Half-year financial results - H1 2019

SIF2 SIF MOLDOVA S.A.

Report date: August 6, 2019

Information according to: Law 24/2017, ASF Regulation 5/2018, BSE Market Operator Code  

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

Headquarters: 94C Pictor Aman street, Bacau

Phone/fax/e-mail: 0234576740 / 0234570062 / [email protected]

Sole registration number at the Trade Register Office: 2816642

Trade Register Number: J04/2400/92

LEI: 254900Y1O0025N04US14

Share capital: 101,317,917.6 RON

Number of issued shares: 1,013,179,176

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 H1 2019 Financial Statements

 

1. H1 2019 Board Report synthesis

The H1 2019 results registered by SIF Moldova and the objectives of the following period are in accordance with the “2019 Activity Program” and “Investment strategy and policy”, approved in the General Meeting of Shareholders.

 

Portfolio Structure

Relative to the total value of managed assets, the listed shares portfolio holds the main weight, of 67% (H1 2018: 73%), while the weight of unlisted shares is 9.7% (H1 2018: 9.3%). We maintain the financial sector 42%  (H1 2018: 41.5%) and energy sector 13.2% (H1 2018: 18.1%) reported to total assets value, as the main sectors in the portfolio structure.

 

The total value of managed assets reached 2175 million lei (H1 2018: 2016 million lei), while the  net asset value (NAV) has been of 2.02 lei (H1 2018: 1.84 lei). The price of SIF2 share at the end of H1 2019 has been 0f 1.32 lei, leading to a SIF2 price/NAV discount of 34%.

 

Financial Performance

The net result recorded in H1 2019 has been of 125.9 million lei (H1 2018: 72 mil. lei), 160% reported to 2019 Budget, being comprised of net profit – the amount of  102.6 million lei and net gain from the sale of financial assets reflected in reported result – the amount of 23.3 million lei.  Investments in securities were of 16.6 million lei.

 

We do have to underline though, that the occurrence of exceptional events, independent from the will of issuers or investors, such as an unpredictable tax policy, has had and might have the consequence of the occurrence of severe disturbances in the economic environment and on the capital market, that might affect the performance of issuers and titles in the portfolio, our performance and implicitly that of SIF2 share.  

 

Investment strategy

In this context, the investment strategy differentiated on managed assets portfolios was the optimum prudential approach. We thus opted for:

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

·         Recalibration for the CORE portfolio – listed portfolio what provides liquidity to SIF Moldova assets, representing the main income generator;

·         Restructure for the SELL portfolio – we have continued the restructure process, reducing the number of holdings in this portfolio by 22 in comparison to H1 2018 through the full sale of holdings.

The focus on the “private equity” type approach for the implementation of certain investment projects, leads to the increase of managed assets profitability and insures the compensation of the risk generated by the high volatility of the listed titles in the portfolio registered in the analyzed period.  

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

§   “Baba Novac Residence  Real Estate Project (100% holding through Tesatoriile Reunite SA) – is running according to the set schedule, the building of the residential complex comprised of 6 blocks with 363 apartments and 436 parking spaces (above and underground). The sale pace is above that initially forecast, so that by the end of H1 2019, 96% of the total number of apartments has been sold. Stage 1, which includes a number of 121 apartments, has been completed, and the apartments are currently being delivered to the buyers. Stages 2 and 3 will be completed in Q4 2019.

§  "Blueberry Farm" Project (100% holding through Agrointens SA) – The production sold in 2018 has been of around 233 tons. We are currently extending the cultivated area to 66 ha, the aim being 84 ha by 2020 and 200 ha in the following 4 years.  

§  "Veranda Mall" Project (37% indirect holding through Professional Imo Partners SA and Nord SA) – generated in H1 2019 revenue of around 3.2 million euro, with an occupation degree of 98% and a number of around 4,5 million visitors. The extension of the commercial gallery area with 3.300 square meters has been completed. The extension project will be completed in Q3 2019 with the opening of a multiplex cinema. 

§   “Atria Urban Resort” Real Estate Project (50% holding through Straulesti Lac Alfa SA) – targets the 4 stages building, of a residential center to include 1381 apartments, on a land area of around 9 ha, located in the NW of Bucharest Municipality, in the vicinity of Colosseum Retail Park with easy access to Piata Victoriei and the north part of the capital city. At present, stage 1 (160 apartments) is under construction, completion deadline in Q3 2019, 48% of the apartments being already sold.

§  Iasi Real Estate Project (100% holding through Agroland Capital SA) - We have purchased assets belonging to IASITEX SA company, namely around 30.000 square meters of land and an administrative building (GF+8) with a built area of 4600 square meters, located in the center of Iasi municipality. Our detailed analysis and forecasts targeted both the quality and location of the purchased assets, and the potentially significant real estate development of Iasi Municipality, on all segments: residential, office and commercial. We are currently running the selection process for the architectural solution of the real estate project

 

2. H1 2019 Board Report availability

 

In compliance with the 2019 financial communication calendar, we hereby inform the investors that starting with August 6, 2019, at 18:00 hours, it will be made available:  

·         “SIF Moldova’s Board of Directors Report for H1 2019” drafted in compliance with the Law 24/2017, FSA Regulation 5/2018 and Norm 39/2015; 

·         “Special purpose financial information for the 6 months’ period concluded on June 30, 2019, unaudited”

(www.sifm.ro /Regular Reports/2019).

 

The Report can be viewed in the links below.

 

Claudiu Doros

CEO

 

Catalin Nicolaescu                        

Compliance Officer