Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate

 

Secure Property Development & Investment PLC ('SPDI' or 'the Company')

Final Results

27 May 2015

 

Secure Property Development & Investment PLC, the AIM quoted South Eastern European focused property and investment company, is pleased to announce its full year financial results for the year ended 31 December 2014.

 

Financial Highlights

·     59% increase in total asset value to €62 million (2013: €39million) reflecting the transformational acquisitions made during the year across the region

·     33% increase in rental income to €3.6 million (2013: €2.7million)

·     300% increase in EBITDA to €0.8 million (2013: €0.2million)

·     £0.75 per share of Net Asset Value at year end (2013: £1.13) significant premium to current share price - provides strong asset backing

 

Operational Highlights

·     Successfully implemented strategy to expand geographic spread of the portfolio to encompass fast growing South Eastern European countries which offer high yields and capital growth

·     Acquired three income producing assets in Romania & Greece that generate ~€3.5 million of Net Operating Income ('NOI') annually, increasing the Company's annualised NOI by ~230%

o  Blue chip tenants include Danone, Nestle & Kuehne+Nagel

o  Long lease terms providing revenue visibility

·     Platform in place to take advantage of highly positive South Eastern European property market fundamentals

 

Post Balance Sheet Highlights

·     €26 million of net asset value acquisitions made in Romania and Bulgaria in 2015

o  increases total Assets under Management (AuM) to €126 million

o  provides further geographic diversification of portfolio, and

o  ensures its position as a regional property company

·     €8 million cash raised via Open Offer in March 2015

 

Lambros G. Anagnostopoulos, Chief Executive Officer, said, "2014 has been a transformational year for the Company, one that has seen us embark on the roll-out of our regional growth strategy.  Thanks to this, the Company has ended the year with a presence in three countries and a geographically diversified portfolio of prime real estate in Southeastern Europe, which generates visible income streams and offers significant capital growth potential.  

 

"In 2014, we added three income producing properties in Greece and Romania to our portfolio, all of which fit our investment criteria: prime locations; strong covenants with blue chip tenants on long term rental contracts; secured at attractive, double digit yields.  As a result we now have a broad asset backed, revenue generative property portfolio.  With a strong management team in place with a proven track record in emerging Europe, coupled with positive market fundamentals for the region, I look forward to the year ahead, as we continue to implement our strategy towards our goal of creating the leading institutional South Eastern European income producing and dividend yielding property company."

 

* * ENDS * *

 

For further information please visit www.secure-property.eu or contact:

Lambros Anagnostopoulos SPDI Tel: +30-210-7226470 Constantinos Bitros Tercel Moore SPDI SP Angel Corporate Finance LLP Tel: +30-210-7226470 Tel: +44 (0) 20 3463 2260 Jeff Keating SP Angel Corporate Finance LLP Tel: +44 (0) 20 3463 2260 Lottie Brocklehurst St Brides Partners Ltd Tel: +44 (0) 20 7236 1177 Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236 1177

 

 

 

2014 was a pivotal year for SPDI, as the Company embarked upon its acquisition strategy in earnest. The logic behind this strategy remains unchanged: to take advantage of the low prices of commercial property on offer in South East Europe with strong tenants and competitively priced financing.  The objective is to build a diversified portfolio of fully let prime commercial real estate, which generates high levels of income from a blue chip tenant base on long leases, and at the same time offers the potential for significant capital growth. 

 

With the above in mind, the year under review has seen excellent progress made.  The numbers speak for themselves:   57% increase in total assets to €61 million (2013: €39million), a reflection of the transformational acquisitions made during the year across the region; a 33% increase in rental income to €3,6 million (2013: €2,7million); and a 300% increase in EBITDA to €0,8 million (2013:€0,2million).  We have ended the year with a Net Asset Value of £0,75 per share (2013: £1,13) which, even after taking into account the new shares issued during 2015, remains substantially higher than our current market valuation and provides us with considerable asset backing. 

 

Finding the right properties across Europe to meet our strict investment criteria against a backdrop of a property market that is on a rising trend, requires a management team with a proven track record.  The year under review has demonstrated that SPDI has one such team, and as a result we believe that we are very well positioned to continue to source a strong pipeline of suitable opportunities due to our wealth of experience and contacts, as we look to add to our growing number of properties owned and managed across the region.

 

Indeed post period end we have done just that.  In April 2015, we announced the acquisition of an interest in a fully let and income generating office building in Sofia, while in May we followed this up by announcing the acquisition of a series of prime property assets in Romania and Bulgaria, including a 100% interest in a prime location big box retail property in Craiova, Romania (wholly let to Praktiker) as well as a 24,35% interest in Delea Nuova, a Class A office building in Bucharest city centre, which is fully let mainly to the telecommunications regulator of Romania.

 

 With a running annualized NOI of €8 million, a portfolio of seven income producing properties covering four countries we now have a cash generative platform from which to accelerate the roll-out of our strategy to build a portfolio of prime real estate in Southeastern Europe.  We continue to evaluate additional opportunities that fit the Company's investment criteria of high yields and blue chip tenants in Southeastern European population hubs, as we look to expose our shareholders to both immediate cash flows with long term visibility, as well as the potential for significant capital uplift, as the on-going European yield compression play gathers momentum across the continent. 

 

The very low interest rates across Europe should work in favour of continued yield compression in commercial property, and we remain confident that we are very well positioned to make 2015 another year of carefully structured acquisitions of undervalued property assets and improving financial performance. 

 

Paul Ensor

Chairman of the Board

26 May 2015

 

 

 

2.   Letter to the Shareholders

26 May 2015

    

Dear Shareholders,

2014 was the year that the Company's strategy of diversifying regionally and acquiring high yielding income producing assets was kicked off in earnest. SPDI started the year, as it had always done in the past, as a wholly Ukraine based company, and by year-end it owned and managed more properties in other countries in terms of Asset Value.

 

The directors of SPDI embarked on its growth and diversification strategy with a view to identifying ways to acquire undervalued income producing assets and extending its reach beyond its traditional one country. The Company then moved forward to identify and negotiate to acquire a number of portfolios of assets, all class A with substantial income generation capacity and capital appreciation potential, while at the same time it moved to identify a number of investors that would want to contribute assets or capital. By year end the Company had identified key participants on both efforts, having signed preliminary agreements. The stage was set to take a big step forward.

