| Board of Directors approves results for six months ending 30 June 2007 |
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- Board of Directors approves results for six months ending 30 June 2007:
- Consolidated net profit: €40.2 million (€10.1 million for the fiscal year consisting of six months ending on 31 December 2006 and €10.8 million for the corresponding six-month period of the 2006 calendar year)
- Consolidated shareholders' equity: €177.7 million (€156.3 million as of 31 December 2006)
- Significant writedown of the shareholding in Coronet: €10 million
- Approval of merger-by-incorporation of wholly-owned subsidiaries, LM Real Estate S.p.A., Acal S.p.A. and Ida S.p.A., into Sopaf
Milan, 12 September 2007 – At a meeting held today, the Sopaf S.p.A. Board of Directors approved the financial statements for the six months ending 30 June 2007.
It is noted that the extraordinary meeting of the Sopaf shareholders held on 10 November 2006 passed a resolution to change the fiscal year end from 30 June to 31 December. Accordingly, the first-half report approved today is compared with the fiscal year (consisting of six months only) ending 31 December 2006 and with the corresponding period for the calendar year of 2006. It also noted that the comparison with the results of the first six months of the year of 2006 is not considered highly significant in consideration of important changes occurring in the area of consolidation, following the Sopaf Group's reorganization, and in particular, the deconsolidation of the real estate assets as part of that reorganization.
Consolidated results for the first half of the year *
Revenues and other income for the first half amounted to €4.0 million (including €2.5 million of commissions generated by the management companies consolidated on a line-by-line basis), whereas, consistent with Sopaf's core business activity, the most significant components of earnings are included among the profits realized on the disposal of assets, which amounted to €60 million. The latter amount includes the profits derived from the sale of the shareholding in Omniapartecipazioni S.p.A., the sale of the Immsi S.p.A. shares (€50.3 million) and the disposal of the interest held in the Aster real estate fund (€10.6 million).
Therefore, while the gross operating margin (after €12.3 million of expenditures, inclusive of €2.3 million in relation to the management companies consolidated on a line-by-line basis) is a loss of €8.3 million (compared with a loss of €4.4 million for the fiscal year consisting of six months, and a profit of €0.6 million for the corresponding six-month period of 2006), the Group earned an operating profit of €41.0 million (versus a profit of €3.7 million for the fiscal year consisting of six months and an operating loss of €5.1 million for the corresponding six-month period of 2006).
As to shareholdings, the Group's share of the profits reported by companies valued with the net equity method amounted to €1.2 million (compared with €10.7 million for the fiscal year consisting of six months and €4.5 million for the corresponding six-month period of 2006), while the risk provisions and writedowns include a €10 million charge against the value of the interest held in Coronet.
Earnings before interest and taxes amounted to €42.2 million, compared with a profit of €14.3 million for the fiscal year consisting of six months and a loss of €0.6 million the corresponding six-month period of 2006.
The Group realized net financial income of €0.8 million, inclusive of €3.8 million of dividends distributed by the companies in which equity investments are held; the result compares with net financial charges of €3.8 million for the fiscal year consisting of six months and €1.2 million the corresponding six-month period of 2006).
Pre-tax profit was thus €43.0 million (versus a pre-tax profit of €10.5 million for the fiscal year consisting of six months and a pre-tax loss of €1.7 million for the corresponding six-month period of 2006).
Consolidated net profit (after €2.7 million of income taxes and €0.1 million of earnings accruing to minority interests) amounted to €40.2 million (compared with €10.1 million for the fiscal year consisting of six months and €10.8 million for the corresponding six-month period of 2006).
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The balance of equity investments and other financial assets was €227.6 million as of 30 June 2007 (€269.2 million as of 31 December 2006), with the change mainly reflecting the sale of Omniapartecipazioni and the Aster Fund and the fair-value adjustment of the holding in Delta S.p.A., which was classified as of 31 December as an investment in an affiliate and as of 30 June 2007 as an asset available for sale (book value of €96 million as of 30 June 2007, versus €49.7 million as of 31 December 2006).
The balance of shareholders' equity and minority interests as of 30 June 2007 was €181.0 million (versus €179.6 million as of 31 December 2006), and included €3.3 million of minority interests (versus €23.3 million as of 31 December 2006) and €177.7 million of consolidated shareholders' equity (versus €156.3 million as of 31 December 2006).
The increase in consolidated shareholders' equity during the six-month period is the result of the accrual of earnings and changes in the fair-value reserve, while the minority interests were lower for the effect of the elimination of the company, Star Venture 1 Scpa, from the consolidation area (the company was liquidated on 29 June 2007).
