COMPAGNIA IMMOBILIARE AZIONARIA S.P.A.
Milan, 28 August 2014
The Board of Directors of Compagnia Immobiliare Azionaria Spa (Cia) met in Milan today to examine performance and the consolidated results for the first six months of the year.
Group revenues for the period to 30 June 2014 totalled 3.1 million euro (5.1 million euro in the corresponding period of the previous year). The reduction of 39.1% was mainly due to property sales in the first half of 2013 that were not repeated in the current year.
Operating costs amounted to 1.6 million euro, down 55.5% from the 3.6 million euro incurred in the period to 30 June 2013. This decrease reflects the cost of selling properties in the first half of last year.
Gross operating profit (EBITDA) was essentially stable at 1.5 million euro. Non-recurring income includes the penalty of 0.8 million euro paid for breach of contract by a purchaser of property from Diana Bis. This income has already been collected by the company, as explained further in the half-year financial report.
The consolidated income statement reports a post-tax profit of 67 thousand euro, compared with the net loss
of 0.413 million euro recorded in the first half of 2013.
The net financial situation reflects net borrowing from third parties of 48.3 million euro, compared with 49.2 million euro at 31/12/2013. The improvement of 0.97 million euro was mainly due to the steady repayment of loans, as well as to lower borrowing from the Class group following the collection of trade receivables due from that counterparty.
Italian property market
Based on the latest data from the Tax Authorities (Property Market Observatory), the property market grew by 1.6% in the first half of 2014 with respect to the comparative period in the prior year. Although the enthusiasm sparked last autumn has been scaled back (party due to uncertainties linked to the new Tasi municipal service charge, following the cancellation of Imu 2013), the announced recovery is confirmed by the data released and an increase in mortgage lending. This encouraging data is sustained by the performance of the residential and commercial segment, which grew by more than 4%, despite further declines in the other segments of the property sector. Experts stress however that it is too early to proclaim an inversion in trend based on the above numbers, not least because the data was influenced by the deferral of some sale completions to early 2014, in order to benefit from a more favourable tax regime. In this regard, a study published by Nomisma highlights that the road to recovery will be "long and arduous" for the property market: this analysis confirms the essential stability, compared with the established trend, of the average discount allowed on selling prices (16%) and of the average time taken to sell a property (about 9.4 months). Luxury properties have been partially sheltered from the crisis in the segment and, indeed, the growth in demand outstripped supply during the first half of 2014. This factor was mostly due to the steady
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reduction in prices over recent months: specifically, prices have dropped by between 4.5% and 7% since the
end of 2013, thus facilitating investment by those with access to fairly substantial financial resources. The overall trend, as well as the prospects for a recovery of the property market, will undoubtedly be affected by the further implosion of the principal economic indicators. In particular, Italian GDP decreased by 0.2% in the second quarter with respect to the first.
Against this market background, numerous negotiations have begun and are continuing for the sale of apartments and garages in the new residential block developed in the Duomo area of central Milan by Diana Bis Srl.
Wine production and sale
According to the data gathered by Nomisma (Wine Monitor) for the first half of 2014, the Italian wine market experienced slower growth with respect to the same period in 2013. In particular, the exports locomotive has slowed considerably with respect to prior years: the growth rates seen in the first six months of each of the past four years have declined steadily, from 8.5% in 2011 to 0.4% in 2013 (analysis covering the top 20 markets, whose purchases represent about 85% of the global total). Following a sustained gallop in prior years, this slowdown would seem to be a physiological reaction. Italian wine exports to Switzerland and Germany have fallen considerably: -9% and -8% respectively. Broad stability in the United States (+1%); growth of between 9% and 12% in the United Kingdom, Japan, Norway and Brazil. Chinese imports have slowed (following double-digit growth in recent years, although market share remains inadequate at less than 7%) and demand from Canada has eased. Exports to the world's principal markets are essential in order to sustain the entire domestic wine industry, from production to sales, especially in view of the stead y drop in domestic consumption. Sales to chain retailers have fallen by 4%, while those to the traditional distribution channel (normal trade, Ho.Re.Ca. etc.) have declined by 7%.
