Today the Board of Directors of IGD -Immobiliare Grande Distribuzione SIIQ S.p.A.(“IGD”or the “Company”), one of the main players in Italy’s retail real estate market  and listed on the STAR segment of the Italian Stock Exchange,  in a meeting chaired by Gilberto Coffari, examined and approved  the Consolidated Interim Management Statement at 30 September 2014.

“This is the last quarter pre-capital increase and the end of a nine month period that was still critical but  during which our key commercial, economic and financial indicators held, as shown by the pre-tax profit posted at 30 September which rose +14%” Claudio Albertini, IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.’s Chief Executive Officer stated ”In terms of subscriptions, the capital increase was a great success which allows us to be optimistic about the close of the current year and, above all,  confident about the positive impact that the transaction will have on next year’s performance, thanks to a stronger capital structure and financial position, while also trusting in an improved economic environment”

Principal consolidated results at 30 September 2014

In the first nine months of 2014, the IGD Group generated consolidated operating revenue of approximately €91.8 million, an increase of 1.5% with respect to the first nine months of 2013, thanks to both the stability of the core business revenues, as well as the completion of 5 residential units and other trading revenue that amounted to €1.6 million relating to the Porta a Mare project.

These results were, moreover, recorded in what is still a very weak environment and characterized by the lower percentage of revenue generated by indexed leases due to the drop in inflation.  In Italy growth was recorded in both the footfalls at the Group’s centers (+0.2%) and,above all, in the sales posted by the mall retailers (+3.5% for the whole network).

More in detail, rental income fell by 0.6% due primarily to the decline recorded in Romania. This change is explained by:

• an increase in like-for-like revenue in Italy, net of the planned or strategic vacancies, of 0.4%. The positive performance of the hypermarkets was confirmed  (+0.8% due to indexing and the full impact of rent step-ups for recently opened hypermarkets). Malls were largely stable (+0.1%), with particularly positive performances posted by Tiburtino, Conè, Nova and Le Maioliche.
• new openings made in 2014 (expansion of Centro d’Abruzzo, which was inaugurated on 10 April 2014, and Piazza Mazzini, where the first retail units were opened on 10 July);
• a drop in revenue in Romania (-19.2%): like-for-like (-11%) due to the downside of the contracts recorded at year-end 2013 and in first quarter 2014, as well as an increase in the average vacancies in the period and the vacancies, for -8%, needed to proceed with the investment plan;
• rental income generated by the Porta a Mare project in Livorno following the rental of office units in 2012 and 2013 of approximately €140 thousand.

Revenue from services rose 5.5% with respect to the same period of the prior year: pilotage revenue increased significantly in the period (by approximately €393 thousand), as a result of the activities carried out linked to the expansion of Centro d’Abruzzo and Piazza Mazzini in Livorno.

Direct costs pertaining to the core business and including personnel expenses amounted to €23.4 million, an increase of 10.4% with respect to the same period of the prior year due, above all, to the increase in rents and lease payments (+31.4%), following the sale of the Le Fonti del Corallo mall in Livorno which is now under management. Net of the rent and lease payments, direct costs pertaining to the core business show a slight increase of1.3%.

General expenses pertaining to the core business, reached €7 million, up 3.8% with respect to the first nine months of 2013 but basically unchanged as a percentage of core business revenue ( 7.9%).

The core businessEbitda Margincame to 66.1%, while the Ebitda Margin for freehold management reached77.7%.

EBIT performed well rising 0.8% at 30 September 2014 to €43.8 million while net financial expense improved slightly reaching €34.5 million versus €34.7 million at the end of September 2013.

The consolided pre-tax profit for the period amounted to €9.4 million, an increase of 14%with respect to 2013, as a result of fewer writedowns and fair value adjustments, as well as lower financial expense.

The Group’s portion of net profit amounted to €7 million at 30 September 2014, down with respect to the €11 million recorded at 30 September 2013 but this result, however, was influenced by the one-off tax effect related to the “Sblocca Italia” Law Decree that became effective in the period.

Funds From Operations(FFO) amounted to €25 milionat 30 September 2014.

The IGD Group’s net debt at 30 September 2014 amounted to€1.037 billion, largely unchanged with respect to the figure recorded at the end of June 2014.

At the end of third quarter 2014 the gearing ratio was 1.30 with the Loan to Value coming in at 56.1%; while the adjusted gearing ratio[1] and adjusted Loan to Value came to 0.95 and 48.2%, respectively.

Today the Board of Directors has also resolved to use part of the proceeds of the recent share capital increase, for an aggregate amount equal to Euro 68.1 million, in order to early terminate and/or partially repay medium-long term financing arrangements having terms and conditions more burdensome than those currently available on the market, with a reduction of the encumbrances on the real estate portfolio estimated in approximately Euro 132 million.

[1] Figures adjusted to reflect the estimated impact of the capital increase (€200 mn) and the acquisition of a real estate portfolio (€94.8 mn) completed at the end of October 2014.