Frk Eur Igc Etf Regulatory News (EURO)

9 Oct 2007 07:01

EuroTrust A/S09 October 2007 Date: October 9, 2007 EuroTrust A/S Annual Result for the twelve months ended 30 June 2007 Eurotrust A/S ("Eurotrust or The Group"), the international developer of windenergy projects and residential property today announces its Annual results forthe twelve months ended 30 June 2007. Key Points - Financial • Turnover down 13% overall to Euro 50.8 million (2006 Euro 58.1 million) but turnover in the wind energy division up 275% to Euro 7.1million • Annual Result influenced heavily by one-off items, including the costs of AIM listing, at a loss of Euro 7.4 million (2006 profit of Euro 6.2 million) • Earnings per share: loss of Euro 0,20 (2006 profit of Euro 0,26) • No dividend is proposed Key Points - Operational • Strong growth in operating income achieved in the wind energy market (up 392% to Euro 3.1 million) • Very significant opportunities for further investment in wind farms in selected countries across Europe. Current installed capacity is 79 MW with a further 92 MW under construction and another 512 MW under development. • The medium term goal is to acquire 1.000 MW of installed capacity in the next 3-5 years. • Clear near term objective to become a pure renewable energy developer and producer and changes to the management team to reflect renewable energy focus have been announced • Adjusted operating margin (before one-off items and amortisation of intangibles) improved • Planned divestment of shares in the Real Estate Division in order to capitalize the strong growth in the Wind Division. • The Company has a strong portfolio in its Real Estate pipeline, comprising approximately 12,000 dwellings in 44 projects in Denmark and Norway with an estimated market value upon completion of approximately Euro 4 billion over a 15 year development period. • Total shareholder equity is booked at EUR 153.8 million compared to EUR 79.0 million on June 30 2006. Chief Executive, Bo Kristensen stated: "We are extremely pleased with the development in the Wind Division andconditions in this market remain extremely strong. We have announced ourintention to divest shares in the Real Estate Division in order to take fulladvantage of these conditions. At present we are very pleased with the progress of the municipalities planningauthorities in order to realize value from our strong portfolio of Real Estatein Denmark and Norway. Our property portfolio is strong and contains significant value, our planneddivestment in this area will leave us extremely well positioned to expand ourwind energy activities in a very strong market for the benefit of shareholders." For further information please contact: EuroTrust +45 7696 6000Bo Kristensen, CEO Cenkos Securities plc +44(0)20 7397 8926 West Hill Corporate Finance +44 (0)20 7464 8822Alan Richards Haggie Financial +44 (0)20 7417 8989Peter Rigby/Alexandra Parry Notes to Editors:EuroTrust EuroTrust A/S is a leading Danish Renewable Power Producer and a Real Estatedeveloper listed on the AIM market of London Stock Exchange. EuroTrust A/S has171 MW of wind power generation in operation or under construction in Germany,Italy, Spain and Poland, and 44 commercial and residential property developmentprojects in Denmark and Norway. Highlights / summary The Annual result for the 12 month period ending 30 June 2007 showed a US GAAPnet loss of DKK 55.1 million (EUR 7.4 million) compared with the result from theprevious year ending 30 June 2006 of a net profit of DKK 45.9 million (EUR 6.2million). The result comprises an Operating Income of negative DKK 70.7 million (EUR 9.5million) compared to 65.4 million (EUR 8.8 million) on June 30 2006. The Operating Income for the wind division was DKK 22.7 million (EUR 3.1million) compared to DKK 5.8 million (EUR 0.8 million) on June 30 2006 The Operating Income for the Real Estate Division was negative DKK 93.4 million(EUR 12.6 million) compared to a profit of DKK 59.6 million (EUR 8.0 million) onJune 30 2006. The result for the property division was not satisfactory and wasimpacted negatively by factors considered by management to be one off in theirnature: extraordinary restitution costs were incurred on real estate projects asa result