The performance of Feudi del Pisciotto Srl has bucked the overall market trend, with a significant rise in
wine sales in terms of both revenues (+29.3%) and volume (+9%) with respect to the same period in the prior year. This reflects the steady market affirmation of the brand, which is facilitated by the excellent ratings awarded to the company's wines by international critics.
Development and investment activities
a. in Sicily, work is almost finished on a restaurant within the complex owned by Feudi del Pisciotto. This completes the planned investment in the Wine Relais, following the earlier opening of hospitality services (10 rooms and suites with every comfort, created in the habitable part of the island's largest eighteenth century Palmento or winery). The flow of visitors to the Relais remains significant and initial revenues are encouraging, with numerous bookings throughout the summer season. The comments made by guests are all extremely positive (sources: Booking and Tripadvisor);
b. the possibility of developing other properties in Sicily is still under review. In particular:
- to make better use of the buildings owned by Isola Longa Srl in the Trapani area known as "Riserva dello
Stagnone" (Trapani salt marshes);
- to enhance use of the ancient Baglio (walled farmstead) owned by Feudi del Pisciotto, extending over 2,60 0 sq.m.;
- to improve usage of the properties on the island of Levanzo (in Sicily) owned by Agricola Florio Srl.
The dispute with a leading listed Spanish company is still open due to its non-recognition of both the put
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option exercised for the purchase of 15% of Donnafugata Resort Srl, and the arbitration ruling that deemed
fair the 33 million euro valuation determined by prof. Luigi Guatri, the original arbitrator. Following the period of 30 days established by the second panel of arbitrators at the hearing held on 6 May 2014, in order to attempt a reconciliation, the arbitration board concluded that settlement between the parties would not be possible. At the final hearing on the dispute, held on 14 July 2014, the arbitrators concluded that they would have to make a decision. Their ruling pursuant to art. 820 of the civil procedures code must be filed by 2
October 2014.
Given the above and on confirmation of the demonstrated and documented facts, once the price established for the quotas sold has been collected together with the related expenses, CIA will realise a substantial capital gain with respect to the carrying amount of the investment.
Although the macroeconomic environment continues to be marked by considerable volatility and uncertainty, the outlook for the operations of the Group during the second half of the year remains good. This reflects the stability of the returns from the property investments made and the related activiti es carried out by the parent company, as well as - and above all - the expectations deriving from pursuit of the commercial and real estate operations of Diana Bis Srl and Feudi del Pisciotto Srl. The latter's revenues from the sale of wine are expected to increase substantially due, in particular, to the strong growth of the export channel.
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For additional information, please contact: Compagnia Immobiliare Azionaria Communications/Investor Relations
Gian Marco Giura
Tel: +39 02-58219395
E-mail: gmgiura@class.it
The income statement and the statement of financial position are presented below.
The half-year report will be made available to the public on the website of Cia,
www.c-i-a.it, prior to the legal deadline.
The executive responsible for preparing the corporate accounting documents of Compagnia Immobiliare Azionaria S.p.A., Emilio Adinolfi, hereby certifies that the accounting information contained in this document is consistent with the underlying documents, registers and accounting entries.