 

During the year, SPDI acquired four income producing assets. The logistics park that Nestle is using in Bucharest, Romania , the headquarters of Danone also in Bucharest, Romania, a residential portfolio of let apartments in the same city and the logistics park leased to Kuehne+Nagel in Athens, Greece (transaction completed in 2015). These new assets, generate annually ~€3,6 million of Net Operating Income ('NOI'), increasing the Company's annual running NOI by ~230%. To underpin its asset management capability in the new regions it invested in, the Company hired a small number of seasoned executives in Bucharest that can help its effort to grow further in Romania.  By year end, the Company is well poised to grow as it attracts more investor shareholders who share the Company's vision of creating the leading institutional property company in the region.

 

Set against the macroeconomic environment and geopolitical events that unfolded during the year, our growth and diversification strategy has been vindicated.  For much of the year, Eastern Europe was growing fast and hopes were high that it would contribute to a regeneration of European GDP growth that was in the making. By year-end though, the mood and the facts were not as positive. The crisis in Ukraine continued unabated, despite the election of the new president in May and the new government in October, with more intensive fighting in the East of the country and the Hryvnia spiralling down as the country's economy was moving closer to collapse. Greece, which had been expected to be able to regain market access and had seen its government bond rates dropping substantially close to those of other EU nations by mid year, experienced a marked setback with snap elections being called for January 2015, which created political and economic instability. Romania, among the countries we gained exposure to during the year, experienced solid economic growth through the year, had the fastest GDP growth rate of any EU country in Q3 2014 and showed signs of even faster growth by year end.  At the same time, Europe as a whole was inching to recession with the ECB deciding to commence a QE package of its own, mirroring what the Fed did in the US three years earlier. 

 

In addition to growing and rebalancing our portfolio of assets, the year under review also saw considerable progress made with regards to strengthening our balance sheet.  In December 2014, twenty months after having finalised negotiations with the European Bank for Reconstruction and Development ("EBRD") on rescheduling the amortisation plan of the Brovary construction loan and twelve months after having received the written agreement of the 'B' Lender on the restructuring, we finally managed to sign all legal documents and eliminate the pending legacy balance sheet risk factor by formalising the loan agreement.

 

The 2014 accounts show a much better and more different operational picture than any prior ones. If we disregard the asset revaluation and FX losses as a result of the Ukrainian Crisis, the operating results are positive and promising. It is the first year in the history of the Company that our revenues topped €3,6 million, while our EBITDA surpassed €0,8 million, more than quadrupling in comparison to 2013. Finally the Company has profits after tax of ~€1 million indicating an even better year to come.

 

Having successfully put the Company on a solid foundation, both financially and operationally, against the backdrop of the global economic and financial sector issues between 2010 - 2013 (including the Cypriot economic crisis in 2013 and the Ukrainian crisis in 2014), we are highly confident that 2014 was a turnaround year for SPDI. With property assets and people on the ground now in the capitals of the three largest economies/countries in South East Europe, SPDI is well positioned to take the necessary steps forward that the shareholders have mandated us to perform. Even though some of these countries are going through considerable change, their property markets are in need of international investors and capital to grow.  We plan to play our part in assisting them to do just that. With the support of our shareholders and partners that share our vision, we plan to exert every effort in achieving our common goals.

 

Best regards,

 

Lambros G. Anagnostopoulos

Chief Executive Officer

 

 

3.   Management Report

3.1. Corporate Overview & Financial Performance

In 2014 the Company's management focused on diversifying its asset base into more than one regional country. The Company acquired four assets:

 

·    The Innovations Logistics Park located on Bucharest's ring road in Romania, a 15.862 sqm gross leasable area logistics center that is primarily let to Nestle Romania (72% of its income).

·    The Danone headquarters office building (EOS) in Bucharest, Romania. The 3.386 sqm gross leasable office is built next to Danone's production and warehousing facility close to Bucharest ring road and is fully let to Danone.

·    A portfolio of let apartments as part of four separate residential developments in Bucharest. The 122 apartments are 60% let and are generating income both from lettings as well as from sales now that the market in Bucharest is picking up.

·    The GED Logistics park in Athens, Greece, mostly let to Kuehne + Nagel (70% of its warehouse income). The 17.756 sqm logistics center also has a 1MW photovoltaic installation on its roof generating and selling electricity to the grid. This transaction was completed in early 2015.

 

At the same time, management also spent time and resources in identifying various acquisition opportunities so as to create a strong pipeline of suitable targets. We entered negotiations for a number of these during the period, moved into thorough due diligence on some of them and, by the year end, were able to bring four to a position where they are ready for closing subject equity capital availability.

 

On that front, the Company scanned the equity markets and identified a small number of potential cornerstone investors that would be interested in supporting the growth plan of the Company.

Finally, the Company continued focusing on efficient operations and addressing the Ukrainian economic deterioration that caused substantial Hryvnia devaluation. All the tenants of our Brovary logistics terminal have US$ based lease agreement but nonetheless they are operating in a market that undergoes serious issues and their bottom line is hit by the local currency devaluation. As such they have requested and we plan to extend to them some rental relief as they go through this very tough period.

 

In parallel, the Company maintained its overall lean and strict operations management, keeping the annual operating and administrative costs to ~€2,3 million even though a number of new assets have been added to the portfolio while increasing the Company's net annual rental income by 33% to €3,6 million.

 

The political instability in Ukraine continues and until this is resolved it is hard to predict the final impact on the country's economy. 

 

As Terminal Brovary is in Kiev and all its tenancy agreements are in US$, there is minimal imminent risk. On the other hand, in view of the serious bottom line loss its tenants are being faced with, we plan to offer lease incentives to maintain the low or zero vacancy.

 

During 2014 and for a short period there were capital controls imposed in the country, at which time it was difficult to export the rental income we had received. We used such period to re-pay a higher amount of the EBRD loan capital, ensuring that the Company does not suffer from such controls that had been stopped by year-end.

 

In an effort to further streamline its operations, the Company has progressed with finalizing the merger of many of its Ukrainian non-operational, idle entities, thus lowering administrative costs. Further optimization is to be expected by further consolidating operating companies and eliminating intercompany loans so as to decrease the Ukrainian operation's dependency on equity support.

 

Furthermore, by introducing the new leveraged acquisitions the Company moves towards meeting its target leveraged capital structure of 50-55% LTV.

