In Q1, the company observed an increase in net operating income of 37.8% and an increase in net income of 41.1%. As of 30 April 2019, NAV amounts to RON 9.65bn (EUR 2.03bn), which translates into a NAV per share of RON 1.3527.

As Fondul Proprietatea (FP) published their Q1 2019 report, we are bringing you key takes from the report.  The main contributor to the profit in Q1 was the net unrealized gain from equity investments at fair value through profit or loss amounting to RON 392.5m (+26.7% YoY), mainly generated by OMV Petrom SA, as a result of the positive evolution of this company’s share price in Q1. Note that OMV Petrom’s share price increased by 19.4% with the impact of RON 328.5m.

Gross dividend income amounted to RON 34.7m, which includes the dividend income earned from the Fund’s portfolio companies (collected in January 2019). This included the special dividends from Alro of RON 33.3m and Alcom of RON 1.3m. Note that in Q1 2018, Fondul Proprietatea did not record any gross dividend income.

As a result of both, the company observed an increase in net operating income 37.8% YoY, amounting to RON 429.3m.

When observing operating expenses, they amounted to RON 14.7m, which represents a decrease by RON 3.3m (-18.3%).

In Q1, the company recorded a net income of 414.4m, which represents an increase of 41.1%.

FP Performance (Q1 2019 vs Q1 2018) (RON m)

Turning our attention to the Fund’s NAV; as of 29 March 2019, the company reported a NAV of RON 10.17bn and a NAV per Share of RON 1.4190. In Q1 2019, the NAV per share had an overall increase of 0.7% YoY, mainly due to the positive share price evolution of the Fund’s listed holdings (OMV Petrom) and due to the tenth buyback programme carried out by the Fund.

Furthermore, as of 29 March 2019, the discount of the Fund’s share price to NAV was 35.5% which during Q1 ranged between 34.5% and 43.2%.

Overview of Fondul Proprietatea’s April 2019 NAV

Fondul Proprietatea also published their NAV as of 30 April 2019. According to the latest NAV report, Fondul reported a total NAV of RON 9.65bn (EUR 2.03bn), which translates into a NAV per share of RON 1.3527.

When comparing it to the same period last year, their NAV increased by 2%, while NAV per share increased by 5.8%. Meanwhile, when comparing MoM, Fondul’s NAV decreased by 5.1%, while their NAV per share decreased by 4.7%.

Fondul Share Price & NAV per Share (2016 – 15.5.2019)

Next, when observing the portfolio structure, it remains traditionally oriented towards the power, oil and gas sectors, whereby the two largest holdings, Hidroelectrica and OMV Petrom account for 63.43% of the total NAV.

Furthermore, when looking at the Fund’s portfolio structure, unlisted equities account traditionally for the largest share, with 73.4%.

Turning our attention towards the share’s price performance, as of 15 May, the share price amounted to RON 0.964, marking a 1.8% decrease YoY. The discount to NAV per share increased by 5.4 p.p. YoY and currently stands at 29.47%.

Fondul Price To NAV Discount (2016 – 15.5.2019) (%)