Interim Report Q1 2012/13

6/25/2012 11:14 AM EST

TK Development A/S
Quarterly report

Interim Report Q1 2012/13

Company announcement no. 11/2012

Aalborg, Denmark, 2012-06-25 17:14 CEST (GLOBE NEWSWIRE) -- 

Summary

  -- TK Development’s financial results amounted to DKK -6.9 million before tax,
     compared to DKK -7.5 million in the same period the year before.
  -- In April 2012, a Bill proposing changes to the rules for tax loss
     carryforwards was introduced. This Bill was enacted in June 2012. For TK
     Development, this has considerably lengthened the time horizon for
     utilizing tax losses, and thus significantly increased the uncertainty
     relating to utilization of the tax asset. TK Development has calculated
     that the changed rules entail a need to impair the Group’s tax asset by DKK
     150.0 million. This amount has been recognized in the Interim Report for Q1
     2012/13.
  -- The results after tax amounted to DKK -154.9 million, against DKK -5.1
     million in the same period the year before.
  -- Consolidated equity totalled DKK 1,725.7 million at 30 April 2012,
     corresponding to a solvency ratio of 38.5 %.
  -- Following its completion, the extension to the Group’s Czech investment
     property, the Futurum Hradec Králové shopping centre, opened as scheduled
     on 10 May 2012. The current occupancy rate of the extension is 90 %.
  -- Construction of the first phase of the Group’s project in Bielany, Poland,
     is progressing as planned. The total project area comprises about 56,200
     m², primarily housing consisting of 900-1,000 units, with 136 being built
     in the first phase. Sales agreements have been concluded for about 39 % of
     these units.
  -- The Group’s total project portfolio amounted to DKK 3,547 million at 30
     April 2012, of which DKK 2,024 million is attributable to projects that
     have been completed and thus generate cash flow. The annual net rent from
     the current leases amounts to DKK 137 million, equal to a return on cost of
     6.8 %. Based on full occupancy, the return on cost is expected to reach 7.8
     %. Negotiations for the sale of several of these projects are ongoing.
  -- In total, the Group’s completed, cash-flow-generating projects and its
     investment properties amount to DKK 2,392 million. The Group’s net
     interest-bearing debt amounts to DKK 2,278 million.
  -- At 30 April 2012, the Group’s project portfolio comprised 774,000 m² (31
     January 2012: 776,000 m²).
  -- The continued uncertainty on the international financial markets has led to
     consistently long decision-making processes among financing sources,
     tenants and investors alike.
  -- The Group will make the startup of major new projects contingent on
     obtaining either full or partial financing for them and on freeing up cash
     resources from the sale of one or more major completed projects.
  -- Management still considers it of great importance for the Group to sell a
     number of major completed projects in the 2012/13 financial year. The sale
     of major completed projects will generate the cash resources required to
     underpin future operations and project flow, and thus long-term earnings.
     In light of the volatility of financial markets, the volume, timing and
     proceeds of major project sales are subject to uncertainty. Despite this
     uncertainty, Management expects to sell a number of projects in the near
     future and to generate positive pre-tax results for the 2012/13 financial
     year.

 Further information is available from Frede Clausen, President and CEO, on
tel. +45 8896 1010. 

The expectations mentioned in this announcement, including earnings
expectations, are naturally subject to risks and uncertainties, which may
result in deviations from the expected results. Expectations may be affected by
various factors, as mentioned in the section ”Risk issues” in the Group’s
2011/12 Annual Report.