CONDENSED UNAUDITED CONSOLIDATED
INTERIM FINANCIAL RESULTSfor the six months ended 31 December 2019
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 1 /
1
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
2 PERFORMANCE OVERVIEW
4 SOUTH AFRICAN PORTFOLIO
14 DEVELOPMENTS AT WATERFALL
23 INVESTMENT IN MAS
28 REST OF AFRICA RETAIL INVESTMENTS
30 FINANCIAL RESULTS
37 STRATEGIC UPDATE
39 QUESTIONS AND ANSWERS
40 APPENDICES
AGENDA
Deloitte interior, Waterfall City
INTERIM RESULTS for the six months ended 31 December 2019
/ 2 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
3
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
DEPS cents
Dec 2019 Dec 2018 % change
South African portfolio 37.4 29.3 27.6
Developments at Waterfall (2.5) (2.3) 8.7
Investment in MAS 16.6 12.3 35.0
Rest of Africa retail investments 1.7 5.7 (70.2)
Distributable earnings per share 53.2 45.0 18.2
Sales of sectional title units (1.3) -
Abnormal net lease cancellation fee (2.1) -
Interest received from AttAfrica - (4.8)
Core distributable earnings 49.8 40.2 23.9
FOCUSED APPROACH FOUR KEY DRIVERS
2
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
01Core DEPS
December 2018: 40.2cps
49.8cps
PERFORMANCE OVERVIEW
05Interest cover ratio
June 2019: 1.85 times
1.91 times
02DPS
December 2018: 40.5cps
45.0cps
06Gearing
June 2019: 37.7%
39.1%
03DPS growth
Full year guidance: 8.0% - 10.0%
11.1%
07Trading density growth
December 2018: 6.9%
5.7%
04Developments at Waterfall
June 2019: 7 buildings completed
6 buildings completed
08Mall of Africa trading density growth
December 2018: 12.7%
10.1%
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 3 /
4
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
1ST KEY DRIVER: SOUTH AFRICAN PORTFOLIO
Dec 2019Core DEPS
34.0cps
Mall of Africa, Waterfall CityR20.7bn | 76.5% of TOTAL ASSETS
68.3%
Dec 2018Core DEPS
29.3cps72.9%
NOTES
/ 4 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
5
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
11PGLA green certified
12Installed PV capacity
119 405m² 6 852 kWp
June 2019: 119 405m2 June 2019: 6 852 kWp^ Weighted average based on PGLA ** Weighted average lease expiry on PGLA# Weighted average based on gross rent multiplied by PGLA* Rental escalation excluding rates multiplied by PGLA, excluding BMW Group SA Regional Distribution Centre
SOUTH AFRICAN PORTFOLIO01Value of total assets
June 2019: 75.6%
76.5%
05Collections
June 2019: 99.0%
98.8%
02Number of additional buildings
June 2019: 7 newly completed
6 newly completed
06WALE**
June 2019: 6.5 years
6.1 years
03Average portfolio age^
June 2019: 6.7 years
7.2 years
07Rental reversion#
June 2019: +6.9%
-7.5%
04Occupancy
June 2019: 93.8%
94.0%
08Rental escalation*
June 2019: 7.3%
7.2%
09Tenant success rate^
10Trading density growth
92.0% 5.7%
June 2019: 80.6% December 2018: 6.9%
6
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Weighted on property value2 Eglin valued in accordance with the signed sale agreement
VALUATION INPUTS FOR DCF METHODOLOGY
Dec 2019SECTOR
% of total portfolio by value
Discount rates%
Exit cap rates%
Cap rates%
Average valueR/m²
Retail 52.28 12.35 7.14 6.88 32 670
Office and mixed-use 37.62 13.24 8.12 7.74 28 312
Light industrial 8.20 13.25 8.51 7.75 9 785
Hotel 1.90 13.75 8.41 7.92 26 403
Total portfolio 100.00 12.78 7.65 7.29 26 050
Jun 2019SECTOR
% of total portfolio by value
Discount rates%
Exit cap rates%
Cap rates%
Average valueR/m²
Retail 52.23 12.38 7.10 6.84 32 592
Office and mixed-use 37.32 13.13 8.05 7.63 29 699
Light industrial 8.62 13.51 8.32 7.51 9 714
Hotel 1.83 13.74 8.40 7.91 25 338
Total portfolio 100.00 12.78 7.58 7.21 26 185
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 5 /
NOTES
7
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
SOUTH AFRICAN PORTFOLIO: LEASING UPDATEOCCUPANCY Dec 2019 Jun 2019
% PGLA m2 % PGLA m2
Retail 97.8 289 257 97.1 287 573
Office and mixed-use 85.7 233 714 87.5 227 583
Like-for-like portfolio 86.7 224 234 88.5 225 598
Buildings completed during the period 67.9 9 480 38.1 1 985
Light industrial 100.0 173 266 97.1 175 561
Hotel 100.0 13 690 100.0 13 690
Year end portfolio occupancy 94.0 709 927 93.8 704 407
Plus: filled post period-end 0.6 4 863 0.9 6 594
Plus: 2 Eglin 2.9 22 215 2.8 20 732
Adjusted portfolio occupancy 97.5 737 005 97.5 731 733
Waterfall 98.6 457 471 97.7 448 656
Non-Waterfall 95.9 279 534 97.1 283 077
/ 6 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
9
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
TRADING DENSITY* RENT TO TURNOVER#
CENTREDec 2019
R/m2Dec 2018
R/m2Growth
%Dec 2019
%Dec 2018
%Change
%
Super-regional 3 293 2 991 10.1
Mall of Africa 3 293 2 991 10.1 9.1 9.2 (1.1)
Regional 2 781 2 680 3.8
Brooklyn Mall 3 036 2 928 3.7 10.6 10.8 (1.9)
Eikestad Precinct 2 693 2 597 3.7 7.0 7.0 0.0
Garden Route Mall 2 854 2 710 5.3 6.9 6.8 1.5
MooiRivier Mall 2 659 2 600 2.3 6.7 6.5 3.1
Convenience and other 4 982 4 948 0.7
Glenfair Boulevard 5 040 4 939 2.0 5.1 5.2 (1.9)
Lynnwood Bridge 4 908 4 959 (1.0) 5.9 5.8 1.7
Neighbourhood 3 900 3 479 12.1
Waterfall Corner 3 900 3 479 12.1 4.8 5.3 (9.4)
Portfolio (effective average) 3 177 3 006 5.7
* Reported tenant turnover divided by PGLA based on a 12 month average # Gross rental including operating costs and rates divided by reported turnover based on a 12 month average
SOUTH AFRICAN PORTFOLIO: RETAIL
8
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
09Tenant success rate#
June 2019: 79.0%
90.9%
10Non-PGLA income
December 2018: R10.1m
R8.7m
11Installed PV capacity
June 2019: 6 611 kWp
6 611kWp
12% Generator capacity^
June 2019: 63.3%
97.4%
* Rental escalation excluding rates multiplied by PGLA# Weighted average based on gross rent multiplied by PGLA^ Based on PGLA
SOUTH AFRICAN PORTFOLIO: RETAIL01% of total portfolio by value
June 2019: 51.8%
51.9%
05WALE
June 2019: 4.1 years
4.0 years
02Value of total portfolio
June 2019: R9.9bn
R9.9bn
06Rental reversion#
June 2019: +1.6%
-10.8%
03Occupancy
June 2019: 97.1%
97.8%
07Rental escalation*
June 2019: 7.0%
6.9%
04Collections
June 2019: 99.4%
98.8%
08Trading density growth
December 2018: 6.9%
5.7%
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 7 /
NOTES
10
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Mall of Africa visitor information
SOUTH AFRICAN PORTFOLIO: MALL OF AFRICA
* Reported tenant turnover divided by PGLA based on a 12-month average
Dec 2019 Jun 2019 Jun 2018 Jun 2017
Trading density* (R/m²) 3 293 3 202 2 832 2 564
Rolling 12-months foot count (million) 16.4 15.5 14.6 14.0
Rent to turnover (%) 9.1 9.1 9.6 9.9
Rolling 12-months non-PGLA income (R’million) 8.7 7.1 5.9 4.3
Occupancy (%) 98.8 97.2 99.4 98.6
Collections (%) 98.5 99.4 99.0 95.8
Conversion rate
93%
Average stores visited
7.4Average time a mobile device
spends per single visitPercentage of mobile devices
that visit and enter a storeAverage number of stores visited
per mobile device per visitPercentage of mobile devices
detected more than oncein 31 days
Time spent
119 min
Loyalty
55%
/ 8 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
12
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
SOUTH AFRICAN PORTFOLIO: LIGHT INDUSTRIAL
* Rental escalation excluding rates multiplied by PGLA, excluding BMW Group SA Regional Distribution Centre^ Weighted average based on PGLA
01% of total portfolio by value
June 2019: 8.6%
8.1%
05WALE
June 2019: 10.0 years
9.6 years
02Value of total portfolio
June 2019: R1.6bn
R1.6bn
06PGLA of total portfolio
June 2019: 22.5%
22.9%
03Occupancy
June 2019: 96.8%
100.0%
07Rental escalation*
June 2019: 7.1%
6.9%
04Collections
June 2019: 100.0%
100.0%
08Average portfolio age^
June 2019: 2.7 years
3.3 years
11
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
SOUTH AFRICAN PORTFOLIO: OFFICE AND MIXED-USE
# Weighted average based on gross rent multiplied by PGLA* Rental escalation excluding rates multiplied by PGLA^ Weighted average based on PGLA
09PGLA green certified
June 2019: 59.0%
59.0%
10Installed PV capacity
June 2019: 241 kWp
241 kWp
11Average portfolio age^
5.4 years
12Newly completed PGLA
December 2018: 9 634m2
18 642m²
01% of total portfolio by value
June 2019: 37.8%
38.1%
05WALE
June 2019: 6.8 years
6.4 years
02Value of total portfolio
June 2019: R7.2bn
R7.3bn
06Rental reversion#
June 2019: +2.8%
+7.1%
03Occupancy
June 2019: 88.2%
85.7%
07Rental escalation*
June 2019: 7.7%
7.7%
04Collections
June 2019: 99.7%
99.3%
08Tenant retention success rate
June 2019: 89.4%
96.6%
June 2019: 5.1 years
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 9 /
13
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
SOUTH AFRICAN PORTFOLIO: HOTEL
* Rental escalation excluding rates multiplied by PGLA^ Weighted average based on PGLA
01% of total portfolio by value
June 2019: 1.8%
1.9%
05WALE
8.2 years
02Value of total portfolio
June 2019: R346.9m
R361.5m
06PGLA of total portfolio
June 2019: 1.8%
1.8%
03Occupancy
June 2019: 100.0%
100.0%
07Rental escalation*
June 2019: 7.0%
7.0%
04Collections
June 2019: 100.0%
100.0%
08Average portfolio age^
June 2019: 6.3 years
7.3 years
June 2019: 8.7 years
NOTES
/ 10 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
15
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
WATERFALL CITY
Pipeline
Completed
Under construction
Waterfall City
Netcare Hospital
14
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
2ND KEY DRIVER: DEVELOPMENTS AT WATERFALLDeloitte Head Office, Waterfall City
Dec 2019Core DEPS
(2.5)cps
R2.4bn | 8.7% of TOTAL ASSETS
(5.0%)
Dec 2018Core DEPS
(2.3)cps
(5.7%)
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 11 /
NOTES
16
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
LEASEHOLD LAND
Industrial 170 952m²
Total 170 952m²
WATERFALLCITYAN INTEGRATEDCITY THATWORKS
Retail 52 692m²
Residential 60 473m²
Office 593 101m²
Industrial 13 321m²
Hotel 50 640m²
Total 770 227m²
Total of 1 102 882m² effective remaining undeveloped bulk, valued via comparable sales technique.
WATERFALLLOGISTICS HUBGAUTENG’SLOGISTICS HUBOF CHOICE
Sanlam JV
Industrial 686 054m²
Attacq (23.57%)
161 703m²
Total 161 703m²
Remaining undeveloped bulk
COMPLETED - HELD
COMPLETED - SOLD
BULK - SOLDWaterfall City
(%)
WaterfallLogistics Hub
(%)UNDER CONSTRUCTION
REMAINING UNDEVELOPED BULK
65.7
22.0
4.84.03.5
21.937.9
2.21.2
36.8
/ 12 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
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A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
COMPLETED DEVELOPMENTS
* Sectional title
COMPLETED BUILDINGSMulti or single
tenantedEffective PGLA m² % Let/sold
Practicalcompletion date
Leasecommencement
date
Waterfall CityThe Ingress – Building 2 Multi 4 484 37.2 Q2 FY20 Q3 FY20The Ingress – PSG Wealth Single 4 311 100.0 Q1 FY20 Q1 FY20Waterfall Point – Building 1* Multi 2 339 79.8 sold Q2 FY20 InventoryWaterfall Point – Building 2* Multi 2 585 100.0 Q2 FY20 Q2 FY20Waterfall Point – Building 3* Multi 2 339 50.8 sold Q2 FY20 InventoryWaterfall Point – Building 4* Single 2 584 100.0 Q2 FY20 Q2 FY20TOTAL 18 642 >80.0
Waterfall Point
The Ingress
18
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Deloitte Head Office
PGLA: ±42 500m²
Land Parcel 10
Sector: office
50.0% JV with Atterbury
Targeting Silver LEED certification(as built and commissioning)
Completion date: Quarter 3 FY20
Installing PV system of 220 kWp
Corporate consolidation
DEVELOPMENTS UNDER CONSTRUCTION
Deloitte
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 13 /
NOTES
19
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Waterfall Corporate Campus
PGLA: ±35 000m²
Land Parcel 10B
Seven buildings phased development
Sector: office
50.0% JV with Zenprop
All buildings have targeted or have achieved a minimum four-star GBCSA(by design and as built) certification
Completed
• Three buildings (16 300m2) – >95.0% let
Completed post 31 December 2019
• Building 5 ContinuitySA (5 530m²) – fully let
• Completion date: Quarter 3 FY20
Under construction post 31 December 2019
• Building 4 spec building (4 958m²)
• Expected completion Quarter 1 FY21
DEVELOPMENTS UNDER CONSTRUCTION | CONTINUED
CorporateCampus
/ 14 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
21
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Nexus Waterfall, Courtyard Hotel
PGLA: ±32 000m²
Land Parcel 10
Sector: office and mixed-use
Targeting four-star GBCSA certification(by design and as built)
Phased development
“New concept” 4-star Courtyard Hotelby the City Lodge Hotel Group
› 168 keys
› Completion date: Quarter 2 FY21› Lease term: 15 years
Three office buildings
DEVELOPMENTS UNDER CONSTRUCTION | CONTINUED
Nexus Waterfall
20
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Nespresso warehouse
Total PGLA: 4 757m²
Land Parcel 8 North
Sector: light industrial
Estimated completion date: Quarter 4 FY20
This marks the final development in Land Parcel 8 North
DEVELOPMENTS UNDER CONSTRUCTION | CONTINUED
Nespresso
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 15 /
22
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Ellipse Waterfall
Develop to sell residential units
Land Parcel 10
50.0% JV with Portstone Developments
Targeting four-star GBCSA certification(by design and as built)
Sector: residential (sectional title)
Phased development
• Newton and Kepler towers (phase 1): 269 units, >75.0% pre-soldCompletion date: Quarter 1 FY22
• Cassini tower (phase 2): 175 units,>13.0% pre-sold
• Galileo tower (phase 3): ±175 units based on early designs
DEVELOPMENTS UNDER CONSTRUCTION | CONTINUED
Ellipse
NOTES
/ 16 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
24
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
05DPS and guidance
€858.1 million
MAS OVERVIEW01Strategy
Long-term focusing on capital allocation, operational excellence, leveraging and cost efficiencyFocus on Central and Eastern Europe (“CEE”), redeployment of capital invested in Western Europe into CEE
02Asset split*
Total€1 462.2 million
CEE€524.3 million
Development JV€206.2 million
Western Europe€565.6 million
Head Office€166.1 million
Total€906.3 million
CEE€344.3 million
Development JV€171.2 million
Western Europe€298.1 million
Head Office€92.7 million
03NAV split*
Total€27.7 million
CEE€12.7 million
Development JV€4.9 million
Western Europe€8.7 million
Head Office€1.4 million
04Distributable earnings split*
Interim dividend declared of 4.24 euro cents per share Prior guidance replaced. Aim to pay out 100.0% of adjusted distributable earnings per share on a bi-annual basis
* As per MAS proportionate accounts
23
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Nova Park, Poland
3RD KEY DRIVER: INVESTMENT IN MAS
Dec 2019Core DEPS
16.6cps
R3.0bn | 11.0% of TOTAL ASSETS
33.3%
Dec 2018Core DEPS
12.3cps 30.6%
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 17 /
25
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
01Board and management• Investment JV and Prime Kapital
management platform acquisition approved 20 November 2019
• MAS now a Central and Eastern Europe (CEE) property investor and operator
• Reconstituted board• Strong, experienced management
MAS RESULTS AND INCOME-GENERATING PORTFOLIO02Western Europe
• Acceleration of exit strategy
› €544.0 million of IP to be recycled
› €508.0 million targeted by Dec 2020
› €36.0 million of costs estimated to crystallise on disposal
03CEE
• Growing contribution from CEE(46.0% adjusted DE from CEE vs 33.8%in prior period)
• Extensions and refurbishment› Extension of Militari Shopping Centre
(Romania) to commence soon› Extension of Nova Park (Poland)
underway› Major refurbishment and tenant
reconfiguration of Stara Zagora Mall (Bulgaria) underway
Galleria Burgas, Bulgaria
NOTES
/ 18 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
27
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
2 500
2 750
3 000
3 250
3 500
Jun2019
Equityacc
Shareof OCI
Dividend FXimpact
Dec2019
• Shareholding drop to 20.7% due to MAS share issue (30 June 2019: 22.8%) • Decrease in equity accounted investment in associate from R3.2 billion to R3.0 billion• Cash dividends received of R121.2 million during period (being final MAS’ FY19 dividend)• Strengthening of rand vs euro
MAS IN ATTACQ’S FINANCIALSR’million
3 183.5
194.0 16.0 (121.2)
(297.1)
2 975.2
26
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Development pipeline (€’million)
MAS AND PKM DEVELOPMENTS
CEE development pipelineDevelopment completions • Zalau Value Centre (Zalau, Romania): 23 338m², initial yield of 12.2%• DN1 Value Centre (Balotesti, Romania): 46 726m², initial yield of 11.1%• €773.0 million total development pipeline made up of:
