TIDMRC2
RNS Number : 8026I
Reconstruction Capital II Ltd
17 August 2021
17 August 2021
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2021
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 2021.
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 2021, Reconstruction Capital II Limited ("RC2") had a
total unaudited net asset value ("NAV") of EUR21.2m or EUR0.1562
per share, which represents a 1.53% fall since the beginning of the
year.
As at 30 June 2021, RC2 and its subsidiary, RC2 (Cyprus) Ltd had
cash and cash equivalents of approximately EUR0.37m. Additionally,
RC2 (Cyprus) Ltd had loan receivables from Telecredit and Mamaia
Resort Hotels of EUR 0.45m. As at 30 June 2021, RC2 had sundry
liabilities of EUR0.07m.
Operational highlights
Both the Romanian and Bulgarian economies have proven to be
relatively resilient to the ongoing Covid-19 pandemic, with their
first quarter GDPs growing by 2.8% and 2.5%, respectively, over the
quarter, compared to an average EU of 0.1%.
The pandemic itself seems to have subsided in Romania and
Bulgaria, with the number of daily new cases falling from 1,400 and
600, respectively, at the beginning of May, to 150 and 100, at the
end of July. Due to the fall in cases, most Covid-19 related
restrictions were lifted in both countries. However, the number of
daily new cases has started to creep up again, reaching 240 and 400
in Romania and Bulgaria, respectively, at the beginning of August.
Romania and Bulgaria are particularly vulnerable to a resurgence of
the pandemic, due to them having the lowest vaccination rates in
the EU, with only 31.5% and 19.2% of their eligible populations,
respectively, having received at least one dose, compared to an EU
average of 71%.
The Policolor Group had a good performance in the first 6 months
of 2021 with sales at EUR 41.2m, mainly helped by
better-than-expected sales results from the resins and chemicals
divisions, whose combined sales were 63.8% above the budget. On the
other hand, the coatings division posted first half year sales 6.7%
below budget, mainly due to weaker demand as consumers re-oriented
their spending away from home improvement due to the easing of
covid related restrictions. Helped by higher resins and chemicals
sales and improved cost controls, the Group posted recurring EBITDA
of EUR 2.6m, higher than the budgeted EUR 2.1m.
Mamaia Resort Hotels achieved first semester revenues of EUR 1m,
or 14% above budget, which resulted in a six-month 2021 EBITDA loss
of EUR -0.1m, compared to a budgeted loss of EUR -0.2m. The
over-performance was mainly due to a contract signed with an
international organization covering the low season first four
months of the year. The bulk of the Hotel's revenues and profits
are typically generated during the high season months of July and
August.
Telecredit deployed EUR 6.5m in financing products to small and
medium sized enterprises over the first semester, which was 4%
below budget. However, the company turned profitable at operating
level in the second quarter, having generated an Operating Profit
before Depreciation of EUR 143,000 over the period, compared to a
first quarter loss of EUR 8,000.
http://www.rns-pdf.londonstockexchange.com/rns/8026I_1-2021-8-16.pdf
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Anca Moraru
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 2021
On 30 June 2021, Reconstruction Capital II Limited ("RC2") had a total
unaudited net asset value ("NAV") of EUR 21.2m or EUR 0.1562 per share,
which represents a 1.53% fall since the beginning of the year.
Both the Romanian and Bulgarian economies have proven to be relatively
resilient to the ongoing Covid-19 pandemic, with their first quarter
GDPs growing by 2.8% and 2.5%, respectively, over the quarter, compared
to an average EU of 0.1%.
The pandemic itself seems to have subsided in Romania and Bulgaria,
with the number of daily new cases falling from 1,400 and 600, respectively,
at the beginning of May, to 150 and 100, at the end of July. Due to
the fall in cases, most Covid-19 related restrictions were lifted
in both countries. However, the number of daily new cases has started
to creep up again, reaching 240 and 400 in Romania and Bulgaria, respectively,
at the beginning of August. Romania and Bulgaria are particularly
vulnerable to a resurgence of the pandemic, due to them having the
lowest vaccination rates in the EU, with only 31.5% and 19.2% of their
eligible populations, respectively, having received at least one dose,
compared to an EU average of 71%.
