Weng Fine Art : Releases Solid Consolidated Financial Statements for 2022 – Significant Profit Decline, but Positive Outlook

Weng Fine Art AG (WFA) has presented the audited consolidated financial statements for the fiscal year 2022. Despite a notable decline in profits and various challenges within the market environment, the company has maintained a strong financial position and is able to report a positive outlook for the upcoming quarters.

In 2022, the WFA Group faced disrupted supply chains from its suppliers and trading partners, along with decreasing buyer demand. Additionally, the loss of nearly €600,000 resulting from the sale of the stake in 360X Art AG affected the results for 2022.

Despite these obstacles, the WFA Group achieved earnings of €604,000. The consolidated balance sheet profit at the end of 2022, which includes the profit carryover from 2021, amounted to €4,744,000.

On this basis, the group's equity ratio increased from 56.5% to 57.3%. This positive development reflects the financial stability that enables the WFA Group to maintain reliable partnerships with nine reputable banks in Germany and Switzerland.

The Editions business segment, managed by the Swiss subsidiary ArtXX AG, is showing signs of recovery. The sales for the first half of 2023 exceeded those of the second half of 2022. Measures to strengthen the team in Zug, along with targeted structural optimizations, contribute to this positive trend. With the supply chain issues resolved, the group's management is now confident that numerous new edition projects can be realized in the coming months. This is expected to lead to a gradual increase in ArtXX AG's revenue in the second half of 2023 and beyond. Furthermore, the company will significantly expand its marketing efforts, including an initiative to address the Asian market.

The platform Weng Art Invest, previously tested within a small user group, is on the verge of being opened to the general public. The platform allows for the trading of physical art editions in token form. Recently, financial institutions have expressed interest in collaborations and investments, potentially leading the ArtXX management to consider spinning it off into a separate entity.

In the core area of German Weng Fine Art, the art trade, the first half of 2023 likely marked the end of the current downturn. Despite the challenging situation, profit margins have been maintained at the level of the previous year. It is important to note that prices for artworks have overall remained stable; the decline primarily affected trading volumes. This aligns with a common trend in the art market within a recessive environment, as currently observed. The management is optimistic that recovery will emerge in the coming months. Transactions in the current quarter suggest a substantial increase in revenue compared to the first half of the year for the remaining months of the fiscal year. Simultaneously, the board is working on a sustainable restructuring of this business segment.

Since the beginning of the year, the WFA management has been engaging in discussions with Artnet's management, as well as various potential investors or co-investors. Weng Fine Art, including the shares held by its CEO Rüdiger K. Weng, holds nearly 30% of the shares in the publicly traded online service provider for international art trading. The goal of the participants in these discussions is to strategically and financially position Artnet sustainably and profitably. Additionally, the WFA management places importance on establishing a broad strategic collaboration between Artnet and WFA.

The WFA management remains confident in the future of the art data business, as well as the operation and utilization of online marketplaces. These areas will continue to be integral components of the WFA business model, especially when it becomes possible to offer products from ArtXX and Weng Art Invest through such platforms on a larger scale.

Despite challenging circumstances, WFA has proven to be financially stable and profitable. The board looks forward with confidence to the next twelve months, during which innovative business models are expected to contribute to the positive development of all areas of the company.

During the regular Annual General Meeting scheduled for August 21, 2023, in Düsseldorf, the Board of Directors and the Supervisory Board of Weng Fine Art will propose a dividend distribution of approximately €593,000 or €0.11 per share (compared to €0.16 in the previous year).

You can download the complete and audited consolidated financial statement here.