. Highlights Q1 2020:
Following is a summary of net profit (loss) attributable to equity holders, by activity. Management evaluates performance of main segments by their operational result. Further information that includes detailed segment analysis can be found further in this report.
Further to the 2019 annual financial statements, during the reporting period the COVID-19 crisis continued to affect the Company's results. Due to the crisis, Galleria Dalian’s operations and fair value were adversely impacted. The real estate development segment and the water infrastructure activities (discontinued operations) experienced some impact. For additional information see Note 1C to the interim consolidated financial statements and the result analysis below.
Q1 2020: €3.8 million net loss for the quarter to equity holders (Q1 2019: net loss of €23.5 million), is mainly due to interest expenses which were partially offset by positive impact of FX and Israeli CPI on the Company’s debentures.
Q1 2020: the net profit to equity holders of the real estate activities amounted to €0.8 million (Q1 2019: net profit of €1.2 million), mostly as a result of delivery of apartments in both Europark Dalian and the residential JV projects partially offset by a devaluation of the Galleria Dalian shopping mall in the amount of €2.9 million (Q1 2019: nil).
The COVID-19 pandemic had a limited impact on the development activities and some impact on the investment property activities. As shops in the Galleria Dalian shopping mall had to be temporarily closed, a rental discount of €0.3 million in total was granted to tenants and the valuation of the shopping mall decreased by €2.9 million.
Water infrastructure (discontinued operation)
Q1 2020: the result attributable to equity holders came in at nil. The result was impacted by delays in several projects. (Q1 2019: net loss of €2.9 million).
Kardan’s water infrastructure company - TGI, is currently in the midst of ongoing negotiations with the financing banks regarding the restructuring of their debts, which will include, among other things, continuing to provide credit to TGI.
The outbreak of the COVID-19 virus has had impact on the water infrastructure activities. In a significant part of the countries, the projects in which TGI takes part have continued in full or in part; and in some countries the projects have stopped completely. In addition, the economic crisis following the COVID-19 outbreak impacted some of the countries TGI is operating in. TGI estimates that its projects will continue.