Today, in a meeting chaired by Gilberto Coffari, the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. (“IGD” or the “Company”), a major player in Italy’s retail property market and listed on the STAR segment of the Italian Stock Exchange, examined and approved the Half-Year Financial Report at 30 June 2015.

“The numbers for this half show an increase in the key financial performance indicators with significant growth in revenue, EBITDA, profit and FFO”, Claudio Albertini, IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.’s Chief Executive Officer stated. “We believe that we have finally entered into a recovery phase which should stabilize in the next few months, not only for IGD, but also for Italy’s macroeconomic environment. The strong growth in retailers’ sales, in fact, and the steady number of footfalls at our shopping centers confirm the recovery in consumption underway, in addition to demonstrating, once again, the validity of the shopping center model.  The net profit for the first half of the year was also positively impacted by property valuations which benefitted, in addition to the consolidated quality of the portfolio, from a slight, but expected and hoped for, yield compression.”

Principal consolidated results at 30 June 2015

The shopping centers continued to perform well in first half 2015 with retailers’ sales at Italian shopping centers rising 6.7% (including the extensions, the sixth consecutive quarter of growth) and footfalls stable; in Romania, footfalls increased (+1.7%) due also to a decrease in the construction work underway.

The occupancy improved in Italy (average for malls and hyper reached 96.2%) and, above all, in Romania (88.9% versus 86.2% at 31/03/2015).

Core business revenue reached €62.3 million, an increase of 3.3% against the same period of the prior year.

Rental income rose 3.8% against the same period 2014 to €59.9 million; the increase is explained primarily by:

• for €2.3 million, the new openings made in 2014 like the Centro d’Abruzzo extension, Piazza Mazzini in Livorno, the reformatted Le Porte di Napoli center and the acquisition of a portfolio of core real estate assets in October 2014 post-capital increase, in addition to the inauguration of Clodì Retail Park in May 2015;
• like-for-like revenue in Italy which, net of the strategic or planned vacancies, was largely unchanged for both hypermarkets and malls;
• for -€612 thousand, by like-for-like strategic vacancies (vacant space which has already been pre-let, but where new layouts are being completed), sale of the City Center property on via Rizzoli at the end of May 2015 and other minor changes;
• for €116 thousand, by an increase in like-for-like revenue in Romania, due to the marketing carried out in the period. The vacancies needed to proceed with the investment plan and other changes caused revenue to fall by-€140 thousand.

As for the Porta a Mare project, the income generated by the rental of offices at Palazzo Orlando reached €162 thousand (an increase of approximately €30 thousand), while revenue from trading (relating to the sale of three residential units and appurtenances) amounted to €886 thousand.

Core business Ebitda amounted to €41.4 million, an increase of 3.9% against 30 June 2014, while total Ebitda rose 3.8% to €41.2 million.

The core business Ebitda Margin came to 66.5%, while the Ebitda Margin for freehold management reached 76.7%.

Ebit came to €40.1 million, an increase of 59.2% against the same period 2014, due primarily to a drop in writedowns and negative fair value adjustments (-92.4%).

Net financial expense improved markedly against 30 June 2014, coming in at €20.3 million (- 11.3 %) and the average cost of debt came to 3.88% (vs. 4.06% in the previous period). The change is linked primarily to the decrease in financial payables as a result of the capital increase completed year-end 2014 which made it possible to extinguish a few loans, along with a drop in the spreads applied.  The bond swap completed in April 2015 also held to reduce financial expense (the positive effects of this transaction will become more apparent in the second half).

The Group’s portion of net profit amounted to €20.4 million at 30 June 2015, an increase of more than €16 million against the same period 2014.

Funds from Operations (FFO) rose 23.8% against first half 2014 to €21.2 million.

The NNNAV was in line with the figure recorded at 31 December 2014 (€1.23 per share); the Group’s net equity was impacted by the operating results posted in first half 2015, as well as the €28.4 million in dividends paid on 20 May 2015.

The IGD Group’s net financial position amounted to €937.9 million at 30 June 2015,  stable with respect to 31 December 2014 (€942.0 million); both loan to value (48.3%) and the gearing ratio (0.95) were basically unchanged. Net financial expense improved also as a result of the bond swap finalized in April 2015.

The Real Estate Portfolio at 30 June 2015

Based on the independent appraisals of CBRE, Reag Advisory and Cushman&Wakefield, the market value at 30 June 2015 of the IGD Group’s real estate portfolio – comprised of 56 properties in Italy and 15 in Romania – reached €1,942.38 million, down with respect to the €1,951.15 million recorded at 31 December 2014 due also to the sale of the property on Via Rizzoli in Bologna.

Like-for-like hypermarkets were up by +1.5% (+€9.0 million) while, like-for-like, shopping malls and retail parks increased by 1.2% to €11.5 million. The average financial occupancy in Italy came to 96.24% (97.21% at 31/12/2014) while average yields reached 6.45% for hypermarkets and 6.42% for shopping malls.

The market value of the Romanian portfolio at 30 June 2015 was €172.6 million, down with respect to the €175.3 million recorded at  31/12/2014. The financial occupancy amounted to 88.94%, an improvement against the figure recorded at year-end 2014 (86.54%), and the average yield to 6.37%

The Board of Directors, after the Committee for Related Party Transactions issued a favorable opinion, resolved to amend the Procedure for Related Party Transactions in order to voluntarily extend application to include the material transactions carried out with companies of the Unipol Group.
The Procedure for Related Party Transactions, as amended, is available on IGD’s website, https://www.gruppoigd.it/Governance, as well as at the Company’s registered offices, at Borsa Italiana S.p.A. and the authorized storage mechanism provided through www.emarketstorage.com.