The Audit Committee has met on a few occasions during the year in order to effectively monitor potential conflicts of interest of the directors and senior managers as well as to discuss with the auditors the affairs of the Company. The Audit Committee in its role of overseeing the financial reporting and internal controls of the Company ensures proper corporate governance in this respect.

 

The Remuneration Committee pursuant to its responsibility to determine the policy for the remuneration of the Directors and Executive Management of the Company has met a few times throughout the year to review the practices of the Company and engaged with management to ensure that all issues under its supervision are resolved. The Remuneration Committee has proposed to the BoD the application of the Employee Stock Option plan, following the decision of the December 2013 AGM. Such share options will be distributed to the employees for the first time in 2015.

 

The Board is ultimately responsible for the Group's financial reporting, internal control and risk management systems and ensures that the Finance Department prepares detailed budgets and cash flow projections, which are approved annually and updated regularly throughout the year. Ongoing financial control is a responsibility of the management which reports to the BoD in order to maintain a tight liquidity control.

 

2014 showed the turnaround of the Company as achieved through the intensive 2012-2013 restructuring. Most notably, the Company more than quadrupled its EBITDA to €0,8m (2013:€0,2m) and passed to net operational profitability of ~€1m (2013:-€0,1m). Income from Operations grew by 33%.

 

3.2. Property Holdings

 

The Company's portfolio, consists of commercial income producing and residential properties in Romania, Greece and Ukraine as well as four development projects at different development stages in Ukraine.

 

Commercial-Industrial 

Terminal Brovary Logistic Park consists of a 49.180 sq.m. Class A warehouse and associated office space, situated on the junction of the main Kiev - Moscow highway and the Borispil road which was fully completed in 2012. The facility has been 85% leased (warehouse space was 94% leased) at the end of the reporting period.

 

Innovations Terminal Logistic Park consists of a 16.570 sqm gross leasable Class A warehouse and associated office space, situated on the west side of Bucharest's ringroad. Its construction, tenant specific, was completed in 2008 and is separated in four warehouses, two of which offer cold storage, the total area of which being 6.395 sqm. Innovations was acquired by the Company in May 2014 and was 100% leased at the end of the reporting period, 61% to Nestle and 39% to other local companies.

 

GED Logistic Park consists of a 17.756 sq.m. gross leasable area industrial and associated office space, situated on the west side of Athens, close to the Port of Piraeus. The facility has been in operation since 2010 and as at the end of the reporting period was 100% leased to Kuehne + Nagel (70%) and GE Dimitriou SA (30%). The park also has a photovoltaic alternative energy production facility installed on its roof. The said asset is to be consolidated within the Company's accounts in 2015 as the closing of the transaction was effected in March 2015.

 

EOS Business Park which serves Danone Head Quarters in Romania, is a 3.386 sqm GLA Class A office building, situated in the North Eastern Part of Bucharest. The building is fully let to Danone.

 

Land Bank

Bela Logistic Centre is a 22.4 ha plot in Odessa situated on the main highway to Kiev. Following the issuance of permits in 2008, below ground construction for the development of a 103.000 sq.m. GBA logistic center commenced. Construction was put on hold in 2009 due to the global economic crisis.

 

Kiyanovskiy Lane consists of four adjacent plots of land, totaling 0.55 ha earmarked for a residential development, which are well located, overlooking the scenic Dnipro River, St. Michael's Spires and historic Podil neighborhood. During 2014, management held discussions with a number of interested parties with regard to a possible development of this asset should the market developments allow for such action.

 

Tsymlyanskiy Lane is a 0.36 ha plot of land located in the historic Podil District of Kiev earmarked for the development of a residential complex.

 

Balabino project is a 26.38 ha plot of land situated on the south entrance of Zaporozhye, a city in the south of Ukraine with a population of 800.000 people. Balabino is zoned for retail and entertainment development.

 

Residential portfolio

This consists of a portfolio of 122 apartments units, situated on four distinct locations in the city of Bucharest. By year end 60% of the apartments units were let while during the year 7 units were sold.

 

In 2014, the Company continued with RICS accredited CBRE Ukraine as its valuer for the Ukrainian Assets and also appointed RICS accredited Property Partners as the valuer for the Romanian assets. The valuations have been carried out by the appraisers on the basis of Market Value in accordance with the appropriate sections of the current Practice Statements contained within the Royal Institution of Chartered Surveyors ("RICS") Valuation - Professional Standards (2014) (the "Red Book") and is also compliant with the International Valuation Standards (IVS).

At the year-end, the Company's property assets were valued at €61 million, an increase of 57% from the December 2013 valuation due to acquisitions effected throughout 2014. It should be noted that the fair value of the Ukrainian assets has been reduced by ~€8 million (representing a reduction of ~20% in EUR denominated values or ~30% in USD denominated values) due to the continuing crisis.

 

During the year the Company's asset portfolio became more diversified in terms of geography as well as asset class. At the end of the reporting period, 54% of the company's portfolio is outside Ukraine while with the addition of GED Logistics in March 2015, Ukraine falls to 43% and by the reporting date only 26% of the Gross Asset Value is attributable to the said country. The same applies to the income generation ability of the Company which at the reporting date depends on Ukraine by 28%.

 

Excluding the revaluation losses that are attributable to the reduction of asset prices in Ukraine as well as the foreign exchange losses either associated with the EBRD loan to Terminal Brovary, mostly hedged due to the USD denominated income, and the intercompany loans that have been affected on paper by the devaluation of the UAH from 8 to the USD, to 33 to the USD by the end of the reporting period, the table below presents the comparable for the operating performance in the last 3 years:

 

 

 

	2014	notes	2013	notes	2012	notes
EUR
Operational income	3.591.903	1	2.717.166		1.650.897
Administration expenses	(2.743.723)	2	(2.475.720)		(2.523.734)
Investment property operating expenses	(660.263)		(543.217)		(431.414)
Other (expenses)/ income, net	(136.058)		495.774	3	407.933	3
Gain realized on acquisition of subsidiary	766.221	4	-		-
Operating profit	818.080		194.003		(896.318)
Finance costs, net	(1.414.400)		(1.034.456)		(1.677.544)
Profit/(loss) before tax	(596.320)		(840.453)		(2.573.862)
Income tax expense	(220.476)		(125.722)		(65.259)
(Loss) / Profit for the year	(816.796)		(966.175)		(2.639.121)
Valuation gains/(losses) from investment property	9.297.525		635.067		2.687.028
Foreign exchange losses, net	(7.512.640)		201.952		-
(Loss) / Profit for the year	968.089		(129.156)		47.907
Notes
1. includes 6months income from Innovations and 4months from EOS Business Park
2. includes one off legal expanses
3. includes legacy liabilities write off
4. refers to acquisition of asset below market value

 

The Net Equity attributable to the shareholders as at 31 December 2014 stood at €32 million representing a 13% decrease over the 2013 Net Asset Value due to revaluation of the Ukrainian assets.

