S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Q3 2011 Earnings Presentation
44 slides from S.C. Fondul Proprietatea SA's earnings presentation, Nov 15, 2011
Slide 1: 2011 Q3 Results Presentation
15 November 2011 Fondul Proprietatea 2011 Q3 Results Presentation This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 2: Disclaimer
DISCLAIMER 1 Disclaimer This presentation is made solely to the intended recipient and should not be distributed to, or acted upon by, any other person. It is for general information only and reflects the personal views of the presenter. Nothing herein is intended to constitute advice on investment,
Slide 3: Romania Macroeconomic Update
Romania Macroeconomic Update This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 4: Romania–Macroeconomic Update
Q3 2011 RESULTS 3 Romania–Macroeconomic Update Budget Deficit 2001–2012e (%GDP) Current Account Deficit 2001–2012e (%GDP) 9% 8.5% 16% 13.4% 11.6% 6.4% 10.4% 5.7% 12% 6% 8.4% 8.7% 4.4% 3.5% 8% 5.8% 4.4% 5.0% 5.0% 3% 2.6% 4.2% 4.2% 2.0% 2.2% 1.9% 3.3% 1.5% 1.2% 1.2% 4% 0% 0% 2001 2002 2003 2004 2005 2
Slide 5: Recovery Underway
Q3 2011 RESULTS 4 Recovery Underway Industrial output 2008–2011 Monthly unemployment 2009–2011 (%) 110 9 8.4 8.4 8.1 7.8 8.1 7.7 7.5 7.5 105 8 7.4 7.4 7.1 7.0 6.9 6.7 6.6 7 100 5.9 6 5.4 5.0 4.8 4.8 4.8 4.9 95 5 90 4 3 85 2 80 1 75 0 12/07 6/08 12/08 6/09 12/09 6/10 12/10 6/11 12/09 3/10 6/10 9/10 1
Slide 6: Gas Production / Consumption 2011
Q3 2011 RESULTS 5 Gas Production / Consumption 2011 • 1% YoY decrease in gas production for the first 8 months, from 79.3 TW/h to 78.5 TW/h • 6% YoY increase in gas consumption for the first 8 months, from 90.9 TW/h to 96.3 TW/h Gas Production (TW/h) Gas Consumption (TW/h) 11 24 18 10 12 9 6 8 0 Jan
Slide 7: Electricity Production / Consumption 2011
Q3 2011 RESULTS 6 Electricity Production / Consumption 2011 • 6% YoY increase in electricity production for the first 8 months, from 38.1 TW/h to 40.5 TW/h • 3% YoY increase in electricity consumption for the first 8 months, from 34.4 TW/h to 35.5 TW/h Electricity Production (TW/h) Electricity Inter
Slide 8: Fund Information
Fund Information This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 9: FTIML – One Year as Fund Manager
Q3 2011 RESULTS 8 FTIML – One Year as Fund Manager 6/11 11/10 RON 432 million dividend 3/11 distribution for 2010 8/11 Obtain CNVM approval for NAV Selection of Wood & Co. to Depositary change calculation applying fair value execute buy-back program European road-show to ING Bank principles 10/10 1/
Slide 10: The Fund – Key Facts
Q3 2011 RESULTS 9 The Fund – Key Facts Fund Details as of 31 October 2011 Dividends Paid RON EUR* Base Currency RON 2006 0.0025 0.0070 Fund Launch Date 28 December 2005 2007 0.0066 0.0018 2008 – – Franklin Templeton 29 September 2010 Appointment Date 2009 0.0816** 0.0193 Listing Date 25 January 2011
Slide 11: Net Asset Value
Q3 2011 RESULTS 10 Net Asset Value NAV (RON) / Share Cumulative Performance Since December 2010: +2.8% Dividend 1.2500 0.03141 1.1942 1.1919 1.1754 1.1541 1.1692 1.2004 1.1625 1.1352 1.1450 1.1500 1.1124 1.1147 1.0902 1.0500 0.9792 0.9500 0.8500 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Octobe
Slide 12: Shareholders Structure
Q3 2011 RESULTS 11 Shareholders Structure Shareholders Structure* (% Held) Evolution 100% 6% 5% 6% 7% 8% 9% 10% 10% 11% 18% 20% 22% 24% 27% 75% 31% 9% 35% 37% 9% 9% 39% Percentage Held 9% 9% 9% 50% 33% 28% 26% 10% 9% 35% 10% 37% 39% 25% 39% 38% 37% 37% 37% 37% 25% 19% 12% 6% 5% 3% 0% 2/11 3/11 4/11
Slide 13: Unpaid Share Capital of the Fund
Q3 2011 RESULTS 12 Unpaid Share Capital of the Fund Options for the Blocked Shares 1 Romanian State to pay RON 372,527,672 to the Fund (financing and effects) 2 Start litigation against Romanian State to receive RON 372,527,672 3 Cancel unpaid shares, issue and sell new shares – Fund Manager decisio
Slide 14: Portfolio Management
Portfolio Management This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 15: Portfolio Structure (I)
Q3 2011 RESULTS 14 Portfolio Structure (I) • As at 31 October 2011, the portfolio was heavily weighted towards the electricity, oil and gas sectors (approx. 86% of the NAV), offering unique exposure to the energy sector • 9 month period ended 30 September 2011 acquisitions: – Added stakes in Erste B
