Interim Unaudited Financial Statements

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 €21.2m or €0.1562 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 €0.37m. Additionally, RC2 (Cyprus) Ltd had loan receivables from Telecredit and Mamaia Resort Hotels of € 0.45m. As at 30 June 2021, RC2 had sundry liabilities of €0.07m.

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 € 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 € 2.6m, higher than the budgeted € 2.1m.

Mamaia Resort Hotels achieved first semester revenues of € 1m, or 14% above budget, which resulted in a six-month 2021 EBITDA loss of € -0.1m, compared to a budgeted loss of € -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 € 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 € 143,000 over the period, compared to a first quarter loss of € 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: [phone]

Grant Thornton UK LLP

(Nominated Adviser)

Philip Secrett
Tel: [phone]

finnCap Limited

(Broker)

William Marle / Giles Rolls

Tel: [phone]

 

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 € 21.2m or € 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 € 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 € 2.6m, higher than the budgeted € 2.1m. Mamaia Resort Hotels achieved first semester revenues of € 1m, or 14% above budget, which resulted in a six- month 2021 EBITDA loss of € -0.1m, compared to a budgeted loss of € -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 € 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 € 143,000 over the period, compared to a first quarter loss of € 8,000. At the end of June, RC2 and RC2 (Cyprus) Ltd had cash and cash equivalents of € 0.37m, loan receivables from Telecredit and Mamaia Resort Hotels of € 0.45m, and short-term liabilities of € 0.07m. Telecredit reimbursed a net amount of € 1.05m to RC2 during the first semester, leaving an outstanding balance of € 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

		30June 2021 EUR		30June 2020 EUR		31December 2020 EUR
		Unaudited		Unaudited		Audited
Investment Income
Fairvaluelossonfinancialassetsat fairvaluethroughprofitorloss		(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)
Netfinancialincome/(expense)		3		-		(16,286)
Total expenses		(341,738)		(315,688)		(676,585)
(Loss)/profitfortheperiod/year		(329,698)		(297,790)		1,851,371
Other comprehensive income		-		-		-
Totalcomprehensive(loss)/profitfortheperiod/yearattributabletoowners		(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

		30June 2021 EUR		30June 2020 EUR		31December 2020 EUR
		Unaudited		Unaudited		Audited
ASSETS
Non-current assets
Financialassetsatfairvaluethroughprofitor loss		21,231,506		19,509,494		21,999,552
Total non-current assets		21,231,506		19,509,494		21,999,552
Currentassets
Tradeandotherreceivables		17,123		13,585		13,600
Cashandcashequivalents		37,502		10,200		33,073
Totalcurrentassets		54,625		23,785		46,673
TOTALASSETS		21,286,131		19,533,279		22,046,225
LIABILITIES
Current liabilities
Tradeandotherpayables		67,664		134,275		91,782
Borrowings		-		-		406,278
TOTALLIABILITIES		67,664		134,275		498,060
NETASSETS		21,218,467		19,399,004		21,548,165
EQUITYATTRIBUTABLETO 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

STATEMENTOFCHANGESINEQUITY
Forthesixmonthsended30June2021
Share	Retained(deficit)/
Sharecapital  premiumEUR    EUR	earningsEUR		TotalEUR
Balance at 1 January2020  1,358,569  109,206,779	(90,868,554)		19,696,794
Lossfor theperiod  -  - Othercomprehensiveincome  -  -	(297,790) -		(297,790) -
Totalcomprehensivelossfortheperiod  -  -	(297,790)		(297,790)
Balance at30June2020  1,358,569  109,206,779	(91,166,344)		19,399,004
Profitfor theperiod  -  - Othercomprehensiveincome  -  -	2,149,161 -		2,149,161 -
Totalcomprehensiveprofitfortheperiod  -  -	2,149,161		2,149,161
Balanceat 31December2020  1,358,569  109,206,779	(89,017,183)		21,548,165
Lossfor theperiod  -  - Othercomprehensiveincome  -  -	(329,698) -		(329,698) -
Totalcomprehensivelossfortheperiod  -  -	(329,698)		(329,698)
Balance at30June2021  1,358,569  109,206,779	(89,346,881)		21,218,467

 

CASH FLOW STATEMENT

For the six months ended 30 June 2021

	30June 2021 EUR		30June 2020 EUR		31December 2020 EUR
	Unaudited		Unaudited		Audited
Cashflowsfromoperating activities
(Loss)/profitbeforetaxation	(329,698)		(297,790)		1,851,371
Adjustmentsfor:
Fairvaluelossonfinancialassetsatfairvalue
throughprofitorloss	2,100,354		2,113,199		1,752,486
Interestincome	(2,112,394)		(2,131,097)		(4,280,442)
Financialexpenses	11,035		-		6,278
Net(gain)/lossonforeignexchange	(3)		-		8
Netcashoutflow before changesinworking
capital	(330,706)		(315,688)		(670,299)
(Increase)/Decreaseintradeandotherreceivables	(3,523)		3,088		3,073
(Decrease)/Increaseintradeandotherpayables	(24,118)		96,913		54,420
Disposalsandrepaymentsoffinancialassets	780,085		160,000		180,000
Netcashprovidedby/(usedin)operating	421,738		(55,687)		(432,806)
Cashflowsfromfinancing activities
Proceedsfromborrowings	250,000		-		400,000
Repaymentofloansfromrelatedparty	(650,000)		-		-
Interestpaid	(17,312)		-		-
Netcashflow (usedin)/providedbyfinancing	(417,312)		-		400,000
Netincrease/(decrease)incashandcash
equivalentsbeforecurrencyadjustment	4,426		(55,687)		(32,806)
Effectsofexchangeratedifferencesoncashandcash
equivalents	3		-		(8)
Netincrease/(decrease)incashandcash
equivalentsaftercurrencyadjustment	4,429		(55,687)		(32,814)
Cashandcashequivalentsatthebeginningofthe
period/year	33,073		65,887		65,887
Cashandcashequivalentsat the endof the
period/year	37,502		10,200		33,073

 

END

 

 

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