KBC Ancora closes financial year 2016/2017 with a profit of EUR 843.2 million, principally due to dividend income and reversal of impairments

8/31/2017, 8:00 PM (Source: GlobeNewswire)

Regulated information, Leuven, 31 August 2017 (20.00 hrs CEST)

KBC Ancora closes financial year 2016/2017 with a profit of EUR 843.2 million, principally due to dividend income and reversal of impairments

KBC Ancora recorded a profit of EUR 843.2 million in the financial year 2016/2017, equivalent to EUR 10.77 per share. This compares with a loss of EUR 21 million in the previous financial year. The result in the second half of the financial year was EUR 776 million, or EUR 9.91 per share.           
KBC Ancora's recurring result amounted to EUR 196.7 million. This was the product of dividend income from the participating interest in KBC Group (EUR 217 million), operating expenses (EUR 2.3 million) and interest charges (EUR 18.1 million).
In addition, KBC Ancora recorded a partial reversal of impairments of its participating interest in KBC Group (EUR 646.5 million). KBC Ancora does not take this non-recurring result into account in the calculation basis for dividend. KBC Ancora distributed an interim dividend of EUR 2.13 per share in June 2017 and, as announced earlier, will not distribute a final dividend.

The Board of Directors of Almancora Société de gestion, statutory manager of KBC Ancora SCA, hereby announces the annual figures for the financial year ended 30 June 2017, subject to the approval of the General Meeting of KBC Ancora Shareholders to be held on 27 October 2017.

Abridged financial summaries and notes[1]

Results for the financial year

  Fin. Year

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


(x EUR 1,000)
2015/2016
per share
(in EUR)
Income 863,630 11.03 99 0.00
Dividends from financial fixed assets 217,046 2.77 0 0.00
Reversal of impairment of financial fixed assets 646,487 8.26 0 0.00
Other income 98 0.00 99 0.00
Expenses 20,423 0.26 21,086 0.27
Cost of debt 18,132 0.23 18,833 0.24
Services and sundry goods 2,290 0.03 2,252 0.03
Other costs 1 0.00 1 0.00
Result after taxes 843,208 10.77 -20,987 -0.27
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 profit of EUR 843.2 million in the financial year 2016/2017, compared with a loss of EUR 21 million in the previous financial year. Income (EUR 863.6 million) principally comprised the dividend from the participating interest in KBC Group (EUR 217 million) and non-recurring income resulting from the partial reversal of impairments of the participating interest in KBC Group (EUR 646.5 million). Expenses (EUR 20.4 million) consisted mainly of the usual operating costs (EUR 2.3 million) and costs associated with debt (EUR 18.1 million).

Developments in the last six months of the financial year 2016/2017

Final dividend from participating interest in KBC Group

Following the publication of its annual results, KBC Group announced on 9 February 2017 that, after the distribution of the interim dividend of EUR 1.00 in November 2016, it would be paying a final dividend of EUR 1.80 per share in respect of the financial year 2016. As a result, KBC Ancora received dividend amounting to EUR 139.5 million on 11 May 2017, taking the total dividend income from the participating interest in KBC Group for the full financial year 2016/2017 to EUR 217 million.

KBC Ancora interim dividend

On 8 June 2017, KBC Ancora distributed an interim dividend of EUR 2.13 per share to its shareholders, amounting to a total of EUR 166.8 million. As already announced, KBC Ancora will not distribute a final dividend.

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

KBC Ancora did not buy or sell any KBC Group shares in the second half of the financial year, and holds 77,516,380 KBC Group shares.

On 31 March 2009, substantial impairments were applied to the participating interest in KBC Group in response to the impact of the financial crisis. The Board of Directors is of the opinion that the positive developments at the level of KBC Group allow for a reversal of a substantial proportion of these impairments of KBC Group shares. Specifically, the net book value is increased from EUR 31.5 per share to EUR 39.84 per share. This produces a non-recurring result of EUR 646.5 million. As announced in 2009, steps were taken to neutralise the impact of this non-recurring result on KBC Ancora's ability to distribute dividends.

The net asset value of the KBC Ancora share corresponds to 0.99 times the price of the KBC Group share, less the net debt[2] per share. KBC Ancora's net debt position as at 30 June 2017 stood at EUR 4,68 per share.
Based on the price of the KBC Group share on 30 June 2017 (EUR 66.41), the net asset value of one KBC Ancora share amounted to EUR 61.06, and the KBC Ancora share (EUR 42.825) was trading at a discount of 29.9% to the net asset value.

Based on the closing price of the KBC Group share on 30 August 2017 (EUR 68.62), the net asset value of one KBC Ancora share amounted to EUR 63.25, and the KBC Ancora share (EUR 45.23) was trading at a discount of 28.5% 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
(July 2016 - June 2017)
Trend in discount of KBC Ancora share to its net asset value (July 2016 - June 2017)
       

Result for the second half of the financial year 2016/2017

  2H FY

(x EUR 1,000)
2016/2017 per share
(in EUR)
2H FY

(x EUR 1,000)
2015/2016
per share
(in EUR)
Income 786,063 10.04 58 0.00
Dividends from financial fixed assets 139,529 1.78 0 0.00
Reversal of impairment of financial fixed assets 646,487 8.26 0 0.00
Other income 47 0.00 58 0.00
Expenses 10,044 0.13 10,550 0.13
Cost of debt 8,857 0.11 9,401 0.12
Services and sundry goods 1,186 0.02 1,149 0.01
Other costs 1 0.00 1 0.00
Result after taxes 776,019 9.91 -10,492 -0.13
Number of shares in issue*   78,301,314   78,301,314

In the second half of the financial year 2016/2017, KBC Ancora recorded a profit after tax of EUR 776 million. In the same period in the previous financial year, KBC Ancora recorded a loss of EUR 10.5 million.

