· Initiated spin-off of Israeli Activities; downsizing of Financial Services Activities;
· Net debt of Kardan and intermediate holding companies brought down by EUR 188 million to EUR 445 million in H1-2011;
· Net result H1-2011: Loss of EUR 36 million (H1-2010: profit of EUR 1 million), mainly due to Financial Services and “Other”




Highlights divisions (all figures represent Kardan stake):
Real Estate
· Sale of 16% interest in GTC SA raises approx. EUR 195 million partly to reduce leverage, while retaining 27% strategic stake;
· GTC SA sells its 50% stake in Galeria Mokotow;
· GTC China raises capital by selling its 50% share in office project
as well as a 50% stake in shopping center;
· Debt crisis impacts sentiment.

Water Infrastructure
· Agreement signed for development of two new wastewater treatment plants in China;
· New CEO initiates restructuring activities.

Financial Services
· Sale of VAB Bank (Ukraine);
· Acquisition of Bulgarian bank;
· Sale of Sovcombank, Russia, announced (indicating EUR 10 million impairment on goodwill in Q2-2011).

Rental & Leasing of Vehicles
· Negative contribution due to change of control in AVIS Israel (accounting impact)

Other (activities not attributable to a segment, finance and general expenses not allocated to specific activities)
· Teledata sale proceeds (for shares) influenced by negative stock market sentiment

The Management Board of Kardan N.V. (“Kardan”) commented on the results of the first half year of 2011:

“During the first half year we took significant steps to decrease Kardan’s leverage and to further streamline Kardan’s businesses. Next to a consistent focus on the existing activities, this enables us to start investigating expansion of our real estate and water infrastructure activities through both our existing as well as new platforms. By the end of June 2011, our net debt position on Kardan and our intermediate holding company levels had been brought down by EUR 188 million to EUR 445 million, compared to year end 2010 (EUR 633 million). This was partly financed with the proceeds from selling a 16% stake GTC SA, our CEE Real Estate company, in which we retain a long term strategic 27% interest. In terms of streamlining the organization, we parted with our banking operation in the Ukraine, signed an agreement to sell our remaining stake in our Russian banking operations (Sovcombank) and completed the acquisition of Bulgarian Banka Sofia, enabling us to attract deposits going forward. In addition, we initiated the process to spin-off its Israeli activities. Once the sale of the stake in Sovcombank and the spin-off are completed, Kardan will be a lean organization focusing on initiating, developing and managing cash flow generating assets in emerging markets mainly in the fields of Real Estate and Water Infrastructure. To (partially) finance our ambitious development growth from the existing land bank in China, we sold 50% of our shopping mall in Chengdu, as well as our stake in the only office project in China. GTC SA also raised additional funds for further development by selling its 50% stake in Galeria Mokotow in Warsaw to its co-owner.

The net result of the first half year 2011 was a loss of EUR 36 million, mainly due to Financial Services and activities which are not directly allocated to a segment or division. The results over the first half of this year have also been impacted by the measures we are taking to strengthen our organization in the current unstable worldwide macroeconomic environment.

Within Tahal Group International (TGI), our water infrastructure business, we have restructuring activities taking place in Q2-2011, in line with our aim to implement more focus and to work more efficiently. This has affected the results of Tahal negatively. Our real estate developer in China, GTC China, continues to do well, whereas GTC SA in CEE has been impacted by the macro-economic unrest in Europe, decreasing the value of our assets despite relatively stable yields. The same accounts for our lending activities in Romania and Bulgaria, which are still faced with lagging consumer confidence hampering retail lending.
Our current real estate assets are located mainly in CEE and Asia, whilst we also have water projects in African and Latin American countries. We intend to expand our asset base further in Asia, carefully assessing whether the countries of interest meet our requirements, such as a reliable legal structure, a growing and educated middle class and a need for our expertise in Real Estate and Water Infrastructure. Particularly in these turbulent markets we are very careful in allocating Kardan capital to new opportunities. We remain fully committed to pursue our long term strategy of creating value through our assets in emerging markets”, says Alain Ickovics, Chairman of the Management Board.