› €220.8 million of projects under construction› €552.2 million of projects under permitting
Projects under construction• 32 900m² Dambovita Mall (Targoviste, Romania)
(May 2020 targeted trading date)• 92 000m² super-regional Mall Moldova (Iasi, Romania)• 17 000m² mall (Sfantu Gheorghe, Romania)• Marmura Residence (465 apartments, Bucharest, Romania)
Projects under permitting• €258.0 million relates to large-scale mixed use Silk District development
(Iasl, Romania)› Includes 98 000m² A grade offices, 2 500 residential units › Targeted start date moved to September 2020
• Avalon Estate (Bucharest, Romania) construction to commenceonce building permits issued
220.8
552.2
0
200
400
600
Under construction Under permitting
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 19 /
NOTES
28
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
4TH KEY DRIVER: REST OF AFRICA RETAIL INVESTMENTSRest of Africa presence
Dec 2019Core DEPS
1.7cps
R0.8bn | 2.8% TOTAL ASSETS
3.4%
Dec 2018Core DEPS
0.9cps
2.2%
/ 20 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
29
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
0
100
200
300
400
Jun2019
ECL adj Interestaccrued
Interestreceived
FXimpact
Dec2019
0
100
200
300
400
Jun2019
Loansrepaid
Loansadvanced
ECL adj FXimpact
Dec2019
Note: Attacq has no debt against its Rest of Africa retail investments
REST OF AFRICA RETAIL INVESTMENTS BREAKDOWN
R’000Dec2019 %
Jun2019 %
Attacq offshore cash on hand 174 317 23.0 180 624 22.0
Ikeja City Mall (loan) 278 586 36.6 276 899 33.8
AttAfrica (loan) 306 561 40.4 362 545 44.2
Rest of Africa retail investments 759 464 100.0 820 068 100.0
362.5
276.9 0.2306.6 15.0
(113.9)
(1.2)46.9 13.4278.6
(2.3)
AttAfrica (R’million) Ikeja (R’million)
(12.1)
30
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
FINANCIAL RESULTS
Novartis, Waterfall City
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 21 /
NOTES
31
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
01Core DEPS growth
23.9%
FINANCIAL OVERVIEW
05Weighted average cost of debt
June 2019: 8.8%
8.8%
02Interest cover ratio
1.91 times
06Interest rate hedging
June 2019: 78.7%
80.2%
03Gearing
June 2019: 37.7%
39.1%
07First time adoption
IFRS 16
04Debt expiry profile
June 2019: 3.6 years
3.1 years
08Leasehold land
Change in valuation technique
June 2019: 1.85 timesDecember 2018: n/a
/ 22 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
33
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
R’000 Dec 2019 Jun 2019 % change
South African portfolio 20 695 353 20 455 643 1.2
Developments at Waterfall* 2 354 782 2 329 199 1.1
Investment in MAS 2 985 125 3 192 978 (6.5)
Rest of Africa retail investments 759 464 820 068 (7.4)
Head office – South Africa 266 264 252 441 5.5
Head office – Global 267 72 270.8
Total assets 27 061 255 27 050 401 0.0
Total liabilities (11 992 758) (11 462 669) 4.6
Total equity 15 068 497 15 587 732 (3.3)
Progress on developments under construction, including development surplus and a negative fair value adjustment on leasehold land
* Includes developments under construction and leasehold land
BALANCE SHEET PER KEY DRIVER
Forex movements and utilisation of cash balance to part settle euro debt
Increase in interest bearing debt in respectof developments and recognition of IFRS 16 lease liabilities
Increase due to newly completed buildings, the recognition of IFRS 16 right of use assets, set off by negative fair value adjustments
32
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
R’000 Dec 2019 Dec 2018 % change
South African portfolio 262 200 205 587 27.5
Developments at Waterfall (17 323) (16 213) 6.8
Investment in MAS 117 086 86 579 35.2
Rest of Africa retail investments 12 093 40 424 (70.1)
Distributable earnings 374 056 316 377 18.2
DISTRIBUTABLE EARNINGS PER KEY DRIVER
Increase mainly due to newly completed buildings, vacancies filled and in-force escalations. NOI like-for-like growth was 7.6%
Cents per share Dec 2019 Dec 2018 % change
South African portfolio 37.4 29.3 29.6
Developments at Waterfall (2.5) (2.3) 8.7
Investment in MAS 16.6 12.3 35.0
Rest of Africa retail investments 1.7 5.7 (70.2)
Distributable earnings 53.2 45.0 18.2
Sales of sectional title units (1.3) - Nmf
Abnormal net lease cancellation fee (2.1) - Nmf
Interest received in cash from AttAfrica - (4.8) Nmf
Core distributable earnings 49.8 40.2 23.9
Dividend per share 45.0 40.5 11.1
Holding costs on development rights comprising rates and taxes and marketing
Increase in the underlying euro-based dividends of 23.3% net of euro interest paid as well as the impact of forex movements
Cash interest received
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 23 /
34
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
VALUATION OF LEASEHOLD LANDValuation technique changed from residual land valuation to comparable salesTo facilitate the application of comparable sales – the leasehold land has been categorised as per below:
* Market rates relate to freehold bulk rates, with the exception of the rates of unserviced land which relate to leasehold rates on land area
Freehold market rates*
Valued areas External valuer range Utilised
Land Land Bulk Industrial Mixed use Industrial Mixed use ValuationCategory Characteristics Comparable sales application Parcels (m²) (m²) (R per m²) (R per m²) R’000
Unserviced leasehold land
Unserviced leasehold landwith development potential
Land area multiplied by market rate per m2
for unserviced land
12, portions of 10
471 387 - 150-750 150-170 150 150 70 708
Partially serviced leasehold land
Leasehold land,at varying degrees of servicing
Land/bulk area multiplied by market rate per m2
of serviced bulk, reduced by future costs of servicing, and leasehold liability; DCF factor applied relative to timelines of servicing
Portions of 8, 10 41 620 144 980 600-1 750 2 500-4 700 1 150 3 000 276 165
Fully serviced leasehold land
Leasehold landwith s82 certificates, a small measure of costs to complete
Land/bulk area multiplied by market rate per m2
of serviced bulk, reduced by future costs of servicing, and leasehold liability
9, 10b, 22, portions of 8 and 10
228 621 217 366 600-1 750 2 500-4 700 1 200 3 200 660 861
741 268 362 346 1 007 734
Impairment of leasehold land for the six months ended 31 December 2019: R51.2m
NOTES
/ 24 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
36
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
NET ASSET VALUE PER SHARE MOVEMENT
18
19
20
21
22
23
24
25
Jun2018
IFRS 9transition
adjustment
Shareissues
Loss for theyear
Othercompre-
hensive loss
Dividendpaid
Otherdistribut-
ableearnings
movements
OtherFVOCIreserve
movements
FCTR Settlementof SBP
SBPreserve
Jun2019
Shareissues
Loss for theperiod
Othercompre-hensiveincome
Dividendpaid
Otherdistribut-
ableearnings
movements
FCTR Settlementof SBP
SBPreserve
Dec2019
R per share
24.24 (0.03) (0.87)0.00
(0.05) (1.14)
(0.21) 0.040.18 (0.03) 0.03 22.16 0.01 (0.06) (0.41)0.010.12 (0.43)
(0.01) 0.02 21.41
35
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
1.91 1.85
39.1 37.7
0
10
20
30
40
0,0
0,8
1,6
2,4
Dec 2019 Jun 2019Interest cover ratio Gearing
9.7 9.9
2.0 1.9
8.8 8.8
0
4
8
12
Dec 19 Jun 19
INTEREST-BEARING DEBTInterest cover ratio (times) and Gearing (%) Weighted average cost of debt (%)
1 217
4 438
2 978
73
2 093
6991 040
3 007
1 489
2 740
0
1 000
2 000
3 000
4 000
5 000
Within 1 year 1 to 2 years 2 to 3 years 3 to 4 years > 4 years
Debt maturity Hedge maturity
Debt and hedge maturity (R’million)
11 69510 799
8960
3 000
6 000
9 000
12 000
15 000
Committed facilities Drawn facilities Available facilities
Debt facilities (R’million)
9.0
0.9
8.7
1.0
Rand-denominated Euro-denominated Hedging premium Total
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 25 /
37
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
STRATEGIC UPDATE
Corporate Campus, Waterfall City
NOTES
/ 26 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
39
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
QUESTIONS AND ANSWERS
Waterfall Point, Waterfall City
38
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
South Africa• Own and manage dominant nodes
anchored by retail• Focus on property fundamentals
› Tenant experience focused› Proactive in identifying tenant failures› Improve cost efficiencies
• Roll-out developments in Waterfall City and Waterfall Logistics Hub
• Creating safe, sustainable spaces where people can connect and grow
* Guidance has not been reviewed or reported on by Attacq’s auditors
STRATEGIC UPDATEInternational• Investment in MAS
› Future cap raisings will not be followed
• Rest of Africa retail investment› no further investments to be made but for
operational needs › continue implementation of exit strategy› Disposal proceeds to be used to reduce
debt
Balance sheet management• Allocation of capital • Improve ICR• Long-term targets:
› Gearing <35.0%› ICR >2.0 times
• Guidance* affirmed at upper range› Approximately 10.0% growth in DPS
PSG, Waterfall City Nova Park, Poland Cummins interior, Waterfall City
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 27 /
40
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
APPENDICES
Deloitte head office, Waterfall City
NOTES
/ 28 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
41
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
SA PORTFOLIO: LEASE EXPIRY PROFILE
0
100 000
200 000
300 000
400 000
500 000
Vacant Month-to-month Dec 2020 Dec 2021 Dec 2022 Dec 2023 Dec FY24+
Hotel 13 690Industrial 8 518 164 748Office 38 955 374 16 775 34 599 15 420 14 767 151 779Retail 6 488 4 709 38 042 57 928 29 273 50 232 109 073TOTAL 45 443 5 083 54 817 92 527 44 693 73 517 439 290
Lease expiry profile - PGLA (m²)
6.0%
0.7%
7.3%
12.2%
5.9%9.7%
58.2%
TOTAL 45 443 5 083 54 817 92 527 44 693 73 517 439 290
42
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
* Gross rental including operational costs and rates
SA PORTFOLIO: TOP 5 TENANTS PER SECTOR
TOP 5 TENANTS
Attributable gross rentalas a % of total gross rent
%
RetailThe Foschini Group 3.1Edcon 2.5Mr Price Group 2.4Woolworths 2.0Shoprite Checkers 2.0Office and mixed-usePwC 5.8Cell C 5.5Aurecon 5.0Transnet 3.6Adams & Adams 2.8Light industrialMassmart 2.3Amrod 2.1BMW 2.0Cummins 0.6Dimension Data 0.5
TOP 5 TENANTS
Attributable PGLAas a % of total PGLA
%
RetailWoolworths 3.6Shoprite Checkers 3.2Edcon 2.9Massmart 2.8The Foschini Group 2.1Office and mixed-useCell C 6.0PwC 5.0Transnet 3.3Aurecon 3.1Adams & Adams 1.7Light industrialMassmart 6.9Amrod 5.2BMW 4.4Dis-chem 1.2Dimension Data 1.1
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 29 /
43
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
SA PORTFOLIO: PROPERTY COST-TO-INCOME RATIODec 2019 Dec 2018
TotalR’000
WaterfallR’000
Non-Waterfall
R’000Total
R’000Waterfall
R’000
Non-Waterfall
R’000
Rental income^ per income statement A 1 130 999 656 988 474 011 1 004 001 546 663 457 338
Property expenses per income statement* B (385 828) (210 424) (175 404) (365 346) (196 185) (169 161)
Municipal recoveries^ C 240 947 131 217 109 730 208 611 102 787 105 824
Municipal charges* D (267 262) (154 655) (112 607) (232 968) (125 817) (107 151)
Repayment of lease liability (LL) interest E (10 582) (10 638) 56 - - -
Repayment of LL capital F (11 509) (11 939) 430 - - -
Rental paid* (5 824) (5 846) 22 (21 477) (21 058) (419)
Gross cost to income adjusted for LL ((B+E+F)/A) 36.1% 35.5% 36.9% 36.4% 35.9% 37.0%
Net cost to income adjusted for LL ((B+E+F+C)/(A-C)) 18.8% 19.4% 17.9% 19.7% 21.0% 18.0%
^ Municipal recoveries included in rental income* Rental paid and municipal charges included in property expenses
NOTES
/ 30 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
45
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
• Buildings included for 6 months in both periods# Excludes net operating income impact of 2 Eglin, straight-lining, sale of inventory and cost of sales
SA PORTFOLIO: NET OPERATING INCOME BRIDGE
450
550
650
750
850
Dec 2018NOI
Plus:RI increasecompletedbuildings*
Plus:RI increasebuildings
completed2020
Plus:RI increasebuildings
completed2019
Plus:Early
termination
Plus:RI Eglinimpact
Less:PE increasecompletedbuildings*
Less:PE increase
buildingscompleted
2019
Less:PE increase
buildingscompleted
2018
Plus:PE Eglinimpact
Plus:IFRS 16
rental paid
Dec 2019NOI
R’million
Like-for-like net operating income per sector % Change
Retail (1.1)
Office and mixed-use# 18.8
Light industrial 5.6
Hotel 6.5
Total 7.6
638.7
81.0 14.1 16.0 16.0 0.5(32.4)
(5.9) (6.3) 1.6 21.9 745.2
Interim vacancies and tenant replacements
Contractual escalations, vacancies filled and full year income from tenants previously in beneficial occupation
44
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
RETAIL CATEGORY % of area % of total turnover% trading density
growth
Accessories, jewellery and watches 1.1 2.1 3.1
Apparel 25.8 20.8 2.6
Books, cards and stationery 1.9 1.5 (2.0)
Department stores 24.2 22.0 12.8
Electronics 2.5 4.7 5.1
Entertainment 3.5 0.6 (4.2)
Eyewear and optometrists 0.5 0.7 (3.5)
Food 11.3 12.4 (2.0)
Food services 8.3 9.8 16.8
Health and beauty 5.6 11.6 1.9
Homeware, furniture and interior 6.8 4.4 8.5
Luggage 0.3 0.4 1.6
Services 0.2 0.2 8.6
Speciality 3.1 4.2 10.3
Sportswear and outdoor 4.9 4.6 1.1
Total 100.0 100.0 5.7
SA PORTFOLIO: RETAIL PER SECTOR
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 31 /
NOTES
46
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Hotel portfolio
PROPERTY NAME Location Key tenantsPGLA
m²Valuation
R’000ValueR/m²
City Lodge Hotel Lynnwood Pretoria City Lodge 7 946 239 114 30 092 City Lodge Hotel Waterfall City Waterfall City Lodge 5 744 122 341 21 299 TOTAL 13 690 361 455 26 403
Values provided above reflect Attacq’s undivided share in the property: *25.0%; **80.0%
SA PORTFOLIO: OVERVIEWRetail portfolio
PROPERTY NAME Location Key tenantsPGLA
m²Valuation
R’000ValueR/m²
Brooklyn Mall* Pretoria Checkers, Dis-Chem, Game, Woolworths 18 764 641 331 34 179 Eikestad Mall** Stellenbosch Checkers, Game, Food Lover’s Market, Woolworths 38 227 936 320 24 494 Garden Route Mall George Dis-Chem, Edgars, Game, Pick n Pay, Woolworths 53 767 1 501 600 27 928 Glenfair Boulevard Pretoria Dis-Chem, Shoprite Checkers, SuperSpar 15 951 452 947 28 396 Lynnwood Bridge – retail Pretoria Planet Fitness, Safari and Outdoor Warehouse, Woolworths 11 378 373 139 32 795 Mall of Africa** Waterfall Checkers Hyper, Game, Edgars, Woolworths 99 770 4 467 525 44 778 MooiRivier Mall Potchefstroom Checkers, Dis-Chem, Edgars Game, Woolworths 49 696 1 231 600 24 783 Waterfall Corner Waterfall Checkers, Woolworths 9 582 207 634 21 669 Waterfall Lifestyle Waterfall Bounce, Virgin Active 7 139 128 553 18 007 TOTAL 304 274 9 940 649 32 670
/ 32 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
48
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Values provided above reflect Attacq’s undivided share in the building: *50.0%
SA PORTFOLIO: OVERVIEW | CONTINUED
Light industrial portfolio
PROPERTY NAME Location TenantsPGLA
m²Valuation
R’000ValueR/m²
Amrod Waterfall Amrod 37 937 418 416 11 029 BMW Group SA Regional Distribution Centre Waterfall BMW 31 987 279 435 8 736 Cummins SA Regional Office* Waterfall Cummins 7 649 116 339 15 210 Dimension Data Waterfall Dimension Data 8 291 94 151 11 356 Dis-Chem warehouse Waterfall Dis-Chem 8 518 84 038 9 866 GloTool Waterfall GloTool 5 262 40 597 7 715 Massbuild distribution centre Waterfall Massbuild 50 033 417 401 8 343Pirtek Waterfall Pirtek 2 815 31 653 11 244 Superga Waterfall Superga 4 710 44 169 9 378 Zimmer Biomet* Waterfall Zimmer Biomet 2 050 32 096 15 657 TOTAL 159 252 1 558 295 9 785
47
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Office and mixed-use portfolio
PROPERTY NAME Location Key tenantsPGLA
m²Valuation
R’000ValueR/m²
2 Eglin Sunninghill Group Five 25 525 135 000 5 289Allandale building Waterfall Cummins, Trans-Africa Projects, WiseTech Global 15 359 423 102 27 547 Brooklyn Bridge Office Park Pretoria Circle Chambers, SARS 23 525 481 000 20 446 Cell C Campus Waterfall Cell C 43 890 955 866 21 779Gateway West Waterfall Sage South Africa, Spaces 13 803 359 914 26 075 Transnet Waterfall Transnet 24 354 639 359 26 253 The Ingress – building 2 Waterfall Greensill, Averda South Africa 4 484 80 931 18 049The Ingress – PSG Wealth Waterfall PSG Wealth 4 311 118 656 27 524Lynnwood Bridge – Aurecon Pretoria Aurecon 19 104 634 199 33 197 Lynnwood Bridge Pretoria Adams & Adams, Citadel, Sanlam, Water Research Commission 27 613 929 582 33 665 Maxwell Office Park* Waterfall Cipla Colgate, Golder Associates, Premier Foods 18 424 537 686 29 184 Novartis Waterfall Novartis 7 982 238 887 29 928 PwC Tower# Waterfall PwC 36 461 1 394 080 38 235 Waterfall Corporate Campus – building 1* Waterfall Isuzu Motors South Africa, Decision Inc 2 934 85 190 29 035 Waterfall Corporate Campus – building 2* Waterfall SASSETA 3 231 76 236 23 595 Waterfall Corporate Campus – Accenture* Waterfall Accenture 1 985 68 043 34 279Waterfall Point – building 2 Waterfall RSR, Novo Energy, Teleforge 2 585 63 762 24 666Waterfall Point – building 4 Waterfall RSR 2 584 65 817 25 471TOTAL 278 154 7 287 310 26 199