of the bankruptcy of a key general contractor. Further projects in theReal Estate portfolio have been delayed due to the amalgamation of municipalplanning authorities leading to a delay in expected income. As added investor information (non-US GAAP measurements) the Management hascalculated that the Operating Income for the Real Estate Division would havebeen DKK 39 million (EUR 5.2 million), save for the events that have impactedthe Company and which the Management regard as one-off in nature US GAAP total shareholder equity is booked at DKK 1,144.7 million (EUR 153.8million) compared to DKK 589.5 million (EUR 79.0 million) on June 30 2006. EuroTrust's goal is to become one of Europe's leading private companies in therenewable sector by increasing its portfolio of investments in this sector to1.000 MW of installed capacity inside the next 3-5 years, corresponding to atotal investment of approximately DKK 10-12 billion (EUR 1.3-1.5 billion). The Company currently has an installed wind capacity of 79 MW, comprising windturbines in Germany and Italy, 92 MW under construction in Poland and Spain, andan additional 512 MW, which is under development in Europe with secured projectrights. EuroTrust continues to pursue a policy of growing its wind activities throughorganic development of its portfolio and targeted acquisitions. In this regard,during the financial year 2006/07 EuroTrust acquired 50.25 % of European WindFarms A/S ("EWF"), a Danish development company with much attractive future windenergy projects. Furthermore, four large wind farm projects have been acquiredfrom one of Germany's largest wind developers, WKN Windkraft Nord AG with atotal expected capacity of 216 MW. In September 2007, EuroTrust announced that EWF has entered into an agreementwith R.E. Wind Srl, an Italian wind farm developer, to jointly develop aportfolio of nine Italian wind farm projects in the regions of Tuscany,Calabria, Puglia and Sicily totalling 683 MW. EuroTrust will own an economicinterest of 171 MW of this total. EuroTrust announced in June 2007 six conditional sales of large real estateprojects. The sale of the two projects in central Copenhagen has been completed,concluding the Company's exit from the underperforming central Copenhagen marketfor flats, albeit with the write off of substantial but manageable developmentexpenses already incurred. The Lokken project has also been sold as planned,with a satisfactory result. Completion of the sale of the Skagen project has been postponed until the end ofthe year, which is expected to impact the financial year 2007/08. The sale of the two projects regarding Romo Golf & Wellness could not becompleted. Consequently, the proposed sales have not been reflected in the 2006/07 results and the Company is currently working on an alternative sales model. In December 2006 the Company entered into a joint venture with Folkeferie.dkregarding the development and sale of holiday homes in 6-8 of their holidayresorts in Denmark. This joint venture is progressing very positively and wevalue our close working relationship with Folkeferie.dk. The Company also signedin October 2006 an agreement to purchase Real Ejendomme A/S, a company situatedon Zealand with an attractive portfolio of real estate projects. The Company has many strong projects in its pipeline, comprising in excess of12,000 dwellings in 44 real estate projects in Denmark and Norway with anestimated market value upon completion of approximately DKK 30 billion (EUR 4billion) over a 15 year development period. In accordance with US GAAP the Company revalued its 22.5% shareholding in EuropeVision Plc to DKK 293.3 million (EUR 39.4 million) over the equity. Future gainsor losses compared to the cost basis DKK 78.1 million (EUR 10.6 million) inconnection with any sale of this holding will impact the P&L. In December 2006 the Company announced that it had issued 3,600,000 ordinaryshares in an offering valued at USD 52.2 million. (EUR 40 million), placed withtwo British institutional investors, of which the largest investor, InvescoPerpetual, now holds 15.9% of the shares in EuroTrust. The proceeds of theplacing were used primarily in connection with the financing of the equitycontribution of two new