RomReal : Second Quarter (Q2) 2017 Financial Results and Investor Presentation

Net Asset Value (NAV)

• Net Asset value was EUR 0.44 (NOK 4.08) per share, 4% down compared to the end of Q1 2017. The decrease in NAV is mostly due to transaction costs during the second quarter related to the finalisation of previously announced plots disposals.
• More correctly, the NAV would have been EUR 0.48 (NOK 4.45) if the value from all Q1 2017 plot sales transactions has been permitted according to IFRS applied to all sold properties.

Operational highlights

• After the end of the quarter, the Company managed to close further two sales of assets at prices commanding an average premium of about 22% over the carrying value in the end 2016 IFRS accounts, totalling proceeds about EUR 0.61 million after sales commissions.
• Carrefour plot (No. 8 on the list): presale agreement signed in July 2017 for a total price of EUR 65,000 of which EUR 5,000 received. The transaction for this farmland plot  is expected to be concluded immediately after the pre-emption right legal period is over. Such is expected to be finalised and the difference in price collected by October 2017.
• Ovidiu Town (No.3 on the list) was also sold and paid early August.
• Hospital plot (No.9 on the list): The Urbanization Certificates referring to the main building characteristics of the plot as well as that for the demolition of the old buildings, currently on the plot, have been obtained from the City Hall. The plot is offered for sale on the market at present.
• Ovidiu Lakeside (No. 1 on the list): the new planning permission (PUZ) was obtained on 2 August 2017.

Financial Results

• Net Result for the quarter was EUR 802,000 loss compared to a EUR 848,000 loss in 2Q 2016. Operating cash flow for the quarter was a negative EUR 2,182,000 compared to minus EUR 219,000 in the same period last year. The operational cash outflows include the income tax payment related to the sales closed in H1 2017.
• By the end of the quarter, the Company has a cash position of EUR 2.5 million plus the remainder of the seller's credit of about EUR 1.2 million and EUR 0.61 million from the recent, after quarter plot sales, totalling at about EUR 4.3 million or about EUR 0.10 per share.

Macro and real estate market highlights

• Romania recorded the biggest economic growth in the European Union of 5.7% in the second quarter compared to the same period of last year, according to Eurostat, the statistics office of the EU, published on the 17 August.
• According to the online real estate platform immobiliare.ro, asking prices in Romania registered an increase of 10.6% year on year. Still these prices are about 45% below peak prices in 2008. Prices in Constanta have reached to EUR 1,044 /sqm, a 9.2% increase year on year.

A recorded investor presentation will be made available tomorrow Friday 25 August at 10:00am CET at www.romreal.com