LAMDA Development consolidated turnover reached Euro 67,1 million in 1st semester 2006 compared to Euro 33,5 million in same period of previous year 2005, showing an increase of 100%.
The growth in group turnover is mainly attributed to the revenues generated by the two Shopping and Leisure Centers, The Mall Athens and Mediterranean Cosmos, as well as to the continuing sales of residential units by LAMDA Olympia Village S.A.. It should be noted that group turnover no longer consolidates the turnover of Swissport LAMDA Hellas after its disposal in June 2005.
Group turnover reiterates the strategic focus on Real Estate development, management and investment. Consolidated net profits after minority interest increased significantly as it reached Euro 44,6 million compared to a loss of Euro 6,8 million in the corresponding period last year. It should be noted that even if fair value gains were to be deducted from profits, the result would lead to profits of Euro 14,6 million.
The significant increase of the consolidated results by Euro 51,4 million compared to the 1st Semester 2005 is attributed to the gains from the adjustment of the fair value of the shopping center The Mall Athens by Euro 30 million (after the deduction of the deferred tax) and also to the successful operation and management of the two Shopping and Leisure Centers. The adjustment of the consideration for the transfer of the shares of EUROBANK PROPERTIES REIC by Euro 4,7 million and the profit from the transfer of ARGONAYTIS shares by Euro 3,4 million have also positively attributed to the results. The reduction of corporate income tax rate had also a positive effect to the profits by Euro 5,4 million. This favorable development counterbalanced the increase in financial expenses by Euro 7,2 million which are now expensed and no longer capitalized as in the previous periods, given the completion and commencement of operation of the group's real estate developments.
As far as the fair market value gains that resulted from the evaluation of the Shopping Center The Mall Athens, it should be noted that they have resulted from the successful operation of the shopping center and the improvement in the capitalization rate compared to the valuation as of 31/12/2005. The use of a lower cap rate for the valuation of the Shopping Center is based not only to the current market conditions but also to the sales agreement with HSBC LUXEMBOURG Sarl for the transfer of the 50% of the shares that LAMDA DEVELOPMENT held in the Shopping Center. The specific transaction, that has not been completed yet, obliged the company to appraise the value of the Shopping Center according to the current market conditions, as indicated by IFRS (IRS40). It should be noted that the financial profit from the forthcoming transaction has not been fully reflected in the financial results, as its completion is still pending.
The parent company LAMDA Development posted profits of Euro 33,4 million compared with profits of Euro 0,7 million in the 1st Semester 2005. This significant increase in profits is mainly an outcome of the reversal of provision from impairment by Euro 38,7 million reduction in the value of Lamda Olympia Village that was held on 31/12/2003 but it does not affect the consolidated results. Consolidated results have also been influenced positively by Euro 4,7 million from the adjustment in the consideration of the shares transfer of EUROBANK PROPERTIES REIC. On the other hand, results have been influenced negatively by Euro 5,6 million because of the provision of impairment of the value of LAMDA Shipyards & Marine Services SA., which reflects the transfer of accumulated loses of this subsidiary to the parent company.
LAMDA Olympia Village SA generated net profits of Euro 49,4 million against a loss of Euro 4 million in the 1st Semester of 2005. The net profits of the Shopping Center The Mall Athens that resulted from its appraisal to the fair market value are Euro 38 million. Total EBIT reached Euro 15 million, Euro 10,7 million of which pertain to net operating income from The Mall whereas the remaining Euro 4,3 million were generated by residential sales in ILIDA. The Center is currently fully leased.
PYLEA SA realized net profits of Euro 3,3 million compared to a loss of Euro 0,8 million in the corresponding period in the previous year. The entire income of Euro 8,6 million is generated by the operation of the Shopping Center Mediterranean Cosmos which is currently leased by 97%.
LAMDA TechnOL Flisvos Marina SA presented losses of Euro 1,6 million compared to losses of Euro 5,3 million in the 1st Semester 2005. This improvement stems from the increase in sales revenue which reached Euro 3 million compared to Euro 1,9 million in the first Semester 2005 and also due to the fact that the results of the 1st Semester 2005 were negatively influenced from the total amount of rent adjustment that concerned the fiscal year of 2004. It should be emphasized that negative results are attributed to the lease payments to ETA since, by applying the principle of prudence, the company charges its financial results by the full amount of lease payments requested by ETA (Hellenic Tourist Development Company), despite the fact that the final arbitration decision is in process and not issued yet. This arbitration decision is expected to decide the lease payments not only for the current year but also for the previous years 2005 and 2004. Furthermore, it is worth noting that the construction works in the marina resumed in the beginning of February 2006, after a 12 month suspension, given the withdrawal of the petition to the Council of State by the Municipality of Paleo Faliro.
LAMDA Shipyards & Marine Services S.A. continued with its efforts to reorganize and minimize operating costs. For that reason the company transferred the total share capital that held in the company ARGONAYTHS ANE registering profits of Euro 4,5 million. The company's financial results showed a profit of Euro 1,8 million compared to Euro 2 million losses in the corresponding period in the previous year.
LAMDA Hellix SA posted a turnover of Euro 1,1 million, increased by 70% compared to the corresponding period in 2005, whereas the net profits increased by 64%, reaching the amount of Euro 119 thousand. The company continues its efforts towards focusing on its business activities in the development, management and investment in real estate in Greece and abroad, whereas the main aim is to improve the relationship between return on investment and risk undertaken. All above would lead to the company's main target which is to increase the net value of assets.

The financial results of the first half-year 2006 will be published in the press on 31/8/2006 (newspapers Naftemporiki & Eleftherotypia) and will be announced on the company's website (www.lamda-development.net).