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<ul><li><p>Condensed consolidated interim results for the six months ended 31 December 2017</p><p>30 years of property investment excellence.</p></li><li><p>HYPROP INVESTMENTS LIMITED(Incorporated in the Republic of South Africa) (Registration number 1987/005284/06) JSE share code: HYPISIN: ZAE000190724 (Approved as a REIT by the JSE) (Hyprop or the company or the group)</p><p>Highlights</p><p>Dividend up</p><p>8,3% Developments and extensions in the SA portfolio of </p><p>R290 million </p><p>Acquired The Mall in </p><p>Sofia, Bulgaria (via Hystead)</p><p>Agreement to acquire City Centre One Zagreb East and City Centre One Zagreb West in</p><p>Zagreb, Croatia (via Hystead)</p></li><li><p>Condensed consolidated interim results for the six months ended 31 December 2017</p><p>1</p><p> Unaudited six months</p><p>31 December 2017</p><p>R000</p><p>Unaudited six months</p><p>31 December 2016</p><p>R000 </p><p>Audited 12 months</p><p>30 June 2017</p><p> R000 </p><p>Revenue 1 539 370 1 621 331 3 167 649Investment property income 1 544 712 1 590 208 3 128 062 Straight-line rental income accrual (5 342) 31 123 39 587 </p><p>Property expenses (521 113) (544 095) (1 073 877)Net property income 1 018 257 1 077 236 2 093 772Other operating expenses (28 295) (48 185) (78 232)</p><p>Operating income 989 962 1 029 051 2 015 540Net interest (161 646) (172 406) (336 502)</p><p>Received 151 132 160 423 294 177 Paid (312 778) (332 829) (630 679)</p><p>Net operating income 828 316 856 645 1 679 038Other income 22 996 17 505 36 931 Change in fair value 510 707 619 973 983 372 </p><p>Investment property 541 717 590 391 1 181 786 Straight-line rental income accrual 5 342 (31 123) (39 587)Financial guarantee (29 409) (163 855)Investment in joint venture 10 102 10 102 Derivative instruments (6 943) 50 603 (5 074)</p><p>Profit/(loss) on disposal 86 (2 934) (526)Investment in subsidiary (2 557) (2 557)Investment property 86 (377) 2 031 </p><p>Impairment of loan (AttAfrica) (8 539) (25 377)Impairment of goodwill (18 134) (18 134) Net income before equity-accounted investments 1 353 566 1 473 055 2 655 304Share of loss from joint ventures (50 380)Share of income from associate 96 Dividends 78 820 82 923 146 350 Profit before taxation 1 432 386 1 556 074 2 751 274Taxation (6 080) (3 710) (4 340)Profit for the period/year 1 426 306 1 552 364 2 746 934 Other comprehensive incomeItems that may be reclassified subsequently to profit or lossExchange differences on translation of foreign operations (6 331) (14 771) (27 623)</p><p>Total comprehensive income for the period/year 1 419 975 1 537 593 2 719 311 </p><p>Total profit for the period/year attributable to:Shareholders of the company 1 436 930 1 577 849 2 767 652 Non-controlling interests (10 624) (25 485) (20 718) Profit for the period/year 1 426 306 1 552 364 2 746 934 Total comprehensive income attributable to:Shareholders of the company 1 434 389 1 572 409 2 755 272 Non-controlling interests (14 414) (34 816) (35 961) Total comprehensive income for the period/year 1 419 975 1 537 593 2 719 311 </p><p>Condensed consolidated statement of comprehensive income</p></li><li><p>2 Condensed consolidated interim results for the six months ended 31 December 2017</p><p>Condensed reconciliation headline earnings</p><p> Unaudited six months</p><p>31 December 2017</p><p>R000</p><p>Unaudited six months</p><p>31 December 2016</p><p>R000 </p><p>Audited 12 months</p><p>30 June 2017</p><p> R000 </p><p>Profit for the period/year 1 436 930 1 577 849 2 767 652 Earnings 1 436 930 1 577 849 2 767 652 Headline earnings adjustments (541 803) (600 144) (1 173 229)</p><p>Change in fair value of: Investment property (541 717) (611 110) (1 181 786) Investment in joint venture (10 102) (10 102)</p><p>Loss/(profit) on disposal: Investment in subsidiary 2 556 2 556 Investment property (86) 378 (2 031)Impairment of goodwill 18 134 