Slide 16: Portfolio Structure (II)
Q3 2011 RESULTS 15 Portfolio Structure (II) • As at 30 September 2010, FP’s portfolio included stakes in 83 companies (29 listed and 54 unlisted), both privately held and State-owned, ranging from less than 1% up to 100% • As at 31 October 2011, the portfolio includes stakes in 76 companies (29 list
Slide 17: Largest Holdings
Q3 2011 RESULTS 16 Largest Holdings No. Portfolio Company Status % Stake NAV RON mn NAV EUR mn % in Total NAV 1 OMV Petrom S.A. Listed–SPO 2012 20% 3,498.2 809 23.4% 2 Hidroelectrica S.A. Unlisted 20% 3,340.4 772 22.4% 3 Romgaz S.A. IPO 2012 15% 1,220.2 282 8.2% 4 Nuclearelectrica S.A. Unlisted 10%
Slide 18: Top 20 Portfolio Holdings – Dividends
Q3 2011 RESULTS 17 Top 20 Portfolio Holdings – Dividends Top 20 Holdings 2010 Profit Dividend Payout % 2011 FP Net Dividend 2010 FP Net Dividend 1 OMV Petrom S.A. 2,190.0 46% 201.5 0.0 2 Hidroelectrica S.A. 292.4 90% 52.5 6.5 3 Romgaz S.A. 651.2 110% 106.0 87.8 4 Nuclearelectrica S.A. 13.1 – 0 0.0 5
Slide 19: Active Portfolio Management (I)
Q3 2011 RESULTS 18 Active Portfolio Management (I) Unlocking the Underlying Value of the Fund • Representation on the Boards of Directors in 18 portfolio companies, and nomination of 15 independent directors in companies, which together represent a total of over 75% of the Fund’s NAV • Legal actions
Slide 20: Active Portfolio Management (II)
Q3 2011 RESULTS 19 Active Portfolio Management (II) Romgaz Donation Case • August 2010 Romanian Government issued an Ordinance allowing Romgaz to “donate” RON 400m to the state budget, following the proposal of the Ministry of Finance • September, October, November 2010 – 3 GSMs to approve the donat
Slide 21: Active Portfolio Management (III)
Q3 2011 RESULTS 20 Active Portfolio Management (III) Nuclearelectrica Share Capital Increase • Ministry of Economy and Commerce published in November a draft Emergency Government Ordinance for a share capital increase of Nuclearelectrica with the value of heavy water bought for Reactors 3 and 4 usin
Slide 22: Measures Agreed with IMF
Q3 2011 RESULTS 21 Measures Agreed with IMF Measures with Impact on the Energy Reforming State-Owned Enterprises Sector • Improve corporate governance legislation for SOEs: • Increase the energy prices to better align with CUG – Regular independent financial external audits for non-residential consu
Slide 23: Future Developments
Future Developments This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 24: Secondary Listing: WSE Recommendation (I)
Q3 2011 RESULTS 23 Secondary Listing: WSE Recommendation (I) Progress to date: • Fund Manager recommendation to list on the Warsaw Stock Exchange • Start of selection process for Investment Bank / Consortium to sponsor the secondary listing • Meetings with Investment Banks / Consortia • Meetings wit
Slide 25: Secondary Listing: WSE Recommendation (II)
Q3 2011 RESULTS 24 Secondary Listing: WSE Recommendation (II) CNVM guidance: • CNVM approvals are required to facilitate the offering and the secondary listing • Negative initial feedback from CNVM • The local regulator is afraid of letting the most liquid issuer list on another stock market and lea
Slide 26: Buy-Back Program
Q3 2011 RESULTS 25 Buy-Back Program Buy-Back Program Terms • GSM approval to purchase up to 10% of outstanding shares until 1 March 2012 • According to 31 December 2010 statutory financial statements, the Fund had RON 120.3 million (EUR 28.3 million) in available reserves for the buy-back programme
Slide 27: 2011–2012 SPO & IPO Timeline
Q3 2011 RESULTS 26 2011–2012 SPO & IPO Timeline • After the expected IPOs, the weight of listed holdings will increase from 32% of NAV as at 30 September 2011 to 68% of NAV • Law 247 / 2005 specified that all state-owned companies in the Fund’s portfolio must be listed by the end of 2008; new deadli
Slide 28: FP Market Performance
Q3 2011 RESULTS 27 FP Market Performance NAV vs. Market Capitalisation (EUR bn)* FP Share Price** 4 0.65 0.6 3 2.17 0.55 2 0.5 0.11 1 0.45 1.38 1.17 0 0.4 1/25/11 2/19/11 3/16/11 4/10/11 5/05/11 5/30/11 6/24/11 7/19/11 8/13/11 9/07/11 10/02/11 10/27/11 NAV Market Capitalisation 31 October 2011 9 Nov
Slide 29: Q3 Results
Q3 Results This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 30: Income Statement
