Romania's Fondul Proprietatea posts 13% y/y rise in 9-mo net profit

The main contributors to the profit increase were the net gain generated by the valuation update for majority state-owned hydro power producer Hidroelectrica and the gross dividend income from portfolio companies, Fondul Proprietatea said in an unaudited financial statement filed with the Bucharest Stock Exchange, BVB.

The fund's net asset value (NAV) rose to 15.433 billion lei at the end of September 2022 from 12.264 billion lei a year earlier. Fondul Proprietatea's current market capitalisation stands at 11.72 billion lei.

At the end of September, the fund's portfolio was composed of holdings in 33 companies - six listed and 27 unlisted - a combination of privately held and state-controlled entities. The largest unlisted holding is Hidroelectrica, which represents 78.5% of the fund's NAV, while the largest listed holding company is oil and gas group OMV Petrom [BSE:SNP], accounting for 4.5% of the NAV.

In September, Fondul Proprietatea, a minority shareholder in Hidroelectrica, announced that together with the company it has selected a consortium of investment banks in relation to Hidroelectrica's planned initial public offering (IPO). In August, the Romanian government announced that Fondul Proprietatea will launch an IPO of up to 19.94% interest in Hidroelectrica by the end of the first half of 2023.

The fund also holds stakes in gas supply group Engie Romania, salt producer Salrom, Maritime Ports Administration SA Constanta, electricity producer Nuclearelectrica [BSE:SNN], aluminium producer Alro [BSE:ALR] and aerospace company Romaero [BSE:RORX].

Fondul announced at end-July that it aims to list Salrom in the first half of 2023. The economy ministry owns 51% of Salrom and the remaining 49% is controlled by the investment fund.

Fondul Proprietatea's shares traded 0.11% lower at 1.8840 lei by 1044 CET on Tuesday on the BVB.

OMV Petrom shares traded flat at 0.4540 lei by 1040 CET, whereas Nuclearelectrica traded 1.26% lower at 43.05 lei by 1046 CET.

Alro shares traded 0.35% higher at 1.43 lei by 1042 CET on Tuesday, whereas Romaero shares last traded on November 2, closing at 32 lei.

Launched in December 2005, Fondul Proprietatea was established to compensate Romanians whose properties were confiscated by the former communist government. Following an international tender announced in December 2008, Franklin Templeton Investments was officially appointed as investment manager and sole administrator of the fund in September 2010. The fund was listed on the Bucharest Stock Exchange in 2011 and on the Specialist Fund Market of the London Stock Exchange by means of global depositary receipts (GDRs) in 2015.

(1 euro = 4.8982 Romanian lei)