Consolidated income statement for the period ended 30 June 2014€uro/000 | 30/06/2013 | 31/12/2013 | 30/06/2014 | Change (%) on 30/06/2013 |
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Sales revenues | 5,100 | 8,211 | 3,108 | (39.1) |
Operating costs | (3,570) | (4,770) | (1,590) | (55.5) |
Gross profit | 1,530 | 3,441 | 1,518 | (0.8) |
% of revenues | 30.0 | 41.9 | 48.8 | |
Non-recurring income/(expense) | (138) | (74) | 591 | n.s. |
Amortisation and depreciation | (772) | (1,550) | (880) | 14.0 |
Operating result | 620 | 1,817 | 1,229 | 98.2 |
% of revenues | 12.2 | 22.1 | 39.5 | |
Financial income (charges), net | (1,108) | (2,198) | (1,139) | 2.8 |
Result before tax | (488) | (381) | 90 | 118.4 |
Income taxes | 73 | (4) | (26) | (135.6) |
Result attributable to non-controlling interests | 2 | 5 | 3 | n.s. |
Result attributable to owners of the parent | (413) | (380) | 67 | 116.2 |
€uro/000 | 30/06/2013 | 30/06/2014 | Change (%) |
Rental revenues | 1,676 | 1,690 | 0.8 |
Facility management revenues | 355 | 357 | 0.6 |
Wine sale revenues | 389 | 503 | 29.3 |
Other vineyard and Wine Relais revenues | 372 | 273 | (26.6) |
Property sale revenues | 2,252 | -- | (100.0) |
Other revenues | 56 | 285 | n.s. |
Total | 5,100 | 3,108 | (39.1) |
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Consolidated net financial position at 30 June 2014€uro/000 | 30/06/2013 | 31/12/2013 | 30/06/2014 | Change 2014/2013 | Change % |
Securities | -- | -- | -- | -- | -- |
Liquid funds | 37 | 325 | 28 | (297) | (91.4) |
Financial receivables - current | -- | -- | -- | -- | -- |
Financial payables - non-current | (43,564) | (42,318) | (41,369) | 949 | 2.2 |
Financial payables - current | (6,334) | (7,240) | (6,920) | 320 | 4.4 |
Net consolidated financial position | (49,861) | (49,233) | (48,261) | 972 | 2.0 |
ASSETS (thousands of euro) | 31 December 2013 | 30 June 2014 |
ASSETS (thousands of euro) | ||
Intangible assets with an indefinite life | -- | -- |
Other intangible assets | 6 | 5 |
Intangible assets | 6 | 5 |
Property, plant and equipment | 44,049 | 43,309 |
Investments measured at equity | 15,549 | 15,550 |
Other equity investments | 265 | 265 |
Deferred tax assets | 277 | 360 |
Other receivables | 1,762 | 1,756 |
NON-CURRENT ASSETS | 61,908 | 61,245 |
Inventories | 15,676 | 17,532 |
Trade receivables | 6,352 | 6,522 |
Financial receivables | -- | -- |
Tax receivables | 1,068 | 497 |
Other receivables | 887 | 1,014 |
Liquid funds | 325 | 28 |
CURRENT ASSETS | 24,308 | 25,593 |
TOTAL ASSETS | 86,216 | 86,838 |
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EQUITY AND LIABILITIES (thousands of euro) | 31 December 2013 | 30 June 2014 |
EQUITY AND LIABILITIES (thousands of euro) | ||
Share capital | 923 | 923 |
Share premium account | 1,526 | 1,526 |
Legal reserve | 185 | 185 |
Other reserves | 8,036 | 7,670 |
Net profit (loss) for the period | (380) | 67 |
Equity attributable to owners of parent | 10,290 | 10,371 |
Capital and reserves attributable to NCI | 5,045 | 5,040 |
Net profit (loss) attributable to NCI | (5) | (3) |
Equity attributable to NCI | 5,040 | 5,037 |
SHAREHOLDERS' EQUITY | 15,330 | 15,408 |
Financial payables | 42,318 | 41,369 |
Deferred tax liabilities | 104 | 33 |
Provisions for liabilities and charges | -- | 3 |
Severance indemnities and other payroll provisions | 25 | 30 |
NON-CURRENT LIABILITIES | 42,447 | 41,435 |
Financial payables | 7,240 | 6,920 |
Trade payables | 6,477 | 6,479 |
Tax payables | 161 | 262 |
Other payables | 14,561 | 16,334 |
CURRENT LIABILITIES | 28,439 | 29,995 |
TOTAL LIABILITIES | 70,886 | 71,430 |
EQUITY AND LIABILITIES | 86,216 | 86,838 |
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