Fondul Proprietatea (hereinafter “The Fund”) has published today its semi-annual report and financial results for the first half of 2020 and would like to share the most important highlights:
- The share price had a strong performance in the first two months of the year, reaching a record high of RON 1.3800 per share on 14 February 2020. The negative impact of COVID-19 pandemic on the economic activity and global capital markets led to a significant drop in the Fund’s performance in March. In the second quarter of the year, the markets started recovering, and Fondul followed this trend. Therefore, the share price as of the end of June 2020 was 13.5% higher compared to the end of March 2020, and 4.1% higher compared to end of December 2019.
- The cumulative performance of the Fund’s NAV/share continues to be very strong, recording in the first six months of the year an increase of 122.45% since the Fund’s inception. At the end of June 2020, the Fund’s NAV was RON 10.14 billion (USD 2.35 billion) and the NAV/share reached RON 1.5622.
- In terms of the contribution to the NAV performance in the first 6 months of the year, the main performers among the Fund’s portfolio companies were Hidroelectrica, Nuclearelectrica and Romaero. The main detractors for the period were OMV Petrom, Bucharest Airports, Engie and Salrom.
- The Fund’s trading discount to NAV* continued to shrink. As of the end of June, the discount for the ordinary shares listed on the Bucharest Stock Exchange was 19.79% compared to 23.05% as of the end of December 2019, while for the GDRs listed on the London Stock Exchange was 20.73%, versus 25.76% as at 31 December 2019.
- The unaudited results of the Fund in accordance with IFRS for the six months ended 30 June 2020 recorded a loss of RON 848.6 million. The main contributor to the loss was the net unrealised loss from equity investments at fair value through profit or loss amounting to RON 1,960.9 million, generated by OMV Petrom SA, as a result of the negative evolution of the company’s share price during the first semester of 2020 (total impact represented a decrease of RON 696.6 million and share price drop of 27.5%) and the decrease in the value of unlisted holdings in the portfolio of RON 1,264.4 million following the valuation update process (mostly related to CN Aeroporturi Bucuresti SA, E-Distributie companies and Hidroelectrica SA). This was partially offset by the gross regular and special dividend income from portfolio companies of RON 1,151.2 million recorded during this period.
- The dividend income came mainly from E-Distributie companies (special dividend of RON 522.9 million), Hidroelectrica SA (RON 399.5 million), OMV Petrom SA (RON 175.6 million), and Nuclearelectrica SA (RON 34.9 million).
* The discount is calculated based on the latest published NAV available for the day of the calculation.
For more detailed information on the H1 2020 Report and Financial Results please consult the report on www.fondulproprietatea.ro or www.bvb.ro.
Statement of Financial Position
| RON million | 30 Jun 2020 | 31 Mar 2020 | 31 Dec 2019 | 30 Jun 2019 | 30 Jun 2020 vs. 31 Dec 2019 (%) |
| Unaudited | Unaudited | Audited | Unaudited | ||
| Cash and current accounts | 431.3 | 25.9 | 31.9 | 631.2 | |
| Deposits with banks | 139.5 | 641.6 | 338.4 | 207.8 | |
| Treasury bills | – | – | – | 49.4 | |
| Government bonds | 152.0 | – | 137.3 | – | |
| Dividend receivables | 436.1 | 24.2 | – | 227.6 | |
| Equity investments | 9,449.0 | 8,949.7 | 11,413.1 | 10,178.1 | |
| Other assets | 0.5 | 0.7 | 0.3 | 117.8 | |
| Total assets | 10,608.4 | 9,642.1 | 11,921.0 | 11,411.9 | -11.0% |
| Payables | 21.1 | 29.5 | 16.7 | 19.7 | |
| Other liabilities | 445.9 | 26.8 | 32.8 | 657.8 | |
| Total liabilities | 467.0 | 56.3 | 49.5 | 677.5 | +843.4% |
| Total equity | 10,141.4 | 9,585.8 | 11,871.5 | 10,734.4 | |
| Total liabilities and equity | 10,608.4 | 9,642.1 | 11,921.0 | 11,411.9 | -11.0% |
Source: IFRS financial statements
Statement of Comprehensive Income
| RON million | Q1 2020 Unaudited | Q2 2020 Unaudited | H1 2020 Unaudited | H1 2019 Unaudited |
| Net (loss)/ gain from equity investments at fair value through profit or loss | (2,463.3) | 502.4 | (1,960.9) | 1,041.6 |
| Gross dividend income | 522.9 | 628.3 | 1,151.2 | 680.8 |
| Interest income | 3.4 | 3.0 | 6.4 | 5.6 |
| Other income, net* | 0.1 | 4.3 | 4.4 | 3.6 |
| Net operating (loss)/ income | (1,936.9) | 1,138.0 | (798.9) | 1,731.6 |
| Administration fees recognised in profit and loss | (13.0) | (16.1) | (29.1) | (26.2) |
| Other operating expenses | (5.1) | (5.0) | (10.1) | (12.0) |
| Operating expenses | (18.1) | (21.1) | (39.2) | (38.2) |
| Finance costs | – | – | – | (0.3) |
| (Loss)/ Profit before income tax | (1,955.0) | 1,116.9 | (838.1) | 1,693.1 |
| Income tax | – | (10.5) | (10.5) | (9.9) |
| (Loss)/ Profit for the period | (1,955.0) | 1,106.4 | (848.6) | 1,683.2 |
| Other comprehensive income | – | – | – | – |
| Total comprehensive income for the period | (1,955.0) | 1,106.4 | (848.6) | 1,683.2 |
Source: IFRS financial statements
* Other income, net included mainly the net gain/ (loss) from fair value changes related to government securities, net foreign exchange gain/ (loss), net impairment losses on receivables and other operating income/ (expenses).
