Replacement Half Year Results non-material changes

NON-MATERIAL TEXT AMENDMENTS

Non-material changes have been made to the 'Independent Auditors' Report on Review of Interim Financial Information' section of the 'Half Year Results' announcement released by Plaza Centers N.V. on 15 August 2016 at 17:21 UK time under RNS No 2271H.

The changes are identified below:

1. Original version: "….condensed consolidated statement of financial position of Plaza Centers N.V. ("the Company") as at June 30, 2016, the condensed consolidated…"

Corrected version: "…condensed consolidated interim financial information of Plaza Centers N.V. ("the Company") as at June 30, 2016, which comprises the condensed consolidated interim statement of financial position as at June 30, 2016, the condensed consolidated interim…"

2. Original version: "…and notes to the interim financial information ("the condensed consolidated interim financial information")…"

Corrected version: "…and notes to the condensed consolidated interim financial information…"

3. Original version: "Emphasis of matter"

Corrected version: "Emphasis of matters"

4. Original version: "Note 6 which discloses information"

Corrected version: "Note 5(d) and Note 5(f) which disclose"

The full amended text is shown below.

16 August 2016

PLAZA CENTERS N.V.

RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016

SIGNIFICANT ACCELERATION OF STRATEGIC ASSET DISPOSAL PROGRAMME

AND OPERATIONAL PROGRESS IN FIRST HALF

Plaza Centers N.V. ("Plaza" / "Company" / "Group"), a property developer and investor with operations in Central and Eastern Europe ("CEE") and India, today announces its results for the six months ended 30 June 2016.

Financial highlights:

·      Reduction in total assets to €388 million as a result of the Company's portfolio repositioning and deleveraging      strategy (31 December 2015: €392 million)

·      Book value of the Company's Trading Property decreased by 4% to €304 million over the period, due to non-core  disposals and the increased strategic focus on income producing assets

·      Net Operating Income ("NOI") (excluding Riga Plaza which is accounted for as an equity accounted investee)       decreased slightly to €6.2 million (30 June 2015: €6.5 million), mainly due to the disposal of Liberec Plaza (sold in   Q1 of 2016)

·      Losses significantly reduced by 83% to €6 million (30 June 2015: loss of €35.6 million), stemming from decreased net finance expenses of €9.9 million (30 June 2015: €28.3 million)

·     €4.0 million profit recorded at operating level (30 June 2015: €7.4 million loss) and no write downs booked in the period

·     Basic and diluted loss per share of €0.89 (June 30, 2015: loss per share of €5.25) following the conclusion of a Reverse Share Split

·      Consolidated cash position as at June 30, 2016 (including restricted bank deposits) rose to €25 million (31 December 2015: €20.4 million) and current cash position of circa €19.2 million (€6.8 million restricted)

·      Slight increase in LTV to 80% (31 December 2015: 79%) due to non-cash finance costs incurred

Operational highlights:

·      Stable occupancy was recorded across the Company's existing shopping and entertainment centres in the CEE, with an overall portfolio occupancy level of 94.75% as of 30 June 2016, compared to 94.6% at 31 December 2015.

o  At Torun Plaza, Poland, occupancy remained stable at 96.7% (2015: 96.1%). While footfall decreased by 4.4%, turnover was relatively stable with a slight reduction of 0.5% on the same period in 2015. Considerable letting success was recorded, with several new tenants being signed to the scheme, including Sizeer, Pharmaland, Swiat Ksiazki, Concept Store, Resto Design (home interiors) and Rainbow Tours, while a number of existing tenants, such as Deichmann, Mohito and Reserved, took on additional space. In addition, a significant number of existing tenants including, Lee Wrangler, Bytom and Swiss have extended their leases.

o  In Latvia, Riga Plaza's occupancy level increased slightly to 98% (2015: 97%). Vacancies arising from the exit of certain retail brands from the Latvian market have been filled. A 5.3% increase in turnover was recorded, along with a 1.5% increase in footfall, compared to the same period in 2015. Five new tenants have opened shops in first half of 2016, while a further two lease agreements were signed in the period.

o  Suwalki Plaza, Poland continues to deliver a strong performance.  While occupancy decreased slightly to 95.4% (2015: 96.5%), turnover was up 21.8% in the first six month of 2016, while footfall increased by 10.5%, compared to the same period in 2015.

o  Zgorzelec Plaza, Poland recorded an 8.6% increase in turnover compared to the same period in 2015, while footfall has increased by 8.5%. Occupancy remained unchanged at 88.9%.

