The Board of Directors of IFIL, which met today in Turin under the chairmanship of
Gianluigi Gabetti, examined the results for the first six months of 2005.
The first half of the year ended with a consolidated income for the IFIL Group of €624.1
million; the consolidated loss for the corresponding period of 2004 had been €89.1
million. The positive change of €713.2 million is principally due to the gain realized on
the sale of La Rinascente and the improvement in the results of the Fiat Group.
The net financial position of the “Holdings System” at June 30, 2005 shows a liquidity
position of €930 million. This is an increase of €250 million compared to the balance at
the end of 2004 (€680 million) due to the cash generated by the sale of the investment in
La Rinascente and the collection of dividends from holdings and partially absorbed by
the investment made in SanpaoloIMI and the dividends paid out by IFIL.
Consolidated stockholders’ equity of the Group at June 30, 2005 amounts to €4,628.7
million, with an increase of €835.8 million compared to the end of 2004 (€3,792.9
million).
The parent company, IFIL S.p.A., recorded income of €29.4 million for the first six
months of 2005, with an increase (+9.3%) over the income for the corresponding period
of 2004 (€26.9 million).
Major events during the first six months of 2005
During March and April 2005, IFIL purchased 22,700,000 SanpaoloIMI ordinary shares
on the market (equal to 1.54% of the class of stock) for €263.5 million and increased its
percentage investment in the bank to 6.28% of ordinary capital stock and 4.98% of total
capital stock.
After obtaining approval from the relevant antitrust authorities, on May 6, 2005, 99.09%
of the share capital of Rinascente S.p.A. held by Eurofind Textile S.A. (a company
controlled by Auchan and IFIL) was sold to Tamerice S.r.l. for € 888 million. On May
17, 2005, the remaining 50% interest in Eurofind Textile was then purchased from the
Auchan Group for €349.5 million. As a result of these transactions, the IFIL Group
received net proceeds for a total of €529.1 million and realized a gain of €459.1 million.
In April 2005, the agreement was executed between IFIL, Banca Intesa, the Marcegaglia
Group and Sviluppo Italia for the partial privatization of Italia Turismo (ex-
Sviluppo Italia Turismo - SIT). Once approval was obtained from the European antitrust
authority, Turismo&Immobiliare (the company in which the three private stockholders
each own equal stakes) subscribed to Italia Turismo’s capital stock increase of
€60 million and purchased stock of the company from Sviluppo Italia for €16 million
thus acquiring a 49% stake for a total investment of €76 million. By reason of subsequent
agreements sealed in July, Pirelli RE will become a stockholder of
Turismo&Immobiliare, purchasing about an 8.3% stake in the capital of this company
from each of the three private stockholders for €1.1 million and assuming the same
commitments. After executing the transaction, subject to approval by the antitrust
authorities, Turismo&Immobiliare’s capital will be owned by private stockholders each
holding a 25% interest.
Performance by the main subsidiaries and affiliates
Fiat Group
During the first six months of the year, sales by the Fiat Group totaled €22.8 billion. The
income from ordinary operations was €407 million, roughly double that of €205 million
reported for the first six months of 2004. The consolidated net result for the first half of
2005 was a profit of €475 million against a loss of €680 million for the same period of
2004.
Sequana Capital Group
The consolidated net income of the Sequana Capital Group for the first half of 2005,
under IFRS, was €73.5 million (€112.7 million in the first half of 2004). Among the
major events in the first six months of 2005 is the agreement signed at the end of June
between Sequana Capital, Legg Mason and the managers of Permal Group for the sale of
the investment held in Permal Group by Sequana Capital to Legg Mason, for varying
interest holdings and at different conditions. Closing of the transaction is scheduled to
take place by the end of 2005, with the consequent transfer of control of Permal Group to
Legg Mason by Sequana Capital. For the current year, the gain on this deal is expected to
be in the order of €350 million while the net debt of the Group should decline by
approximately €400 million as a result of the receipt of the consideration on the sale. The
liquidity available at the holding level would be above € 300 million.
