The Fund reported a net operating loss of RON654 million, compared with revenue of RON2 billion in 2019.
“The main contributor to the negative result in the first nine months of 2020 was the net loss from equity investments at fair value through profit or loss amounting to RON 1,885.7 million, mainly generated by (1) the decrease in unlisted holdings value of RON 1,264.4 million following the valuation update process (mostly related to CN Aeroporturi Bucuresti SA, E-Distributie companies and Hidroelectrica SA), which also considered the effect of dividends distributed by the companies subject to valuation of RON 940.0 million and (2) OMV Petrom SA, as a result of the negative evolution of this company’s share price during the period (total impact RON 642.8 million, share price decrease of 25.1%). This was partially offset by the gross dividend income from portfolio companies of RON1,218.7 million recorded during this period,” per the Fund’s financial report.
The net loss from equity investments at fair value through profit or loss for the first nine months of 2020 of RON1,885.7 million was mainly generated by OMV Petrom SA (RON642.8 million, decrease in share price of 25.1%), CN Aeroporturi Bucuresti SA (RON287.1 million), E-Distributie Banat SA (RON266.7 million), EDistributie Muntenia SA (RON215.8 million), Hidroelectrica SA (RON179.0 million) and E-Distributie Dobrogea SA (RON156.8 million).
Gross dividend income for the nine-month period ended 30 September 2020 included the dividend income earned from the Fund’s portfolio companies, mainly from E-Distributie companies (RON522.9 million), Hidroelectrica SA (RON399.5 million) and OMV Petrom SA (RON175.6 million).
Interest income arose from deposits held with banks and from short-term government securities.
The Fund’s share price continued to recover after the significant drop recorded by all capital markets following the COVID-19 outbreak at the beginning of the year and, as at the end of September 2020, was 16.7% higher compared to the end of March 2020, and 7.0% higher compared to end of December 2019.
The cash and cash equivalents of the Fund during the first nine months of 2020 included term deposits with banks, treasury bills and government bonds issued by the Ministry of Public Finance of Romania. All instruments are denominated in RON and have maturities of up to one year.
“The increase in liquid assets by 128.6% during the nine-month period ended 30 September 2020 is mainly due to the cash inflows from the dividends collected from portfolio companies (RON 1,197.2 million) and the proceeds from disposal of equity investments of RON 635.4 million which were offset by the payments for the acquisition of own shares within the eleventh buy-back programme (RON 790.7 million), including the tender offers finalised in March and September and by the payments to shareholders regarding cash distributions in total amount of RON396.6 million,” the report reads.
“The net decrease in equity investments of RON2,521.1 million during the first nine months of 2020 was principally generated by the decrease in the value of unlisted holdings in the portfolio by RON 1,264.4 million following the valuation update process at the end of June, mostly related to CN Aeroporturi Bucuresti SA, E-Distributie companies and Hidroelectrica SA (the valuations include the effect of annual and special dividends distributed by the companies subject to valuation which amount to RON 940.0 million for the first six months of 2020); the disposal of 1.7 billion shares in OMV Petrom SA under an accelerated bookbuild offering for a total amount of RON 561.0 million; the negative evolution of OMV Petrom SA share price (total impact RON 642.8 million, share price decrease of 25.1%),” the Fund said in its report.