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, examined and approved the interim financial report at 30 September 2017 during a meeting chaired by Elio Gasperoni.

SOLID OPERATING PERFORMANCE IN A POSITIVE RETAIL ENVIRONMENT

Particularly positive performances were recorded in the third quarter of the year (retailers’ sales rose 4.3%, excluding the ESP extension) with total sales for retailers in Italian malls up +3.7% (including the ESP extension inaugurated on 1 June 2017, +1.8% excluding it), while footfalls were 0.1% higher than in the prior year thanks also to the calendar effect (an additional Saturday and one less Thursday).

Footfalls in Romania were down (-2.2%) due to the opening of new shopping centers, as well as internal fit-outs. Consumer and retail trends in the country continue to be particularly positive, however, as shown by the occupancy rate (96.9%) and the upside on renewals (+2.3%).

In Italy the positive trend in pre-letting reported in prior quarters also continued: 134 contracts, renewals and turnover, were signed in the first nine months of the year with an average upside of +5.7%; while the average occupancy (malls and hyper) came to 96.8%.

FINANCIAL RESULTS ACCELERATE (FFO +22.8%) 

Total consolidated revenue amounted to around €112.9 million, up 10.7% compared to the same period of the prior year.

More in detail,rental income rose 6.1% to €103.4 millionexplained by:

• for around €1.3 million,like-for-like growth (+1.5%) in Italy. Malls were up (+2.1%) as a result of the pre-letting carried out between year-end 2016 and the end of the current period, as well as lower discounts; around 1/3 (about 50 bps) of the result is attributable to inflation;
• for around €4.3 million, higher revenue not like-for-like (Centro Maremà in Grosseto inaugurated at the end of October 2016 and the opening of the ESP extension on 1 June 2017);
• for around €0.54 million,higher revenue like-for-like in Romania (+7.0%)linked to pre-letting and renegotiations.

Growth was also recorded in revenue from services (+19.4%) which amounted to €4.7 million. Most of this revenue comes from the facility management business which was 8.4% higher than in the prior period due to new management mandates. This figure also includes the revenue generated by agency and pilotage, related to the opening of the ESP extension.

The Porta a Mare project generated revenue from trading of around €4.9 million as a result of the sale of 17 residential units and appurtenances. At the approval date of this quarterly report preliminary agreements for an additional 8 residential units have been signed; the total of the units sold or for which there are commitments, therefore, has now reached 79% of the total saleable area.

Core business Ebitda came to€75.9million, an increase 7.7 % compared to 30 September 2016. Higher core business revenue (linked also to the expanded perimeter), as well as the less than proportional increase in direct costs and general expenses, caused the core business Ebitda Margin to rise by 70 basis points against the prior year to 70.2%. The freehold Ebitda margin came to 79.7%, an increase of 100 basis points with respect to September 2016.

Financial expense fell 14.1% to €26 million,despite the higher NFP recorded at the end of the period.The result is attributable to the recent liability management activities, as well as the decrease in the notional amount of a few IRS.  The downward path of the average cost of debt was confirmed (2.85% vs 2.91% at the end of June 2016).

The Group’s portion of net profit amounted to €64.7 million, an increase of 74.1%.

Funds from Operations (FFO) rose 22.8% against the first nine months of 2016 to €49.0 million.

The Group confirms the FY 2017 growth target for FFO of +20%, disclosed and revised last August.

As mentioned above, the IGD Group’s net financial position was down €11.05 million against 30 June 2017 and came to €1,065.71 million.

The gearing ratio (0.96x) and loan-to- value (48.0%) were fully in line with the Business Plan targets.