Values provided above reflect Attacq’s undivided share in the building: *50.0%; Values provided above reflect Attacq’s effective co-ownership in the building: #75.0%
SA PORTFOLIO: OVERVIEW | CONTINUED
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 33 /
49
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Values provided above reflect Attacq’s undivided share in the building: *50.0%# Estimated PGLA for Attacq’s attributable share of development. Subject to change upon final re-measurement post completion^ The estimated value on completion of pre-sold and inventory is indicative of sales proceeds and not of an external valuation** Pre-sold based on bankable sales
DEVELOPMENTS: OVERVIEWDevelopments under construction
% completed
Estimated practical
completion datePGLA#
m²% Pre-let
PGLA
Estimatedcapital cost
R’000
Estimated valueon completion
R’000
Book value at31 Dec 2019
R’000PROPERTY NAME
Waterfall City
Deloitte Head Office* 86.3 Q3 FY20 21 250 100.0 713 653 839 150 731 074
Waterfall Corporate Campus – ContinuitySA* 85.9 Q3 FY20 2 765 100.0 64 187 83 926 72 539
Ellipse Waterfall (Phase 1) – sectional title inventory*^ 8.8 Q1 FY22 8 522 >75.0 pre-sold** 248 645 317 316 25 322
Nexus Waterfall, Courtyard Hotel 38.3 Q2 FY21 6 236 100.0 176 535 195 037 83 684
Waterfall Logistics Hub
Nespresso 33.9 Q4 FY20 4 757 100.0 46 746 46 940 23 312
TOTAL 43 530 100.0 1 249 766 1 482 369 935 931
NOTES
/ 34 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
50
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Dec 2019 Jun 2019
m² % m² %Waterfall City
LP 10 Waterfall City (Retail, residential, office and hotel) 552 294 58.7 559 901 59.0
LP 10A Corporate City (Office) 150 000 15.9 150 000 15.8
LP 10B Corporate Campus (Office) 6 282 0.7 6 282 0.7
LP 12 Capital City (Office) 48 330 5.1 48 330 5.1
LP 21 Landmark Park (Office) 13 321 1.4 13 321 1.4
Sub total 770 227 81.8 777 834 82.0
Waterfall Logistics Hub
LP 8 Distribution Campus (Industrial) 24 905 2.6 24 905 2.6
LP 9 Logistics Precinct (Industrial) 128 365 13.7 128 365 13.5
LP 22 Commercial District (Industrial) 17 682 1.9 17 682 1.9
Sub total 170 952 18.2 170 952 18.0
Total remaining bulk 941 179 100.0 948 786 100.0
Waterfall Junction (Industrial and retail) – effective share in Attacq Sanlam JV 161 703 161 703
Total remaining effective bulk including Waterfall Junction 1 102 882 1 110 489
DEVELOPMENTS: LEASEHOLD LAND
51
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
GROWTH IN CORE DISTRIBUTABLE EARNINGS
200
250
300
350
400
Dec
201
8 C
ore
DE
NO
Iin
crea
se
Ed
con
rest
ruct
ure
Ope
ratin
g ex
pen
se
i
ncre
ase
Inve
stm
ent i
ncom
e
dec
rea
se
Finan
ce c
ost
dec
reas
e
Dec
rea
se in
Equi
ties d
ivid
end
Cur
rent
tax
in
crea
se
Sect
iona
l titl
e sa
les
d
ecre
ase
Oth
er S
A in
vest
men
ts
MA
S d
ivid
end
in
crea
se
Real
ised
hed
ging
fore
x in
crea
se
Dec
reas
e in
Eur
ofu
ndin
g fin
ance
cos
t
Hed
ging
tax
dec
reas
e
Afri
ca in
tere
st
i
ncre
ase
Afri
ca ta
x d
ecre
ase
Land
hol
din
g co
sts
i
ncre
ase
Dec
201
9 C
ore
DE
R’million
282.8
69.3 (7.5)(1.6) (30.7)
6.6 (2.3) (0.0) (0.6) (0.5)
23.8 4.8 0.3 1.5 4.9 0.4 (1.1) 350.1
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 35 /
52
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
DIRECT METHOD: CORE DISTRIBUTABLE EARNINGS
TOTALSouth African
portfolioDevelopments
at WaterfallInvestment
in MASRest of Africa
retail investments
Rental income 1 105 474 1 105 474 Per the income statement 1 130 999 - - - -Less: Abnormal lease cancellation fee (18 000) - - - -Less: Edcon restructure (7 525) - - - -
Property expenses (399 290) (399 290) - - -Per income statement (385 828) - - - -Less: Cost iro lease cancellation 3 000 - - - -Less: Rental paid (22 091) - - - -Plus: Depreciation 2 749 - - - -Plus: Deferred leasing 2 880 - - - -
Other income (realised forex/sundry income) 7 289 197 - 7 092 -Operating expenses (82 179) (82 179) - - -
Per income statement (83 622) - - - -Less: Rental paid (1 064) - - - -Plus: Depreciation 1 705 - - - -Plus: Deferred leasing 802 - - - -
Other expenses (land holding costs) (17 323) - (17 323) - -Investment income 25 917 25 917 - - -
Per income statement 49 964 - - - -Less: non-cash interest (1 094) - - - -Less: Associates (non-cash) (22 953) - - - -
Finance cost (420 922) (411 829) - (9 093) -Per income statement (437 671) - - - -Plus: Interest on lease liability 11 359 - - - -Plus: interest capitalised 5 390 - - - -
Current tax (2 130) (40) - (2 090) -MAS dividend received 121 177 - - 121 177 -Investment income from Ikeja 12 093 - - - 12 093 Core distributable earnings 350 106 238 250 (17 323) 117 086 12 093
NOTES
/ 36 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
53
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
R’000 Dec 2019 Jun 2019 % change
South African Portfolio 9 930 901 10 321 064 (3.8)
Developments at Waterfall* 2 354 782 2 329 199 1.1
Investment in MAS 1 903 480 1 969 099 (3.3)
Rest of Africa Retail Investments 743 471 803 851 (7.5)
Head office – South Africa 135 596 164 447 (17.5)
Head office – Global 267 72 270.8
Net asset value 15 068 497 15 587 732 (3.3)
* Includes developments under construction and leasehold land
NET ASSET VALUE PER KEY DRIVER
CENTS PER SHARE Dec 2019 Jun 2019 % change
South African Portfolio 14.11 14.67 (3.8)
Developments at Waterfall* 3.35 3.31 1.0
Investment in MAS 2.70 2.80 (3.4)
Rest of Africa Retail Investments 1.06 1.14 (7.6)
Head office – South Africa 0.19 0.23 (17.6)
Head office – Global 0.00 0.00 0.00
Net asset value per share 21.41 22.16 (3.4) 411 353 shares issued due to LTI scheme
54
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
INVESTMENT PROPERTIES MOVEMENT
16 000
17 000
18 000
19 000
20 000
21 000
Jun 2018 Capex DUC* Leaseholdland
Completedbuildings
HFS** Inventory PPE*** Othermovements
Jun2019
Additions ofIFRS 16 ROU^
assets
Capex DUC* Leaseholdland
Completedbuildings
Other HFS** Othermovements
Dec2019
R’million
19 791.1
950.4 92.2 (384.1)(373.2)
70.1 23.7(102.4) 13.7 20 081.5
* DUC: Developments under construction** HFS: Held for sale*** PPE: Property, Plant and Equipment^ ROU: Right-of-use
Fair value adjustments TransfersFair value adjustments Transfers
249.3
456.0 102.1 (51.2) (381.0)(138.0)(3.0) 4.3 20 320.0
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 37 /
NOTES
55
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
* Loan advanced to 25.0% co-owners of the PwC Tower
INVESTMENTS
2 9753 183
307 363 336 332 279 27780
241116 112 27 32 45 52
0
500
1 000
1 500
2 000
2 500
3 000
3 500
Dec 2019 Jun 2019 Dec 2019 Jun 2019 Dec 2019 Jun 2019 Dec 2019 Jun 2019 Dec 2019 Jun 2019 Dec 2019 Jun 2019 Dec 2019 Jun 2019 Dec 2019 Jun 2019MAS AttAfrica PwC Tower* Ikeja City Mall Newtown Precinct Waterfall Junction Wingspan Other
Equity Loan
R’million
/ 38 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
57
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
R’000 Dec 2019
Net cash generated from operating activities 353 501
Working capital movements 34 271
Trade and other receivables 5 482
Inventory 41 570
Trade and other payables (12 781)
Adjustments between distributable earnings and cash from operating activities (13 716)
Share-based payments (11 877)
Bad debts (3 563)
Edcon restructure (7 525)
Current taxation paid versus accrued 119
Interest accrual (1 065)
Interest capitalised to investment property 21 976
Capital repayments of lease liability (11 939)
Other adjustments 158
Distributable earnings 374 056
CASH GENERATED TO DISTRIBUTABLE EARNINGS
The nature of the adjustments largely reflect timing differences (net interest accruals), non-cash items (share-based payments and bad debts) and items of a capital nature (Edcon restructure and repayment of lease liabilities)
56
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
INVESTEC BANK NEDBANKRMB SANLAMABSA STANDARD BANKMMI LIBERTYOMSFIN
INTEREST-BEARING DEBT
Funding mix (%)
Dec 2019
28.5
4.32.84.4
2.4
40.0
8.8
2.9
5.9
^ Calculated as total interest-bearing debt - unrestricted cash on hand / (total assets - cash on hand - right of use asset recognised as a result of IFRS 16: Leases)* Calculated as total interest-bearing debt / (total assets - goodwill - intangible assets - deferred initial lease expenditure - straight line lease adjustment - receivables - deferred tax asset)
Group covenants Covenant Actual
Bank gearing ratio* (%) 60.0 42.3
Minimum net asset value (R’billion) 7.0 15.1
Dec 2019 Jun 2019
Gross interest-bearing debt (R’000) 10 799 330 10 516 731
ZAR debt (R’000) 9 440 412 9 061 280
EUR debt (R’000) 1 358 918 1 455 451
Weighted average loan term (years) 3.1 3.6
Gearing^ (%) 39.1 37.7
Total hedged as a percentage of total committed facilities (%) 80.2 78.7
Weighted average term of hedges (years) 3.8 3.4
Total weighted average cost of debt (%) 8.76 8.76
ZAR weighted average cost of debt (%) 9.73 9.86
EUR weighted average cost of debt (%) 2.04 1.90
Interest cover ratio (times) 1.91 1.85
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 39 /
NOTES
58
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
IMPACT OF FIRST-TIME ADOPTION OF IFRS 16: LEASESDec 2019
R’000Dec 2018
R’000
Impact on the statement of profit or loss and other comprehensive incomeProperty expenses
Rental paid (5 824) (21 477) Operating expenses
Rental paid (456) (2 830)Depreciation on right-of-use asset (1 053) -
Finance costsInterest expense on lease liability (11 359) -
Fair value adjustmentsFair value adjustment on right-of-use asset (10 067) -
Impact on the statement of financial positionNon-current assets
Investment property 239 207 -Property and equipment 10 738 -
Non-current liabilitiesLease liability 224 895 -
Current liabilitiesLease liability 24 373 -
Impact on the statement of cash flowsCash flow from operating activities
Rental paid (cash from operations) (6 280) (24 307)Finance cost on lease liability (11 216) -
Cash flow from financing activitiesRepayment of lease liability (11 939) -
Rental paid relates only to variable rental, fixed rentals are capitalised to the lease liability (2018: rental paid based on fixed and variable)
Based on the weighted average cost of debt, the interest recognised
The fair value adjustments the ROU assets over the remaining term of the underlying tenant lease
Lease liability, including only the fixed rentalsof the underlying tenant lease
The rental payments due within the next12 months
Only variable payments included in cash from operations (2018: all rental payments included)
The lease liability being amortised, results in a payment of finance costs and a repaymentof capital on the lease liability
/ 40 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
59
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Environmental• Giles Pendleton nominated as incoming
chairperson of the GBCSA board• 123 949 m² of buildings undergoing green
certification by both GBCSA and US GBC• Total PV production for the six month ended is
1 453.9 MWh, equivalent to a reduction of 1 410.25 Tonne CO2e
SUSTAINABILITYGovernance• Continuous improvement in ESG reporting
demonstrated by our inclusion in the FTSE/JSE Responsible Investment Top 30 Index
• Appointed Group Risk and Compliance Officer
• Appointed Company Secretary
Tree planting, Lynnwood Bridge Gogo Mahlatse house donation, Attacq sponsorship Attacq Foundation skills development sponsorship
Social• Focus on being socially responsible citizen
that can contribute positively to the upliftment of the communities in which we operate
• B-BBEE Level 3 (strategic KPI achieved)› Improvement in Procurement and Skills
Development scorecards.
• Improved diversity
60
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
Purpose• Promote and support programmes aimed at
education and training
2020 Vision• Ensuring our youth are educated, equipped
with the necessary skills and sufficiently prepared for employment
ATTACQ FOUNDATION 2020 Training initiatives• Roast Republic Coffee in Waterfall City:
learnership and apprenticeship programme• Ukukhula learnership - 30 Learners
on 12 month learnership• 12-month disabled learnership program
through SDC for 10 learners• Property Point enterprise development
training for 8 SMME’s
2020 Educational initiatives• Bursaries: Woman in Property and Atterbury
Foundation• School learners programmes
› Bana ba Rona, ECD Centre, end of year graduation
› Attacq the Future› Keep a girl in school (sanitary towels) in
partnership with Sage Foundation› Back to School Programme – Tembisa and
Alexandra primary schools
Bana Ba Rona graduation ceremony, Attacq Foundation Attacq the Future, Attacq Foundation Keep a girl in school campaign
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 41 /
61
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
WATERFALL MASTER PLAN
NOTES
/ 42 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
62
A T T A C Q | I N T E R I M R E S U L T S P R E S E N T A T I O N
DISCLAIMER
This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements beliefs or opinions including statements with respect to the company’s business financial condition and results of operations. These statements which contain the words “anticipate” “believe” “intend” “estimate” “expect” “forecast” and words of similar meaning reflect the directors’ beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the company cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation and the company expressly disclaims any obligations or undertaking to release any update of or revisions to any forward-looking statements in this presentation. No statement in this presentation is intended to be a profit forecast.As a result you are cautioned not to place any undue reliance on such forward-looking statements.
This document speaks as of the date hereof. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness accuracy or fairness. This information is still in draft form and has not been legally verified. The financial information included herein is in draft form and unaudited. The company its advisers and each of their respective members directors officers and employees are under no obligation to update or keep current the information contained in this presentation to correct any inaccuracies which may become apparent or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law and any opinions expressed in them are subject to change without notice. No representation or warranty express or implied is given by the company or any of its subsidiary undertakings or affiliates or directors officers or any other person as to the fairness accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of this presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such information.
NOTES
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 43 /
CONDENSED UNAUDITED CONSOLIDATED
INTERIM FINANCIAL RESULTS for the six months ended 31 December 2019
/ 44 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
NOTES
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 45 /
Commentary Commentary
Highlights • Growth in core distributable earnings per share (DEPS) of 23.9%• Dividend per share (DPS) growth of 11.1% to 45.0 cents• Trading density growth in retail portfolio of 5.7%, with Mall of Africa having increased by 10.1%• On a like-for-like basis, net operating income increased by 7.6%• Interest cover ratio improved to 1.91 times from 1.85 times• Six buildings were completed in Waterfall with a further six buildings under construction• Reduction in Rest of Africa exposure with the disposal of interest in Manda Hill, Zambia
IntroductionAttacq is a South African-based Real Estate Investment Trust (REIT), with a vision of delivering sustainable income and long-term capital growth through a focused approach in real estate investments and developments. The quality South African portfolio is dominant in its respective nodes, ensuring its defensiveness in a subdued economy.