18 134 </p><p>Headline earnings 895 128 977 705 1 594 423 </p><p>Total shares in issue 248 441 278 248 441 278 248 441 278 Weighted average shares in issue 248 137 264 246 931 585 247 441 400 Diluted weighted average shares in issue 248 335 543 247 260 478 247 720 531 Total shares in issue for dividend per share (excludes treasury shares) 247 995 018 248 030 619 247 899 032 Basic earnings per share (cents) 579,1 639,0 1 118,5 Headline earnings per share (cents) 360,7 395,9 644,4 Diluted earnings per share (cents) 574,4 634,0 1 110,8 Diluted headline earnings per share (cents) 356,2 391,2 637,1 </p></li><li><p>Condensed consolidated interim results for the six months ended 31 December 2017</p><p>3</p><p>Condensed consolidated statement of financial position</p><p> Unaudited 31 December </p><p>2017R000</p><p>Unaudited 31 December </p><p>2016R000 </p><p>Audited30 June </p><p>2017 R000 </p><p>AssetsNon-current assets 33 100 805 32 512 844 32 854 166</p><p>Investment property 30 275 912 29 186 107 29 681 596 South African portfolio 28 409 403 27 110 496 27 711 853 Ikeja City Mall (Lagos, Nigeria) 1 866 509 2 075 611 1 969 743 </p><p>Building appurtenances and tenant installations 151 382 134 155 148 530 Investments in sub-Saharan Africa (excluding SA) 2 656 209 3 141 399 3 005 821 Loans receivable 17 302 16 991 17 434 Derivative instruments 34 192 785 </p><p>Current assets 1 366 529 985 404 1 366 021Receivables 263 468 237 446 230 741 Derivative instruments 8 894 3 401 9 530 Cash and cash equivalents 1 094 167 744 557 1 125 750 </p><p>Non-current assets held-for-sale 189 746 916 798 426 681 </p><p>Total assets 34 657 080 34 415 046 34 646 868</p><p>Equity 25 430 456 24 560 294 24 882 553 Stated capital and reserves 25 350 571 24 464 850 24 788 254Non-controlling interest 79 885 95 444 94 299</p><p>LiabilitiesNon-current liabilities 6 042 607 9 011 418 5 428 316</p><p>Interest-bearing liabilities 5 648 768 8 838 496 5 068 332 Financial guarantee 193 264 163 855 Derivative instruments 61 822 32 789 56 530 Deferred taxation 138 753 140 133 139 599 </p><p>Current liabilities 3 176 220 821 149 4 322 925Payables 479 816 521 149 489 681 Interest-bearing liabilities 2 695 583 300 000 3 832 306 Derivative instruments 821 938 </p><p>Liabilities directly associated with non-current assets held-for-sale 7 797 22 185 13 074 Total liabilities 9 226 624 9 854 752 9 764 315 </p><p>Total equity and liabilities 34 657 080 34 415 046 34 646 868</p><p>Net asset value per share (R) 102,22 98,47 99,78</p></li><li><p>4 Condensed consolidated interim results for the six months ended 31 December 2017</p><p>Condensed consolidated statement of changes in equity </p><p> Unaudited 31 December </p><p>2017R000</p><p>Unaudited 31 December </p><p>2016R000 </p><p>Audited30 June </p><p>2017 R000 </p><p>Balance at beginning of period/year 24 882 553 23 118 856 23 118 856Total profit for the period/year attributable to Hyprop shareholders 1 436 930 1 577 849 2 767 652 Non-controlling interest (14 414) (34 816) (35 961)Issue of shares 695 656 695 656 Treasury shares (7 990) 3 422 Dividends (862 193) (798 907) (1 660 316)Share-based payment reserve (1 890) 7 096 5 624 Foreign currency translation reserve (2 540) (5 440) (12 380)</p><p>Balance at end of period/year 25 430 456 24 560 294 24 882 553 </p><p>Distribution detailsTotal distribution for the period/year (cents) 376,3 347,3 695,1Six months ended 30 June (cents) 347,8Six months ended 31 December (cents) 376,3 347,3 347,3</p></li><li><p>Condensed consolidated interim results for the six months ended 31 December 2017</p><p>5</p><p>Condensed consolidated statement of cash flows</p><p> Unaudited 31 December </p><p>2017R000</p><p>Unaudited 31 December </p><p>2016R000 </p><p>Audited30 June </p><p>2017 R000 </p><p>Cash flows from operating activities (1 551) 145 241 319 908 Cash generated from operations 1 056 760 1 014 952 2 159 602 Interest received 85 525 