TIDMRC2
RNS Number : 8682W
Reconstruction Capital II Ltd
21 August 2020
21 August 2020
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2020
Reconstruction Capital II Limited ("RC2", the "Company" or the
"Group"), a closed-end investment company incorporated in the
Cayman Islands admitted to trading on the AIM market of the London
Stock Exchange, today announces its results for the six months
ended 30 June 2020.
Copies of the company's interim financial statements will today
be posted to shareholders. The interim report is also available on
the Company's website http://www. reconstructioncapital2.com/.
Financial highlights
On 30 June 2020, Reconstruction Capital II Limited ("RC2") had a
total unaudited net asset value ("NAV") of EUR19.5m or EUR0.1428
per share, which represents a 1.52% fall since the beginning of the
year.
As at 30 June 2020, RC2 had cash and cash equivalents of
approximately EUR10,000 while its subsidiary, RC2 (Cyprus) Ltd, had
cash and cash equivalents of EUR68,000. Additionally, RC2 (Cyprus)
Ltd had loan receivables from Telecredit and Mamaia Resort Hotels
of EUR 1.5m. As at 30 June 2020, RC2 had sundry liabilities of
EUR137,000.
Operational highlights
The Romanian and Bulgarian governments took timely measures to
contain the spread of COVID-19 when the numbers of cases and
fatalities were still relatively low compared to Western Europe.
Although these measures, which were stricter in Romania, seemed to
have suppressed the pandemic, once the restrictions in both
countries were gradually lifted in mid-May, the number of cases has
been rising to worrying levels with Romania and Bulgaria posting
two of the highest rates of new cases in South-East Europe. At the
end of July, Romania and Bulgaria were reporting 100 and 70
COVID-19 active cases per 100,000 inhabitants, respectively,
compared to 22 and 19 active cases at the end of May.
The Policolor Group's January-June 2020 sales results were up
3.4% year-on-year at EUR 31.2m, albeit 13.9% below budget. Sales of
coatings were badly affected by the COVID-19 pandemic and related
lockdown restrictions during April, but sales of both coatings and
resins have since recovered, making up some of the lost ground.
Over the first half of 2020, the Policolor Group generated a
recurring EBITDA (excluding revenues and expenses allocated to the
real estate division) of EUR 2m, in line with the budget, helped by
production efficiencies and operating cost savings.
Both Mamaia and Telecredit's operations have been badly affected
by the COVID-19 pandemic, and both management teams have prepared
revised budgets to reflect the estimated impact of the pandemic on
their respective businesses this year.
Following the finalization of the second phase of the renovation
works on its public areas, and due to the Romanian authorities
re-allowing open air restaurants to operate, the Mamaia hotel
re-opened at the beginning of June. However, it is still not
allowed to use its indoor restaurants, and is forced to restrict
its food and beverage service to its outdoor terrace, where social
distancing rules limit the number of customers. Management's
revised 2020 budget for the Hotel envisages total revenues of EUR
2.0m instead of an originally planned EUR 3.2m, and a net loss of
EUR -0.24m instead of an original estimated net profit of EUR
0.18m. In April, RC2 provided a EUR 0.3m loan to the Hotel to help
finalize its planned renovation works. The loan was fully drawn by
the end of May.
Telecredit deployed EUR 3.7m in financing products to small and
medium sized enterprises in the first semester, generating an
Operating Loss before Depreciation of EUR 0.2m due to increased
provisions expenses, reflecting the difficulties small and
medium-sized companies are currently facing due to the pandemic.
The revised 2020 budget prepared by management anticipates a net
loss of EUR 0.39m compared to an original estimated net profit of
EUR 0.06m, due to lower financing volumes generating lower interest
revenues (EUR 0.8m as opposed to an initial EUR 1m) and
significantly higher provisions on SME lending (EUR 0.2m as opposed
to an initial EUR 0.1m). The company reimbursed EUR 0.3m of the EUR
1.5m loan RC2 provided to Telecredit in the second half of
2019.
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Anca Moraru
Tel: +40 21 316 76 80
Grant Thornton UK LLP
(Nominated Adviser)
Philip Secrett
Tel: +44 (0) 20 7383 5100
finnCap Limited
(Broker)
William Marle / Giles Rolls
Tel: +44 20 7220 0500
ADVISER'S REPORT
For the six months ended 30 June 2020
On 30 June 2020, Reconstruction Capital II Limited ("RC2") had a total
unaudited net asset value ("NAV") of
EUR19.5m or EUR0.1428 per share, which represents a 1.52% fall since
the beginning of the year.
