Annual Report Presentation TK Development A/S

Annual Report Presentation
TK Development A/S
May 2004
Annual Report 2003/04
¾ In the 2003/04 financial year, TK Development recorded
a gross margin of DKK -624.0m and a result after
tax of DKK -722.8m.
¾ Previous forecast:
¾ Projected loss after tax in the DKK 200m range.
¾ Results would be dependent on both liquidity and
possible strategic agreements, and might turn out to
deviate significantly from the forecast.
2
Annual Report 2003/04
The deviation of actual results from the results forecast is attributable
to the decisions made by the Supervisory Board today:
1.
Conclusion of agreement with the Investment Fund for Central
and Eastern Europe regarding the restructuring of Euro Mall
Holding A/S :
- carrying on the company’s activities under a new strategy
- restoring the capital base
2.
Transfer of the Northern European projects to a new company to
be established under the name TKD Nordeuropa A/S, wholly owned
by TK Development A/S.
¾
3
New issue of subordinated loan capital expected.
Annual Report 2003/04
The negative departure from the results forecast is due mainly to:
4
1.
Writedown of the portfolio of projects not yet sold to a lower
estimated market value .
2.
Writedown of the portfolio of development sites, etc. to a
lower estimated sales price due to quick realization.
3.
Writedown of the portfolio of projects sold on which income
has been recognized. A number of projects sold at the design
stage will not be implemented.
Annual Report 2003/04
¾ The negative result is primarily attributable to writedowns in
respect of the activities in Central Europe.
¾ Highly unsatisfactory result, but a forward-looking solution to
the Group’s future operations has been found.
¾ A consolidated result of about DKK 0m after tax is anticipated
for the 2004/05 financial year.
5
Annual Report 2003/04
Focus of the individual divisions:
¾ Northern Europe:
Property development
¾ Central Europe:
Property investment
¾ TK Development:
Divestment
6
Annual Report 2003/04
TK Development A/S
•
•
•
•
Field’s
Germany
Russia
Northern European projects
handed over prior to 1 April
2004
Balance sheet total: DKK 2.6 billion
TKD Nordeuropa A/S
(TK: 100 %)
•
Development projects:
Denmark, Sweden, Finland
and the Baltic States
Balance sheet total: DKK 2.5 billion
7
Euro Mall Holding A/S
(TK: 80 %, Investment Fund 20 %)
•
•
•
Operation of centres
Completing development of
a small number of centres
Divestments
Balance sheet total: DKK 1.7 billion
Liquidity
Continued need for strong focus on liquidity:
Central Europe
The new strategy (including sale of development sites) will generate
sufficient liquidity to carry out the activities planned.
¾ Financing commitments have been given by the Group’s banks
for development projects.
Northern Europe
There will be adequate liquidity by virtue of
1. The new subordinated debenture loan
2. Commitments from the Group’s lenders to provide continued
financing for projects in progres.
3. A declaration of intent from lenders to provide financing for
future projects.
8
TK Development A/S
¾
The Parent Company, TK Development, has received
¾ A commitment for refinancing of the subordinated loan of
DKK 100m that matures in September 2004 .
¾
9
The business plan shows that there will be sufficient
means for making substantial repayments on loans during
the period covered by the business plan.
Cash and balance sheet management
Balance sheet total at 31 January 2004
DKK 6.8bn
Reduced by about DKK 800m since beg. of year
Expected reduction of project portfolio
over the next six months
approx. DKK 1.5bn
Equity at 31 January 2004:
Reduced by DKK 861m since beg. of year
Total capital resources:
DKK 574m
DKK 1,238m
Solvency based on total capital resources:
At 31 January 2004:
After reduction of project portfolio,
see above
10
18.3 %
approx. 23 %
Revised strategy
The background for redirecting the strategy in Central Europe is
Management’s expectations for:
¾ More stable market conditions
¾ Increasing investor interest
¾ Lower return requirements in the longer term
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Restructuring of Euro Mall Holding A/S
Main elements of the restructuring of Euro Mall Holding A/S:
¾ Change of strategy to development and property company.
Euro Mall Holding A/S will thus retain the fully-developed projects.
¾ Writedown of remaining activities with a view to fast realization,
concentrating the activities on cash-flow-generating activities.
¾ Capacity adjustment with major savings on capacity costs
(already initiated).
¾ Reconstruction of the equity of Euro Mall Holding A/S by converting
debt of DKK 450m into equity. New equity will be established by the
Investment Fund converting a DKK 90m subordinated loan into equity.
TK Development will contribute DKK 360m by converting intragroup
balances.
12
TKD Nordeuropa A/S
¾ All activities in
¾
¾
¾
¾
Denmark (excl. Field’s)
Sweden
Finland
Baltic States
to be transferred to a new company, TDK Nordeuropa A/S
¾ Purpose:
¾ Securing the necessary capital resources for developing existing and
new projects
¾ TKD Nordeuropa A/S will be wholly owned by TK Development A/S
¾ TKD Nordeuropa A/S will be a pure development company
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TKD Nordeuropa A/S
¾ Portfolio of about 60 development projects with a value of about
DKK 2.4bn, including profit on account at 31 January 2004
¾ Balance sheet total: about DKK 2.5bn
¾ Equity: DKK 300m
¾ Contribution of a subordinated loan of DKK 440m from TK
Development A/S
¾ Finally, a DKK 150-250m SUBORDINATED DEBENTURE LOAN will
be offered for subscription
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Outlook
Euro Mall Holding A/S
Positive operating result
TKD Nordeuropa A/S
Positive operating result
TK Development A/S
Negative operating result
Total Group
15
0
Conclusion
Unsatisfactory result, but:
¾
We have the banks’ backing for a forward-looking business plan
for both Central Europe and Northern Europe.
