TIDMKDDG
RNS Number : 8229Z
KDD Group NV
29 September 2009
29 September 2009
KDD Group N.V.
("KDD Group" or the "Group")
Interim Results for the six months ended 30 June 2009
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 for the six months ended 30 June 2009 (the "Interim Results").
Financial Highlights
The fair values of the Group's investment property and investment property under
development portfolios (the "Development Portfolios") have increased by 16% or
EUR 27.7 million, for the six months ended 30 June 2009, to EUR 196.6 million
(31 December 2008: EUR 168.9 million).
The fair value of the Development Portfolio has been estimated by the Group,
using the fundamental assumptions established by Colliers International
("Colliers") during the course of their previous appraisal of KDD Group's
projects, which took place as at 31 December 2008. This approach was taken by
the Group on the basis that the board of directors of the Group (the "Board")
believes that all of the underlying assumptions initially set out by Colliers,
including rental rates, market trends and applied yields, have not changed
significantly over the last six months. The only new appraisal undertaken by
Colliers in the last six months has been for the Group's latest project, Metro
City, located on Brovarsky Avenue in Kyiv.
This significant increase in fair value of the Group's investment and
development portfolios is due to additional capital expenditures made for
projects on EUR 23.7 million and excess of fair value of Metro City over the
accumulated costs by EUR 4.0 million.
The profit after tax of EUR 3.85 million recorded for the six months ended 30
June 2009 comprised, inter alia: a revaluation surplus on the Metro City project
net of deferred tax effect amounting to EUR 3.0 million; a significant decrease
in general and administrative expenses by 50% or EUR 1.8 million, as a result of
the reduction in salaries, related charges and other professional services;
interest income on deposits of EUR 1.9 million; the gain from the extension of
promissory notes of EUR 2.65 million; and an increase in the provision
for recoverable VAT of EUR 1.9 million.
Net asset value, as at 30 June 2009, has increased by approximately EUR 3.43
million or 2% to EUR 157.4 million, compared with the value as at the year ended
31 December 2008. This is primarily due to the above mentioned net profits of
EUR 3.85 million.
Outlook and Revised Strategy
KDD Group remains confident in the Group's business model, which the Board
believes will enable the Group to benefit from the recovery in the economic
climate and the re-opening of the real estate credit markets. Accordingly, the
Group has used this period of slowdown to prepare itself, as far as possible, to
be best ready for future growth, in order to maximise returns for shareholders.
The Group has remained focused on strengthening the business through various
means, including:
* the acquisition of outstanding permits for certain projects;
* the constant promotion of the KDD Group within the local property community; and
* conceptual / design improvements in certain projects.
During the third quarter of 2009, the Board experienced a gradual stabilisation
of both real estate prices and rent rates. The Board believes that many
companies operating within the real estate market, including KDD Group, are
optimistic that there will be a return to growth in Ukraine by mid 2010. The
Board would note that in late July of this year, the International Monetary Fund
(IMF) significantly improved its 2010 GDP growth forecast for Ukraine from 1% to
2.7%.
Against this background, KDD Group has decided to resume its fund raising
efforts, in order to bring the PecherSky and Kureni projects into the
construction phase as rapidly as practicable. Accordingly, the Board and the
management team continue to undertake negotiations with a number of banks, in
order to attract financing for the PecherSky residential project.
The Board strongly believes that the fundamentals of the Group and its projects
remain solid, so we look into the future with optimism and we would like to
thank our employees, partners and shareholders for their continued support
during the recent economically challenging period.
The complete Interim Results of KDD Group can be accessed using the following
link:
http://www.kddgroup.com.ua/
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Enquiries:
+----------------------------------------------------+-----------------------------------------------------+
| KDD Group | Tel: +38 050 516 6091 |
| Petro Radchuk | |
| | |
+----------------------------------------------------+-----------------------------------------------------+
| Strand Partners Limited | Tel: +44 207409 3494 |
| Stuart Faulkner / James Spinney | |
| | |
+----------------------------------------------------+-----------------------------------------------------+
| Renaissance Capital | Tel: +7 495 783 5691 / |
| Arie Kravtchin / Sergiy Oleksiyenko | +38 044 492 7399 |
+----------------------------------------------------+-----------------------------------------------------+
Notes to editors:
KDD Group is the holding company of one of Ukraine's leading real estate
investment and development groups. The Group holds a diversified portfolio of
real estate projects comprising offices, residential complexes, retail centres
and mixed-use projects. The Group 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.
This information is provided by RNS
The company news service from the London Stock Exchange
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