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17 Aug 2021 07:00
17 August 2021
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2021
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 2021.
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 2021, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €21.2m or €0.1562 per share, which represents a 1.53% fall since the beginning of the year.
As at 30 June 2021, RC2 and its subsidiary, RC2 (Cyprus) Ltd had cash and cash equivalents of approximately €0.37m. Additionally, RC2 (Cyprus) Ltd had loan receivables from Telecredit and Mamaia Resort Hotels of € 0.45m. As at 30 June 2021, RC2 had sundry liabilities of €0.07m.
Operational highlights
Both the Romanian and Bulgarian economies have proven to be relatively resilient to the ongoing Covid-19 pandemic, with their first quarter GDPs growing by 2.8% and 2.5%, respectively, over the quarter, compared to an average EU of 0.1%.
The pandemic itself seems to have subsided in Romania and Bulgaria, with the number of daily new cases falling from 1,400 and 600, respectively, at the beginning of May, to 150 and 100, at the end of July. Due to the fall in cases, most Covid-19 related restrictions were lifted in both countries. However, the number of daily new cases has started to creep up again, reaching 240 and 400 in Romania and Bulgaria, respectively, at the beginning of August. Romania and Bulgaria are particularly vulnerable to a resurgence of the pandemic, due to them having the lowest vaccination rates in the EU, with only 31.5% and 19.2% of their eligible populations, respectively, having received at least one dose, compared to an EU average of 71%.
The Policolor Group had a good performance in the first 6 months of 2021 with sales at € 41.2m, mainly helped by better-than-expected sales results from the resins and chemicals divisions, whose combined sales were 63.8% above the budget. On the other hand, the coatings division posted first half year sales 6.7% below budget, mainly due to weaker demand as consumers re-oriented their spending away from home improvement due to the easing of covid related restrictions. Helped by higher resins and chemicals sales and improved cost controls, the Group posted recurring EBITDA of € 2.6m, higher than the budgeted € 2.1m.
Mamaia Resort Hotels achieved first semester revenues of € 1m, or 14% above budget, which resulted in a six-month 2021 EBITDA loss of € -0.1m, compared to a budgeted loss of € -0.2m. The over-performance was mainly due to a contract signed with an international organization covering the low season first four months of the year. The bulk of the Hotel's revenues and profits are typically generated during the high season months of July and August.
Telecredit deployed € 6.5m in financing products to small and medium sized enterprises over the first semester, which was 4% below budget. However, the company turned profitable at operating level in the second quarter, having generated an Operating Profit before Depreciation of € 143,000 over the period, compared to a first quarter loss of € 8,000.
http://www.rns-pdf.londonstockexchange.com/rns/8026I_1-2021-8-16.pdf
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Anca Moraru
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 2021
|
