Atrium European Real Estate Limited

EANS-Adhoc: Atrium European Real Estate Limited
2016 RESULTS REFLECT CONTINUED STRONG PERFOMANCE ACROSS THE PORTFOLIO

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  Disclosed inside information pursuant to article 17 Market Abuse Regulation
  (MAR) transmitted by euro adhoc with the aim of a Europe-wide distribution.
  The issuer is solely responsible for the content of this announcement.
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annual result
22.03.2017


Atrium European Real Estate Limited

2016 RESULTS REFLECT CONTINUED STRONG PERFOMANCE ACROSS THE PORTFOLIO

Ad hoc announcement - Jersey, 22 March 2017. Atrium European Real Estate 
Limited (VSE/ Euronext: ATRS) ("Atrium" or the "Company" and together with its 
subsidiaries, the "Group"), a leading owner, operator and redeveloper of
shopping centres and retail real estate in Central and Eastern Europe, announces
its results for the fourth quarter and year ended 31 December 2016. 

Key Highlights
- LFL NRI momentum up 1.8% excluding Russia, driven by portfolio quality uplift
- Positive  operational results, operating margin at 95.4% and occupancy rate
  at 96.6%
- Profit growth before tax up EUR104m
- Strong progress in the redevelopment and extension programme, initiatives to 
  add 70,000 sqm of new GLA by 2020 (7,600 sqm added in 2016), focussed on
  Warsaw
- Major milestone reached in March 2017 with a framework agreement signed to
  resolve the vast majority of the Austrian legacy issues
- Cost saving programme of EUR10m per annum from 2018 onwards in administrative
  costs as a result of the signing of the legacy arrangement and identified
  operational efficiencies
- A balance sheet well positioned to support future growth

Business review
- Profit before taxation was EUR72.6m for the year, reflecting an increase of
  EUR103.5m compared to a loss of EUR30.9m for 2015 - primarily driven by a 
  EUR14.5m revaluation (compared to a EUR104.7m devaluation last year, mainly 
  due to Russia) offset by a EUR20m increase in administration expenses, 
  largely due to higher legacy legal costs and provision
- Group NRI was EUR188.8m (2015: EUR197.9m) with EPRA like-for-like NRI of 
  EUR156.6m (2015: EUR160.3m) impacted by a EUR5.9m or 15.0% reduction in 
  income in Russia (Q4 '16: -3.0%)
- Group operating margin remained healthy at 95.4% (2015: 96.4%)
- Occupancy rate steady at 96.6% (31 December 2015: 96.7%)
- Company adjusted EPRA earnings per share was 31.4 EURcents (2015: 33.3 
  EURcents) 
- EBITDA, excluding revaluation and disposals, impairments and legacy legal
  matters was EUR162.2m (2015: EUR174.0m) reflecting the disposal of non-core 
  assets and a reduction in income from Russia  
- Value of the Group's portfolio of 60 standing investments stood at EUR2.6
  billion after strategic portfolio sales (31 December 2015: 77: EUR2.7 billion)
- EPRA net asset value ("NAV") per share was EUR5.39 (31 December 2015: EUR5.64
  following the payment of a 14.0 EURcents special dividend in September and 
  including three quarterly dividends of 6.75 EURcents
- Consistent annual dividend of EURcents 27 per share approved for 2017 with the
  first quarterly dividend of 6.75 EURcents per share due to be paid as a 
  capital repayment on 31 March to shareholders on the register at 24 March, 
  with an ex dividend date of 23 March 2017

Significant progress with portfolio repositioning during 2016 and into 2017:
- Redevelopment and extension programme driving future higher quality cash flow

    - 7,600 sqm extension at Atrium Promenada successfully completed and opened,
      with ongoing works to add a further 13,400 sqm
    - A 8,600 sqm GLA extension has commenced at Atrium Targowek
    - These Polish projects are part of a wider redevelopment pipeline which 
      will deliver almost 70,000 sqm of new GLA to the Group's portfolio and 
      make a significant contribution to the continued drive for more 
      sustainable income growth

