In H1 2022, Fondul recorded an unrealized gain from equity instruments at fair value through P&L of RON 3.58bn. Net operating income increased by 126.7% YoY, while the Fund recorded a net profit of RON 4.2bn, an increase of 129.3% YoY. Finally, NAV as of 31 June 2022 stood at RON 16.3bn, an increase of 44.1% YoY.
In H1 2022, the unrealized gain from equity instruments at fair value through profit and loss amounted to RON 3.58bn. 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 reevaluated its Hidroelectrica holding, which increased by 3.9x.
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), E-Distributie Banat (RON 69.9m), E-Distributie Muntenia (RON 44.2m) and E-Distributie Dobrogea (RON 43.7).
In total, the net operating income amounted to RON 4.21bn, an increase of 127% YoY. Moving on to OPEX, it amounted to RON 74.4m, an increase of 52.8% YoY, coming mainly from an increase in administration fees (+40.2% YoY). The larger increase in op. income compared to OPEX meant that EBIT amounted to RON 4.13bn, an increase of 128.7% YoY.
The Fund, therefore, recorded a non-taxable income of RON 653.6m, which mitigates the non-deductible expenses of RON 100.9m, as well as the impact from the income tax of RON 661.2m. When combined with the mentioned income tax at 16% (RON 661.2m), this would mean that the Fund does not pay any income tax. As such, the net income amounted to RON 4.13bn, an increase of 129.3% YoY.
Fondul Proprietatea key financials (H1 2021 vs. H1 2022, RONm)
Balance Sheet
Looking at the balance sheet, the Fund recorded a slight decrease in liquid assets (which includes cash and cash equivalents, deposits with banks, treasury bills, and govt. bonds) of 11.3% YTD. This came as a result of cash outflows from the payment of the 13th Buyback Tender Offer (RON 711.5m) and the payment of the June 2022 dividend distribution (RON 682.4m) and the collection of the Buyback Tender Offer guarantee from the broker (RON 215.3m). Finally, other assets amounted to RON 4.7bnm (FY 2021: RON 298.7k), as a result of prepaid expenses and the Bank of New York annual fee.
Meanwhile, total liabilities decreased by -66.2% YTD and amounted to RON 137.9m, due to the lower dividends payable, net of withholding tax. The Fund’s total NAV amounted to RON 16.3bn, an increase of 44.1 YoY, meaning that the NAV per share amounted to RON 2.7817.