·      In April, Dori Keren was appointed to the role of Acting Chief Executive Officer and will become Chief Executive Officer on 1 January 2017.

Progress in portfolio rationalisation:

In the first six months of 2016 and to the date of this announcement, Plaza has received net proceeds of €21.5 million from sales transactions. The disposals form part of the Company's ongoing strategy to dispose of non-core and mature assets, to refocus on development projects, as well as to reduce the Company's debt.

·      Disposal of a 23,880 sqm site in Slatina, Romania in March for €0.66 million, consistent with the asset's last reported book value. In line with the Company's stated restructuring plan, 75% of the cash proceeds were distributed to the Company's bondholders as an early repayment.

·      Sale of a subsidiary holding Liberec Plaza, in the Czech Republic, on 31 March 2016 for €9.5 million. Following net asset value adjustments related to the subsidiary's balance sheet, the Company received a net amount of €9.37 million. The majority of the proceeds from the sale (€8.5 million, reflecting 100% of the outstanding loan) were repaid to Plaza Centers Enterprises B.V. ("PCE"), a wholly owned subsidiary of Plaza, on account of the bank loan PCE acquired in September 2015 (the bank loan was provided to the SPV, the holding and operating company of Liberec Plaza). Almost €1 million of surplus cash flow was delivered by the disposal, after the settlement of the loan and at least 75% of the net proceeds were distributed to the Company's bondholders in line with the Company's stated restructuring plan.

·      A binding pre-agreement to sell a 15,000 sqm development plot in Piraeus, near Athens, Greece, for €4.7 million was signed in April 2016. The sale agreement with a third party developer is subject to certain conditions being met, including due diligence which has up to six months to complete. The purchaser has provided a corporate guarantee to secure the transaction for 10% of the consideration. Upon completion of the disposal, 75% of the net cash proceeds will be distributed to Plaza's bondholders.

·      A subsidiary of Plaza, in which the Company has a 50% stake, entered into a business sale agreement in May for the disposal of Riga Plaza to a global investment fund. The agreement reflects a value for the business of circa €93.4 million (reflecting 100% of the asset value), which is in line with the last reported book value. 75% of the net cash proceeds from Plaza's share of the sale (expected to be circa €19 million, following the repayment of the bank loan associated with the business of circa €55 million (reflecting 100%)), will be distributed to bondholders within the quarter following the closing. The closing of the transaction is subject to several conditions precedent, all of which are expected to be fulfilled by the end of September 2016.

·      Disposal of the Company's wholly owned subsidiary which held the "MUP" plot and related real estate in Belgrade, Serbia, for €15.9 million (to be received in several tranches), well above the book value of circa €13.5 million. The sale was completed on 29 June 2016. In addition to the €15.9 million transaction consideration, Plaza will also be entitled to an additional pending payment of €600,000 once the purchaser successfully develops at least 69,000 sqm above ground. Upon the receipt of each stage payment, 75% of the net cash proceeds will be distributed to Plaza's bondholders in the following quarter.

·      On 26 June 2016 Plaza signed a €42.5 million loan agreement with a consortium of banks led by the Hungarian bank OTP Bank Plc to support the development of Belgrade Plaza (Visnjicka) shopping centre, which is on schedule to open in the first half of 2017. The 32,000 sqm GLA development is currently over 55% pre-let and heads of terms have been agreed on a further 15% of space. The centre will be anchored by a supermarket, a multi-screen cinema complex and major international brands.