- Disposals to further focus portfolio on higher quality assets
    - Disposal of a EUR102.6m portfolio of ten retail assets in the Czech 
      Republic completed in February 2016, reflecting an 8% premium to fair 
      value  
    - Framework agreement signed in April 2016 for the EUR10m sale of two land 
      plots in Russia
    - EUR17.5m sale in June 2016 of three smaller Polish assets and the 
      EUR12.5m disposal of Atrium Azur in October 2016, when the Group exited 
      Latvia, both achieved at slightly above fair value, in line with previous 
      disposals


Financing transactions provide balance sheet strength and flexibility
- Voluntary repayment of a EUR49.5m bank loan in Poland completed in March 2016 
- 84% of the Group's standing investments are unencumbered as at 31 December 
  2016
- EUR17m nominal value of bonds due in 2020 and 2022 repurchased in April 2016
- EUR175m of unsecured revolving credit facilities now available following the 
  signing of a EUR25m increase in Q4 2016
- As at 31 December 2016 Gross LTV and Net LTV were 32.3% and 28.7% 
  respectively. The Company remains conservatively leveraged and well placed to 
  support future redevelopments and growth opportunities as they arise

New milestone in resolving legacy issues
- In January 2016, the Company announced the resolution of the Dutch litigation 
  and the establishment of a compensation fund which was in place through to 
  October 2016 and resulted in expected compensation payments of EUR11m in 
  respect of some 1,650 submissions (of which Atrium bears 50%)
- Major positive milestone reached in March 2017 with a framework agreement to 
  resolve the vast majority of the Austrian legacy issues with a maximum 
  related payment of EUR44m and an increase in the provision by approximately 
  EUR32m. 

Management changes
- Liad Barzilai appointed Chief Executive Officer of the Group as of 23 
  February 2017, following the resignation of Josip Kardun   

Commenting on the results, Liad Barzilai, Group CEO, said:  "Our results today 
reflect both the improvement of the portfolio and the strengthening of our 
balance sheet, which provide the Group with a strong platform for growth in the 
coming year. 

"Our redevelopment and extension programme is progressing well and we have a
healthy pipeline of opportunities that will help us to deliver higher quality
and sustainable income in future years.

"Furthermore, the significant progress made towards resolution of our legacy
issues and the associated cost reduction, together with cost savings from
improved operational efficiencies will add approximately EUR10m of EBITDA
annually and put us in a position to look forward positively to the years ahead
and creating further value for our shareholders. 

"Having only taken up the role of CEO in February, I would like to thank my
colleagues at Atrium for their contribution to another robust set of year-end
results."

This announcement is a summary of, and should be read in conjunction with, the
full version of the Group's Q4 2016 results, which can be found on the Company
page of the Vienna Börse website at http://en.wienerborse.at/ and on the Group's
page of the Euronext Amsterdam website, www.euronext.com or on the Group's
website at www.aere.com. 

Further information can be found on the Company's website www.aere.com or from: 
Analysts: 
RLee@aere.com 

Press & Shareholders: 
FTI Consulting Inc 
+44 (0)20 3727 1000 
Richard Sunderland 
Claire Turvey 
Ellie Sweeney 
atrium@fticonsulting.com 


The Company is established as a closed-end investment company incorporated and
domiciled in Jersey and regulated by the Jersey Financial Services Commission as
a certified Jersey listed fund, and is listed on both the Vienna Stock Exchange
and the Euronext Amsterdam Stock Exchange. Appropriate professional advice
should be sought in the case of any uncertainty as to the scope of the
regulatory requirements that apply by reason of the above regulation and
listings. All investments are subject to risk. Past performance is no guarantee
of future returns. The value of investments may fluctuate. Results achieved in
the past are no guarantee of future results.


Further inquiry note:
For further information:
FTI Consulting Inc.:
+44 (0)20 3727 1000
Richard Sunderland
Claire Turvey
Richard.sunderland@fticonsulting.com

end of announcement                               euro adhoc 
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issuer:      Atrium European Real Estate Limited
             Seaton Place 11-15
             UK-JE4 0QH  St Helier Jersey / Channel Islands 
phone:       +44 (0)20 7831 3113
mail:     richard.sunderland@fticonsulting.com
WWW:      http://www.aere.com
sector:      Real Estate
ISIN:        JE00B3DCF752
indexes:     Standard Market Continuous
stockmarkets: official market: Wien, stock market: Luxembourg Stock Exchange 
language:   English
 

 


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