The group’s business model is based on four key drivers, namely the South African portfolio, Developments at Waterfall, Investment in MAS Real Estate Inc. (MAS) and the Rest of Africa retail investments. Attacq’s strategy is to exit the Rest of Africa retail investments in an orderly manner.
Attacq is listed on the Johannesburg Stock Exchange (JSE) and is included in the FTSE/JSE SAPY Index and FTSE/JSE SA REIT Index. Attacq is the only property company included in the FTSE/JSE Responsible Investment Top 30 Index.
The group has restated its prior period interim financial statements. For more information, refer to the paragraph below titled Restatement of Attacq’s prior period interim financial statements.
General overviewAttacq’s board of directors (board) is pleased to announce that an interim dividend of 45.0 cents per share (cps) (31 December 2018: 40.5cps) for the six months ended 31 December 2019 has been declared.
Attacq’s South African portfolio performed well, supported by good trading growth from the Mall of Africa as well as income from new buildings completed in Waterfall. The Rest of Africa portfolio, notwithstanding an increase in core distributable earnings, continued to underperform. These drivers combined with strong growth in dividends received from MAS, resulted in the group’s core distributable earnings increasing by 23.9% to R350.1 million (31 December 2018: R282.8 million).
During the six-month period ended 31 December 2019 the net asset value per share (NAVPS) declined by 3.4% from R22.16 at 30 June 2019 to R21.41.
A breakdown of core distributable earnings per key driver is tabled below:
Unaudited 31 December 2019
Unaudited31 December 2018
Changein cps
Core distributable earnings R’000 cps R’000 cps %South African portfolio 238 250 34.0 205 587 29.3 16.0Developments at Waterfall (17 323) (2.5) (16 213) (2.3) 8.7Investment in MAS 117 086 16.6 86 579 12.3 35.0Rest of Africa retail investments 12 093 1.7 6 800 0.9 88.9Total 350 106 49.8 282 753 40.2 23.9
/ 46 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Commentary (continued)
South African PortfolioOverviewAttacq’s high-quality South African portfolio consists of retail, office and mixed-use, light industrial and hotel properties. The group prides itself on providing an authentic service experience that integrates our collaborative approach with our clients’ unique needs – creating sustainable value for all our stakeholders within our South African portfolio.
During the six months ended 31 December 2019, the operational portfolio increased with newly completed buildings of 13 964m2 and decreased with the disposal of the Torre Industries building, resulting in the 31 December 2019 primary gross lettable area (PGLA) of 755 370m2 (30 June 2019: 750 825m2). These asset movements contributed towards the 16.0% increase in core distributable earnings of 34.0cps (31 December 2018: 29.3cps). The value of the existing South African portfolio is R20.7 billion (30 June 2019: R20.5 billion), comprising 76.5% (30 June 2019: 75.6%) of total gross assets.
The portfolio’s weighted average lease expiry profile is 6.1 years as at 31 December 2019 (30 June 2019: 6.5 years). The average growth in trading densities in the retail portfolio for the year ended 31 December 2019 was 5.7% (31 December 2018: 6.9%) with the Mall of Africa’s trading density continuing to grow strongly by 10.1% (31 December 2018: 12.7%) for the calendar year ended. The Mall of Africa’s rent to sales ratio also improved to 9.1% (31 December 2018: 9.2%) despite the challenging trading conditions.
Net profit from property operationsNet profit from property operations, excluding the International Financial Reporting Standards (IFRS) adjustment for straight-line leasing and profits from the sale of sectional title units, increased by 16.7% to R745.2 million (31 December 2018: R638.7 million). On a like-for-like basis, net operating income increased by 7.6%.
Rental incomeRental income increased by 12.6% to R1.1 billion (31 December 2018: R1.0 million) due to the additional rental income from the buildings completed during the FY19 and FY20 years as well as in-force escalations and vacancies filled. Like-for-like rental growth of 8.1% was achieved. This was driven by the 12.8% growth in the office and mixed-use portfolio due to contractual escalations, full year rental income from tenants previously in beneficial occupation and filling of vacancies.
Property expensesThe property expenses increase of 5.6%, excluding cost of sale, to R385.8 million (31 December 2018: R365.3 million) was mainly due to newly completed buildings and an increase in municipal rates. Municipal charges increased by 14.7% to R267.3 million (31 December 2018: R233.0 million), not all of which are recoverable from tenants. The municipal charge recovery ratio improved from 89.5% to 90.2%.
The first-time adoption of IFRS 16: Leases resulted in a R15.7 million decrease in property expenses.
Property cost-to-income ratioThe property cost-to-income ratio calculated below is based on best practice recommendations first edition issued by the SA REIT Association. The Waterfall portfolio’s ratios include payments relating to the land lease rental obligation. The impact of IFRS 16: Leases has been ignored for the purpose of this calculation.
Property cost-to-income ratio
Unaudited31 December
2019%
Unaudited31 December
2018%
Waterfall portfolioNet cost-to-income ratio 19.4 21.0Gross cost-to-income ratio 35.5 35.9Non-Waterfall portfolioNet cost-to-income ratio 17.9 18.0Gross cost-to-income ratio 36.9 37.0
Commentary (continued)
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 47 /
OccupancyThe overall occupancy rate increased from 93.8% as at 30 June 2019 to 94.0% as at 31 December 2019. Unoccupied space at period end mainly relates to 2 Eglin, Brooklyn Bridge Office Park, Gateway West and The Ingress – building 2. Subsequent to 31 December 2019, 1 622m2 of The Ingress – building 2 was filled as well as 1 640m2 of Gateway West.
Unaudited31 December
2019
Unaudited30 June
2019Sector occupancy % PGLA m2 % PGLA m2
Retail 97.8 289 257 97.1 287 573 Office and mixed-use 85.7 233 714 87.5 227 583
Existing portfolio 86.7 224 234 88.5 225 598 Completed during the period 67.9 9 480 38.1 1 985
Light industrial 100.0 173 266 97.1 175 561 Hotel 100.0 13 690 100.0 13 690 Portfolio occupancy 94.0 709 927 93.8 704 407 Add: filled post period-end 0.6 4 863 0.9 6 594 Add: 2 Eglin 2.9 22 215 2.8 20 732 Adjusted portfolio occupancy 97.5 737 005 97.5 731 733
Waterfall 98.6 457 471 97.7 448 656Non-Waterfall 95.9 279 534 97.1 283 077
Leases amounting to 19 941m2 (2.6% of total PGLA) expired during the period, of which 92.0% have been leased at a 7.5% reduction in rental rates (weighted on the average rental rate per square metre) with a weighted average lease escalation rate of 6.2%.
Lease renewalsPGLA
m2Success rate
%
Expiring rental rate increase*
%Escalation rate*
%Retail 4 106 96.6 7.1 7.5Office and mixed-use 15 835 90.9 (10.8) 5.9Portfolio 19 941 92.0 (7.5) 6.2
* Based on new and renewed leases pertaining to leases that expired during the six months ended 31 December 2019
/ 48 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Commentary (continued)ValuationsThe capitalisation rates (cap rates) for the 31 December 2019 completed building valuations remained largely unchanged except that of the industrial portfolio which increased by 25.0 basis points. Valuation inputs (i.e. long-term vacancy rates, rental reversions and market rental growth rates) were revised considering the prevailing macro-economic conditions resulting in a negative fair value adjustment of R324.6 million (31 December 2018: positive R90.4 million). This excludes the IFRS adjustment for straight-line leasing.
The office and mixed-use buildings that contributed to the negative fair value adjustment are 2 Eglin, Aurecon and Cell C. The fair value adjustments for the retail centres were negatively impacted by the capital expenditure on tenant reconfigurations, rental reversion at Glenfair shopping centre and Lynwood Bridge retail refurbishments.
The information below is weighted on property values for all properties valued using the discounted cash flow (DCF) methodology:
Sector% of total portfolio
Discount rates %
Exit cap rates %
Cap rates %
Average value per PGLA
R/m2
Retail 52.28 12.35 7.14 6.88 32 670Office and mixed-use 37.62 13.24 8.12 7.74 28 312Light industrial 8.20 13.25 8.51 7.75 9 785Hotel 1.90 13.75 8.41 7.92 26 403Total portfolio 100.00 12.78 7.65 7.29 26 050
All property valuations as at 31 December 2019 are directors’ valuations which are in the main supported by external desktop valuations performed by Mills Fitchet Cape Proprietary Limited (Mills Fitchet) and Sterling Valuation Specialists Close Corporation (Sterling). All income producing properties were valued on the DCF methodology, except for 2 Eglin which was valued in accordance with the signed sale agreement.
Developments at WaterfallOverviewWaterfall’s location and ease of access creates an attractive value proposition for the continued development of a new city and logistics hub in the centre of Gauteng. Attacq has 941 179m2 (30 June 2019: 948 786m2) of developable bulk remaining at Waterfall. In addition, Attacq’s share of the industrial developable bulk in its joint venture with Sanlam Life Insurance Limited (Sanlam) is 161 703m2 (30 June 2019: 161 703m2).
The group’s core distributable earnings were negatively impacted by the holding costs relating to developments under construction and leasehold land. Holding costs include rates and taxes, marketing, security, and property owners’ association levies. For the six months ended 31 December 2019, the impact thereof on core DEPS was a reduction of 2.5cps (31 December 2018: negative 2.3cps).
The total asset value of Developments at Waterfall, including the value of the Attacq Sanlam joint venture (Waterfall Junction), increased to R2.4 billion (30 June 2019: R2.3 billion). Whilst these assets are currently not contributing to core distributable earnings, it creates the platform for future economic benefits through the utilisation of developable bulk in the development of new properties.
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 49 /
Developments at Waterfall
Unaudited31 December
2019R’000
Audited30 June
2019R’000
Developments under construction 910 593 791 276Leasehold land* 1 007 734 1 076 193Pre-development capex 243 273 181 966Subtotal 2 161 600 2 049 435Waterfall Junction 116 293 111 620Inventory 25 322 51 137Assets held for sale 26 465 19 018Trade and other receivables 24 555 97 018Other assets 547 971Total 2 354 782 2 329 199
* Comprise the development rights, infrastructure and services
Completed developmentsDuring the six months ended 31 December 2019 six buildings were completed in Waterfall with a PGLA of 18 642m2. Waterfall Point building 1 and 3 are classified as inventory and Waterfall Point buildings 2 and 4 are classified as investment property.
Completed developmentsFirst lease commencement date
Multi or single tenanted
TotalPGLA m2
Occupancy %
ValuationR’000
Waterfall City The Ingress – building 2 1 March 2020 Multi 4 484 37.2 80 931The Ingress – PSG Wealth 1 August 2019 Single 4 311 100.0 118 656Waterfall Point – building 1# Sectional title – inventory Multi 2 339 79.8 sold 17 273Waterfall Point – building 2 1 October 2019 Multi 2 585 100.0 63 762 Waterfall Point – building 3# Sectional title – inventory Multi 2 339 50.8 sold 42 031Waterfall Point – building 4 1 October 2019 Single 2 584 100.0 65 817Total 18 642 >80.0 388 470
# Inventory is valued at cost
/ 50 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Commentary (continued)Developments under constructionDevelopments under construction increased to R910.6 million (30 June 2019: R791.3 million) as a result of capital expenditure and fair value adjustments based on the progress of the developments offset by developments completed. The value of developments under construction as at 31 December 2019 is supported by desktop valuations performed by Mills Fitchet and Sterling adjusted for costs still to be incurred to final completion.
The following developments were under construction as at 31 December 2019. Attacq’s attributable share of the total of 76 067m2 PGLA is 43 530m2.
Developments under construction Sector
Anticipated practical completion date
Lease commencement date
EffectivePGLA (m2)*
Total PGLA (m2)*
Pre-let % based on
total PGLAWaterfall CityDeloitte head office+ Office Q3 FY20 1 April 2020 21 250 42 500 100.0Waterfall Corporate Campus, ContinuitySA+ Office Q3 FY20 1 March 2020 2 765 5 530 100.0Ellipse, phase I+ Residential Q1 FY22 n/a 8 522 17 044 >75.0#
Nexus Waterfall, Courtyard Hotel Hotel Q2 FY21 1 January 2021 6 236 6 236 100.0Waterfall Logistics HubNespresso Industrial Q4 FY20 1 June 2020 4 757 4 757 100.0Total 43 530 76 067 100.0
* Estimated PGLA of development. Subject to change upon final re-measurement post completion + Attacq has a 50.0% ownership# Pre-sold based on bankable sales
Deloitte head officeThe Deloitte head office development is a 50/50 joint venture between Attacq and Atterbury Property Holdings Proprietary Limited and its subsidiaries. Practical completion was reached on 31 January 2020, with lease commencement date set at 1 April 2020. The consolidation of the Deloitte Pretoria and Johannesburg offices will result in 3 200 Deloitte employees occupying the building. The development is targeting a silver United States Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) (as built and commissioning) certification and includes a 220 kWp photovoltaic system.
Waterfall Corporate CampusWaterfall Corporate Campus is a 50/50 joint venture between Attacq and Zenprop Property Holdings Proprietary Limited (Zenprop). The development will comprise of seven office buildings with a centrally located communal facility which includes a conference facility and restaurant. The estimated total PGLA for this development is 35 000m2 with an approximate total development cost of R880.0 million. The first three buildings (16 300m2) and communal facility are completed. Practical completion for the fourth building, to be occupied by ContinuitySA, was reached on 31 January 2020. Construction on a speculative basis for the fifth building commenced after 31 December 2019 and is expected to be completed in quarter 1 FY21. The remaining buildings will be developed in a phased approach subject to market demand. All buildings are targeting a minimum four-star GBCSA (by design and as built) certification.
EllipseAs part of the “live, work, play” urban environment in Waterfall City, Attacq is co-developing Ellipse, a residential offering, in Waterfall City. This high-rise luxury residential development comprises four towers with approximately 620 residential units in total. The development is a 50/50 joint venture with Portstone Developments Proprietary Limited (Portstone) with Phase I consisting of two towers of 269 units with an estimated development cost of R520.0 million. Construction has commenced and the anticipated completion date of Phase I is quarter 1 FY22.
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 51 /
Nexus Waterfall, Courtyard HotelNexus Waterfall comprises three office buildings and a “new concept” 4-star Courtyard Hotel which will be operated by, and leased to, the City Lodge Hotel Group for 15 years. The total PGLA of the precinct is estimated at 32 000m2 at an estimated total development cost of R925.0 million. Construction of the 10-storey, 168-key hotel has commenced at an approximate development cost of R1.3 million per key. Construction of the remaining precinct will be in a phased approach subject to market demand. Each building is targeting a minimum four-star GBCSA (by design and as built) certification.
Nespresso A 4 757m2 warehouse with an office component for Top Vending – Nespresso South Africa is currently under construction. The design of the Nespresso building is based on the completed midi-unit scheme within the same land parcel and represents the final development for Land Parcel 8 North.
Leasehold landLeasehold land relates to the notarially secured leasehold rights in respect of Waterfall, held by Attacq Waterfall Investment Company Proprietary Limited (AWIC), a 100.0% subsidiary of Attacq.
As at 31 December 2019, AWIC has 941 179m2 of developable bulk remaining, held on leasehold land, the core of which is 770 227m2 in Waterfall City, zoned for mixed-use developments. The Waterfall Logistics Hub, which is zoned for light industrial tenants, comprises a further 170 952m2.
The group carries leasehold land, encompassing both development rights and infrastructure, at fair value. The group has previously determined fair value with reference to a residual land valuation technique which is dependent upon several inputs and underlying assumptions. With effect from the financial year ending 30 June 2020, the group has adopted a comparable sales valuation technique for leasehold land which is more in line with international best practice. The comparable sales technique is an internationally accepted technique to assess the fair value of land. The adoption of this valuation technique is a change in estimate in terms of IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors.
For the application of the comparable sales technique, the leasehold land has been categorised into three different categories and valued accordingly. The below table summarises the application:
Category Characteristics ValuationUnserviced leasehold land
Leasehold land with development potential
Land area multiplied by market rate per m2 for unserviced land
Partially serviced leasehold land
Leasehold land at varying degrees of servicing
Land/bulk area multiplied by market rate per m2 of serviced bulk, reduced by future costs of servicing, and leasehold liability; DCF factor applied relative to timelines of servicing
Fully serviced leasehold land
Leasehold land with Section 82 certificates and a small measure of servicing required
Land/bulk area multiplied by market rate per m2 of serviced bulk, reduced by future costs of servicing, and leasehold liability
The output of the comparable sales valuation technique determines the valuation of leasehold land, being in aggregate development rights together with infrastructure and services. For the reporting period, leasehold land has been impaired by R51.2 million (31 December 2018: R15.9 million). This valuation represents a directors’ valuation, conducted in consultation with an external valuer. An independent external valuation, on a comparable sales basis, will be carried out for the purposes of the 30 June 2020 financial results.
Waterfall JunctionAttacq, through a joint venture between Sanlam (76.43%) and Attacq (23.57%), has access to a further 686 054m2 (effective share 161 703m2) of industrial developable bulk in Waterfall. Attacq has been appointed as the development, property and asset manager for the joint venture. The development of Waterfall Junction has been activated with the design and commencement of a bulk water pipeline as well as roads and other infrastructure.
/ 52 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Commentary (continued)
Investment in MASOverviewCore distributable earnings of R117.1 million (31 December 2018: R86.6 million) were generated by the investment in MAS representing MAS dividends received in cash of R121.2 million (31 December 2018: R97.3 million) adjusted for realised hedging gains net of tax and interest paid on euro debt funding associated with the investment.
Description
Unaudited31 December
2019R’000
Unaudited31 December
2018R’000
MAS dividend received 121 177 97 300Plus: Realised hedging gain 7 092 2 323Less: Tax paid on hedging (2 090) (3 624)Less: Interest paid on euro funding (9 093) (9 420)Core distributable earnings from MAS 117 086 86 579
Attacq’s shareholding in MAS decreased to 20.7% (30 June 2019: 22.8%) due to an increase in issued shares. The market value of Attacq’s investment, based on the 31 December 2019 MAS share price of R19.10 (28 June 2019: R21.90) is R2.8 billion (30 June 2019: R3.2 billion). Attacq’s equity accounted investment at 31 December 2019 is R3.0 billion (30 June 2019: R3.2 billion).
