The Board of Directors approved the consolidated half-year ...static.classeditori.it/.../CIA-ComunicatoSemestre2016-Df_EN.pdf · The first six months of this year showed significant

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The Board of Directors approved the consolidated half-year report at 30 June 2016

Total revenues of 2.80 million euro

Ebitda increased from 0.61 to 1.2 million euro

Milan, 28 September 2016 – The Board of Directors of Compagnia Immobiliare Azionaria Spa (CIA) met in Milan today to review the activities and the consolidated results relating to the first six months of the year. Consolidated results Overall revenues amounted to 2.80 million euro, down 25.6% from the 3.77 million euro of the same period of the previous year. Operating costs amounted to 1.60 million euro, down from the 3.15 million euro incurred in 2015. The gross operating margin (ebitda) grew from 0.61 million euro to 1.2 million euro. The incidence of the operating margin on revenues at 30 June 2016 equals 42.8%. The results attributable to owners of the parent in the first half of 2016 are negative for 0.99 million euro, against a loss of 1.34 million euro during the same period of the previous year. The consolidated net financial position shows net borrowings of 46.02 million euro as at 30 June 2016, compared with 46.12 million euro as at 31 December 2015. Consolidated net equity amounted to 12.27 million euro compared with 13.47 million at 31 December 2015. Conditions in the principal markets and performance during the first half of 2016

Property market The first six months of this year showed significant signs of recovery for the Italian property market. Though still weak, these signs are no longer confined to the residential sector and now also concern the service/commercial sector, as confirmed by the report published by the Nomisma Real Estate Market Observatory (July 2016). The first half of 2016 saw a generalised growth in all the segments, with an average increase of 17.3% compared with the same period of the previous year; specifically, the residential sector grew by 20.6%, the commercial sector by 14.5% and the service sector by 1.3%. The annual price variation remains in negative territory, with a gap ranging between -1.8% for new homes and -2.5% for offices. According to the Institute’s indications, the annual cape rate of an investment in the real estate sector stands between 5% of the residential sector and 7% of the commercial sector. Even in a context of attention being paid to loan quality, in the first part of 2016, the mortgage loans granted by banks confirmed an expansion (+14.6% compared with the corresponding period of 2015), thanks to the gradual easing of the conditions applied by banks to the offer of loans to businesses and households, the low interest rate and the growing number of applications for new mortgage loans and subrogations from Italian households.

Another reference market for the real estate investments made by Cia is New York–Manhattan, where the entire property sector has recorded exponential growth for two years, beyond the levels prior to the financial crisis of 2008. The positive trend is confirmed in the first half of the year, with a 10% growth compared with the corresponding period of the previous year regarding both the residential and the commercial sector.

In this market scenario characterised by volatility and uncertainty, the real estate investments made by the group in the business sector, despite the temporary decrease in rental fees recorded this year, guarantee a substantial stability of returns consequently to the long contractual maturities and the related activities.

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Italian wine market

Italian exports grew in value also in the first six months of 2016, continuing to drive the Italian wine market: exports rose by 2% compared with the historic record of 2015. The USA is the top market in terms of exports, with an additional increase in value of 5% compared with the first half of 2015. Growing considerably are also the United Kingdom (+7%), Austria (+13%) and China, where Italian wine rose by 15% in value and 17% in volume. Good news also from Russia, which returned to growing with +6% in value and +11.6% in volume. The domestic market showed timid signs of recovery: Oiv estimate of Italian wine consumption returned to be positive in 2015 at +0.3%, while the Iri Infoscan Census figures show for the same year (as confirmed in the first few months of 2016) a rise in sales in large-scale retail (which handles about 66% of total wine purchases) for both volume and value.

