LONDON (Alliance News) - Property developer Plaza Centers N.V, the London- and Warsaw-listed shopping and entertainment centres developer Thursday said its losses widened in 2013, as it was hit by high impairment charges and finance costs.
The Central and Eastern Europe-focused firm - which is currently undergoing a debt restructuring - posted pretax losses of EUR224.4 million for 2013, compared with losses of EUR90.7 million, even though rental income crept to EUR23.7 million, from EUR23.1 million a year earlier.
Plaza said it was beset by a number of problems throughout the year including a EUR186 million impairment of trading properties, equity accounted investees, investment property and pre-payments compared with just EUR83.7 million a year earlier. In addition, net finance cost more than doubled to EUR39.3 million from EUR17.2 million in 2012.
Plaza Centers was hit hard by the economic downturn, a corresponding lack of transactions in property investment markets and a lack of traditional bank financing. It has raised about EUR61 million by selling five assets in 2013, refinanced debt on some properties and tried to maximise its returns from its remaining assets.
However, this hasn't come quick enough to allow it to meet upcoming bond obligations, including a EUR15 million payment that was due to Polish bondholders in November and a EUR17 million payment due to Israeli bondholders in December.
The company attributed the slight increase in rental income to the improvement in performance of its CEE shopping centres. The rental income performance would have been even stronger, had there not been a loss of income caused by a fire incident in India, Plaza added.
Plaza said its total assets are now worth EUR586 million, down from EUR886 million, as a result of "changes in the accounting presentation of joint venture, Special Purpose Vehicles, and primarily due to impairment of trading properties and equity accounted investees as well as debt repayments."
Overall, Plaza said its net asset value fell 40% to EUR274 million, from EUR459 million, primarily as a result of impairment assets mainly in Serbia, Romania and India. Occupancy levels across the company's portfolio rose to 93% from 89%.
Financially, the company said its consolidated cash position at the year-end was EUR33.7 million, down from EUR65.8 million. Gearing increased to 64% from 50%, as a result of impairment losses and finance costs during the year.
"Our clear priority is to conclude our restructuring process successfully whilst continuing to leverage the ability and expertise of our management team and the quality of our income generating assets to achieve success in our day-to-day operations," Chief Executive Ran Shtarkman said in a statement. "It is this combination of factors that underpins the Board's continued confidence that the company retains significant value for its stakeholders and will be able to repay its creditors."
Following the withholding of payments of all corporate level debt and in line with the restructuring plan, the firm said it will commit to "certain restrictions on dividends."
The stock was trading at 11.75 pence Thursday, down 0.25 pence or 2.1%,
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Plaza (PLAZ)