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SIF MOLDOVA S.A. - SIF2

2020 Q1 report

Release Date: 5/15/2020 6:26:59 PM

IRIS Code: A4036

Report date: May 15, 2020

Information according to: Law 24/2017, FSA Regulation 5/2018

Issuer name: Societatea de Investitii Financiare MOLDOVA S.A.

Headquarters: 94C Pictor Aman street, Bacau

Phone/fax/e-mail: 0234576740 / 0234570062 / sifm@sifm.ro

Sole registration number at the Trade Register Office: 2816642

EUID: ROONRC J/04/2400/1992

LEI: 254900Y1O0025N04US14

Share capital: 100,217,917.6 RON

Number of issued shares: 1,002,179,176

Face Value: 0.1 RON/share

Ownership structure: 100% private

Free float: 100%

ASF Register No.: PJR071AFIAA/040002

Regulated market on which the issued securities are traded: Bucharest Stock Exchange, Premium category

International identifiers:

Bucharest Stock Exchange: SIF2

ISIN: ROSIFBACNOR0

Bloomberg: BBGID BG000BMN5F5

Reuters: SIF2.BX

 

To:       Bucharest Stock Exchange

 

FINANCIAL SUPERVISORY AUTHORITY

Financial Instruments and Investments Sector

 

Important Event: Availability of the Board Report and Q1 2020 Financial Statements

 

1. Q1 2020 Board Report synthesis

The results registered by SIF MOLDOVA in Q1 2020 and the objectives of the following period, are in line with the “2020 Activity Program” and “SIF MOLDOVA’s Investment Strategy and Policy” approved in the General Meeting of Shareholders.

 

Portfolio Structure

The listed shares portfolio in the total assets under management holds the main weight, with 69.6% (Q1 2019: 73.8%), while the weight of unlisted shares represents 12% (Q1 2019: 10.6%) in the context of the reorientation of the investment policy.

 

The main sectors in the portfolio structure remain the financial sector with 43% (Q1 2019: 41.4%) and the energy sector with 15.8% (Q1 2019: 17.4%) in the total assets value.

 

The total value of the assets under management was 1804 million lei (Q1 2019: 1950 million lei), while the net asset value per share (NAV per share) was 1.75 lei (Q1 2019: 1.83 lei). SIF2 share price at the end of Q1 2020 was 1.32 lei (Q1 2019: 1.20) which led to a SIF2 price/NAV per share discount of 24% (Q1 2019: 34%)

 

The investments in securities made in Q1 2020 amounted to 51.2 million lei (Q1 2019: 12.7 million lei), which represents 48.8% of the investment program approved for 2020.

 

The net result (loss) registered in the first 3 months of 2020 is under the budgeted level, mainly because of the unrealized net loss from the revaluation of financial assets at fair value through profit or loss (FVTPL) registered by the Company, following the negative effect that the start of the COVID 19 pandemic crisis has had on international and national financial markets, with impact on the fair value of fund units and shares held by the Company and classified in this category.

 

In the context of the COVID 19 pandemic, it is to be expected that during 2020 a high volatility of quotations will be registered on Bucharest Stock Exchange, the market on which most of SIF Moldova’s portfolio is exposed. Although the management of the Company has taken into consideration an impact on the value of Company’s assets on the short run, on the average and long run it is expected that markets reabsorb the effects of this crisis as well. The measures that have started to be taken by states all over the world and Romania as well, both as an answer to the pandemic itself and the economic ones are meant to reestablish the trust in the social and economic environment, especially in the financial markets.

 

The management of SIF Moldova does not estimate difficulties in honoring its obligations towards the shareholders and third parties, as the present and future liquidity availabilities are in line with the limitations imposed by regulations and enough to cover current payments over the year and dividend distribution. 

In this context, the investment strategy differentiated on the assets under management portfolios represented the optimal approach. Thus, it was decided to:

Increase for the Majority Holdings portfolio - “private equity” approach within existent majority holdings (real estate, agriculture, other sectors);  

Recalibration for the CORE portfolio - listed portfolio that provides liquidity to SIF Moldova, representing the main income generator;  

Restructuring for the SELL portfolio – the process of restructuring the SELL portfolio continued, reducing the number of participations by 18 compared to Q1 2019, through the full sale of the participations.

 

The emphasis on the “private equity” approach for the implementation of some investment projects, leads to the increase of the profitability of the assets under management and ensures the compensation of the risk generated by the high volatility of the quotations of the securities listed in the portfolio.

 

A short presentation of the status and results of these projects indicates the following:

“Baba Novac Residence” real estate project (100% owned through Tesatoriile Reunite)

The project was completed, at present we are running the stage of entering the final sales and purchase agreements. 359 of the 363 apartments have been sold. 

The investment bank credit was repaid in full.

The return of capital to SIF Moldova was decided through the 22.6 million lei capital reduction in H1 2020, and the offering of dividends of around 8 million lei.

“Blueberry Farm Extension” (100% owned through Agrointens SA) – has as object the acquisition and establishment of new blueberry plantation farms. In 2019 the cultivated area amounts to 82 ha and in the spring of 2020, it will reach 86 ha. 

“Veranda Mall” project (37% indirect holding through Professional Imo Partners SA and Nord SA) – the expansion stage was completed with about 6.300 square meters, with an area dedicated to the commercial galleries and a multiplex Cinema equipped with 12 cinema halls, the rentable area reaching around 34000 square meters.

“Atria Urban Resort” real estate project (50% ownership through Straulesti Lac Alfa SA) – targets the 4-stage building of a residential complex that includes  1381 apartments, located in the North West area of Bucharest, near Colosseum Retail Park with easy access to the northern area of the capital city. On the reporting date, the Stage 1 (160 apartments) is completed, 83% of the Stage 1 apartments having been sold. The construction of stage 2 started in December 2019. 

Iasi real estate project (100% ownership through Agroland Capital SA) - Assets belonging to the company IASITEX SA were acquired, the company owns a land with an area of about 2.83 ha and an administrative building (Ground floor + 8) with a built area of 4600 sqm, positioned in the central area of Iasi. Our detailed analyzes and projections focused on both the quality and location of the assets acquired, as well as the significant real estate development potential of Iasi Municipality. The process of elaborating the urban planning documentation is in progress.

 

2. Q1 2020 Board Report availability

In compliance with the 2020 financial communication calendar, we hereby inform the investors that starting with May 15, 2020, at 18:00 hours, it will be made available:  

“SIF Moldova’s Board of Directors Report for Q1 2020” drafted in compliance with the Law 24/2017, FSA Regulation 5/2018 and Norm 39/2015; 

“Special purpose financial information for the three months’ period concluded on March 31, 2020, unaudited”

(www.sifm.ro/Regular Reports/2020).

 

Claudiu Doros

CEO

 

Catalin Nicolaescu

Compliance Officer

 



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