Aalborg, Denmark, 2012-09-25 08:57 CEST (GLOBE NEWSWIRE) --
Summary
- TK Development recorded results of DKK -40.0 million before tax in the first six months of 2012/13, compared to DKK 8.1 million in the first six months of 2011/12.
- In April 2012, a Bill proposing changes to the rules for tax loss carryforwards was introduced. This Bill was enacted in June 2012. For TK Development, this has considerably lengthened the time horizon for utilizing tax losses, and thus significantly increased the uncertainty relating to utilization of the tax asset. TK Development has calculated that the changed rules entail a need to impair the Group’s tax asset by DKK 150.0 million. This amount has been recognized in the Interim Report for the first six months of 2012/13.
- The results after tax amounted to DKK -186.6 million, against DKK 16.9 million in the first six months of 2011/12.
- Consolidated equity totalled DKK 1,697.7 million at 31 July 2012, corresponding to a solvency ratio of 37.4 %.
- In July 2012, TK development entered into a conditional agreement with Heitman regarding the sale of two Polish projects amounting to a total project value of EUR 95 million. The sale comprises a 70 % stake in the Group’s Galeria Tarnovia shopping centre in Tarnów and a new development project in Jelenia Góra. TK Development will realize a minor profit on the completion of this sale as well as free up cash resources. Future profits will also be generated in the form of fee income from the jointly owned company established for developing, letting and managing the construction of the development project. The sale is expected to be completed in October 2012.
- Following its completion, the extension to the Group’s Czech investment property, the Futurum Hradec Králové shopping centre, opened as scheduled on 10 May 2012. The current occupancy rate for the whole shopping centre is 99 %.
- Futurum Hradec Králové, the Czech Republic, is owned in a joint venture with GE Capital and Heitman. The joint venture has decided to attempt selling the property and has initiated the sales process. Based on the ongoing sales process, Management has changed the valuation of the property, thus recognizing a negative value adjustment of DKK 24.3 million for the first six months of 2012/13.
- Construction of the first phase of the Group’s project in Bielany, Poland, is progressing as planned. The total project area comprises about 56,200 m², primarily housing, consisting of 900-1,000 units, with 136 being built in the first phase. Sales agreements have been concluded for about 43 % of these units.
- The Group’s total project portfolio amounted to DKK 3,615 million at 31 July 2012, of which DKK 2,030 million is attributable to projects that have been completed and thus generate cash flow. The annual net rent from the current leases amounts to DKK 136 million, equal to a return on cost of 6.7 %. Based on full occupancy, the return on cost is expected to reach 7.7 %. Negotiations for the sale of several of these projects are ongoing.
- In total, the Group’s completed, cash-flow-generating projects and its investment properties amount to DKK 2,454 million. The Group’s net interest-bearing debt amounts to DKK 2,328 million.
- At 31 July 2012, the Group’s project portfolio comprised 767,000 m² (31 January 2012: 776,000 m²).
- Uncertainty on the international financial markets continues to affect the property sector negatively, leading to consistently long decision-making processes among financing sources, tenants and investors alike.
- The Group will make the startup of major new projects contingent on obtaining either full or partial financing for them and on freeing up cash resources from the sale of one or more major completed projects.
- Management considers it of great importance for the Group to sell additional, completed major projects in the 2012/13 financial year. The sale of major completed projects will generate the cash resources required to underpin future operations and project flow, and thus long-term earnings. In light of the volatility of financial markets, the volume, timing and proceeds of major project sales are subject to uncertainty. Despite this uncertainty, Management expects to sell additional projects in the near future and to generate positive pre-tax results for the 2012/13 financial year. Thus, Management maintains its profit expectations for 2012/13.
- Today, Ernst Michaelsen has chosen to retire from the Supervisory Board. At the Company’s Annual General Meeting in May 2012, Ernst Michaelsen was elected as a new Supervisory Board member at the request of a few major shareholders. His decision to retire from the Supervisory Board is based on subsequent changes to the group of shareholders, which mean that Carl Ejler Rasmussen Holding Sweden AB no longer holds shares in TK Development A/S.
Further information is available from Frede Clausen, President and CEO, on tel. +45 8896 1010.
The expectations mentioned in this announcement, including earnings expectations, are naturally subject to risks and uncertainties, which may result in deviations from the expected results. Expectations may be affected by various factors, as mentioned in the section “Risk issues” in the Group’s 2011/12 Annual Report.