large wind parks now under construction and the equitycontribution in connection with the acquisition of wind farms in Germanyacquired through EWF. The Company was admitted to the London Stock Exchange's AIM Market at the end ofMay 2007, and terminated its listing on NASDAQ after 10 years on this market. Nonew shares were issued in connection with this transfer. The total costs of delisting from NASDAQ and listing on AIM were approximatelyDKK 19 million (EUR 2.6 million) which are one off costs. The total annual costsincurred by the Company from its NASDAQ listing including the additional costsof reporting its accounts under US GAAP were considerable and it is expectedthat the costs associated with the AIM listing will be significantly less. EuroTrust has concluded a strategic review and determined that shareholder valuewill be enhanced by increasing the capital available to the wind division inorder to take advantage of the many acquisition opportunities available in themarket. There are a number of options open to the Board in order to achievethis, one of which is a divestment of shares of the Group's property developmentoperations. Advisers have been appointed to assist in this evaluation process. Changes are proposed in the composition of EuroTrust management. The presentchairman of the Board Erik Damgaard is stepping down at the next generalassembly and the current CEO, Bo Kristensen, will resign as CEO and seekelection as the Company's Chairman of the Board. The present director of theCompany's wind division Robert Skjodt has been appointed to succeed BoKristensen as CEO, reflecting the evolving strategy of the Group and increasingfocus on wind energy. Management review - 2006/07 EuroTrust A/S is pleased to announce its results for the financial year 2006/07.The final results for the year 2006/07 show a loss of US GAAP DKK 55.1 million(EUR 7.4 million) after tax which is deemed by the Management to beunsatisfactory, despite the great efforts made by our staff. The income from investments in wind farms is consistent with expectations andsatisfactory. For the financial year 2006/07 this division showed an OperatingIncome of US GAAP DKK 22.7 million (EUR 3.1 million). The income from the Real Estate Division is well below expectations andunsatisfactory. For the financial year 2006/07 this division showed an OperatingLoss of US GAAP DKK 93.4 million (EUR 12.6 million). The result for the Real Estate Division was not satisfactory and was impactednegatively by factors considered by management to be one off in their nature:extraordinary restitution costs were incurred on real estate projects as aresult of the bankruptcy of a key general contractor. Further projects in theReal Estate portfolio have been delayed due to the amalgamation of municipalplanning authorities leading to a delay in expected income. As added investor information (*) (non-US GAAP measurements) the Management hascalculated what the operating income would have been, save for the followingevents that have impacted the Company and which the Management regard as one-offin nature: Added investor informationOne-off Events DKK million EUR millionOperating Income (non-US GAAP measurements) for Real Estate Division 39 5.2Contractor Bankruptcy -34 -4.6Strandboulevarden/Det Gamle Enigheden (out of Copenhagen) -22 -3.0Other -14 -1.9Delta - Construction Company loss -21 -2.8Start-up Costs Romo Resort & restitution costs -22 -3.0AIM admission costs -19 -2.6Operating Income (US GAAP measurements) for real estate division -93 -12.6 (*) In addition to the US GAAP results provided by this document, the companyhas provided non- US GAAP financial measurements that present operating income.The items are presented in the table below, which reconcile the US GAAP resultsto non- US GAAP financial measurements described in this document. The Companyhas chosen to provide non- US GAAP financial measurements to investors becauseit believes that excluding certain charges represents a better basis for thecomparison of its current results to the results of its peer companies. Inaddition, the company believes that it provides a means to highlight the resultsof core ongoing operations to investors. The presentation of this additionalinformation