RNS Number : 0704D
Spazio Investment NV
10 September 2008
SPAZIO INVESTMENT N.V. ANNOUNCES INTERIM RESULTS
FOR PERIOD ENDED 30 JUNE 2008 AND AN ACCELERATION TO ITS BUSINESS PLAN
10th September 2008 - Spazio Investment N.V., ("Spazio" or the "Company"), a real estate investment company focused on the Italian
industrial real estate market, today reports financial results for the six months ended 30 June 2008 and an acceleration of its business
plan.
Financial Highlights for H1 2008
� Total portfolio Open Market Value (OMV) as at 30 June 2008 of EUR757.5 million (EUR728.6 million as at 31 December 2007) with an
annualised passing rent of EUR42.6 million
� Adjusted Net Asset Value (NAV) per share of EUR15.8 remained constant compared to Adjusted NAV at 31 December 2007
� Profit after Tax for H1 2008 of EUR21.4 million (H1 2007 EUR34.4 million)
� Proposed dividend per share of EUR0.59 (H1 2007 EUR0.22)
� Strong financial position
� Completed asset sales of EUR56.9 million at an average premium to OMV of 6.7% and at an average gross exit yield of 6.2% for
investment properties
� Acquired EUR59.9 million of assets at an average gross entry yield of 8.2%
� Shareholder approval obtained for a new share buyback programme of up to 10% of issued
share capital, which can be implemented subject to Board approval.
John Duggan, Chairman of Spazio, commented:
"In the first half of 2008 Spazio has delivered a robust set of results despite very challenging market conditions. Since its IPO,
Spazio has delivered good cash returns to shareholders, returning cash of approximately EUR49 million in the form of dividends as well as
returning EUR35 million of capital to shareholders via a share buy back programme. In response to an uncertain economic outlook and a
volatile real estate market, the Board plans to implement an acceleration of its business plan to maximize shareholder value and cash
returns within a defined time frame".
DISCLAIMER
Certain of the statements contained in this release are statements of future expectations and other forward looking statements. These
expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. The outlook is
based on the current property portfolio and disregards the potential effects of acquisitions and divestments, or significant changes in
exchange and interest rates. Actual results, performance or events may differ materially from those in such statements due to, among other
things, (i) general economic conditions, in particular economic conditions in Spazio Investment N.V.'s core markets, (ii) performance of
financial markets, (iii) interest rate levels, (iv) currency exchange rates, (v) changes in laws and regulations, and (vi) changes in the
policies of governments and/or regulatory authorities. Spazio Investment N.V. assumes no obligation to update any forward looking
information contained in this document.
Enquiries
Spazio Investment N.V.
Fabrizio Lauro Tel: +39 02 6442 50844
Deutsche Bank * Nominated Adviser
Ben Lawrence Tel: +44 (0) 20 7545 8000
Press Enquiries - Brunswick Group LLP
Justine McIlroy Tel: +44 (0)20 7404 5959
Richard Jacques
RESULTS FOR THE PERIOD ENDED 30 JUNE 2008 AND INTERIM DIVIDEND
Profit after tax for the period was EUR21.4 million compared with EUR34.4 million in H1 2007 with income available for distribution of
EUR16.4 million compared with EUR6.8 million in H1 2007. Against the comparatives for H1 2007, the decline in profit after tax reflects the
impact of asset revaluations in H1 2007 and the increase in income available for distribution reflects increased gains realised on disposals
in H1 2008. Rental income in H1 2008 remained broadly constant compared to H1 2007 at EUR21.4 million.
Spazio's Adjusted NAV per share of EUR15.8 remained constant compared to Adjusted NAV at 31 December 2007. This primarily reflected
strong gains realised on sales of assets, acquisitions completed in H1 2008 at a discount to OMV and the defensive nature of our assets.
The Board has resolved to pay an interim dividend of EUR0.59 per share for the period from 1 January 2008 to 30 June 2008 compared with
EUR0.22 over the same period last year, representing a pay-out ratio of 100% of distributable income.
The interim dividend will be paid on 6 October 2008 to shareholders on the register on 19 September 2008.