Hedging of MAS dividends and tax implicationsAttacq hedged a portion of MAS’ final FY19 dividend received during October 2019 and realised a taxable foreign exchange profit of R7.1 million (31 December 2018: R2.3 million). Tax relating to the foreign exchange profit amounted to R2.1 million (31 December 2018: R3.6 million).
Attacq has the following currency hedges in place in respect of expected future MAS dividends:
MAS dividend period Anticipated timing of receiptAmount hedged
EUR’millionFixed rate
RAmount hedged
R’millionInterim FY20 March 2020 4.5 17.31 77.2Final FY20 October 2020 5.9 17.63 104.2Interim FY21 March 2021 1.7 17.71 29.2
Strategy and performanceUnder new management, MAS has announced a focus on maximising long-term returns from investments by concentrating on capital allocation, operations, leverage and cost efficiency in order to sustainably grow distributable earnings per share rather than focus on specific distribution targets. MAS has consequently withdrawn its prior guidance to the market of targeting 30.0% growth in dividends per share by the year ending 2022 and has targeted paying, subject to certain assumptions, at least 100.0% of MAS’ adjusted distributable earnings to shareholders on a bi-annual basis for the foreseeable future.
MAS’ adjusted total earnings for the period increased by 20% to EUR27.6 million compared to the prior period, with the contribution made by MAS’ CEE assets increasing 63.4% over the prior period and making up 46.0% of total adjusted earnings as compared to 33.8% of total adjusted earnings for the prior period. MAS’ previously communicated strategy of exiting its mature Western European assets to invest into the higher growth CEE markets is being accelerated and EUR544 million of Western European assets is earmarked for disposal by 2022. MAS IFRS NAV declined by 4.4% from 134.6 euro cents per share as at 30 June 2019 to 128.6 euro cents per share due to the 10.5% increase in issued shares offset by positive fair value adjustments on the CEE portfolio.
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 53 /
Development pipelineDuring the period, the Prime Kapital CEE Development joint venture completed the Zalau Value Centre and DN1 Value Centre at initial yields of 12.2% and 11.1% respectively. The remaining development pipeline totals EUR773.0 million, made up of EUR220.8 million of assets under construction and a further EUR557.2 million of projects under permitting. Developments under construction include the 32 900m2 Dambovita regional mall (Targoviste, Romania), the 92 000 m2 super-regional Mall Moldova (Iasi, Romania), a 17 000m2 mall (Sfantu Gheorghe, Romania) and the 465-apartment Marmura Residence development (Bucharest, Romania). EUR258.0 million of the pipeline under permitting relates to the large-scale mixed used Silk District development in Iasi, Romani. The expected construction start date of the project has been moved to September 2020 from the second quarter of 2020 due to a delay in receiving local council approvals.
Interim dividendMAS has announced an interim dividend per share of 4.24 euro cents per share to be paid on or about 3 April 2020.
For further information in respect of MAS’ results, refer to the MAS website at www.masrei.com.
NOTES
/ 54 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Rest of Africa retail investmentsOverviewDuring the year the Rest of Africa retail investments generated core distributable earnings of R12.1 million (31 December 2018: R6.8 million). As at 31 December 2019, the value of Attacq’s Rest of Africa retail investments was R759.5 million (30 June 2019: R820.1 million) representing 2.8% (30 June 2019: 3.0%) of Attacq’s total gross assets (including cash balances held in AIH International Limited (AIHI), a wholly-owned subsidiary of Attacq).
Attacq’s Rest of Africa retail investment comprises:
• Cash held by AIHI of R174.3 million (30 June 2019: R180.6 million) • A 31.8% shareholding in AttAfrica, which is invested in three retail properties in Ghana; and• A 25.0% shareholding in Gruppo Investment Nigeria (Gruppo), the owner of Ikeja City Mall, Nigeria.
Attacq’s strategy, which is aligned with its co-shareholders, is to seek an orderly disposal of these assets and recycle proceeds into interest-bearing debt. Progress has been made in implementing this strategy with the exit of Achimota Retail Centre (Accra, Ghana) during the 2019 financial year and the sale of Manda Hill Shopping Centre (Lusaka, Zambia) in August 2019. A new funding arrangement is in place between AttAfrica shareholders from 1 January 2020, with all capital requirements and distributions to be on a pari passu basis going forward. Asset management of the AttAfrica assets has been internalised and in-principle agreement as been reached to acquire the minority shareholdings in AttAfrica for a nominal amount. Operationally, trading conditions remain challenging, impacted by local currency weakness against the US dollar and poor tenant depth.
Attacq’s investment in AttAfrica, through its shareholder loan, amounted to R306.6 million (30 June 2019: R362.5 million). A reversal of impairment of R13.4 million (30 June 2019: impairment of R418.5 million) was recognised against the loan in the current period due to a net repayment of the loan of R67.1 million as well as a 0.8% strengthening of the rand against the US dollar. During the period, no cash interest was received from AttAfrica (31 December 2018: R33.6 million).
The group’s loan to Gruppo totalled R278.6 million (30 June 2019: R276.9 million). The increase in the investment value is as a result of capitalised interest of R15.0 million (31 December 2018: R24.0 million) of which R12.1 million (31 December 2018: R7.2 million) was received in cash, set off by the 0.8% strengthening of the rand against the US dollar (31 December 2018: 2.6%).
Attacq does not have any debt associated with its Rest of Africa retail investments and any proceeds will be utilised at the group’s discretion.
Assets held for saleUnaudited
31 December 2019
R’000
Audited30 June
2019R’000
Transactions with joint venture partnersEllipse 26 465 19 018Investment property2 Eglin, Sunninghill 135 000 –Torre Industries – 77 000InvestmentsRainprop Proprietary Limited – 763Newtown precinct 80 000 –Total 241 465 96 781
Commentary (continued)
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 55 /
The proceeds from the sale of the building previously let to Torre Industries was received on 11 October 2019. The investment in Rainprop Proprietary Limited has been impaired to Rnil. The R26.5 million (30 June 2019: R19.0 million), in respect of the Ellipse leasehold land, has been received upon transfer to Portstone.
Sale agreements have been entered into for the disposal of 2 Eglin, Sunninghill and Newtown precinct which are subject to conditions precedent. The sale of these two assets allows the recycling of capital which will be positive on future core distributable earnings and cash flow.
Non-current assets held for sale are unencumbered and upon transfer of the assets, the cash received will used for effective capital allocation.
BorrowingsTotal interest-bearing borrowings increased by 2.7% to R10.8 billion (30 June 2019: R10.5 billion) due to capital requirements for developments at Waterfall. Committed but undrawn facilities as at 31 December 2019 was R895.7 million (30 June 2019: R1.4 billion), of which R861.5 million is rand-denominated. These facilities exceed the cost-to-complete on developments under construction of R220.7 million (30 June 2019: R582.4 million). Subsequent to 31 December 2019, a facility was secured to fund the entire development of Ellipse phase I.
The euro-denominated borrowings of R1.4 billion (30 June 2019: R1.5 billion) are secured by a combination of a cession of MAS shares and mortgage bonds over investment properties.
The interest cover ratio improved to 1.91 times (30 June 2019: 1.85 times). Gearing, calculated as total interest-bearing debt less unrestricted cash on hand as a percentage of total assets less cash on hand and right of use asset recognised as a result of IFRS 16: Leases, increased to 39.1% (30 June 2019: 37.7%). The increase in gearing is mainly due to lower investment property values and the impact of the strengthening of the rand against the euro related to the investment in MAS.
Units
Unaudited31 December
2019
Audited 30 June
2019Total drawn facilities R’000 10 799 330 10 516 731 Total weighted average loan term years 3.1 3.6
Rand-denominated interest-bearing borrowingsCommitted facilities available R’000 10 301 862 10 415 826 Drawn facilities R’000 9 440 412 9 061 280Weighted average loan term years 3.4 3.9
Euro-denominated interest-bearing borrowingsCommitted facilities available R’000 1 393 158 1 498 072Drawn facilities R’000 1 358 918 1 455 451Weighted average loan term years 1.4 1.7
Interest cover ratio times 1.91 1.85
Gearing % 39.1 37.7
/ 56 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
In order to mitigate rand-denominated interest rate risk, 91.0% (30 June 2019: 90.5%) of total committed facilities of R10.3 billion (30 June 2019: R10.4 billion) were hedged by way of fixed interest-rate loans or interest rate swaps. On a rand and euro denominated basis, this equates to 80.2% (30 June 2019: 78.7%), which exceeds the minimum hedging policy requirement of 70.0%. There are currently no euro-denominated hedges in place.
Units
Unaudited31 December
2019
Audited30 June
2019Total hedged as a percentage of total committed facilities % 80.2 78.7Total hedged as a percentage of rand-denominated committed facilities % 91.0 90.5Total weighted average rand-denominated hedged term years 3.8 3.4
The weighted average cost of funding remained unchanged over the last six months at 8.8% (30 June 2019: 8.8%).
Units
Unaudited31 December
2019
Audited30 June
2019Total weighted average cost of debt % 8.76 8.76Rand-denominated weighted average cost of debt % 9.73 9.86Weighted average floating interest rate % 8.69 8.95Premium for hedging % 1.04 0.91Euro-denominated weighted average cost of debt % 2.04 1.90Weighted average floating interest rate % 2.04 1.90Premium for hedging % – –
R1.2 billion (30 June 2019: R313.6 million) of the group’s interest-bearing debt is due for repayment in December 2020 and relates to one of the tranches in the Attacq Retail Fund Proprietary Limited (ARF) and Lynnwood Bridge Office Park Proprietary Limited (LBOP) syndicated loan. Attacq is in the process of refinancing the maturing tranche and targets an implementation date of 30 June 2020 for the transaction.
Prior to 31 December 2019, Attacq successfully negotiated the extension of the maturity date for Facility 1 of the euro-denominated funding provided by Standard Bank. Facility 1 is for an amount of EUR27.5 million (R433.0 million); the maturity date was extended from 31 July 2020 to 31 January 2021.
Due to lower forward interest rates, an increase in other financial liabilities of R18.3 million (31 December 2018: increase R15.9 million) was recorded on the mark-to-market valuation of interest rate swaps.
ProspectsDuring September 2019 Attacq indicated that it was targeting DPS growth of between 8.0% and 10.0% for the year ending 30 June 2020. Attacq achieved DPS growth of 11.1% for the six months ended 31 December 2019 and has revised its target for the full year ending 30 June 2020 to a growth in DPS of approximately 10.0%.
This guidance is based on the following assumptions:
• Achieving forecasted rental income based on contractual terms and anticipated market-related renewals• Tenants will be able to absorb the recovery of rising utility costs and municipal rates• The expected roll-out of the current and budgeted development portfolio• No unforeseen circumstances such as major corporate tenant failures or deterioration of the macro-economic environment
The prospects have not been reviewed or reported on by Attacq’s auditors.
Commentary (continued)
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 57 /
Restatement of Attacq’s prior period interim financial statementsError on transition adjustment relating to IFRS 9: Financial InstrumentsIFRS 9: Financial instruments became effective for all periods beginning on or after 1 January 2018. The group considered the impact of IFRS 9: Financial instruments at 31 December 2018. Based on initial assessments, the impact was not materially different from IAS 39: Financial Instruments: Recognition and Measurement.
The impact of the adoption of IFRS 9: Financial instruments was reassessed for the period ended 30 June 2019 and the total equity balance at 1 July 2018 was restated. Consequently, the restatements were applied to the interim reporting period ended 31 December 2018.
Error in discounting intercompany loans not payable on demandAttacq grants intercompany loans to subsidiaries and associates. For the loans granted to AWIC, ARF, Brooklyn Bridge Office Park Proprietary Limited, LBOP, Lynnaur Investments Proprietary Limited and Nieuwtown, subordination agreements are in place. Consequently, these loans are not repayable to Attacq on demand. In terms of IFRS 9: Financial Instruments (2018: IAS 39: Financial Instruments: Recognition and Measurement), loans to group companies should be recognised initially at fair value. Due to the loans to the mentioned entities, not being repayable on demand, the fair value of the loan at initial recognition will be lower than the amount advanced. The loans were discounted back for the duration of the subordination period at the incremental rate of borrowing of the underlying subsidiaries and associate. Interest was recognised for the period, on the discounted loan balances using the effective interest rate method.
The discounting of the loans to the subsidiaries are eliminated on consolidation of the group’s condensed unaudited consolidated interim financial statements and therefore has no impact on the group’s condensed unaudited consolidated interim financial statements.
Error in classification of AttAfrica and Gruppo loansThe group, through its wholly-owned subsidiary AIHI, granted loans to AttAfrica and Gruppo. The loan to AttAfrica is repayable on 31 December 2020 and the loan to Gruppo is repayable at Gruppo’s discretion. These loans have been reclassified from current assets to non-current assets.
Error in classification of Nieuwtown loanThe group granted a loan to Nieuwtown and as per the subordination agreement the loan to Nieuwtown has been subordinated until 29 April 2042. This loan has been reclassified from current assets to non-current assets.
The impact of these restatements on the key metrics is as follows:
31 December 2018
Unobservable inputsAs reported
centsRestatement
centsRestated
centsNAVPS 2 366 (3) 2 363DEPS 45.0 – 45.0
/ 58 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Restatement of consolidated interim financial statements for 31 December 2018A restatement is required in terms of IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors because of the material adjustments to individual line items of the financial statements as detailed below:
IMPACT ON CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEAs reported
Unaudited31 December
2018R’000
RestatementR’000
RestatedUnaudited
31 December2018
R’000Impairment losses (389 630) 19 109 (370 521)Operating profit 253 710 19 109 272 819 Net income from associates and joint ventures 24 007 (6 552) 17 455 Investment income 138 552 255 138 807 Profit before taxation 41 814 12 812 54 626 Profit for the period 31 332 12 812 44 144 Attributable to:
Owners of the holding company 31 332 12 812 44 144 Total comprehensive income for the period 25 468 12 812 38 280 Attributable to:
Owners of the holding company 25 468 12 812 38 280
Earnings per shareBasic (cents) 4.5 1.8 6.3 Diluted (cents) 4.4 1.8 6.2
IMPACT ON CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs reported
Unaudited31 December
2018R’000
RestatementR’000
RestatedUnaudited
31 December2018
R’000ASSETSNon-current assetsInvestment in associates and joint ventures 3 329 163 42 394 3 371 557 Loans to associates and joint ventures – 1 085 452 1 085 452 Other financial assets 388 307 (549) 387 758 Total non-current assets 25 379 967 1 127 297 26 507 264 Current assetsLoans to associates and joint ventures 1 283 417 (1 144 631) 138 786 Other financial assets 26 822 (428) 26 394 Total current assets 2 360 084 (1 145 059) 1 215 025 Total assets 27 916 795 (17 762) 27 899 033 Equity and liabilitiesEquityDistributable reserves 9 052 751 (43 320) 9 009 431 Available-for-sale reserve 283 506 25 558 309 064 Equity attributable to owners of the holding company 16 640 810 (17 762) 16 623 048 Total equity and liabilities 27 916 795 (17 762) 27 899 033 The following information does not form part of the statement of financial position:Net asset value per share (cents) 2 366 (3) 2 363 * Only line items affected by the restatement are presented
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 59 /
Restatement of consolidated interim financial statements for 31 December 2018IMPACT ON RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS
As reportedUnaudited
31 December2018
R’000Restatement
R’000
RestatedUnaudited
31 December2018
R’000Profit for the period 31 332 12 812 44 144 Headline earnings adjustments 169 696 12 557 157 139
Net impairment of associates and other investments 389 617 (19 109) 370 508Net income from associates and joint ventures (79 055) 6 552 (72 503)
Headline earnings 201 028 255 201 283Headline earnings per share
Basic (cents) 28.6 – 28.6Diluted (cents) 28.3 – 28.3
IMPACT ON RECONCILIATION OF PROFIT FOR THE PERIOD TO DISTRIBUTABLE EARNINGSThe reconciliation of profit to distributable earnings is a non-form part of the condensed financial statements for the periods and year presented.
As reportedUnaudited
31 December2018
R’000Restatement
R’000
RestatedUnaudited
31 December2018
R’000Profit for the year attributable to Attacq’s shareholders 31 332 12 812 44 144 Adjustment for net non-cash interest from associates (64 786) (255) (65 041)Net income from associates and joint ventures (24 007) 6 552 (17 455)Net impairment of associates, other investments and loans 389 617 (19 109) 370 508
* Only line items affected by the restatement are presented
/ 60 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Declaration of a cash dividend The board declared an interim gross cash dividend of 45.00000 cents per share, for the six months ended 31 December 2019, out of the company’s distributable income.
The dividend is payable to Attacq shareholders in accordance with the timetable set out below:
2020Last day to trade cum dividend Tuesday, 17 MarchShares trade ex dividend Wednesday, 18 MarchRecord date Friday, 20 MarchPayment date Monday, 23 March
Notes:
1. Share certificates may not be dematerialised or rematerialised between Wednesday, 18 March 2020 and Friday, 20 March 2020, both days inclusive.
2. Payment of the dividend will be made to shareholders on Monday, 23 March 2020. In respect of dematerialised shareholders, the dividend will be transferred to the Central Securities Depository Participant (CSDP) account or broker account on Monday, 23 March 2020. Certificated shareholders’ dividend will be deposited on or about Monday, 23 March 2020.
3. Where the transfer secretaries do not have the banking details of any certificated shareholders, the cash dividend will be held in trust by the transfer secretaries pending receipt of the relevant certificated shareholder’s banking details whereafter the cash dividend will be paid via electronic transfer into the personal bank accounts of certificated shareholders.
