and take decisions with a view to,
maximising long-term, recurring distributable earnings per share, even if these cause a reduction in short-term,
year-on-year per share distribution growth', and has therefore not provided earnings guidance. Even though this policy
remains relevant, the Board is confident that recurring distributable earnings per share for the first half of 2015 will range
from 17.3 to 17.7 euro cents per share (compared to 14.16 euro cents per share for the six months ended 30 June 2014)
based on the assumptions that a stable macroeconomic environment prevails, no major corporate failures occur and
planned developments remain on track, leading to growth in distributable earnings per share ranging from 22% to 25%
compared to the first half of 2014. This forecast has not been audited or reviewed by NEPI's auditors and is the
responsibility of the Board.
By order of the Board of Directors,
Martin Slabbert, Chief Executive Officer
Mirela Covasa, Finance Director
11 February 2015
IFRS IFRS Pro forma Pro forma
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Reviewed Audited Unaudited Unaudited
31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
ASSETS
Non-current assets 1 368 193 898 040 1 389 772 920 924
Investment property 1 269 299 807 465 1 334 512 872 465
Investment property at fair value 978 980 703 811 1 038 545 758 623
Investment property under development 208 246 103 654 213 894 113 842
Advances paid for investment property 82 073 - 82 073 -
Goodwill 17 639 16 218 17 639 16 218
Investments in joint ventures 13 241 5 055 - -
Long-term loans granted to joint ventures 30 395 37 064 - -
Other long-term assets 37 444 29 828 37 446 29 831
Financial assets at fair value through profit or loss 175 2 410 175 2 410
Current assets 148 705 141 607 153 166 148 359
Trade and other receivables 40 469 28 036 41 199 31 443
Financial investments at fair value through profit or loss - 61 079 - 61 079
Cash and cash equivalents 108 236 52 492 111 967 55 837
Investment property held for sale 27 360 1 561 27 360 1 561
Total assets 1 544 258 1 041 208 1 570 298 1 070 844
EQUITY AND LIABILITIES
Total equity attributable to equity holders 1 241 289 712 236 1 241 289 712 236
Share capital 2 746 1 999 2 746 1 999
Share premium 1 074 310 632 296 1 074 310 632 296
Share-based payment reserve 4 127 3 453 4 127 3 453
Currency translation reserve (1 229) (1 229) (1 229) (1 229)
Accumulated profit 167 133 76 595 167 133 76 595
Non-controlling interest (5 798) (878) (5 798) (878)
Total liabilities 302 969 328 972 329 009 358 608
Non-current liabilities 241 345 232 260 258 199 244 542
Loans and borrowings 171 071 173 568 187 742 185 624
Deferred tax liabilities 57 517 50 678 55 907 50 160
Other long-term liabilities 9 171 4 059 9 446 4 059
Financial liabilities at fair value through profit or loss 3 586 3 955 5 104 4 699
Current liabilities 61 624 96 712 70 810 114 066
Trade and other payables 38 365 32 246 40 153 33 554
Loans and borrowings 23 259 64 466 30 657 80 512
Total equity and liabilities 1 544 258 1 041 208 1 570 298 1 070 844
IFRS IFRS Pro forma Pro forma
CONSOLIDATED STATEMENTS OF INCOME
Reviewed Audited Unaudited Unaudited
Net rental and related income 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
61 749 41 420 65 726 45 188
Contractual rental income and expense recoveries 87 017 55 322 93 078 60 927
Property operating expenses (25 268) (13 902) (27 352) (15 739)
Administrative expenses (2 839) (2 180) (3 040) (2 452)
Acquisition fees (2 357) (4 986) (2 357) (4 986)
Fair value adjustments of investment property 27 980 19 787 35 227 19 913
Fair value gains on financial investments at fair value through
1 299 970 1 299 970
profit or loss
Net result on sale of financial investments - 586 - 586
Dividends received from financial investments 2 417 2 906 2 417 2 906
Share-based payment expense (675) (955) (675) (955)
Foreign exchange loss (241) (238) (215) (290)
Gain on acquisition of subsidiaries 1 400 5 547 1 400 5 547
Gain on disposal of investment property 619 527 619 527
Impairment of goodwill - (816) - (816)
Profit before net finance (expense)/income 89 352 62 568 100 401 66 138
Net finance income/(expense) 1 412 1 784 (4 559) (1 816)
Finance income 7 315 7 514 3 492 5 300
Finance expense (5 903) (5 730) (8 051) (7 116)
Share of profit of joint ventures 4 148 1 241 - -
Profit before tax 94 912 65 593 95 842 64 322
Deferred tax expense (637) (9 007) (1 567) (7 736)
Profit after tax 94 275 56 586 94 275 56 586
