KD Group, finančna družba, d.d., Ljubljana, Dunajska cesta 63, (hereinafter: ‘KD Group, d.d.’ or “the Company”) hereby announces its expected operating results for 2014. Since the publication of the business report of KD Group and the KD Group for the first nine months of 2014, KD Group has continued to implement its planned strategy and business plans, with the current assessment being that the expected results at the end of 2014 will be in line with those presented in the business reports of the KD Group and KD Group d.d. for the first nine months of 2014.
Life insurance
In 2014, the Adriatic Slovenica d.d. Group generated EUR 56.2 million in consolidated premium income from life and pension insurance, representing a 3.9% year-on-year decline. The main reason for the decline in revenue was lower average premiums on life insurance policies due to changes in the structure of the life insurance portfolio and a higher volume of maturity claims as a result of the ageing of the existing portfolio. Despite a decline in the number of life insurance policy cancellations in 2014 compared with the previous year, the level of early terminations continues to affect the volume of gross life insurance premiums written. Sales of new life insurance policies grew across all segments in 2014, with the annual equivalent of new annual life insurance premiums increasing by 26 per cent.
Property insurance
During the same period, the Adriatic Slovenica Group collected EUR 245.6 million in gross written premiums for property insurance (including health insurance). The 2014 results exceeded those of the previous year in the general liability insurance segment, as well as in fire and natural disasters insurance and other non-life insurance. The total amount of non-life insurance premiums was 2.5 per cent lower than in 2013, mainly as a result of a reduction in premiums for supplementary health insurance. Nevertheless, the volume of property insurance premiums written by Adriatic Slovenica increased in the final quarter of 2014 compared with the previous year. A positive trend in 2014 is evident in the volume of claims settled, which, despite the floods and ice storms in 2014, fell by 3.3 per cent compared with the previous year, primarily due to customer segmentation and prudent risk management.
Investment performance
Owing to the favourable investment environment in global financial markets and sound asset management, Adriatic Slovenica estimates its investment performance (after taking into account the guaranteed return on mixed life insurance and excluding the investment result from life insurance policies where the investment risk is borne by the company) for 2014 at EUR 13.5 million.
Asset
management
Total assets under management in mutual funds managed by KD Skladi d.o.o. rose from EUR 377 million at the start of 2014 to EUR 445 million as at 31 December 2014, primarily due to general market growth and an increase in the number of investors in mutual funds managed by KD Skladi. Investor optimism has been restored thanks to positive news from almost all capital markets, which is also reflected in a higher number of contributions to mutual funds. Stronger growth was achieved primarily in European and regional markets in South-Eastern Europe, which is also reflected in higher returns from funds investing in these two regions.
The estimated total value of assets in mutual funds and assets under management within the framework of financial instrument management services provided by various management companies within the KD Group is estimated at EUR 554 million as at 31 December 2014.
Sale of the KD Group’s non-strategic investments
KD Group d.d. has signed an agreement for the purchase and sale of a 100 per cent stake in Gea College, d.d., business education, Ljubljana. The entire sale process is expected to be completed by the end of February 2015 with the transfer of all shares to the buyer. The company estimates that this sale will reduce the debt ratio at consolidated level by approximately EUR 0.4 million, based on figures as at 31 December 2014.
Furthermore, the subsidiary KD Kapital d.o.o. has received a non-binding offer for the sale of a 51 per cent stake in Žičnice Vogel d.d., the operator of the Vogel ski centre, and is currently in the process of finalising the share purchase agreement. The agreement is expected to be signed at the end of February 2015. Following the signing of the agreement and the completion of the sale, the expected impact of this sale is a reduction in debt at consolidated level of approximately EUR 4.1 million and a reduction in consolidated and adjusted EBITDA of approximately EUR 0.9 million, based on figures as at 31 December 2014.
The Company has also received a non-binding written offer to purchase a 100 per cent stake in Šumijev kvart d.o.o., which is responsible for the development and construction of the so-called Šumi Centre, a mixed-use commercial and residential development. The Šumi Centre will be situated in one of the most prestigious locations in Ljubljana, on Slovenska cesta, and covers an area of 45,000 m². The final terms of the sale are currently being negotiated with the selected bidder. The sale is expected to be finalised in the third quarter of 2015. The expected net debt reduction based on the proposal received amounts to EUR 12.5 million.
The information contained in this announcement will be available on the official website of KD Group d.d. www.kd-group.com for at least 5 years from the date of publication.
KD Group d.d.
KD Group d.d.
