OREANDA-NEWS. Acme Corporation SIA (hereinafter - ‘the Company’ or ‘Acme Corporation’) and its subsidiaries (hereinafter - ‘the Group’) invest in the operation and management of rental real estates (offices, retail and land development) in Latvia. As at 31 December 2015 Acme Corporation was the parent for three Latvian registered limited liability companies - Neatkar?g? patentu a?ent?ra SIA (office anchored real estate), Big Truck SIA (logistic development) and Slokas 161 SIA (retail anchored real estate).

In October 2014 management signed a share purchase agreement for the sale of subsidiaries Apex Investments SIA (Apex Investments) and Tukums Projekts SIA (Tukuma Projekts) to Hili Properties BV. The sale concluded on 30 January 2015.

Due to the fact that the Group has positive equity and positive net margin, there are no further doubts about its going concern position.

In both office and retail segments rents were stable. Delinquent rents are being well managed at the moment by our property manager.

For the year ended 2015 the Latvian statistics service report inflation at 0.2%. For this reason the Group will be in a position to upward revise rent charges in 2016, where applicable, only marginally.

Retail

At the end of January 2015 Apex Investments and Tukums Projekts were sold.

A separate company SIA Slokas 161 (Slokas 161) for the Slokas property was established early in January 2015 since management did not want to mix grocery anchored retail with other anchored retail. Transfer of Slokas property from Apex Investments to Slokas 161 took place in January 2015. During the year Slokas 161 signed a lease agreement with Lemon Gym for the development of 800 meters of space. The lease will require approximately EUR 150 000 of capital investment. This lease will have a positive impact on the cash flow.

Office

For our offices gross rent has settled to a market rate of EUR 11.00 to EUR 12.00 per square meter per month. There are some historical outliers to the current market rate pulling the offices average below current market. At Citadeles iela 12 the remaining 400 vacant meters have been leased. To prepare the space for occupancy EUR 80 000 will need to be invested.

Land

Management has engaged an architectural firm to prepare the detailed planning for the property. Detailed planning is expected to be complete during 2016.

Bond

Acme Corporation has made four quarterly repayment of principal to bondholders of record for 2015. Acme Corporation has made all coupon payments on the bonds to date.

During the year a subsidiary of Acme has purchased 3,805 bonds. Acme now directly or indirectly via a subsidiary owns 4,205 bonds. There remain 825 bonds outstanding and free floating on the Riga exchange at close of 2015.

Senior Debt

In March 2015 the debt pertinent to continuing operations was extended until February 2018.

At the time of writing one month EURIBOR is quoted at approximately minus 0.34%. Management has agreed with our Senior lender that our debt has a floor of zero percent. These rates are unprecedentedly low and have positive impact onto the cash flow.

The Group still is focused on conserving its cash flow and internally developing its portfolio. With this in mind, the group has agreed the purchase of Mui?as Parks SIA in order to gain 100% control of the development land in Kekava parish. Nevertheless, the Group is now positive about acquisitions that can add synergy and net positive results to the group as a whole.  

 

Note   2015 2014
    EUR EUR
  CONTINUING OPERATIONS    
15 Revenue 1 280 068 1 220 469
16 Cost of sales (706 016) (588 411)
6 (Impairment charge)/ reversal of impairment charge on non-financial assets (391 500) 2 331 654
  Gross profit 182 552 2 963 712
       
  Selling expenses (23 023) (15 098)
17 Administrative expenses (101 530) (59 148)
  Other operating income 8 181 618
18 Other operating expenses (236 045) (61 134)
  Operating profit/ (loss) (169 865) 2 828 950
       
19 Finance income 2 762 562 228 029
20 Finance costs (332 840) (531 214)
  Profit before income tax 2 259 857 2 525 765
       
21 Income tax  (42 240) (362 493)
  Profit for the year from continuing operations 2 217 617 2 163 272
       
  DISCONTINUED OPERATIONS    
4 Profit for the year from discontinued operations 13 035 497 55 672
  PROFIT FOR THE YEAR 15 253 114 2 218 944
  Other comprehensive income - -
  Total comprehensive income for the year 15 253 114 2 218 944
       
  Attributable to:    
  Equity holders of the Company 15 253 114 2 218 944
       

 

Note   31.12.2015 31.12.2014
    EUR EUR
  ASSETS    
  Non-current assets    
5 Property, plant and equipment 144 647 104 492
6 Investment property 12 228 446 13 005 544
7 Loans - 8 860
  Other financial assets - 4 000
    12 373 093 13 122 896
  Current assets    
4 Assets held for sale - 10 070 803
  Inventory 56 -
8 Trade receivables 16 697 8 543
  Current income tax assets 50 184 -
7 Loans 9 125 3 876
9 Other debtors 482 401 49 660
10 Cash and cash equivalents 226 757 170 150
    785 220 10 303 032
  Total assets 13 158 313 23 425 928
       
  EQUITY    
  Capital and reserves attributable to equity holders of the Group    
11 Share capital 2 844 2 844
  Accumulated deficit (10 526 513) (12 745 457)
  Profit for the year 15 253 114 2 218 944
  Total equity 4 729 445 (10 523 669)
       
  LIABILITIES    
  Non-current liabilities    
12 Borrowings 5 296 713 6 498 609
13 Deferred income tax liabilities 1 036 162 993 972
    6 332 875 7 492 581
  Current liabilities    
4 Liabilities held for sale - 16 814 795
12 Borrowings 1 722 463 9 275 886
14 Trade and other payables 373 480 316 199
  Current income tax liabilities 50 50 136
    2 095 993 26 457 016
  Total liabilities 8 428 868 33 949 597
  Total equity and liabilities 13 158 313 23 425 928