CONSOLIDATED QUARTERLY REPORT for the fourth quarter of 2011 from 1 October to 31 December 2011
1. INTRODUCTION The Issuer is the parent company of a real estate development group with investments in the following market sectors: - residential, - commercial, - land. The Issuer operates through special purpose vehicles. The direct owner of the Issuer s shares in SPVs is Fundusz Inwestycyjny Zamknięty Monday (Monday FIZ), a closed-ended fund acting pursuant to Poland s investment funds act. With regard to the structure of the Monday Development Group, the Issuer's Management Board has recognised that, in parts of the separate and consolidated reports relating to factors and events affecting the financial result (point 5 below) and corporate development (point 6 below), it is also necessary to present circumstances and events relating to projects implemented by specific SPVs, despite the fact that formally these are not the Issuer s subsidiaries and are not subject to consolidation. 2. BASIC INFORMATION ON THE ISSUER 2.1. Monday Development S.A. is registered in the Register of Companies under entry number KRS 0000323647. The entry was made by the District Court for Poznań Nowe Miasto i Wilda in Poznań, 8th Commercial Division of the National Court Register. The Company's registered office is in Poznań at ul. Piątkowska 116. 2.2. The Company holds the following identification numbers: REGON 301054767 NIP 7811832838 2.3. Telephone and address details MONDAY DEVELOPMENT S.A. ul. Piątkowska 116 60-649 Poznań tel. +48 616705000 fax +48 616705001 www.mondaydevelopment.pl biuro@mondaydevelopment.pl 2.4. Management Board Kurt Montgomery - President of the Management Board Monika Owerko - Member of the Management Board Piotr Łopatka - Member of the Management Board 2
3. ISSUER'S SUBSIDIARIES COMPANY NAME COMPANY PROFILE ISSUER'S STAKE MONDAY SP. Z O.O. general partner in real estate development entities 100.0% MONDAY MANAGEMENT SP. Z O.O. general partner in a management entity 100.0% INTERNAL FINANCE SP. Z O.O. general partner in a financing entity 100.0% MONDAY PALACZA SP. Z O.O. general partner in SPV Palacza 50.0% MONDAY PALACZA SP. Z O.O. SKA special purpose vehicle 49.9% The Issuer is the sole owner of investment certificates in Monday FIZ which, with regard to the fact that it is not defined as a subsidiary, is not subject to consolidation. 4. SELECTED FINANCIAL DATA DESCRIPTION 4Q 2011 4Q 2010 Q1-Q42011 Q1-Q42010 1 Oct - 30 Dec 2011 1 Oct - 30 Dec 2010 1 Jan - 30 Dec 2011 1 Jan - 30 Dec 2010 NON-CURRENT RECEIVABLES - - - - NON-CURRENT INVESTMENTS 28182 15383 28182 15383 CURRENT RECEIVABLES 161 579 161 579 CURRENT INVESTMENTS 13842 5261 13842 5261 CASH AND CASH EQUIVALENTS 696 92 696 92 EQUITY 26092 15135 26092 15135 NON-CURRENT PAYABLES 7097-7097 - CURRENT PAYABLES 5056 4463 5056 4463 DEPRECIATION - - - - in PLN thousand NET REVENUE FROM SALES 360 279 1800 1115 PROFIT (LOSS) ON SALES 14 145 371 419 OPERATING PROFIT (LOSS) 14 142 369 417 GROSS PROFIT (LOSS) 14 128 373 314 NET PROFIT (LOSS) 152 112 500 272 in PLN thousand 3
5. FACTORS AND EVENTS AFFECTING THE FINANCIAL RESULT 5.1. The level of the Issuer's equity is stable and has increased by PLN 3 334 000, mainly due to a PLN 3 927 000 increase in the value of investment certificates held in FIZ Monday. Due to the increase in value of the certificates, the Company has created a PLN 746 000 deferred tax provision. 5.2. Revaluation of portfolio companies increased Monday FIZ s valuation by a total of PLN 4 004 000. The higher valuation results from project progress and the upcoming generation of proceeds, which is reflected in their lower discount. 5.3. The remaining profit is generated by the Issuer's equity investments. 4
6. CORPORATE DEVELOPMENT 6.1. PIĄTKOWSKA PROJECT PROJECT COMMERCIALISATION The Piątkowska 116 building was handed over at the end of December 2010. By the end of Q4 2011, 82% of office space in the building was covered by preliminary and final sales contracts. Total planned revenues from the investment are estimated at approx. PLN 13.7m. Despite the advanced stage in negotiations with potential purchasers of the remaining premises, the Company has not been able to achieve its goal of completing the commercialisation process in Q4 2011. Based on on-going negotiations, the Company expects the remaining three premises to be sold during the first half of 2012. 6.2. CHWIAŁKOWSKIEGO PROJECT CONTINUATION OF CONSTRUCTION WORKS AND APARTMENT PRE-SALES The Chwiałkowskiego project concerns the construction of a six-storey tenement building with garage and commercial premises with total usable area of 1 900m2. The investment is located in the north of Poznań's Wilda district, immediately neighbouring the city centre. The location provides ease of access to popular leisure, entertainment and shopping attractions and welldeveloped transport and service infrastructure. In Q4 the Company continued the construction works commenced in August 2011 and executed pre-sales of apartments. Construction completion is planned for September 2012. Total planned revenues from the investment amount to PLN 11.7m. 6.3. SOKOŁA I PROJECT COMMENCEMENT OF CONSTRUCTION This project covers the construction of a modern residential building with underground car park at ul. Sokoła 21 in Poznań. The investment is located in the quiet district of Sołacz not far from Sołacki park and close to recreational areas surrounding Lake Rusałka. The development provides for construction of a four-storey building and the repair and renovation of an existing residential building. The project includes apartments with various architectural layouts, from studio flats to four-room apartments, service premises and an underground garage. Construction works commenced at the end of 2011. Pre-sales of apartments began before the start of construction and continued in Q4 2011. Completion of the investment is planned for Q1 2012. Planned revenues from the investment are estimated at PLN 17.9m. 6.4. PALACZA PROJECT APPROVAL OF THE ARCHITECTURAL CONCEPT This investment is located on 12 500m2 of land at the junction of Heweliusza and Palacza streets in Poznań's Grunwald district. A complex of four- and five-storey residential buildings with usable area of approx. 