KBC Ancora Interim Financial Report 2016/2017

1/27/2017, 5:40 PM (Source: GlobeNewswire)

Regulated information, Leuven, 27 January 2017 (17.40 hrs CET)

Interim Financial Report 2016/2017

KBC Ancora recorded a profit of EUR 67.2 million in the first half of the financial year 2016/2017. This compared with a loss of EUR 10.5 million for the same period in the previous financial year. This result was principally determined by the interim dividend distributed by KBC Group in November 2016, in combination with the usual operating costs and interest charges in the first half of each financial year.

Abridged financial summary and notes[1]

Results for the first half of the financial year 2016/2017

  1H fin. Year

(x EUR 1,000)
2016/2017
per share
(in EUR)
1H fin. Year

(x EUR 1,000)
2015/2016
per share
(in EUR)
Recurring financial profit/loss 68,242 0.87 -9,432 -0.12
Other recurring profit/loss -1,054 -0.01 -1,063 -0.01
Profit/loss from capital operations 0 0.00 0 0.00
Extraordinary profit/loss 0 0.00 0 0.00
Result before taxes 67,189 0.86 -10,495 -0.13
Result after taxes 67,189 0.86 -10,495 -0.13
Number of shares in issue*   78,301,314   78,301,314

* No instruments have been issued which could lead to dilution.

KBC Ancora recorded a positive result of EUR 67.2 million in the first six months of the current financial year, equivalent to EUR 0.86 per share, compared with a negative result of EUR 10.5 million in the same period in the previous financial year.
The result principally comprised the interim dividend distributed by KBC Group (EUR 77.5 million), interest charges on debt (EUR 9.3 million) and operating costs (EUR 1.1 million).


Balance sheet as at 31 December 2016

(x EUR 1,000) 31.12.2016 *30.06.2016
BALANCE SHEET TOTAL 2,498,531 2,441,801
Assets    
Fixed assets 2,441,766 2,441,766
  Financial fixed assets 2,441,766 2,441,766
Current assets 56,765 35
Liabilities    
Capital and reserves 2,112,394 2,045,206
  Issued capital 2,021,871 2,021,871
  Legal reserve 7,541 7,541
  Unavailable reserves 35,955 35,955
  Profit (loss) carried forward -20,161 -20,161
  Result for the period 67,189 0
Creditors 386,137 396,595
  Amounts falling due after more than one year 375,000 375,000
  Amounts falling due within one year 170 19,883
  Accruals and deferred income 10,967 1,712

* The balance sheet as at 30 June 2016 is shown after appropriation of profit.

The balance sheet total stood at EUR 2.5 billion, EUR 56.7 million higher than at the end of the financial year 2015/2016.

The number of shares held by KBC Ancora in KBC Group remained unchanged.

Capital and reserves rose by an amount equal to the positive result over the first six months of the year (EUR 67.2 million). Amounts owed to creditors reduced by EUR 10.5 million, while current assets rose by EUR 56.7 million.


Interim report on the first six months of the current financial year 2016/2017

Notes on the first half of the current financial year 2016/2017

Results for the first six months of the financial year 2016/2017

KBC Ancora recorded a positive result of EUR 67.2 million in the first six months of the current financial year, compared with a negative result of EUR 10.5 million in the same period in the previous financial year.

This result was influenced principally by the following elements:

  • Dividend income totalling EUR 77.5 million; as announced on 11 August 2016, KBC Group distributed an interim dividend in November 2016 of EUR 1.00 per KBC Group share.
  • Interest charges totalling EUR 9.3 million, EUR 0.2 million less than in the same period in the previous financial year.
  • Operating expenses amounting to EUR 1.1 million, in line with the previous financial year. The recurring operating expenses consisted primarily of costs incurred within the cost-sharing agreement with Cera (EUR 0.8 million). In addition, there were the usual costs such as listing fees (EUR 0.1 million) and management expenses (EUR 0.1 million).