is not meant to be considered in isolation or as a substitute forresults prepared in accordance with US GAAP. The Management is keenly aware that while the wind activities are progressingvery positively the Real Estate activities will not in the short term generatesufficient liquidity to fulfil the Company's plans for investments in its windactivities. The Board's initiative regarding the capitalization of the winddivision, potentially through the divestment of shares in the Real Estateactivities mentioned below, addresses these issues. EuroTrust's prospects depend on the company's ability to acquire funding eitheras external funding, organic funding, by divestment of shares in the Real EstateDivision or through new issue of shares. SIMPLIFICATION OF GROUP STRUCTURE The first half of the financial year 2006/07 was characterized by finalising theimplementation of the Group's new strategy in terms of business, company law andorganization as well as implementing a number of acquisitions. The Groupcompleted a comprehensive simplification of its structure following the reversemerger between Aktiv Gruppen Holding A/S and EuroTrust in April 2006.EuroTrust's earlier media activities were sold off in April 2006 enabling theCompany to focus fully on its new business strategy - real estate development inDenmark and Norway providing funding for investments in renewable energythroughout Europe. EUROTRUST TO DIVEST SHARES IN ITS REAL ESTATE ACTIVITIES. During the year it has become increasingly clear that major opportunities in theWind Energy sector are available to the Company in the near future. Howeverrealisation of the property portfolio, which portfolio Management view as beinghighly attractive, will require some years of patience and tenacity, producing amis-match between the capital requirements of the Wind Energy business and cashgeneration of the property portfolio. The Board of Directors has therefore authorised the Executive Board toinvestigate, together with the Company's financial advisors, the various optionsopen to the Company in further capitalising the Wind Energy business, includingthe potential divestment of the real estate activities. In this connection it isa priority for the Company that the interests of its current shareholders aswell as its many trusted and loyal employees are taken into account. Although the Board of Directors has directed the Executive Board to investigateoptions for divesting shares in the real estate activities, at present there canbe no certainty of the financial impact this may have on EuroTrust. The primary objective for divesting shares in the Real Estate activities is tobecome a pure wind energy company and to develop a shareholder base interestedin supporting the growth in this market. The secondary objective is to achieveattractive transactional terms on the proposed divestment, allowing substantialreinvestment in wind energy projects. The Executive Board is working diligently with its financial advisors, inidentifying potential investors with an aim of concluding negotiations in thepresent financial year, 2007/08. AIM As of 30 May 2007 the Company changed its listing to the London Stock Exchange'sAIM Market. This transition was costly - both in time, management and money. Themain reason for the change is that EuroTrust is a European company with entirelyEuropean based assets/businesses, and one with ambitious goals that require asupportive shareholder base which understands the markets in which the Companyoperates and Management's development objectives. The annual costs of beinglisted on NASDAQ were substantially higher than those expected at AIM and theCompany had no substantial US shareholder base, making it essential that theCompany move its listing to a market better able to support its expansion plans. In the period since coming to AIM, Management has made many presentations toinvestors active on the AIM market - and already the Company seems to beattracting firm interest from institutional investors. However more work needsto be done in this regard - and in addition the Management feels that theCompany needs to obtain more exposure in the retail market in order to securebetter liquidity in its shares. Presentations to retail