¾
We have now created a structure with a very clear separation
between our business units.
¾
We will be establishing capital and cash flow conditions to
enable us to undertake the projects we have in the pipeline.
16
Project developments
Northern Europe - Denmark
Field’s, Copenhagen
9 Field’s in Ørestad City opened
on 9 March 2004
9 Current occupancy rate:
95 %
9 Patronage and revenue live up
to expectations
9 Price: about DKK 1.5bn
9 Possible fluctuation margin:
DKK +50/-150m
9 The deal with CGI is expected
to be completed in May-June
2004 with an associated
payment to TK of about DKK
1.2bn
17
Project developments
Northern Europe - Denmark
Amerika Plads, Copenhagen
9 In Denmark, the 14,000 m²
headquarters building for the
law firm Plesner Svane
Grønborg was completed
and handed over in March
2004 according to plan. The
property has been sold to
Deka Immobilien Investment
GmbH for DKK 373m
18
Project developments
Northern Europe - Denmark
Amerika Plads, Copenhagen
9
19
Development of new site at Amerika
Plads, the Southern Free Port of
Copenhagen, is about to commence.
This is an integrated project consisting
of:
Serviced apartments hotel of about
8,500 m² for the Medina Group, which
will also acquire the hotel
Retail outlets of about 1,500 m², half of
which have been let and sold.
Underground parking facility of about
3,500 m², sold to Kommanditaktieselskabet Danlink Udvikling, which will
be responsible for the area’s overall
underground parking solution.
Housing of about 6,600 m², for which
building rights have been sold to the
NCC Group.
Project developments
Northern Europe - Denmark
Amerika Plads, Copenhagen
9 Amerika Plads comprises a
development area of about
100,000 m2, half of which is
to be used for housing. The
sale of rights to construct
dwellings is going according
to plan.
20
Project developments
Northern Europe - Denmark
Stuhrs Brygge, Aalborg
9 Construction work on the
building for KMD A/S
(formerly Kommunedata A/S)
at Stuhrs Brygge, Aalborg, is
expected to start in autumn
2004, with handing-over in
spring 2006.
9 The 26,000 m² building has
been sold to KMD A/S.
9 KMD will take over and pay
for the property as the project
progresses.
21
Project developments
Northern Europe - Denmark
Stuhrs Brygge, Aalborg
9 In Aalborg, a 9,600 m²
housing project is currently being developed
with the Essex Group as
end-investor. Construction
work started in April 2004.
Other sites are also being
developed, which will
result in a total development area of about
100,000 m2.
22
Project developments
Northern Europe - Denmark
The Kennedy Arcade, Aalborg
9 The Kennedy Arcade Centre
in Aalborg, whose tenants
include Dreisler, Nordisk
Film, the County of North
Jutland and the Municipality
of Aalborg, opened on 21
March 2004. The centre has
attracted a satisfactory
number of visitors since its
opening. The remaining
premises are expected to be
let by spring 2004.
23
Project developments
Northern Europe - Denmark
Gladsaxe:
• The shopping centre covers
7,500 m².
• Four tenants: Biva, Harald
Nyborg, T. Hansen (auto
equipment), Daells Bolighus.
• One Jet petrol station.
• The project was completed and
handed over in April 2004.
24
Project developments
Northern Europe - Sweden
Uppsala:
•
•
•
25
The 6,000 m2 project in
Uppsala was started up in
April 2004.
Tenants: Rusta, Intersport,
SOVA and Babyland.
Handing-over scheduled for
October 2004.
Project developments
Northern Europe - Finland
Hämeenlinna:
• The project covers 6,300 m².
26
•
Tenants include Jysk.
•
Sold via intermediary to
private Danish investors.
Project developments
Northern Europe - Finland
Pirkkala Retail Park:
• Three of the four phases of
Pirkkala Retail Park in
Tammerfors have been
handed over.
• Sold via intermediary to
private Danish investors.
27
Project developments
Central Europe - Poland
Microsoft:
• Headquarters building for
Microsoft in Warsaw was
handed over in December 2003.
28
•
About 9,500 m².
•
Property sold to international
investor.
Project developments
Central Europe – the Czech Republic
Optima Butovice:
• Started up in April 2004.
• Approx. 45,000 m².
• Ahold is hypermarket
operator.
• Current occupancy rate: 85
%.
• Expected opening:
November 2004.
• Framework agreement
concluded with ING Real
Estate Development for
acquisition of the project.
29
Project developments
Central Europe – the Czech Republic
Karlovy Vary:
• The construction of an 18,300
m² centre in Karlovy Vary will
commence in May 2004, with
Interspar as hypermarket
operator.
30
•
Current occupancy rate:
83 %.
•
Expected opening: Spring 2005.
Investment property in Central Europe
Karlovy Vary – CZ – 100%
31
Hradec - CZ – 20%
Brno – CZ - 20%
Sosnowiec – PL – 100%
Olomouc - CZ - 20%
Ostrava – CZ - 20%
Bydgoszcz – PL – 100%
Torun – PL – 66.7%
Košice – SK – 37.5%