 

The table below presents the contribution of each of the holdings of the Company at the end of the reporting period to its Net Asset Value.

		2014			2013
€m		GAV	Debt	NAV	NAV
Innovations	Rom	14,0	7,4	6,6
Eos	Rom	6,4	4,3	2,1
Terminal Brovary	Ukr	17,4	11,8	5,6	8,0
Residential units	Rom	8,4	6,2	2,2
Land banking	Ukr	14,9		14,9	22,0
Total Property Value		61,1	29,7	31,4	29,9
Other Assets minus Other Liabilities		1,2		1,2	7,8
Net Asset Value total				32,6	37,7
Mcap 31/12/2014 (Share price at £0,56)				24,1
Mcap 26/5/2015  (Share price at £0,31)				18,5
Discount as of the reposrting date vs NAV 31/12/2014				-43%

 

The NAV per share as at 31 December 2014 stood at GBP 0.75; lower than a year before, due to the new shares issued as a result of a capital increase and the valuation decrease of the Ukrainian assets, while the discount of the Market Value against the NAV decreased to 26%. Due to a drop in share price in the first quarter of 2015, this discount reached by the reporting date 43%.

 

3.3. Financial and Risk Management

The Group's overall bank debt exposure at the end of the reporting period consisted of €30 million including:

a.   the €11,8m construction loan to Terminal Brovary from EBRD. The loan was originally restructured in June 2011 and was again under a restructuring process which concluded in December 2014 and effectively matched the then current cash inflows from the asset with the debt amortization plan.

b.   the €4,3m lease of the EOS business park with Alpha Bank.

c.    the €7,4m lease of the Innovations park with Bank of Piraeus.

d.   with the remaining being the residential project loans

 

Overall, the Group's Loan to Value ratio at the end of 2014 stands at 48%.

Throughout 2014 the Company continued to preserve liquidity and optimize its cash flow in a difficult credit environment. By maintaining a tight cash flow schedule, the Company has been able to manage its liabilities while making progress towards implementing its growth strategy by acquiring income producing assets.

 

Most importantly, during the year the Company mitigated the effects of the Ukrainian hryvnia devaluation to a large extent, by minimizing the cash available in Ukraine and transferring all excess cash out of the country by repaying either the EBRD or the intercompany loans, thus protecting the shareholder's value.

 

3.4. 2015 and beyond

Going into 2015, the Company is poised to grow by acquiring new income producing assets in Romania, Bulgaria and/or Greece. To effect that, more capital needs to be raised, and as first step the Company executed an open offer for new shares to its existing shareholders raising €8m in March 2015. Political turmoil in Greece and military one in Ukraine will necessitate even more prudence on actions taken but will also create an environment full of opportunities when such turmoil abates.

 

In early March 2015 the Company concluded the GED warehouse acquisition in Greece, while in April 2015 the Company proceeded in acquiring 20% of the Autounion, a Class A office building in Sofia, Bulgaria. The acquisition, which is the Company's first in Bulgaria, is in line with its strategy to build a diversified portfolio of prime commercial real estate in East and Southeast Europe, which is fully let to blue chip tenants on long leases, generate high yields and have the potential for capital growth.

 

In May 2015 the Company acquired two portfolios of assets consisting of:

 

·    100% of a DIY retail property in a prime location in Craiova, Romania.  The building of a Gross Lettable Area ('GLA') of 9.385 sqm is wholly let to Praktiker, a leading DIY brand and produces an annualised NOI of ~€1 million

 

·    a 24,35% interest in Delea Nuova,  a Class A office building in a prime business location in Bucharest - the building is fully let mainly to the telecommunications regulator of Romania, produces an annualized NOI of €1,9 million and has a GLA of 10.280sqm over ten floors and includes underground parking

 

·    a small portfolio of newly built income producing residential assets, located on Grivita Lake in north Bucharest and on the slopes of Boyana in South Sofia.  They generate an annualized income of €300.000, as they are mostly let - the Company intends to sell these to generate substantial near term cash for reinvestment

 

As a result of these acquisitions the Gross Asset Value of the Company is now diversified as follows:

 

	Gross Asset Value
EURm/%	May 2015e		2014		2013
Ukraine	32	26%	32	42%	40	100%
Greece	16	13%	16	21%
Romania	59	47%	29	37%
Bulgaria	19	15%		0%
Total	126	100%	77	100%	40	100%

Furthermore, the annualized Net Operating Income, considering also the newly acquired assets is estimated as follows:

	Annualized Net Operating Income
EURm	May 2015e		2014		2013
Ukraine	2,3	28%	2,4	40%	2,7	100%
Greece	1,5	18%	1,5	24%
Romania	3,7	46%	2,1	36%
Bulgaria	0,7	9%		0%
Total	8,2	100%	6,0	100%	2,7	100%

 

As such, our focus in 2015 is a) to improve even further the Company's operating results, b) leading to a dividend distribution for the first time in its history in 2016, while at the same time to attract more like minded investors and grow the Company's balance sheet with both new capital and assets in other countries in the South East Europe region, while safeguarding our position and income in Ukraine.

 

3.5. Ukraine

Nearly one year after the clashes that resulted in the fall of the incumbent government, the deterioration and finally breaking off of Russia-Ukraine relations and the loss of part of Ukraine's geographic area, the situation remains particularly volatile. The social and geopolitical instability continues to affect not only Ukraine's economic and political well-being, but also relations between Russia and the rest of the world, as the international financial markets remain volatile. Ukraine engaged in a loan agreement with the IMF before the summer, having already received two tranches of the loan for ongoing fiscal consolidation. The future remains uncertain for the country, even though the two elections (the presidential in May and the Parliamentary in October) have resulted in a pro-European government.