brokers are currentlybeing planned. The process of conversion from NASDAQ listed ADRs to AIM listed DIs has been afrustrating one to say the least. This transition has to our knowledge neverbeen attempted by a Danish listed company where the underlying shares are heldat Vaerdipapir Centralen and the practical difficulties experienced by investorscould not, we believe, have been predicted. The Management regrets any inconvenience this may have caused to ourshareholders but at the same time Management wishes to assure its shareholdersthat it feels that everything it could do to mitigate the circumstances has beendone. By bypassing the very intricate custodian banking system where custodian banksheld ADRs on behalf of each other thus slowing an efficient information flow,the Management was able to consistently move the conversion forward - not leastdue to the great efforts of its DI issuer ComputerShare who has shown greatdetermination and agility in forcing the many conversions through the system. Weare happy to say that over 99% of all ADRs are now converted. The costs of delisting from NASDAQ and listing on AIM were DKK 19 million, whichin light of the heavy annual costs of being listed on NASDAQ are deemedacceptable, not least given the expected long term benefits of an AIM listing,including widening the shareholder base, accruing to the Company. Share liquidity has suffered during this process. The Management is keenly awareof the issues involved and is actively pursuing measures that allow the newtrading setup to work efficiently. These measures include helping the conversioninto easily tradable DIs, into educating the banks and brokers in closecooperation with ComputerShare in how to efficiently settle our shares and incooperation with our NOMAD, Cenkos securities in getting the shares trading onthe electronic platform at AIM (SETSmm), which is planned to happen duringOctober 2007. For further information or assistance visit our website www.eurotrust.dk orcontact the Company directly. Further we are pleased to show excerpt from the Annual Report of EuroTrust A/Sbelow - for the full report please look at www.eurotrust.dk PROFIT & LOSS STATEMENT Consolidated annual report Fiscal year 2006/07 Fiscal year 2005/06 Year ended 30 June 2007 Year ended 30 June 2006 1.000 DKK 1.000 EUR 1.000 DKK 1.000 EUR Turnover 377.952 50.785 433.788 58.155Direct costs -340.542 -45.758 -334.796 -44.884Gross profit 37.410 5.027 98.992 13.271Staff costs -53.950 -7.249 -16.756 -2.246Other expenses -36.677 -4.928 -10.986 -1.473Depreciation and amortization -17.504 -2.352 -5.817 -780Operating income -70.721 -9.503 65.433 8.772Financial income 35.070 4.712 5.163 693Associated companies 4.196 564 710 95Financial expenses -49.268 -6.620 -12.667 -1.698Result before taxes and minority interest -80.723 -10.847 58.639 7.862Taxes 29.656 3.985 -12.117 -1.625Result before minority interest -51.067 -6.862 46.522 6.237Minority interest -4.000 -538 -632 -85Result -55.067 -7.399 45.890 6.152 Basic income per weighted average common share Income from continuing operations -1,51 -0,20 1,93 0,26Net income -1,51 -0,20 1,93 0,26 Weighted average common shares 36.361 36.361 23.760 23.760outstanding Diluted income per weighted average common shares Income from continuing operations -1,51 -0,20 1,93 0,26Net income -1,51 -0,20 1,93 0,26Weighted average common shares 36.361 36.361 23.829 23.829 outstanding, assuming dilution DKK amount have been converted into EUR at an exchange rate of EUR 1 = 7,4422for the fiscal year 2006/07 and EUR 1 = 7,4592 for the fiscal year 2005/06. Thisconversion is used on all following pages. ASSETSConsolidated annual report 30 June 2007 30 June 2006 1.000 DKK 1.000 EUR 1.000 DKK 1.000 EUR Goodwill 314.270 42.228 169.639 22.742Other intangible assets 222.037 29.835 177.270 23.765Plant & equipment 18.830 2.530 10.675 1.431Property on operating lease 8.601 1.156 10.024 1.344Property held for resale and 624.593 83.926 210.935 28.278developmentWind turbines 333.417 44.801 281.008 37.673Wind turbines under 267.038 35.882 -constructionInvestments in associates 124.734 16.760 24.212 3.246Mortgage loans receivables 36.627 4.921 109.857 14.728Other 76.611 10.294 62.132 8.330Non - current assets 2.026.759 