The 2016 harvest started one week later than in 2015: Coldiretti estimates an overall 5% increase compared with the 47.5 million hectolitres of last year, coming first in terms of production once again against the long-standing rival, France. In the first half of the year the subsidiary Feudi del Pisciotto recorded a rise in sales of 58% and an increase in the average price of 4.9% compared with the first half of 2015. Bookings and sales forecasts are positive thanks to the growing export channel, especially as a consequence of the long-term contracts signed with leading importers in China and the progressive brand awareness, facilitated by the excellent ratings awarded to the company's wines by international critics. The 2016 harvest, which started in August, confirms the predictions for the entire segment, with an estimated growth of more than 5% in volume compared with the previous year and excellent quality.

Development and investment activities a. In Sicily, the restaurant was inaugurated on 1 May, while the work is almost finished on a

cookery school (for which a partnership agreement with LeCirque was signed) and a small spa within the complex owned by Feudi del Pisciotto. This will complete the planned investment in the Wine Relais, following the earlier opening of hospitality services (10 rooms and suites with every comfort, created in the habitable part of the island's largest eighteenth-century Palmento or winery). In the first half of 2016, which traditionally coincides with the low season, the Relais recorded a significant number of visitors, generating encouraging revenues and a growing occupancy rate. The comments made by guests continue to be all extremely positive, with top ratings in most cases (source of data: Booking and Tripadvisor).

b. A project is being defined to create additional rooms and suites in a portion of the old Baglio stretching over 2,600 square meters, with the aim of implementing and strengthening the current offer of the Wine Relais;

c. on the island of Levanzo (Sicily), a project is being studied to valorise the properties of the subsidiary Agricola Florio Srl by devising a structured area development plan that combines the rural identity of the complex with its tourist vocation, taking those measures that are typical of the so-called Rural Tourism. According to a first phase of the project, about 400 square meters of buildings will be recovered and redeveloped to create charming and very comfortable accommodation that fully respects the island’s architecture and naturalistic setting.

Principal events subsequent to 30 June 2016 No significant event is to be reported that occurred in the first few months of the year other than those already mentioned.

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Business outlook The macroeconomic scenario is still uncertain with regard to the growth prospects for the economy in general, and the Italian system in particular. Encouraging signs of a possible recovery are being seen and the outlook for the operations of the Group remains good, in consideration of the stability of the returns from the investments made, the expectations regarding the development of the property transactions in progress and the growth of the commercial operations of the subsidiary Feudi del Pisciotto. Management’s main guidelines include the development of the business through actions aimed at the organic growth of the results and profitability levels, in line with the group’s financial constraints and the commitment to maximising value creation through efficiency of operations and capital structure.

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For additional information, please contact:

Compagnia Immobiliare Azionaria

Gian Marco Giura

Tel: +39 02-58219395

Mobile: +39 334-6737093

E-mail: [email protected]

The income statement and the statement of financial position are presented below.

The consolidated half-year report will be made available to the public on the website of Cia,

www.c-i-a.it, prior to the legal deadline

The executive responsible for preparing the corporate accounting documents of Compagnia Immobiliare Azionaria

S.p.A., Walter Villa, hereby certifies that the accounting information contained in this document is consistent with the underlying documents, registers and accounting entries.

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Consolidated comprehensive income statement for the period ended 30 June 2016

(thousands of euro)

30 June 2015 30 June 2016

Revenues 3,453 2,678

Other operating income 315 127

Total Revenues 3,768 2,805

Costs for purchases (1,901) (355)

Costs for services (760) (683)

Payroll costs (285) (295)

Other operating costs (214) (269)

Investments measured at net equity 6 (3)

Gross operating margin – EBITDA 614 1,200

Net non-core income/(charges) (52) (503)

Depreciation, amortisation and write-downs (1,131) (744)

Operating result - EBIT (569) (47)

Net financial income/(charges) (1,175) (1,037)

Pre-tax result (1,744) (1,084)

Taxes 405 88

Net Result (1,339) (996)

Profit (loss) attributable to third parties 1 (8)

Result attributable to the group (1,340) (988)

Other components of comprehensive income

statement

Actuarial income/(charges) not recorded in income

statement (IAS 19)

3 (6)

