* Retail, cars hurt most by capital controls and consumer cutbacks *
Cyprus Trading Corporation Plc, the main holding company of the retail giant NK Shacolas Group, seems to have overcome the troubles faced by the local economy and reported more than 9 mln euros in profit for the first half of the year, despite a 15% reduction in turnover for the period.
Announcing the consolidated group profits for the January-June period, CTC said turnover fell to 163.3 mln euros, from 191.1 mln in the same period last year and 2013 will probably fall short of the 407.4 mln in turnover for the whole of 2012.
However, cost-cutting introduced last year continued well into 2013, with the retail sectors and car sales affected most by the capital controls imposed by the Troika austerity measures that also impacted on consumer confidence.
Group first-half after tax profits came in at 9.25 mln euros or 2.68 cents a share (2012 1H -1.93c, 2012Y 4.76c), a significant turnaround from the first-half loss of 2 mln euros reported last year, and far better than the 7.13 mln euros reported for the whole of 2013.
Despite being a steady dividend payer in past years, the Shacolas Group and in particular CTC, Ermes Department Stores Plc and Woolworth (Cyprus) Properties Plc are widely expected to continue retaining dividends due to some new developments in the economy, such as a revised higher tax that is expected to impact the value of the group’s properties. The company said it is also making provision for continued austerity for the rest of 2013 which will have an impact on the retail sector.
In March, CTC subsidiary Amaracos Holdings sold its 50% share in telco MTN Cyprus to the South African mother company, in a deal worth 73 mln euros. However, Ermes Department Stores Plc, operator of the Debenhams chain of stores, as well as Superhome Centre DIY, the Scandia car and truck distributor, and airport and defence catering services, saw turnover reduced by 12.7% from 109.4 mln euros in 1H 2012 to 95.4 mln in 1H 2013, with losses rising from 2.56 mln in 1H 2012 to 2.97 mln in 1H 2013, impacted by a once-off cost of 1.49 mln euros. It also closed down the Domex Trading subsidiary and shut down the Debenhams Avenue store in Nicosia due to a fall in retail consumer confidence.
Woolworth (Cyprus) Properties Plc. saw its commercial real estate rental income fall from 10.2 mln euros in 1H 2012 to 8.8 mln in 1H 2013, with operating profits reduced from 9.3 mln to 7.9 mln, respectively. Thus, after-tax profits were also down from 1.53 mln euros in 1H 2012 to 282,000 in 1H 2013.
Woolworth Properties owns the land or leases for the retail stores and is a major investor in ITTL Trade Tourist and Leisure Park Plc, operator of the Shacolas Emporium Park that includes The Mall of Cyprus and IKEA, as well as The Mall of Engomi and other properties. The company also has a majority stake in Cyprus Limni Resorts & Golf Courses Plc, developer of a major hotel and golf resort near Polis Chrysochous, the groundbreaking ceremony of which took place in early 2013. In August 2013, the company also concluded an additional agreement with a commercial lessor in Annex 4 at the Mall of Cyprus, a deal that should help improve rental income for 2H 2013.
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