 

Gross Domestic Product continued to decrease for yet another quarter and it is expected to close for 2014 at -6,0% from 0% growth in the previous year, as domestic demand, investments and consumption have been severely hit. Another factor that will negatively contribute to economic activity is the current situation in the Donetsk and Lugansk Region, where almost 75% of Ukraine's steel production comes from. Steel production levels reached the ones of the 2008 crisis.

 

The devaluation of the Ukrainian Hryvnia which peaked at 34 UAH to the USD (from 8 UAH to the USD in late 2013) and the deterioration in imports and exports have led to a favorable current account balance in 2014. Specifically, the current account deficit in H1 2014 contracted to 1,8% of GDP from 3,1% in H1 2013, as the trade deficit decreased accordingly. Inflationary pressures led to a CPI index of 11% in the period January-November 2014 compared to -0,3% in January-November 2013.

 

While fiscal finances have deteriorated, the IMF deal has provided some stability. The fiscal deficit in the period January-September widened to 4,8% of GDP from 3,2% in January-September 2013, as expenditures shot up to 53,1% from 34,2% in the same periods. Revenues, however, also increased to 48,6% of GDP in January-September from 31% in January-September 2014.

 

As far as interest rates are concerned, the National Bank of Ukraine hiked its key rate by 150 bp to 14% in November. The interest rate move was apparently motivated by the accelerating inflation in the last few months. Given basically non-functioning monetary transmission mechanism, NBU interest rate decision is mostly symbolic and will have no much impact on other interest rates and economic dynamics.

 

3.6. Romania

Romania's preliminary GDP results recorded a 3,3% year-on-year increase in Q3 2014, from 2,2% in Q2 2014 and 3,6% in Q3 2013.

 

In the first eight months of 2014, the Current Account Deficit was 0,6% of GDP compared to 0,4% of GDP in January-August 2013, as per the adoption of the new calculation methodology, as the primary income deficit widened. The external sector remains relatively firm, as the RON is stable and until now imports and exports have not been hit by the ongoing crisis in Ukraine and Russia. In addition, public finances have improved significantly in 2014, as in the first nine months the fiscal balance turned to a surplus of 0,1% of GDP compared to a deficit of 1,3% in January-September last year, as public expenditures have declined. According to the updated data and the new calculation methodology, the external debt in the first nine months decreased to 64,5% of GDP from 69,5% in 2013. Both short-term and long-term debt were limited.

Inflation has fallen to historically low levels since September 2013 (1,4% in October 2014), as a result of the abundant agricultural harvest, taxes imposed during last year and declining food prices. The latest forecast for average inflation in 2014 is 1,5%.

 

The National Bank of Romania continued its cycle of monetary easing by cutting its rate to 2,75%, with the aggregate cuts since December 2013 totaling 100 bps. It has also reduced the minimum reserve requirement ratios on Romanian Leu and FX-denominated debt to 10% and 14% from 12% and 18% respectively, thus allowing banks to build up their reserves.

 

S&P upgraded in mid-May Romania's long-term and short-term foreign and local currency sovereign credit ratings to "BBB-/A-3" from "BB+/B", with stable outlook. This move brings S&P's rating on par with the other two major rating agencies, Moody's and Fitch, which both rate Romania investment grade.

 

3.7. Bulgaria

Bulgaria continues to show signs of a steady recovery, as real GDP remains very stable although below its long-term average. GDP grew by 1,6% year-on-year in Q3 2014 from a slightly higher increase of 1,8% in Q2 2014 and a lower 1,1% in Q3 2013. The revision of the national accounts to convert to the ESA 2010 methodology brought up real GDP in 2013 to 0,9% compared to the previous 0,7% value.

 

The Current Account balance decreased to 2,0% of the GDP for the period of January to August from 3,1% in the same period last year, mainly due to the increase of the trade deficit. The Bulgarian economy has been on a deflationary path since September 2013. Reduction in the administratively set energy prices and a strong harvest (leading to lower food prices) made prices trend sharply downward. Indicatively, inflation in the first ten months of 2014 averaged -1,5% from 1,4% in the same period last year, as most of the consumer price index constituents either declined or slowed down.

 

The fiscal deficit in the first nine months widened to 1,9% of GDP from 0,4% in January-September last year, due to an increase in public expenditures. This number however is well below the maximum of 3,0% providing the necessary stability to the country.

 

The government successfully resorted on June 27 to the international markets with the planned €1,5bn September 2024 Eurobond sale. The said issue attracted strong as well as diversified demand in reflection of ongoing as well as broad-based investor confidence towards Bulgarian assets. Total bids reportedly amounted to ca €3,7bn and the auction produced an average accepted yield of 3,055% or 160bps over mid-swaps.

 

On the political front, a fragmented new parliament emerged from the early parliamentary elections in Bulgaria on October 5th. Eight parties, the highest number in the post-Communist era, accomplished to surpass the 4% threshold in order to enter the parliament. The new coalition government successfully managed to deal with one major issue; the resolution of Corporate Commercial Bank.

 

3.8. Greece

The confirmation by Eurostat of the 2013 primary budget surplus and the redistribution of part of that surplus to a number of social groups, reinforced the credibility of the Greek fiscal consolidation, boosted consumer confidence and stabilized household spending. 2014 was going to be the first year after 6 recession years with an overall GDP increase but elections declared in December 2014 have taken a heavy toll and have thrown the country's economy back into recession. In addition to the economics the country's credibility is being severely damaged. 

 

In the first nine months of 2014, Greece's GDP level was higher by 0,6%, compared with the corresponding period of last year, when it had fallen by 4,3%. This was mainly due to higher international tourist arrivals during the summer period, leading to the strongest growth in the exports of goods since the 2004 Olympic Games.

 

Total domestic consumption increased by 1,2% in the first nine months of 2014, after a contraction by 4,2% in the same period a year earlier and 6 consecutive negative years. Again, in the second part of the year consumption started to show signs of further improvement before collapsing in November and December due to the elections announcement.

 

With exports rising faster than imports, the deficit of the external sector has been reduced by 9,7% over the first half of the previous year, at €2,6 billion (3,4% of the GDP), while during the same period of 2013 that deficit had shrank much faster (-43,1%).

 

Bank of Greece recorded a net deposit outflow of ~€11bn that extended to €35bn by end of March 2015 bringing the banking crisis under severe liquidity stress. For the moment the slack is being picked up by the ECB through the ELA. Deposits are at an all-time low of €135bn from €250 in 2008.

