RomReal : First Quarter 2017 Results and Investor Presentation

Net Asset Value (NAV)

• Net Asset value was EUR 0.46 (NOK 4.25) per share, 2.1% down compared to the end of 2016. The decrease in NAV is mainly due to the negative foreign exchange differences and the interest expense for the period.
• More importantly, the Net Asset Value would have been EUR 0.49 (NOK 4.60) if the values from all Q1 2017 sales transactions are applied to the sold properties.

Operational highlights

• The Urbanism Certificate of the Alexandriei plot has been successfully obtained from the City Hall and the plot is now fully eligible for sale.
• On April 7, 2017, the Group has prepaid entirely the outstanding loan from Alpha Bank thus emerging as a debt free Company. The shareholder loan was also fully repaid during May.
• The Company has a cash position today of about EUR 2.3 million plus the sellers secured credit of EUR 1.75 million that is serviced monthly with equal instalments plus interest until the 7 April 2018. This implies a cash or cash equivalent of about EUR 0.10 per share.
• On 21 April 2017, the Annual General Meeting has elected Mrs Heidi Sorensen Austbo as Company Director.

Financial Results

• Net Result for the quarter was EUR 284,000 loss compared to an EUR 423,000 profit in 1Q 2016. Operating cash flow for the quarter was a negative EUR 172,000 compared to minus EUR 97,000 in the same period last year.

Macro and real estate market highlights

• After a strong GDP growth rate of 4.8% in 2016, the Romanian economy is expected to register a 4% GDP increase this year according to the European Bank for Reconstruction and Development. The main drivers for the economic growth during this period was the private consumption, supported by VAT reduction, public wage increases and improved labour market. In the first quarter 2017, the preliminary GDP growth came in a solid 5.7%, according to Eurostat.
• According to the online real estate platform immobiliare.ro, asking prices in Romania were up by 1.2% in April against the previous month from a national average of EUR 1,092/sqm to EUR 1,105 /sqm. This registers an increase of 8.8% year on year. Prices in Constanta have reached to EUR 1,013 /sqm, a 5.9% increase year on year. This makes Constanta the fourth Romanian city where asking prices have passed the EUR 1,000/sqm level. Still prices in Bucharest and Constanta apartments are about 40% below peak prices in 2008.

A recorded investor presentation will be made available tomorrow Friday 26 May at 10:00am CET at www.romreal.com