272 912 266 423 Interest paid (279 974) (343 716) (441 049)Taxation paid (1 669) (4 751)Dividends paid (862 193) (798 907) (1 660 317)</p><p>Cash flows from investing activities 322 698 492 721 669 846 Acquisition of and additions to investment property (147 988) (78 362) (123 721)Additions to building appurtenances and tenant installations (21 087) (23 348) (57 064)Proceeds on disposal of assets classified as held-for-sale 225 259 520 557 874 233 Increase in investment in sub-Saharan Africa (excluding SA) (109 506)Dividends received 87 368 73 891 89 093 Decrease/(increase) in loans receivable 179 146 (17) (3 189)</p><p>Cash flows applied to financing activities (349 991) (83 804) (44 833)Loans repaid (335 089) (779 459) (2 011 393)Issue of shares 695 655 695 655 Loans raised 3 262 1 279 879 Purchase of Hyprop shares (long-term staff incentive scheme) (18 164) (8 974)</p><p>Net increase in cash and cash equivalents (28 844) 554 158 944 921 Cash disposed with subsidiary (4 006)Translation effects on cash and cash equivalents of foreign entities (1 896) (5 441) (12 336)Cash reallocated to assets held-for-sale (843) (3 117) (1 786)Cash and cash equivalents at beginning of period/year 1 125 750 198 957 198 957 </p><p>Cash and cash equivalents at end of period/year 1 094 167 744 557 1 125 750 </p></li><li><p>6 Condensed consolidated interim results for the six months ended 31 December 2017</p><p>Commentary</p><p>INTRODUCTIONHyprop is a specialist shopping centre Real Estate Investment Trust (REIT), which operates a portfolio of shopping centres in South Africa (SA), sub-Saharan Africa (excluding SA) and South-Eastern Europe.</p><p>Hyprops strategy is to own dominant, quality shopping centres in major metropolitan areas, where such assets can be acquired or developed at attractive yields.</p><p>The shopping centre portfolio in South Africa includes super-regional centre Canal Walk, large regional centres Clearwater, The Glen, Woodlands, CapeGate, Somerset and Rosebank malls, and regional centre Hyde Park Corner.</p><p>The sub-Saharan African portfolio (excluding SA) includes interests in Accra Mall, West Hills Mall and Achimota Retail Centre (all in Accra, Ghana), Kumasi City Mall in Kumasi, Ghana, Manda Hill Centre in Lusaka, Zambia and Ikeja City Mall in Lagos, Nigeria.</p><p>Hyprops investments in South-Eastern Europe, held via a 60% interest in UK-based Hystead Limited (Hystead), include interests in Delta City Belgrade, Serbia, Delta City Podgorica, Montenegro, Skopje City Mall in Skopje, Macedonia and The Mall in Sofia, Bulgaria (acquired October 2017). </p><p>In February 2018, Hystead agreed to acquire a 90% interest in City Centre One Zagreb East and City Centre One Zagreb West, both in Zagreb, Croatia.</p><p>FINANCIAL RESULTSHyprop has declared a dividend of 376,3 cents per share for the six months ended 31 December 2017 (the period), an increase of 8,3% on the corresponding period in 2016. </p><p>DISTRIBUTABLE EARNINGS STATEMENT AND RECONCILIATION TO DIVIDEND DECLAREDDistributable earnings</p><p>Operating segment</p><p>Six months 31 December </p><p>2017R000</p><p>Six months31 December</p><p>2016R000</p><p>South African property portfolio 952 345 968 198 Continuing operations 944 034 924 877 Properties sold 8 311 43 321 </p><p>Investments in sub-Saharan Africa (excluding SA) 40 025 30 884 Investments in South-Eastern Europe 91 615 58 351 Fund management expenses (29 900) (32 826)Net interest (148 373) (180 688)Other income 27 415 17 505 Total dividend 933 127 861 424 Total shares in issue at period-end 248 441 278 248 441 278 Treasury shares in issue (446 260) (410 659)Shares in issue for distributable earnings 247 995 018 248 030 619 Dividend per share (cents) 376,3 347,3 Dividend per share growth (%) 8,3 16,6 </p><p>Distributable earnings for the period benefited from income received from the investments in South-Eastern Europe, particularly the new acquisitions in Skopje, Macedonia (November 2016) and in Sofia, Bulgaria (October 2017). The inclusion of distributable earnings from Ikeja City Mall in Lagos, Nigeria also contributed to the growth in distributable earnings for the period.