Participating interest in KBC Group, net debt position and net asset value

The number of KBC Group shares in portfolio remained unchanged during the past six months at 77,516,380. KBC Ancora holds 0.99 KBC Group shares per KBC Ancora share in issue. The average book value of the KBC Group shares is EUR 31.5 per share.

KBC Ancora's net debt amounted to EUR 4.21 per share as at 31 December 2016, a reduction of EUR 0.85 per share compared with 30 June 2016. This reduction in net debt was due to the interim dividend distributed by KBC Group in November 2016. KBC Ancora's intention to distribute an (interim) dividend in early June 2017 will cause net debt to increase again.

The net asset value of one KBC Ancora share as at 31 December 2016 was thus equivalent to the price of 0.99 KBC Group shares less EUR 4.21. Based on the closing price of the KBC Group share on 31 December 2016 (EUR 58.83), the net asset value of one KBC Ancora share amounted to EUR 54.03, and the KBC Ancora share (EUR 39.775) was trading at a discount of 26.4% to the net asset value.

Based on the closing price of the KBC Group share on 26 January 2017 (EUR 61.25), the net asset value of one KBC Ancora share amounted to EUR 56.43, and the KBC Ancora share (EUR 41.845) was trading at a discount of 25.8% to the net asset value.


The following charts illustrate the movements in the price of the KBC Group and KBC Ancora shares and the discount of the KBC Ancora share to its net asset value.

Trend in KBC Group and KBC Ancora share price
(January - December 2016)
Trend in discount of KBC Ancora share to its net asset value (January - December 2016)
       

Principal risks and uncertainties in the remaining months of the financial year

Certain risk factors could have an impact on the value of the assets held by KBC Ancora and on its ability to distribute a dividend. Reference is made in this regard to the description of the risks in the most recent annual report (page 9).

KBC Group reported a net profit of EUR 1.74 billion for the first nine months of 2016. KBC Group will announce its annual result for the financial year 2016 on 9 February 2017.

In August 2016, KBC Group confirmed its dividend policy of applying a dividend payout ratio (including the coupon on the outstanding Additional Tier-1 instruments) of at least 50% of the consolidated profit. Following its Annual General Meeting in May 2017, KBC Group will distribute a final dividend which, together with the interim dividend distributed in November 2016, will constitute the total dividend in respect of the financial year 2016. 
                                                                                                                          
In addition to a final dividend received from KBC Group, KBC Ancora's result in the second half of the current financial year (2016/2017) will consist principally of interest charges plus the usual limited operating expenses (costs within the cost-sharing agreement with Cera, listing costs and management expenses).

Barring unforeseen circumstances, KBC Ancora will close the financial year 2016/2017 with a positive result. KBC Ancora intends to distribute its recurring result, after reconciliation of the loss carried forward of EUR 20.2 million and the addition to the legal reserve, as an interim dividend. The amount and the payment date of the interim dividend will be announced on 19 May 2017 (17.40 hrs CEST).


Declaration by the responsible individuals

"We, the members of the Board of Directors of Almancora Société de gestion, statutory manager of KBC Ancora SCA, hereby jointly declare that, in so far as we are aware:

  1. the abridged financial summaries, drawn up in accordance with the applicable standards for financial statements, present a true and fair picture of the capital position, financial position and results of KBC Ancora,
  2. the interim financial report presents a true and fair view of the key events and principal transactions with affiliated parties during the first six months of the current financial year and of their impact on the abridged financial summaries, as well as a description of the principal risks and uncertainties during the remaining months of the financial year."

Information on the external audit

The auditor has reviewed the interim financial information. The auditor's report is appended to this interim report.

                                                          ---------------------------------

KBC Ancora is a listed company which holds 18.5% of the shares in KBC Group and which together with Cera, MRBB and the Other Permanent Shareholders is responsible for the shareholder stability and further development of the KBC group. As core shareholders of KBC Group, these parties have signed a shareholder agreement to this effect.