 

4.   Real Estate Market Developments

4.1. Ukraine

Ongoing tensions in the East along with fundamental economic problems, have taken their toll on the country's real estate market during the first half of the year. Since then, the situation seems to stabilize with businesses largely adopting a wait-and-see attitude.

 

In 2014, the new supply of logistics space reached 144.000 sqm, nearly 7% increased in comparison with 2013, leading to a total stock of 1,72 million sqm in the Greater Kiev area. Compared to the same period in 2013, take-up has decreased by 60%, reaching approximately 118.000 sqm. This drop in demand along with the delivery of several relatively sizeable schemes during the period against the background of extremely suppressed business dynamics in the country, led to rent contraction by 15-25%. Growing supply and low business activity have made downward correction of market rents, by 50-100bp.

 

The cumulative new office supply in 2014 in Kyiv reached approximately 155.000 sqm and was around 18% higher than at the end of 2013 and only 1% less than in 2012. There was approximately 1,71 million sqm of speculatively delivered office stock in Kyiv at the end of 2014, excluding government buildings and offices constructed by owner-occupiers. The vacancy rate in Kiev remains the highest among the European capitals and in the end of the reporting period was standing at 23,5%. Devaluation and prevailing supply in the market balance is the reason behind the drop and the wide range in rental rates, especially in class A offices. According to preliminary estimates, take-up did not exceed 50.000 sqm by year end results, mainly driven from manufacturing and IT companies.

 

In 2014, total stock amounted to around 1,44 million sqm, approximately 8% higher than in 2013. At the first half of the year, some retailers decided to leave the Ukrainian market, but in the second half new brands like Nespresso, Intimissimi and Calzedonia decided to enter the market. New supply on the market, loss of tenants and a low occupancy rate of some new objects on the market led to a vacancy rate of 10%. These rates along with the devaluation of the local currency put downward pressure on rental rates, which dropped at USD 50-80/sqm for shopping centers and USD 150-200/sqm for high street shops.

 

(1 - Sources : Jones Lang LaSalle, DTZ Research, CBRE Research, The Advisers/Knight Frank, Forton International, MBL Research, Colliers International)

 

4.2. Romania

The investment volume in Romania in 2014 rose by 254% compared to 2013, reaching €1,3 billion (including owner-occupied and residential transactions). This represents the highest volume recorded in Romania since 2007.

 

The modern stock in Bucharest remains constant at approximately 1 million sqm. During the year, Romanian industrial market experienced its largest ever transaction involving a single asset, with CA Immo selling a 215.000 sqm logistic park. Gross take-up amounted to approximately 210.000 sqm, the highest figure in the last five years. Considering the recent transactions and the absence of speculative development, the vacancy rate dropped from 11-13% to ca. 8% in Bucharest and Ilfov areas and it remained at the same level in the rest of the country. Yield slightly compressed from 10% to 9,5%, while rental rates showed no significant change throughout the year.

 

Take-up in 2014 reached a total of 223.000 sqm, the highest figure registered since 2008. The modern office stock in Bucharest stands at around 2,21 million sqm. Currently there is 215.900 sqm of space under construction, of which 28% has already been secured under pre-let agreements and, with an anticipated improvement in demand will help to lower the vacancy rate which at the end of the year was 14,3%, the sharpest year on year change (370bp) after the financial crisis. Prime headline rents increased slightly to €18,5/sqm, while the increasing interest from investors for prime properties in Bucharest encouraged a yield compression by 25 bps, now at 7,75 %.

 

The modern retail stock in Romania increased slightly at 2,9 million sqm as only three new retail schemes were built during the year. After a weak performance in 2013, retail sales recorded a 7% year-on-year growth in 2014. The gap between prime and secondary stock continues to be significant. Yield and rental rates are stable since 2013 while vacancy rates remain at low levels, due to the lack of new supply.

 

After a timid market recovery in 2012, and a more active 2013, the first half of 2014 saw a reduction in the number of vacant units in previously completed residential projects. The revival of the market is also indicated by the expansion of well-performing projects. As in previous years, the Prima Casa government program is still a major driver of demand. Between 2008 and H1 2014, c. 119.200 Prima Casa loans were approved, with a total value of over €4,5 billion, helping the market to pick up quickly.

 

4.3. Bulgaria

The Bulgarian Real Estate market remains stable with signs of sector improvement in the office and residential assets classes. The relative stability of the Bulgarian economy and the reduced residential prices at levels 50% to the 2008 peak have fueled a sizable increase in transactions.

 

Total modern stock in 2014 increased by 5% year-on-year to 757.000 sqm, while take-up activity hardly reached 12.000 until the end of Q3. Prime rents slightly increased -for the first time after the recession- to €3,75/sqm. (7% year-on-year), while yields remained relatively stable for one more year at 11,75%.

 

During 2014, only 20.000 sqm of class A offices were delivered. As a consequence, the Sofia office stock increased only by 1,8% at 1,68 million sqm. The overall market vacancy rate registered a decrease for a second consecutive year. The total class A and B vacant space amounted to approximately 255.000 sqm, or an aggregate 15% of the total class A and B inventory. The pipeline showed a further 40% decrease year-on-year reaching 100.000. The take-up of class A and B space reached 71.000 sqm on a year-on-year basis, showing a 9% increase. Yields are at 9%, recording a slight drop of 50bp year-on-year.

 

After the closure of The Strand in Burgas and Mega Mall Ruse in the second half of 2014, the total volume of modern retail space of shopping centers in Bulgaria reached 783.000 sqm,, while demand remains relatively healthy and rental rates increased 6% year-on-year in shopping malls. Vacancy rates in Sofia remained stable at 12%. However, good news comes from international retailers, who are either returning or entering the Bulgarian market for the first time, indicating imminent decrease in vacancy rates.

 

4.4. Greece

The outlook for the Greek economy which has been much improved in the first 3 quarters of 2014, after seven years of recession, has deteriorated rapidly in the last quarter of the year. Risks are now greater than ever to the recovery story and yet more negative shock have affected market performance driving transaction to a collapse in late 2014.

 

As of Q3, €50 million exchanged hands, more than double the total seen in 2013. Investors struggle to balance risk and price especially given the subdued occupational market and fragile economy. Value-add funds and Greek REICs are likely to be the first to act if the right asset comes to market, spurred on partially by the recent reduction of transfer tax to a flat rate of 3,00%. Prime rents are stable at €2,60/sqm for manufacturing in Athens and €4,00/sqm for logistics. Yields dropped 200 bps, now standing at 11% on average.

