“Currency fluctuations have significantly impacted our results for Q3 of this year positively and for the 9 months to 30 September 2015 negatively. For Q3 2015 we are able to report a consolidated net profit of EUR 4.3 mn, on the back of the profit contributions of the Water Infrastructure and Banking & Retail Lending segments, combined with the positive impact of EUR 16 mn on our NIS denominated outstanding debentures due to the weakening of the NIS versus the Euro.
For the period January – September 2015, all our operating segments contributed a profit from continuing operations and we also recognized a significant profit on the sale of our Chinese water infrastructure company KWIG. However, these contributions were more than off-set by our financing expenses which, for the 9 month period, included a negative impact of EUR 23 mn from foreign exchange revaluation during the period. This is the main reason for Kardan’s total consolidated net loss of EUR 4.9 mn in the period January – September 2015. Kardan Land China opened its shopping mall, Galleria Dalian, in the third quarter and thus started generating rental income. We are pleased that more lease agreements are being signed with tenants (at present we have 76% tenancy agreements signed and we expect that such an occupancy rate will be achieved in the first half of 2016). Although markets remain challenging, Kardan Land China has managed to sell 5% more apartments from joint venture projects in 9M 2015 than in the same period last year. In addition, Building B of the Europark project in Dalian, comprising 262 apartments, was sold to Fraser Suite Dalian Company Ltd. in August.
Our water infrastructure company Tahal continued to make good progress with its projects. Substantial effort was devoted to new business generation, including an agreement signed in Q2 to design, build and operate a water supply system in India, leading to a healthy backlog as at September 30, 2015. We expect to be able to finalize the second phase (25%) of the sale of KWIG soon.
TBIF, our banking and retail lending segment, continues to contribute solid profits on a healthy portfolio, with growing income and strong cost control. The Debt Settlement with our debenture holders, which came into effect in early July last, gives us time to continue working on improving the performance of our operating segments and simultaneously to take steps to generate the funds required for our 2017 repayment obligations”, states Shouky Oren, CEO of Kardan N.V
Highlights Q3 + 9M 2015:
Kardan N.V. Q3 2015:
EUR 4.3 mn net profit to equity holders (Q3 2014: loss of EUR 7.5 mn)
Positive NIS foreign exchange on financing expenses of EUR 16 mn (Q3 2014: EUR 4 mn negative impact)
9M 2015
EUR 4.9 mn net loss to equity holders (9M 2014: EUR 11.4 mn loss)
Positive net contributions from all operating divisions, more than off-set by negative foreign exchange on financing expenses of EUR 23 mn (9M 2014: EUR 10 mn negative impact)
Real Estate Asia Q3 2015
EUR 3.9 mn net loss (Q3 2014: EUR 0.4 mn profit); predominantly due to higher net financing expenses
9M 2015
EUR 12.9 mn net profit (9M 2014: EUR 3.8 mn profit), predominantly on the revaluation of Galleria Dalian (completed in Q2 2015)
Water Infrastructure Q3 2015
EUR 1.4 mn net profit (Q3 2014: EUR 1.8 mn net profit)
Strong growth in profit from continuing operations (Q3 2015: EUR 1.6 mn, Q3 2014: EUR 0.1 mn)
Substantial revenue increase including positive foreign exchange effect of strong USD
9M 2015
EUR 20.2 mn net profit (9M 2014: EUR 5.3 mn profit), including EUR 19 mn net profit on discontinued operations of KWIG and a one-off charge (EUR 3 mn) relating to early repayment of loan
Positive impact of strengthening of USD versus the Euro
Banking and Retail Lending Q3 2015
EUR 3.9 mn net profit (Q3 2014: EUR 0.1 mn loss) predominantly on strong revenue growth
9M 2015
EUR 11.6 mn net profit (9M 2014: EUR 5.4 mn profit) on growth in revenues, better equity earnings and improved account service including F/X
The Q3 + 9M 2015 condensed interim consolidated income statements, split into the different segments of Kardan N.V. are shown in the table below. It is noted that the comparable results of Q3 and 9M 2014 have been adjusted to reflect the impact of the discontinued operations of KWIG.
Condensed Interim Consolidated Income Statement Kardan N.V.
For the three months ended September 30, 2015:
Real Estate Asia Water Infrastructure Banking and Retail lending Other Total
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tijd 09.15
Kardan EUR 0,252 +1,1ct vol. 342.000