ACQUISITIONS AND DISPOSALS IN THE FIRST HALF OF 2008
Spazio has completed EUR59.9 million of acquisitions in the period:
� Acquisition from SMA S.p.A. (part of the Auchan Group) of a distribution centre of 32,000 sqm and additional 14,500 sqm of land
with development potential at Segrate, 15 km east of Milan. Purchased for consideration of EUR20 million with a gross entry yield of 8.4%
(sale and leaseback transaction);
� Acquisition from Immobiliare Capra S.r.l., a private Italian real estate developer, of a broadcasting centre in Milan for EUR12.4
million. Centre is fully let to RAI (Italian State owned broadcasting company), with a gross entry yield of 7.7%; and
� Acquisition from Pasini Group of an office building located in Sesto San Giovanni (Milan) for EUR27.5 million with a gross entry
yield of 8.3%. The building has a GLA of 13,100 sqm and was developed by the Pasini Group over a period of 18 months. The asset is let to
Alstom Power Italia which uses the building to host its Southern European Headquarters.
Spazio has completed EUR56.9 million of disposals in the period:
� Disposal of 28 Telecom Italia assets located throughout Italy for a total cash consideration of EUR26.3 million, at an average
exit yield of 5.8%, representing a 4.8% premium to OMV as at 31 December 2007;
� Disposal of 1 Prada asset located near Arezzo for a total cash consideration of EUR12.2 million, at an exit yield of 6.9%,
representing an 7.9% premium to OMV as at 31 December 2007;
� Disposal of 1 Enel asset located in Milan for a total cash consideration of EUR10 million, at an exit yield of 6.8%, representing
a 7.2% premium to OMV as at 31 December 2007;
� Disposal of 1 vacant asset located in Pianezza (part of the Agrileasing portfolio) for a total cash consideration of EUR0.32
million representing an 9.6% gross margin over historical purchase price; and
� Disposal of 13 units of Edificio 16, with a GLA of 3,356 sqm, for a total cash consideration of approximately EUR8 million,
representing a premium to book value of 29.5%.
DIVIDENDS
Out of the EUR16.4 million of the income available for distribution in H1 2008, EUR6.1 million is mainly attributable to recurring
rental income. The remaining EUR10.3 million results from trading activity, primarily realised gains from the disposals of assets. There is
a 142% increase in distributable income in H1 2008 compared to the same period last year, due mainly to gains from increased sales of
assets.
POST PERIOD-END EVENTS
On 4 July 2008 an amendment was approved to a facility contract originally executed on 26 September 2006 which restructures the credit
facilities used for the purchase of an office building from the Pasini Group by the Fund on 23 April 2008.
Based on the amendment, while the overall commitment of the lending banks remains the same, the two credit facilities were reduced and
the disbursement methodology changed.
On 14 July 2008 the lending banks made a total disbursement of EUR19.1 million against the above mentioned credit facilities.
UPDATE ON DEVELOPMENT PROJECTS
We have two existing developments, Edificio 16 and Eastgate Park. Following the announcement of the acceleration of our business plan
Spazio does not intend to acquire any new development projects.
EDIFICIO 16
As at 30 June 2008, total investment in this project was EUR34.1 million, 26 units had been sold, with a further 4 units contracted to
be sold. We remain confident that we will achieve our target of completing up to 75% of cumulative sales in 2008 and to sell the remaining
units by the end of the first half of 2009.
EASTGATE PARK
As at 30 June 2008 total investment in the Eastgate Project was EUR74.9 million, with three buildings (industrial, logistic and artisan)
with a total GLA of 53,500 sqm completed and infrastructure work approximately 60% complete. First phase of development is expected to be
completed by the end of 2009, with anticipated costs to completion of EUR25 million, at which point remaining infrastructure work and land
movement for preparation of urbanised plot will be completed.
We have started marketing the first three units and we expect to execute our first sales in the last quarter of 2008. Following
completion of this first phase of development, the Board will then consider options for the remaining land at the Eastgate site.
ACCELERATION OF BUSINESS PLAN
In light of the current market conditions, the Board and the Fund Manager are completing a review of the Group's portfolio, to identify
those assets with limited opportunity to create value in the short to medium term.
The Board plans to undertake an orderly disposal of such assets at prices that will realise value for shareholders while preserving the
overall value of the Group's portfolio. The plan remains to dispose of up to EUR140 million of assets in this financial year ending December
2008, with EUR56.9 million of disposals already achieved, albeit that worsening real estate market conditions have made this target more
challenging. Further significant disposals of assets will be targeted in the financial years ending December 2009 and December 2010.
