IRF European Fin Investments Ltd
31 March 2008
Press Release 31 March 2008
IRF European Finance Investments Ltd
('IRF' or the 'Company')
Final Results
IRF European Finance Investments Ltd (AIM: IRF) announces its audited financial
results for the 12 months ended 31 December 2007.
Highlights
• Group Net Income increases 185% to €160.0 million
• Dividend declared of $0.28 per share
• Company Net Asset Value per share on 31 December 2007 of $5.59
Angeliki Frangou, Chairman of IRF said, '2007 was a year of significant
accomplishment. We simplified our capital structure through two warrant
programs. These programs reduced the number of outstanding warrants by
approximately 85%, from 91.7 million warrants to 13.6 million warrants. In
addition, we opportunistically invested and created a gain of approximately
€80.0 million (including dividends), representing a 24% return on our
investment.'
Ms. Frangou continued: 'We are also delighted with our operational performance
in 2007. Although the financial services industry suffered during the latter
half of 2007, we were able to avoid much of the dislocation affecting the
industry. Today, our liquidity provides great flexibility in terms of
considering and executing on potential transactions.'
Below are the financial highlights of the consolidated group, including Proton
Bank and its subsidiaries (the 'Group') and IRF and its wholly owned
subsidiaries for the 12 months ended 31 December 2007.
Financial Highlights
Amounts in € 000 The Group IRF
Income Statement items
Net Income 159,995 88,449
Profit before income tax 87,606 68,451
Income tax expense 9,732 -
Profit after tax 78,026 68,451
Attributable to equity holders of the 61,635 68,451
Company
Minority Interests 16,391 -
Basic earnings per share (in euro/ 0.56 0.62
share)
Diluted earnings per share (in euro/ 0.53 0.59
share)
Balance Sheet Items
Cash and cash equivalents 559,371 350,503
Total assets 2,750,355 480,072
Total liabilities 1,973,008 3,291
Total Equity 777,347 476,781
Equity attributable to equity holders 487,099 476,781
of the Company
Minority Interests 290,248 -
Dividend Payment
Based upon 2007 results, IRF has declared a dividend payment of US $0.28 per
common share in respect of 2007. The record date has been fixed at 18 April
2008 with 25 April 2008 being the dividend payment date.
Commenting on the declaration of the dividend, Angeliki Frangou said: 'Our 2007
financial results permitted the board to declare a dividend of $0.28 per share.
Continued dividends will depend on future financial performance.'
Net Asset Value
IRF determined that its shares had a net asset value ('NAV') of $5.59 per share,
on 31 December 2007, computed as follows: IRF owned a 20.60% interest in Proton
Bank. The value of this holding, based on the closing share price on the Athens
Stock Exchange on 31 December 2007, was €126.5 million. IRF had 124.8 million
common shares outstanding. The Euro/$ exchange rate of $1.4729 on 31 December
2007 was used.
IRF intends to determine and publish NAV on a periodic basis. This estimated
NAV is provided for information purposes only and should not be relied upon for
investment decisions.
Share Buybacks
In 2007, IRF purchased approximately 4.5 million shares for a total cost of
approximately $20.3 million. As of 31 December 2007 the total common shares
and warrants outstanding were 124.8 million and 13.6 million, respectively.
For further information:
IRF European Finance Investments Ltd
Angeliki Frangou, Chairperson Tel: +30 (0) 210 428 0560
Numis Securities Limited
Jagjit Mundi Tel: +44 20 7260 1000
James Black Tel: +44 20 7260 1000
About IRF
IRF was formed to invest in the financial services industry throughout Europe
with a primary focus on credit institutions and insurance companies in South
Eastern Europe. IRF's current strategy is the acquisition of financial
institutions having valuations which do not reflect their potential and where
marketing and operational efficiencies are possible. IRF owns a 20.60% interest
in Proton Bank
About Proton Bank
Proton Bank is a full-service financial services institution, including retail
and investment banking as well as the provision of specialized corporate
advisory and investment services. Proton Bank has 28 branches in Greece and is
listed on the Athens Stock Exchange under the symbol 'PRO'.
Forward-looking statements
All statements, other than statements of historical fact, included in this
release are forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based upon
current expectations and are subject to a number of risks, uncertainties and
assumptions that could cause actual results to differ materially from those
described in the forward-looking statements. IRF assumes no obligation and
expressly disclaims any duty to update the information contained herein except
as required by law.
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007
BOARD OF DIRECTORS
Name Position
Angeliki Frangou Chairman, Non - Executive Director
Sheldon Goldman Deputy Chairman
Loukas Valetopoulos Chief Executive Officer, Director
Alexander Meraclis Secretary of the Company
John Karakadas Non - Executive Director
Changes in the Board of Directors
On the 25 January 2007, Dionysios Malamatinas, Director of IRF, submitted his
resignation effective from 29 January 2007 and has not been replaced.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL ACCOUNTS
The directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law and in accordance with the AIM regulations the
directors have elected to prepare financial statements in accordance
International Financial Reporting Standards as adopted by the European Union.
The financial statements are required by law to give a true and fair view of the
state of affairs of the Group and of the profit or loss of the Group for that
period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and estimates that are reasonable and prudent;
• state whether applicable International Financial Reporting Standards as
adopted by the European Union have been followed, subject to any material
departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in business.