Q3 2011 RESULTS 29 Income Statement Q3 2010 Q3 2011 9 Month Period 9 Month Period (Million RON Unaudited) Ended 30 September 2010 Ended 30 September 2011 Revenues from Current Activity, Out of Which: 97.4 2.3 365.1 595.9 Revenues from Financial Assets 36.1 (3.7) 209.3 509.5 Interest Income 57.9 5.4
Slide 31: Balance Sheet
Q3 2011 RESULTS 30 Balance Sheet 31 December 2010 30 June 2011 30 September 2011 (Million RON) Audited Unaudited Unaudited Financial Assets 10,890.5 12,003.1 10,829.2 Non-Current Assets–Total 10,890.5 12,003.1 10,829.2 Current Assets–Total 1,332.4 1,045.9 567.9 Prepaid Expenses – 0.1 0.1 Payables Wi
Slide 32: Upcoming Events
Upcoming Events This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 33: EGM and OGM Agenda – November 2011
Q3 2011 RESULTS 32 EGM and OGM Agenda – 23 November 2011 1. Amendments to the Constitutive Act: • Cancelling the voting rights restrictions • Introducing electronic voting • Clarifying the limits for the investment policy 2. The decrease of the registered share capital of Fondul Proprietatea from RO
Slide 34: 2011 Upcoming Events
Q3 2011 RESULTS 33 2011 Upcoming Events Date Event 23 November General Shareholders Meeting Fondul Proprietatea at ING EMEA 28–29 November Warsaw Conference This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 35: Thank you!
Thank you! This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 36: Appendix
Appendix This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 37: Romanian Government’s Options for the Restitution Process
Q3 2011 RESULTS 36 Romanian Government’s Options for the Restitution Process* Propose to inject new assets into Fondul Proprietatea • Assets to be added to FP would be subject to shareholder approval 1 • Questions regarding the valuation of the assets • No publicly stated intention so far from the S
Slide 38: Active Portfolio Management
Q3 2011 RESULTS 37 Active Portfolio Management Fondul Proprietatea Court Arguments in the Romgaz Case • The primary financial objective of companies is to make a profit for the benefit of shareholders and not to perform donations to state budget. • This donation denies shareholders their right to th
Slide 39: New Electricity Generation Strategy
Q3 2011 RESULTS 38 New Electricity Generation Strategy Merger of the Three Thermo Power IPO’s of Hidroelectrica Plants and Nuclearelectrica in 2012 with the Coal Mines to Form CE Oltenia • Creation of the two energy giants has been • CE Oltenia will be formed after the merger of: cancelled – CE Turc
Slide 40: Unpaid Share Capital of the Fund (I)
Q3 2011 RESULTS 39 Unpaid Share Capital of the Fund (I) Background • According to legislation governing Fondul, the Romanian Government should have transferred to the Fund: • 20% (43,902,253 shares) of Nuclearelectrica • 40% (2,045,512 shares) of Electromecanica Ploiesti • 40% (8,063,374 shares) of
Slide 41: Unpaid Share Capital of the Fund (II)
Q3 2011 RESULTS 40 Unpaid Share Capital of the Fund (II) Litigations Unpaid • The Prahova Court, the Ploiesti Court of Appeal and 3% the Supreme Court of Justice irrevocably decided that the legislation was unclear and that the Fund cannot be registered as a shareholder of Electromecanica Ploiesti.
Slide 42: Cancellation of Shares Repurchased in 2011
Q3 2011 RESULTS 41 Cancellation of Shares Repurchased in 2011 Accounting Entries Nominal Value DR Share Capital (Acc. 101) RON 240.3m Acquisition Value CR Treasury Shares (Buybacks) (Acc. 109) RON 120.3m Can Be Subsequently CR Gain on Cancellation or Disposal of Treasury Shares (Acc. 141) RON 120.0m
Slide 43: Constraints on Distributions to Shareholders (I)
Q3 2011 RESULTS 42 Constraints on Distributions to Shareholders (I) RONm Share Capital 13,778.4 Reserves (2,939.4) • Legal Reserves 102.5 Since 2008, according to CNVM Regulations (Order 11/2009), the • Reserve Related to Fund has recorded all impairment adjustments for financial assets Impairment A
Slide 44: Constraints on Distributions to Shareholders (II)
Q3 2011 RESULTS 43 Constraints on Distributions to Shareholders (II) • Due to the negative reserves, Fund’s ability to make distributions to shareholders is restricted. Romanian Companies law states “If a loss in net assets is incurred, the subscribed registered capital shall have to be restored or