·      On 28 June 2016 the Company signed an agreement for the sale of a 20,700 sqm plot of land in Lodz, Poland, to a residential developer, for €2.4 million. The conditional agreement will be followed by a transfer agreement which is expected to be signed by the end of August 2016. 26% of the site was previously sold in two separate transactions completed in 2015 and 2016 for a total value of €1.2 million. Following these transactions Plaza still owns 4,000 sqm of land for future value realisation. In line with the Company's stated restructuring plan, 75% of the net cash proceeds from the sale will be distributed to Plaza's bondholders within the quarter following the receipt of each cash installment.

·      On 30 June 2016 Plaza signed a Debt Repayment Agreement ("DRA") with the financing bank (the "Bank") of Zgorzelec Plaza in Poland. As part of the DRA, Plaza will make a payment of €1.1 million (in escrow) to the Bank and the Bank will deposit (in escrow) Release Letters for:

i.    releasing a mortgage in favour of the Bank from a plot of land of Plaza in the city of Leszno, Poland;

ii.  releasing of a recourse right obligation (of €1.1 million) under the corporate guarantee of Plaza and an additional subsidiary of Plaza;

iii.   subordination agreement; and

iv.   submission for enforcement on the loan.

On conclusion of the transaction, which is on schedule for 15 September 2016, Plaza expects to recognise an accounting profit of circa €10 million.

Key highlights since the period end:

·      The Company announced that it has signed a non-binding Letter of Intent ("LOI") with a global investment fund (the "Purchaser") regarding the sale of the Torun Plaza and Suwałki Plaza shopping and entertainment centres in Poland (together the "Portfolio") for a total agreed value of  €121 million. The agreed value is subject to price adjustments based on the performance of the malls (Net Operating Income) and the upside amount is capped at €7.3 million. As of the reporting date the aggregate bank loan balance of the two shopping centres is circa €72 million. While there is no certainty that the transaction will go ahead, the disposal is currently expected to complete by the end of October 2016. 

·      Disposal of an 18,400 sqm plot in a suburb of Ploiesti, Romania to a local investor for €280,000. Upon completion of the disposal 75% of the net cash proceeds will be distributed to Plaza's bondholders.

·      An Indian subsidiary ("SPV") of Elbit Plaza India Real Estate Holdings Limited (in which Plaza holds a 50% stake with its joint venture partner, Elbit Imaging Ltd.) signed a Joint Development Agreement relating to its 74.7 acre plot in Chennai, India, to confer the property development rights to a reputable local developer. The SPV will receive 73% of the total revenues from the plotted development and 40% of the total revenues from the eventual sale of the fully constructed residential units in instalments subject to development milestones.

Commenting on the results, acting CEO Dori Keren said:

"The first six months of 2016 have been another extremely busy period for Plaza. We have continued with our deleveraging and refocusing programme. Plaza has undertaken over €166 million of disposals since the approval of the restructuring plan and we have made good strides in our efforts to reposition the portfolio so that it is more focused on higher quality income producing assets and development projects.

"Alongside this, our commitment to the implementation of the restructuring plan is clear, having returned over NIS 104 million to our bondholders since the plan was approved in July 2014, and we are on track to return at least another NIS 330 million in the second half of the year. With our core markets in the CEE delivering a robust performance, we have a good level of comfort in our outlook for the remainder of the year."

For further details, please contact:

Notes to Editors

Plaza Centres N.V. (www.plazacenters.com) is a emerging markets developer of shopping and entertainment centres with operations in Central and Eastern Europe and India. It focuses on constructing new centres and, where there is significant redevelopment potential, redeveloping existing centres in both capital cities and important regional centres. The Company is dual listed on the Main Board of the London Stock Exchange and, as of 19 October 2007, the Warsaw Stock Exchange (LSE: "PLAZ", WSE: "PLZ/PLAZACNTR"). Plaza Centers N.V. is an indirect subsidiary of Elbit Imaging Ltd. ("EI"), an Israeli public company whose shares are traded on both the Tel Aviv Stock Exchange in Israel and the NASDAQ Global Market in the United States. It has been active in real estate development in emerging markets for over 20 years.

Forward-looking statements

This press release may contain forward-looking statements with respect to Plaza Centers N.V. future (financial) performance and position. Such statements are based on current expectations, estimates and projections of Plaza Centers N.V. and information currently available to the company. Plaza Centers N.V. cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. Plaza Centers N.V. has no obligation to update the statements contained in this press release, unless required by law.

