Unaudited interim information of Invalda INVL group for 6 months of 2018
The net profit of Invalda INVL and consolidated net profit for 6 months of 2018 amounted to EUR 14 thousand. In the same period of 2017 the net profit of the company and consolidated net profit was EUR 7.74 million.
Company’s and consolidated equity capital for the 6 months of 2017 amounted to EUR 65.45 million, in the same period of 2017 it was EUR 60.39 million.
Invalda INVL, one of the Baltic region’s leading asset management groups, had equity of EUR 65.5 million at the end of the first half of 2018, which is 2.27% more than at the end of 2017. Equity per share increased 2.35% in the six-month period to EUR 5.66. The company’s net profit in the first half of the year was EUR 14 000, or 99.8% less than in the same period last year.
“Invalda INVL’s results are attributable to asset management and investment operations. In the main area of asset management, we’re continuing expansion and so don’t expect a profit from these activities this year. The results of investment activities, meanwhile, depend on the change in value of our investments – in the first half of this year there were no significant events and markets were volatile, so profits here were not big. We hope the work we’re now doing will positively impact results over the coming six to twelve months,” said Darius Šulnis, the president of Invalda INVL.
Asset management business
The Invalda INVL group’s total client assets under management at the end of June were EUR 659.6 million and increased 7.9% from the start of the year. The number of clients that group companies have, meanwhile, rose 2.2% this year through the end of June to 194 700.
“Even though some of our products were the best or among the best in the market, some investors experienced losses, and the total amount earned for clients was insignificant. The main reason was that the first half of the year was volatile in many markets and negative in some,” Darius Šulnis said.
“We continue work on the planned projects in the asset management area, and the related costs are the reason for the negative results for these activities. We hope the projects will generate a significant return already next year,” Darius Šulnis said. Group revenue from the asset management business grew 7.8% in the first half of this year compared to the same period last year, to EUR 3.5 million, with a loss of EUR 190 000 from these operations.
In late June, INVL Asset Management launched the INVL Baltic Sea Growth Fund, a new closed-end mutual fund intended for professional investors which will seek to invest in medium-size companies with an attractive risk-return ratio, providing them with capital for further growth. The fund’s target size after the distribution of its investment units is EUR 200 million and the maximum size is EUR 300 million.
Also at the end of June it was announced that a preliminary agreement had been reached with the Moldovan Agency for Public Property regarding the participation of a consortium in an auction to acquire a stake of 41.09% in Moldova-Agroindbank (MAIB), the largest bank in Moldova. The agreement was signed by a consortium comprising the European Bank for Reconstruction and Development, Invalda INVL and Ukrainian private equity manager Horizon Capital. The international consortium, operating through HEIM Partners, a company established in the United Kingdom, committed to make an offer to acquire the shares of MAIB.
Investments in controlled companies and funds
INVL Baltic Real Estate
The value of Invalda INVL’s 32.27% equity stake in the real estate investment company INVL Baltic Real Estate was EUR 9.8 million at the end of June, with a gain from the start of the year of EUR 233 000, including dividends.
“We’re pleased with INVL Baltic Real Estate’s successful operations and believe in its prospects. For our part, we continue resolutely carrying out our declared intention of publicly offering some of the shares that Invalda INVL owns. That gives other persons a chance to invest in commercial real estate and at the same time increases the attractiveness and liquidity of INVL Baltic Real Estate’s shares,” Invalda INVL President Darius Šulnis said.
He said Invalda INVL abides by a policy of investing in the group’s products together with clients and thus intends to retain a 10% stake in INVL Baltic Real Estate. The public offering of INVL Baltic Real Estate shares is taking place in three stages. By the end date of 13 December, a total of up to 22% or 2.893 million of the company’s shares currently owned by Invalda INVL will be offered to investors.
The gain from Invalda INVL’s 14.1% stake in INVL Technology, a company that invests in IT businesses, was EUR 152 000 during the first half of 2018 and the value of investment was EUR 2.7 million at the end of June. “We expect that the organic growth in new markets of the businesses owned by this company and the new contracts they have signed should have a positive impact on the portfolio companies’ performance,” Darius Šulnis said.
INVL Baltic Forests Fund I
The value of the INVL Baltic Forests Fund I increased 8.2% in the first half of the year. A second offering of the fund which ended in May raised an additional EUR 10 million. Following INVL Asset Management’s EUR 0.5 million investment commitment in the second offering, that company’s total investment in the fund will reach EUR 1 million. “We’re developing the fund’s activities as planned and rationally investing the money that’s been successfully raised, so the value of the investment is growing,” Darius Šulnis said.
INVL Emerging Europe Bond Subfund
The value of investments in the INVL Emerging Europe Bond Subfund (through Cedus Invest) decreased 2.7% in the first half of this year to EUR 8.27 million. The change was due to negative developments in the fund’s investment markets which continued in the second quarter. “This investment is short-term and will be reduced as Invalda INVL has a need for funds for other projects,” said Darius Šulnis.
The value of the investment in Šiaulių Bankas (a 6.79% stake) rose during the first half of the year to EUR 18.6 million and the gain from the investment, including dividends, was EUR 0.64 million. “Šiaulių Bankas’s results are very good and we believe they should be reflected in the share price,” Darius Šulnis said.
The value of Invalda INVL’s investment in Litagra at the end of June was EUR 10.2 million, and the gain from this investment in the first half of the year was EUR 0.2 million. Now focused on primary crop production, the company continues investing, thereby increasing its production capacity, efficiency and potential.
The value of the Inservis group, meanwhile, was EUR 2.25 million at the end of June and the loss on this investment, including dividends, in the first half of the year was EUR 0.8 million. “We’re not happy with this company’s performance and hope that changes in its management will positively impact the company’s operations and growth,” Darius Šulnis said.
The investment in the shares of Žemaitijos Pienas was sold during the second quarter of this year. The gain from it in the first half of the year, including dividends, was EUR 0.5 million.
“In our investment activity, we look for undervalued shares of top companies in a variety of areas. We think properly chosen companies and responsible investment oversight can bring investors a significant return,” Darius Šulnis said.
The person authorised to provide additional information:
President of Invalda INVL