Good morning everyone, and welcome to RomReal's second quarter 2020 results presentation. I, Harris Palaondas, Investor Relations for RomReal, will guide you through this presentation today. The presentation will also be available online on our website at www.romreal.com or alternatively, on the Oslo Stock Exchange website. Now, if you please turn to page three. Here we have the second quarter results highlights. The NAV, the net asset value, was at EUR 0.45 or NOK 4.78 . That's before tax for Norwegian investors per share. That being of about 0.3% higher compared to the end of the first quarter. The year-end valuation was concluded by Knight Frank in February 2020, and therefore, there was no further changes made to the value of the investment properties during the quarter.
Our Lakeside plot, which is number one on the list of this presentation, the contract for the electric connection of the area was signed. In the Industrial Park, which is number four on the list, the building authorization for the road and utilities has been obtained for the company. This is important since there will be a NATO base very soon built, and this infrastructure investment is expected to bring new values to the real estate of the area. During the first quarter of this year, the company entered into a sale agreement for four plots at Lakeside. That is for a total consideration of EUR 565,000, which has been paid in full. By the 14 May 2020, EUR 1.99 million, that's without VAT, was invested in infrastructure primarily in Industrial Park and Lakeside with the aim of increasing the marketability of the plots.
Due to very recent legislation and according to our tax advisor's understanding, the worst-case payment in the ongoing tax dispute is expected to be reduced from the original EUR 1.7 million to about EUR 1.05 million, that being a reduction of about EUR 0.65 million. This amount of EUR 1.05 million due is still to be contested by the company in the court of law. Please turn to the next page. Now the financial results. We had the net result for the quarter of EUR 196,000 loss compared to EUR 138,000 gain in the second quarter of last year. The difference was mainly from the sales of plots last year, which did not occur in this period. The net change in cash flow for the quarter was a negative EUR 62,000 compared to EUR 26,000 negative in the same period last year.
At the end of the quarter, the company had a cash position of EUR 2.8 million plus a total of EUR 405,000 in unsettled receivables related to binding sales agreement. This totals to about EUR 3.2 million or about EUR 0.08 per share. With the COVID-19 crisis, Romania's GDP in the second quarter of 2020 has witnessed a contraction of 12.3% compared to the previous quarter, and a 10.5% reduction compared to the same period of 2019. During the second quarter of 2020, the average residential prices in Romania declined by more than 4% at the end of June 2020 compared with March 2020 and reached an average of EUR 1.3 thousand per square meter compared to almost EUR 1.4 thousand per square meter in the beginning of the quarter. If we compare them with the first half of 2019, prices of apartments are actually still higher by 9.6%.
Please turn to the next page. Here we have the net asset value movement during the second quarter of 2020. Our investment property that relates of our land bank is at EUR 3.7 million. Assets held for sale at EUR 2.3 million. Inventories at almost EUR 9 million, and cash at EUR 2.8 million. That gives a total net asset value of about EUR 18.5 million or EUR 0.45 per share. We're seeing the NAV changing versus the previous quarter by 0.3%, which is a marginal increase, and also an increase of 3.2% compared to the same quarter last year. Please turn to the next page for the financial highlights. Here we can see the financial highlights. The operating revenue during the second quarter was EUR 190,000 compared to EUR 41,000 reported in the same quarter last year.
This consists of the revenue resulting from the sales of some plots as well as from the rent earned by the company in respect of some of the plots. Total operating expenses amounted to EUR 176,000 the second quarter of the year compared to EUR 251,000 the same quarter last year. The main cost elements relate to the general administrative expenses of about EUR 100,000. On the remaining operating expenses, the payroll costs were EUR 53,000, while the management fees were around EUR 24,000.
The other operating income or expense during the quarter was an expense of EUR 37,000, reflecting mainly the movement between the euro and the Romanian leu exchange rate. RomReal generated an operating loss of EUR 24,000 compared to a loss of EUR 165,000 the same quarter last year. Foreign exchange results for the second quarter was a EUR 171,000 loss, compared to a net foreign exchange gain of EUR 303,000 in the same period last year.
During the quarter, the Romanian leu lost 0.35% to the euro, and this has been the trend in the last few months. The company's policy is to hedge these effects by retaining most of its cash in euros and also by denominating all receivables in euros. Although not reflected from an accounting perspective, practice in real estate is that transactions are denominated in euro, and payments made at the exchange rate reduce the risk of cash losses due to exchange rate movements.
The results before tax was a loss of EUR 305,000 compared to a loss before tax of about EUR 1 million during the same quarter last year. The company's cash and cash equivalent position is at EUR 2.78 million, compared to EUR 2.37 million at the end of the Q4 2019. In addition, we have about EUR 605,000 in outstanding payments related to binding sales agreement, which totals of about EUR 3.2 million.