Spazio plans to return the net proceeds from disposals to shareholders, whilst maintaining a strong balance sheet. Other than where
exceptional opportunities present themselves, the Group will not acquire assets whilst returning capital is expected to create more value
for shareholders.
RETURN OF CAPITAL
The Board expects the acceleration of the business plan to generate significant distributable cash. Delivery of the EUR140 million of
disposals targeted for 2008 would release capital for distribution of approximately EUR45 million. This EUR45 million would be in excess of
any profit on sale of these assets realised above book value, or any rental income, both of which the Board will continue to distribute as
dividends.
The excess capital generated from disposals will be returned to shareholders in a tax-efficient and transparent manner, which may
include the use of further on-market share buybacks and/or tender offers.
REVISED INCENTIVE ARRANGEMENTS
In order to align the interests of our external manager more strongly with the interests of the Company's shareholders, we are
negotiating revised terms with the external manager. These revised terms will incentivise the external manager to deliver the accelerated
business plan and will be linked to delivering specific targets for cash returns to shareholders and enhancing NAV.
FURTHER UPDATE AND APPROVALS
The Board expects to update investors with the detail of the accelerated business plan and revised incentive arrangements by 19
September in a separate announcement.
In addition, the Board will seek shareholder approval to implement the revised incentive arrangements described above and to grant the
Board authority to implement any return of capital as required. A circular setting out the details of these proposals, which will
incorporate a notice of an Extraordinary General Meeting of the Company, will be sent to shareholders in due course.
OUTLOOK
The outlook for the real estate sector in general remains challenging. The Italian market is fairing relatively well compared with other
European markets. Demand from occupiers is still holding up for industrial units and modern logistics space. The lack of availability of new
space has helped to protect the sector in Italy. There is a smaller number of completed investment sales, due mainly to the limited
availability of product. Interest from local investors remains firm. Prime rents and yields remained stable in H1 2008, the expectation is
that yields will soften in the future.
Nevertheless, the Board is confident that Pirelli RE, its external manager, will be able to deliver an accelerated business plan and
realise value for its shareholders.
Spazio Investment N.V.
Condensed Consolidated Interim Balance Sheet as at 30 June 2008
(in Euro)
Note ASSETS 30.06.2008 31.12.2007
NON-CURRENT ASSETS
1 Investment property 642,050,000 619,780,000
CURRENT ASSETS
2 Inventories 95,668,589 89,904,481
Trade receivables 2,902,920 5,094,683
Other receivables 2,392,830 1,977,195
Derivative financial instruments 11,126,126 5,035,512
3 Cash and cash equivalents 87,938,070 103,332,229
TOTAL CURRENT ASSETS 200,028,535 205,344,100
TOTAL ASSETS 842,078,535 825,124,100
EQUITY
4 Share capital 5,498,279 6,096,020
Share premium 274,486,750 308,956,491
Retained earnings 133,983,152 100,361,034
TOTAL EQUITY 413,968,181 415,413,545
LIABILITIES
NON-CURRENT LIABILITIES
5 Bank borrowings and payables to other 402,969,332 385,527,853
financial institutions
CURRENT LIABILITIES
5 Bank borrowings and payables to other 66,738 61,476
financial institutions
Trade payables 16,956,863 20,564,041
Other payables 6,976,449 2,937,456
6 Tax payables 1,140,972 619,729
TOTAL CURRENT LIABILITIES 25,141,022 24,182,702
TOTAL LIABILITIES AND EQUITY 842,078,535 825,124,100
The notes are an integral part of this condensed consolidated interim financial statements.
Spazio Investment N.V.
