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Itacare Capital Investments reports loss of USD5.8m for 2008

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Itacare Capital Investments, a real estate investment company focused on high-end residential resorts in Brazil, has reported a loss of USD5.8m for 2008.

Itacare Capital Investments, a real estate investment company focused on high-end residential resorts in Brazil, has reported a loss of USD5.8m for 2008.

The loss includes USD1.6m non-cash unrealised loss on the portfolio (comprising a USD1.9m revaluation loss less a deferred tax write-back of USD0.3m) and USD1.0m in non-recurring costs relating to the aborted Bovespa listing.

The basic net asset value per share was down 4.7 per cent to USD1.01 (2007: USD1.06) including cash and cash equivalents of USD20m.

The company has an uncommitted cash position of USD10m, against an annual run rate of approximately USD3m per annum, which will provide funds until a time when the company expects to have started generating cashflow through the realisation of investments.

The company says it has made good progress on the portfolio, with local currency increases in valuation of 42 per cent and 53 per cent achieved through progress on planning for its Trancoso-Bahia Beach and Duas Barras projects respectively, as well as term sheet signed with Hotel Marco Internacional.

It says financing opportunities in Brazil remain available at attractive terms, despite the ongoing global economic conditions, and that Brazil remains strongly placed to perform well against the benchmark of the other BRIC countries

Michael St Aldwyn, chairman of Itacare Capital, says: ‘Considering the state of world markets and the perceived uncertainty of emerging markets, I am very proud of how your company has weathered the storm so far. This does not mean that we will not have to continue to work extremely hard to extract all that we expect to achieve from the assets we have, but it does mean that we are well prepared for when the level of uncertainty diminishes.
 
‘I am also encouraged particularly by the fact that some solid operational progress is being made at an asset level, as evidenced by the 42 per cent and 53 per cent increases in the valuation of our Trancoso-Bahia Beach and Duas Barras projects respectively, albeit at a local currency level. 
 
‘Our robust and uncommitted cash position of USD10m will allow the company to operate at its current run rate of approximately USD3m for a further three years, which we anticipate will allow the company to weather the current downturn and see it through to a time when we believe that it will have started generating cashflow through the realisation of investments.’

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