In accordance with Attacq’s status as a REIT with effect from 29 May 2018, shareholders are advised that the dividend meets the requirements of a “qualifying distribution” for the purposes of section 25BB of the Income Tax Act, No 58 of 1962 (Income Tax Act). The dividend on the shares will be deemed to be a taxable dividend for South African tax purposes in terms of section 25BB of the Income Tax Act.
Tax implications for South African resident shareholdersThe dividend received by or accrued to South African tax residents must be included in the gross income of such shareholders and will not be exempt from income tax (in terms of the exclusion to the general dividend exemption contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act) because it is a dividend distributed by a REIT. This dividend is, however, exempt from dividend withholding tax (dividend tax) in the hands of South African tax resident shareholders, provided that the South tax resident shareholders provide the following forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the company, in respect of certificated shares:
a) declaration that the dividend is exempt from dividends tax
b) written undertaking to inform the CSDP, broker or the company, as the case may be, should the circumstances affecting the exemption change or the beneficial owner cease to be the beneficial owner
c) oth in the form prescribed by the Commissioner for the South African Revenue Service.
Shareholders are advised to contact their CSDP, broker or the company, as the case may be, to arrange for the abovementioned documents to be submitted prior to payment of the dividend, if such documents have not already been submitted.
Commentary (continued)
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 61 /
Tax implications for non-resident shareholdersDividends received by non-resident shareholders will not be taxable as income and instead will be treated as an ordinary dividend which is exempt from income tax in terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax Act. Any distribution received by a non-resident from a REIT will be subject to dividend withholding tax at 20.0%, unless the rate is reduced in terms of any applicable agreement for the avoidance of double taxation (DTA) between South Africa and the country of residence of the shareholder. Assuming dividend withholding tax will be withheld at a rate of 20.0%, the net dividend amount due to non-resident shareholders is 36.00000 cents per share.
A reduced dividend withholding rate in terms of the applicable DTA may only be relied on if the non-resident shareholder has provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the company, in respect of certificated shares:
a). a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA
b). a written undertaking to inform their CSDP, broker or the company, as the case may be, should the circumstances affecting the reduced rate change or the beneficial owner cease to be the beneficial owner
c). both in the form prescribed by the Commissioner for the South African Revenue Service.
Non-resident shareholders are advised to contact their CSDP, broker or the company, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the dividend if such documents have not already been submitted, if applicable.
The number of shares in issue as at 31 December 2019 and as at the date of this announcement is 750 334 130 ordinary shares of no par value which includes 46 427 553 treasury shares. Attacq’s tax reference number is 9241/038/64/6.
Subsequent eventsIn line with IAS 10: Events after the reporting period, the declaration of the dividend occurred after the six-month period under review, resulting in a non-adjusting event which is not recognised in the financial statements. There are no further subsequent events noted.
CommitmentsPlease refer to developments under construction and developments in the pipeline for future capital commitments. Future commitments will be funded by undrawn banking facilities, cash on hand and proceeds from capital recycling activities.
Issue of sharesDuring the period under review, 411 353 shares were issued in terms of long-term incentive awards.
Change in director and company secretaryThys du Toit resigned from the board of directors with effect from 14 November 2019. Anda Matwa has been appointed as company secretary from 1 March 2020 and is replacing Peter de Villiers who has been acting as interim company secretary.
Basis of preparation, changes in accounting policies and change in accounting estimatesThe condensed unaudited consolidated interim financial statements for the six months ended 31 December 2019 have been prepared in accordance with IFRS, IAS 34: Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the requirements of the Companies Act of South Africa. These interim results was compiled under the supervision of R Nana CA(SA), CFO of Attacq.
The accounting policies applied in the preparation of the condensed unaudited consolidated interim financial statements are in terms of IFRS and are consistent with the accounting policies applied in the preparation of the previous consolidated annual financial statements for the year ended 30 June 2019, with the exception of the adoption of all the new, revised and amended accounting pronouncements as issued by the International Accounting Standards Board (IASB) which were effective for Attacq from 1 July 2019. In particular, the following standards had an impact on Attacq’s unaudited consolidated interim financial statements:
/ 62 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Impact on the condensed unaudited consolidated interim financial statementsIFRS 16: LeasesLessee accountingIFRS 16: Leases introduces a single, on balance sheet lease accounting model for lessees. Attacq elected to adopt IFRS 16: Leases from 1 July 2019 using the modified retrospective approach without restating comparative figures. There was no impact to opening retained earnings on adoption of IFRS 16: Leases, which replaces the existing lease standard and the related interpretations. In applying IFRS 16: Leases for the first time, Attacq used certain practical expedients permitted by the standard, namely a single discount rate for leases with reasonably similar characteristics. All leases that met the definition of a lease under IAS 17: Leases were carried forward as a lease under IFRS 16: Leases. The liability was measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate at 1 July 2019. The incremental borrowing rate applied to the lease liability on 1 July 2019 ranged between 8.5% to 9.5%. This range was calculated with reference to the weighted average cost of debt. Attacq will recognise the right-of-use asset and lease liability for its operating lease property. The nature of expenses related to this lease will now change from an operating lease expensed to the statement of profit or loss and other comprehensive income to an asset measured at fair value and/or cost hence being fair valued and depreciated. Finance costs includes interest on the lease liability. On 1 July 2019 a lease liability was raised and subsequently amortised over the period of the lease.
Lessor accountingLessor accounting remains substantially unchanged at Attacq, as a lessor, has operating leases only.
Unaudited31 December
2019R'000
Unaudited31 December
2018R'000
Impact on the statement of profit or loss and other comprehensive incomeProperty expenses
Rental paid (5 824) (21 477)Operating expenses
Rental paid (456) (2 830)Depreciation on right-of-use asset (1 053) –
Finance costsInterest expense on lease liability (11 359) –
Fair value adjustmentsFair value adjustment on right-of-use asset (10 067) –
Impact on the statement of financial positionNon-current assets
Investment property 239 207 –Property and equipment 10 738 –
Non-current liabilitiesLease liability 224 895 –
Current assetsLease liability 24 373 –
Impact on the statement of cash flowsCash flow from operating activities
Rental paid (6 280) (24 307)Finance cost on lease liability (11 216) –
Cash flow from financing activitiesRepayment of lease liability (11 939) –
Commentary (continued)
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 63 /
Change in accounting estimateThe group’s development rights together with infrastructure and services, is classified as investment property and is measured in terms of IAS 40: Investment Property’s fair value model. As discussed under the heading “leasehold land”, the group has changed its valuation technique to comparable sales to determine such fair value.
IAS 40: Investment Property requires that fair value assessments, required where such investment property is carried under the fair value model, be driven by IFRS 13: Fair value measurements which guides that valuation technique changes shall be accounted for as a change in accounting estimate in accordance with IAS 8: Accounting policies, Changes in accounting estimates and Errors.
The group’s investment properties are valued internally by the directors at interim reporting periods and externally by independent valuers for year-end reporting. In terms of IAS 40: Investment Property and IFRS 7: Financial Instruments: Disclosures, the group’s investment properties are measured at fair value and are categorised as level 3 investments. In terms of IAS 39: Financial Instruments: Recognition and Measurement and IFRS 7: Financial Instruments: Disclosure, the group’s interest rate derivatives are measured at fair value through profit or loss and are categorised as level 2 investments. In terms of IAS 39: Financial Instruments: Recognition and Measurement, listed investments are measured at fair value, being the quoted closing price at the reporting date, and are categorised as level 1 investments. Unlisted investments are categorised as level 3 investments. There were no transfers between levels 1, 2 and 3 investments during the period. The valuation methods applied are consistent with those applied in preparing the previous consolidated financial statements.
The condensed interim financial statements have not been audited or reviewed by Attacq’s auditors.
P Tredoux M HammanChairman CEO
3 March 2020
/ 64 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Condensed consolidated statement of profit or loss and other comprehensive income
Unaudited31 December
2019R’000
RestatedUnaudited
31 December2018
R’000
Audited30 June
2019R’000
Gross revenue 1 194 948 1 107 066 2 283 244 Rental income 1 130 999 1 004 001 2 057 548 Straight-line lease income adjustment 56 421 81 319 197 124 Sale of sectional title units 7 528 21 746 28 572
Gross property expenses (384 406) (386 467) (780 690)Property expenses (385 828) (365 346) (749 143)Cost of sales of sectional title units 1 422 (21 121) (31 547)
Net profit from property operations 810 542 720 599 1 502 554 Other income 61 334 39 523 89 532 Operating expenses (83 622) (83 508) (155 485)Impairment losses (265 278) (370 521) (505 148)Other expenses (31 689) (33 274) (170 138)Operating profit 491 287 272 819 761 315 Amortisation of intangible asset (9 982) (9 982) (19 964)Fair value adjustments (352 971) 71 103 (801 735)
Investment properties (333 125) 86 962 (665 110)Other financial assets and liabilities (18 271) (15 859) (135 761)Other investments (1 575) – (864)
Net income from associates and joint ventures 188 405 17 455 124 770 Investment income 49 964 138 807 230 549 Finance costs (437 671) (435 576) (855 465)(Loss)/profit before taxation (70 968) 54 626 (560 530)Income tax credit/(expense) 33 941 (10 482) (42 058)(Loss)/profit for the period/year (37 027) 44 144 (602 588)Attributable to:
Owners of the holding company (37 027) 44 144 (602 588)Other comprehensive income/(loss)Income/(loss) on available-for-sale financial assets 9 273 (5 867) (6 144)Taxation relating to components of other comprehensive income – 3 (27 566)Other comprehensive income/(loss) for the period/year net of taxation 9 273 (5 864) (33 710)Total comprehensive (loss)/income for the period/year (27 754) 38 280 (636 298)Attributable to:
Owners of the holding company (27 754) 38 280 (636 298)
Earnings per shareBasic (cents) (5.3) 6.3 (85.7)Diluted (cents) (5.3) 6.2 (85.7)
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 65 /
Unaudited31 December
2019R’000
RestatedUnaudited
31 December2018
R’000
Audited30 June
2019R’000
AssetsNon-current assetsProperty and equipment 18 808 37 083 10 069Investment properties 20 319 983 20 369 160 20 081 544
Per valuation 21 415 555 21 292 503 21 120 691Straight-line lease debtor (1 095 572) (923 343) (1 039 147)
Straight-line lease debtor 1 095 572 923 343 1 039 147Deferred initial lease expenditure 5 558 8 129 6 860Intangible assets 174 685 256 520 184 667Goodwill 67 774 67 774 67 774Investment in associates and joint ventures 3 003 827 3 371 557 3 217 711Loans to associates and joint ventures 278 586 1 085 452 879 955Other financial assets 389 362 387 758 386 709Other investments – 488 –Total non-current assets 25 354 155 26 507 264 25 874 436Current assetsTaxation receivable 5 025 2 713 4 806Trade and other receivables 211 092 225 707 203 450Inventory 84 626 93 078 51 137Loans to associates and joint ventures 427 915 138 786 113 649Other financial assets 25 295 26 394 32 656Cash and cash equivalents 711 682 728 347 673 486Total current assets 1 465 635 1 215 025 1 079 184Non-current assets held for sale 241 465 176 744 96 781Total assets 27 061 255 27 899 033 27 050 401Equity and liabilitiesEquityStated capital 6 473 103 6 462 389 6 463 585Distributable reserves 7 713 300 9 009 431 7 954 665Fair value through other comprehensive income reserve 290 491 309 064 281 218Share-based payment reserve 118 539 106 511 117 118Foreign currency translation reserve 473 064 839 868 771 146Acquisition of non-controlling interests reserve – (104 215) –Equity attributable to owners of the holding company 15 068 497 16 623 048 15 587 732
Condensed consolidated statement of financial position
/ 66 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Condensed consolidated statement of financial position (continued)
Unaudited31 December
2019R’000
RestatedUnaudited
31 December2018
R’000
Audited30 June
2019R’000
Non-current liabilitiesLong-term borrowings 9 582 193 10 007 313 10 203 134 Deferred tax liabilities 202 468 185 367 238 539 Other financial liabilities 288 922 141 955 268 112 Cash settled share-based payments 306 376 537 Lease liability 224 895 – – Total non-current liabilities 10 298 784 10 335 011 10 710 322 Current liabilitiesOther financial liabilities 4 919 38 668 29 439 Lease liability 24 373 – – Taxation payable 1 328 3 354 1 228 Cash settled share-based payments 514 329 89 Trade and other payables 422 488 361 735 389 690 Provisions 23 215 33 802 18 304 Short-term portion of long-term borrowings 1 217 137 503 086 259 611 Total current liabilities 1 693 974 940 974 698 361 Liabilities directly associated with non-current assets held for sale – – 53 986 Total liabilities 11 992 758 11 275 985 11 462 669 Total equity and liabilities 27 061 255 27 899 033 27 050 401 The following information does not form part of the statement of financial positionNet asset value per share (cents) 2 141 2 363 2 216
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 67 /
Reconciliation between earnings and headline earnings
Unaudited31 December
2019R’000
RestatedUnaudited
31 December2018
R’000
Audited30 June
2019R’000
(Loss)/profit for the period/year (37 027) 44 144 (602 588)Headline earnings adjustments 554 071 157 139 1 124 202
Loss/(profit) on disposal of associate – 2 597 (14 550)(Profit) on disposal of other investments – (2 180) –Loss/(profit) on disposal of investment property 2 – (11 095)Net impairment of associates and other investments 265 115 370 508 550 023 Impairment of intangible asset – – 61 871 Fair value adjustments 334 700 (71 103) 665 974 Net income from associates and joint ventures (60 093) (72 503) (46 995)Tax effect of adjustments 14 347 (70 180) (81 026)
