Looking at our group operating results I am cautiously optimistic about the development of our various operating companies. In all our organizations we have implemented efficiency measures and we have put a lot of emphasis on stringent project management in order to diminish our risks. Kardan Land China has made significant progress with the construction of the major development of Europark Dalian. The construction was initiated in mid 2012 and Kardan Land China plans to open the retail center before the end of 2014. Also during 2013, 120 apartments of the project were handed over next to 2,727 apartments which we delivered in our various joint venture projects, boosting both revenues and equity earnings. Tahal Projects has been successful in capitalizing on its sustainable reputation through large irrigation and engineering projects largely in Africa resulting in a growth in revenues and operating profit. Although construction activities were slow during 2013, Kardan Water in China managed to render more water services from existing facilities with better results. TBIF, our banking and retail lending segment, almost doubled its revenues on better origination and improved qualities of portfolios, whilst keeping its operating costs well under control, nearly moving the company out of its long standing operational loss situation. However, notwithstanding the fact that some fundamental issues have improved within the group, we did report a substantial loss for our equity holders. Besides the already mentioned negative contribution of GTC SA there were four other main factors impacting our results over 2013: 1) EUR 17.5 million impairments of goodwill and intangibles of investee companies in our banking and lending segment as the recovery of the economy in Bulgaria and Romania is taking longer than we had expected and pending the possible sale of our stake in Avis Ukraine, 2) following the strengthening of the Israeli Shekel versus the Euro, Kardan’s financing expenses with respect to the debentures were negatively impacted by foreign exchange losses in the amount of EUR 10 million, 3) a write off of EUR 8 million in our water infrastructure projects’ segment following insolvency of their Polish subsidiary and 4) Tahal Projects’ gain on the sale of a real estate asset in Tel Aviv.
Looking at 2014 we deem it in all our stakeholders’ interest to continue with our plans to encourage our segments to improve their results and consequentially to create value and simultaneously to generate cash from the same segments in order to meet the obligations to our debt holders. We are committed to succeed in growing our existing businesses and strengthening the financial position of Kardan”, states Shouky Oren, CEO of Kardan N.V.