Sign In
30 Aug 2023 09:46
30 August 2023
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2023
Reconstruction Capital II Limited ("RC2", the "Company" or the "Group"), a closed-end investment company incorporated in the Cayman Islands admitted to trading on the AIM market of the London Stock Exchange, today announces its results for the six months ended 30 June 2023.
Copies of the company's interim financial statements will today be posted to shareholders. The interim report is also available on the Company's website http://www. reconstructioncapital2.com/.
Financial highlights
On 30 June 2023, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €23.4m or €0.1729 per share, which represents a 1.59% fall since the beginning of the year.
As at 30 June 2023, RC2 and its subsidiary, RC2 (Cyprus) Ltd had cash and cash equivalents of approximately €0.017m and receivables of €0.017m. As at 30 June 2023, RC2 had short-term liabilities of €0.243m.
Operational highlights
During the first half of 2023, the macroeconomic challenges which started in 2022 due to the outbreak of war in neighbouring Ukraine continued to erode consumers' purchasing power, affecting all of the Fund's investee companies, although inflationary pressures which had been fuelled by the outbreak of war fell significantly in the second quarter.
The Policolor Group achieved revenues of € 37.6m during the first semester, 22.7% below budget and 15.9% lower year-on-year, as the anhydrides division struggled to source the necessary raw materials due to the less available ortho-xylene, pursuant to the EU banning imports from Russia. The coatings division's sales were slightly higher year-on-year but 9% below budget, as the cost-of-living crisis reduced consumers' discretionary spending, while the construction market weakened. Although the Group's gross margin overperformed the budget in percentage terms, the Group's six-month EBITDA of € 1.5m was € 1.3m below budget, mainly due to the reduced activity at the anhydrides division and the underperformance of the coatings division.
The Mamaia Hotel did not meet its budget over the first half of 2023, as the cost-of-living crisis and the ongoing war in Ukraine across the Black Sea significantly impacted demand for the Hotel in the second quarter, despite an unexpectedly good performance in the first quarter. In addition, unseasonal bad weather, including lots of rainfall on weekends in May and June, led to the cancellation of a number of corporate events and a significant reduction in the number of walk-in clients. As a result, the Hotel generated revenues of € 0.90m, 22% below budget. During the first half of the year, the Hotel posted an EBITDA loss of € 0.52m, € 0.14m higher than the budgeted loss of € 0.38m, mainly due to lower accommodation revenues, higher food and beverage costs, and higher salaries due to a tight labour market.
During the first half of 2023, Telecredit generated interest revenues of € 0.83m, 7.8% higher year-on-year but 10% below budget, and an operating profit before depreciation and interest expenses of € 0.25m, below both the € 0.34m budget target and last year's result of € 0.38m. The underperformance was mainly driven by lower demand in the first quarter since Telecredit outperformed its budgeted financing volumes in the second quarter. In May, Telecredit extended the maturity of its € 2.0m loan from a specialized institutional lender by a year to 2024, and increased the facility amount to € 3.0m.
At the end of June, RC2 had cash and cash equivalents of € 0.017m, receivables of € 0.017m, and short-term liabilities of € 0.243m.
