New Europe Property Investments, which is listed on Johannesburg's AltX and London's AIM, on Tuesday reported a profit of €2.1 million for the first six months of 2009, compared with EUR2.0 million for the first six months of last year.

Earnings per share were 7.95 euro cents for the six months to end June 2009, versus 7.46 euro cents for the same period a year ago.

In a statement accompanying its results, the company said it continued to perform in accordance with expectations during the first six months of the 2009 financial year despite the downturn in the economic cycle.

It said this was the result of a strategy biased in favour of long-term leases and conservative gearing.

Three non-cash items affected the Group's consolidated income statement negatively by EUR804,180.

These items include deferred tax, changes in the fair values of financial instruments put in place for interest rate hedging purposes and the amortisation of the share incentive scheme fair value.

An exchange gain of €1.7 million recorded in the consolidated group income statement results from the weakening of the Romanian leu compared to the euro.

The group's Romanian subsidiaries are accounted for in leu with the result that a movement of the currency gives rise to movements in the recorded leu value of assets and liabilities of the group subsidiaries that are consolidated.

In substance, however, the group's income, assets and liabilities are euro denominated.

Distributable earnings in relation to the interim period amounted to €2.2 million.

Adjusted NAV per share is €1.93, compared with EUR1.98 at end December 2008 due to JSE listing expenses, changes in the fair value of the financial instruments and the difference between the currency translation reserve in the balance sheet and the foreign exchange gain in the income statement.

The board has declared a dividend per share of 7.66 euro cents in respect of the six months.

The group said the economic downturn had created unique investment opportunities with a number of property holding companies and developers are under financial pressure.

New Europe Property Investments has been exploring a number of acquisition opportunities and is in advanced negotiations in respect of a number of these opportunities with plans to acquire a number of operating commercial centres in a phased manner over the course of the next few
months.

"If completed, the acquisitions are expected to have a material enhancing effect on NEPI's future earnings per share," the group said.

In addition, the group said it plans to move its listing from the AltX to a main board listing on the JSE early 2010.

At 10.36am shares in NEPI were unchanged at R22.75 in Johannesburg.

Source: I-Net Bridge