The Policolor Group had a good performance in the first 6 months of
2021 with sales at EUR 41.2m, mainly helped by better-than-expected
sales results from the resins and chemicals divisions, whose combined
sales were 63.8% above the budget. On the other hand, the coatings
division posted first half year sales 6.7% below budget, mainly due
to weaker demand as consumers re-oriented their spending away from
home improvement due to the easing of covid related restrictions.
Helped by higher resins and chemicals sales and improved cost controls,
the Group posted recurring EBITDA of EUR 2.6m, higher than the budgeted
EUR 2.1m.
Mamaia Resort Hotels achieved first semester revenues of EUR 1m, or
14% above budget, which resulted in a six- month 2021 EBITDA loss
of EUR -0.1m, compared to a budgeted loss of EUR -0.2m. The over-performance
was mainly due to a contract signed with an international organization
covering the low season first four months of the year. The bulk of
the Hotel's revenues and profits are typically generated during the
high season months of July and August.
Telecredit deployed EUR 6.5m in financing products to small and medium
sized enterprises over the first semester, which was 4% below budget.
However, the company turned profitable at operating level in the second
quarter, having generated an Operating Profit before Depreciation
of EUR 143,000 over the period, compared to a first quarter loss of
EUR 8,000.
At the end of June, RC2 and RC2 (Cyprus) Ltd had cash and cash equivalents
of EUR 0.37m, loan receivables from Telecredit and Mamaia Resort Hotels
of EUR 0.45m, and short-term liabilities of EUR 0.07m. Telecredit
reimbursed a net amount of EUR 1.05m to RC2 during the first semester,
leaving an outstanding balance of EUR 0.15m. The shareholder loan
to RC2 from Portadrix Investments Limited was fully repaid in the
second quarter, resulting in RC2 being debt-free at the end of June.
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2021
30 June 30 June 31 December
2021 2020 2020
EUR EUR EUR
Unaudited Unaudited Audited
Investment
Income
Fair value loss on financial
assets at
fair value through profit
or loss (2,100,354) (2,113,199) (1,752,486)
Interest income 2,112,394 2,131,097 4,280,442
--------------- --------------- ---------------
Net
investment income 12,040 17,898 2,527,956
--------------- --------------- ---------------
Expenses
Operating
expenses (341,741) (315,688) (660,299)
Net financial income/(expense) 3 - (16,286)
--------------- --------------- ---------------
Total
expenses (341,738) (315,688) (676,585)
--------------- --------------- ---------------
(Loss)/profit for the
period/year (329,698) (297,790) 1,851,371
--------------- --------------- ---------------
Other comprehensive - - -
income
--------------- --------------- ---------------
Total comprehensive (loss)/profit
for the period/year attributable
to owners (329,698) (297,790) 1,851,371
--------------- --------------- ---------------
Earnings Per Share attributable
to the owners of the Company
Basic and diluted earnings
per share (0.0024) (0.0022) 0.0136
--------------- --------------- ---------------
STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
30 June 30 June 31 December
2021 2020 2020
EUR EUR EUR
Unaudited Unaudited Audited
ASSETS
Non-current assets
Financial assets at fair
value through profit or
loss 21,231,506 19,509,494 21,999,552
--------------- --------------- ---------------
Total non-current
assets 21,231,506 19,509,494 21,999,552
--------------- --------------- ---------------
Current assets
Trade and other receivables 17,123 13,585 13,600
Cash and cash equivalents 37,502 10,200 33,073
--------------- --------------- ---------------
Total current assets 54,625 23,785 46,673
--------------- --------------- ---------------
TOTAL ASSETS 21,286,131 19,533,279 22,046,225
--------------- --------------- ---------------
