2 August 2011
KDD Group N.V.
(the "Company" or the "Parent")
The Company and its subsidiaries
(together referred to as the "KDD Group" or the "Group")
Interim Results for the six months ended 30 June 2011
KDD Group N.V., the holding company of one of Ukraine's leading real estate investment and development groups, is pleased to report its financial results as at and for the six months ended 30 June 2011 (the "Interim Results").
The complete Interim Results of KDD Group for the six months ended 30 June 2011 are available on the Company's website:
http://www.kddgroup.com.ua/archives/category/investor_relations/financial_reports
Financial Highlights
During the six months ended 30 June 2011, the fair values of the Group's investment property portfolio and investment property under development portfolio (together, the "Portfolios") have decreased by approximately 1% (EUR 3.2 million) to EUR 325.9 million (31 December 2010: EUR 329.1 million).
The decrease in the fair value of the Portfolios is the result of a change in the rate of currency translation and arises on translation from the functional currency (UAH) to the presentation currency of the IFRS financial statements (EUR). Currency translation difference amounts to EUR 27.2 million for the six months of 2011. This decrease in fair value was offset by the increase in the fair value of the Group's Portfolios due to capitalization of construction works on Sky Towers Project (EUR 17.7 million) and capitalization of bank loan interest attributable to Sky Towers Project construction (EUR 6.3 million).
For the six months ended 30 June 2011, the Group made an after tax profit of EUR 0.1 million, principally generated by net financial income (due to operational and non-operational foreign exchange differences) and proceeds from the Kureni restaurant.
The general and administrative expenses of the Group for the first six months of 2011 remained at the same level as the corresponding period for 2010 and amounted to EUR 1.6 million.
The Group's net asset value as at 30 June 2011 decreased by EUR 18.2 million to EUR 237.1 million, from the value as at 31 December 2010 (EUR 255.3 million). This decrease is mostly due to the negative effect of currency translations, as mentioned above.The effect of currency translation adjustments for the six months ended 30 June 2011 amounted to EUR 18.3 million.
Outlook and Revised Strategy
The Ukrainian real estate sector continued its stabilisation process during the period. Major indicators, such as rent rates, residential property prises and construction volumes, remained generally unchanged, with demand throughout all sectors growing modestly. In the first half of 2011, Ukrainian banks did not reduce interest rates below 18%, due to expectations of a possible currency devaluation.
KDD Group has undertaken negotiations with a number of banks and has concluded that, under current market conditions, only strategic partnerships with new equity financing on an individual project level can allow further realisation of its larger projects, namely WTC Kyiv and Metro City. The Company is pleased to confirm that construction of both Sky Towers and PecherSky is ongoing and based on existing debt financing.
Petro Slipets, KDD Group's CEO, commented:
"The Board remains focused on searching for new financing options in order to start the realisation of several projects from the Company's portfolio. Demand for good quality real estate is growing and we believe that our portfolio of projects is well-balanced to capitalise on this; however, financing remains the key challenge."
The complete Interim Results of KDD Group for the six months ended 30 June 2011 are available on the Company's website:
http://www.kddgroup.com.ua/archives/category/investor_relations/financial_reports
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Enquiries:
KDD Group N.V. Petro Radchuk | Tel: +38 050 516 6091 |
Strand Hanson Limited Stuart Faulkner / James Spinney / Liam Buswell | Tel: +44 207409 3494 |
Notes to editors:
KDD Group is the holding company of one of Ukraine's leading real estate investment and development groups, which holds a diversified portfolio of real estate projects comprising offices, hotels, residential complexes, retail centres and mixed-use projects. The Company currently has nine projects, of which three are in the construction phase and six are at various stages of design and development. These projects, which have a total planned gross area of approximately 2.7 million square metres, are located in the capital region of Kyiv with the exception of one residential project in L'viv.
