| Board of Directors approves financial statements as of 30 September 2007 |
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- Consolidated net profit for the first nine months: €40.3 million (€10.1 million for the fiscal year of six months ending 31 December 2006)
- Earnings for the full year of 2007 expected to improve significantly over previous years
- Group's net equity: €175.8 million (€156.3 million as of 31 December 2006)
- Consolidated net financial position: €135.9 million (€121.7 million as of 31 December 2006).
Milan, 13 November 2007 – At a meeting held today, the Sopaf S.p.A. Board of Directors approved the consolidated financial statements as of 30 September 2007.
Consolidated results for the first nine months of 2007
The report for the first nine months of 2007 is the Sopaf Group's first report for which the fiscal period corresponds with the calendar period, following the change in the fiscal year approved by the shareholders on 10 November 2006. Accordingly, without a basis for comparison, the data as of 30 September 2007 (nine months) are reviewed with reference to the data for the fiscal year of six months ending 31 December 2006.
Revenues and other income for the first nine months of 2007 amounted to €5.3 million (including €3.6 million of commissions generated by the management companies), while the earnings derived from the ordinary activity of divesting shareholdings came to €62.6 million and thus represented the most significant component of income.
Accordingly, while the gross operating margin (which incorporates €15.9 million of expenses, including €3.4 million for the management companies) is a negative €10.6 million (versus a negative €4.4 million for the fiscal year of six months ending 31 December 2006), the operating margin was positive for €41 million (€3.7 million for the fiscal year of six months ending 31 December 2006).
With reference to the companies in which investments are held, the Group's share of earnings for those valued with the net equity method was €1.9 million (€10.7 for the fiscal year of six months ending 31 December 2006). Provisions for risks and writedowns include €10 million set aside with regard to the investment held in Coronet.
The earnings before interest and taxes amounted to €42.9 million, compared with €14.3 million for the fiscal year of six months ending 31 December 2006.
Inclusive of €3.8 million of dividends paid by the companies in which investments are held, the net financial charges came to €0.9 million (net financial charges for the fiscal year of six months ending 31 December 2006 amounted to €3.8 million).
Profit before taxes totaled €42 million (€10.5 million for the fiscal year of six months ending 31 December 2006).
The Group's net earnings amounted to €40.3 million (compared with the €10.1 million for the fiscal year of six months ending 31 December 2006).
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At the end of September 2007, the Group had shareholdings and other financial assets amounting to €282.9 million (versus €269.2 million as of 31 December 2006). The change in the balance is mainly the result of:
- the sale of the shareholding in Omniapartecipazioni S.p.A.,
- the sale of the Aster Fund,
- the purchase of investments in Banca Bipielle Network S.p.A. and Area Life International Assurance Ltd,
- the subscription of units of the PWM AIGGIG Multimanager hedge fund, launched by the subsidiary, PWM SGR, on 1 July 2007 in partnership with AIG Global Investment Group,
- the fair-value adjustment of the shareholding in Delta S.p.A., which was booked as an investment in an affiliate company (book value of €49.7 million) as of 31 December, but re-classified as of 30 September 2007 as an asset available for sale (book value of €96 million) because it no longer met the criterion set out in IAS 28 (significant influence over the management);
- an additional investment in Res Finco AG, the German company which is 24.72% owned by Sopaf and is active in the renewable energy business.
The Sopaf Group does not have any financial instruments in its portfolio whose underlying assets are made up of sub-prime mortgages or instruments referring to sub-prime mortgages. In addition, the fair-value reserve includes a negative change of €3.8 million which refers to holdings of publicly traded equity securities and units of mutual investments that were adjusted to market value as of 30 September 2007.
Shareholders' equity and minority interests amounted to €179.4 million as of 30 September 2007 (versus €179.6 million as of 31 December 2006). The balance includes €3.6 million of minority interests (€23.3 million as of 31 December 2006) and €175.8 million of shareholders' equity (€156.3 million as of 31 December 2006). The increase in the Group's equity is attributable to the accrual of earnings for the period and changes in the fair-value reserve, whereas minority interests decreased due to the elimination of Star Venture 1 Scpa from the consolidation area (the company was liquidated in June).
The Group's net financial debt as of 30 September 2007 was €135.9 million (€121.7 million as of 31 December 2006), and includes the “Sopaf 2007-2012 3.875% convertible bonds”. The roughly €49.7 million of the proceeds from the bond issue have made it possible for the Group to diversify its financing, thereby reducing the cost of the debt and increasing the medium-term debt consistent with the investment activity.
Principal events for the quarter
- On 26 September, Sopaf perfected the purchase of investments in Banca Bipielle Network S.p.A. and Area Life International Assurance Ltd.
- On 4 September 2007, the placement of the “Sopaf 2007-2012 3.875% convertible bonds” was concluded with total subscription.
- As part of a corporate reorganization project, the Sopaf S.p.A. Board of Directors approved the merger by incorporation of LM Real Estate S.p.A, Acal S.p.A. and Ida S.r.l. in Sopaf S.p.A. on 12 September; the proposed merger by incorporation will be submitted to the next shareholders' meeting for approval by the shareholders.
Significant events subsequent to 30 September 2007
On 23 October, the Board of Directors approved a share buyback plan that will be submitted to the next shareholders' meeting for approval by the shareholders.
On 7 November, the Tergeste real estate fund, which is wholly owned by the Sopaf Group, perfected a sale that will give rise to a consolidated capital gain of roughly EUR 8 million.
On 7 November, Sopaf perfected the purchase of 128 Class A units of the closed-end real estate fund, FIP (Fondo Immobili Pubblici), for €18.2 million. Other units of the fund are already held by the affiliate, Five Stars SA.
Outlook
Considering the results achieved as of 30 September 2007 and the sale effected by the Tergeste fund, Sopaf expects to close the year of 2007 with results that are significantly better than those of previous years.
Giorgio Magnoni, CEO, stated: “Considering Sopaf's financial structure and the constant monitoring of risks to which Sopaf is exposed, I do not see any critical elements as far as the financial plan or the target levels of profitability are concerned. On the contrary, I believe this scenario presents great potential for new business development for a company such as Sopaf whose operations are focused on seeking out and capitalizing on new opportunities."
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The Board of Directors also approved an updated version of the Organization, Management and Control Model required by Legislative Decree n. 231/2001.
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The manager responsible for the preparation of Sopaf S.p.A.'s accounting documents, Alberto Ciaperoni, states pursuant to the Paragraph 2 of Article 154-bis of the Legislative Decree 58/1998 that the accounting data contained in this press release correspond to the data in the Company's accounting books and records.
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For 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 consolidated profit and loss statement, consolidated balance sheet and statement of consolidated net financial position are provided as exhibits to this press release; such statements are unaudited.
