Atrium European Real Estate Limited

EANS-Adhoc: Atrium European Real Estate Limited
FIRST HALF 2015 RESULTS

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14.08.2015


Atrium European Real Estate Limited
("Atrium")

FIRST HALF 2015 RESULTS 

Ad hoc announcement - Jersey, 14 August 2015. Atrium European Real Estate
Limited (VSE/ Euronext: ATRS) (the "Company" and together with its subsidiaries,
the "Group"), a leading owner, operator and developer of shopping centres and
retail real estate in Central and Eastern Europe, announces its interim results
for the second quarter and six months ended 30 June 2015.

Highlights:
- Gross rental income ("GRI") of EUR103.6m (6M 2014: EUR106.9m), with an EPRA 
  like-for-like GRI of EUR88.1m (6M 2014: EUR96.5m)
- Net rental income ("NRI") of EUR97.9m (6M 2014: EUR103.1m), with an EPRA like-
  for-like NRI of EUR83.7m (6M 2014: EUR95.1m)

  - Excluding Russia the Group's NRI increased by 5.3% and like-for-like EPRA
    NRI was flat
  - The performance was impacted by the rental discounts provided to tenants in 
    the Group's Russian portfolio, these were granted to protect occupancy 
    levels, as the economic situation remained challenging

- The operating margin in the Group's core markets of Poland, Czech Republic
  and Slovakia remained strong at 98%, with the Group operating margin high at
  94.5% despite the adverse performance in Russia
- EPRA occupancy rates as at 30 June 2015 was a robust 96.8% (31 December 
  2014:97.4%).  Russian occupancy remained high, at 96.3% 
- EBITDA, excluding revaluation and disposals, was EUR81.3m (6M 2014: EUR90.3m)
- Profit after taxation was EUR10.0m compared to EUR36.2m for the first half of
  2014. The change was mainly caused by:

  - A lower NRI of EUR5.2m, and an increase of EUR6.5m in non-recurring legacy
    legal and administrative expenses
  - EUR10.6m charge from the disposal of non-core assets in the Czech Republic
    mainly as a result of a reclassification of a currency translations reserve
  - A EUR20.9m increase in finance expenses (mainly related to bond buyback
    costs, the early repayment of a bank loan in Poland, higher interest
    expenses due to the bond issuance and foreign exchange differences)
  - The above items were partially offset by, a higher deferred tax credit of
    EUR14.3 million, mainly related to a release of deferred tax liability on
    certain Polish assets following a Polish holdings restructuring net of an
    increase in the Group's Russian deferred tax liability

- Company adjusted EPRA earnings per share was 16.0 EURcents (6M 2014: 19.2
  EURcents)
- The Group's standing investments portfolio comprised 82 assets at the quarter-
 end compared to 153 as at 31 December 2014, but grew in value by 7.4% to
  EUR2.7 billion after accounting for, inter alia:

  - The disposal of 72 non-core properties in the Czech Republic
  - The inclusion of the Atrium Felicity shopping centre development in Lublin,
    Poland, which opened in March 2014
  - The acquisitions of a 75% interest in Arkády Pankrác shopping centre in
    Prague, the Czech Republic, which completed in June, and of two prime
    shopping centres in November 2014; Focus Mall Bydgoszcz in Poland and Palác
    Pardubice, also in Czech Republic

- Total assets of EUR3,382.6m with a cash position of EUR275.9m (31 December
  2014: EUR425.2m) and borrowings of EUR1,046.6m as at 30 June 2015 (31 December
  2014:EUR1,068.1m), representing a gross and net LTV of 34.5% and 25.4%  
  respectively. Unencumbered borrowings were 81.3% at 30 June 2015 (31 December 
  2014 64.9%)
- EPRA Net asset value ("NAV") per ordinary share was EUR5.92 (31 December 2014:
  EUR6.08) after first and second quarter dividend distributions of EUR0.0675
  per share in the first half of 2015
- Third quarterly dividend of EUR0.0675 per share due to be paid as a capital
  repayment on 30 September 2015 to shareholders on the register at 23
  September 2015, with an ex-dividend date of 22 September 2015

Operational highlights during and after the period:

Investment properties
- Completed the sale of a portfolio of 72 retail assets in the Czech Republic
  for a consideration of EUR69m in January 2015
- Completed the acquisition of a 75% interest in the Arkády Pankrác shopping
  centre in Prague in June, for a consideration of EUR162m. The Otto family will
  continue to own the remaining 25% of the joint venture
- Opened the 17,300 sqm extension of the Atrium Copernicus shopping centre in
  Torun, Poland in March 2015