MANAGEMENT STATEMENT

The first half of 2016 has been an intensive period for the Company with over €21million of net proceeds recorded in the period and to the date of this announcement. Since the approval of the debt restructuring plan in July 2014 the disposal of 13 non-core or mature assets, with a total value of €104 million, has been successfully concluded, delivering €47 million of net proceeds. The work we have been undertaking has been guided by an overarching strategy which aims to refocus the Company's portfolio towards core, quality income producing assets and developments in key locations which have a high income potential.

At the same time, we have been mindful of our debt position and our obligations to our bondholders, and in the last 18 months we have returned over NIS 104 million to our bondholders and we expect to be in a position to return at least another NIS 330 million in the second half of the year, and in accordance with the accepted restructuring plan be eligible for one year deferral of principal repayments of the bonds. A detailed Cash Flow forecast is enclosed in the Condensed Consolidated Interim Financial Information of the Company for 30 June 2016.

Operationally, we continue to see a robust performance from our core portfolio of shopping and entertainment centres in CEE. In particular, our Polish shopping centres have delivered growth across all metrics and especially in turnover, while Riga Plaza continues to perform solidly. Our ability to improve the quality of income and tenant covenants, deliver additional space for existing tenants and extend lease agreements, as described previously in the operational highlights section, is indicative of the appetite for space in our shopping centres as a result of their high performance levels.

This operational performance is set against the backdrop of CEE markets which are faring well, showing steady growth and a good level of consumer optimism. This is especially true of Romania and Poland and with a positive outlook for our core markets.

Results

As a result of non-cash finance costs (€7.0 million) incurred during the first half of the year, Plaza recorded a €6 million loss attributable to the shareholders of the Company. This was a considerable reduction on the losses reported in the first half of 2015 (loss in six months to 30 June 2015: €36 million). The reduction in finance costs has resulted mainly from the amortisation of the discount created upon the conclusion of the restructuring plan.

First half revenue from the operating shopping centres was €8.4 million (H1 2015: €9.8 million), with the reduction, due to the disposal of Liberec Plaza in Czech Republic in March 2016 and Koregaon Park in March 2015.

Group Net Operating Income ("NOI") decreased in the first six months of 2016 to €8.0 million (H1 2015: €8.3 million) (including Riga Plaza which is accounted for as equity accounted investee), mainly due to the abovementioned disposal of the Liberec Plaza.

The consolidated cash position as at June 30, 2016 (including restricted bank deposits, short term deposits and held for trading financial assets) was €25 million (31 December 2015: €20 million) and the current cash position is circa €19.2 million (€6.8 million restricted).

Portfolio progress

The Company's portfolio of 19 assets comprises 14 development projects, four operational shopping and entertainment centres and one office building. As at 15 August 2016, 17 assets are located across Central and Eastern Europe and two are in India, the full detail is as follows:

Liquidity & Financing

Plaza ended the period with a consolidated cash position (including restricted bank deposits, short term deposits and held for trading financial assets) of €25 million, compared to €20 million at the end of 2015.

The Group continues to pursue a conservative financing policy and has made good progress. This includes the planned deleveraging of Zgorzelec Plaza through the sale of the Zgorzelec SPV as agreed with the financing bank.

Strategy and Outlook

The management intends to maintain the momentum we have built up behind the implementation of the portfolio repositioning strategy, to create a portfolio of income producing assets that will  support the delivery of our obligations to our bondholders and to bring value to our shareholders.

We are cognisant of the fact that there is a significant amount of work ahead of us in terms of improving the debt position and capital structure of the Company in order to deliver meaningful shareholder value, but, with a favourable backdrop in the economies and markets where we operate, we are confident that with our experienced team and professional abilities we are on the right path to achieving this.

OPERATIONAL REVIEW

Over the course of the year to date, Plaza has continued to make good progress against its operational and strategic objectives, delivering strong turnover, footfall and occupancy at a portfolio level and securing a number of new high profile tenants through the application of intensive asset management skills at its four operating shopping centres. The status of the 14 development projects is outlined in the table below.