On 30 June 2021, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of € 21.2m or € 0.1562 per share, which represents a 1.53% fall since the beginning of the year. Both the Romanian and Bulgarian economies have proven to be relatively resilient to the ongoing Covid-19 pandemic, with their first quarter GDPs growing by 2.8% and 2.5%, respectively, over the quarter, compared to an average EU of 0.1%. The pandemic itself seems to have subsided in Romania and Bulgaria, with the number of daily new cases falling from 1,400 and 600, respectively, at the beginning of May, to 150 and 100, at the end of July. Due to the fall in cases, most Covid-19 related restrictions were lifted in both countries. However, the number of daily new cases has started to creep up again, reaching 240 and 400 in Romania and Bulgaria, respectively, at the beginning of August. Romania and Bulgaria are particularly vulnerable to a resurgence of the pandemic, due to them having the lowest vaccination rates in the EU, with only 31.5% and 19.2% of their eligible populations, respectively, having received at least one dose, compared to an EU average of 71%. The Policolor Group had a good performance in the first 6 months of 2021 with sales at € 41.2m, mainly helped by better-than-expected sales results from the resins and chemicals divisions, whose combined sales were 63.8% above the budget. On the other hand, the coatings division posted first half year sales 6.7% below budget, mainly due to weaker demand as consumers re-oriented their spending away from home improvement due to the easing of covid related restrictions. Helped by higher resins and chemicals sales and improved cost controls, the Group posted recurring EBITDA of € 2.6m, higher than the budgeted € 2.1m. Mamaia Resort Hotels achieved first semester revenues of € 1m, or 14% above budget, which resulted in a six- month 2021 EBITDA loss of € -0.1m, compared to a budgeted loss of € -0.2m. The over-performance was mainly due to a contract signed with an international organization covering the low season first four months of the year. The bulk of the Hotel's revenues and profits are typically generated during the high season months of July and August. Telecredit deployed € 6.5m in financing products to small and medium sized enterprises over the first semester, which was 4% below budget. However, the company turned profitable at operating level in the second quarter, having generated an Operating Profit before Depreciation of € 143,000 over the period, compared to a first quarter loss of € 8,000. At the end of June, RC2 and RC2 (Cyprus) Ltd had cash and cash equivalents of € 0.37m, loan receivables from Telecredit and Mamaia Resort Hotels of € 0.45m, and short-term liabilities of € 0.07m. Telecredit reimbursed a net amount of € 1.05m to RC2 during the first semester, leaving an outstanding balance of € 0.15m. The shareholder loan to RC2 from Portadrix Investments Limited was fully repaid in the second quarter, resulting in RC2 being debt-free at the end of June.
|
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2021
|
| 30 June 2021 EUR |
| 30 June 2020 EUR |
| 31 December 2020 EUR |
| Unaudited |
| Unaudited |
| Audited | |
InvestmentIncome |
|
|
|
|
|
|
Fair value loss on financial assets at fair value through profit or loss |
|
(2,100,354) |
|
(2,113,199) |
|
(1,752,486) |
Interest income |
| 2,112,394 |
| 2,131,097 |
| 4,280,442 |
Netinvestment income |
| 12,040 |
| 17,898 |
| 2,527,956 |
Expenses |
|
|
|
|
|
|
Operatingexpenses |
| (341,741) |
| (315,688) |
| (660,299) |
Net financial income/(expense) |
| 3 |
| - |
| (16,286) |
Totalexpenses |
| (341,738) |
| (315,688) |
| (676,585) |
(Loss)/profit for the period/year |
| (329,698) |
| (297,790) |
| 1,851,371 |
Other comprehensiveincome |
| - |
| - |
| - |
Total comprehensive (loss)/profit for the period/year attributable to owners |
|
(329,698) |
|
(297,790) |
|
1,851,371 |
Earnings Per Share attributable to the owners of the Company Basic and diluted earnings per share |
|
(0.0024) |
|
(0.0022) |
|
0.0136 |
STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
|
| 30 June 2021 EUR |
| 30 June 2020 EUR |
| 31 December 2020 EUR |
|
| Unaudited |
| Unaudited |
| Audited |
ASSETS |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Financial assets at fair value through profit or loss |
|
21,231,506 |
|
19,509,494 |
|
21,999,552 |
Total non-currentassets |
| 21,231,506 |
| 19,509,494 |