 

Development finance is very limited and no significant schemes were constructed in Athens during 2014. Some projects that have broken ground were postponed by their developers, who decided to wait for when fundamentals are more robust. Total office deals reached approximately €28 million as of Q3. The high vacancy rate is heavily linked with the lack of demand. Prime rents in Athens CBD have seen a 5% drop year-on-year. Yields recorded a drop of 100bps, now at 8,5%.

 

During the period of recession there was a distortion of rent levels on existing lease agreements versus new leases. Consequently, the same area can see a large gap between rent levels. Upward pressure on prime rents, especially for these small and medium size units, continued and double-digit growth was recorded in Athens and Thessaloniki's high streets, ranging from 5% to 30% year-on-year. Supply for prime space has been tightening, however, vacancies are still on the rise in secondary areas. Yields have contracted slightly since last year, standing at 7-8% for high streets shops and a little over 8% for shopping centers.

 

5.   Property Assets

5.1. Aisi Brovary - Terminal Brovary Logistic Park , Ukraine

The Brovary Logistic Park consists of a 49.180 sq m GLA Class A warehouse and associated office space. The building has large facades to Brovary ring road, at the intersection of the Brovary (Е-95/М-01 highway) and Borispil ring roads. It is located 10 km from Kiev city border and 5 km from Borispol international airport.

 

The building is divided into six independent sections (each at least 6.400 sq m), with internal clear ceiling of 12m height and industrial flooring constructed with an anti-dust overlay quartz finish. The terminal accommodates 90 parking spaces for cars and trucks, as well as 24 hour security and municipal provided sewage, water and garbage collection.

 

As of the end of December, the park remained 85% leased, with 94% of its warehouse capacity leased.

 

5.2. Innovations Logistics Park, Romania

The Park incorporates approximately 8.470 sqm of multipurpose warehousing space, 6.395 sqm of cold storage and 1.705 sqm of office space. It is located in the area of Clinceni, south west of Bucharest center, 200m from the city's ring road and 6km from Bucharest-Pitesti (A1) highway. Its construction was tenant specific, was completed in 2008 and it comprises four separate warehouses, two of which offer cold storage.

As of the end of December the warehouse was 100% leased with Nestle Ice Cream Romania being the anchor tenant (100% of cold space and 72% of total NOI), following the recent renewal of its lease .

 

5.3. GED Warehouse and Photovoltaic Park, Greece

The 17.756 sqm complex that consists of industrial and office space is situated on a 44.268 sqm land plot in the West Attica Industrial Area (Aspropyrgos). It is located at exit 4 of Attiki Odos (the Athens ring road) and is 10 minutes from the port of Piraeus and the National Road. The roofs of the warehouse buildings house a photovoltaic park of 1.000KWp.

 

The buildings are characterized by high construction quality and state-of-the-art security measures. The complex includes 100 car parking spaces, as well as two central gateways (south and west).

 

The Company reached a binding agreement in August 2014 for the acquisition of the asset which was expected to be concluded upon the transfer of the asset from previous owner to a newly formed company, and completion of certain other conditions which were finalized in March 2015. The complex at the end of December is 100% occupied, while the major tenant (approximately 70%) is the international transportation and logistics company Kuehne + Nagel.

 

5.4. EOS Business Park - Danone headquarters, Romania

The park consists of 5.000 sqm of land including a class "A" office building of 3.386 sqm GLA and 90 parking places. It is located next to the Danone factory, in the North-Eastern part of Bucharest with access to the Colentina Road and the Fundeni Road.  The Park is very close to Bucharest's ring road and the DN 2 national road (E60 and E85) and is also serviced by public transportation. The park is highly energy efficient.

 

The Company has reached a binding agreement in August 2014 for the acquisition of the asset which was finalised in November 2014. The complex at the end of December is fully let to Danone Romania, the French multinational food company, until 2026.

 

5.5. Residential portfolio

a)        Romfelt Plaza (Doamna Ghica), Bucharest, Romania

Romfelt Plaza is a residential complex located in Bucharest, Sector 2, relatively close to the city center, easily accessible by public transport and nearby supporting facilities and green areas.

 

The residential unit portfolio acquired by the Company comprises 2.990 sqm across nine studios, six  two bed apartments and thirteen three bed apartments, all located in buildings A, D, E, F, and I.

 

As of the end of December total existing leases stood at 20 indicating an occupancy rate of 74%.

 

b)        Linda Residence, Bucharest, Romania

Linda Residence is a residential complex located in Bucharest, Sector 3, close to subway transportation which connects the project to all areas in Bucharest in less than 30 minutes.

 

The 2.642 sqm residential portfolio acquired by the Company comprises twenty seven apartments including two studios, fifteen two bed, eight three bed and two four bed apartments, as well as 27 storage spaces, and 20 surface parking spaces.

 

As of the end of December there are a total of 5 total existing leases indicating an occupancy rate of approximately 23%.

 

c)        Monaco Towers, Bucharest, Romania

Monaco Towers is a residential complex located in South Bucharest, Sector 4, enjoying good car access due to the large boulevards, public transportation, and a shopping mall (Sun Plaza) reachable within a short driving distance or easily accessible by subway.

 

The residential portfolio acquired by the Company comprises forty apartments, twenty five two-room apartments and fifteen three-room apartments, totaling 3.609 sqm.

 

As of the end of December the total existing leases stood at 31 indicating an occupancy rate of 78%.

 

d)        Blooming House, Bucharest, Romania

Blooming House is a residential development project located in Bucharest, Sector 3, a residential area with the biggest development and property value growth in Bucharest, offering a number of supporting facilities such as access to Vitan Mall, kindergartens, café, schools and public transportation (both bus and tram).

 

The residential unit portfolio acquired by the Company comprises twenty seven apartments, comprising twelve two bed, forteen three bed, and one five bed, totaling 2.387 sqm, plus 28 parking spaces, 13 above ground, 15 underground.

 

At the end of December the total existing leases stood at 17 indicating an occupancy rate of approximately 63%.

 

5.6. Land Bank

a)  Aisi Bela - Bela Logistic Center

The site consists of a 22,4 ha plot of land with zoning allowance to construct up to 103.000 sqm GBA industrial properties and is situated on the main Kiev - Odessa highway, 20km from Odessa port, in an area of high demand for logistics and distribution warehousing.

