REG - Reconstruction CapII - Interim Unaudited Financial Statements
17/08/2022 15:30
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RNS Number : 3722W Reconstruction Capital II Ltd 17 August 2022
17 August 2022
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2022
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 2022.
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 2022, Reconstruction Capital II Limited ("RC2") had a total
unaudited net asset value ("NAV") of €26.5m or €0.1955 per share, which
represents a 0.83% fall since the beginning of the year.
As at 30 June 2022, RC2 and its subsidiary, RC2 (Cyprus) Ltd had cash and cash
equivalents of approximately €0.05m and receivables of €0.02m. As at 30
June 2022, RC2 had liabilities of €0.09m.
Operational highlights
Whilst Romania and Bulgaria continued to achieve strong year-on-year GDP
growth of 6.4% and 4.0%, respectively, during the first quarter of 2022, the
outbreak of war in neighbouring Ukraine at the end of February generated
supply chain disruptions and exacerbated food and energy price increases.
Consequently, inflationary pressures intensified in both countries, eroding
the purchasing power of consumers, and adding additional pressure on
companies' profitability margins as the prices of raw materials and utilities
experienced sharp increases. At the end of June, the annual inflation rate
reached 15.1% in Romania, and 16.9% in Bulgaria.
The Policolor Group generated operating revenues of €45.2m over the first
six months, slightly above budget and 8.8% above the €41.5m achieved during
the same period last year. Coatings sales of €25.3m were 4.2% above the same
period last year, but 8.0% below budget, mainly due to weak market demand due
to cost-of-living pressures on consumers. Sales of anhydrides reached
€6.0m, below the budgeted €6.7m, whilst resins sales of €16.9m were
29.2% above last year, and 20.0% above budget, driven by high market prices
for resins and strong demand from customers. Driven mainly by the coatings
business' gross margin underperforming the budget due to difficulties in
passing on raw material price increases to customers, the Group's recurring
six-month EBITDA came in at € 1.8m, significantly below both last year's
result and the budget target of €3.1m
Mamaia Resort Hotels reported excellent results for the first semester of
2022, significantly overperforming both its budget and last year's
performance. Operating revenues came in at €1.7m, 112.7% above budget and
55.3% higher year-on-year, driven by a better occupancy rate due to the Hotel
securing some long-term group occupancy contracts which started in the
off-season months. The six-month EBITDA of €0.3m compares to a budgeted
EBITDA loss of €-0.3m, mainly due to the higher revenues.
Telecredit continued its strong growth during the second quarter, having
deployed € 11.1m in financing products to small and medium-sized enterprises
over the first semester, 16.1% above budget and 70.7% higher year-on-year. The
company generated an Operating Profit before Depreciation and Interest Expense
of €383,000 over the period, 38.3% above budget and 176.0% above the result
achieved during the same period of 2021.
At the end of June, RC2 and RC2 (Cyprus) Ltd had cash and cash equivalents of
€0.2m, receivables of €0.1m, and short-term liabilities of €0.1m.
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Luca Nicolae
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 2022
On 30 June 2022, Reconstruction Capital II Limited ("RC2") had a total
unaudited net asset value ("NAV") of €26.5m or €0.1955 per share, which
represents a 0.83% fall since the beginning of the year.
Whilst Romania and Bulgaria continued to achieve strong year-on-year GDP
growth of 6.4% and 4.0%, respectively, during the first quarter of 2022, the
outbreak of war in neighbouring Ukraine at the end of February generated
supply chain disruptions and exacerbated food and energy price increases.
Consequently, inflationary pressures intensified in both countries, eroding
the purchasing power of consumers, and adding additional pressure on
companies' profitability margins as the prices of raw materials and utilities
experienced sharp increases. At the end of June, the annual inflation rate
reached 15.1% in Romania, and 16.9% in Bulgaria.
The Policolor Group generated operating revenues of € 45.2m over the first
semester, slightly above budget and 8.8% above the € 41.5m achieved during
the same period last year. Coatings sales of € 25.3m were 4.2% above the
same period last year, but 8.0% below budget, mainly due to weak market demand
due to cost-of-living pressures on consumers. Sales of anhydrides reached €
6.0m, below the budgeted € 6.7m, whilst resins sales of € 16.9m were 29.2%
above last year, and 20.0% above budget, driven by high market prices for
resins and strong demand from customers. Driven mainly by the coatings
business' gross margin underperforming the budget due to difficulties in
passing on raw material price increases to customers, the Group's recurring
six-month EBITDA came in at € 1.8m, significantly below both last year's
result and the budget target of € 3.1m
Mamaia Resort Hotels reported excellent results for the first semester of
2022, significantly overperforming both its budget and last year's
performance. Operating revenues came in at € 1.7m, 112.7% above budget and
55.3% higher year-on-year, driven by a better occupancy rate due to the Hotel
securing some long-term group occupancy contracts which started in the
off-season months. The six-month EBITDA of € 0.3m compares to a budgeted
EBITDA loss of € -0.3m, mainly due to the higher revenues.
Telecredit continued its strong growth during the second quarter, having
deployed € 11.1m in financing products to small and medium-sized enterprises
over the first semester, 16.1% above budget and 70.7% higher year-on-year. The
company generated an Operating Profit before Depreciation and Interest Expense
of € 383,000 over the period, 38.3% above budget and 176.0% above the result
achieved during the same period of 2021.
