Plaza Centers reports EUR81m loss for six month to end June 2013
Plaza Centers has reported a loss for the six month period ended 30 June 2013 of EUR81m (30 June 2012 – EUR10m loss).
The loss stems mainly from the non-cash EUR61m impairment of trading properties (of which 42 per cent relates to assets in Serbia, 21 per cent to Czech Republic, 26 per cent to India and 11 per cent to Greece), fair value adjustments and the share in loss of associated companies.
The company has also seems a reduction in total assets to EUR793m (31 December 2012: EUR886m), mainly as a result of non-cash, predominantly market-related impairment adjustments of EUR61m booked in the period (decrease in the value of trading properties to EUR561m (31 December 2012: EUR612m).
Total revenues more than doubled in the period following the EUR16.7m disposal of an Indian investment, and an increase in revenue from operating shopping centres, to EUR14.3m (H1 2012: EUR14.1m), despite a decrease in revenue at Fantasy Park (decrease of EUR1m due to the closure of some gaming and entertainment units) and Koregaon Park, which was partly closed for the majority of the period.
The company’s cash position at the end of the period end (including restricted bank deposits and available for sale financial assets) was EUR100m (31 December 2012: EUR66m) with working capital of EUR390m (31 December 2012: EUR391m). The current cash position is circa EUR32m following a EUR67m bond principal and interest repayment on 1 July 2013.
During the period Plaza completed its first exit in India following the sale of its 50 per cent stake in a vehicle which primarily owns interests in an office complex project located in Pune, Maharashtra. The transaction valued the assets collectively at EUR33.4m and, as a result, Plaza has received gross cash proceeds of circa EUR16.7m in line with its holding.
The company has seen Improved occupancy levels achieved across the existing shopping and entertainment centres, with the overall portfolio occupancy rate increasing to 89 per cent (31 December 2012: 88 per cent) as at the reporting date.
Ran Shtarkman (pictured), the president and chief executive of Plaza Centers, says: “We have seen sustained progress towards our key strategic and operational objectives in the year to date, driven by our continued commitment to the realisation of completed and non-core assets and the management of both the level of our debt and active assets in our portfolio.
“Across our portfolio of operating shopping centres, we have seen increases against all of our three key performance metrics of occupancy, footfall and turnover during the first half of the year, with the most notable improvements shown at our assets in the more resilient economies in Central and Eastern Europe. Of these, the most outstanding performance has been at Zgorzelec Plaza in Poland which, further to recent asset management initiatives, significantly increased turnover and footfall in June by 65 per cent and 42 per cent respectively, compared to June 2012. The continued increase in overall occupancy rates throughout our portfolio is indicative of our ability to leverage our long-term, strong relationships with leading international retailers.
“By contrast, the persistent uncertainty in the economic and consumer environment across Europe leads us to maintain our cautious approach to development, with the result that we will only press forward with our pipeline of projects when external funding becomes available. In addition, we will continue our track record of successful asset disposals in order to deleverage the company and reallocate realised capital from stabilised completed projects and non-core assets to the core yielding assets in the portfolio, thereby creating additional capital value and driving income growth.”