Dolphin NAV’s crashes as Aristo takes its toll
Annual Financial Results for the year ended 31 December 2016 show that Dolphin Capital, an investor in high-end residential resorts in the eastern Mediterranean, saw its gross Assets of drop to EUR466 million (2015: EUR911 million). The sterling NAV per share as at 31 December 2016 stood at 25p before deferred tax and 22p after deferred tax, a 40.8% and 43.6% decrease respectively compared to 31 December 2015. The decrease was partially offset by a 16.2% appreciation of the Euro versus the Sterling.
NAV reduction principally due to:
- A reduction in the carrying value of DCI’s shareholding in Aristo by a total of EUR144 million resulting from: the EUR35 million impact of the debt restructuring agreement reached with Bank of Cyprus in June 2016; operating losses; and, a further EUR109 million write-down on sale based on the EUR45 million sales price which had been agreed with Mr. Aristodemou but which has now been terminated by the Company effective 3 May 2017 due to Mr. Aristodemou’s failure to settle the deferred payments as they became due. The Company received EUR1.8 million from this transaction and has retained a 47.9% stake in Aristo.
- The loss from the sale of Playa Grande of EUR25 million.
- A writedown in the carrying value of Pearl Island by EUR25 million reflecting the post year end disposal of DCI’s 60% shareholding for EUR27 million.
- Year-end valuation writedowns and impairment charges of EUR21 million on assets retained.
- Other operational, corporate, finance and management expenses.
Total Debt of EUR101 million (2015: EUR232 million) with a Group total debt to gross asset ratio of 22% (2015: 26%). Following the completion of the Playa Grande project disposal on 8 December 2016 which included the retirement of all of the Company’s EUR50 million and US$9.17 million 2018 convertible bonds, and the repayment of the 2016 convertible bonds in 31 March 2016, DCI itself does not have any further recourse loans or guarantees and the remaining Group debt is at project level on a non-recourse basis.
Total Group cash as of 31 March EUR17.8 million (31 December 2016: EUR4.7 million).
Divestments
Their target is to dispose of all assets by 31 December 2019. In this respect they report:
- Completion of sale of the Company’s 100% interest in the Playa Grande Golf and Resort project, including the Amanera resort in the Dominican Republic, for a consideration of EUR64 million, comprising cash of EUR4.6 million and debt repayment of EUR59.4 million (equating to a EUR140 million enterprise value) on 15 November 2016.
- Following the year end, completion of the sale of the Company’s 60% interest in Pearl Island, Panama Republic for a cash consideration of EUR27 million (equating to a EUR63 million enterprise value).
Operations:
Amanzoe performance improved by increasing occupancy to 62% (2015: 57%) and generating an average daily rate (“ADR”) of EUR1,242 (2015: EUR1,229). Two residential units were sold, bringing the total number of units sold in the project to 14.
Residential masterplan filed allowing the sale of freehold units at Kilada Hills. Founders Program launched, targeting the sale of 40 Kilada Hills Founders’ Memberships, each including a golf course lot and golf course membership.
Discussions progressing with a renowned international resort and real estate investor for a joint venture transaction involving a EUR20 million equity investment to fund the construction of the Kea resort, in exchange for a 50% shareholding in the project.
Additional sales agreements signed for the sale of one Seafront Villa in Kilada Hills and for three residences at La Vanta, Turkey.
Residential zoning in Sitia Bay achieved which provides legal entitlement for the sale of residential lots independently from the already permitted resort development.
Commenting, Andrew Coppel, the chairman of Dolphin’s Board of Directors, said: “Following the adoption of the New Asset Strategy, we are focussed on maximising value for shareholders and our objective is to have disposed of all assets no later than 31 December 2019. Whilst market conditions for disposals in our geographic areas of operation remain challenging, we are encouraged by the disposals to date.”
Miltos Kambourides, Founder of Dolphin and Managing Partner of DCP, said: “We are pleased with the successful disposal of our assets in the Carribean and Central America region. The momentum of the continuously improving performance of Amanzoe, if combined with a positive shift in the Greek political and economic environment, should allow for further asset sales.”
DCI : Dolphin NAV’s crashes as Aristo takes its toll