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 2014.

 “We are satisfied with the results obtained in the half, including in light of what are still problematic global market conditions; in our view we also effectively exploited the opportunities the market offered us, disposing of assets amounting to €60 million, issuing a€150 million bond and, lastly, successfully completing the Dividend Reinvestment Option with subscriptions of approximately €13 million.” Claudio Albertini, IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.’s Chief Executive Officer stated.“These transactions strengthened our financial and capital structure with a view to the launch of the capital increase to be approved during today’s Shareholders’ Meeting”.

Principal consolidated results at 30 June 2014

In first half 2013 the IGD Group’s consolidated operating revenue amounted to approximately €61.8 million, an increase of 2.1% with respect to first half 2013. The core business rental income was accompanied by the revenue generated by the Porta a Mare project in Livorno (three units in Palazzo Orlando were rented) and revenue from trading of €1.4 million following the sale of 4 residential units and appurtenances.

Rental income fell by 0.5% 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 0.7%. An average downside of -4.7% (on 138 contracts which includes both renewals and turnover) was recorded in the period due primarily to the turnover of two mid-size stores (net of which the downside reaches -1.5%);
• other increases, including openings (expanded Centro d’Abruzzo which was inaugurated on 10 April 2014), which exceeded the drop in revenue recorded as a result of the strategic vacancies affecting the like-for-like perimeter in Italy (vacant spaces already pre-let for which new layouts are being developed);
• a drop in like-for-like revenue in Romania (-€0.6 million) due to the downside of the 2013 contracts, already recorded at year-end and in first quarter 2014, as well as an increased number of vacancies and the recommercialization underway (exit of a bank in 3Q 2013). The planned vacancies (necessary in order to proceed with the investment plan) also caused revenue to drop an additional  €0.5 million.

Revenue from services rose 7.8% with respect to the same period of the prior year. The largest percentage of this item continues to be generated by Facility Management (85% of the total or €2.3 million).  A significant increase was, however, recorded by Pilotage in the period (approximately €264 thousand), as a result of the activities carried out linked to the expansion of Centro d’Abruzzo and Piazza Mazzini in Livorno (where the first retail operations were inaugurated on 10 July 2014).

Direct costspertaining to the core business and including personnel expenses amounted to €15.5 million, an increase of 10.2% with respect to the same period of the prior year due, above all, to the increase in rents and lease payments (€1.1 million or 26.9%), following the sale of the Le Fonti del Corallo mall in Livorno which is now under management based on a long-term lease agreement entered into with the buyer; at 30 June 2014 this item represented approximately 35% of total direct costs.

Direct costs amounted to 25.7% of core business revenue.

General expenses (including payroll costs at headquarters), reached €4.9 million, up slightly with respect to the €4.8 million posted in first half 2013, and 8.2% as a percentage of revenue, largely unchanged.

As a result of the changes described above core business EBITDA amounted to €39.9 million in first half 2014, down 4.2% with respect to the €41.6 million recorded at 30 June 2013.

The core business EBITDA Margin came to 66.1%.

EBIT performed well rising 4.3% at 30 June 2014 to €25.2million; this figure is explained primarily by fewer  writedowns and the change in the properties’ fair value (-15.8%) which was also impacted by the costs incurred for restyling and fit-outs.

Net financial expense was largely unchanged in the first half coming in at €22.9 million (€23 million at the end of June 2013).

The Group’s portion of net profit amounted to €4.4 million at 30 June 2014, an increase of 9.8% against 30 June 2013.

Funds from operations (FFO) amounted to €17.2 million at 30 June 2014, a decline of 6.3% with respect to the €18,3 million posted in the first half of the prior year.

The IGD Group’snet debtat 30 June 2014 amounted to €1.034 billion, a decided improvement with respect to the €1.085 billion recorded at year-end 2013.

At the end of first half 2014 the gearing ratio was 1.30 with the Loan to Value coming in at 55.9%.

The Real Estate Portfolio at 30 June 2014

Based on the independent appraisals of CBRE, Reag Advisory and Cushman&Wakefield, themarket valueat 30 June 2014 of the IGD Group’s real estate portfolio– comprised of 50 properties in Italy and 15 in Romania – reached€1,849.5 million, down with respect to the €1,891.3 million recorded at 31 December 2013 due, above all, to the sale of the Le Fonti del Corallo shopping mall (€47 million) in February 2014.

The change like-for-like at 30 June 2014 was marginal (-0.1%) and is explained entirely by the portfolio in Italy where hypermarkets held (+0.6% or +€3.1 million) and malls fell -0.5% or -€4.5 million.

The average financial occupancy in Italy came to 96.6% (97.4% at 31/12/2013) while average yields reached 6.65% for hypermarkets and 6.59% for shopping malls.

The market value of the Romanian portfolio at 30 June 2014 was €174.3 million, unchanged with respect to   31/12/2013. The financial occupancy amounted to 88.3%, an improvement against the figure recorded at year-end 2013 (84.5%), and the average yield to 6.64%