 

Following the completion of planning and issuance of permits in 2008, construction commenced, with column foundation and peripheral walls for 100.000 sqm completed in 2009. Development was then put on hold, due to lack of funding and deteriorating market conditions.

 

b)  Kiyanovskiy Lane - Land for Residential Complex

The project consists of 0,55 ha of land located at Kiyanovskiy Lane, near Kiev city centre. It is destined for the development of business to luxury residences with beautiful protected views overlooking the scenic Dnipro River, St. Michaels' Spires and historic Podil.

 

The concept design of the project is under review with the proposed development to include residential apartments (GBA of circa 21.000 sqm) and 100 parking spaces across two basement levels.

 

c)  Tsymlyanskiy Lane - Land for Residential Complex

The 0.36 ha plot is located in the historic and rapidly developing Podil District in Kiev. The Company owns 55% of the plot, with one local co-investor owning the remaining 45%.

 

In 2009, all necessary documents were submitted to relevant authorities for approval and issuance of a construction permit. The plan was to develop approximately 10.000 sqm GBA of 40 high end residential units and office spaces on lower floors, as well as 41 parking spaces over three underground levels. Since then, the project has been on hold. In 2014 the company renewed its holding permit.

 

d)  Balabino-Land for Retail/Entertainment Development

The 26,38 site is situated on the south entrance of Zaporozhye city, three km away from the administrative border of Zaporozhye. It borders the Kharkov-Simferopol Highway (which connects eastern Ukraine and Crimea and runs through the two largest residential districts of the city) as well as another major artery accessing the city centre.

 

The site is zoned for retail and entertainment and various development options are being evaluated as per the market's needs.

 

7.   Consolidated Statement of Comprehensive Income

       For the year ended 31 December 2014

	Note	2014		2013
		€		€
Operating income	11.3	3.591.903		2.717.166
Valuation gains from investment property	11.3	9.297.525		635.067
		12.889.428		3.352.233
Administration expenses	11.4	(2.743.723)		(2.475.720)
Investment property operating expenses	11.5	(660.263)		(543.217)
Gain on acquisition of subsidiaries		766.221		-
Other (expenses)/income, net	11.6	(136.058)		495.774
Operating profit		10.115.605		829.070
Net finance costs	11.7	(1.414.400)		(1.034.456)
Foreign exchange (losses)/income, net		(7.512.640)		201.952
Profit/(loss) before tax		1.188.565		(3.434)
Income tax expense	11.8	(220.476)		(125.722)
Profit/(loss) for the year		968.089		(129.156)
Other comprehensive (loss)/income
Exchange difference on I/C loans to foreign holdings		(19.746.111)		-
Exchange difference on translation of foreign operations		8.904.153		(1.424.354)
Total comprehensive (loss)/income for the year		(9.873.869)		(1.553.510)
Profit /(Loss) attributable to:
Owners of the parent			927.337	(139.408)
Non-controlling interests			40.752	10.253
			968.089	(129.155)
Total comprehensive income attributable to:
Owners of the parent		(9.577.120)		(1.561.681)
Non-controlling interests		(296.749)		8.171
		(9.873.869)		(1.553.510)

 

Earnings/(losses) per share (Euro cent per share):		11.1
Basic earnings/(losses) for the year attributable to ordinary equity owners of the parent			0,03	(0,01)
Diluted earnings/(losses) for the year attributable to ordinary equity owners of the parent			0,03	(0,00)

 

 

8.   Consolidated Statement of Financial Position

      For the year ended 31 December 2014

	Note	2014	2013	2012
		€	€	€
ASSETS
Non‑current assets
Investment properties	11.9	53.533.187	28.714.379	29.733.212
Investment property under construction	11.9	5.083.216	6.525.995	6.331.030
Prepayments made for investments	11.9	2.674.219	3.625.553	3.789.601
Tangible and intangible assets		200.203	103.443	73.011
Goodwill		43.269	-	-
Long-term receivables		125.909	-	-
		61.660.003	38.969.370	39.926.854
Current assets
Prepayments and other current assets		4.251.489	3.595.741	4.129.281
Cash and cash equivalents		891.938	9.668.260	194.366
		5.143.427	13.264.001	4.323.647
Total assets		66.803.430	52.233.371	44.250.501
EQUITY AND LIABILITIES
Issued share capital	11.10	338.839	4.383.018	4.212.421
Share premium		97.444.044	92.704.841	79.176.629
Foreign currency translation reserve		(1.411.825)	(10.315.978)	(8.891.624)
Exchange difference on I/C loans to foreign holdings		(19.746.111)	-	-
Accumulated losses		(44.064.475)	(49.093.113)	(48.953.705)
Equity attributable to equity holders of the parent		32.560.472	37.678.768	25.543.721
Non-controlling interests		651.882	948.631	930.207
Total equity		33.212.354	38.627.399	26.473.928
Non‑current liabilities
Interest bearing borrowings	11.11	12.255.716	-	1.347.340
Finance lease liabilities	11.13	11.463.253	387.400	428.962
Redeemable preference shares	11.10	349.325	-	-
Trade and other payables	11.12	214.685	480.458	503.940
Deposits from tenants		499.831	315.604	324.328
		24.782.810	1.183.462	2.604.570
Current liabilities
Interest bearing borrowings	11.11	5.960.706	11.077.240	12.554.173
Trade and other payables	11.12	1.654.852	779.688	1.941.592
Taxes payable		431.828	423.539	401.567
Redeemable preference shares	11.10	349.325	-	-
Provisions		68.253	119.023	253.564
Deposits from tenants		161.579	-	-
Finance lease liabilities	11.13	181.723	23.020	21.107
		8.808.266	12.422.510	15.172.003
Total liabilities		33.591.076	13.605.972	17.776.573
Total equity and liabilities		66.803.430	52.233.371	44.250.501

 

Net Asset Value (NAV) € per share:	11.1
Basic NAV attributable to equity holders of the parent		0,96	1,34	2,30
Diluted NAV attributable to equity holders of the parent		0,84	1,17	2,01

 

On 26 May 2015 the Board of Directors of SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC authorised these financial statements for issue.

Lambros Anagnostopoulos	Paul Ensor	Constantinos Bitros
Director & Chief Executive Officer	Director & Chairman of the Board	Chief Financial Officer