Condensed Consolidated Interim Income statement for the period from 01 January 2008 to 30 June 2008
(in Euro)
Note 01.01.2008 01.01.2007
/30.06.2008 /30.06.2007
7 Rental income 21,367,038 21,438,979
8 Net gain from fair value adjustment on 6,103,670 21,247,936
investment property
1 Net gain on disposal properties 2,674,838 130,000
2 Net gain on disposal inventories 1,826,530 -
Other operating income 174,084 324,031
Realised and unrealised gain on financial 6,090,614 6,603,215
assets at fair value through profit and loss
Management fees (2,597,319) (2,566,948)
Other costs (5,500,541) (3,980,875)
OPERATING PROFIT BEFORE FINANCING COSTS 30,138,914 43,196,338
Financial income 2,645,543 1,103,482
Financial expenses (11,336,760) (9,891,991)
PROFIT BEFORE TAX 21,447,697 34,407,829
9 Tax expense - -
PROFIT FOR THE PERIOD 21,447,697 34,407,829
10 Basic and diluted earnings per share (Euro) 0.78 1.13
The notes are an integral part of this condensed consolidated interim financial statements.
Spazio Investment N.V.
Condensed Consolidated Interim Cash Flow Statement for the period from 01 January 2008 to 30 June 2008
(in Euro)
Note 01.01.2008 01.01.2007
/30.06.2008 /30.06.2007
Profit for the 21,447,697 34,407,829
period
Adjustments for
non-cash items:
- Financial expenses 11,336,760 9,891,991
- Financial income (2,645,543) (1,103,482)
8 - Change in fair (6,103,670) (21,247,936)
value of investment
property
- Unrealised gain on (6,090,614) (6,603,215)
assets held for
trading/derivatives
- Adjustment IPO - 41,514
costs
Changes in working
capital:
- Change in trade (1,415,415) (2,432,441)
receivables/payables
- Change in other 3,670,947 7,203,485
and tax
receivables/payables
- Change in other 473,654 48,244,436
and tax
receivables/payables
(VAT)
2 Investment in (11,962,578) (21,295,462)
inventories
2 Disposal in 6,198,470 -
inventories
Net cash flow generated / (absorbed) from operating activities 14,909,708 47,106,719
(A)
1 Acquisition of (62,356,330) (25,412,064)
investment property
1 Acquisition cost 46,190,000 1,070,000
plus additions to
properties disposed
Interest received 2,077,135 725,431
Disposal/( - (11,300,190)
investment) in
financial assets at
fair value through
profit and loss
Net cash flow generated / (absorbed) from investing activities (14,089,195) (34,916,823)
(B)
Interest paid (11,729,264) (8,846,678)
Dividend (22,224,452) (3,962,400)
distribution of the
profit
Proceeds of 18,407,653 8,529,981
borrowings and
payables to banks
and other financial
institutions
Purchase of shares (668,609) -
Net cash flow generated / (absorbed) from financing activities (16,214,672) (4,279,097)
(C)
Total net cash flow (15,394,159) 7,910,799
generated /
(absorbed) in the
period (D=A+B+C)
Cash and cash 103,332,229 85,901,954
equivalents at the
beginning of the
period (E)
Cash and cash 87,938,070 93,812,753
equivalents at the
end of the period
(D+E)
The notes are an integral part of this condensed consolidated interim financial statements.
Spazio Investment N.V.
Condensed Consolidated Interim Statement of Changes in Equity for the period from 01 January 2008 to 30 June 2008
(in Euro)
note Share capital Share premium Retained earnings Equity
Equity at 31 December 2006 6,096,020 308,904,842 101,110,871 416,111,733
Cost of IPO - 41,514 - 41,514
Dividend 2006 - - (3,962,400) (3,962,400)
Profit of the period - - 34,407,829 34,407,829
Equity at 30 June 2007 6,096,020 308,946,356 131,556,300 446,598,676
note Share capital Share premium Retained earnings Equity
Equity at 31 December 2007 6,096,020 308,956,491 100,361,034 415,413,545
Dividend 2007 13 - - (22,224,452) (22,224,452)
Purchase of share capital - - (668,609) (668,609)
Cancelled acquired shares (597,741) (34,469,741) 35,067,482 -
Profit of the period - - 21,447,697 21,447,697
Equity at 30 June 2008 5,498,279 274,486,750 133,983,152 413,968,181
The retained earnings not distributable amount to EUR 117,984,489 relating to the revaluation of investment properties and derivatives.
The notes are an integral part of this condensed consolidated interim financial statements.
Notes to the accounts
Introduction
Spazio Investment N.V. (the "Company"), incorporated at 22 November 2005 is a public company (listed at Alternative Investment Market -
London) with limited liability (naamloze vennootschap) domiciled in Amsterdam, The Netherlands. The address of the registered office is
Royal Damcenter Dam 7f 1012 JS Amsterdam The Netherlands.