LIABILITIES
Current
liabilities
Trade and other payables 67,664 134,275 91,782
Borrowings - - 406,278
--------------- --------------- ---------------
TOTAL LIABILITIES 67,664 134,275 498,060
--------------- --------------- ---------------
NET ASSETS 21,218,467 19,399,004 21,548,165
--------------- --------------- ---------------
EQUITY ATTRIBUTABLE TO OWNERS
Share
capital 1,358,569 1,358,569 1,358,569
Share premium 109,206,779 109,206,779 109,206,779
Accumulated deficit (89,346,881) (91,166,344) (89,017,183)
--------------- --------------- ---------------
TOTAL EQUITY 21,218,467 19,399,004 21,548,165
--------------- --------------- ---------------
Net Asset Value per share
Basic and diluted net asset
value per share 0.1562 0.1428 0.1586
--------------- --------------- ---------------
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June
2021
Share Retained
(deficit)/
Share capital premium earnings Total EUR
EUR EUR EUR
Balance at 1 January 2020 1,358,569 109,206,779 (90,868,554) 19,696,794
Loss for the period - - (297,790) (297,790)
Other comprehensive income - - - -
-------------- ----------------
Total comprehensive
loss for the period
- - (297,790) (297,790)
-------------- ----------------
Balance at 30 June
2020 1,358,569
109,206,779 (91,166,344) 19,399,004
-------------- ----------------
Profit for the period - - 2,149,161 2,149,161
Other comprehensive income - - - -
-------------- ----------------
Total comprehensive
profit for the
period -
- 2,149,161 2,149,161
-------------- ----------------
Balance at 31
December 2020
1,358,569
109,206,779 (89,017,183) 21,548,165
-------------- ----------------
Loss for the period - - (329,698) (329,698)
Other comprehensive income - - - -
-------------- ----------------
Total comprehensive
loss for the period
- - (329,698) (329,698)
-------------- ----------------
Balance at 30 June
2021 1,358,569
109,206,779 (89,346,881) 21,218,467
-------------- ----------------
CASH FLOW STATEMENT
For the six months ended 30 June 2021
30 June 30 June 31 December
2021 2020 2020
EUR EUR EUR
Unaudited Unaudited Audited
Cash flows from operating activities
(Loss)/profit before taxation (329,698) (297,790) 1,851,371
Adjustments for:
Fair value loss on financial
assets at fair value
through profit or loss 2,100,354 2,113,199 1,752,486
Interest income (2,112,394) (2,131,097) (4,280,442)
Financial expenses 11,035 - 6,278
Net (gain)/loss on foreign exchange (3) - 8
--------------- --------------- ---------------
Net cash outflow before changes
in working
capital (330,706) (315,688) (670,299)
(Increase)/Decrease in trade
and other receivables (3,523) 3,088 3,073
(Decrease)/Increase in trade
and other payables (24,118) 96,913 54,420
Disposals and repayments of
financial assets 780,085 160,000 180,000
--------------- --------------- ---------------
Net cash provided by/(used in)
operating 421,738 (55,687) (432,806)
--------------- --------------- ---------------
Cash flows from financing activities
Proceeds from borrowings 250,000 - 400,000
Repayment of loans from related
party (650,000) - -
Interest paid (17,312) - -
--------------- --------------- ---------------
Net cash flow (used in)/provided
by financing (417,312) - 400,000
--------------- --------------- ---------------
Net increase/(decrease) in cash
and cash
equivalents before currency
adjustment 4,426 (55,687) (32,806)
Effects of exchange rate differences
on cash and cash
equivalents 3 - (8)
--------------- --------------- ---------------
Net increase/(decrease) in cash
and cash
equivalents after currency adjustment 4,429 (55,687) (32,814)
Cash and cash equivalents at
the beginning of the
period/year 33,073 65,887 65,887
--------------- --------------- ---------------
Cash and cash equivalents at
the end of the
period/year 37,502 10,200 33,073
--------------- --------------- ---------------
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