First Semester 2014 Financial Results

LAMDA Development: First Semester 2014 Financial Results

Reaffirming the trend from the previous quarters, EBITDA of our three Shopping Centers posted an increase of 5% reaching €18,6 million. EBITDA attributed to the Group reached €14,5 million, almost flat compared to the equivalent period last year. It should be noted that on a like-for-like basis it corresponds to an increase of 6%.

SIGNS OF RECOVERY IN OUR RETAIL INDICATORS

The positive trend in the main retail indicators of our Shopping Centres continues even stronger in the first semester of 2014. Aggregate shopkeepers’ turnover in our three malls increased by 9% in the first half of 2014 following an increase of 6% in the second half of 2013. Total customer visits increased by 6,5% and 1,5% respectively. Average occupancy of our Shopping Centres’ exceeds 98%, and demand for retail spaces is increasing.

The favourable performance of our Shopping Centres compared to the rest of the retail market in Greece proves the fact that they have overwhelmingly won the preference of the consumer public. Shopkeepers continue to enjoy ample support via marketing, promotional and communication activities which procure satisfactory customer visits as evidenced by actual data.

Shopkeepers’ turnover in “Golden Hall” was increased by 11,5%, while it is very encouraging that customer visits were also increased significantly by 14%. Operational profitability reached €6,4 mil., slightly increased versus last year. In “Mediterranean Cosmos” in Thessaloniki, shopkeepers’ turnover increased by 9%, customer visits by 5% and the Centre is fully occupied. Regarding “The Mall Athens”, the above indicators continue to show strong performance as shopkeepers’ turnover and customer visits were increased by 8% and 5% respectively.

FINANCIAL RESULTS ANALYSIS

Following IFRS standard 11 that is effective from 1/1/2014, our company is obliged to discontinue consolidating Joint Ventures by the proportional method and henceforth, Joint Ventures will be consolidated with the equity method. It must be stressed that, in the balance sheet, consolidation with the equity method does not have any effect on the Group Equity or Net Result after Taxes.

The following table summarizes the Group’s Retail EBITDA:

Flisvos Marina posted an operational semester loss of €0,1 mil., compared to €0,2 mil loss in the equivalent period last year. It must be noted that an increase in the demand for berthing spots has therefore led to the increase in occupancy. Office buildings had a positive contribution of €0,9 million (same as last year) to the quarterly Group profitability. It must be noted that the dividends and participations revenue decrease is attributed to the inclusion of €1,1 mil profit from LAMDA Hellix and Flisvos Marina participations disposal in the equivalent period last year.

Net Consolidated Loss for the period amounts to €6,8 million compared to losses of €25,7 million in the first semester of 2013. The difference is attributed to the once-off accounting adjustment effect of €11,8 million that relates to deferred taxation triggered by the 6% increase in corporate tax rates from 20% to 26%. Furthermore, the noticeable improvement is also attributed to lower fair value losses in the current semester from our investment portfolio by €11,6 mil.

Net Asset Value before Taxes reached €307 million (€6,9 per share) compared to €296 million on 31/12/2013.

Summary of consolidated financial figures

LAMDA Development stock is still trading at a discount compared to its Net Asset Value. Stock price return from the beginning of the year exceeds 6% with improved daily volume. More precisely, with a share price of €4,70 on 22/8/2014, the current discount versus the adjusted NAV per share, following the Share Capital Increase, approximates 17%.

The Net Loan to Value Ratio (Net LTV) of the Group’s investment portfolio was 59,1% with the previous accounting treatment (proportional method) and 51,6% with the equity method currently applied, a level deemed quite satisfactory which was further improved following the recent share capital increase.

RECENT DEVELOPMENTS AND DECISIONS

• The Hellenic Republic Asset Development Fund, with the decision of its Board of Directors dated 31.03.2014, appointed Lamda Development as the preferred investor in its tender process for the acquisition of 100% of the share capital of “Hellinikon S.A.”. The Investment, of an estimated cost of €7 billion, aims at the implementation of an Integrated Development Plan in the Metropolitan Pole of Hellinikon – Agios Kosmas and will include, among others, the construction of a metropolitan park of 2 million square meters, the development of residential zones, hotels, shops, malls, open cultural areas, museums, health and well-being centers and sport and leisure facilities, the creation of a business, education and research hub and the full upgrade of the current marina and coastal front.
• The Extraordinary General Meeting of the Shareholders of the Company, held on 29/4/2014, approved the increase of the share capital of the Company for an amount of up to €150 million by payment in cash with preemptive rights of the existing shareholders and authorized the Board of Directors to determine the subscription price of the new shares. The share capital increase was completed successfully and reiterated the trust that the local and international investment community have placed in our Company. Funds will be used to strengthen the Company’s capital structure and liquidity with the aim to complete existing projects (such as the undeveloped part of IBC), the participation in new private sector projects and / or privatization projects, as well as the improvement in working capital and finally, the participation in individual projects within Hellinikon master development.
• In June our Company sold its treasury stock, a total of 3.497.599 shares (representing 7,88% of the entire share capital before the share capital increase) to TPG-Axon Management LP at €4,85 per share, while total consideration approximated €17 mil.
• It must be noted that during the recent share capital increase Blackstone / GSO became a strategic investor in our Company. This strategic participation offers multiple benefits to the Company in terms of business development, improved access to the international capital markets and therefore successful implementation of the Company’s business strategy.

The summary of the financial figures for the first semester 2014 will be posted on the company’s website (www.lamda-development.net) and on the website of the Athens Exchange.