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Overig advies 30/11/2017 08:58
Highlights Q3 and 9M 2017:
Net profit (loss) per activity:
(In € millions) 9M 2017 9M 2016 Q3 2017 Q3 2016
Real Estate (9.5) (10.8) (4.3) (2.5)
Water Infrastructure (discontinued operations) 2.3 2.0 0.1 0.3
Banking and Retail lending (discontinued operations) - 21.6 - 15.2
Other (banking and retail lending - continuing operations) 2.0 1.5 0.6 (1.8)
Total Operations (5.2) 14.3 (3.6) 11.2
Holding (Corporate Finance and G&A) (10.6) (23.5) 7.7 (14.5)
Total (15.8) (9.2) 4.1 (3.3)

Q3 2017: € 4.1 million net profit to equity holders (Q3 2016: loss of € 3.3 million), including a significant positive impact of € 14.0 million as a result of foreign exchange translation differences of the EUR versus the NIS and changes in Israeli CPI on the Company’s debentures.
9M 2017: € 15.8 million loss to equity holders (9M 2016: loss of € 9.2 million), mainly as result of net finance expenses on the Company’s debentures and the finance expenses of the Real Estate activity.
Both Real Estate and Water Infrastructure improved their contribution to the net result in 9M 2017 vs 9M 2016. Avis Ukraine (included in continuing operations of banking and retail lending above) showed a continuous strong performance and contributed equity earnings of € 2.2 million in 9M 2017.

Ariel Hasson, CEO of Kardan NV: “In the third quarter of 2017 Kardan recognized a net profit attributable to equity
holders of € 4.1 million. Both the real estate and the water infrastructure activities showed an improvement in
revenue. In infrastructure, the company won several interesting multi-year projects in Angola/Zambia and India.
These new projects will, once the conditions precedent are fulfilled, double the order backlog.
In November 2017 we approached our debenture holders regarding the intended sale of TGI and the implications
of the terms of the intended sale on the timing of the upcoming payment to the debenture holders, due in February
2018. We requested the debenture holders to enter into negotiations in relation to rescheduling the payments as we
estimate that there is a reasonable possibility of delays in the sale process of TGI and consequently in the coming
repayment. Such delay is not affecting the total expected consideration from the sale of TGI1
Kardan still estimates that the value of its assets exceeds its liabilities, and that a prudent and professional sale
process of the assets is likely to result in full repayment of the Company's debts.2

It is noted that an agreement for the sale of TGI has not been signed yet, and that no date for signing such agreement has been
set; therefore, there is no certainty that such agreement will be signed or completed.
It is noted that the Company’s ability to repay its debt is based on its current equity, as well as the expected consideration
from the sale of TGI, and is dependent on factors that are not wholly within the control of the Company such as changes in
foreign currencies, the business conditions of the real estate activities in China, and so forth.

Condensed Interim Consolidated Income Statement Kardan N.V.
For the nine and three month periods ended September 30, 2017 (in € millions)
9M - 2017 9M - 2016 Q3 - 2017 Q3 - 2016 12M - 2016
Total revenues 7.1 9.0 2.8 2.3 11.1
Total expenses 16.3 16.2 5.6 5.8 21.8
Loss from operations before fair value
adjustments, disposal of assets and financial
(9.2) (7.2) (2.8) (3.5) (10.7)
Gain (loss) from fair value adjustments and
disposal of assets and investments, net (0.4) (2.0) (0.4) (1.7) (4.2)
Result from operations before finance
(9.6) (9.2) (3.2) (5.2) (14.9)
Financing income (expenses), net (19.2) (30.5) 5.3 (17.1) (47.3)
Equity earnings, net 12.4 2.5 2.4 2.5 3.9
Profit (loss) before income tax (16.4) (37.2) 4.5 (19.8) (58.3)
Income tax expenses / (benefit) 1.7 (4.4) 0.5 (1.0) (4.5)
Profit (loss) from continuing operations (18.1) (32.8) 4.0 (18.8) (53.8)
Profit from discontinued operations 2.3 23.6 0.1 15.5 22.5
Profit (loss) for the period attributable to
Kardan equity holder (15.8) (9.2) 4.1 (3.3) (31.3)
Other comprehensive income (loss) (20.6) (11.2) (4.2) 0.1 (2.5)
Total Comprehensive loss attributable to Kardan equity holders (36.4) (20.4) (0.1) (3.2) (33.8)