The principal activity of the Company is holding of investments in subsidiaries and associates.
Spazio Investment N.V. is the total owner of the fund Spazio Industriale Fondo Comune di investimento Immobiliare di tipo chiuso. The
Company is owned for 18.42%, at the end of June, by Pirelli RE Netherland B.V. which is totally owned by Pirelli & C. Real Estate S.p.A..
The reporting on operations of the Company during the 1st half year 2008 have been disclosed in the section "Chairman's Statement".
The comparative data in the Condensed consolidated income statement and the cash flow statements for the period from 1 January 2007 up
to 30 June 2007 refer to the 1st half year 2007.
Significant Accounting Policies
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2007, as
described in the annual financial statements for the year ended 31 December 2007.
Basis of preparation
The condensed consolidated interim financial statements for the half year ended 30 June 2008 have been prepared in accordance with IAS
34, "Interim financial reporting". This report has not been audited. The interim condensed consolidated financial statements should be read
in conjunction with the annual financial statements for the year ended 31 December 2007.
New standards or interpretations
The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year
beginning 1 January 2008 but are not currently relevant for Spazio Investment N.V..
* IFIRIC 11, 'IFRS 2 - Group and treasury share transactions'.
* IFRIC 12, 'Service concession arrangements'.
* IFRIC 14, 'IAS 19 - the limit on a defined benefit asset, minimum funding requirements and their interaction'.
The following new standards, amendments standards and interpretations have been issued but are not effective for the financial year
beginning 1 January 2008 and have not been early adopted:
* IFRS 8, 'Operating segments', effective for annual periods beginning on or after 1 January 2009. IFRS 8 replace IAS 14, 'Segment
reporting', and requires a 'management approach' under which segment information is presented on the same basis as that used for internal
reporting purposes. The expected impact is still being assessed in detail, but it appears likely that the number of reported segments may
increase.
* IAS 23 (amendment), 'Borrowing costs', effective for annual periods beginning on or after 1 January 2009. This amendment is not
relevant to Spazio Investment N.V., as it currently applies a policy of capitalizing borrowing costs.
* IFRS 2 (amendment) 'Share-based payment', effective for annual periods beginning on or after 1 January 2009.
* IFRS 3 (amendment), 'Business combinations' and consequential amendments to IAS 27, 'Consolidated and separated financial
statements', IAS 28, 'Investments in associates' and IAS 31, 'Interests in joint ventures', effective prospectively to business combinations
for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009.
Management is assessing the impact of the new requirements regarding acquisition accounting, consolidation and associates on Spazio
Investment N.V.. Spazio Investment N.V. does not have any joint ventures.
* IAS 1 (amendment), 'Presentation of financial statements', effective for annual periods beginning on or after 1 January 2009.
Management is in the process of developing proforma accounts under the revised disclosures requirements of this standards.
* IAS 32 (amendment), 'Financial instruments: presentation', and consequential amendments to IAS 1, 'Presentation of financial
statements', effective for annual periods beginning on or after 1 January 2009. This is not relevant to Spazio Investment N.V., as it does
not have any puttable instruments.
* IFRIC 13, 'Customer loyalty programmes', effective for annual periods beginning on or after 1 July 2008. Management is evaluating
the effect of this interpretations on its revenue recognition.
Segment reporting
The Group has only one line of business and operates through the Fund exclusively in Italy; accordingly it is not required to prepare
segment reports.
Note 1 Investment property
01.01.2008 01.01.2007
/30.06.2008 /31.12.2007
EUR EUR
Balance as at the beginning of the year 619,780,000 621,120,000
Additions:
- Acquisitions 59,920,000 28,907,500
- Capital expenditure 2,436,330 769,550
Net gain from fair value adjustments on 6,103,670 22,983,450
investment property
- Acquisition cost plus additions to properties (46,190,000) (50,000,500)
disposed
Balance as at the end of the period 642,050,000 619,780,000
The net gain on disposed property of EUR 2,674,838, as included in the Income Statement, refers to the properties sold during the first
half of 2008. The item is equal to the difference between the amount of sales proceeds (EUR 48,864,838) and the carrying amount (EUR
46,190,000).