A stable occupancy level was recorded across the Company's shopping and entertainment centres in the CEE, with the overall portfolio occupancy level increasing slightly to 94.75% as at 30 June 2016, compared to 94.6% at 31 December 2015. Footfall was strong across the portfolio as asset management initiatives continued to support the performance of the assets, which also delivered improved income across the four assets.

The Company's current assets and pipeline projects are summarised in the table below:

(*) all completion dates of the projects are subject to securing external financing and securing sufficient tenant's demand.

Projects that are classified as "Under planning and feasibility examination" also have potential to be sold as land.

Details of major activities by country are as follows:

Poland

In August 2016, Plaza signed a non-binding Letter of Intent ("LOI") with a global investment fund (the "Purchaser") regarding the sale of the Torun Plaza and Suwałki Plaza shopping and entertainment centres in Poland (together the "Portfolio"). The total agreed value of the Portfolio is €121 million. The agreed value is subject to price adjustments based on the performance of the malls (Net Operating Income) and the upside amount is capped at €7.3 million. As of the reporting date the aggregated bank loan balance of the two shopping centres is circa €72 million. The disposal is currently expected to complete by the end of October 2016. Under the terms of the LOI, the Portfolio will remain under Plaza's management until 31 December 2017, during which time the Company will continue to implement its asset management plans to further optimise the tenant mix and improve the rental income and the NOI. At this point in time, there is no certainty that the transaction will be completed. Plaza will update the market on the progress of the transaction as appropriate.

Romania

Plaza holds a 75% interest in a joint venture with the Government of Romania to develop Casa Radio (Dambovita), which is the largest development opportunity in central Bucharest. A 467,000 sqm complex, including a 90,000 sqm GLA shopping mall, leisure centre, offices, a hotel and a convention and conference hall, is planned for the site. The Company has obtained a PUD (Detailed Urban Permit) and a PUZ (Zonal Urban Plan) for the Dambovita Centre Multifunctional Complex.

Following the Global financial crisis and to ensure that the development process was more aligned with the current market conditions, the Company initiated preliminary discussions with the Authorities (which are shareholders in the SPV and a party to the Public Private Partnership) regarding the future of the project. The Company has also officially notified the Authorities that it will be seeking to redefine some of the terms in the existing PPP contract, including the timetable, structure and project milestones. Please see note 5 of the Financial Statements for further information on the project.

In July 2015, the Company received the building permit to develop Timisoara Plaza, a circa 38,000 sqm GLA shopping and entertainment centre in Timisoara, western Romania. A binding financing offer has also been agreed with a commercial bank for circa 65% of the project cost. The Company has signed a pre-let agreement for 10,426 sqm with international retailer Auchan as the anchor supermarket. Construction is expected to commence in 2016, and completion is due in 2018.

In March 2016 the Company sold its 23,880 sqm site in Slatina, Romania, to a third party developer for €660,000, consistent with the asset's last reported book value. No gain or loss was recorded from this transaction.

Serbia

In June 2016, Plaza signed a €42.5 million loan agreement to support the development of Belgrade Plaza (Visnjicka) in the Serbian capital, Belgrade, from a consortium of banks led by the Hungarian bank OTP Bank Plc. Belgrade Plaza is being developed on a 31,000 sqm plot of land owned by Plaza in Belgrade, a city with strong market demand and further future potential, given its large catchment area of approximately 1.7 million people. Construction is already in advanced stages and the centre is scheduled to open in the first half of 2017. Belgrade Plaza, which is currently over 50% pre-let, will comprise circa 32,000 sqm of GLA and will be anchored by a supermarket, a multi-screen cinema complex and major international brands.

Greece

Plaza has signed a binding pre-agreement to sell a 15,000 sqm development plot in Piraeus, near Athens, Greece, for €4.7 million. The sale agreement with a third party developer is subject to certain conditions being met, including due diligence which has up to six months to complete.

