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 leading owner and manager of retail shopping centers in Italy and listed on the STAR segment of the Italian Stock Exchange, examined and approved the Half-Year Financial Report at 30 June 2013.

“In what is still a difficult market environment characterized by a persistent situation of generalized crisis, our Group managed to maintain its economic-financial fundamentals intact,  with core business cash flow generation in line with the prior year” Claudio Albertini, IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.’s Chief  Executive Officerstated. “We will continue to work closely with our tenants, in line with the idea of sustainability engendered in our business model. Given this phase of transition and in light of continuous external pressures, we will continue to focus on strengthening our financial structure and keeping financial expense under control, as is illustrated by the decrease in financial charges posted in the quarter which partially offset the drop in operating revenue”.

Principal consolidated results at 30 June 2013

In first half  2013 the IGD Group’s consolidated operating revenue amounted to approximately €60.5 million, a slight drop with respect to the €61.6 million posted in first half  2012 in Italy (-1.2% like-for-like). More in detail, malls were hardest hit (-3.7%) by the situation of generalized crisis which resulted in increased vacancies; in a few instances, such as Tiburtino, the vacancies are explained by the openings expected to take place in the second half of the year. In Romania, revenue continued to decline (-5.4%) due primarily to the full impact of the renewal downside recorded in second half 2012 and the planned vacancies necessary to complete the work underway (approximately 1,500 m² di of which relative to the  H&M opened in Buzau in May), designed to attract new international brands in the medium term.

Revenue from services amounted to €2.5 million, down (-4%) with respect to the same period of the prior year due mainly for the expiration of two management mandates.

In first half 2013 the IGD Group’s core business EBITDA amounted to €41.6 million, a drop of 3.5% with respect to the €43.1 million recorded at 30 June 2012. This decline is explained by the decrease in revenue and the 2.0% increase in direct costs (including further increase of the IMU) pertaining to the core business (€14 million at 30 June 2013) which represent approximately 27% of total direct costs (versus approximately 24% in first half 2012). Condominium fees for which IGD is responsible also rose in the period (+9,3%) as a result of the increased vacancies.

The core business EBITDA margin came in at 68.8%, a slight drop with respect to the 70.0% recorded at 30 June 2012 due to the combined effect of the decrease in revenue and the increase in direct costs.

The IGD Group’s EBIT at 30 June 2013 amounted to €24.2 million, compared to €30.8 million in the same period of the prior year due to the negative fair value adjustments of property, as well as the drop in Ebitda.

Net financial expense dropped in the first half (-4.5%) as financial charges fell from the €24.2 million posted at 30 June 2012 to €23.2 million at the end of June 2013.

The Group’s portion of net profit at 30 June 2013 amounted to €4 million, versus €8.3 million in first half 2012, due primarily to the impact of fair value impairment.

Funds from Operations (FFO) came in at €17.6 million at 30 June 2013, versus €18 million in the first half of the prior year, testimony to the ability to generate solid cash flow.

The IGD Group’s net debt at 30 June 2013 amounted to €1.086 billion, largely unchanged with respect to the €1.089 billion recorded at 30 June 2012.

At the end of first half 2013 the gearing ratio, net debt to equity, was unchanged with respect to the 1.38 posted at 31 December 2012.

The Real Estate Portfolio at 30 June 2013

Based on CB Richard Ellis’s and Reag Advisory’s independent appraisals, the market value at 30 June 2013 of the IGD Group’s real estate portfolio – comprised of 51 properties in Italy and 16 in Romania –  reached €1,895.9 million, basically in line (- 0.56%) with the €1,906.56 million recorded at 31 December 2012.

The market value of the IGD Group’s portfolio in Italy at 30 June 2013 on a like-for-like basis was €1,559.2 million, (–1.11%).  The figure was impacted by the increase in IMU, the rise in average capitalization rates, and the downward revision of inflation over the next few years.

The average financial occupancy in Italy came to 96.9% (97.5% at 31/12/2012) while average yields reached 6.64% for hypermarkets and 6.59% for shopping malls.

The market value of the Romanian portfolio at 30 June 2013 was €176,9 million  (-0.56%). The financial occupancy amounted to 88.3% and the average yield to 7.14%