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Luca Nicolae
Tel: +40 21 316 76 80
Grant Thornton UK LLP
(Nominated Adviser)
Philip SecrettTel: +44 (0) 20 7383 5100
finnCap Limited
(Broker)
William Marle / Giles Rolls
Tel: +44 20 7220 0500
ADVISER'S REPORT For the six months ended 30 June 2023
|
During the first half of 2023, the macroeconomic challenges which started in 2022 due to the outbreak of war in neighbouring Ukraine continued to erode consumers' purchasing power, affecting all of the Fund's investee companies, although inflationary pressures which had been fuelled by the outbreak of war fell significantly in the second quarter. The Policolor Group achieved revenues of € 37.6m during the first semester, 22.7% below budget and 15.9% lower year-on-year, as the anhydrides division struggled to source the necessary raw materials due to the less available ortho-xylene, pursuant to the EU banning imports from Russia. The coatings division's sales were slightly higher year-on-year but 9% below budget, as the cost-of-living crisis reduced consumers' discretionary spending, while the construction market weakened. Although the Group's gross margin overperformed the budget in percentage terms, the Group's six-month EBITDA of € 1.5m was € 1.3m below budget, mainly due to the reduced activity at the anhydrides division and the underperformance of the coatings division. The Mamaia Hotel did not meet its budget over the first half of 2023, as the cost-of-living crisis and the ongoing war in Ukraine across the Black Sea significantly impacted demand for the Hotel in the second quarter, despite an unexpectedly good performance in the first quarter. In addition, unseasonal bad weather, including lots of rainfall on weekends in May and June, led to the cancellation of a number of corporate events and a significant reduction in the number of walk-in clients. As a result, the Hotel generated revenues of € 0.90m, 22% below budget. During the first half of the year, the Hotel posted an EBITDA loss of € 0.52m, € 0.14m higher than the budgeted loss of € 0.38m, mainly due to lower accommodation revenues, higher food and beverage costs, and higher salaries due to a tight labour market. During the first half of 2023, Telecredit generated interest revenues of € 0.83m, 7.8% higher year-on-year but 10% below budget, and an operating profit before depreciation and interest expenses of € 0.25m, below both the € 0.34m budget target and last year's result of € 0.38m. The underperformance was mainly driven by lower demand in the first quarter since Telecredit outperformed its budgeted financing volumes in the second quarter. In May, Telecredit extended the maturity of its € 2.0m loan from a specialized institutional lender by a year to 2024, and increased the facility amount to € 3.0m. At the end of June, RC2 had cash and cash equivalents of € 0.017m, receivables of € 0.017m, and short-term liabilities of € 0.243m. |
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2023
| 30 June 2023 EUR | 30 June 2022 EUR | 31 December 2022 EUR | |||
Unaudited | Unaudited | Audited | ||||
Investment Income | ||||||
Fair value loss on financial assets at fair value through profit or loss |
(261,845) |
(102,597) |
(2,615,823) | |||
Interest income | 255,360 | 257,916 | 518,085 | |||
Net investment income | (6,485) | 155,319 | (2,097,738) | |||
Expenses | ||||||
Operating expenses |
| (363,202) | (394,892) | (844,981) | ||
Net financial income/(expense) | (11,925) | (35) | (871) | |||
Total expenses | (375,127) | (394,927) | (845,852) | |||
(Loss)/profit for the period/year | (381,612) | (239,608) | (2,943,590) | |||
Other comprehensive income | - | - | - | |||
Total comprehensive (loss)/profit for the period/year attributable to owners |
(381,612) |
(239,608) |
(2,943,590) | |||
Earnings Per Share attributable to the owners of the Company Basic and diluted earnings per share |
(0.0028) |
(0.0018) |
(0.0217) |
STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
| 30 June 2023 EUR | 30 June 2022 EUR | 31 December 2022 EUR | |||
Unaudited | Unaudited | Audited | ||||
ASSETS | ||||||
Non-current assets | ||||||
Financial assets at fair value through profit or loss |
|
24,027,598 |
26,557,140 |
24,104,083 | ||
Total non-current assets | 24,027,598 | 26,557,140 | 24,104,083 | |||