</p></li><li><p>Condensed consolidated interim results for the six months ended 31 December 2017</p><p>7</p><p>Net interest costs of R148,4 million (31 December 2016: R180,7 million) reduced due to non-core asset sales of R867 million during the 2017 financial year and the sale of Willowbridge North for R225 million in September 2017. </p><p>The proceeds from non-core asset sales were applied in part to the reduction of debt and in part to capital expenditure in the South African portfolio. The remaining cash was placed on deposit. </p><p>Fund management expenses reduced during the period, partly due to asset management fees received from Hystead amounting to R7,4 million (31 December 2016: R6,8 million), and a reduction in the share-based payment expense relating to the staff share incentive scheme. </p><p>Included in other income are credit enhancement fees of R25,2 million (31 December 2016: R17,5 million) received for the funding guarantee provided by Hyprop in respect of the South-Eastern European investments. </p><p>RECONCILIATION FROM HEADLINE EARNINGS TO DISTRIBUTABLE EARNINGS</p><p> Unaudited six months</p><p>31 December 2017</p><p>R000</p><p>Unaudited six months</p><p>31 December 2016</p><p>R000 </p><p>Audited 12 months</p><p>30 June 2017</p><p> R000 </p><p>Headline earnings 895 127 977 705 1 594 423Distributable earnings adjustments 38 000 (116 281) 148 798</p><p>Change in fair value: Derivative instruments 6 943 (50 602) 5 074 Financial guarantee 29 409 163 855Investments in: Sub-Saharan Africa (excluding SA)1 (26 024) (48 487) (29 928) South African subsidiaries1 (364) 1 118 1 212 South-Eastern Europe 11 389 (24 572) (24 572)Impairment of loan (AttAfrica) 8 539 25 377Capital items 3 697 5 286 6 154Deferred taxation 4 411 976 1 626</p><p>Distributable earnings 933 127 861 424 1 743 2211 Net effect of converting IFRS earnings to distributable earnings</p><p>SOUTH AFRICAN PORTFOLIORevenue and distributable earnings</p><p>Unaudited six months ended Unaudited six months ended31 December 2017 31 December 2016</p><p>Business segmentRevenue</p><p>R000</p><p>Distributableearnings</p><p>R000Revenue</p><p>R000</p><p>Distributableearnings</p><p>R000</p><p>Shopping centres 1 318 591 877 306 1 287 100 860 789 Value centres 74 816 51 232 68 473 50 298 Total retail 1 393 407 928 538 1 355 573 911 087 Total standalone offices1 24 138 15 496 22 841 13 790 Investment property (excluding properties sold) 1 417 545 944 034 1 378 414 924 877 Properties sold2 10 494 8 311 74 173 43 488 Total investment property 1 428 039 952 345 1 452 587 968 365 1 Consists of Lakefield Office Park (held-for-sale) and Cradock Heights2 Willowbridge North was sold during the period. Properties sold in the prior year include Somerset Value Mart, Willowbridge </p><p>South, Glenfield and Glenwood office parks</p></li><li><p>8 Condensed consolidated interim results for the six months ended 31 December 2017</p><p>Commentary (continued)</p><p>Despite the difficult economic and political conditions in South Africa during the period, which had a negative effect on consumer confidence, the shopping centres achieved positive trading results.</p><p>Like-for-like growth in distributable earnings (excluding properties sold) for the period was 2,1%. Income was negatively affected by construction work at The Glen, Rosebank Mall and Canal Walk and vacancies as a consequence of Stuttafords vacating Clearwater Mall, Rosebank Mall and Canal Walk in May 2017.</p><p>Excluding the effects of the construction work and the Stuttafords vacancies, growth in distributable earnings from shopping centres was 5,2%.</p><p>Somerset Mall...</p></li></ul>

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