Release Date: January 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The fund's net asset value (NAV) increased to RON2.25 billion or $470 million by the end of December 2024.
- Operating revenues for airports increased by 20% compared to the first nine months of 2023, reaching RON1.1 billion.
- The operating profit for airports rose to RON524 million, marking a 24.7% increase year-on-year.
- The fund's total return for the net asset value in 2024 was 17%.
- The fund successfully completed its 15th buyback program and initiated the 16th, with approval to repurchase RON320 million shares.
Negative Points
- The fund's shares were trading at a significant discount of 51% for shares and 54% for GDRs as of the latest NAV.
- Total return for local shares was negative 32.1%, and for GDRs, it was negative 36.7% in 2024.
- Operating revenues for Constanta Ports decreased by 5% year-on-year, impacted by a significant drop in volumes linked to Ukraine.
- The fund faced challenges in corporate governance, with the legality of board appointments being contested in court.
- Changes in the fiscal code resulted in the fund starting to pay income tax in 2024, amounting to RON13 million.
Q & A Highlights
Q: What is the timeline for choosing the next manager for Fondul Proprietatea?
A: Johan Meyer, CEO, stated that Franklin Templeton, the current manager, is not responsible for the selection process. This is managed by the board of nominees, and any updates will be communicated by them.
Q: How do you see the operating income and volume trends for Constanta Ports after the decline in Ukrainian traffic?
A: Johan Meyer, CEO, mentioned that the future volumes depend largely on developments in Ukraine. Some traffic may be permanent, while some may revert to Ukrainian facilities. Expectations are for similar or better volumes compared to the previous year, but it is too early to make definitive statements.
Q: What is the current dividend per share, and what are the expectations for 2024?
A: Catalin Cadaru, Financial Reporting Manager, explained that the dividend per share for the previous year was $0.06. The final dividend for 2024 will be determined after the audit is completed, and documentation will be published around the end of February.
Q: Is the policy still to pay out about 90% or more of earnings?
A: Johan Meyer, CEO, clarified that Fondul Proprietatea has a cash distribution policy rather than a targeted payout ratio. For portfolio companies, the payout varies based on shareholder approvals, with a legislative minimum of 50% for main assets like airports.
Q: What is the EV/EBITDA multiple for the airport in the NAV, and how does it compare to recent transactions?
A: Marius Dan, Deputy CEO, stated that the current multiple is 7.2 after discounts for lack of control and marketability, based on trailing 12 months EBITDA. This is lower than private transactions, which typically occur at or above 20 times EBITDA.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