Current assets | ||||||
Trade and other receivables |
| 17,126 | 19,172 | 15,492 | ||
Cash and cash equivalents | 17,221 | 46,438 | 73,337 | |||
Total current assets | 34,347 | 65,610 | 88,829 | |||
TOTAL ASSETS |
24,061,945 |
26,622,750 |
24,192,912 | |||
LIABILITIES | ||||||
Current liabilities | ||||||
Trade and other payables |
| 243,207 | 91,174 | 124,485 | ||
Total current liabilities |
| 243,207 | 91,174 | 124,485 | ||
Non-current liabilities |
|
|
|
|
|
|
Borrowings |
| 382,756 |
| - |
| 250,833 |
Total non-current liabilities |
| 382,756 |
| - |
| 250,833 |
TOTAL LIABILITIES |
|
625,963 |
|
91,174 |
|
375,318 |
NET ASSETS |
23,435,982 |
26,531,576 |
23,817,594 | |||
EQUITY ATTRIBUTABLE TO OWNERS |
|
|
| |||
Share capital | 1,355,784 | 1,357,034 | 1,355,784 | |||
Share premium | 109,187,284 | 109,196,034 | 109,187,284 | |||
Accumulated deficit | (87,107,086) | (84,021,492) | (86,725,474) | |||
TOTAL EQUITY | 23,435,982 | 26,531,576 | 23,817,594 | |||
Net Asset Value per share Basic and diluted net asset value per share |
0.1729 |
0.1955 |
0.1757 | |||
STATEMENT OF CHANGES IN EQUITY | |||||||||||
For the six months ended 30 June 2023 | |||||||||||
Share | Retained (deficit)/ | ||||||||||
Share capital premium EUR EUR | earnings EUR | Total EUR | |||||||||
Balance at 1 January 2022 1,358,569 109,206,779 | (83,781,884) | 26,783,464 | |||||||||
Loss for the period - - Other comprehensive income - - | (239,608) - | (239,608) - | |||||||||
Total comprehensive loss for the period - - |
(239,608) |
(239,608) | |||||||||
Repurchase and cancellation of own shares (1,535) (10,745) | - | (12,280)
| |||||||||
Transactions with owners (1,535) (10,745) | - | (12,280) | |||||||||
Balance at 30 June 2022 1,357,034 109,196,034 | (84,021,492) | 26,531,576 | |||||||||
Profit for the period - - Other comprehensive income - - |
(2,703,982) - |
(2,703,982) - | |||||||||
Total comprehensive profit for the period - - |
(2,703,982) |
(2,703,982) | |||||||||
Repurchase and cancellation of own shares (1,250) (8,750) | - | (10,000) | |||||||||
Transactions with owners (1,250) (8,750) | - | (10,000) | |||||||||
Balance at 31 December 2022 1,355,784 109,187,284 | (86,725,474) | 23,817,594 | |||||||||
Loss for the period - - Other comprehensive income - - |
(381,612) - |
(381,612) - | |||||||||
Total comprehensive loss for the period - - |
(381,612) |
(381,612) | |||||||||
Balance at 30 June 2023 1,355,784 109,187,284 | (87,107,086) | 23,435,982 | |||||||||
CASH FLOW STATEMENT
For the six months ended 30 June 2023
30 June 2023 EUR | 30 June 2022 EUR | 31 December 2022 EUR | |||
Unaudited | Unaudited | Audited | |||
Cash flows from operating activities | |||||
(Loss)/profit before taxation | (381,612) | (239,608) | (2,943,590) | ||
Adjustments for: | |||||
Fair value loss on financial assets at fair value | |||||
through profit or loss | 261,845 | 102,597 | 2,615,823 | ||
Interest income | (255,360) | (257,916) | (518,085) | ||
Financial expenses | 11,923 | - | 833 | ||
Net (gain)/loss on foreign exchange | 2 | 35 | 6 | ||
Net cash outflow before changes in working | |||||
capital | (363,202) | (394,892) | (845,013) | ||
(Increase)/Decrease in trade and other receivables | (1,634) | (13,145) | (9,465) | ||
(Decrease)/Increase in trade and other payables | 118,722 | (114,511) | (81,200) | ||
Repayments of financial assets | 70,000 | 570,000 | 770,000 | ||
Net cash provided by/(used in) operating | (176,114) | 47,452 | (165,678) | ||
Cash flows from financing activities |
|
|
| ||
Payments to purchase own shares | - | (12,280) | (22,280) | ||
Proceeds from borrowings | 120,000 | - | 250,000 | ||
Net cash flow (used in)/provided by financing | 120,000 | (12,280) | 227,720 | ||
Net increase/(decrease) in cash and cash | |||||
equivalents before currency adjustment | (56,114) | 35,172 | 62,042 | ||
Effects of exchange rate differences on cash and cash equivalents | (2) | (35) | (6) | ||
Net increase/(decrease) in cash and cash |
|
|
| ||
equivalents after currency adjustment | (56,116) | 35,137 | 62,036 | ||
Cash and cash equivalents at the beginning of the period/year | 73,337 | 11,301 | 11,301 | ||
Cash and cash equivalents at the end of the | |||||
period/year | 17,221 | 46,438 | 73,337 |
Follow the stocks
