In FY 2022, Fondul recorded an unrealized gain from equity instruments at fair value through a P&L of RON 1.84bn. Net operating income decreased by 43.4% YoY, while the Fund recorded a net profit of RON 2.77bn, a decrease of 44.8% YoY. Finally, looking at the latest available data for NAV, as of 28 February 2023, NAV stood at RON 14.8bn, an increase of 16.7% YoY.
In FY 2022, the unrealized gain from equity instruments at fair value through profit and loss amounted to RON 1.84bn. The unrealized gain from equity investments at fair value through profit or loss was mainly generated by the change in fair value for the holding in Hidroelectrica SA (unrealized gain of RON 2.2bn), as a result of the strong performance registered by the company in the period in the current electricity market context. Further, positive Hidroelectrica’s development was slightly offset by the net unrealized loss from equity investments at fair value for the Holding in Engie Romania
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 82m), Enel Energie (RON 39.5m), E-Distributie companies (RON 68m), Alro (RON 32.1m) and a few other holdings within the portfolio.
In total, the net operating income amounted to RON 2.9bn, a decrease of 43.4% YoY. Moving on to OPEX, it amounted to RON 125.2m, an increase of 17.5% YoY, coming mainly from intermediaries and other transaction-related fees (RON 19.1m). Overall, the larger decrease in op. income meant that EBT amounted to RON 2.8bn, a decrease of 44.7% YoY.
The Fund, therefore, recorded a non-taxable income of RON 714.8m, which mitigates the non-deductible expenses of RON 383.7m, as well as the impact from the income tax of RON 444.2m. When combined with the mentioned income tax at 16% (RON 444.2m), this would mean that the Fund almost does not pay any income tax. With this said, the net income amounted to RON 2.77bn, a decrease of 44.8% YoY.
Fondul Proprietatea key financials (FY 2021 vs. FY 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) due to the dividend distribution and following the cash outflow for the buy-back program. However, we note that the most important cash inflows are related to the collection of dividend receivables from portfolio companies and the proceeds from the sale of OMV Petrom shares within the ABB offerings in January and December 2022.
Meanwhile, total liabilities increased by 7.8% YoY and amounted to RON 104.4m, due to the recording of the February 2022 dividend payable amount following the shareholders’ approval of a RON 0.06 DPS distribution during the 15 December 2021 GSM. Finally, the Fund’s total NAV amounted to RON 14.8bn, an increase of 16.7 YoY, meaning that the NAV per share amounted to RON 2.5728 in February 2023 (the latest available data for NAV).