Headline earnings 517 044 201 283 521 614 Number of shares in issue* 703 906 577 703 395 224 703 495 224 Weighted average number of shares in issue* 703 669 602 703 178 702 703 311 279 Diluted weighted average number of shares in issue* 712 014 065 711 327 206 710 613 023 Headline earnings per share
Basic (cents) 73.5 28.6 74.2 Diluted (cents) 72.6 28.3 73.4
* Adjusted for 46 427 553 treasury shares
/ 68 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Unaudited31 December
2019R’000
RestatedUnaudited
31 December2018
R’000
Audited30 June
2019R’000
Cash flow generated from operating activities 353 501 213 554 653 327 Cash generated from operations 649 612 466 061 1 170 806 Investment income 38 010 97 428 186 552 Dividend income 121 177 99 600 191 045 Finance costs (453 049) (432 980) (868 330)Settlement of cash settled share based payments – (14 389) (14 389)Taxation paid (2 249) (2 166) (12 357)Cash flow (utilised in) investing activities (336 202) (554 218) (819 409)Property and equipment acquired (1 386) (1 545) (3 591)Investment properties acquired (434 088) (528 600) (907 330)Associates and joint ventures disposed – – 96 179 Obtaining control of entity 18 079 – – Other investments acquired (7 525) – – Other financial assets repaid/(raised) 11 718 (25 170) (27 072)Additions to deferred initial lease expenditure – (4 030) (3 536)Cash flow relating to non-current assets held for sale 77 000 5 127 25 941 Cash flow generated from/(utilised in) financing activities 20 897 (152 115) (381 558)Capital raised – 2 281 3 477 Dividends paid (288 433) (520 334) (805 250)Repayment of lease liability (11 939) – – Long-term borrowings raised 1 223 446 384 445 1 599 898 Long-term borrowings repaid (923 254) (8 966) (1 194 443)Loans to associates and joint ventures repaid/(advanced) 42 131 (26 391) 884
Other financial liabilities (repaid)/raised (21 054) 16 850 13 876
Total cash movement for the period/year 38 196 (492 779) (547 640)Cash at the beginning of the period/year 673 486 1 221 126 1 221 126 Total cash at the end of the period/year 711 682 728 347 673 486
Condensed consolidated statement of cash flows
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 69 /
Unaudited31 December
2019R’000
RestatedUnaudited
31 December2018
R’000
Audited30 June
2019R’000
Cash flow generated from operating activities 353 501 213 554 653 327 Cash generated from operations 649 612 466 061 1 170 806 Investment income 38 010 97 428 186 552 Dividend income 121 177 99 600 191 045 Finance costs (453 049) (432 980) (868 330)Settlement of cash settled share based payments – (14 389) (14 389)Taxation paid (2 249) (2 166) (12 357)Cash flow (utilised in) investing activities (336 202) (554 218) (819 409)Property and equipment acquired (1 386) (1 545) (3 591)Investment properties acquired (434 088) (528 600) (907 330)Associates and joint ventures disposed – – 96 179 Obtaining control of entity 18 079 – – Other investments acquired (7 525) – – Other financial assets repaid/(raised) 11 718 (25 170) (27 072)Additions to deferred initial lease expenditure – (4 030) (3 536)Cash flow relating to non-current assets held for sale 77 000 5 127 25 941 Cash flow generated from/(utilised in) financing activities 20 897 (152 115) (381 558)Capital raised – 2 281 3 477 Dividends paid (288 433) (520 334) (805 250)Repayment of lease liability (11 939) – – Long-term borrowings raised 1 223 446 384 445 1 599 898 Long-term borrowings repaid (923 254) (8 966) (1 194 443)Loans to associates and joint ventures repaid/(advanced) 42 131 (26 391) 884
Other financial liabilities (repaid)/raised (21 054) 16 850 13 876
Total cash movement for the period/year 38 196 (492 779) (547 640)Cash at the beginning of the period/year 673 486 1 221 126 1 221 126 Total cash at the end of the period/year 711 682 728 347 673 486
Stat
edca
pit
alR
'00
0
Dis
trib
utab
lere
serv
esR
'00
0
FVO
CI
rese
rve
R'0
00
Shar
e-b
ased
pay
men
tre
serv
eR
'00
0
Fore
ign
curr
ency
tran
slat
ion
rese
rve
R'0
00
Acq
uisi
tion
of n
on-
cont
rolli
ngin
tere
sts
rese
rve
R'0
00
Equi
ty
attr
ibut
able
to o
wne
rs o
fth
e ho
ldin
g
com
pan
yR
'00
0
Una
udit
ed b
alan
ce a
s re
po
rted
at
30 J
une
2018
6 4
60
10
8 9
53
4 7
76 2
89
370
117
39
0 7
44
70
1 (
104
215
) 1
7 0
42
130
IFR
S 9
imp
lem
enta
tio
n r
esta
tem
ent
– 8
0 5
18 (
98
28
0)
– –
– (
17 7
62)
Aud
ited
bal
ance
at
1 Ju
ly 2
018
– r
esta
ted
6 4
60
10
8 9
615
29
4 1
91
09
0 1
17 3
90
74
4 7
01
(10
4 2
15)
17
024
36
8To
tal c
om
pre
hens
ive
inco
me
– 4
4 1
44
(5
86
4)
– –
–3
8 2
80
Pro
fit
for
the
per
iod
–4
4 1
44
– –
– –
44
14
4O
ther
co
mp
reh
ensi
ve lo
ss –
– (
5 8
64
) –
– –
(5
86
4)
Fo
reig
n c
urr
ency
tra
nsl
atio
n r
eser
ve –
– –
– 9
5 16
7 –
95
167
Issu
e o
f sh
ares
2 2
81
– –
– –
– 2
28
1S
ettl
emen
t o
f sh
are-
bas
ed p
aym
ent
tran
sact
ion
– –
– (
14 8
65)
– –
(14
86
5)D
ivid
end
s (
520
33
4)
(52
0 3
34
)Tr
ansf
er o
f re
serv
e o
n d
isp
osa
l of
inve
stm
ents
– (
123
83
8)
123
83
8 –
– –
–Tr
ansf
er b
etw
een
res
erve
s –
6 9
77 –
(6
977
) –
– –
Pre
sen
t va
lue
of
loan
s to
ass
oci
ate
– (
12 8
12)
– –
– –
(12
812
)R
eco
gn
itio
n o
f sh
are-
bas
ed p
aym
ent
rese
rve
– –
– 1
0 9
63
– –
10
96
3U
naud
ited
bal
ance
at
31 D
ecem
ber
20
18 –
re
stat
ed 6
46
2 3
89
9 0
09
43
1 3
09
06
4 1
06
511
839
86
8 (
104
215
)16
623
04
8To
tal c
om
pre
hens
ive
inco
me
– (
64
6 7
32)
(27
84
6)
– –
– (
674
578
)L
oss
fo
r th
e p
erio
d –
(6
46
73
2) –
– –
– (
64
6 7
32)
Oth
er c
om
pre
hen
sive
loss
– –
(27
84
6)
– –
– (
27 8
46
)F
ore
ign
cu
rren
cy t
ran
slat
ion
res
erve
– –
– –
(6
8 7
22)
– (
68
722
)Is
sue
of
shar
es 1
19
6 –
– –
– –
1 1
96
Set
tlem
ent
of
shar
e-b
ased
pay
men
t tr
ansa
ctio
n –
– –
(2)
– –
(2)
Div
iden
ds
(28
4 9
16)
(28
4 9
16)
Tran
sfer
of
rese
rve
fro
m a
cqu
isti
on
of
no
n-
con
tro
llin
g in
tere
st r
eser
ve –
(10
4 2
15)
– –
– 1
04
215
–Tr
ansf
er o
f sh
are-
bas
ed p
aym
ent
rese
rve
on
ve
stin
g –
46
7 –
(4
67)
– –
–P
rese
nt
valu
e o
f lo
ans
to a
sso
ciat
e –
(19
370
) –
– –
– (
19 3
70)
Rec
og
nit
ion
of
shar
e-b
ased
pay
men
t re
serv
e –
– –
11
076
– –
11
076
Aud
ited
bal
ance
at
30 J
une
2019
6 4
63
58
5 7
954
66
5 2
81
218
117
118
771
14
6 –
15 5
87
732
Tota
l co
mp
rehe
nsiv
e in
com
e –
(37
027
) 9
273
– –
– (
27 7
54)
Lo
ss f
or
the
per
iod
– (
37 0
27)
– –
– –
(37
027
)O
ther
co
mp
reh
ensi
ve in
com
e –
– 9
273
– –
– 9
273
Fo
reig
n c
urr
ency
tra
nsl
atio
n r
eser
ve –
– –
– (
298
08
2) –
(29
8 0
82)
Issu
e o
f sh
ares
9 5
18 –
– (
9 5
18)
– –
–D
ivid
end
s –
(28
8 4
33)
– –
– –
(28
8 4
33)
Tran
sfer
of
shar
e-b
ased
pay
men
t re
serv
e o
n
vest
ing
– 7
10 –
(71
0)
– –
–R
ever
sal o
f p
rese
nt
valu
e o
f lo
ans
to a
sso
ciat
e –
80
20
2 –
– –
– 8
0 2
02
Ob
tain
ing
co
ntr
ol o
f en
tity
– 3
18
3 –
– –
– 3
18
3R
eco
gn
itio
n o
f sh
are-
bas
ed p
aym
ent
rese
rve
– –
– 1
1 6
49
– –
11
64
9U
naud
ited
bal
ance
at
31 D
ecem
ber
20
19 6
473
10
3 7
713
30
0 2
90
49
1 1
18 5
39 4
73 0
64
–15
06
8 4
97
Condensed consolidated statement of changes in equity
/ 70 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Office and mixed use
R’000RetailR'000
IndustrialR'000
HotelR'000
Waterfall developments
R'000Head office SA
R'000Total SA
R'000
MASEuropean
R'000Rest of Africa
R'000
Head office GlobalR'000
TotalR'000
STATEMENT OF FINANCIAL POSITIONInvestment property 6 568 694 9 766 067 1 468 344 353 278 – 2 000 18 158 383 – – – 18 158 383Waterfall developments – – – – 2 161 600 – 2 161 600 – – – 2 161 600
Developments under construction – – – – 910 593 – 910 593 – – – 910 593Leasehold land – – – – 1 251 007 – 1 251 007 – – – 1 251 007
Straight-line lease debtor 718 106 226 083 140 953 10 430 – – 1 095 572 – – – 1 095 572Intangible assets and goodwill – – – – – 242 459 242 459 – – – 242 459Investments in associates and joint ventures 1 079 26 564 – – – 1 018 28 661 2 975 166 – – 3 003 827Other financial assets 336 005 28 157 6 847 – – 33 689 404 698 9 959 – – 414 657Loans to associates and joint ventures – – – – 116 293 5 061 121 354 – 585 147 – 706 501Trade and other receivables 98 789 62 400 9 708 1 075 24 555 14 517 211 044 – – 48 211 092Cash and cash equivalents 76 486 104 796 6 098 7 547 349 431 537 365 – – 174 317 711 682Inventory 59 304 – – – 25 322 – 84 626 – – – 84 626Non-current assets held for sale 135 000 – – – 26 465 80 000 241 465 – – – 241 465Other assets 1 673 – – – – 27 499 29 172 – – 219 29 391Total assets 7 995 136 10 214 067 1 631 950 364 790 2 354 782 755 674 23 316 399 2 985 125 585 147 174 584 27 061 255Long-term borrowings – – – – – 9 440 412 9 440 412 – – 1 358 918 10 799 330Other financial liabilities – – – – – 293 841 293 841 – – – 293 841Deferred tax liabilities – – – – – 110 614 110 614 91 854 – – 202 468Trade and other payables 146 687 161 390 12 843 2 110 18 171 65 334 406 535 – – 15 953 422 488Lease liability 134 054 51 517 50 287 2 253 – 11 157 249 268 – – – 249 268Other liabilities – – – – 16 062 9 261 25 323 – – 40 25 363Total liabilities 280 741 212 907 63 130 4 363 34 233 9 930 619 10 525 993 91 854 – 1 374 911 11 992 758STATEMENT OF COMPREHENSIVE INCOMERental income 419 919 577 827 107 533 20 168 – 5 552 1 130 999 – – – 1 130 999Straight-line lease income adjustment 47 487 (5 941) 17 025 (2 150) – – 56 421 – – – 56 421Sale of inventory 7 528 – – – – – 7 528 – – – 7 528Property expenses (120 634) (235 550) (27 452) (5 985) – 3 793 (385 828) – – – (385 828)Cost of sales 1 422 – – – – – 1 422 – – – 1 422Net profit from property operations 355 722 336 336 97 106 12 033 – 9 345 810 542 – – – 810 542Other income 150 – 197 – – 8 200 8 547 7 567 45 220 – 61 334Operating expenses (15 821) (17 302) (3 987) (867) – (45 645) (83 622) – – – (83 622)Impairment losses (5) (5) (1 476) – – (263 771) (265 257) – (21) – (265 278)Other expenses – – (2) – (17 323) (7 689) (25 014) – (6 675) – (31 689)Operating profit/(loss) 340 046 319 029 91 838 11 166 (17 323) (299 560) 445 196 7 567 38 524 – 491 287Amortisation of intangible assets – – – – – (9 982) (9 982) – – – (9 982)Fair value adjustments (331 062) (39 375) (27 219) 16 609 50 922 (22 846) (352 971) – – – (352 971)Net income from associates 57 (5 441) – – – (173) (5 557) 193 962 – – 188 405Investment income 19 766 3 935 586 – – 10 679 34 966 – 14 998 – 49 964Finance costs (5 944) (2 402) (2 475) (108) – (412 259) (423 188) – – (14 483) (437 671)Profit/(loss) before tax 22 863 275 746 62 730 27 667 33 599 (734 141) (311 536) 201 529 53 522 (14 483) (70 968)Taxation – – – – – (10 595) (10 595) 44 576 – (40) 33 941Profit/(loss) for the period attributable to owners 22 863 275 746 62 730 27 667 33 599 (744 736) (322 131) 246 105 53 522 (14 523) (37 027)
Unaudited condensed segmental analysis31 December 2019
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 71 /
Office and mixed use
R’000RetailR'000
IndustrialR'000
HotelR'000
Waterfall developments
R'000Head office SA
R'000Total SA
R'000
MASEuropean
R'000Rest of Africa
R'000
Head office GlobalR'000
TotalR'000
STATEMENT OF FINANCIAL POSITIONInvestment property 6 568 694 9 766 067 1 468 344 353 278 – 2 000 18 158 383 – – – 18 158 383Waterfall developments – – – – 2 161 600 – 2 161 600 – – – 2 161 600
Developments under construction – – – – 910 593 – 910 593 – – – 910 593Leasehold land – – – – 1 251 007 – 1 251 007 – – – 1 251 007
Straight-line lease debtor 718 106 226 083 140 953 10 430 – – 1 095 572 – – – 1 095 572Intangible assets and goodwill – – – – – 242 459 242 459 – – – 242 459Investments in associates and joint ventures 1 079 26 564 – – – 1 018 28 661 2 975 166 – – 3 003 827Other financial assets 336 005 28 157 6 847 – – 33 689 404 698 9 959 – – 414 657Loans to associates and joint ventures – – – – 116 293 5 061 121 354 – 585 147 – 706 501Trade and other receivables 98 789 62 400 9 708 1 075 24 555 14 517 211 044 – – 48 211 092Cash and cash equivalents 76 486 104 796 6 098 7 547 349 431 537 365 – – 174 317 711 682Inventory 59 304 – – – 25 322 – 84 626 – – – 84 626Non-current assets held for sale 135 000 – – – 26 465 80 000 241 465 – – – 241 465Other assets 1 673 – – – – 27 499 29 172 – – 219 29 391Total assets 7 995 136 10 214 067 1 631 950 364 790 2 354 782 755 674 23 316 399 2 985 125 585 147 174 584 27 061 255Long-term borrowings – – – – – 9 440 412 9 440 412 – – 1 358 918 10 799 330Other financial liabilities – – – – – 293 841 293 841 – – – 293 841Deferred tax liabilities – – – – – 110 614 110 614 91 854 – – 202 468Trade and other payables 146 687 161 390 12 843 2 110 18 171 65 334 406 535 – – 15 953 422 488Lease liability 134 054 51 517 50 287 2 253 – 11 157 249 268 – – – 249 268Other liabilities – – – – 16 062 9 261 25 323 – – 40 25 363Total liabilities 280 741 212 907 63 130 4 363 34 233 9 930 619 10 525 993 91 854 – 1 374 911 11 992 758STATEMENT OF COMPREHENSIVE INCOMERental income 419 919 577 827 107 533 20 168 – 5 552 1 130 999 – – – 1 130 999Straight-line lease income adjustment 47 487 (5 941) 17 025 (2 150) – – 56 421 – – – 56 421Sale of inventory 7 528 – – – – – 7 528 – – – 7 528Property expenses (120 634) (235 550) (27 452) (5 985) – 3 793 (385 828) – – – (385 828)Cost of sales 1 422 – – – – – 1 422 – – – 1 422Net profit from property operations 355 722 336 336 97 106 12 033 – 9 345 810 542 – – – 810 542Other income 150 – 197 – – 8 200 8 547 7 567 45 220 – 61 334Operating expenses (15 821) (17 302) (3 987) (867) – (45 645) (83 622) – – – (83 622)Impairment losses (5) (5) (1 476) – – (263 771) (265 257) – (21) – (265 278)Other expenses – – (2) – (17 323) (7 689) (25 014) – (6 675) – (31 689)Operating profit/(loss) 340 046 319 029 91 838 11 166 (17 323) (299 560) 445 196 7 567 38 524 – 491 287Amortisation of intangible assets – – – – – (9 982) (9 982) – – – (9 982)Fair value adjustments (331 062) (39 375) (27 219) 16 609 50 922 (22 846) (352 971) – – – (352 971)Net income from associates 57 (5 441) – – – (173) (5 557) 193 962 – – 188 405Investment income 19 766 3 935 586 – – 10 679 34 966 – 14 998 – 49 964Finance costs (5 944) (2 402) (2 475) (108) – (412 259) (423 188) – – (14 483) (437 671)Profit/(loss) before tax 22 863 275 746 62 730 27 667 33 599 (734 141) (311 536) 201 529 53 522 (14 483) (70 968)Taxation – – – – – (10 595) (10 595) 44 576 – (40) 33 941Profit/(loss) for the period attributable to owners 22 863 275 746 62 730 27 667 33 599 (744 736) (322 131) 246 105 53 522 (14 523) (37 027)
/ 72 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Office and mixed use
R'000Retail
R'000Industrial
R'000Hotel
R'000
Waterfall developments
R'000Head office SA
R'000Total SA
R'000
MASEuropean
R'000Rest of Africa
R'000
Head office Global R'000
Total R'000
STATEMENT OF FINANCIAL POSITIONInvestment property 6 693 022 9 778 866 1 402 250 318 587 – 5 000 18 197 725 – – – 18 197 725Waterfall developments – – – – 2 171 435 – 2 171 435 – – – 2 171 435
Developments under construction – – – – 597 594 – 597 594 – – – 597 594Leasehold land – – – – 1 573 841 – 1 573 841 – – – 1 573 841