Non-controlling interest 4 920 878 4 920 878
Profit for the period attributable to equity holders 99 195 57 464 99 195 57 464
Weighted average number of shares in issue 225 426 685 163 836 991 225 426 685 163 836 991
Diluted weighted average number of shares in issue 229 775 959 168 827 400 229 775 959 168 827 400
Basic weighted average earnings per share (euro cents) 44.00 35.07 44.00 35.07
Diluted weighted average earnings per share (euro cents) 43.17 34.04 43.17 34.04
Distributable earnings per share (euro cents) 29.69 25.79 29.69 25.79
Headline earnings per share (euro cents) 30.19 21.58 30.19 21.58
Diluted headline earnings per share (euro cents) 29.62 20.94 29.62 20.94
RECONCILIATION OF PROFIT FOR THE PERIOD TO IFRS IFRS Pro forma Pro forma
DISTRIBUTABLE EARNINGS Reviewed Audited Unaudited Unaudited
Profit for the period attributable to equity holders 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
99 195 57 464 99 195 57 464
Unrealised foreign exchange loss 350 256 350 256
Acquisition fees 2 357 4 986 2 357 4 986
Share-based payment expense 675 955 675 955
Accrued interest on share-based payments 542 563 542 563
Fair value adjustments of investment property (27 980) (19 787) (35 227) (19 913)
Fair value gains of financial investments at fair value
(1 299) (970) (1 299) (970)
through profit or loss
Fair value adjustment of financial assets and liabilities 1 866 (1 157) 2 882 (2 040)
Amortisation of financial assets (708) (476) (708) (476)
Net result on sale of financial investments - (586) - (586)
Dividends received from financial investments (2 417) (2 906) (2 417) (2 906)
Accrued dividend from financial investments 2 304 4 364 2 304 4 364
Gain on disposal of investment property (619) (527) (619) (527)
Gain on acquisition of subsidiaries (1 400) (5 547) (1 400) (5 547)
Deferred tax expense 637 9 007 1 567 7 736
Impairment of goodwill - 816 - 816
Shares issued cum distribution 6 870 3 577 6 870 3 577
Adjustments related to joint ventures
Fair value adjustments of investment property (7 247) (126) - -
Fair value adjustment of financial assets and liabilities 1 016 (883) - -
Deferred tax expense/(income) 930 (1 271) - -
Adjustments related to non-controlling interest
Fair value adjustments of investment property - 1 - 1
Deferred tax income - (108) - (108)
Acquisition fees - (275) - (275)
Distributable earnings for the period 75 072 47 370 75 072 47 370
Distribution from reserves 6 659 1 574 6 659 1 574
Less: distribution declared (81 731) (48 944) (81 731) (48 944)
Interim distribution (33 475) (20 594) (33 475) (20 594)
Final distribution (48 256) (28 350) (48 256) (28 350)
Earnings not distributed - - - -
Number of shares entitled to distribution 278 138 240 204 544 236 278 138 240 204 544 236
Distributable earnings per share for the period (euro cents) 29.69 25.79 29.69 25.79
Distribution from reserves per share (euro cents) 2.53 1.00 2.53 1.00
Less: Distribution declared per share (euro cents) (32.22) (26.79) (32.22) (26.79)
Interim distribution per share (euro cents) (14.87) (12.93) (14.87) (12.93)
Final distribution per share (euro cents) (17.35) (13.86) (17.35) (13.86)
Earnings not distributed (euro cents) - - - -
RECONCILIATION OF PROFIT FOR THE PERIOD TO HEADLINE IFRS IFRS Pro forma Pro forma
EARNINGS Reviewed Audited Unaudited Unaudited
31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Profit for the period attributable to equity holders 99 195 57 464 99 195 57 464
Fair value adjustments of investment property (27 980) (19 787) (35 227) (19 913)
Gain on sale of investment property (619) (527) (619) (527)
Gain on acquisition of subsidiaries (1 400) (5 547) (1 400) (5 547)
Impairment of goodwill - 816 - 816
Total tax effects of adjustments 4 952 3 035 6 112 3 055
Fair value adjustment of investment property for joint ventures (7 247) (126) - -
Total tax effects of adjustments for joint ventures 1 160 20 - -
Headline earnings 68 061 35 348 68 061 35 348
RECONCILIATION OF NET ASSET VALUE TO IFRS IFRS Pro forma Pro forma
ADJUSTED NET ASSET VALUE Reviewed Audited Unaudited Unaudited
31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Net Asset Value per the Statement of financial position 1 241 289 712 236 1 241 289 712 236
Loans in respect of the Initial Share Scheme 9 132 11 574 9 132 11 574
Deferred tax liabilities 57 517 50 678 55 907 50 160
Goodwill (17 639) (16 218) (17 639) (16 218)
Deferred tax liabilities for joint ventures (1 610) (518) - -
Adjusted net asset value 1 288 689 757 752 1 288 689 757 752