Alpitour Group
The interim consolidated data of the Alpitour Group for the first six months to April 30,
2005 show net sales of €339.6 million, a figure that is basically in line with that of the
first half of the prior year (proforma) of the NHT Group. In a highly negative season for
tourism (which principally generates revenues in the summer, while costs are incurred
uniformly throughout the year), the consolidated result shows a net loss for the Group of
€23.9 million, recorded after posting depreciation and amortization charges of €7.9
million and deferred tax benefits of €9.9 million.
Juventus Football Club
Operating revenues by Juventus during the period January 1 – June 30, 2005 (€133.8
million) show a considerable increase (+13%) over the first half of 2004 (€118.4 million).
This is partly due to the bonuses obtained as a result winning the Championship, which
allowed the team to directly play in the current season’s U.E.F.A. Champions League.
Net income grew from €4.1 million in the first half of 2004 to €6.8 million in the same
period of this year.
Significant events subsequent to the end of the first six months of 2005
Maintaining a 30.06% stake in the ordinary capital stock of Fiat S.p.A.
On September 20, 2005, IFIL purchased 82,250,000 Fiat ordinary shares from Exor
Group (controlled by Giovanni Agnelli e C. S.a.p.az. through a 70.45% direct stake and
29.30% indirect stake through IFI S.p.A.). These shares came from an equity swap
agreement between Exor Group and Merrill Lynch International last April. This purchase
was deliberated on September 15, 2005 by the Board of Directors, which used the
services of an advisor, Mr. Gerardo Braggiotti of G.B. Partners.
The purchase price was €6.5 per share for an investment of €535 million. Fiat stock was
officially traded at €7.76 per share on September 15, 2005 compared to the weighted
average official prices over the last three months of €6.91 per share and the weighted
average official prices of the last six months of €6.16 per share. The stock was transferred
from Merrill Lynch to Exor Group at the same time the Fiat capital increase was
executed, on September 20, 2005. The sale by Exor Group to IFIL immediately followed
on the same date. In the identical context, IFIL, on the same date, sold Merrill Lynch all
the option rights to which it was entitled on the Fiat capital increase.
Prior to the purchase of the above stock, after the purchase of 5,500,000 ordinary shares on
the market by IFIL on September 7, 8 and 9 for approximately €41 million, the investment
held by IFIL in Fiat totaled 246,083,447 ordinary shares and 31,082,500 preferred shares.
The aforementioned transactions allowed IFIL to maintain its investment in Fiat ordinary
capital stock unchanged (30.06%) after the capital increase by Fiat which took place on
September 20, 2005.
On September 16, 2005, Consob asked IFIL and the parent Giovanni Agnelli e C. to provide
further information on the above-described transaction. IFIL and Giovanni Agnelli e C.
complied with Consob’s request and on September 17, 2005 issued two press releases
containing the requested information.
Change in the consolidated net financial position of the “Holdings System”
Following the investment in Fiat ordinary stock (-€576 million) and other net changes (-
€2 million), the positive consolidated net financial position of the “Holdings System” at the
end of September amounts to €352 million (€930 million at the end of June).
Rating
It should also be mentioned that on September 16, 2005, Standard & Poor’s announced that it
had placed the rating on IFIL’s long-term debt (“A –“) under observation, in view of a
possible downgrade, and confirmed the rating on IFIL’s short-term debt (“A – 2”).
Business outlook
Taking into account the consolidated income reported for the first six months of 2005
(€624.1 million) and the forecasts formulated by the major holdings, it is expected that the
2005 consolidated financial statements of the IFIL Group will show a strong growth in the
economic and financial results compared to 2004.
As for IFIL S.p.A., the profit for 2005 is expected to be significantly higher than that of the prior
year (€80.2 million).
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