Income (EUR 786.1 million) was principally determined by the following factors:

  • KBC Group distributed a final dividend of EUR 1.80 per share in May 2017, generating income of EUR 139.5 million for KBC Ancora. KBC Group did not distribute a dividend in the same period of the previous financial year.
  • The decision by the Board of Directors on 31 August 2017 to partially reverse the impairments applied to the participating interest in KBC Group led to an increase in the net book value per KBC Group share from EUR 31.5 per share to EUR 39.84 per share. This partial reversal of impairments generated a non-recurring result of EUR 646.5 million.

Expenses (EUR 10 million) were principally determined by the following factors:

  • The usual operating expenses amounted to EUR 1.2 million, in line with the previous financial year. Of this total, EUR 0.9 million relates to costs incurred within the cost-sharing agreement with Cera. Other costs relate among other things to listing fees, financial services and management costs.
  • The costs associated with debt amounted to EUR 8.9 million, EUR 0.5 million less than in the same period in the previous financial year.

Balance sheet as at 30 June 2017

(x EUR 1,000) 30.06.2017 30.06.2016 30.06.2015
BALANCE SHEET TOTAL 3,098,303 2,441,801 2,443,180
Assets      
Fixed assets 3,088,253 2,441,766 2,441,766
  Financial fixed assets 3,088,253 2,441,766 2,441,766
Current assets 10,050 35 1,414
Liabilities      
Capital and reserves 2,721,632 2,045,206 2,066,193
  Issued capital 2,021,871 2,021,871 2,021,871
  Legal reserve 48,693 7,541 7,541
  Unavailable reserves 650,117 35,955 35,955
  Profit (loss) carried forward 950 -20,161 826
Creditors 376,671 396,595 376,987
  Amounts falling due after more than one year 375,000 375,000 375,000
  Amounts falling due within one year 239 19,883 232
  Accruals and deferred income 1,432 1,712 1,755

Total assets stood at EUR 3.1 billion on 30 June 2017, an increase of EUR 656.5 million compared with the previous year.

The number of KBC Group shares in portfolio remained unchanged in the year under review. As at the balance sheet date, KBC Ancora had a total of 77,516,380 KBC Group shares in portfolio, The decision to partially reverse the impairments led to an increase in the net book value of these shares from EUR 31.5 to EUR 39.84 per share, in turn leading to an increase in the value of the participating interest in KBC Group of EUR 646.5 million, to EUR 3.1 billion. The stock market price of the KBC Group share on the balance sheet date was EUR 66.41.

Amounts owed to creditors fell by EUR 19.9 million in the year under review to EUR 376.7 million; EUR 375 million of this total comprised financial debt. Current assets increased by EUR 10 million.

After set-off of the loss carried forward from the previous financial year (EUR 20.2 million), the result available for appropriation amounted to EUR 823 million. The following appropriation of profit will be proposed to the General Meeting of Shareholders to be held on 27 October 2017:

  • addition of EUR 41.2 million (5% of the result available for appropriation) to the legal reserve;
  • addition of EUR 614.2 million to the unavailable reserves in order to neutralise the impact of the non-recurring result of EUR 646.5 million resulting from the partial reversal of impairments on KBC Ancora's ability to pay dividends. This amount represents 95% of the non-recurring result. The remaining 5% of the reversal of impairments is comprised in the increase in the legal reserve;
  • distribution of a dividend of EUR 166.8 million (EUR 2.13 per share), which was paid to shareholders as an interim dividend on 8 June 2017;
  • carry-forward of the balance of EUR 1 million, or EUR 0.01 per share, to the next financial year.

Notes on anticipated developments in the financial year 2017/2018

Costs within the cost-sharing agreement with Cera are expected to amount to approximately EUR 1.8 million. The total interest charge for the financial year 2017/2018 is estimated at approximately EUR 15.5 million. Other operating costs are likely to be around EUR 0.8 million.

During the Investor Event held in Ireland in June 2017, KBC Group reaffirmed its intention to aim for a dividend payout ratio (including the coupon on the outstanding Additional Tier-1 instruments) of at least 50% of the consolidated profit. Barring exceptional or unforeseen circumstances, KBC Group will distribute an interim dividend of EUR 1.00 per share in November, followed by a final dividend after the Annual General Meeting of Shareholders. The interim dividend will serve as an advance payment on the total dividend. In its press release dated 10 August 2017, KBC Group subsequently confirmed its intention to pay an interim dividend of EUR 1.00 per share to its shareholders on 17 November 2017.


Information on the external audit of the annual accounting data

The auditor, KPMG Réviseurs d'entreprises, represented by Olivier Macq, has issued an unqualified opinion on the financial statements and has confirmed that the accounting data included in this press release contain no obvious inconsistencies compared with the financial statements.

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

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:
26 September 2017    Annual Report 2016/2017 available and convocation to Annual General                                          Meeting of Shareholders
27 October 2017         Annual General Meeting of Shareholders
26 January 2018         Interim financial report (1H)
31 August 2018           Annual press release for the financial year 2017/2018

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



[1]               KBC Ancora's reporting is based on Belgian GAAP.

[2]               Net debt is defined here as the total liabilities less the total assets excluding financial assets.




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Source: KBC Ancora via Globenewswire

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