Net asset value per share (euro) 4.52 3.56 4.52 3.56
Adjusted net asset value per share (euro) 4.63 3.70 4.63 3.70
Number of shares for net asset value per share purposes 274 526 188 199 836 882 274 526 188 199 836 882
Number of shares for adjusted net asset value per share
278 138 240 204 544 236 278 138 240 204 544 236
purposes
SEGMENTAL ANALYSIS Retail Office Industrial Corporate Total
2014 Reviewed
Contractual rental income and expense recoveries 59 496 25 541 1 980 - 87 017
Profit before net finance income 67 431 18 719 1 728 1 474 89 352
Total Assets 1 153 768 292 647 17 208 80 635 1 544 258
Total Liabilities 167 993 129 111 2 382 3 483 302 969
2013 Audited
Contractual rental income and expense recoveries 26 055 27 313 1 954 - 55 322
Profit before net finance income 43 735 16 519 1 339 975 62 568
Total Assets 612 144 289 331 17 308 122 425 1 041 208
Total Liabilities 165 535 142 181 2 354 18 902 328 972
LEASE EXPIRY PROFILE 2015 2016 2017 2018 2019 2020 2021 2022 2023 >=2024 Total
Total based on rental income 2.9% 9.6% 10.2% 16.2% 18.5% 15.0% 5.4% 2.3% 3.6% 16.3% 100%
Total based on rented area 4.9% 6.8% 8.4% 14.3% 14.6% 13.7% 5.4% 3.0% 6.4% 22.5% 100%
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
IFRS IFRS
Reviewed Audited
Cash flows from operating activities 31 Dec 2014 31 Dec 2013
50 295 26 823
Cash flows from financing activities 378 517 293 677
Cash flows used in investing activities (373 068) (353 288)
Net increase/(decrease) in cash and cash equivalents 55 744 (32 788)
Cash and cash equivalents brought forward 52 492 85 280
Cash and cash equivalents carried forward 108 236 52 492
CONSOLIDATED STATEMENT Share Share Share- Currency Accumu- Non- Total
OF CHANGES IN EQUITY capital premium based translation lated controlling
Payment reserve profit interest
reserve
Balance at 1 January 2013 1 353 355 027 15 492 (1 229) 22 980 - 393 623
Transactions with owners 646 277 269 (12 039) - (3 849) - 262 027
- Issue of shares 579 251 691 - - - - 252 270
- Share-based payment reserve - - 11 387 - - - 11 387
- Sale of shares issued under the
Initial Share Scheme 4 1 260 - - - - 1 264
- Sale of shares issued under the
Current Share Scheme 1 489 (490) - - - -
- Vesting of shares issued under the
Initial Share Scheme - - 955 - - - 955
- Vesting of shares issued under the
Current Share Scheme 10 3 482 (3 492) - - - -
- Earnings distribution - - - - (3 849) - (3 849)
- Reclassification of the Current
Share Scheme 52 20 347 (20 399) - - - -
Total comprehensive income - - - - 57 464 (878) 56 586
- Profit for the period - - - - 57 464 (878) 56 586
Balance at 31 December 2013 1 999 632 296 3 453 (1 229) 76 595 (878) 712 236
Balance at 1 January 2014 1 999 632 296 3 453 (1 229) 76 595 (878) 712 236
Transactions with owners 747 442 014 674 - (8 657) - 434 778
- Issue of shares 715 427 289 - - - - 428 004
- Share-based payment reserve - - 11 882 - - - 11 882
- Sale of shares issued under the
Initial Share Scheme - - - - - - -
- Sale of shares issued under the
Current Share Scheme 12 3 293 (431) - - - 2 874
- Vesting of shares issued under the
Initial Share Scheme - - 675 - - - 675
- Vesting of shares issued under the
Current Share Scheme 13 4 791 (4 804) - - - -
- Earnings distribution - - - - (8 657) - (8 657)
- Reclassification of the Current
Share Scheme 7 6 641 (6 648) - - - -
Total comprehensive income - - - - 99 195 (4 920) 94 275
- Profit for the period - - - - 99 195 (4 920) 94 275
Balance at 31 December 2014 2 746 1 074 310 4 127 (1 229) 167 133 (5 798) 1 241 289
BUSINESS COMBINATIONS
Promenada Mall Kragujevac
Plaza
31 Oct 2014 1 Sep 2014
Investment property 148 000 39 940
Current assets 11 464 3 030
Deferred tax liabilities (3 934) (1 320)
Current liabilities (6 315) (1 510)
Net identifiable net assets at fair value 149 215 40 140
Goodwill arising on acquisition 3 934 -
Consideration paid in cash 153 149 40 140
BASIS OF PREPARATION
These condensed consolidated financial results for the year ended 31 December 2014 have been prepared in accordance
with the recognition and measurement criteria of the International Financial Reporting Standards ("IFRS"), its
interpretations adopted by the International Accounting Standards Board ("IASB"), the presentation and the disclosure
requirements of IAS 34 Interim Financial Reporting and the JSE Listings Requirements. The accounting policies which
have been applied are consistent with those used in the preparation of the annual financial statements for the year ended
