DJ Final Results
Arricano Real Estate Plc (ARO)
Final Results
27-Apr-2020 / 11:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
27 April 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7
OF EU REGULATION 596/2014
Arricano Real Estate plc
("Arricano" or the "Company" or, together with its subsidiaries, the
"Group")
Audited Results for the 12 months ended 31 December 2019
Arricano is one of the leading real estate developers and operators of
shopping centres in Ukraine. It owns and operates five completed shopping
centres comprising over 147 ,900 sqm of gross leasable area and land for a
further three sites under development.
Highlights
· Recurring revenues increased by 18% to USD 37.3 million (2018: USD 31.5
million)
· Net operating income (excluding revaluation gains) increased by 17% to
USD 24.4 million (2018: USD20.9 million)
· The Company's portfolio was valued independently at USD 289.3 million as
at 31 December 2019 (2018: USD 258.5 million)
· Occupancy was 99.7% as at 31 December 2019
· As at 31 December 2019, total bank borrowings were USD 43.4 million
(2018: USD 36.3 million)
· As at 31 December 2019, total borrowings were USD 102.4 million (2018:
USD 96.5 million)
· Net asset value was USD 127.9 million as at 31 December 2019 (2018: USD
94.0 million)
· Ganna Chubotina appointed CEO
Post year-end
· COVID-19 pandemic has resulted in the temporary restrictions of customer
access to all 5 shopping and entertainment centres in March 2020 excluding
hypermarket and pharmacy outlets
· To offset the expected reduction in rental and ancillary income, the
Company has reduced costs across the business
· The Company at an advanced stage of negotiations with all its lenders to
restructure debt servicing schedules.
Ganna Chubotina, Chief Executive Officer of Arricano, commented:
"Arricano delivered a good trading performance in 2019 lifting rental income
by 18%. Significant progress was also made in refinancing the loans and
accessing new capital for the development of the Lukianivka shopping and
entertainment centre whilst achieving the highest tenant occupancy across
the existing portfolio of 99.7%.
More recently, COVID-19 has significantly disrupted the economy in Ukraine
and globally. Social distancing has been introduced with shopping centres
largely closed. Arricano is responding to the challenges caused by COVID-19,
working together as a team, to prepare for when businesses are allowed to
re-commence."
For further information please contact:
CEO:
Arricano Real Estate plc Tel: +357 25 582 535
Ganna Chubotina
Nominated Adviser and Broker:
WH Ireland Limited Tel: +44 (0)20 7220 1666
Chris Fielding
Financial PR: Tel: +44 (0)20 3151 7008
Novella Communications Limited
Tim Robertson/Fergus Young
Chairman's Statement
2019 was a successful year for Arricano. Our shopping centres were almost
fully let with vacancy of just 0.3% and this was achieved alongside an 18%
increase in turnover to USD37.3 million reflecting rental uplift. Also
during 2019, the Company raised USD40 million of new bank borrowings to
refinance the existing loans and support the development of the Lukianivka
shopping and entertainment centre in Kyiv and refinance existing loan
facilities.
Our commercial strategy led by recently appointed CEO, Ganna Chubotina, is
to continue to enhance the benefits of offline commerce, making the Arricano
malls, cozy, comfortable places that are genuine social spaces which
individuals and families are keen to visit not simply to shop but to enjoy
different experiences . The occupancy levels combined with the high visitor
numbers in 2019 show the success of this strategy and are further underlined
by the multiple retail awards won by the Company and the individual malls.
Amongst the awards achieved, Sun Gallery in Kryvyi Rih and City Mall in
Zaporizhzhia won the Ukrainian National Award "Consumer Choice - 2019" for
the best shopping malls in the respective cities. City Mall (Zaporizhzhia)
won the nomination for "The best shopping mall in a city with a population
of less than 1 million" in Retail & Development Business Awards 2019.
During the course of 2019, the Company announced the possible sale of Sun
Gallery and City Mall to Dragon Capital Group. However, prior to completing
a sale, the management team of Arricano developed upgraded strategies for
these centers which it is believed will further increase their value and
efficiency and the potential sale was cancelled. The Company is focused on
the sustainable development of new projects, historically the business has
opened a new mall every 1.5-2 years and this continues to be our target.
The three development sites covering 14 ha. in Lukyanivka (Kyiv), Petrivka
(Kyiv), and Rozumovska (Odesa) continue to be progressed. With the capital
from the new banking facilities, the highly innovative Lukianivka project
has made good progress and subject to COVID-19 is expected to be completed
in 2022.
The Company continues to pursue Stockman Interhold S.A. concerning the
ownership of Assofit, whish held the Sky Mall shopping centre and in which
Company holds a 49.97% shareholding.
In December 2019, the Company confirmed the appointment of Ganna Chubotina
as the CEO of Arricano. Ganna was previously the Director of the Company's
retail leasing department. Prior to working for Arricano, Ganna worked for
JLL Ukraine. She is a highly experienced manager and is working positively
across the team as we develop the business and meet the challenges posed by
COVID-19.
In line with guidance from the authorities, all 5 shopping and entertainment
centres were temporarily semi-closed in March 2020, with only hypermarket
and pharmacy outlets open for business. It is uncertain how long the
restrictions will be in place and the Company is working collaboratively to
reduce costs where appropriate and support tenants as far as possible so
that all stakeholders are in a position to re-open once the restrictions are
lifted.
On behalf of the Board I would like to thank every employee and stakeholder
of Arricano for their contribution in 2019. I would also like to commend
everyone for their positive response to the COVID-19 crisis and their
willingness to work together to support the business and their colleagues
during this unprecedented time.
The outlook for 2020 is now very different to the one we expected to look
forward to at the outset of the year. Importantly, we have a strong team and
good assets so that once we are through this crisis we expect to be well
placed to re-open our malls and welcome visitors back. Financially the
response to the crisis has been swift, the Company has reduced expenses
appropriately, largely suspended capital investment projects, apart from the
Lukianivka development, and is working with tenants to find equitable
solutions on rent collection. The Company is continuing discussions with all
its lenders to restructure debt servicing schedules.
Overall, the Board believes the Company has the financial flexibility to
meet its financial commitments and emerge from this crisis well-placed to
regain its position as premier provider of shopping and entertainment
experiences.
© 2020 Dow Jones News