The Romanian and Bulgarian governments took timely measures to contain
the spread of COVID-19 when the numbers of cases and fatalities were
still relatively low compared to Western Europe. Although these measures,
which were stricter in Romania, seemed to have suppressed the pandemic,
once the restrictions in both countries were gradually lifted in mid-May,
the number of cases has been rising to worrying levels with Romania
and Bulgaria posting two of the highest rates of new cases in South-East
Europe. At the end of July, Romania and Bulgaria were reporting 100
and 70 COVID-19 active cases per 100,000 inhabitants, respectively,
compared to 22 and 19 active cases at the end of May.
The Policolor Group's January-June 2020 sales results were up 3.4%
year-on-year at EUR 31.2m, albeit 13.9% below budget. Sales of coatings
were badly affected by the COVID-19 pandemic and related lockdown
restrictions during April, but sales of both coatings and resins have
since recovered, making up some of the lost ground. Over the first
half of 2020, the Policolor Group generated a recurring EBITDA (excluding
revenues and expenses allocated to the real estate division) of EUR
2m, in line with the budget, helped by production efficiencies and
operating cost savings.
Both Mamaia and Telecredit's operations have been badly affected by
the COVID-19 pandemic, and both management teams have prepared revised
budgets to reflect the estimated impact of the pandemic on their respective
businesses this year.
Following the finalization of the second phase of the renovation works
on its public areas, and due to the Romanian authorities re-allowing
open air restaurants to operate, the Mamaia hotel re-opened at the
beginning of June. However, it is still not allowed to use its indoor
restaurants, and is forced to restrict its food and beverage service
to its outdoor terrace, where social distancing rules limit the number
of customers. Management's revised 2020 budget for the Hotel envisages
total revenues of EUR 2.0m instead of an originally planned EUR 3.2m,
and a net loss of EUR -0.24m instead of an original estimated net
profit of EUR 0.18m. In April, RC2 provided a EUR 0.3m loan to the
Hotel to help finalize its planned renovation works. The loan was
fully drawn by the end of May.
Telecredit deployed EUR 3.7m in financing products to small and medium
sized enterprises in the first semester, generating an Operating Loss
before Depreciation of EUR 0.2m due to increased provisions expenses,
reflecting the difficulties small and medium-sized companies are currently
facing due to the pandemic. The revised 2020 budget prepared by management
anticipates a net loss of EUR 0.39m compared to an original estimated
net profit of EUR 0.06m, due to lower financing volumes generating
lower interest revenues (EUR 0.8m as opposed to an initial
EUR 1m) and significantly higher provisions on SME lending (EUR 0.2m
as opposed to an initial EUR 0.1m). The company reimbursed EUR0.3m
of the EUR1.5m loan RC2 provided to Telecredit in the second half
of 2019.
As at 30 June 2020, RC2 had cash and cash equivalents of approximately
EUR10,000 while its subsidiary, RC2 (Cyprus) Ltd, had cash and cash
equivalents of EUR68,000. Additionally, RC2 (Cyprus) Ltd had loan
receivables from Telecredit and Mamaia Resort Hotels of EUR 1.5m.
As at 30 June 2020, RC2 had sundry liabilities of
EUR137,000.
New Europe Capital SRL
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2020
Investment Income 30 June 30 June 30 December
2020 2019 2019
EUR EUR EUR
Unaudited Unaudited Audited
Fair value loss on financial
assets at fair value through
profit or loss (2,113,199) (2,162,241) (14,482,512)
Interest Income 2,131,097 2,151,033 4,319,475
------------ ------------ -------------
Net Investment profit/loss 17,898 (11,208) (10,163,037)
------------ ------------ -------------
Expenses
Operating expenses (315,688) (443,456) (845,572)
Financial income - 255 255
------------ ------------ -------------
Total expenses (315,688) (443,201) (845,317)
------------ ------------ -------------
Loss for the period/year (297,790) (454,409) (11,008,354)
------------ ------------ -------------
Other comprehensive income - - -
------------ ------------ -------------
Total comprehensive loss for
the period/year attributable
to owners (297,790) (454,409) (11,008,354)
============ ============ =============
Earnings Per Share attributable
to the owners of the Company
Basic and diluted earnings per
share (0.0022) (0.0033) (0.0806)
STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
30 June 30 June 31 December
2020 2019 2019
EUR EUR EUR
Unaudited Unaudited Audited
ASSETS
Non-current assets
Financial assets at
fair value through profit
or loss 19,509,494 30,293,424 19,651,596
-------------- -------------- --------------
Total non-current assets 19,509,494 30,293,424 19,651,596
