Financial results of Arricano for the first 6 months of 2020
On September 24, Arricano, a leading developer and operator of shopping malls in Ukraine, released its Consolidated interim condensed financial statements for the 6 months ended June 30, 2020 at the information platform of the AIM London stock exchange.
The first half of 2020 has become a challenge for all businesses and sectors of the economy, especially for the commercial real estate market in Ukraine. Due to the Covid-19 pandemic, the access of the visitors to shopping malls was restricted for 10 weeks, from mid-March to June. Due to these factors, the company's total revenue for the first half of 2020 decreased by 18% compared to the first half of 2019, amounting to USD 14.2 million. To compare, for the first half of 2019, this figure was equal to USD 17.4 million.
However, the company managed to effectively reduce corporate personnel and operating expenses by USD 1.2 million, which is 23% of identical expenses for the first half of 2019.
Thus, operating profit excluding investment property revaluation decreased by 16% to USD 9.6 million, compared to USD 11.4 million in the first half of 2019.
Profit before tax was us USD 27.1 million. For the same period of 2019 it was USD 8.8 million.
Cash flow from operating activities reduced by 35%, from USD 10.1 million to USD 6.5 million, reflecting lower revenues and slower collection as a result of the Covid-19 pandemic.
As of June 30, 2020, the net asset value of the Arricano group was USD 131.0 million. As of December 31, 2019, this figure was USD 127.9 million.
Henceforward, the company's property portfolio is moving to one revaluation per annum.
Anna Chubotina, CEO of Arricano, summarized: "The Covid-19 pandemic has significantly affected business performance and financial results both in Ukraine and globally. The need for social distancing and the restriction of access to shopping malls has affected the financial results, including the turnover of our tenants. Having assessed the existing threats and opportunities, we responded to this challenge with two solutions. Firstly, we acted quickly, by optimizing cost base where possible. Secondly, we focused our team's efforts on opening shopping malls, working with tenants, and marketing projects to create new attractive motives for visiting our shopping malls, stimulating demand and sales. We see that our business is gradually recovering, the turnover of tenants and the number of visitors is increasing."