10 000m2 is planned for construction. The development is designed in the style of urban villas and features modern architecture. The project is being implemented jointly with Warsaw-based Unidevelopment Sp. z o.o., a member of the Unibep Group. 5
Work on preparation of an architectural concept for the investment commenced in Q4 2011. Commencement of construction is planned for Q2 2010, with completion in Q1 2014. Planned revenues from the investment are estimated at PLN 65.1m. 6.5. SOKOŁA II PROJECT DEVELOPMENT OF AN ARCHITECTURAL CONCEPT At the end of Q1 2011 the Company signed a preliminary agreement on the acquisition of additional land at ul. Sokoła in Poznań. This land acquisition enabled commencement of the project's second phase construction of a residential building with garage and commercial premises. As a result of expanding the investment to include neighbouring property (this possibility was referred to in the last quarterly report), the entire planned area is approx. 3 300m2 of usable living area. Estimated revenues to be generated from the investment are approx. PLN 21m. Work connected with investment preparation was continued in Q4 2011. Commencement of construction is planned for the end of H1 2012. Construction will last 12 months. 6.6. BOTANICZNA PROJECT INVESTMENT PREPARATION In Q4 2011 work continued on preparing the investment, including the acquisition of environmental decisions and acceptance of the transport concept for the residential complex. In December last year the Company obtained a new decision on construction conditions compliant with the current land development concept. The decision was approved and entered into force in January this year. The project also provides for construction to be implemented in several phases between 2012 and 2014. Total planned revenues from the investment are estimated at approx. PLN 155m. After completion of the capital increase phase, Monday Development will hold a 39% stake in the SPV. 6.7. RATAJE PROJECT APPROVAL FOR THE SPATIAL DEVELOPMENT PLAN This project provides for the construction of a complex of residential and office buildings in the Rataje district with total usable area of 24 000m2. In December 2011 Poznań's city council approved a local spatial development plan which provides for development in accordance with the Company's project design for the investment area. In January 2012 the plan was officially entered into the official journal of the Greater Poland Province and in February 2012 became legally binding, enabling the Company to commence development of an architectural design. Planned revenues from the investment are estimated at almost PLN 140m, of which PLN 45m in revenues will be generated under phase I, PLN 46.5m under phase II and PLN 48m under phase III. 6.8. STRZESZYN PROJECT SERVICE INFRASTRUCTURE AND COMMERCIALISATION OF LAND The Strzeszyn project covers the development of 2.17ha of land. The Company is in the process of obtaining permits for all three plots and is continuing work on land development for the investment. 6
The first construction permit was issued in Q2 2011. Going forward, the Company anticipates issue of the second of three construction permits. The third application will be submitted by March this year. Commercialisation of the project is taking longer than anticipated due to the extensive construction permit acquisition procedure. Planned revenues from the investment are estimated at approx. PLN 3.7m. 6.9. MAŁE GARBARY PROJECT AWAITING THE CONDITIONS FOR CONSTRUCTION This project covers the construction of an office building of approx. 1 000m2 in area on a 340m2 plot in the very centre of Poznań. The planned building will be similar in standard and function to the completed Piątkowska 116 project. The Company anticipates issue by the city council's urban planning and architecture department of a decision on construction conditions, which is a condition for commencement of work on an architectural concept for the building. 6.10. WIELKOPOLSKI KAMPUS TECHNOLOGICZNY PROJECT The Greater Poland Technology Campus (Wielkopolski Kampus Technologiczny) is a project aimed at the development of a professional space which will encourage cooperation and development among design and new technology companies. The project is being implemented in cooperation with two experienced consultancy firms from Poznań: ECDF and PWB. The project provides for the construction of an office and service building of approx. 8 000m2 in area. In Q4 2011 the Company filed an application for co-funding of the project under the Greater Poland Regional Operational Programme 2007-2013, Priority I Competitiveness of Enterprises, Measure 1.4, "Support for Enterprises connected with the Regional Innovation Strategy". The Company is currently waiting for a decision on award of the subsidy. 7