Romania's Fondul Proprietatea turns to loss in 2020

The main contributor to the loss recorded in 2020 was the negative net change in fair value of the fund’s equity investments as a result of the pandemic's impact on overall economic activity and capital markets, Fondul Proprietatea said in a filing to the Bucharest Stock Exchange, BVB.

However, the pandemic's impact was partially netted off by the gross dividend income from portfolio companies, which amounted to 1.22 billion lei in 2020, it added.

In 2020, Fondul posted a net unrealised loss from equity investments at fair value of 1.1 billion lei, mainly related to its holdings in Bucharest Airports Company, oil and gas group OMV Petrom as well as in electricity distribution companies E-Distributie Banat, E-Distributie Muntenia and E-Distributie Dobrogea. This loss was partially netted off by the increase in majority state-owned hydropower producer Hidroelectrica fair value, as a result of the company’s strong performance.

A net realised loss of 142 million lei recorded in 2020 is related to the partial disposal of OMV Petrom holding and by the disposal of the entire holding in nuclear power producer Nuclearelectrica, the fund said.

The fund's assets fell to 10.322 billion lei at the end of 2020, from 11.921 bllion lei at the end of 2019.

Fondul Proprietatea's current market capitalisation stands at 11.5 billion lei.

At the end of 2020, the fund's portfolio was composed of holdings in 32 companies - six listed and 26 unlisted - a combination of privately held and state-controlled entities.

The largest unlisted holding of Fondul Proprietatea is Hidroelectrica, which represents 49.96% of the fund's NAV, while the largest listed holding company is OMV Petrom, accounting for 14.03% of the NAV.

Fondul Proprietatea's gross dividend income increased by 29% on the year to 1.2 billion lei in 2020, mainly due to dividends from E-Distributie companies, Hidroelectrica and OMV Petrom.

For 2020, the fund is proposing a dividend of 0.072 lei per share from 2016 and 2017 unallocated profits. For 2019, the fund distributed a dividend of 0.06099 lei per share.

Fondul Proprietatea's shares traded 0.63% lower at 1.5850 lei by 1044 CET on Tuesday on the BVB.

(1 euro =4.8746 Romanian lei)