The Group's consolidated net financial debt as of 30 June 2007 was €76.5 million, and thus had decreased with respect to the €121.7 million posted on 31 December 2006, with most of the decline due to the effect of the Omniapartecipazioni/Immsi and Aster Fund sales.
Holding company's results
Sopaf S.p.A. closed the first half with a loss of €18.7 million, mostly due to the writedown of the shareholding in Coronet and operating expenses. Shareholders' equity as of 30 June 2007 amounted to €64.5 million.
Principal events for the first half of 2007
During the first half of 2007, Sopaf continued to expand according to the strategies previously outlined, and thus by reinforcing the activity of tapping third-party funding and by broadening the range of investment vehicles to be offered to co-investors.
Specific developments include the following.
- In April, the Group perfected the purchase of the remaining 70% of Cartesio Alternative Investments SGR S.p.A., whose name was changed in May to Sopaf Capital Management SGR S.p.A.; this company has embarked on a process of setting up hedge funds investing in securities.
- The subsidiary, Private Wealth Management SGR, set up a new hedge fund of funds, PWM AIGGIG Multimanager Fund, in partnership with AIG Global Investment Group (the asset management arm of the U.S.-based AIG, a leader in financial and insurance services). The fund, which secured the investment of both financial sponsors (Sopaf S.p.A. for €14.5 million and AIG for €15 million) inaugurated operations on 1 July 2007.
- China Opportunity Sicar made its first investment (USD5 million) in a company involved in the oil and gas sector.
- In June, the liquidation of the Luxembourg companies, Star Venture Management SA and Star Venture 1 Scpa, was completed.
In addition to the previously mentioned sales of Omniapartecipazioni, Immsi and the Aster Fund, in May, Sopaf invested another €3 million in Res Finco AG, a German company active in the renewable energy business (Sopaf owns 24.72% of the company). Res Finco is the owner and manager of one of Germany's largest wind parks (installed capacity of 76.5 MW), and is at an advanced stage in developing wind parks in France (roughly 60 MW); the company is also pursuing expansion through acquisitions mainly in Germany, France, Poland, and off-shore locations.
Outlook for the full year
The management of Sopaf expects, partly in consideration of the earnings results for the first half, that the full-year profit will be significantly higher than the profits earned in prior years.
Material events subsequent to the close of the first half of 2007
- On 1 August Sopaf, De Agostini Invest Sa and Aviva Italia Holding S.p.A. signed an agreement with the Banco Popolare to purchase 79.73% of Banca Bipielle Network S.p.A. As of the same date, Sopaf and Aviva signed two contracts with the Banco Popolare to purchase 100% of Area Life International Assurance Ltd and Aviva Previdenza S.p.A. (see press release issued on 1 August 2007).
- On 4 September, the offering under option to the Sopaf shareholders of the “Sopaf 2007-2012 3.875% convertible bonds” expired, with all 56,520,463 convertible bonds issued having been subscribed for a total countervalue of €49,738,007.44 (see press releases issued on 23 April, 29 June, 19 July, 16 August, 23 August and 5 September).
- As part of the plan to simplify and streamline the Group's structure, the Sopaf Board of Directors today approved the merger-by-incorporation of wholly-owned subsidiaries, LM Real Estate S.p.A., Acal S.p.A. and Ida S.p.A., into Sopaf, and approved a resolution to convene an extraordinary meeting of the shareholders to approve the merger transaction as well as a special meeting of the bondholders in order to proceed with the appointment of a bondholder representative, the setting up of an expenditure fund, and the approval of the referenced merger.
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In accordance with Paragraph 2 of Article 154-bis of the Law Decree n. 58/1998, the manager in charge of the preparation of the Sopaf S.p.A. corporate accounting documents, Alberto Ciaperoni, affirms that the accounting information contained in this press release corresponds to the Company's documented results and accounting books and records.
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Per additional information
Maria Antonietta Barelli Laura La Ferla
Sopaf S.p.A. PMS
Tel: +39 (02) 72.14.24.29 Tel: +39 (02) 48.00.02.50
+39.335.620.0990 +39 329.470.5000
mabarelli@sopafgroup.it l.laferla@pmsgroup.it
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The profit and loss statement, balance sheet and statement of net financial position for the six months ending 30 June 2007 are provided as exhibits to this press release; the data contained therein are now undergoing a limited review by the independent auditors.
