First Semester 2006 Financial Results in accordance with IFRS
LAMDA Development consolidated turnover reached 67,1 million in 1st semester 2006 compared to 33,5 million in same period of previous year 2005, showing an increase of 100%.
The growth in group turnover is mainly attributed to the revenues generated by the two Shopping and Leisure Centers, The Mall Athens and Mediterranean Cosmos, as well as to the continuing sales of residential units by LAMDA Olympia Village S.A.. It should be noted that group turnover no longer consolidates the turnover of Swissport LAMDA Hellas after its disposal in June 2005.
Group turnover reiterates the strategic focus on Real Estate development, management and investment, as indicated in the following table:
| millions | Real Estate Rental Revenues | Real Estate Sales | Project Management | Other Revenue | Total |
| 1st Semester 2006 | 25,7 | 30,2 | 1,8 | 9,4 | 67,1 |
| 1st Semester 2005 | 2,0 | 14,0 | 3,6 | 13,9 | 33,5 |
Consolidated net profits after minority interest increased significantly as it reached 44,6 million compared to a loss of 6,8 million in the corresponding period last year. It should be noted that even if fair value gains were to be deducted from profits, the result would lead to profits of 14,6 million.
The significant increase of the consolidated results by 51,4 million compared to the 1st Semester 2005 is attributed to the gains from the adjustment of the fair value of the shopping center "The Mall Athens" by 30 million (after the deduction of the deferred tax) and also to the successful operation and management of the two Shopping and Leisure Centers. The adjustment of the consideration for the transfer of the shares of EUROBANK PROPERTIES REIC by 4,7 million and the profit from the transfer of ARGONAYTIS shares by 3,4 million have also positively attributed to the results. The reduction of corporate income tax rate had also a positive effect to the profits by 5,4 million. This favorable development counterbalanced the increase in financial expenses by 7,2 million which are now expensed and no longer capitalized as in the previous periods, given the completion and commencement of operation of the groups real estate developments.
As far as the fair market value gains that resulted from the evaluation of the Shopping Center "The Mall Athens", it should be noted that they have resulted from the successful operation of the shopping center and the improvement in the capitalization rate compared to the valuation as of 31/12/2005. The use of a lower cap rate for the valuation of the Shopping Center is based not only to the current market conditions but also to the sales agreement with HSBC LUXEMBOURG Sarl for the transfer of the 50% of the shares that LAMDA DEVELOPMENT held in the Shopping Center. The specific transaction, that has not been completed yet, obliged the company to appraise the value of the Shopping Center according to the current market conditions, as indicated by IFRS (IRS40). It should be noted that the financial profit from the forthcoming transaction has not been fully reflected in the financial results, as its completion is still pending.
The parent company LAMDA Development posted profits of 33,4 million compared with profits of 0,7 million in the 1st Semester 2005. This significant increase in profits is mainly an outcome of the reversal of provision from impairment by 38,7 million reduction in the value of Lamda Olympia Village that was held on 31/12/2003 but it does not affect the consolidated results. Consolidated results have also been influenced positively by 4,7 million from the adjustment in the consideration of the shares transfer of EUROBANK PROPERTIES REIC. On the other hand, results have been influenced negatively by 5,6 million because of the provision of impairment of the value of LAMDA Shipyards & Marine Services SA., which reflects the transfer of accumulated loses of this subsidiary to the parent company.
LAMDA Olympia Village SA generated net profits of 49,4 million against a loss of 4 million in the 1st Semester of 2005. The net profits of the Shopping Center "The Mall Athens" that resulted from its appraisal to the fair market value are 38 million. Total EBIT reached 15 million, 10,7 million of which pertain to net operating income from The Mall whereas the remaining 4,3 million were generated by residential sales in "ILIDA". The Center is currently fully leased.
PYLEA SA realized net profits of 3,3 million compared to a loss of 0,8 million in the corresponding period in the previous year. The entire income of 8,6 million is generated by the operation of the Shopping Center "Mediterranean Cosmos" which is currently leased by 97%.
