SIF Banat Crisana : Financial Results as of September 30, 2022

SIF Banat-Crișana's results for Q3 2022 are under the sign of the current difficult investment context, the dividend income recorded by the company (RON 166m) being impacted at the level of the net result by the gain/loss on investments position, which reflects the fair value evolution of assets at fair value through profit or loss (shares of subsidiaries, investments in fund units, bonds).

SIF Banat-Crișana's net asset value, calculated in accordance with ASF regulations, was of RON 2,989.3m as of September 30, 2022, down 12.3% vs 2021-year end, mainly influenced by the decline in the stock market quotations of the main holdings in the portfolio.

The company had an active investment position during the first 9 months of the year, purchasing shares in listed companies, partially making use of the available liquidity reserve, originated from a significant divestment activity during 2021.

During the first three quarters of 2022, the Company recorded dividend income amounting to RON 166m, 18% over the level budgeted for the entire year 2022, 58% being represented by the dividends distributed to shareholders by the main banks listed on the BVB. At the same time, the investment policy put into practice in the first part of 2022, through the purchase of shares in issuers from the energy sector, led to a significant increase in the volume of dividends collected, respectively to exceeding budgeted dividend income.

Interest income increased vs. the corresponding period of the previous year, being mostly related to financial assets at fair value through profit and loss and the result of the constant increase in interest rates on monetary investments and the variable rate of bonus coupon in the case of bonds held in the portfolio. Interest income exceeds their budgeted level by 15% for the entire year 2022.

Loss on investment amounts to RON 143m vs a gain of RON 224.5m recorded on September 30, 2022. The net loss is the result of the fair value measurement, during the first 9 months of the year, of listed shares (subsidiaries and associated entities), of fund units and bonds. The movement of the global stock markets, rising commodity prices and energy costs, negatively influenced the market value of locally listed stocks highlighted in this category.

Expenses as of September 30, 2022, are lower vs. the corresponding period of 2021 with decreases in most categories of expenses. The total expenses as of September 30 represent 45% of their budgeted volume for the year 2022.

Net profit as of September 30, 2022, amounting to RON 7.3m, stands for 9% of the level budgeted for 2022. Given the internal estimates of the gain/loss on investment, based on market quotes available at the date of publication of the quarterly reporting, it is unlikely that the net profit will be achieved at the budgeted level.

Total comprehensive income as of September 30, 2022, is unfavourable, the effect of recognizing in other comprehensive income of the fair value decrease as compared to 2021-year end, of the portfolio of financial assets classified in FVTOCI (Assets at fair value through other comprehensive income - mainly shareholdings in the financial-banking sector). Effectively mitigating these influences is an extremely difficult endeavour, conditioned both by the investment strategy (these assets representing the main source of recurring income) and by the correlation between the level of liquidity available in the market and the value of the stakes held by SIF Banat-Crișana.

The full version of Q3 2022 report is available on SIF Banat-Crișana website, www.sif1.ro, in Investor Relations › Financials section.