The directors, to the best of their knowledge, state that:
• the financial statements, prepared in accordance with International
Financial Reporting Standards as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and profit of
the Group; and
The directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the financial statements comply with the
Companies Act 1981 of Bermuda. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
In so far as the directors are aware:
• there is no relevant audit information of which the company's auditors are
unaware; and
• the directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that the
auditors are aware of that information.
Legislation in Bermuda governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of 'IRF EUROPEAN FINANCE INVESTMENTS LTD'
Report on the Consolidated Financial Statements
We have audited the accompanying financial statements of 'IRF EUROPEAN FINANCE
INVESTMENTS LTD' (the 'Company') and its subsidiaries (the 'Group'), which
comprise the consolidated balance sheet as at December 31, 2007, and the
consolidated income statement, statement of changes in equity and cash flow
statement for the year then ended, and a summary of significant accounting
policies and other explanatory notes.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these
financial statements in accordance with International Financial Reporting
Standards that have been adopted by the European Union. This responsibility
includes designing, implementing and maintaining internal control relevant to
the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based
on our audit. We conducted our audit in accordance with the Greek Auditing
Standards, which are based on the International Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures selected
depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control
relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the abovementioned financial statements present fairly, in all
material respects, the financial position of the Group as of December 31, 2007,
and its financial performance and cash flows for the year then ended in
accordance with International Financial Reporting Standards that have been
adopted by the European Union.
Athens, 27 March 2008
The Certified Auditor
__________________________
Vasilis Kazas
A.M. SOEL 13 281
Grant Thornton
44 Vasileos Constantinou
116 35 Athens
A.M. SOEL 127
CONSOLIDATED INCOME STATEMENT
Amounts presented in € '000 Note 1/1/- 31/12/2007 1/1 - 31/12/2006
Interest and similar income 122,692 28,990
Interest and similar expenses (78,939) (12,225)
Net interest income 8 43,753 16,765
Fee and commission income 43,966 10,296
Fee and commission expense (16,105) (2,430)
Net fee and commission income 9 27,861 7,866
Dividend income 10 16,217 1,620
Net trading income 11 68,421 28,517
Net income from financial instruments designated at fair 2,263 -
value
Other operating income 12 1,480 1,297
Total Net Income 159,995 56,065
Staff costs 13 (25,136) (7,838)
Other operating expenses 14 (25,836 (10,109)
Impairment of goodwill 27 (7,465) -
Depreciation 15 (7,225) (1,893)
Impairment losses 16 (6,981) (558)
Total operating expenses (72,644) (20,398)
Share of profits / (losses) of associates 255 240
Profit before tax 87,606 35,907
Income tax expense 17 (9,732) (2,904)
Profit after tax from continuing operations 77,874 33,003
Net profit from discontinued operations 42 152 (136)
Profit after tax 78,026 32,868
Attributable to:
Shareholders of the Parent Company 61,635 23,361
Minority Interest 16,391 9,507
78,026 32,868
Earning per Share attributable to parent company's 40
shareholders ( €/share )
From continuing and discontinued operations
- Basic 0.56 0.41
- Diluted 0.53 0.37
From continuing operations
- Basic 0.56 0.41
- Diluted 0.53 0.37
The accompanying notes constitute an integral part of the financial statements.
CONSOLIDATED BALANCE SHEET
Amounts presented in € '000 Note 31/12/2007 31/12/2006
ASSETS
Cash and balances with Central Bank 18 52,796 37,397
Loans and advances to financial institutions 19 527,410 181,885
Trading portfolio and other financial assets at fair value 20 179,802 264,174
through Profit & Loss
Derivative financial instruments 21 11,529 2,611
Loans and advances to customers 22 1,368,025 941,214
Insurance assets - 18,060
Investment portfolio 23 259,944 37,977
Investments in associates 24 3,886 4,604
Property, plant and equipment 25 27,880 33,402
Investment property 28 - 50
Goodwill and other intangible assets 27 166,784 190,100
Deferred tax assets 28 7,098 -
Other assets 29 91,474 34,886
2,696,628 1,746,360
Non current assets held for sale 26,42 53,727 64
TOTAL ASSETS 2,750,355 1,746,424
EQUITY AND LIABILITIES
Due to financial institutions 30 433,941 90,897
Due to customers 31 1,422,139 1,042,157
Derivative financial instruments 21 14,570 6,319
Issued debt securities 32 25,283 1,500
Provisions for insurance contracts 42 - 34,093
Retirement benefit obligations 33 1,140 1,228
Current income tax liabilities 34 10,498 1,349
Deferred tax liability 28 6,928 1,727
Other liabilities 35 14,170 21,445
1,928,669 1,200,714
Liabilities directly associated with assets classified as 42 44,339 -
held for sale
Total Liabilities 1,973,008 1,200,714
Shareholders equity
Share capital 36 147 71
Share premium 36 400,443 200,174
Revaluation reserve 37 (2,570) (2)
Other reserves 37 16,587 16,156
Retained earnings / (losses) 72,491 21,998
Total equity attributable to shareholders' of parent 487,099 238,397
company
Minority interest 290,248 307,313
Total equity 777,347 545,710
TOTAL LIABILITIES AND EQUITY 2,750,355 1,746,424
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