Recalculation of the value of land 1,147 --

Taxes on other components of comprehensive income

statement

-- --

Total components of Comprehensive Income

Statement of the period, net of tax effect

1,150 (6)

TOTAL COMPREHENSIVE INCOME STATEMENT (189) (1,002)

Attributable to:

MINORITY SHAREHOLDERS 1 (8)

PARENT COMPANY SHAREHOLDERS (190) (994)

Basic earnings per share (0.00) (0.01)

Diluted earnings per share (0.00) (0.00)

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Consolidated statement of financial position at 30 June 2016

ASSETS

(thousands of euro)

31 December 2015 30 June 2016

Intangible fixed assets with an indefinite life -- --

Other intangible fixed assets -- --

Intangible fixed assets -- --

Property, plant and equipment 42,537 41,909

Investments measured at net equity 9,782 9,779

Other investments 631 631

Deferred tax assets 331 318

Other receivables 1,977 1,990

NON-CURRENT ASSETS 55,258 54,627

Inventories 16,112 15,950

Trade receivables 2,541 4,014

Tax receivables 659 481

Other receivables 961 815

Cash and cash equivalents 1,033 92

CURRENT ASSETS 21,306 21,352

TOTAL ASSETS 76,564 75,979

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Consolidated statement of financial position at 30 June 2016

LIABILITIES

(thousands of euro)

31 December 2015 30 June 2016

Share capital 923 923

Share premium account 1,526 1,526

Legal reserve 185 185

Other reserves 8,863 7,213

Net profit (loss) for the period (1,441) (988)

Group net equity 10,056 8,859

Minority capital and reserves 5,037 3,416

Minority profit (loss) (1,621) (8)

Minority net equity 3,416 3,408

NET EQUITY 13,472 12,267

Financial payables 40,257 39,632

Deferred tax liabilities -- --

Provision for risks and charges 2 2

Severance fund and other employee funds 32 40

NON-CURRENT LIABILITIES 40,291 39,674

Financial payables 6,900 6,485

Trade payables 6,276 6,625

Tax payables 240 586

Other payables 9,385 10,342

CURRENT LIABILITIES 22,801 24,038

TOTAL LIABILITIES 63,092 63,712

LIABILITIES AND NET EQUITY 76,564 75,979

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Consolidated cash flow statement at 30 June 2016

(thousands of euro) Half-year

2015

Half-year

2016

OPERATING ASSETS

Net profit/(loss) for the period (1,340) (988)

Adjustments:

- Depreciation and amortisation 758 744

Self-financing (582) (244)

Change in inventories 1,881 162

Change in trade receivables 4,209 (1,473)

Change in tax receivables/payables (355) 537

Change in other receivables (87) 133

Change in trade payables 431 349

Change in other payables (4,721) 957

Cash flows of operating assets (A) 776 421

INVESTMENT ASSETS

Property, plant and equipment (1,318) (115)

Intangible fixed assets -- (1)

Investments in equity holdings (27) 3

Cash flows of investment assets (B) (1,345) (113)

FINANCING ASSETS

Change in amounts due to banks and other lenders (512) (1,040)

Change in Risk Funds -- --

Change in severance indemnities (5) 8

Profit Distribution -- (203)

Change in reserves and net equity items 1,141 (6)

Change in reserves and net equity items pertaining to third parties: 1 (8)

Cash flows from financing assets (C) 625 (1,249)

Change in cash and cash equivalents (A)+(B)+(C) 56 (941)

Cash and cash equivalents at start of financial year 36 1,033

Cash and cash equivalents at end of financial year 92 92

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Consolidated net financial position at 30 June 2016 €uro/000 30/06/2015 31/12/2015 30/06/2016 Changes

2016/2015 Change

%

Cash and cash equivalents 92 1,033 92 (941) (91.1)

Non-current financial payables (40,693) (40,257) (39,632) 625 1.6

Current financial payables (6,543) (6,900) (6,485) 415 6.0

Consolidated net financial position

(47,144) (46,124) (46,025) 99 0.2