“Kardan made some significant steps in the first half of 2015, which have positioned us better for the short to medium term. We came to an agreement with our Debenture Holders to postpone most of the repayment of our debentures (principal) by two years, whilst committing to repay the outstanding amounts in full by 2020. Accordingly, our Financial Statements no longer include an emphasis of matter regarding a going concern and - without the immediate debt burden - we can now fully focus on continuing to improve the results of our operating subsidiaries and therefore on the value of Kardan. Of course we continue to face risks such as our exposure to foreign currencies. In the first quarter we suffered from the strong NIS, the denomination of our liabilities, but our equity benefitted from a strong RMB, the denomination of the majority of our assets. This situation changed in Q2 when the RMB weakened. All our operating divisions contributed profits from continuing operations, but these were completely off-set by Kardan’s substantial financing expenses leading to Kardan’s consolidated net lossof
EUR 1.5 mn in Q2 2015 and consequently to a consolidated net loss to our equity holders of EUR 9.2 mn over the first six months of 2015.
Mainly due to the weakened RMB, our Total Comprehensive Loss (*) to our equity holders in Q2 2015 amounted to EUR 10.2 mn and to EUR 2.3 mn for H1 2015.

In Q2, Kardan Land China completed its shopping mall Galleria Dalian, celebrating its grand opening last week. The many reputable and international brands present at the mall and the focus of combining shopping with entertainment are a solid base for its future success. Also last week, we signed an agreement to sell Building B (262 service apartments) of the Europark project to Fraser Suite Dalian. This important transaction, which marks the recognition of the quality of our Europark project, contributes to the further positioning and financial development of the project. On the other hand, our residential joint venture projects are suffering from difficult market circumstances, which is evident from the slower pace of sale of apartments.

Our water infrastructure company, Tahal, continues to grow its large number of projects with an integrated agricultural and regional development focus. Early in June, an agreement was signed for a significant new project in India to design, build and operate a water supply system to provide treated potable water to approximately 131 villages.

Last but not least: TBIF, the subsidiary representing our banking and retail lending segment, again reported a better profit resulting from a growth of revenues and cost control and including the improved result that Avis Ukraine achieved in strenuous market circumstances ’, states Shouky Oren, CEO of Kardan N.V

(*) Total Comprehensive Income / Loss comprises predominantly the net result combined with the direct equity impact of foreign currency translation differences and changes in hedge reserves.

Highlights Q2 + H1 2015:
Kardan N.V.

Q2 2015:
· EUR 1.5 mn net loss to equity holders ( Q2 2014: loss of EUR 6.9 mn)
· Significant positive fair value adjustment of the shopping mall in Dalian on completion of its construction and continued strong results of TBIF;
· Negative NIS foreign exchange and CPI impact on financing expenses of EUR 9 mn
(Q2 2014: EUR 10 mn negative impact)
· Total Comprehensive Loss: EUR 10.2 mn for equity holders (Q2 2014: loss of EUR 3.9 mn)

H1 2015
· EUR 9.2 mn net loss to equity holders (H1 2014: EUR 3.9 mn loss) on positive contributions from all operating divisions and including the gain on the sale of KWIG, more than off-set by significantly negative foreign exchange and CPI impact on financing expenses of EUR 39 mn
(H1 2014: EUR 6 mn negative impact)
· Total Comprehensive Loss: EUR 2.3 mn for equity holders (H1 2014: EUR 3.3 mn loss)

Real Estate Asia

Q2 2015
· EUR 8.1 mn net profit (Q2 2014: EUR 1.8 mn profit); predominantly on a substantial positive fair value adjustment of the shopping mall in Dalian on its completion.

H1 2015
· EUR 17.0 mn net profit (H1 2014: EUR 3.3 mn profit), including positive foreign exchange impact of strong RMB in Q1 2015


Water Infrastructure

Q2 2015
· EUR 0.8 mn net profit (Q2 2014: EUR 2.9 mn net profit)
· Substantial revenue increase including positive foreign exchange effect of strong USD
· Negative foreign exchange effect on discontinued operations (KWIG, China)

H1 2015
· EUR 18.6 mn net profit (H1 2014: EUR 3.4 mn profit), including EUR 19 mn profit on discontinued operations of KWIG and a one-off charge (EUR 3 mn) relating to early repayment of loan

Banking and Retail Lending
Q2 2015

· EUR 4.5 mn net profit (Q2 2014: EUR 3.7 mn profit), including improved equity earnings (Avis Ukraine)


H1 2015

· EUR 7.6 mn net profit (H1 2014: EUR 5.5 mn profit) on growth in revenues, better equity earnings and improved account service including F/X