Financial calendar:
19 May 2017 (17.40 hrs CEST)           Announcement of interim dividend (amount/payment date)
31 August 2017                                         Annual press release for the financial year 2016/2017
26 September 2017 (17.40 hrs CEST)     Annual Report 2016/2017 available
27 October 2017                                       General Meeting of Shareholders

This press release is available in Dutch, French and English on the website www.kbcancora.be.

KBC Ancora Investor Relations & Press contact: Jan Bergmans
Tel.: +32 (0)16 279672   
E-mail: jan.bergmans@kbcancora.be or mailbox@kbcancora.be


Appendix: Detailed balance sheet and profit and loss account with comparative figures

(x EUR 1,000) 31 December 2016 30 June 2016
BALANCE SHEET TOTAL 2,498,531 2,441,801
     
Assets    
Fixed assets 2,441,766 2,441,766
Financial fixed assets 2,441,766 2,441,766
  Companies with which there is a participatory relationship 2,441,766 2,441,766
   Participating interests 2,441,766 2,441,766
     
Current assets 56,765 35
Receivables due within one year 24 29
Cash at bank and in hand 56,742 0
Prepayments and accrued income 0 6
     
Liabilities    
Capital and reserves 2,112,394 2,045,206
Capital 2,021,871 2,021,871
  Issued capital 2,021,871 2,021,871
Reserves 43,496 43,496
  Legal reserve 7,541 7,541
  Unavailable reserves 35,955 35,955
Profit (loss) carried forward -20,161 -20,161
Profit (loss) for the period 67,189  
     
Creditors 386,137 396,595
Amounts falling due after more than one year 375,000 375,000
  Financial liabilities 375,000 375,000
  Credit institutions 375,000 375,000
Amounts falling due within one year 170 19,883
  Financial liabilities 0 19,662
  Credit institutions 0 19,662
  Trade creditors 128 151
  Suppliers 128 151
  Liabilities in respect of taxes,
 remuneration and social security costs
0 0
  Taxes 0 0
  Other creditors 42 70
Accruals and deferred income 10,967 1,712

(x EUR 1,000) 1 July.2016-
31 Dec.2016
1 July 2015-
31 Dec.2015
RESULTS 67,189 -10,495
     
Expenses 10,379 10,535
Cost of debt 9,274 9,432
Other financial expenses 0 0
Services and sundry goods 1,104 1,103
Miscellaneous current expenses 0 0
     
Income 77,567 41
Income from financial fixed assets 77,516 0
  Dividend 77,516 0
Income from current assets 0 0
Other financial income 0 0
Other current revenues 51 41
Gain on realisation of financial assets 0 0


Statutory auditor's report to the statutory manager of KBC Ancora Comm VA on the review of the condensed interim financial information as at 31 December 2016 and for the six-month period then ended

FREE TRANSLATION OF A REPORT ORIGINALLY PREPARED IN DUTCH

Introduction

We have reviewed the accompanying condensed statement of financial position of KBC Ancora Comm VA as at 31 December 2016 and the statement of profit or loss for the 6 month period then ended ("the condensed interim financial information"). The management body is responsible for the preparation and presentation of this condensed interim financial information in accordance with the financial reporting framework applicable in Belgium for interim financial information. Our responsibility is to express a conclusion on this condensed interim financial information based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information as at 31 December 2016 and for the six-month period then ended has not been prepared, in all material respects, in accordance with the financial reporting framework applicable in Belgium for interim financial information.

Brussels, 27 January 2017

KPMG Réviseurs d'Entreprises / Bedrijfsrevisoren
Statutory Auditor
represented by

Olivier Macq
Réviseur d'Entreprises / Bedrijfsrevisor



[1]               KBC Ancora's reporting is based on Belgian GAAP.
See Appendix for a detailed balance sheet and profit and loss account.




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