Highlights H1 and Q2 2020:
Following is a summary of net loss attributable to equity holders, by activity. 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 impacted to a certain extent. In addition, the crisis also has an impact on the real estate development segment and the water infrastructure activities (discontinued operations). For additional information see Note 1C to the interim consolidated financial statements and the result analysis below.
H1 2020: €31.2 million net loss to equity holders (H1 2019: net loss of €46.6 million), is due to high interest expenses on the debentures, which were partially offset by positive impact of FX and Israeli CPI on the Company’s debentures, an impairment loss in the Real Estate activities and a net loss of the Water Infrastructure activities as a result of provisions for losses on projects and doubtful debts.
Q2 2020: € 27.5 million net loss to equity holders (Q2 2019: net loss of € 23.1 million).
H1 2020: the net loss to equity holders amounted to €4 million (H1 2019: net profit of €1.5 million), as a result of a decrease of €7.7 million in the value of the Galleria Dalian shopping mall. The loss was mitigated by the profit from deliveries of apartments in the Dalian project and the joint venture projects.
The COVID-19 pandemic had some impact on the development activities and a more significant impact on the investment property activities. As shops in the Galleria Dalian shopping mall had to be temporarily closed in the first half of 2020, a rental discount of €0.7 million in total was granted to tenants and the valuation of the mall further decreased.
Water infrastructure (discontinued operation)
H1 2020: the net loss attributable to equity holders amounted to €12.8 million impacted by provisions for doubtful debts and impairments and losses mainly on terminated projects (H1 2019: net loss of €11.9 million).
Kardan’s water infrastructure company - TGI, is currently in the midst of ongoing negotiations with the financing banks regarding the restructuring of its debts.
The outbreak of the COVID-19 virus has impacted the water infrastructure activities. Whilst in a significant number of countries in which it operates, the projects in which TGI is involved continued in full or in part; in some countries the projects have stopped completely for a limited period. In addition, the economic crisis following the COVID-19 outbreak impacts the economic activity in some of the countries where TGI is operating. However, TGI’s assessment is that its projects in these affected countries will continue albeit at a slower pace than previously estimated.
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