India

In August 2, 2016, a subsidiary ("SPV") of Elbit Plaza India Real Estate Holdings Limited (in which the Company holds a 50% stake with its joint venture partner, EI) ("EPI"), signed a Joint Development Agreement ("JDA") relating to its 74.7 acre plot in Chennai, India.

Under the terms of the JDA, the SPV will confer the property development rights to a local developer (the "Developer"). The JDA also stipulates specific project milestones, timelines and minimum sale prices.

Development will commence subject to the obtainment of the required governmental / municipal approvals and permits, and it is intended that 67% of the land will be allocated for the sale of plotted developments (whereby a plot is sold with the infrastructure in place for the development of a residential unit by the end purchaser), while the remainder will comprise residential units fully constructed for sale.

The SPV will receive 73% of the total revenues from the plotted development and 40% of the total revenues from the sale of the fully constructed residential units.

In order to secure its obligation, the Developer will pay a total refundable deposit of INR 35.5 Crores (approximately EUR 4.8 million), with INR 10 Crores (approximately EUR 1.35 million) paid following the signing and registration of the JDA, INR 17 Crores (approximately  EUR 2.3 million) payable when planning permission for the first phase of the development project is obtained (the "Project Commencement Date"), and the remaining INR 8.5 Crores (approximately EUR 1.15 million) payable six months after the Project Commencement Date.

FINANCIAL REVIEW

Results

Revenue for the period derived from proceeds received from the disposal of Trading properties and rental income from the operating assets. The disposals of Liberec Plaza (Czech Republic) and the Slatina plot in Romania resulted in €10 million of gross income

Rental income from the four operating assets amounted to €6.3 million, while management fees delivered €2.1 million, compared to €7.3million and €2.5 million respectively in H1 2015. The reductions are the result of the sales of Liberec Plaza (in Q1 2016) and Koregaon Park Plaza in 2015. While the divestment of Fantasy Park, which provided gaming and entertainment services in the shopping centres, in the beginning of the year resulted in a loss of €0.4 million in income, it delivered €0.5 million in cost savings.

Overall operating costs (including selling and marketing expenses) were reduced by 29% to €2.5 million (from €3.5 million in H1 2015) as a result of the sale of the above mentioned shopping centres. Administrative expenses were further decreased by 22% from €3.9 million in H1 2015 to €3.1 million, as a result of increased cost efficiencies and a reduction in headcount.

Following an extensive and lengthy legal procedure relating to a transaction agreement undertaken with Klepierre S.A. ("Klepierre") in 2004, the International Court of Arbitration has ruled that Plaza is liable for an indemnification claim totalling circa €2 million, including costs arising from the legal process. A provision for this indemnification claim has been made in the Company's accounts, recorded under "other expense". Since Klepierre is deemed a creditor under the Company's ongoing Restructuring Plan, payment of the principal amount due by Plaza under the indemnification claim is deferred to July 2018. As such, the provision has been booked as a long term payable.

The majority of the other income has been generated by the gain recorded from the sale of MUP (the development plot in Belgrade) in line with the Company's accounting policy, where an undeveloped plot of land is booked net as it represents income from activities other than normal business operations.

No write downs of trading properties were recorded in the first half of 2016 (H1 2015 €6.8 million).

Finance income slightly decreased to €3.4 million from €3.8 million in 2015. €2.7 million of income derived from foreign exchange gains on the Company's bonds issued in Israeli New Shekels ("NIS") and the change in the Israeli Consumer Price Index in 2016 (H1 2015 €1.6 million income).

Finance costs decreased from €32.1 million in H1 2015 to €13.3 million in H1 2016. The main components of the reduction in costs were:

·      A strengthening of the NIS against the euro during 2015. The effect on the debentures totalled €17.0 million of expense (2016: income €1.6 million).

·      Interest expenses booked on debentures totalled €6.6 million (2015: €7.0 million).

·      In 2016 an additional €7.0 million was recorded as a non-cash expense, associated with amortisation of the discount on debentures (2015: €4.9 million).

·      In 2016, interest expenses on borrowings totalled €2.0 million (2015: €3.1 million of expenses).