Please turn to the next page. The company has properties in Ovidiu, Constanta and in Centru Constanta, that being the Balada Market. For more information on the properties, you can always visit our website at www.romreal.com. Please turn to the next page. Now to the operational highlights. We continue the infrastructure work on Lakeside and the contract for the electrical connection of the area was signed. In order to improve marketing, we have been constructing a showroom that has commenced since June and is expected to finish somewhere in November. Additionally, during the first quarter of 2020, the company entered into a sale agreement for four more plots for a total consideration of EUR 565,500. In Oasis, the company is going to reauthorize the works for finalizing the blocks erected on the site in order to add more value to the plots.
The company expects more specific sales process to develop when the pending regulation and utility issues are granted. We don't expect any delays there. Once we reauthorize the works for the blocks, the value of the plot is expected to be increased significantly. On the industrial park, the building authorization for the road and utilities has been obtained by the company. The company is still discussing the sale of around 15,000 to 20,000 square meters to an international group. On the Balada Market, since the 20th of May, the entire market is open again. It was closed, if you recall, due to certain COVID measures that reduced the square meters that were possible to be used for retailing. Minor maintenance are actually taking place. With regards to the sellability of plots in this current period, we expect a slowdown. We're seeing this due to the COVID issue.
COVID cases in Romania are still high, therefore, the investment activity is merely postponed. Please turn to the next page. Now with regards to the two outstanding court cases. The contestation against the tax authority decision. We have had a change because a very recent regulation may help the company avoid paying the interest proportion of the claim, which is about EUR 650,000 out of the total claim of EUR 1.7 million. This means that the worst-case scenario for the company would have to pay EUR 1.05 million. The company expects to pay this amount during the third quarter of 2020. Of course, this amount will be contested by the company in the court of law. With regards to the other contestation case, the institutional claim for a part of the plot of Mamaia North.
The court dismissed the company's claim based on the higher court's jurisprudence in the sense that the law does not provide such a remedy in case the land is no longer of use to the authorities. The case is at the moment in the appeal phase of the court proceedings. The next hearing will take place in November in front of the Constanta Court of Appeal. The company aims to continue contesting any negative decisions until the very last possibility to contest. Please turn to the next page. This page shows the Romanian macro developments, which for the time being for this quarter have been negative and highly affected by COVID-19 crisis. There's been a decline of 12.3% in the second quarter of the year. If you compare with the last year's same quarter, this is the increase of 10.5%.
The European Commission forecasts Romania's GDP will register a significant decrease of 6% in this year. For the next year, the European Commission estimates Romania's GDP to increase by 4% compared to the previous 4.2% forecast in May. There have been more than 70,000 confirmed cases of coronavirus in Romania, and this is increasing at the rate of 1,500 cases per day, and the country is still under a state of alert.
To support the economy, the government announced a series of measures since March that will help to stimulate about 2% of the GDP. Please turn over to the next page. With regards to the real estate, the volume of commercial transactions in Romania has increased in the first half of 2020 by 21% compared to the same period last year, which proves that real estate, it's a robust investment during crisis. It has reached EUR 410 million according to JLL.
Yields remain higher compared to other Central Eastern European countries, both in the office and industrial space sector at 7% and 8%, respectively. During the second quarter, residential average price of Romanian apartments dropped by about 4.2%. Please turn to the next page. Here we see an overview of the apartment prices development, and this is for July 2020. All data coming from the largest real estate platform, imobiliare.ro. Apartment price in Romania reached EUR 1,309 per square meter, resulting to a decrease of 1.8%. Compared with last year, prices are still higher by 4.8%. In Constanta, prices have reached at EUR 1,228 per square meter, resulting to a minor decrease of about 1% compared with the last month. Still, prices are higher by 7.9% compared to July last year. Please turn to the next page.
This is the list of the top 20 RomReal shareholders as of the 19th of August 2020. This list is here for your convenience, and presents basically an overview of who are the top 20 shareholders of the company. Please turn to the next page. The main focus going forward is, of course, according to our strategy, we're focusing on land value-enhancing activities in order to improve the shareholders' value and exit. This includes, among others, increased sales and marketing efforts, and if required, some infrastructure investments and more resources into regulation processes. Preliminary data suggests that the residential real estate prices and volume of transactions have not been materially affected by the COVID-19 pandemic.
While certain areas of the country were more affected, there are eight counties, including Bucharest, where the number of transactions during the first five months of the year exceeded the volume compared to the same period last year. RomReal's management is conducting business as usual on the ground. According to our strategy, in a short-term perspective, the likelihood of new significant sales is somewhat reduced. A lot of the sales processes are merely postponed. We are expecting that with the relaxation of the measures related to COVID-19, as well as the negative social impact, we will see again a very keen interest into our properties. This concludes our presentation for today. Thank you for participate. At the end of this call, myself, Harris Palaondas, and our Chairman, Kjetil Grønskag, are available for your questions. Thank you all, and have a great day.