Financing transactions
- In May 2015, Atrium successfully issued EUR150m 3.625% notes due in October
  2022, which have been consolidated and form a single series with the EUR350m
  3.625% bond due in October 2022 (issued by Atrium in October 2014). The issue
  price was 106.395% reflecting a yield of 2.9%. The cash proceeds amounted to
  EUR159.6m
- In May 2015, the Group completed a voluntary repayment of a bank loan from
  Berlin-Hannoversche Hypothekenbank AG, in Poland for a total amount of
  EUR105.3m (including fees) held by Atrium Promenada sp. z o.o.
- During the reporting period, Atrium repurchased bonds issued in 2005 and due
  in 2017, with a nominal value of EUR79 million 

Group executive management team changes 
- In January 2015, following the transfer of 52.1m ordinary shares from Apollo
  Global Real Estate Management LP to Gazit-Globe Ltd., the two Atrium
  directors nominated by Apollo, Joseph Azrack and Roger Orf, resigned from the
  Board of Directors
- In January 2015, Atrium announced the appointment of Ryan Lee as its new
  Group Chief Financial Officer. Ryan joined the Group on 2 February 2015, with
  his appointment becoming effective on 1 April 2015 
- In June 2015, Atrium announced the appointment of Ms Karine Ohana M.Sc to the
  Board of Directors as an independent Non-executive Director, with her
  appointment as Director effective from 24 June 2015
- Aharon Soffer resigned from the Board of Directors effective as of 31 August
  2015

Commenting on the results, Josip Kardun, Group CEO, said:  
"During the first half of 2015, there has been an on-going focus on operational
and financial improvements as we continued with the implementation of our well
defined strategy to grow the Group's portfolio and income, while reweighting the
asset base towards higher quality cash flow from larger scale and dominant
shopping centres in our core markets. 
  
"The outlook for most of our countries, and our core markets, in particular,
remains robust. In Russia, by contrast, the situation remains fundamentally
challenging and it is still too early to predict any notable, positive momentum.
Overall, looking ahead, Atrium expects to benefit from the good prospects for
consumer spending and the persistently healthy appetite shown by retailers and
investors alike for its core markets, especially as the Group's asset management
initiatives and portfolio rotation start to bear fruit, and the forthcoming
expiries of long lease durations allow for stronger rental growth in the medium
to long term."

Chaim Katzman, chairman of the Board of Directors, added:
"On behalf of the Board of Directors, I would like to thank Roni for all his
hard work and his meaningful contribution to the business over the past four
years. I wish him great success in his future endeavours."

This announcement is a summary of, and should be read in conjunction with the
full version of the Group's Q2 2015 results, which can be found on the Atrium
page of the Vienna Börse website at http://en.wienerborse.at/ and on the Group's
page of the Euronext Amsterdam website, www.euronext.com or on the Group's
website at www.aere.com.


Further information can be found on Atrium's website www.aere.com or from:

Analysts:

Ljudmila Popova                                         
lpopova@aere.com

Press & Shareholders:

FTI Consulting Inc                      
+44 (0)20 3727 1000
Richard Sunderland
Claire Turvey
Ellie Sweeney
atrium@fticonsulting.com

Atrium is established as a closed-end investment company incorporated and
domiciled in Jersey and regulated by the Jersey Financial Services Authority as
a certified Jersey listed fund, and is listed on both the Vienna Stock Exchange
and the NYSE Euronext Amsterdam Stock Exchange. Appropriate professional advice
should be sought in the case of any uncertainty as to the scope of the
regulatory requirements that apply by reason of the above regulation and
listings. All investments are subject to risk. Past performance is no guarantee
of future returns. The value of investments may fluctuate. Results achieved in
the past are no guarantee of future results.


Further inquiry note:
For further information:
FTI Consulting Inc.:
+44 (0)20 3727 1000
Richard Sunderland
Claire Turvey
Richard.sunderland@fticonsulting.com

end of announcement                               euro adhoc 
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issuer:      Atrium European Real Estate Limited
             Seaton Place 11-15
             UK-JE4 0QH  St Helier Jersey / Channel Islands 
phone:       +44 (0)20 7831 3113
mail:     richard.sunderland@fticonsulting.com
WWW:      http://www.aere.com
sector:      Real Estate
ISIN:        JE00B3DCF752
indexes:     Standard Market Continuous
stockmarkets: official market: Wien, stock market: Luxembourg Stock Exchange 
language:   English
 

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