·      In 2016 €2.3 million of finance costs on debentures were capitalised following the recommencement of construction at the Belgrade Plaza (Serbia) site (2015: nil).

As a result, the loss for the period amounted to circa €6.0 million in H1 2016, representing a significant reduction on losses incurred in the H1 2015 period (€36.0 million loss).

Basic and diluted losses per share for the period were €0.89 (H1 2015: €5.25 loss) based on the adjusted number of shares following the conclusion of the Reverse Share Split.

Balance sheet and cash flow

The balance sheet as at 30 June 2016 showed total assets of €388 million compared to total assets of €392 million at the end of 2015, largely as a result of the implementation of the debt reduction strategy.

The Company's consolidated cash position as at 30 June 2016 (including restricted bank deposits) was €25.0 million (31 December 2015: €20.4 million), with a current cash position of circa €19.2 million (€6.8 million restricted).

LTV increased to 80% in the period (31 December 2015: 79%) as a result of finance costs incurred, as described above.

The value of the Company's trading property decreased from €318 million as at 31 December 2015 to €304 million at the end of 30 June 2016 due to the strategic disposal of Liberec Plaza and the "MUP" plot in Belgrade.

Investments in equity accounted investee companies has improved due to an increase in the net value of Riga Plaza (Latvia) after recording the profit for the six months of 2016 (€45.2 as of 30 June 2016 compared to €44,9 at year end 2015). Investment in Riga Plaza was classified as current, following the signing of the sales agreement in May 2016 relating to the disposal of the asset.

Trade payables increased from €2.2 million to €4.2 million due the construction in progress at Belgrade Plaza (Visnjicka).

Total bank borrowings (long and short term excluding the loan for Riga Plaza) amounted to €101.0 million (31 December 2015: €102.5 million) after the repayment of project loans.

Aside from bank financing, Plaza has a balance sheet liability (including accrued interest) of €182.5 million (with an adjusted par value of circa €197 million net of the €3.9 million series B bonds held in treasury) from issuing debentures on the Tel Aviv Stock Exchange and to Polish institutional investors. These debentures are presented as an amortised cost.

Other current liabilities have remained stable (30 June 2016: €7.6 million compared to 31 December 2015: €7 million).

Dori Keren

Acting CEO

15 August 2016

Plaza Centers N.V.

Condensed Consolidated Interim Financial Information

June 30, 2016

Contents

Independent Auditors' Report on Review of Interim Financial Information

Board of Directors

Plaza Centers N.V.

Introduction

We have reviewed the accompanying condensed consolidated interim financial information of Plaza Centers N.V. ("the Company") as at June 30, 2016, which comprises the condensed consolidated interim statement of financial position as at June 30, 2016, the condensed consolidated interim statements of profit or loss and comprehensive income for the six and three month period then ended, the statement of changes in equity and cash flows for the six month period ended June 30, 2016, and notes to the condensed consolidated interim financial information. Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the EU. Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.

Scope of Review 

We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information as at June 30, 2016 is not prepared, in all material respects, in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the EU.

Emphasis of matters

Without qualifying our conclusion, we draw attention to Note 4 in the condensed consolidated interim financial information which discloses, amongst other things, important information regarding the Company's cash flow projections for 18 months from the end of the reporting period. The Note also discloses that delays in realization of the Company's assets and investments or realization at lower prices than expected by the Company, as well as any other deviation from the Company's assumptions, are uncertainties that could have an adverse effect on the Company's cash flows and the Company's ability to service its indebtedness in a timely manner.

Without qualifying our conclusion, we draw attention to Note 5(d) and Note 5(f) which disclose potential irregularities concerning the Casaradio Project in Romania and the possible outcomes of such irregularities.

Budapest, August 15, 2016

KPMG Hungária Kft.

Plaza Centers N.V.

Condensed consolidated interim statement of financial position

The notes are an integral part of this condensed consolidated interim financial information.

Plaza Centers N.V.

Condensed consolidated interim statement of profit or loss

The notes are an integral part of this condensed consolidated interim financial information.

Plaza Centers N.V.

Condensed consolidated interim statement of comprehensive income

The notes on are an integral part of this condensed consolidated interim financial information.