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BABIS VOVOS INTERNATIONAL TECHNICAL S.A.
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Announcement
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August 29, 2008 NAV (net asset value) per share before deferred tax stood at euros 20.97 during the first half of 2008, a 2.5% increase year-on-year and a 7.9% increase compared to Q1 2008. The NAV increase stemmed mainly from a fair value adjustment on investment property recorded during the period from the completion of 340 Syggrou Avenue. NAV per share after deferred tax stood at euros 16.64, a 7.8% increase over Q1 2008 and a 4.7% year-on-year increase. BVIC Group's investment properties for H1 2008 reached euros 1.36 billion, up 10.2% from 31 December 2007. The most significant change to investment properties came from the completion of 340 Syggrou Avenue during Q2 2008, leading to a euros 101 million increase in the asset valuation from year end 2007. During the first half of 2008, the construction cost incurred for the projects under construction in Poros and at Votanikos led to an increase of euros 18 million in investment properties. The factors mentioned above and, also, the purchase of an asset in Q1 2008 at 1-3 Kifissias Avenue that was valued at euros 9.8 million, lead to an increase of euros 125 million to the portfolio value. BVIC Group's revenue during H1 2008 reached euros 28 million, a 58% decrease compared to H1 2007. Sales of residential assets generated euros 4 million of revenue in H1 2008, whereas during the same period in 2007 sales from the Hellenic Exchanges Complex generated euros 43 million in revenue. The Group's rental revenue remained almost flat year-on-year at euros 23 million. An increase in rental income of 6% from the lease indexation to Greek CPI and 100 bps was almost entirely offset by the termination of the leases with the parking station operator at 49 Kifissias Avenue and Delta Falirou. That resulted in a reduction of almost euros 640 thousand versus the first half of 2007. Moreover, the maturity of a sublease at 32 Kifissias Avenue also reduced rental income by euros 130 thousand. Finally, there was a euros 482 thousand rental decrease with 2year retrospective effect. On the other hand, two new lease agreements regarding 49 Kifissias Avenue and 1-3 Kifissias Avenue will contribute euros 672 thousand on an annual basis in rental revenue as of October 2008. BVIC Group's EBITDA (earnings before interest, tax, depreciation and amortisation) stood at euros 85 million, compared to euros 18 million in H1 2007. There was a net gain from fair value adjustment on investment property of euros 85 million in H1 2008, mainly from the completion of 340 Syggrou Avenue. In H1 2007 there was no fair value adjustment on investment property. Net finance expenses stood at euros 47 million, up from euros 14 million in H1 2007, stemming mainly from a euros 24 million loss from the fair value of the Group's interest rate swap agreements. The Group's profit after tax for the period reached euros 34.8 million, up from euros 1.6 million during H1 2007. 340 Syggrou Avenue The 340 Syggrou Avenue commercial centre was completed in June 2008 and is expected to be delivered by the end of the year. The Group has already signed a lease agreement with Media Markt for 7,291 sqm of retail space with a total annual rental revenue of euros 2,340,000 for the first year leased. The remaining 6,481 sqm of space is under negotiation and is expected to be let before the end of 2008. The centre is anticipated to generate almost euros 4.5 million in annual rental revenue. Votanikos In July 2008, BVIC S.A. received the approval of the Environmental Impact Report for the shopping mall in Votanikos from the Municipal Council of Athens. This was the final approval necessary prior to obtaining the building permit, which management expects to receive shortly. Also during the month of July the master plan for the joint regeneration of Votanikos was approved by the Municipal Council of Athens. The infrastructural works, for which a contractor has already been appointed, are anticipated to commence in October 2008, following the approval of the Ministry of Environment, Physical Planning and Public Works. The regeneration project encompasses the creation of a park of 120,000 sqm, as well as the Panathinaikos sports complex, that will consist of a football stadium of at least 40,000 seats and two indoor halls for the basket ball and volleyball teams as well as the smaller club departments. Moreover, the new town hall of Athens will be developed adjoining the stadium. In August 2008, the tenant mix and commercial strategy for the shopping centre was concluded by a group of external consultants. The study confirms our initial estimate of a rent roll of euros 35 million for the mall's first year of operation. The projected catchment for the project is 2.4 million residents. The Group will be able to start the process of leasing the mall once the building permit has been issued. The project is on track for completion by the end of 2009 with expected total land and construction costs of circa euros 250 million.
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