31 December 2013.
As the Group is focusing on being consistent on those areas of reporting that are seen to be of most relevance to investors
and on providing a meaningful basis of comparison for users of the financial information, it has prepared unaudited
pro forma statement of financial position and unaudited pro forma statement of income. The main difference between the
pro forma statements and the condensed consolidated financial results prepared in accordance with IFRS is that the pro
forma statements are prepared using the proportionate consolidation method for investments in joint ventures, which is not
in accordance with IFRS (consistent with financial statements prepared in accordance with IFRS reported before
1 January 2013), while the IFRS statements use the equity method for accounting for these investments (following the
adoption of IFRS 11 'Joint Arrangements' effective 1 January 2013).
The pro forma statement of financial position and pro forma statement of income have been prepared by and are the
responsibility of the Directors of NEPI. Due to its nature, the pro forma statements of financial position and income may not
fairly reflect the financial position and results of the Group after the differences set out above. The directors are not aware
of any matters or circumstances arising subsequent to 31 December 2014 that require any additional disclosure or
adjustment to the reviewed condensed consolidated financial results. PricewaterhouseCoopers LLC have issued an
unmodified review report on the condensed consolidated financial statements for the year ended 31 December 2014,
prepared in accordance with IFRS, IAS 34 and the JSE Limited Listing Requirements that is available for inspection at the
Company's registered office.
In relation to pro-forma financial information included in this preliminary report, a reporting accountant's report is
required by JSE Limited and will be available for inspection at the Company's registered office on or before
18 February 2015. Furthermore, any reference to future financial performance included in this preliminary report have not
been reviewed or reported on by the group's external auditors. The auditor's review report does not necessarily report on
all of the information contained in this announcement/financial results. Shareholders are therefore advised that in order to
obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of the auditor's review
report together with the accompanying financial information from the issuer's registered office. The directors take full
responsibility for the preparation of the preliminary report.
BANK LOANS AND BORROWINGS
Outstanding Available for 2019
amount drawdown 2015 2016 2017 2018 and beyond
REPAYMENT PROFILE
Floreasca Business Park 51 707 - 3 920 3 920 3 920 39 947 -
Aupark Zilina 49 370 - 1 954 47 416 - - -
The Lakeview 27 713 - 2 110 2 110 2 110 21 383 -
City Business Centre 24 454 - 1 314 1 365 1 418 1 473 18 884
Shopping City Galati 18 873 - 1 355 1 355 1 355 1 355 13 453
Ploiesti Shopping City (joint
venture) 17 429 - 1 095 1 095 1 095 1 095 13 049
Retail Park Pitesti 11 131 - 11 131 - - - -
The Office Cluj-Napoca (joint
venture) 6 875 - 348 348 348 348 5 483
Street Segment Retail
Portfolio and Brasov Value 5 728 200 250 5 478 - - -
Centre
Regional Value Centres 5 285 - 373 373 373 373 3 793
NE Property Cooperatief - 80 000 - - - - -
Rasnov Industrial Facility and
Otopeni Warehouse - 9 500 - - - - -
Total 218 565 89 700 23 850 63 460 10 619 65 974 54 662
The reference base rate (1 month EURIBOR, 3 month EURIBOR) was hedged with a weighted average interest rate cap of
2.0% for 44% of the outstanding notional amount and a weighted average interest rate swap of 1.8% for 56% of the outstanding
notional amount.
Date: 11/02/2015 11:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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