At the end of June, RC2 and RC2 (Cyprus) Ltd had cash and cash equivalents of
€ 0.22m, receivables of € 0.05m, and short-term liabilities of € 0.09m.
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2022
30 June 30 June 31 December
2022 2021 2021
EUR EUR EUR
Unaudited Unaudited Audited
Investment Income
Fair value loss on financial assets at
fair value through profit or loss (102,597) (2,100,354) 2,774,875
Interest income 257,916 2,112,394 3,197,478
Net investment income 155,319 12,040 5,972,353
Expenses
Operating expenses (394,892) (341,741) (725,459)
Net financial income/(expense) (35) 3 (11,595)
Total expenses (394,927) (341,738) (737,054)
(Loss)/profit for the period/year (239,608) (329,698) 5,235,299
Other comprehensive income - - -
Total comprehensive (loss)/profit for the period/year attributable to owners
(239,608) (329,698) 5,235,299
Earnings Per Share attributable to the owners of the Company
Basic and diluted earnings per share
(0.0018) (0.0024) 0.0385
STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
30 June 30 June 31 December
2022 2021 2021
EUR EUR EUR
Unaudited Unaudited Audited
ASSETS
Non-current assets
Financial assets at fair value through profit or loss
26,557,140 21,231,506 26,971,821
Total non-current assets 26,557,140 21,231,506 26,971,821
Current assets
Trade and other receivables 19,172 17,123 6,027
Cash and cash equivalents 46,438 37,502 11,301
Total current assets 65,610 54,625 17,328
TOTAL ASSETS 26,622,750 21,286,131 26,989,149
LIABILITIES
Current liabilities
Trade and other payables 91,174 67,664 205,685
Borrowings - - -
TOTAL LIABILITIES 91,174 67,664 205,685
NET ASSETS 26,531,576 21,218,467 26,783,464
EQUITY ATTRIBUTABLE TO OWNERS
Share capital 1,357,034 1,358,569 1,358,569
Share premium 109,196,034 109,206,779 109,206,779
Accumulated deficit (84,021,492) (89,346,881) (83,781,884)
TOTAL EQUITY 26,531,576 21,218,467 26,783,464
Net Asset Value per share
Basic and diluted net asset value per share 0.1955 0.1562 0.1971
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
Retained (deficit)/
Share
Share capital premium EUR earnings EUR Total EUR
EUR
Balance at 1 January (89,017,183) 21,548,165
2021
1,358,569 109,206,779
Loss for the (329,698) (329,698)
period
- - - -
Other comprehensive
income
- -
(329,698) (329,698)
Total comprehensive loss for the
period
- -
(89,346,881) 21,218,467
Balance at 30 June
2021
1,358,569 109,206,779
Profit for the 5,564,997 5,564,997
period
- - -
Other comprehensive
income
- -
5,564,997 5,564,997
Total comprehensive profit for the
period
- -
(83,781,884) 26,783,464
Balance at 31 December
2021
1,358,569 109,206,779
Loss for the (239,608) (239,608)
period
- - - -
Other comprehensive
income
- -
(239,608) (239,608)
Total comprehensive loss for the
period
- -
Repurchase and cancellation of own shares - (12,280)
(1,535) (10,745)
- (12,280)
Transactions with
owners
(1,535) (10,745)
(84,021,492) 26,531,576
Balance at 30 June
2022
1,357,034 109,196,034
CASH FLOW STATEMENT
For the six months ended 30 June 2022
30 June 30 June 31 December
2022 2021 2021
EUR EUR EUR
Unaudited Unaudited Audited
Cash flows from operating activities
(Loss)/profit before taxation (239,608) (329,698) 5,235,299
Adjustments for:
Fair value loss on financial assets at fair value
through profit or loss 102,597 2,100,354 (2,774,875)
Interest income (257,916) (2,112,394) (3,197,478)
Financial expenses - 11,035 11,035
Net (gain)/loss on foreign exchange 35 (3) (44)
Net cash outflow before changes in working
capital (394,892) (330,706) (726,063)
(Increase)/Decrease in trade and other receivables (13,145) (3,523) 7,573
(Decrease)/Increase in trade and other payables (114,511) (24,118) 113,902
Repayments of financial assets 570,000 780,085 1,210,085
Purchase of financial assets - - (210,000)
Net cash provided by/(used in) operating 47,452 421,738 395,497
Cash flows from financing activities
Payments to purchase own shares (12,280)
Proceeds from borrowings - 250,000 250,000
Repayment of loans from related party - (650,000) (650,000)
Interest paid - (17,312) (17,313)
Net cash flow (used in)/provided by financing (12,280) (417,312) (417,313)
Net increase/(decrease) in cash and cash
equivalents before currency adjustment 35,172 4,426 (21,816)
Effects of exchange rate differences on cash and cash
equivalents (35) 3 44
Net increase/(decrease) in cash and cash
equivalents after currency adjustment 35,137 4,429 (21,772)
Cash and cash equivalents at the beginning of the
period/year 11,301 33,073 33,073
Cash and cash equivalents at the end of the
period/year 46,438 37,502 11,301
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