| 21,999,552 |
Current assets |
|
|
|
|
|
|
Trade and other receivables |
| 17,123 |
| 13,585 |
| 13,600 |
Cash and cash equivalents |
| 37,502 |
| 10,200 |
| 33,073 |
Total current assets |
| 54,625 |
| 23,785 |
| 46,673 |
TOTAL ASSETS |
|
21,286,131 |
|
19,533,279 |
|
22,046,225 |
LIABILITIES |
|
|
|
|
|
|
Currentliabilities |
|
|
|
|
|
|
Trade and other payables |
| 67,664 |
| 134,275 |
| 91,782 |
Borrowings |
| - |
| - |
| 406,278 |
TOTAL LIABILITIES |
|
67,664 |
|
134,275 |
|
498,060 |
NET ASSETS |
|
21,218,467 |
|
19,399,004 |
|
21,548,165 |
EQUITY ATTRIBUTABLE TO OWNERS |
|
|
|
|
| |
Sharecapital | 1,358,569 |
| 1,358,569 |
| 1,358,569 | |
Share premium | 109,206,779 |
| 109,206,779 |
| 109,206,779 | |
Accumulated deficit | (89,346,881) |
| (91,166,344) |
| (89,017,183) | |
TOTAL EQUITY | 21,218,467 |
| 19,399,004 |
| 21,548,165 | |
Net Asset Value per share Basic and diluted net asset value per share |
0.1562 |
|
0.1428 |
|
0.1586 | |
STATEMENT OF CHANGES IN EQUITY |
|
| |
For the six months ended 30 June 2021 |
| ||
Share | Retained (deficit)/ | ||
Share capital premium EUR EUR | earnings EUR |
| Total EUR |
Balance at 1 January 2020 1,358,569 109,206,779 | (90,868,554) |
| 19,696,794 |
Loss for the period - - Other comprehensive income - - | (297,790) - |
| (297,790) - |
Total comprehensive loss for the period - - |
(297,790) |
|
(297,790) |
Balance at 30 June 2020 1,358,569 109,206,779 | (91,166,344) |
| 19,399,004 |
Profit for the period - - Other comprehensive income - - |
2,149,161 - |
|
2,149,161 - |
Total comprehensive profit for the period - - |
2,149,161 |
|
2,149,161 |
Balance at 31 December 2020 1,358,569 109,206,779 | (89,017,183) |
| 21,548,165 |
Loss for the period - - Other comprehensive income - - |
(329,698) - |
|
(329,698) - |
Total comprehensive loss for the period - - |
(329,698) |
|
(329,698) |
Balance at 30 June 2021 1,358,569 109,206,779 | (89,346,881) |
| 21,218,467 |
CASH FLOW STATEMENT
For the six months ended 30 June 2021
| 30 June 2021 EUR |
| 30 June 2020 EUR |
| 31 December 2020 EUR |
Unaudited |
| Unaudited |
| Audited | |
Cash flows from operating activities |
|
|
|
|
|
(Loss)/profit before taxation | (329,698) |
| (297,790) |
| 1,851,371 |
Adjustments for: |
|
|
|
|
|
Fair value loss on financial assets at fair value |
|
|
|
|
|
through profit or loss | 2,100,354 |
| 2,113,199 |
| 1,752,486 |
Interest income | (2,112,394) |
| (2,131,097) |
| (4,280,442) |
Financial expenses | 11,035 |
| - |
| 6,278 |
Net (gain)/loss on foreign exchange | (3) |
| - |
| 8 |
Net cash outflow before changes in working |
|
|
|
|
|
capital | (330,706) |
| (315,688) |
| (670,299) |
(Increase)/Decrease in trade and other receivables | (3,523) |
| 3,088 |
| 3,073 |
(Decrease)/Increase in trade and other payables | (24,118) |
| 96,913 |
| 54,420 |
Disposals and repayments of financial assets | 780,085 |
| 160,000 |
| 180,000 |
Net cash provided by/(used in) operating | 421,738 |
| (55,687) |
| (432,806) |
Cash flows from financing activities |
|
|
|
|
|
Proceeds from borrowings | 250,000 |
| - |
| 400,000 |
Repayment of loans from related party | (650,000) |
| - |
| - |
Interest paid | (17,312) |
| - |
| - |
Net cash flow (used in)/provided by financing | (417,312) |
| - |
| 400,000 |
Net increase/(decrease) in cash and cash |
|
|
|
|
|
equivalents before currency adjustment | 4,426 |
| (55,687) |
| (32,806) |
Effects of exchange rate differences on cash and cash |
|
|
|
|
|
equivalents | 3 |
| - |
| (8) |
Net increase/(decrease) in cash and cash |
|
|
|
|
|
equivalents after currency adjustment | 4,429 |
| (55,687) |
| (32,814) |
Cash and cash equivalents at the beginning of the |
|
|
|
|
|
period/year | 33,073 |
| 65,887 |
| 65,887 |
Cash and cash equivalents at the end of the |
|
|
|
|
|
period/year | 37,502 |
| 10,200 |
| 33,073 |
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