272.333 1.055.752 141.537 Trade receivables 115.069 15.462 48.750 6.536Work in progress 574.662 77.216 439.145 58.873Other receivables 91.857 12.342 87.017 11.666Marketable securities 306.184 41.142 92.474 12.397Free cash 79.591 10.695 129.118 17.310Restricted cash 183.789 24.696 436.291 58.490Current - assets 1.351.152 181.553 1.232.795 165.272 TOTAL ASSETS 3.377.911 453.886 2.288.547 306.809 EQUITY AND LIABILITIESConsolidated annual report 30 June 2007 30 June 2006 1.000 DKK 1.000 EUR 1.000 DKK 1.000 EUR Common shares 288.962 38.827 250.071 33.525Additional paid in capital 606.627 81.512 238.315 31.950Cumulative other comprehensive 201.036 27.013 -2.050 -275incomeRetained earnings 48.083 6.461 103.149 13.828Total equity 1.144.708 153.813 589.485 79.028 Minority interest 65.588 8.813 671 90 Notes payable and long term 614.190 82.528 35.263 4.728debtAssets retirement obligation 1.086 146 1.088 146Total long-term debt 615.276 82.674 36.351 4.874 Credit facilities 1.070.529 143.846 1.191.761 159.771Accounts payable 278.818 37.464 334.011 44.778Taxes payable 6.253 840 147 20Debt associates 0 6.860 920Other liabilities 120.286 16.163 104.039 13.947Deferred tax liabilities 76.453 10.273 25.222 3.381 Total current liabilities 1.552.339 208.586 1.662.040 222.817 TOTAL EQUITY AND LIABILITIES 3.377.911 453.886 2.288.547 306.809 Cash flow statementConsolidated cash flow statement2006/07 Fiscal year 2006/ Fiscal year 2005/ 07 06 1.000 1.000 1.000 1.000 DKK EUR DKK EURCash flows from operating activitiesEarnings before interest and taxes -66.524 -8.939 66.143 8.867 Depreciation 17.504 2.352 5.817 780Associated companies -4.196 -564 -710 -95Minority interest -4.000 -538 -632 -85 Financial payments recieved 35.070 4.712 5.163 693Financial payments made -49.268 -6.620 -12.667 -1.698Change in tax liabilities 1.464 197 12.472 1.672Change in restricted cash 252.502 33.928 -281.275 -37.708Change in working capital -238.825 -32.091 -6.396 -857Change in accounts payable, etc. -45.804 -6.152 -4.498 -604 Cash flows from operating activities -102.077 -13.715 216.583 -29.035 Cash flows used in investingactivitiesAcquisition of intangible fixed 16.171 2.173 -2.810 -377assetsAcquisition of tangible fixed assets -668.164 -89.780 -77.339 -10.368Acquisition of financial fixed -38.350 -5.153 6.981 936assets Cash flows used in investing -690.343 -92.760 -73.168 -9.809activities Cash flows from financing activitiesProceeds from issued shares 285.201 38.322 155.786 20.885Long-term borrowings 582.263 78.238 12.117 1.624Installment on long-term debt -3.338 -449 -2.220 -298Change in interest-bearing debt -121.233 -16.290 251.568 33.726 Cash flows from financing activities 742.893 99.821 417.251 55.937 Changes in cash funds -49.527 -6.654 127.500 17.093 Cash funds at period start 129.118 17.349 1.618 217 Cash funds at period end 79.591 10.695 129.118 17.310 Supplementary information to consolidated annual financialsSegment reporting Fiscal year 2006/07 Fiscal year 2005/06 1.000 DKK 1.000 EUR 1.000 DKK 1.000 EURWIND ENERGY:Turnover 52.774 7.091 19.200 2.574Direct costs -8.903 -1.196 -1.202 -161Gross profit 43.870 5.895 17.998 2.413Staff costs -2.736 -368Other expenses -5.587 -751 -7.061 -947Depreciations -12.820 -1.723 -5.136 -689Operating income 22.726 3.054 5.801 778Associated companies 4.132 555 -906 -121 Total assets 895.539 120.333 362.008 48.532 REAL ESTATE DEVELOPMENT:Turnover 325.179 43.694 414.588 55.581Direct costs -331.639 -44.562 -333.594 -44.723Gross profit -6.460 -868 80.993 10.858Staff costs -51.213 -6.881 -16.756 -2.246Other expenses -31.090 -4.178 -3.924 -526Depreciations -4.683 -629 -681 -91Operating income -93.447 -12.556 59.632 7.994Associated companies 65 9 1.615 217 Total assets 2.482.372 333.554 1.926.539 258.277 CONSOLIDATEDTurnover 377.952 50.785 433.788 58.155Direct costs -340.542 -45.758 -334.796 -44.884Gross profit 37.410 5.027 98.991 13.271Staff costs -53.950 -7.249 -16.756 -2.246Other expenses -36.677 -4.928 -10.985 -1.473Depreciations -17.504 -2.352 -5.817 -780Operating income -70.721 -9.503 65.433 8.772Associated companies 4.196 564 709 95 Total assets 3.377.911 453.886 2.288.547 306.809 This information is provided by RNS The company news service from the London Stock Exchange