Note 2 Inventories
01.01.2008 01.01.2007
/30.06.2008 /31.12.2007
EUR EUR
Balance as at the beginning of the year 89,904,481 53,488,342
Capitalized costs:
- Acquisitions - 8,695,000
- Capital expenditure 10,667,666 32,394,029
- Financial expenses 1,294,912 2,479,085
Total incremental costs in the period 11,962,578 43,568,114
- Costs of inventory sold (6,198,470) (7,151,975)
Balance as at the end of the period 95,668,589 89,904,481
Inventories consist of land for development and buildings under renovation in the normal course of the Fund's activities or during the
construction process or development related to said activities. These buildings and land are not intended for the investment property
portfolio of the Fund.
During the firs half of 2008 a total of 11 sale agreements were made, totalling EUR 8,025,000, relating to the disposal of 13 units in
the renovated building known as "Edificio 16" as well as 18 garages.
The net gain on disposal of inventories, as included in the Income Statement, amounts to EUR 1,826,530 and it is equal to the difference
between the sale proceeds (EUR 8,025,000) and the carrying amount (EUR 6,198,470).
Note 3 Cash and cash equivalents
As at 30 June 2008 this item totals EUR 87,938,070 (with respect to EUR 103,332,229 as at 31 December 2007) of which EUR 70,717,969
restricted accounts (with respect to EUR 64,331,074 as at 31 December 2007), subject to repayment of borrowings and interest due.
Note 4 Share capital
Ordinary shares Preferred shares Total
Balance as at 31 December 2007 30,480,000 100 30,480,100
Shared cancelled on 25 March (2,988,705) - (2,988,705)
2008
Balance as at 30 June 2008 27,491,295 100 27,491,395
Following the share buyback programme the number of shares acquired in the period between September 2007 to January 2008 amount to
3,042,405.
On 25 March 2008 the Company cancelled n. 2,988,705 of its own shares. A number of 53,700 of own shares remain in the equity of the
Company.
Note 5 Bank borrowings and payables to other financial institutions
30.06.2008 31.12.2007
EUR Non-current Current Non-current Current
Jumbo Properties loan 348,807,241 57,066 339,410,018 53,568
Area of Portogruaro loan 46,399,609 8,425 34,125,868 6,036
Edificio 16 loan 7,762,482 1,247 11,991,967 1,872
Total 402,969,332 66,738 385,527,853 61,476
Concerning the "Jumbo Loan" borrowing, during the period has been used EUR 35,160,000 of the remaining part of the Facility Agreement to
invest in the acquisition. Due to the sales EUR 25,945,928 has been reimbursed. As at 30 June 2008 the unutilized part of the Facility
Agreements (Revolving Facility) amounts up to EUR 82,570,296.
Concerning the "Portogruaro Loan" borrowing, during the period has been used EUR 12,213,725 of the remaining part of the Facility
Agreement to invest in the development assets and in the urbanization expenses of Portogruaro area. As at 30 June 2008 the unutilized part
of the Facility Agreements amounts up to EUR 173,998,770.
Concerning the "Edificio 16 Loan" borrowing, during the period has been reimbursed EUR 4,304,653 due to the sales. As at 30 June 2008
the unutilized part of the Facility Agreements amounts up to EUR 10,653,248.
The Jumbo Loan entered into on 26 September 2006, with a duration of seven years extendible through ten years is intended to finance all
the Fund's properties and future acquisitions; the effective interest rate, determined in accordance with the amortized cost method, is
equal to 6.341%.
The Portogruaro Loan entered into on 26 September 2006, with a duration of seven years extendible through ten years is intended to
finance the development of the Portogruaro Site; the effective interest rate, determined in accordance with the amortized cost method, is
equal to 6.751% for tranche 1, 2 and 3, to 11.439% for tranche 4 and the VAT line and to 5.817% for tranche 5.
The Edificio 16 Loan entered into on 26 September 2006, with a duration of seven years extendible through ten years is intended to
finance the purchase of the property for renovation and its subsequent renovation; the effective interest rate, determined in accordance
with the amortized cost method, is equal to 6.799%.
The fair value of the above described borrowings approximated their carrying values at the balance sheet date, as the impact of
discounting is not significant. The fair values are based on cash flow discounted using a rate based on the latest applicable floating rates
at the end of the period.
