FONDUL PROPRIETATEA FINANCIAL RESULTS FOR 2020

Fondul Proprietatea (hereinafter “The Fund”) published ts financial results for 2020 and would like to share the following highlights:

• The Fund’s share price registered a strong performance in the second part of 2020, following the rebound of global stock markets, which led to a historical high level of the share price of RON 1.4500 per share registered on 30 December 2020, and also the lowest discount to the NAV, of 9.71%1, on the same day.

• Last year, the Fund’s NAV per share total return was 2.21% and the Fund’s share price cumulative performance was 26.44%. 

• During 2020, the discount of the Fund’s share price to the NAV ranged between a high of 39.96%and a low of 9.71%1 which was also the closing value of the year, while the average annual discount for ordinary shares was 21.06%.

The liquid assets increased by 111.7% in 2020 compared to the previous year. This is mainly due to the cash inflows from the dividends collected from portfolio companies (RON 1.2 billion) and the proceeds from disposal of equity investments of RON 920.6 million which were offset by the payments for the acquisition of own shares within the eleventh buy-back programme (RON 1.1 billion), including the tender offers finalised in March, September and December and by the payments to shareholders regarding cash distributions in total amount of RON 398.0 million.

• The gross dividend income increased by 29% in 2020 compared to 2019, amounting to RON 1.2 billion, mainly including the dividends from E-Distributie companies (RON 522.9 million), Hidroelectrica SA (RON 399.5 million) and OMV Petrom SA (RON 175.6 million).

• The net decrease in equity investments of RON 2.2 billion during 2020 was mainly generated by:

  • the decrease in the value of unlisted holdings by RON 787.9 million following the valuation update process at the end of the year;

  • the disposal of 1.7 billion shares in OMV Petrom SA under an accelerated bookbuild offering and of the entire holding in Nuclearelectrica SA (total impact RON 920.6 million);

  • the negative evolution of OMV Petrom SA share price, the largest listed holding (total impact RON 529.9 million, share price decrease of 18.7%).

• The main contributor to the loss of RON 103 million recorded in 2020 was the negative net change in fair value of the Fund’s equity investments as result of COVID-19 pandemic impact on overall economic activity and capital markets (RON 1.24 billion), partially netted off by the gross dividend income from portfolio companies (RON 1.22 billion).

• The net unrealised loss from equity investments at fair value through profit or loss of RON 1.1 billion mainly relates to the holdings in CN Aeroporturi Bucuresti SA (RON 398.8 million), OMV Petrom SA (RON 331.0 million), E-Distributie Banat SA (RON 246.6 million), E-Distributie Muntenia SA (RON 200.7 million), and E-Distributie Dobrogea SA (RON 144.3 million), partially netted off by the increase in Hidroelectrica SA fair value (RON 242.4 million) as a result of the company’s strong performance.

• The net realised loss from disposal of equity investments at fair value through profit or loss was related to the partial disposal of OMV Petrom SA holding and by the disposal of the entire holding in Nuclearelectrica SA.

About Fondul Proprietatea

Launched in December 2005, Fondul Proprietatea (“the Fund”) 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 on 29 September 2010. 

The Fund is an alternative investment fund and its investment objective is the maximization to shareholders and the increase of the net asset value per share via investments mainly in Romanian equities and equity-linked securities. The Fund listed on the Bucharest Stock Exchange on 25 January 2011 and on the Specialist Fund

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