In 9M 2022, Fondul recorded an unrealized gain from equity instruments at fair value through P&L of RON 3.14bn. Net operating income increased by 13.6% YoY, while the Fund recorded a net profit of RON 3.51bn, an increase of 13.3% YoY. Finally, NAV as of 31 June 2022 stood at RON 15.4bn, an increase of 25.8% YoY.
In 9M 2022, the unrealized gain from equity instruments at fair value through profit and loss amounted to RON 3.14bn. This increase was generated by Hidroelectrica, as a result of the increase in Hidroelectrica’s holding due to the strong performance registered by the company in the current electricity market. Fondul’s Hidroelectrica holding generated RON 2.1bn of unrealized gain. Solid results from Hidroelectrica’s holding were further amplified by a strong performance of OMV Petrom, generating an unrealized gain of RON 370.6m.
The Fund also recorded a net realized loss from equity investments at fair value through profit or loss, which was generated by the negative change in fair value for the holding in Engie Romania (unrealized loss of RON 123.2m), E-Distributie Banat (RON 111.9m), E-Distributie Dobrogea (RON 84.2m) and E-Distributie Muntenia (RON 79.5).
In total, the net operating income amounted to RON 3.61bn, an increase of 13.6% YoY. Moving on to OPEX, it amounted to RON 95.4m, an increase of 25.8% YoY, coming mainly from an increase in administration fees (+8.5% YoY). The larger increase in op. income compared to OPEX meant that EBT amounted to RON 3.52bn, an increase of 13.3% YoY.
The Fund, therefore, recorded a non-taxable income of RON 658.5m, which mitigates the non-deductible expenses of RON 206.2m, as well as the impact from the income tax of RON 562.7m. When combined with the mentioned income tax at 16% (RON 562.7m), this would mean that the Fund does not pay any income tax. As such, the net income amounted to RON 3.5bn, an increase of 13.3% YoY.
Fondul Proprietatea key financials (9M 2021 vs. 9M 2022, RONm)
Source: Fondul Proprietatea, InterCapital Research
Balance Sheet
Looking at the balance sheet, the Fund recorded a decrease in liquid assets (including cash and cash equivalents, deposits with banks, treasury bills, and government bonds) of 27.3% YTD. Finally, other assets amounted to RON 56.2m (FY 2021: RON 298.7k), as a result of prepaid expenses and the Bank of New York annual fee.
Meanwhile, total liabilities decreased by 76.4% YTD and amounted to RON 105.8m, due to the lower dividends payable, net of withholding tax. Finally, the Fund’s total NAV amounted to RON 15.4bn, an increase of 25.8 YoY, meaning that the NAV per share amounted to RON 2.6935.