Note 6 Tax payables
The amount of EUR 1,140,972 refers to:
* payable regarding VAT, equal to EUR 1,094,262;
* withholding taxes payable to tax authorities on services rendered by Fund's consultants, of EUR 46,710.
Note 7 Rental income
The item amounts to EUR 21,367,038 and it refers principally for EUR 11,100,891 to Telecom Italia rents, for EUR 3,350,786 to rental
incomes from Prada, for EUR 1,304,247 to ENEL rents, for EUR 950,532 to rental incomes from ACC Group and for EUR 906,029 to rental incomes
from BSL Bertola Servizi Logistici.
Note 8 Net gain from fair value adjustment on investment property
The item, amounting EUR 6,103,670, consists of the difference between the fair value at 30 June 2008 and 31 December 2007 (or
acquisition date if later) of investment property and their related acquisition costs.
The fair values are based on open market values, being the estimated amount of which a property could be exchanged on the date of
valuation between a willing buyer and a willing seller in an arm's length transaction wherein the parties have acted knowledgeably,
prudently and without compulsion.
The fair value gains arise from the valuation on 30 June 2008 at fair value, comprising market value by an independent, professionally,
qualified appraiser.
Note 9 Tax expense
In the Netherlands, Dutch corporate tax is based on the fiscal results, taking into account the fact that certain income and expense
items as reported in the profit and loss account are tax-exempt.
Income and capital gains arising from immovable property situated in Italy is effectively exempt from corporate taxation both in Italy
and in the Netherlands. Accordingly no deferred tax is calculated as the Company is legally tax exempt, due to the Dutch tax rules and the
bilateral Italy-Netherlands fiscal Agreement.
Note 10 Earnings per share (EPS)
Basic and diluted EPS is calculated by dividing the profit attributable to the Company's shareholders by the weighted average number of
ordinary shares during the first half of 2008.
6 months ended 30 June 2008
Profit attributable to the Company's shareholders (thousands of Euro)
21,448
Weighted average number of ordinary shares in issue (thousands)
27,491
Basic and diluted EPS (Euro per share)
0.78
Note 11 Event after the condensed consolidated interim financial statements date
On 4 July 2008 an amendment to the "Jumbo Loan" contract, originally executed on 26 September 2006 and subsequently amended, was signed
resulting in the redefinition of the credit facilities referred to as "Pasini Tranche B1" and "Pasini Trance B2" to be used for the purchase
of an office building of approximately 13,100 sq m of GLA purchased by the Fund.
Based on the amendment, while the overall commitment of the lending banks remains the same, the two credit facilities were reduced and
the disbursement methods changed.
On 14 July 2008 the lending banks made a total disbursement of EUR 19,080,000 against the above mentioned "Pasini Tranche B1" and
"Pasini Tranche B2".
Note 12 Related party transactions
Balances between the Group and the Management Company and companies in the latter's Group at 30 June 2008 and transactions between the
same during the period then ended are listed below:
30.06.2008 31.12.2007
Trade payables to Pirelli & C. Group 84,184 176,630
Trade payables to Pirelli & C. RE Group 3,566,028 4,321,034
Trade payables to Management Company 1,155,698 1,085,554
Other payables to Pirelli & C. RE Group 2,000,000 2,000,237
01.01.2008 01.01.20007
/30.06. /31.12.2007
2008
Management fees 2,753,246 2,678,857
Other costs 2,614,711 1,321,272
Note 13 Dividend 2007
According to Spazio Investment N.V. Articles of Association, the Annual General Meeting on 29 April 2008 resolved to pay a dividend of
EUR 0.81 per share in addition to EUR 0.22 of interim dividend already distributed on 15 October 2007 for the previous year. This payment
was made in April 2008.
Note 14 Proposed interim distribution
According to Spazio Investment N.V. Articles of Association, the Management Board resolves to make an interim distributions.
It is proposed that the Management Board approves the payment of an interim dividend of EUR 0.59 per share for the period from 1 January
2008 up to 30 June 2008 payable on 6 October 2008 to shareholders on the register at the close of business on 19 September 2008.
Note 15 Approval of Interim Accounts
The Interim Accounts were approved by the Board of Directors on 8 September 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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