-------------- -------------- --------------
Current assets
Trade and other receivables 13,585 14,299 16,673
Cash and cash equivalents 10,200 100,964 65,887
-------------- -------------- --------------
Total current assets 23,785 115,263 82,560
-------------- -------------- --------------
TOTAL ASSETS 19,533,279 30,408,687 19,734,156
-------------- -------------- --------------
LIABILITIES
Current liabilities
Trade and other payables 134,275 109,949 37,362
TOTAL LIABILITIES 134,275 109,949 37,362
-------------- -------------- --------------
NET ASSETS 19,399,004 30,298,738 19,696,794
-------------- -------------- --------------
EQUITY ATTRIBUTABLE TO OWNERS
Share capital 1,358,569 1,362,569 1,358,569
Share premium 109,206,779 109,250,778 109,206,779
Accumulated deficit (91,166,344) (80,314,609) (90,868,554)
-------------- -------------- --------------
TOTAL EQUITY 19,399,004 30,298,738 19,696,794
-------------- -------------- --------------
Net Asset Value per share
Basic and diluted net asset
value per share 0.1428 0.2224 0.1450
-------------- -------------- --------------
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2020
Retained
Share (deficit)/
Share capital premium EUR earnings Total EUR
EUR EUR
Balance at 1 January 2019 1,403,324 109,862,098 (79,860,200) 31,405,222
Loss for the period - - (454,409) (454,409)
Other comprehensive income - - - -
-------------- ---------------
Total comprehensive loss
for the period
- - (454,409) (454,409)
-------------- ---------------
Repurchase and
cancellation of own shares
(40,755) (611,320) - (652,075)
-------------- ---------------
Transactions with owners
(40,755) (611,320) - (652,075)
-------------- ---------------
Balance at 30 June 2019
1,362,569 109,250,778 (80,314,609) 30,298,738
-------------- ---------------
Loss for the period - - (10,553,945) (10,553,945)
Other comprehensive income - - - -
-------------- ---------------
Total comprehensive loss
for the period
- - (10,553,945) (10,553,945)
-------------- ---------------
Repurchase and
cancellation of own shares
(4,000) (44,000) - (48,000)
-------------- ---------------
Transactions with owners
(4,000) (44,000) - (48,000)
-------------- ---------------
Balance at 31 December
2019 1,358,569 109,206,779 (90,868,554) 19,696,794
-------------- ---------------
Loss for the period - - (297,790) (297,790)
Other comprehensive income - - - -
-------------- ---------------
Total comprehensive loss
for the period
- - (297,790) (297,790)
-------------- ---------------
- -
Repurchase and cancellation
of own shares
- -
-------------- ---------------
- -
Transactions with owners -
-
-------------- ---------------
Balance at 30 June 2020
1,358,569 109,206,779 (91,166,344) 19,399,004
-------------- ---------------
CASH FLOW STATEMENT
For the six months ended 30 June 2020
30 June 30 June 31 December
2020 2019 2019
EUR EUR EUR
Unaudited Unaudited Audited
Cash flows from operating
activities
Loss before taxation (297,790) (454,409) (11,008,354)
Adjustments for:
Fair value loss on financial
assets at fair value
through profit or loss 2,113,199 2,162,241 14,482,512
Interest income (2,131,097) (2,151,033) (4,319,475)
Net gain on foreign exchange - (255) (255)
--------------- --------------- ---------------
Net cash outflow before changes
in working capital (315,688) (443,456) (845,572)
Decrease in trade and other
receivables 3,088 6,712 4,338
Increase/(decrease) in trade
and other payables 96,913 14,348 (58,233)
Purchase of financial assets - (133,602) (133,603)
Disposals and repayments
of financial assets 160,000 310,000 800,000
--------------- --------------- ---------------
Net cash used in operating
activities (55,687) (245,998) (233,070)
--------------- --------------- ---------------
Cash flows from financing
activities
Payments to purchase own
shares - (1,000,657) (1,048,662)
Redemptions of B shares - (132,941) (132,941)
--------------- --------------- ---------------
Net cash flow used in financing
activities - (1,133,598) (1,181,603)
--------------- --------------- ---------------
Net decrease in cash and
cash equivalents before currency
adjustment (55,687) (1,379,596) (1,414,673)
Effects of exchange rate
differences on cash and
cash equivalents - 255 255
--------------- --------------- ---------------
Net decrease in cash and
cash equivalents after currency
adjustment (55,687) (1,379,341) (1,414,418)
Cash and cash equivalents
at the beginning of the
period/year 65,887 1,480,305 1,480,305
--------------- --------------- ---------------
Cash and cash equivalents
at the end of the period/year 10,200 100,964 65,887
--------------- --------------- ---------------
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London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EAAPFASKEEFA
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August 21, 2020 09:00 ET (13:00 GMT)
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