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Orco Property Group : Orco Property Group : Full Year 2012 Unaudited Financial Information

Orco Property Group : Orco Property Group : Full Year 2012 Unaudited Financial
                                 Information

                          ORCO Property Group (OPG)

                Full Year 2012 Unaudited Financial Information

Key events: 2012 and post-closing key events



  oEUR 678 Million OPG and Orco Germany (OG) debt reduction by issuing 91
    Million new OPG shares at an average price of EUR 6.6 p.s. and EUR 73
    Million of New OPG Notes nominal value. As a result of the conversion of
    OG bonds, the Group now directly or indirectly holds 98% of OG compared to
    92% as of December 2011.Berlin GSG refinanced by a new loan of EUR 270
    Million with a term of five years and an interest rate that is 2
    percentage points lower than the initial loan. As of December 2012, the
    LTV of Berlin GSG portfolio stands at 58%.
  oSale of Sky Office in Düsseldorf for EUR 117 Million ensuring full
    repayment of GSG credit facility.
  oSale of Radio Free Europe Building in Prague for USD 94 Million.
  oInitiation of Bubny master plan change by the positive vote of Prague City
    Assembly. A new valid master plan is expected by mid-2014. The Company now
    expects to close its JV transaction with Unibail Rodamco for the retail
    development in April of this year.
  oSale for EUR 10 Million immediately paid in cash of stakes in two Office
    Sub-funds of Endurance Real Estate.



Full year unaudited financial highlights

  oGross Asset Value (GAV) at end 2012 stands at EUR 1.33 Billion (EUR 1.6
    Billion end 2011). The decrease of EUR 271 Million is mainly driven by EUR
    112 Million like-for-like decrease in assets' value notably on commercial
    projects (EUR-49 Million) and by EUR 246 Million of sales and disposals
    such as Radio Free Europe, Sky Office and residential developments.
    Portfolio investments amounted to EUR 46 Million.
  oLoan To Value (LTV) decreased from 70% as of December 2011 to 54% as of
    December 2012 as a result of the successful restructuring of EUR 678
    Million of bond liabilities. Before Bonds, LTV also decreased from 52% to
    49%.
  oAs the major part restructured bond liabilities was exchanged for new
    shares, the Net Asset Value per share decreased from EUR22.19 as of
    December 2011 down to EUR 4.89 as of December 2012.
  oShort term financial loans drastically decreased from EUR 757 Million down
    to EUR 234 Million over 2012 while total debt decreased from EUR1,159
    Million down to EUR 744 Million as a consequence of the successful bond
    restructuring, the GSG partial repayment upon refinancing and the sale of
    Sky office.
  oRevenue of EUR 260 Million in 2012 increased by 65% Y-o-Y mainly driven by
    the sale of Sky Office building (EUR 117 Million) in Dusseldorf partially
    compensated by the decrease of revenues from the sale of residential
    development. The Property Investments business revenue is increasing by
    EUR 1.9 Million despite the loss in revenue from the sales of assets
    compensated by the increase of the occupancy in Berlin and the Hospitality
    activity.
  oThe loss in fair value adjustments on investment properties and the
    impairments of development assets recognized in the P&L amount to
    EUR-54Million over 2012. Impairments of EUR - 44 Million mainly relate
    to Sky Office for EUR -24 Million, the hotel values for EUR-10Million
    and the residential developments in Prague, Warsaw or Bratislava for EUR
    -10 Million. The EUR -9 Million loss in fair value is mainly due to the
    buildings on weak markets with low average occupancy which have seen their
    valuation go down (EUR -28 Million) and is not fully compensated by the
    valuation gains on the Berlin portfolio (EUR 18 Million).
  oAs a result, the operating result consists in a loss of EUR 28.8 Million
    compared to a profit of EUR 39.9 Million in 2011
  oThe adjusted EBITDA amounts to EUR 36.5 Million compared to EUR 30.3
    Million in 2011. This continuous increase of Adjusted Ebitda, driven by
    ongoing profitability increase of our Investment Properties allows the
    Group to cover the interest cash expenses.
  oThe interest expenses decrease from EUR 83 Million to EUR 67 Million,
    driven by bank interest expenses for EUR -11 Million and by the bonds
    expenses for EUR -4 Million. The decrease in interest expenses shall
    continue thanks to the EUR 6 Million of annual savings in interest
    expenses on GSG Berlin, and the sale of cash flow negative assets. The
    bonds interest expenses amounting to EUR 29 Million in 2012, mostly non
    cash, and should be limited to a maximum of EUR 12 Million in 2013 out of
    which EUR 3.2 should be paid cash.
  oFinancial results stand at EUR 4 Million (EUR -90 Million over 2012)
    including a one off positive gain of EUR 74 Million on the EUR 678 Million
    bond liabilities restructuring and partially compensated by impairments
    and valuation changes on financial assets like Endurance Fund and Fillion
    in Russia.
  oThe Net loss over 2012 amounts to EUR 40 Million compared to EUR 53
    Million over 2011. The strong improvement of the adjusted Ebitda has been
    more than compensated by the increased loss on real estate value,
    impairments and provisions, despite the financial result on the
    restructuring of the bond liabilities.

Outlook - Extract from the management message

Jean-François OTT, President and CEO of ORCO declares:

"2012 was a turning point in the recent history of our group. We have
successfully completed the financial restructuring and deleveraging plan
presented in our previous annual report. While the overall values have
decreased, the performance of our assets, particularly the rental ones, has
been improving alongside the global profitability of the Group.

We have a clear real estate strategy to create value through building and
managing investment properties, using our investment and development expertise
in the region. Our asset management performance in Berlin has allowed us to
identify new opportunities, including taking third parties assets under
management, conducting selective arbitrage, opportunistic acquisitions of
properties with upside potential and the development of our large land bank in
Berlin.

We have changed the focus of our Development division from a strategic
independent business into a key value creation tool for our Property
Investments divisions. We have started our investment program to extract the
significant potential upside of our Berlin portfolio.

Our Adjusted EBITDA increased by almost 50% YoY to EUR 34 Million, driven by
the continuous improvement of profitability of our property investment
business line, and now covers paid interests. Improving the yields of our
current investment properties, generating new income from our land bank,
reducing overheads and interest expenses is the path towards our increased
profitability.

Over 2013, the Group expects to achieve revenues between EUR 155 Million and
EUR 165 Million. No revenues related to pre-sales on Zlota 44 are expected to
be recognized in revenue before 2014."

For a full version of the management message, please refer to the 2012
Management Report, chapter 1.

Unaudited documents will be available tonight on :

http://www.orcogroup.com/investors/financial-documentation/full-year-documents:

  oFull Year 2012 unaudited financial report
  oFull Year 2012 unaudited management report

Final Audited Financial Information will be made available over the coming
days without any major expected differences.

For more information, please contact Nicolas Tommasini,
ntommasini@orcogroup.com

OPG: Full year 2012 unaudited financial information

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information contained therein.

Source: Orco Property Group via Thomson Reuters ONE
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