Overall summarized review of Q3 and 9M 2017 results
Kardan recognized a consolidated net loss of € 15.8 million attributable to equity holders in the first nine months of 2017 compared to a net loss of € 9.2 million in the first nine months of 2016, which included a € 15.2 million profit on
the sale of TBIF in Q3 2016. The net profit in the third quarter of 2017 amounted to € 4.1 million (Q3 2016: € 3.3 million net loss).
The financing expenses included a significant positive impact of € 14.0 million due to the strengthening of the EUR
versus the NIS and the change in Israeli CPI on the Company’s debentures in Q3 2017 (Q3 2016: € 8.4 million negative), compensating the significant net negative foreign exchange and Israeli CPI impact in H1 2017.
The Real Estate activities showed an improvement in revenue from the delivery of units in Europark Dalian project to € 2.3 million in 9M 2017 (9M 2016: € 0.6 million). Galleria Dalian gradually further improved rental revenues. This resulted in total revenues of the Real Estate activities of € 7.1 million in 9M 2017, an increase compared to € 6.4
million in 9M 2016, despite the fact that an asset management contract, which contributed approximately € 1.4 million per year, expired as per year-end 2016.
Equity earnings from joint venture residential projects increased substantially to € 10.2 million (€ 1.4 million in 9M 2016) as a result of the delivery of residential units and a significant increase in gross profitability. The net loss
contributed by the Real Estate activities amounted to € 9.5 million in 9M 2017 which was heavily impacted by the interest expenses related to the Europark Dalian loan and the devaluation of the RMB and the USD versus the EUR during the first 9 months of 2017. The net loss in 9M 2016 (€ 10.8 million) included a deferred tax benefit of € 4.9
The ramp up of new projects and the progress in existing projects were the key drivers of the 25% increase in revenu of the Water Infrastructure activities, compared to 9M 2016. Water Infrastructure contributed a net profit of € 2.3
million in 9M 2017 (9M 2016: € 2.0 million).
As of Q1 2017, TGI (Kardan NV’s water infrastructure subsidiary) is presented as Held-For-Sale, its results as discontinued operations. Therefore TGI is no longer presented as a segment in the Company’s consolidated financial statements.
Avis Ukraine continued to show strong results and contributed a net profit of approximately € 2.2 million in the first nine months of 2017.
Taking into account the direct equity impact of foreign currency translation differences and changes in the hedge
reserves combined with the net result, the total comprehensive loss to Kardan NV’s shareholders amounted to
€ 36.4 million in 9M 2017 compared to a comprehensive loss of € 20.4 million in 9M 2016. The other comprehensive
loss was mainly a result of changes in foreign exchange rates.
Kardan N.V.
(company only, in € million)
September 30,
December 31,
Total Assets 377.9 409.7
Total Equity 1.0 37.3
Equity/Total assets (%) 0.3% 9.1%
The shareholders’ equity of Kardan N.V. decreased from € 37.3 million as of December 31, 2016 to € 1.0 million
as of September 30, 2017 mainly due to the loss of € 15.8 million in 9M 2017 and the strengthening of the EUR
versus the RMB, which resulted in a decrease in equity of € 15.1 million in 9M 2017.
As at September 30, 2017, the Company and its subsidiaries met their financial covenants.
For additional details refer to section 4 of the chapter “Significant Events and Developments” which is included in
the Company’s Directors’ Report as of September 30, 2017.
Financial position
For further information regarding the financial position of the Company, and the reasonable possibility of delays in
the sale process of TGI and the discussions initiated by the Company with the Debenture Holders in relation to
rescheduling of the payments to the Debenture Holders please refer to section 3 of the Directors’ Report and to
Note 2 to the financial statements as of September 30, 2017.
In their review report as of September 30, 2017, the auditors draw the attention to the existence of significant doubts
regarding the Company’s ability to meet future liabilities when they become due and its ability to continue as a going
concern, due to - among others - the uncertainty in respect to the Company’s ability to fulfill its obligations of the
coming repayment of debentures in February 2018. As of the date of the financial statements, the Company is in
the process of obtaining the required funds for the repayment of its liabilities. However, as of the date of this report,
there is no certainty that such required funds would in fact be obtained.

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