Straight-line lease debtor 553 808 239 034 116 352 14 149 – – 923 343 – – – 923 343Intangible assets and goodwill – – – – – 324 294 324 294 – – – 324 294Investments in associates and joint ventures 978 37 619 91 025 – 963 58 142 188 727 3 182 830 – – 3 371 557Other financial assets 352 526 22 394 6 913 – – 21 794 403 627 10 525 – – 414 152Loans to associates and joint ventures – – 69 – 136 486 281 317 417 872 – 806 366 – 1 224 238Trade and other receivables 43 240 75 980 13 180 1 230 72 071 19 987 225 688 – – 19 225 707Cash and cash equivalents 44 740 106 900 7 164 54 129 502 985 661 972 – – 66 375 728 347Inventory – – – – 93 078 – 93 078 – – – 93 078Non-current assets held for sale – – 108 204 – 67 777 763 176 744 – – – 176 744Other assets 2 673 – – – – 45 740 48 413 – – – 48 413Total assets 7 690 987 10 260 793 1 745 157 334 020 2 541 939 1 260 022 23 832 918 3 193 355 806 366 66 394 27 899 033Long-term borrowings – – – – – 9 038 478 9 038 478 – – 1 471 921 10 510 399Other financial liabilities – – 12 807 – – 166 765 179 572 – – 1 051 180 623Deferred tax liabilities – – – – – 46 996 46 996 138 371 – – 185 367Trade and other payables 101 119 151 932 25 723 1 091 55 412 26 418 361 695 – – 40 361 735Other liabilities – – – – 27 029 10 424 37 453 – – 408 37 861Total liabilities 101 119 151 932 38 530 1 091 82 441 9 289 081 9 664 194 138 371 – 1 473 420 11 275 985STATEMENT OF COMPREHENSIVE INCOMERental income 356 074 551 073 72 574 19 165 – 5 115 1 004 001 – – – 1 004 001Straight-line lease income adjustment 62 380 3 366 16 775 (1 202) – – 81 319 – – – 81 319 Sale of inventory 32 267 – (10 521) – – – 21 746 – – – 21 746 Property expenses (121 907) (214 682) (22 049) (6 061) – (647) (365 346) – – – (365 346)Cost of sales (29 517) – 8 396 – – – (21 121) – – – (21 121)Net profit from property operations 299 297 339 757 65 175 11 902 – 4 468 720 599 – – – 720 599 Other income – – – – – 2 816 2 816 12 848 21 221 2 638 39 523 Operating expenses (16 721) (16 082) (3 510) (288) – (46 907) (83 508) – – – (83 508)Impairment losses – – – – – (239) (239) – (370 282) – (370 521)Other expenses – – – – (16 213) (5 233) (21 446) – (11 828) – (33 274)Operating profit/(loss) 282 576 323 675 61 665 11 614 (16 213) (45 095) 618 222 12 848 (360 889) 2 638 272 819 Amortisation of intangible assets – – – – – (9 982) (9 982) – – – (9 982)Fair value adjustments (58 956) 74 344 (12 466) 6 110 77 930 (16 552) 70 410 – – 693 71 103 Net income from associates 24 (2 502) 3 463 – (795) (7 832) (7 642) 41 683 (16 586) – 17 455 Investment income 19 273 2 990 44 12 – 48 299 70 618 – 68 189 – 138 807 Finance costs – – – – – (417 705) (417 705) – – (17 871) (435 576)Profit/(loss) before tax 242 917 398 507 52 706 17 736 60 922 (448 867) 323 921 54 531 (309 286) (14 540) 54 626 Taxation - - - - - 1 831 1 831 (11 912) - (401) (10 482)Profit/(loss) for the period attributable to owners 242 917 398 507 52 706 17 736 60 922 (447 036) 325 752 42 619 (309 286) (14 941) 44 144
Restated unaudited condensed segmental analysis31 December 2018
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 73 /
Office and mixed use
R'000Retail
R'000Industrial
R'000Hotel
R'000
Waterfall developments
R'000Head office SA
R'000Total SA
R'000
MASEuropean
R'000Rest of Africa
R'000
Head office Global R'000
Total R'000
STATEMENT OF FINANCIAL POSITIONInvestment property 6 693 022 9 778 866 1 402 250 318 587 – 5 000 18 197 725 – – – 18 197 725Waterfall developments – – – – 2 171 435 – 2 171 435 – – – 2 171 435
Developments under construction – – – – 597 594 – 597 594 – – – 597 594Leasehold land – – – – 1 573 841 – 1 573 841 – – – 1 573 841
Straight-line lease debtor 553 808 239 034 116 352 14 149 – – 923 343 – – – 923 343Intangible assets and goodwill – – – – – 324 294 324 294 – – – 324 294Investments in associates and joint ventures 978 37 619 91 025 – 963 58 142 188 727 3 182 830 – – 3 371 557Other financial assets 352 526 22 394 6 913 – – 21 794 403 627 10 525 – – 414 152Loans to associates and joint ventures – – 69 – 136 486 281 317 417 872 – 806 366 – 1 224 238Trade and other receivables 43 240 75 980 13 180 1 230 72 071 19 987 225 688 – – 19 225 707Cash and cash equivalents 44 740 106 900 7 164 54 129 502 985 661 972 – – 66 375 728 347Inventory – – – – 93 078 – 93 078 – – – 93 078Non-current assets held for sale – – 108 204 – 67 777 763 176 744 – – – 176 744Other assets 2 673 – – – – 45 740 48 413 – – – 48 413Total assets 7 690 987 10 260 793 1 745 157 334 020 2 541 939 1 260 022 23 832 918 3 193 355 806 366 66 394 27 899 033Long-term borrowings – – – – – 9 038 478 9 038 478 – – 1 471 921 10 510 399Other financial liabilities – – 12 807 – – 166 765 179 572 – – 1 051 180 623Deferred tax liabilities – – – – – 46 996 46 996 138 371 – – 185 367Trade and other payables 101 119 151 932 25 723 1 091 55 412 26 418 361 695 – – 40 361 735Other liabilities – – – – 27 029 10 424 37 453 – – 408 37 861Total liabilities 101 119 151 932 38 530 1 091 82 441 9 289 081 9 664 194 138 371 – 1 473 420 11 275 985STATEMENT OF COMPREHENSIVE INCOMERental income 356 074 551 073 72 574 19 165 – 5 115 1 004 001 – – – 1 004 001Straight-line lease income adjustment 62 380 3 366 16 775 (1 202) – – 81 319 – – – 81 319 Sale of inventory 32 267 – (10 521) – – – 21 746 – – – 21 746 Property expenses (121 907) (214 682) (22 049) (6 061) – (647) (365 346) – – – (365 346)Cost of sales (29 517) – 8 396 – – – (21 121) – – – (21 121)Net profit from property operations 299 297 339 757 65 175 11 902 – 4 468 720 599 – – – 720 599 Other income – – – – – 2 816 2 816 12 848 21 221 2 638 39 523 Operating expenses (16 721) (16 082) (3 510) (288) – (46 907) (83 508) – – – (83 508)Impairment losses – – – – – (239) (239) – (370 282) – (370 521)Other expenses – – – – (16 213) (5 233) (21 446) – (11 828) – (33 274)Operating profit/(loss) 282 576 323 675 61 665 11 614 (16 213) (45 095) 618 222 12 848 (360 889) 2 638 272 819 Amortisation of intangible assets – – – – – (9 982) (9 982) – – – (9 982)Fair value adjustments (58 956) 74 344 (12 466) 6 110 77 930 (16 552) 70 410 – – 693 71 103 Net income from associates 24 (2 502) 3 463 – (795) (7 832) (7 642) 41 683 (16 586) – 17 455 Investment income 19 273 2 990 44 12 – 48 299 70 618 – 68 189 – 138 807 Finance costs – – – – – (417 705) (417 705) – – (17 871) (435 576)Profit/(loss) before tax 242 917 398 507 52 706 17 736 60 922 (448 867) 323 921 54 531 (309 286) (14 540) 54 626 Taxation - - - - - 1 831 1 831 (11 912) - (401) (10 482)Profit/(loss) for the period attributable to owners 242 917 398 507 52 706 17 736 60 922 (447 036) 325 752 42 619 (309 286) (14 941) 44 144
/ 74 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Audited condensed segmental analysis30 June 2019
Office and mixed use
R'000Retail
R'000Industrial
R'000Hotel
R'000
Waterfall developments
R'000Head office SA
R'000Total SA
R'000
MASEuropean
R'000Rest of Africa
R'000
Head office Global R'000
Total R'000
STATEMENT OF FINANCIAL POSITIONInvestment property 6 568 929 9 686 888 1 436 998 334 294 – 5 000 18 032 109 – – – 18 032 109 Waterfall developments – – – – 2 049 435 – 2 049 435 – – – 2 049 435
Developments under construction – – – – 791 276 – 791 276 – – – 791 276 Leasehold land – – – – 1 258 159 – 1 258 159 – – – 1 258 159
Straight-line lease debtor 670 618 232 022 123 927 12 580 – – 1 039 147 – – – 1 039 147 Intangible assets and goodwill – – – – – 252 441 252 441 – – – 252 441 Investments in associates and joint ventures 1 022 32 004 – – – 1 191 34 217 3 183 494 – – 3 217 711 Other financial assets 343 035 24 320 9 289 – – 33 237 409 881 9 484 – – 419 365 Loans to associates and joint ventures – – – – 111 620 242 540 354 160 – 639 444 – 993 604 Trade and other receivables 37 177 57 128 7 700 1 001 97 018 3 354 203 378 – – 72 203 450 Cash and cash equivalents 344 698 90 760 5 762 21 971 50 650 492 862 – – 180 624 673 486 Inventory – – – – 51 137 – 51 137 – – – 51 137 Non-current assets held for sale – – 77 000 – 19 018 763 96 781 – – – 96 781 Other assets 2 173 – – – – 19 562 21 735 – – – 21 735 Total assets 7 967 652 10 123 122 1 660 676 347 896 2 329 199 608 738 23 037 283 3 192 978 639 444 180 696 27 050 401 Long-term borrowings – – – – – 9 007 294 9 007 294 – – 1 455 451 10 462 745 Other financial liabilities – – – – – 297 551 297 551 – – – 297 551 Deferred tax liabilities – – – – – 100 019 100 019 138 520 – – 238 539 Trade and other payables 121 765 143 902 12 435 1 712 62 752 30 906 373 472 – 16 218 – 389 690 Non-current liabilities held directly associated with assets held for sale – – – – – 53 986 53 986 – – – 53 986 Other liabilities – – – – 10 925 7 978 18 903 – – 1 255 20 158 Total liabilities 121 765 143 902 12 435 1 712 73 677 9 497 734 9 851 225 138 520 16 218 1 456 706 11 462 669 STATEMENT OF COMPREHENSIVE INCOMERental income 739 065 1 114 314 156 860 38 213 – 9 096 2 057 548 – – – 2 057 548 Straight-line lease income adjustment 179 189 (3 645) 24 351 (2 771) – – 197 124 – – – 197 124 Sale of inventory 39 093 – (10 521) – – – 28 572 – – – 28 572 Property expenses (244 625) (448 831) (47 273) (11 762) – 3 348 (749 143) – – – (749 143)Cost of sales (39 943) – 8 396 – – – (31 547) – – – (31 547)Net profit from property operations 672 779 661 838 131 813 23 680 – 12 444 1 502 554 – – – 1 502 554 Other income 406 – 28 571 – – 3 898 32 875 21 164 33 313 2 180 89 532 Operating expenses (33 632) (32 869) (7 530) (764) – (80 690) (155 485) – – – (155 485)Impairment losses – – – – (29 975) (55 865) (85 840) – (419 308) – (505 148)Other expenses – (930) (86) – (26 589) (66 823) (94 428) – (75 710) – (170 138)Operating profit/(loss) 639 553 628 039 152 768 22 916 (56 564) (187 036) 1 199 676 21 164 (461 705) 2 180 761 315 Amortisation of intangible assets – – – – – (19 964) (19 964) – – – (19 964)Fair value adjustments (267 082) (86 608) (41 323) 21 816 (291 913) (137 979) (803 089) – – 1 354 (801 735)Net income from associates 69 (8 117) (759) – (1 758) (67 380) (77 945) 204 037 (1 322) – 124 770 Investment income 38 104 6 529 199 17 – 66 760 111 609 – 118 940 – 230 549 Finance costs – – – – – (820 681) (820 681) (1 003) – (33 781) (855 465)Profit/(loss) before tax 410 644 539 843 110 885 44 749 (350 235) (1 166 280) (410 394) 224 198 (344 087) (30 247) (560 530)Taxation – – – – – (26 111) (26 111) (14 287) – (1 660) (42 058)Profit/(loss) for the year attributable to owners 410 644 539 843 110 885 44 749 (350 235) (1 192 391) (436 505) 209 911 (344 087) (31 907) (602 588)
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 75 /
Office and mixed use
R'000Retail
R'000Industrial
R'000Hotel
R'000
Waterfall developments
R'000Head office SA
R'000Total SA
R'000
MASEuropean
R'000Rest of Africa
R'000
Head office Global R'000
Total R'000
STATEMENT OF FINANCIAL POSITIONInvestment property 6 568 929 9 686 888 1 436 998 334 294 – 5 000 18 032 109 – – – 18 032 109 Waterfall developments – – – – 2 049 435 – 2 049 435 – – – 2 049 435
Developments under construction – – – – 791 276 – 791 276 – – – 791 276 Leasehold land – – – – 1 258 159 – 1 258 159 – – – 1 258 159
Straight-line lease debtor 670 618 232 022 123 927 12 580 – – 1 039 147 – – – 1 039 147 Intangible assets and goodwill – – – – – 252 441 252 441 – – – 252 441 Investments in associates and joint ventures 1 022 32 004 – – – 1 191 34 217 3 183 494 – – 3 217 711 Other financial assets 343 035 24 320 9 289 – – 33 237 409 881 9 484 – – 419 365 Loans to associates and joint ventures – – – – 111 620 242 540 354 160 – 639 444 – 993 604 Trade and other receivables 37 177 57 128 7 700 1 001 97 018 3 354 203 378 – – 72 203 450 Cash and cash equivalents 344 698 90 760 5 762 21 971 50 650 492 862 – – 180 624 673 486 Inventory – – – – 51 137 – 51 137 – – – 51 137 Non-current assets held for sale – – 77 000 – 19 018 763 96 781 – – – 96 781 Other assets 2 173 – – – – 19 562 21 735 – – – 21 735 Total assets 7 967 652 10 123 122 1 660 676 347 896 2 329 199 608 738 23 037 283 3 192 978 639 444 180 696 27 050 401 Long-term borrowings – – – – – 9 007 294 9 007 294 – – 1 455 451 10 462 745 Other financial liabilities – – – – – 297 551 297 551 – – – 297 551 Deferred tax liabilities – – – – – 100 019 100 019 138 520 – – 238 539 Trade and other payables 121 765 143 902 12 435 1 712 62 752 30 906 373 472 – 16 218 – 389 690 Non-current liabilities held directly associated with assets held for sale – – – – – 53 986 53 986 – – – 53 986 Other liabilities – – – – 10 925 7 978 18 903 – – 1 255 20 158 Total liabilities 121 765 143 902 12 435 1 712 73 677 9 497 734 9 851 225 138 520 16 218 1 456 706 11 462 669 STATEMENT OF COMPREHENSIVE INCOMERental income 739 065 1 114 314 156 860 38 213 – 9 096 2 057 548 – – – 2 057 548 Straight-line lease income adjustment 179 189 (3 645) 24 351 (2 771) – – 197 124 – – – 197 124 Sale of inventory 39 093 – (10 521) – – – 28 572 – – – 28 572 Property expenses (244 625) (448 831) (47 273) (11 762) – 3 348 (749 143) – – – (749 143)Cost of sales (39 943) – 8 396 – – – (31 547) – – – (31 547)Net profit from property operations 672 779 661 838 131 813 23 680 – 12 444 1 502 554 – – – 1 502 554 Other income 406 – 28 571 – – 3 898 32 875 21 164 33 313 2 180 89 532 Operating expenses (33 632) (32 869) (7 530) (764) – (80 690) (155 485) – – – (155 485)Impairment losses – – – – (29 975) (55 865) (85 840) – (419 308) – (505 148)Other expenses – (930) (86) – (26 589) (66 823) (94 428) – (75 710) – (170 138)Operating profit/(loss) 639 553 628 039 152 768 22 916 (56 564) (187 036) 1 199 676 21 164 (461 705) 2 180 761 315 Amortisation of intangible assets – – – – – (19 964) (19 964) – – – (19 964)Fair value adjustments (267 082) (86 608) (41 323) 21 816 (291 913) (137 979) (803 089) – – 1 354 (801 735)Net income from associates 69 (8 117) (759) – (1 758) (67 380) (77 945) 204 037 (1 322) – 124 770 Investment income 38 104 6 529 199 17 – 66 760 111 609 – 118 940 – 230 549 Finance costs – – – – – (820 681) (820 681) (1 003) – (33 781) (855 465)Profit/(loss) before tax 410 644 539 843 110 885 44 749 (350 235) (1 166 280) (410 394) 224 198 (344 087) (30 247) (560 530)Taxation – – – – – (26 111) (26 111) (14 287) – (1 660) (42 058)Profit/(loss) for the year attributable to owners 410 644 539 843 110 885 44 749 (350 235) (1 192 391) (436 505) 209 911 (344 087) (31 907) (602 588)
/ 76 ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
The reconciliation of profit to distributable earnings is a non-IFRS financial measure and does not form part of the condensed financial statements for the periods and year presented.
Unaudited31 December
2019R'000
RestatedUnaudited
31 December2018
R'000
Audited30 June
2019R'000
(Loss)/profit for the period/year attributable to Attacq's shareholders (37 027) 44 144 (602 588)Loss on disposal of associate 83 – –Profit on disposal of other investments – (2 180) –Loss/(profit) on disposal of investment property 2 – (11 095)Loss/(profit) on disposal of investment in associate – 2 597 (14 547)Net impairment of associates, other investments and loans 251 710 370 508 550 967Impairment of Wi-Fi rights intangible asset – – 61 871Fair value adjustments 352 971 (71 103) 801 735Net income from associates and joint ventures (188 405) (17 455) (124 770)Straight-line lease income adjustments (56 421) (81 319) (197 124)Net non-cash interest from associates (10 014) (65 041) (114 193)Net cash interest received from associates 3 450 31 405 89 514Depreciation and amortisation 18 118 18 631 37 026Unrealised foreign currency translation effect (25 628) (19 867) (31 667)Dividends received from associates 121 177 99 600 191 045Edcon restructure (7 525) – (4 129)Interest on lease liability 11 359 – –Rental paid (23 155) – –Other non-cash movements (568) – –Deferred taxation (36 071) 6 457 32 061Distributable earnings for the period/year 374 056 316 377 664 106Number of shares in issue* 703 906 577 703 395 224 703 495 224Weighted average number of shares in issue* 703 669 602 703 178 702 703 311 279DEPSBasic (cents) 53.2 45.0 94.4Dividends (R’000) 316 758 284 875 573 308Interim (R’000) 316 758 284 875 284 875Final (R’000) – – 288 433Dividend per share (cents) 45.0 40.5 81.5Interim (cents) 45.0 40.5 40.5Final (cents) – – 41.0
* Adjusted for 46 427 553 treasury shares
ANNEXURE Reconciliation of profit for the period/year to distributable earnings
ATTACQ INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 77 /
Independent non-executive directorsP Tredoux (Chairman)HR El Haimer (Lead independent)IN MkhariBT NagleS Shaw-TaylorJHP van der Merwe
Executive directorsM Hamman (CEO)R Nana (CFO)JR van Niekerk (COO)
Company secretaryP de Villiers (resigned 29 February 2020)A Matwa (appointed 1 March 2020)
Registered officeATT House, 2nd FloorMaxwell Office Park37 Magwa CrescentWaterfall City2090
Postal addressPostNet suite 016Private Bag X81Halfway House1685
Transfer secretariesComputershare Investor Services (Pty) LtdRosebank Towers, 15 Biermann Avenue, Rosebank, 2196(PO Box 61051, Marshalltown, 2107)
SponsorJava Capital
Company contact detailsHead of Investor RelationsBI BothaLandline number: +27 12 010 3457
ATT House, 2nd Floor, Maxwell Offi ce Park, 37 Magwa Crescent, Waterfall City, 2090+27 10 549 1050 | [email protected]